Friday 18th November: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei up 0.85 %, Shanghai Composite fell 0.15 %, Hang Seng rose 0.10 %, ASX 200 gained 0.40 %
  • Commodities: Gold at $1207 (-0.80 %), Silver at $16.58 (-1.15 %), WTI Oil at $45.10 (-0.75 %), Brent Oil at $46.30 (-0.45 %)
  • Rates: US 10 year yield at 2.34, UK 10 year yield at 1.42, German 10 year yield at 0.29

News & Data:

  • China House Prices (YoY) Oct: 12.3%  (est. 10%, prev. 11.20%)
  • New Zealand ANZ Consumer Confidence Nov: 127.2 (prev. 122.9)
  • PBOC set USDCNY mid-point at 6.8796 (prev. fix. 6.8692, prev. close 6.8720)
  • Rising U.S. yields help dollar to 13-1/2 year high, Asian shares slip
  • U.S. inflation, labour market data bolster Fed December rate hike
  • Yellen says Fed could raise interest rates 'relatively soon'
  • With Trump win, China looks to seize Asia free trade leadership
  • Oil prices fall as strong dollar wipes out OPEC cut optimism

Markets Update:

The US Dollar extended gains overnight, after Fed Chair Yellen said that the Fed is planning to hike rates relatively soon, and that the fact that Donald Trump has won the US election has done nothing to change that. She also said that she will serve her full term, which will end in 2018.

EUR/USD opened around 1.0630 in Asia and extended losses to 1.0580. There is now not much support until 1.05, followed by the 2015 low at 1.0460. Meanwhile, Cable fell from 1.25 in yesterday's early NY session to a low of 1.2385 in Asia. Immediate support is seen at 1.2350, but below that level, there is little support until 1.2100/20.

USD/JPY rallied above 110 overnight and is approaching the 111 level. The next key resistance level to watch is 111.50. While the pair is showing overbought levels, momentum continues to be strong.

The commodity currencies all came under pressure as well. AUD/USD broke below 0.75 yesterday and traded as low as 0.7380 overnight, while NZD/USD fell from 0.7145 to 0.70. It bounced off the big figure, but a break below seems imminent.

Upcoming Events:

  • 07:00 GMT – German PPI
  • 08:00 GMT – ECB President Draghi speaks
  • 09:00 GMT – Euro Zone Current Account
  • 10:30 GMT – FOMC Member Bullard speaks
  • 13:30 GMT – Canadian CPI
  • 14:30 GMT – FOMC Member George speaks
  • 18:30 GMT – FOMC Member Kaplan speaks

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