• Europe roundup: Sterling poised for best week since mid-october, Euro off highs as German industry output declines, investors eye U.S. nonfarm payroll - Friday, December 6th, 2019

    Source: FxWire Pro - Media Round Ups / 06 Dec 2019 06:42:50   America/New_York

    Market Roundup

    • Gold falls on China tariff move
       
    • Oil gains as OPEC+ set to confirm supply cut
       
    • German industry output falls sharply in October
       
    • U.S. dollar set for worst week since October
       
    • Sterling eases after three-day rally

    Economic Data Ahead

    • (0830 ET/1330 GMT) The U.S. Labor Department releases nonfarm payrolls report for the month of November. The report is likely to show 180,000 jobs were added compared with an increase of 128,000 in October.
       
    • (0830 ET/1330 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of November. The rate stood at 63.3 percent in the previous month.
       
    • (0830 ET/1330 GMT) The U.S. Labor Department is expected to report that the unemployment rate remained steady at 3.6 percent in November.
       
    • (0830 ET/1330 GMT) The United States' average hourly earnings are likely to rise 0.3 percent in November after climbing 0.2 percent in the month before.
       
    • (0830 ET/1330 GMT) Statistics Canada releases the employment report for November. The economy probably added 10,000 jobs, compared to a decline of 1,800 jobs in October, while the participation rate is expected to remain steady at 65.7 percent.
       
    • (0830 ET/1230 GMT) Canada's unemployment rate is expected to stay unchanged at 5.5 percent for the month of November.
       
    • (1000 ET/1500 GMT) The U.S. Census Bureau is likely to report that wholesale inventories rose 0.2 percent in October after posting a similar gain in the prior month.
       
    • (1000 ET/1500 GMT) The University of Michigan is likely to report that U.S. preliminary consumer sentiment index declined to 96.5 in December after posting a final reading of 96.8 in November.
       
    • (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count. 
       
    • (1500 ET/2000 GMT) The U.S. Federal Reserve is likely to report that consumer credit declined to $16.0 billion in October from $9.51 billion the month before.
       

    Key Events Ahead

    • No significant events scheduled

    FX Beat

    DXY: The dollar index rebounded from a 1-month low as investors awaited the U.S. jobs report that could offer further insight on the state of the economy. The greenback against a basket of currencies traded 0.5 percent up at 97.44, having touched a low of 97.36 earlier, its lowest since November 4.

    EUR/USD: The euro declined after data showed German industrial output fell unexpectedly in October due to a sharp fall in production of capital goods, indicating persistent weakness in the economy. The European currency traded 0.1 percent down at 1.1094, having touched a high of 1.1116 on Wednesday, its highest since November 7. Immediate resistance is located at 1.1123, a break above targets 1.1140. On the downside, support is seen at 1.1071 (5-DMA), a break below could drag it below 1.1042 (21-DMA).

    USD/JPY: The dollar plunged, extending previous session losses, weighed down by nervousness around U.S.-China trade relations and hints of weakness in the U.S. economy. The major was trading 0.2 percent down at 108.58, having hit a low of 108.42 on Wednesday, its lowest since Nov 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. nonfarm payroll, unemployment rate, wholesale inventories, Michigan consumer sentiment index and consumer credit change. Immediate resistance is located at 109.03 (10-DMA), a break above targets 109.29. On the downside, support is seen at 108.51, a break below could take it near at 108.34.

    GBP/USD: Sterling eased from a 7-month peak but was set for best week since mid-October on signs that next week’s election will yield a Conservative Party win. The major traded 0.2 percent down at 1.3133, having hit a high of 1.3166 on Thursday, it’s highest since May 6. Investors’ attention will remain on the development surrounding the general elections, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3176, a break above could take it near 1.3196. On the downside, support is seen at 1.3120 a break below targets 1.3080. Against the euro, the pound was trading 0.1 percent down at 84.47 pence, having hit a high of 84.30 on Thursday, it’s highest since May 2017.

    USD/CHF: The Swiss franc tumbled, reversing most of its previous session gains, as risk sentiment revived after China’s announcement to waive import tariffs on some American goods. The major trades 0.2 percent up at 0.9886, having touched a low of 0.9855 on Wednesday, it’s lowest since November 4. On the higher side, near-term resistance is around 0.9914 and any break above will take the pair to the next level till 0.9928 (21-DMA). The near-term support is around 0.9850, and any close below that level will drag it till 0.9836.

    Equities Recap

    European shares surged as comments from U.S. President Donald Trump on trade talks with China boosted investor risk sentiment.

    The pan-European STOXX 600 index gained 0.4 percent at 404.20 points, while the FTSEurofirst 300 rallied 0.4 percent to 1,579.07 points.

    Britain's FTSE 100 trades 0.7 percent up at 7,185.97 points, while mid-cap FTSE 250 gained 0.4 to 20,796.16 points.

    Germany's DAX rose 0.2 percent at 13,081.95 points; France's CAC 40 trades 0.4 percent higher at 5,823.79 points.

    Commodities Recap

    Crude oil prices steadied and were set for weekly gains ahead of a meeting of OPEC and its allies later in the day which is expected to formally agree to more output cuts in early 2020. International benchmark Brent crude was trading 0.3 percent up at $63.43 per barrel by 1051 GMT, having hit a low of $60.29 on Tuesday, its lowest since November 20. U.S. West Texas Intermediate was trading 0.1 percent up at $58.37 a barrel, after rising as high as $59.10 on Thursday, its highest since September 23.

    Gold prices eased as investor risk appetite improved after China’s announcement to waive import tariffs on some American goods. Spot gold was trading 0.5 percent down at $1,475.18 an ounce at 1057 GMT, having touched a high of $1483.97 on Wednesday, its highest since Nov. 7. U.S. gold futures fell 0.3 percent to $1,478.00.

    Treasuries Recap

    The Euro zone government bond yields were little changed, but set for their biggest weekly rise in a month. Germany’s 10-year Bund yield was flat at -0.29 percent, and is up 6 basis points this week and set for its biggest weekly jump in a month. Italian bond yields are also set for their biggest weekly rises in a month.

    The Japanese government bond futures fell toward an 8-month low, with the benchmark 10-year JGB futures falling 0.30 point to 152.5. The 10-year JGB yield rose 2 basis points to minus 0.025 percent. The 20-year JGB yield rose 2.5 basis points to 0.290 pecent. The 30-year JGB yield rose 2 basis points to 0.435 percent. The 40-year JGB yield rose 1.5 basis points to 0.455 percent. The five-year yield rose 2.5 basis points to minus 0.130 percent. At the short end of the curve, the two-year JGB yield rose 1.5 basis points to minus 0.140 percent.

    The New Zealand 10-year bond yields were up a steep 18 basis points on the week, against 10 basis points for Aussie paper. The Aussie bond currently yields 37 basis points less than the Kiwi, compared to 11 basis points early this month. The Australian three-year bond futures were off 1.5 ticks on Friday at 99.300, a drop of 5 ticks for the week.

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