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Europe roundup: Sterling tumbles to 1-week low on downbeat business PMI, Euro slumps as German business conditions deteriorate, European shares surge - Friday, November 22nd, 2019

Source FxWire Pro - Media Round Ups Friday, 22 Nov, 2019 11:32:43 GMT
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Market Roundup

  • Oil at fresh two-month high
     
  • Gold gains as U.S.-China trade uncertainty linger
     
  • EZ Markit's flash composite PMI 50.3
     
  • German Markit’s composite PMI 49.2
     
  • German Markit’s manufacturing PMI 43.8
     
  • German Markit’s services PMI 51.3

Economic Data Ahead

  • (0830 ET/1330 GMT) Statistics Canada is expected to report that retail sales declined 0.1 percent in September, while excluding autos, retail sales are likely to have risen 0.1 percent, after falling 0.2 percent in the previous month.
     
  • (0945 ET/1445 GMT) Financial firm Markit releases U.S. preliminary Manufacturing PMI for the month of November. The index is likely to stay have increased to 51.5 from a final reading of 51.3 in the previous month.
     
  • (0945 ET/1445 GMT) Markit Economics will release preliminary U.S. composite PMI for the month of November. The index posted a final reading of 50.9 in the prior month.
     
  • (0945 ET/1445 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index rose to 51 in November after printing a final reading of 50.6 in September.
     
  • (1000 ET/1500 GMT) The University of Michigan is likely to report that U.S. preliminary consumer sentiment index remained unchanged at 95.7 in November.
     
  • (1100 ET/1600 GMT) Federal Reserve Bank of Kansas City issues manufacturing activity index for the month of November. The indicator stood at 8 in the previous month.
     
  • (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count. 
     

Key Events Ahead

  • No significant event scheduled

FX Beat

DXY: The dollar index rose, extending gains for the fourth straight session, as investors awaited pending developments in U.S.-China trade negotiations amid growing skepticism about reports of progress in the talks. The greenback against a basket of currencies traded up at 98.00, having touched a low of 97.68 on Monday, its lowest since November 5.

EUR/USD: The euro plunged to a 1-week low after data showed eurozone business growth almost ground to a halt this month. The economy's IHS Markit's flash composite Purchasing Managers' Index came in at 50.3, down from October's 50.6. Moreover, data showing German business conditions continued to deteriorate in November further dented the bid tone around the major. The European currency traded down at 1.1055, having touched a high of 1.1097 on Thursday, its highest since November 7. Immediate resistance is located at 1.1091, a break above targets 1.1123. On the downside, support is seen at 1.1036, a break below could drag it below 1.1002.

USD/JPY: The dollar tumbled against the safe-haven Japanese yen amid persisting concerns over the prospects of an interim trade deal being struck between United States and China this year. The major was trading 0.1 percent down at 108.53, having hit a low of 108.27 on Thursday, its lowest since November 14. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Markit PMI's and Michigan consumer sentiment index. Immediate resistance is located at 108.85, a break above targets 109.15 (November 13 High). On the downside, support is seen at 108.36, a break below could take it near at 108.03.

GBP/USD: Sterling slumped to a 1-week low, weighed down by a manifesto from the British Labour Party setting out radical plans to raise tax and nationalise infrastructure. Moreover, data showing British business suffered its deepest downturn since mid-2016 this month as the approach of a national election exacerbated uncertainty about Brexit further undermined the bid tone around the British pound. The major traded 0.3 percent down at 1.2873, having hit a low of 1.2863 earlier, it’s lowest since November 14. Investors’ attention will remain on the development surrounding the general elections, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2949, a break above could take it near 1.3000 (October 22 High). On the downside, support is seen at 1.2859, a break below targets 1.2821. Against the euro, the pound was trading 0.3 percent down at 85.88 pence, having hit a high of 85.21 on Monday, it’s highest since May 6.

USD/CHF: The Swiss franc slumped to a 1-1/2 week low after Commerce ministry spokesman Gao Feng told reporters that China will try hard to resolve the dispute and the Wall Street Journal reported that top U.S. negotiators had been invited to Beijing for a new round of face-to-face talks. The major trades at 0.1 percent up at 0.9942, having touched a high of 0.9948 earlier, it’s highest since November 12. On the higher side, near-term resistance is around 0.9958 and any break above will take the pair to the next level till 0.9983. The near-term support is around 0.9883, and any close below that level will drag it till 0.9859.

Equities Recap

European shares rallied after data showed activity in the Euro zone’s dominant services industry rose at a much weaker pace than expected.

The pan-European STOXX 600 index advanced 0.4 percent at 403.87 points, while the FTSEurofirst 300 rallied 0.4 percent to 1,581.66 points.

Britain's FTSE 100 trades 1.1 percent up at 7,320.48 points, while mid-cap FTSE 250 rose 0.3 to 20,429.84 points.

Germany's DAX surged 0.2 percent at 13,158.97 points; France's CAC 40 trades 0.2 percent higher at 5,893.56 points.

Commodities Recap

Crude oil prices rallied to their highest in nearly two months on news of a likely extension of production cuts among major producers. International benchmark Brent crude was trading 0.5 percent up at $63.93 per barrel by 1023 GMT, having hit a high of $64.02 earlier, its highest since September 24. U.S. West Texas Intermediate was trading 0.2 percent higher at $58.39 a barrel, after rising as high as $58.64 on Thursday, its lowest since September 23.

Gold prices surged as doubts persisted over the prospects of an interim trade deal being struck between United States and China this year. Spot gold was trading 0.5 percent up at $1,471.68 an ounce by 1025 GMT, having touched a high of $1,478.70 on Wednesday, its highest November 7. U.S. gold futures rose 0.3 percent to $1,467.40.

Treasuries Recap

European government bond yields edged lower after data showed euro zone business growth almost ground to a halt this month. Germany's benchmark 10-year bond yield declined nearly three bps to -0.35%, down nearly 2 bps for the week. Italy's 10-year bond yield eased off highs and was broadly flat at 1.29 percent.

The Japanese government bond prices eased, sending yields higher across the curve. The benchmark 10-year JGB futures fell 0.32 point to 153.1. The 10-year JGB yield rose 3 basis points to minus 0.085 percent. The 20-year JGB yield increased 2.5 bps to 0.265 percent. The 30-year JGB yield rose 2 bps to 0.410 percent. In the middle of the yield curve, the five-year yield increased 2.5 bps to minus 0.185 percent. At the short end of the curve, the two-year JGB yield rose 1.5 bps to minus 0.185 percent.

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