• Europe roundup: Sterling at 7-month peak as investors speculate on conservative majority, Euro tumbles as German services sector growth weakens, investors eye U.S. service PMI - Wednesday, December 4th, 2019 

    Source: FxWire Pro - Media Round Ups / 04 Dec 2019 06:30:19   America/New_York

    Market Roundup

    • UK services PMI rises
       
    • U.S. and China move closer to phase-one trade deal: Bloomberg
       
    • German services sector growth stays weak: PMI
       
    • French business activity growth slows in November: PMI

    Economic Data Ahead

    • (0815 ET/1315 GMT) Payrolls processor ADP releases U.S. employment report for the month of November. The report is expected to show that 140,000 jobs were added as compared with 125,000 jobs in October.
       
    • (0945 ET/1445 GMT) Financial firm Markit releases final U.S. composite PMI for the month of November. The index posted a final reading of 51.9 in the previous month.
       
    • (0945 ET/1445 GMT) Markit Economics reports final U.S. services PMI for the month of November. The index posted a final reading of 51.6 in October.
       
    • (1000 ET/1500 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. non-manufacturing Purchasing Managers' index eased to a final reading of 54.5 in November from 54.7 in October.
       
    • (1000 ET/1500 GMT) Bank of Canada will meet to announce its benchmark interest rate, where it is expected to hold interest rates at 1.75 percent.
       
    • (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending November 29.

    Key Events Ahead

    • (1000 ET/1500 GMT) Vice-Chair for supervision of the Federal Reserve Board of Governors Randal Keith Quarles' speech
       
    • (1115 ET/1615 GMT) Bank of Canada Governor Stephen S. Poloz and Senior Deputy Governor Carolyn A. Wilkins hold a press conference.

    FX Beat

    DXY: The dollar index steadied after falling to a 1-month trough earlier in the session amid progress of trade talks between the United States and China. Investors now await U.S. service sector PMI which could provide further insight on the strength of the economy. The greenback against a basket of currencies traded flat at 97.76, having touched a low of 97.63 earlier, its lowest since November 5.

    EUR/USD: The euro declined from a near 2-week peak after a survey showed growth in the German services sector remained weak in November, while French business activity expanded at a slower pace in November from October. The European currency traded 0.1 percent down at 1.1073, having touched a high of 1.1093 on Tuesday, its highest since November 21. Immediate resistance is located at 1.1097, a break above targets 1.1123. On the downside, support is seen at 1.1052, a break below could drag it below 1.1036 (10-DMA).

    USD/JPY: The dollar rebounded from a near 2-week low after Bloomberg reported that the United States and China are moving closer to agreeing on the amount of tariffs to be rolled back in a phase-one trade deal. The major was trading 0.1 percent up at 108.71, having hit a low of 108.42 earlier, its lowest since Nov 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ADP employment change, service PMI from both Markit and ISM and Fed Quarles speech. Immediate resistance is located at 108.94, a break above targets 109.22. On the downside, support is seen at 108.36, a break below could take it near at 108.18.

    GBP/USD: Sterling advanced to a fresh 7-month peak, as investors raised their expectations for the ruling Conservative Party to win an outright majority, stoking hopes of Britain avoiding another hung parliament. Moreover, data showing the IHS Markit/CIPS UK Manufacturing PMI was revised higher to 48.9 in November from a preliminary estimate of 48.3 and compared to October's final reading of 49.6 further boosted the upside in the British pound. The major traded 0.4 percent up at 1.3038, having hit a high of 1.3063 earlier, it’s highest since May 8. Investors’ attention will remain on the development surrounding the general elections, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3080, a break above could take it near 1.3132. On the downside, support is seen at 1.2937 (5-DMA), a break below targets 1.2910 (10-DMA). Against the euro, the pound was trading 0.4 percent up at 84.92 pence, having hit a high of 84.81 earlier, it’s highest since Mar. 15.

    USD/CHF: The Swiss franc retreated from a 1-month peak as risk sentiment improved on latest development on U.S.-China phase-one trade deal. The major trades at 0.2 percent up at 0.9884, having touched a low of 0.9855 earlier, 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 0.9933 (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 advanced, halting a 4-day losing streak, boosted by gains in technology stocks and encouraging China services sector data.

    The pan-European STOXX 600 index gained 0.9 percent at 402.40 points, while the FTSEurofirst 300 rallied 1.05 percent to 1,573.45 points.

    Britain's FTSE 100 trades 0.3 percent up at 7,183.05 points, while mid-cap FTSE 250 surged 0.6 to 20,622.09 points.

    Germany's DAX rose 1.2 percent at 13,140.25 points; France's CAC 40 trades 1.3 percent higher at 5,800.04 points.

    Commodities Recap

    Crude oil prices rallied, extending gains for the third straight session, as investors awaited this week's meeting where OPEC and its allies are expected to extend production curbs to support the market, while industry data showing that U.S. crude stockpiles fell more than expected boosted upside. International benchmark Brent crude was trading 1.4 percent up at $61.81 per barrel by 0958 GMT, having hit a low of $60.29 on Tuesday, its lowest since November 20. U.S. West Texas Intermediate was trading 1.2 percent up at $56.94 a barrel, after falling as low as $55.01 on Friday, its lowest since November 20.

    Gold prices declined from a 1-month high recorded earlier in the session following reports stating that United States and China are moving closer to a phase-one trade deal. Spot gold was trading 0.2 percent down at $1,474.82 per ounce by 1008 GMT, having touched a high of $1481.65 on Tuesday, its highest since Nov. 7. U.S. gold futures were flat at $1,484.60.

    Treasuries Recap

    The Japanese government bonds bounced back from 7-1/2-month lows, with the benchmark 10-year JGB futures rising as high as 0.52 point in early trade. In the cash bond market, the 10-year JGB yield fell 1.5 basis points to minus 0.040 percent, off the 7 1/2-month high of minus 0.020 percent, while the 20-year JGB yield fell 1.5 basis points to 0.275 percent. The 30-year JGB yield fell 1.5 basis points to 0.425 percent. The five-year yield fell 1.5 basis points to minus 0.150 percent after hitting a 7 1/2-month high of minus 0.135 percent on Tuesday.

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