Forex - US North American Summary and Highlights 3 Dec


 21:05 (GMT) 03 Dec

  [Forex Highlights]

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Overview

US North American Summary and Highlights 3 Dec (0101-GKZW-C04)

Equities were unable to fully hold their initial gains on the Trump-Xi meeting but remained up on the day. USTs saw losses in the long end erased as the curve flattened. FX markets were subdued.

News highlights

- US Nov ISM manufacturing rose to 59.3 from 57.7 vs 57.5 exp, prices paid fell to 60.7 from 71.6 vs 70.0 exp.

- US Oct construction spending -0.1% vs +0.4% exp.

- Fed's Kaplan said policy not pre-determined, growth to slow in 2019.

- Fed's Brainard said inflation on Fed target, at or beyond full employment.

- Fed's Quarles said where Fed ends in the range of neutral estimates will depend on performance of economy.

- Fed's Clarida said focused on maintaining economy's good performance, inflation at target, goal is symmetric.

Currencies:

US North American Summary and Highlights 3 Dec (0101-GKZW-C01)

There was very little movement for FX traders to latch onto, GBP reversing an early blip higher and little affected by a slight improvement in the mfg PMI.

EUR/USD lost initial gains but then found support to maintain a tight range in the absence of any major data or events.

USD/JPY also very tight but came off the highs despite the better equity performance before edging higher again later in the session. Crosses are a shade higher, though again not hitting any important levels.

Commodity currencies are off the best levels seen in Asia. Crude markets are steady after the initial lift and looking to the OPEC meeting on Thursday. AUD gave up its earlier bounces versus the CAD and NZD.

US North American Summary and Highlights 3 Dec (0101-GKZW-C02)

SEK is a little firmer as Sweden's mfg PMI hit a six-month high, NOK steady after an initial lift on the Russia/OPEC oil news.

No change in sentiment on the CHF, sight deposit data again indicating no action by the SNB.

Bonds:

US North American Summary and Highlights 3 Dec (0101-GKZW-C03)

USTs attempted to sell back overnight on the US-China relief and oil news input, but that ran into very resilient dip buying into NY that then also survived a big upside surprise on the ISM, albeit with lower prices. Indeed, such was the support that the market drove to more than fill the opening gaps and leave 10s pushing below 3%. 2s +4.5bps @ 2.83%, 5s +2.5bps @ 2.84%, 10s -0.0bps @ 2.99%, 30s -1.5bps @ 3.28%.

Agency Spreads: Freddie/Fannie 5s -0.8/-0.4 bps, 10s -0.6/+1.9 bps.

Swap Spreads: 2s -0.05bps, 5s +0.18bps, 10s +0.98bps.

Equities:

With extra US tariffs on China postponed equities opened firmer and remained positive through the session, but moved off the highs, strong ISM data having a limited impact. Consumer discretionary, energy and technology led the advance.

To Be Released -

Data:

04:30 GMT - AU: RBA - Overnight Rate (04-Dec) 4cast: % (Mkt: 1.5 Prev: 1.5)

08:15 GMT - CH: CPI (Nov) % m/m (Mkt: -0.1 Prev: 0.2)

08:15 GMT - CH: CPI (Nov) % y/y (Mkt: 1.1 Prev: 1.1)

08:15 GMT - CH: HICP (Nov) % m/m (Mkt: Prev: 0.2)

08:15 GMT - CH: HICP (Nov) % y/y (Mkt: Prev: 1.1)

10:00 GMT - EU: PPI (Oct) % m/m (Mkt: Prev: 0.5)

10:00 GMT - EU: PPI (Oct) % y/y (Mkt: Prev: 4.5)

Events & Auctions:

03:35 GMT - JP: 10yr Bond Auction

08:00 GMT - EU: European Union Finance Ministers' Meeting in Brussels

09:00 GMT - UK: BoE's Carney Speaks in Parliament

09:30 GMT - ES: 189-Day Bills Auction

09:30 GMT - ES: 364-Day Bills Auction

10:30 GMT - BE: Bills Auction

10:30 GMT - EU: ECB Main Refinancing Operation Result

10:30 GMT - UK: 1% Treasury Gilt Auction 2024

13:55 GMT - UK: BoE's Rule Speaks in London

15:00 GMT - US - Fed's Williams Holds Press Briefing at NY Fed

16:30 GMT - US: 4wk Bills Auction

16:30 GMT - US: 52wk Bills Auction

16:30 GMT - US: 8wk Bills Auction

18:00 GMT - UK: BoE's Vlieghe Speaks in Plymouth


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