FX News Today
European Fixed Income Outlook: The December 10-year Bund future opened at 160.64, marginally higher than the close of 160.60 on Monday. The 10-year cash yield is down -0.4 bp at 0.366% in opening trade and, the 10-year Treasury yield down -0.2 bp at 3.061% as stock markets remain pressured by tech stock worries, fresh troubles for the already beleaguered car sector, ongoing trade tensions and in Europe Brexit uncertainty amid the ongoing political drama in London. BoE Governor Carney and colleagues testify to lawmakers today and will clearly also be quizzed on the BoE’s reaction to a possible hard Brexit, especially after Carney suggested at the last BoE meeting that no-deal scenarios could actually lead to rate hikes as well as cuts. Already released German PPI inflation moved up to 3.3% y/y as expected. Still to come is the UK CBI industrial trends survey for November.
Asian Market Wrap: 10-year Treasury yields are unchanged on the day at 3.063% and 10-year JGB rates climbed 1.0 bp to 0.092%. Asian stock markets headed south amid fresh pressure on tech stocks as software developers and semiconductor manufacturers led Wall Street lower yesterday. Japanese automakers were also under pressure after yesterday’s arrest of Nissan chairman Ghosn as concern about the lack of progress in trade talks continue to weigh on general sentiment. Topix and Nikkei lost -0.73% and -1.10% respectively. The Hang Seng is down -2.06% and the CSI 300 corrected -2.04% so far, while the ASX closed with a loss of -0.38%. US futures are also heading south, led by Nasdaq futures and oil prices have fallen back to levels just under USD 57 per barrel, after reaching an overnight high of USD 57.44 per barrel.
Charts of the Day
Main Macro Events Today
- RBA’s Governor Philip Lowe Speech – Governor Lowe (Tuesday) speaks on “Trust and Prosperity.”
- Inflation Report Hearings – Testimony on inflation and the economic outlook before Parliament’s Treasury Committee.
- BOE’s Governor Carney speech.
- US Housing Starts and Building Permits – Expectations – Housing starts are estimated to rebound 0.7% to a 1.210 mln pace in October, partially reversing a 5.3% drop to 1.201 mln in September that was likely due to Hurricane Florence.
- German Buba President Weidmann and Gov Council Member Wilkins speeches
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Andria Pichidi
Market Analyst
HotForex
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