Kiwi at 1-week trough ahead of labour market data, greenback steadies on U.S.-China trade deal optimism, Asian shares surge - Wednesday, November 6th, 2019.
- Gold firms ahead of trade talks
- Oil falls on large U.S. crude build
Economic Data Ahead
- (0315 ET/0815 GMT) Spain Service PMI
- (0345 ET/0845 GMT) Italy Service PMI
- (0350 ET/0850 GMT) France Service PMI
- (0350 ET/0850 GMT) France Composite PMI
- (0355 ET/0855 GMT) Germany Service PMI
- (0350 ET/0850 GMT) Germany Composite PMI
- (0400 ET/0900 GMT) EZ Service PMI
- (0400 ET/0900 GMT) EZ Composite PMI
- (0500 ET/1000 GMT) EZ retail sales
Key Events Ahead
- (0400 ET/0900 GMT) European Central Bank Vice-president Luis De Guindos' speech
- (0430 ET/0930 GMT) European Central Bank Executive Board member Yves Mersch gives a speech
DXY: The dollar index steadied near a 3-week peak after a survey on the U.S. service sector published yesterday showed that business sentiment had improved in October from a three-year low in September. The greenback against a basket of currencies traded flat at 97.91, having touched a high of 98.11 on Tuesday, its lowest since October 17.
EUR/USD: The euro declined, hovering towards a near 3-week low hit in the previous session, as the greenback surged on the back of strong U.S. economic data. The European currency traded 0.05 percent down at 1.1065, having touched a low of 1.1063 on Tuesday, its lowest since October 17. Investors’ attention will remain on a series of data from the Eurozone economies, EZ service PMI and retail sales, ahead of the U.S. economic data, including flash nonfarm productivity and unit labour cost data. Immediate resistance is located at 1.1088 (21-DMA), a break above targets 1.1119 (10-DMA). On the downside, support is seen at 1.1045, a break below could drag it below 1.1022.
USD/JPY: The dollar edged down after rising to a near 1-week peak in the prior session on rising hopes for a U.S.-China trade deal and a string of solid U.S. economic data. Investors expect that the Trump administration could roll back some of the tariffs it imposed on goods from China as part of a phase one U.S.-China trade deal. The major was trading 0.1 percent down at 109.07, having hit a high of 109.25 on Tuesday, its highest since October 30. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. flash nonfarm productivity and unit labour cost data. Immediate resistance is located at 109.28 (October 30 High), a break above targets 109.62 (May 31 High). On the downside, support is seen at 108.89, a break below could take it near at 108.54 (5-DMA).
GBP/USD: Sterling consolidated within narrow ranges, as the Bank of England is set to hold interest rates unchanged at a policy meeting on Thursday and a national election less than six weeks away. Investors will closely watch any changes in opinion poll trends for the major political parties before taking big positions on the British pound. The major traded flat at 1.2877, having hit a high of 1.2975 on Thursday, it’s highest since October 22. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2949 (October 24 High), a break above could take it near 1.3000. On the downside, support is seen at 1.2806, a break below targets 1.2748. Against the euro, the pound was trading flat at 85.97 pence, having hit a high of 85.74 last month, it’s highest since May 8.
AUD/USD: The Australian dollar rose, extending previous session gains, as the Aussie 10-year yield hit the highest level in over three months. The 10-year yield is trading at 1.254 percent, the highest level since July 25, representing a 17 basis point gain on the low of 1.08 registered on November 1. The Aussie trades 0.1 percent up at 0.6897, having hit a low of 0.6876 on Tuesday, it’s lowest since October 30. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6868 (10-DMA), a break below targets 0.6838. On the upside, resistance is located at 0.6921, a break above could take it near 0.6950.
NZD/USD: The New Zealand dollar plunged to a 1-week low as investors cautiously awaited domestic labour market data. The economy's unemployment rate is expected to rise to 4.1 percent in the third quarter, up from 3.9 percent in the previous quarter, while the employment change is forecast to slow notably, from 0.8 percent to 0.3 percent. The Kiwi trades 0.05 percent down at 0.6373, having touched a low of 0.6364 earlier, its lowest level since October 30. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6435 (October 22 High), a break above could take it near 0.6456 (November 1 High). On the downside, support is seen at 0.6358 (21-DMA), a break below could drag it below 0.6300.
Asian shares surged as investors cheered on better-than-expected U.S. services sector data and rising hopes for a U.S.-China trade deal.
MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.1 percent.
Tokyo's Nikkei gained 0.2 percent to 23,297.25 points, Australia's S&P/ASX 200 index fell 0.6 percent to 6,660.20 points and South Korea's KOSPI surged 0.1 percent to 2,145.66 points.
Shanghai composite index declined 0.3 percent to 2,982.69 points, while CSI 300 index traded 0.3 percent down at 3,990.49 points.
Hong Kong’s Hang Seng traded 0.2 percent higher at 27,725.79 points. Taiwan shares added 0.1 percent to 11,653.07 points.
Crude oil prices declined, weighed down by a larger-than-expected build-up in U.S. crude stocks, after gaining for three straight sessions on expectations of an easing of in U.S.-China trade tensions. International benchmark Brent crude was trading 0.6 percent down at $62.55 per barrel by 0447 GMT, having hit a high of $63.17 on Tuesday, its highest since September 24. U.S. West Texas Intermediate was trading 0.6 percent down at $56.88 a barrel, after rising as high as $57.46 on Tuesday, its highest since September 24.
Gold prices steadied after tumbling more than 1 percent in the previous session, as investors awaited further clarity on the U.S.-China trade talks. Spot gold was trading 0.2 percent up at $1,485.88 per ounce by 0451 GMT, having dipped 1.7 percent to a low of $1,479.27 on Tuesday, its lowest since Oct. 16. U.S. gold futures were 0.3 percent higher at $1,488 per ounce.
The Australian government bonds continued to down trend during Asian session Wednesday tracking a similar movement in the United States’ Treasuries after optimism struck over the U.S.-China trade deal, urging investors to shift towards riskier assets.The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 3-1/2 basis points to 1.251 percent, the yield on the long-term 30-year bond surged 3 basis points to 1.826 percent while the yield on short-term 2-year remained flat at 0.897 percent.