Forex - US North American Summary and Highlights 6 Nov


 21:05 (GMT) 06 Nov

  [Forex Highlights]

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Overview

US North American Summary and Highlights 6 Nov (0101-PWMQ-C04)

The USD was generally firmer though a report that a US-China deal might be delayed to Dec weighed on USD/JPY and equities, while USTs corrected higher.

News highlights

- US Preliminary Q3 non-farm productivity -0.3% vs +0.9% exp, unit labor costs +3.6% vs 2.2% exp.

Currencies:

US North American Summary and Highlights 6 Nov (0101-PWMQ-C01)

The USD tone was generally positive through USD/JPY took a dip back below 109 on a Reuters report quitting US sources that a trade deal with China could be delayed until December. AUD/USD also dipped on the report, seeing AUD catch up with the CAD which saw modest losses after a dip in Oct's Ivey PMI to 48.2 from 48.7. Oil prices were also lower.

The EUR made modest gains through the European morning, helped by the larger than expected rise in German factory orders and the slight upward revision in the PMI services data. Eurozone retail sales were also stronger than expected on a y/y basis at 3.1%, though in line with expectations at 0.1% m/m. However EUR/USD failed to get back above 1.11 and slipped back in North America, testing 1.1063 support.

US North American Summary and Highlights 6 Nov (0101-PWMQ-C02)

GBP/USD slipped to 1.2850, though EUR/GBP gains were modest. Resignation of cabinet minister Cairns may have been awkward for the government but was on a personal scandal not a policy issue.

EUR/SEK traded lower from 10.70 to 10.65, though without an obvious trigger, and EUR/NOK followed lower after initially edging higher, breaking below the 10.1220 October 24 low.

Bonds:

US North American Summary and Highlights 6 Nov (0101-PWMQ-C03)

Better dip buyers returned in Asia after yields ran into yield resistance zones around recent highs, 10s having moved into the 1.85-9% zone. That range hold flushed out a few more buyers and coverers into the NY session, if contained ahead of the 10yr auction, which was well received, marginally extending gains. Fed speakers largely emphasised that policy was (only) slightly accommodative and about right. 2s -1.8bps @ 1.61%, 5s -3.8bps @ 1.63%, 10s -4.4bps @ 1.81%, 30s -4.1bps @ 2.30%.

Agency Spreads: Freddie/Fannie 5s +0.7/+0.2 bps, 10s -0.1/+0.1 bps.

Swap Spreads: 2s -0.43bps, 5s +0.35bps, 10s +0.09bps.

Equities

In a mostly subdued day a hit was taken on Reuters report that a US-China trade deal could be delayed until December, though was still seen as more likely than not to happen. A return to near neutral followed. A sharp slide in energy was the main mover.

Still to come -

Data

00:30 GMT - AU: Trade Balance (Sep) 4cast: 5000AUD mn (Mkt: 5050 Prev: 5926)

05:30 GMT - NL: HICP (Oct) % m/m (Mkt: 0.4 Prev: -1.1)

05:30 GMT - NL: HICP (Oct) % y/y (Mkt: 2.6 Prev: 2.7)

07:00 GMT - DE: Industrial Production (Sep) % m/m (Mkt: -0.3 Prev: -0.6)

07:00 GMT - DE: Industrial Production (Sep) % y/y (Mkt: -4.4 Prev: -4)

07:00 GMT - NO: Industrial Production, Manufacturing (sa) (Sep) % m/m (Mkt: Prev: -1.1)

07:00 GMT - NO: Industrial Production (sa) (Nov) % m/m (Mkt: Prev: -2.1)

08:00 GMT - CH: Foreign Currency Reserves (Oct) USD bn (Mkt: Prev: 777)

09:00 GMT - IT: Retail sales (sa) (Sep) % m/m (Mkt: 0.3 Prev: -0.6)

10:00 GMT - GR: Unemployment (Aug) % (Mkt: Prev: 16.9)

12:00 GMT - UK: BoE Bank Rate (07 Nov) 4cast: 0.75% (Mkt: 0.75 Prev: 0.75)

12:00 GMT - UK: BoE MPC - APF Total (Nov) 4cast: 435GBP bn (Mkt: 435 Prev: 435)

13:30 GMT - US: Initial Claims (02 Nov)k (Mkt: 215 Prev: 218)

20:00 GMT - US: Consumer Credit (Sep) USD bn (Mkt: 15 Prev: 17.901)

23:30 GMT - JP: Household spending (Sep) % y/y (Mkt: 7.7 Prev: 1)

23:30 GMT - JP: labor cash earnings (Sep) % y/y (Mkt: 0.1 Prev: -0.1)

Events

EU: Eurogroup Meeting

12:30 GMT - UK: BoE's Carney speaks in London

18:00 GMT - US: 30yr Bonds Auction (USD 19bn)

18:05 GMT - US: Fed's Kaplan speaks in Dallas


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