Forex - US North American Summary and Highlights 4 Dec


 21:05 (GMT) 04 Dec

  [Forex Highlights]

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Overview

US North American Summary and Highlights 4 Dec (0101-QDFT-C04)

A Bloomberg source report seeing progress in US-China trade talks which got some backing from Trump pushed equities, UST yields and USD/JPY higher despite weak US data. GBP and CAD were also firm, the latter on a more positive than expected BoC statement.

News highlights

- US Nov ADP employment +67k vs 135k exp.

- US Nov ISM non-manufacturing fell to 53.9 from 54.7 vs 54.5 exp.

Currencies:

US North American Summary and Highlights 4 Dec (0101-QDFT-C01)

USD/JPY bounced around 25 ticks on a Bloomberg report quoting unnamed sources saying that the US and China were moving closer to a deal, and to agreeing the extent of tariff rollback, before the December 15 tariff deadline. Weak US ADP data caused only a brief dip with Trump saying talks with China were going well soon after. Buyers were quickly seen after the ISM non-manufacturing data, traders noting gains in new orders and employment as well as a dip in the headline. Gains extended to near 109.

EUR/USD moved higher on the ADP data but after touching a high of 1.1115 on the ISM non-manufacturing report subsequently erased all of its gains.

US North American Summary and Highlights 4 Dec (0101-QDFT-C02)

GBP surged in early Europe with no obvious cause, ahead of an upward revision to the UK services PMI. US data heled extend GBP/USD gains to 1.31 with little subsequent correction. EUR/GBP fell close to .8450.

USD/CAD slipped around 50 ticks as the BoC saw positives in the global and Canadian economies while leaving rates unchanged, eventually falling below 1.32. AUD/CAD slipped but AUD/USD erased earlier losses.

Swedish services PMI fell to their lowest level since 2013, and EUR/SEK initially rose in response, but fell back through the morning helped by the equity market recovery

Bonds:

US North American Summary and Highlights 4 Dec (0101-QDFT-C03)

USTs built on their latest whippy daily reversal over the day as the Bloomberg report claiming trade talk progress and Trump sticking to a 'going well' comment rather than negatives helped US10s back above 1.75%, as S&P recovered above 3090/3100. Better NM ISM details (orders, employment) also focused on rather than the headline or the weak ADP print. 2s +4.4bps @ 1.58%, 5s +6.4bps @ 1.61%, 10s +6.3bps @ 1.78%, 30s +6.4bps @ 2.23%.

Agency Spreads: Freddie/Fannie 5s -1.0/-1.1 bps, 10s -0.1/-0.9 bps.

Swap Spreads: 2s +0.61bps, 5s +0.25bps, 10s +0.06bps.

Equities

Much of the Tuesday plunge was corrected with the help of a Bloomberg source story and Trump comments revising hopes the US and China could reach a trade deal. This outweighed soft US economic data. Energy led broad based gains, financials also firm.

Still to come -

Data

00:30 GMT - AU: Retail Sales (Oct) 4cast: -0.1% m/m (Mkt: 0.3 Prev: 0.2)

00:30 GMT - AU: Trade Balance (Oct) 4cast: 6500AUD mn (Mkt: 6800 Prev: 7180)

05:30 GMT - NL: HICP (Nov) % m/m (Prev: 0.6)

05:30 GMT - NL: HICP (Nov)% y/y (Prev: 2.8)

07:00 GMT - DE: Factory orders (sa) (Oct) % m/m (Mkt: 0.4 Prev: 0.3)

08:00 GMT - ES: Industrial Production (Oct) % m/m (Mkt: -0.5 Prev: -0.8)

08:00 GMT - ES: Industrial Production (Oct) % y/y (Mkt: -0.4 Prev: 0.8)

10:00 GMT - EU: Retail Sales (Oct) % y/y (Mkt: 2.2 Prev: 3.1)

10:00 GMT - EU: GDP (SA) (3Q Final) % q/q (Mkt: 0.2 Prev: 0.2)

10:00 GMT - EU: Retail Sales (Oct) % m/m (Mkt: -0.5 Prev: 0.1)

10:00 GMT - EU: GDP (SA) (3Q Final) % y/y (Mkt: 1.2 Prev: 1.2)

10:00 GMT - GR: Unemployment (Sep) % (Prev: 16.7)

13:30 GMT - CA: Trade Balance (Oct) 4cast: -1.7CAD bn (Mkt: -1.39 Prev: -0.98)

13:30 GMT - US: Trade Balance (Oct) 4cast: -48.3USD bn (Mkt: -48.9 Prev: -52.5)

13:30 GMT - US: Initial Claims (30 Nov) k (Mkt: 215 Prev: 213)

15:00 GMT - CA: Ivey PMI (Nov) (Prev: 48.2)

15:00 GMT - US: Durable Ex Transportation (Oct F) (Mkt: 0.6 Prev: 0.6)

15:00 GMT - US: Factory Orders (Oct) % m/m (Mkt: 0.1 Prev: -0.6)

15:00 GMT - US: Durable Goods Orders (Oct F) (Mkt: 0.6 Prev: 0.6)

23:30 GMT - JP: labor cash earnings (Oct) % y/y (Mkt: 0.3 Prev: 0.5)

23:30 GMT - JP: Household spending (Oct) 4cast: 3% y/y (Mkt: -2.5 Prev: 9.5)

Events

23:00 GMT - NZ: RBNZ Announces Bank Capital Review Decisions

12:45 GMT - CA: BoC's Lane gives economic progress report


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