Global Markets:
- Asian stock markets: Nikkei down 0.05 %, Shanghai Composite fell 0.25 %, Hang Seng declined 0.20 %, ASX rose 0.20 %
- Commodities: Gold at $1227 (+0.25 %), Silver at $16.97 (+0.30 %), WTI Oil at $45.50 (-0.10 %), Brent Oil at $46.60 (-0.15 %)
- Rates: US 10 year yield at 2.21, UK 10 year yield at 1.38, German 10 year yield at 0.29
News & Data:
- Australia Employment Change Oct: 9.8k (est. 20.0K, rev prev. -29.0k from -9.8K)
- Australia Unemployment Rate Oct: 5.6% (est. 5.60%, prev. 5.60%)
- Australia Participation Rate Oct: 64.4% (est. 64.60%, prev. 64.50%)
- Fed's Harker: Rate outlook depends on fiscal policy; still wants a 25bps hike, fiscal policy may result in steeper rate path
- PBOC sets USDCNY mid-point at 6.8692 (prev fix 6.8592, prev close 6.8761)
- U.S. Treasury yields subside, take dollar off 13-and-a-half year peak, Asian stocks steady – RTRS
- U.S. manufacturing sector stabilizing; producer prices tame – RTRS
- Fed's Harker says he supports an interest rate hike – RTRS
- Oil prices fall on U.S. crude stock build, OPEC remains in focus – RTRS
Markets Update:
The US Dollar reached a 13-year high yesterday, amid a change in inflation expectations. USD/JPY almost reached the 110 level, but ran into strong offers ahead of 109.80. A test of 110 seems likely in the near-term, as the pair remains very well bid. Above 110, the next notable resistance level lies at 111.50.
The Euro managed to bounce slightly in Asia, but remains weak overall. The currency has been under pressure as traders focused on the high divergence between the Fed and the ECB. While the US central bank is expected to hike rates in December, the ECB is likely to extend the duration of its quantitative easing programme. EUR/USD rose from 1.0690 to 1.0715 overnight, with resistance now seen at 1.0750/55.
Cable continues to consolidate in a 1.24-1.25 range, and the key levels to watch are 1.2350 and 1.2555. Meanwhile, the commodity currencies managed to recover a bit overnight. NZD/USD rose from 0.7070 to 0.7105, while USD/CAD fell from 1.3450 to 1.3420.
Upcoming Events:
- 09:30 GMT – UK Retail Sales
- 10:00 GMT – Euro Zone CPI
- 12:30 GMT – ECB Meeting Minutes
- 13:30 GMT – US Building Permits
- 13:30 GMT – US CPI
- 13:30 GMT – US Housing Starts
- 13:30 GMT – US Initial Jobless Claims
- 13:30 GMT – US Philadelphia Fed Manufacturing Index
- 13:50 GMT – FOMC Member Dudley speaks
- 15:00 GMT – Fed Chair Yellen testifies
- 17:30 GMT – FOMC Member Brainard speaks
