Thursday 27th November: European Open Briefing

Global Markets:

  • Asian stock markets: Nikkei down 0.50 %, Shanghai Composite gained 0.60 %, Hang Seng lost 0.45 %, ASX rose 0.10 %
  • Commodities: Gold at $1190 (-0.60 %), Silver at $16.31 (-1.80 %), Crude Oil at $72.72 (-1.85 %)
  • Rates: US 10 year yield at 2.245, UK 10 year yield at 1.982, German 10 year yield at 0.736

News & Data:

  • New Zealand Trade Balance m/m NZ$-908mln, Expected: NZ$-645mln, Previous: NZ$-1.3bln
  • New Zealand Trade Balance y/y NZ$-110mln, Expected: NZ$+183mln, Previous: $+630mln
  • Australia Private New Capex 0.2 %, Expected: -1.7 %, Previous: 1.6 %
  • Australia HIA New Home Sales 3.0 %, Previous: 0.0 %
  • Crude Oil slipped to a 4-Year low amid concern OPEC won’t agree to cut output during today’s meeting
  • Japan 10-Year Government Bond Futures rose to a record high of 146.85
  • PBOC’s Hu: PBOC to continue to ensure stable, healthy economic growth. PBOC will further reform FX rate
  • RBNZ’s Net Currency Sales were NZ$1M in October

Markets Update:

Asian stock markets are mixed, with the Nikkei dragged lower by a stronger Yen, but the Shanghai Composite up on the day. Precious metals are having a bad day despite the overall USD weakness, as Gold dropped to $1186 and Silver to $16.12 overnight. Meanwhile, oil prices are under renewed pressure ahead of the OPEC meeting as traders expect that there will be no cut in oil production. The meeting will begin at 09:00 GMT and the press conference is expected to start around 15:00 GMT.

USD/JPY declined to fresh lows overnight. The 117.25/30 support area held on the first test, but there are plenty of stops resting beneath and the 117.00 level should be watched for momentum. There is no specific fundamental reason for the recent JPY strength, but rather profit-taking interest from USD longs ahead of the US holiday that has helped push the USD/JPY lower. Intraday, 117.00 and 117.80 are the key levels to watch.

EUR/USD traded in a 15 pips range in Asia and there is not much to report flow-wise. Price action suggests the pair could extend gains in the upcoming session. The next significant resistance area lies at 1.2580/1.26, while key support now noted at 1.2440. Meanwhile, GBP/USD has finally broken above the 1.5730 level and posted a daily close above. Buying dips towards 1.5735 seems favorable, targeting a move to 1.59.

Commodity currencies have recovered somewhat. AUD/USD rose up to 0.8604 overnight, after hitting a fresh multi-year low at 0.8480 in yesterday’s London session. EUR/AUD, one of the pairs with the largest intraday volatility recently, posted a sharp reversal ahead of the 1.47 resistance level. Pivotal support now seen at 1.4480/1.45.

USD/CAD is consolidating around 1.1250/60. The Canadian Dollar could come under pressure if Oil prices continue to decline, so keep an eye on the OPEC headlines today if you are trading the CAD. Immediate support at 1.1220/25, while resistance noted at 1.1310/15.

Upcoming Events:

  • 06:45 GMT – Swiss GDP (0.4 % q/q, 1.4 % y/y)
  • 08:00 GMT – Spanish GDP (0.5 % q/q)
  • 08:55 GMT – German Unemployment Rate (6.7 %)
  • 08:55 GMT – German Unemployment Change (-1k)
  • 09:00 GMT – Euro Zone M3 Money Supply (2.6 % y/y)
  • 12:00 GMT – German Gfk Consumer Climate (8.6)
  • 12:15 GMT – German Bundesbank President Weidmann speaks
  • 13:00 GMT – German CPI (0.0 % m/m, 0.6 % y/y)

Source:: Thursday 27th November: European Open Briefing

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