Markets await October Fed minutes
- Australia CB leading index m/m -0.1% vs. -0.4% previously
- Australia MI leading index m/m 0.1% vs. 0.1% previously
- Australia wage price index q/q 0.6% vs. 0.6%
- Switzerland ZEW economic expectations 0.0 vs. 18.3 previously
- US Building permits 1.15Mn vs. 1.15Mn; building permits m/m -11.0% vs. -3.8%
- US Housing starts 1.06Mn vs. 1.16Mn ; housing starts m/m4.1% vs. 3.8%
Later
- US Weekly Crude Oil inventories report
- FOMC Meeting minutes
- New Zealand Producer price index
The currency markets were mixed today ahead of the FOMC meeting minutes being the main fundamental risk for the day. The Asian trading session was relatively quiet on lack of any major economic releases. The Aussie was weak since the start after AUDUSD touched session highs of 0.7137 yesterday. The currency pair opened at 0.711 this morning before rallying to test session highs near 0.71 but quickly reversed back to trade -0.26% lower. The NZDUSD was also weaker, down -0.23% for the day as the Kiwi trades near yesterday’s lows of 0.645.
The Yen is looking to post another day of gains as the Greenback trades stronger. USDJPY is currently trading near 123.4 at the time of writing, up 0.02% for the day after the Greenback initially fell to session lows near 123.235 to establish short term support. USDJPY trades near yesterday’s highs, and a break higher could see new highs being posted in the near term.
The European trading session was also quiet with no major releases due. The EURUSD rallied 0.20% for the day as traders square off their short positions ahead of the FOMC minutes. EURUSD briefly touched a session high above 1.0686 before easing back lower.
Germany’s 2-year bond auction held today saw the yields dip to -0.38%, with expectations that the ECB will likely come out strongly in December with monetary policy easing.
The GBPUSD found support on BoE deputy Governor Broadbent’s comments who downplayed the inflation forecasts while coming hawkish noting that there was ‘no virtue in a 25bps rate cut‘. The GBPUSD rallied towards intraday highs of 1.5246 before giving back its gains to trade modestly lower at 1.5209.
The US trading session kicked off with the building permits and housing starts data which continued to remain mixed. Building permits for the month fell more than expected by -11.0% while housing starts remained strong posting another month of gains of 4.5%. The US Dollar initially reacted bearish to the news, but the markets are likely to remain sideways.
The October FOMC meeting minutes are due for release later today during the US trading session as investors weigh in for any hints on the likelihood for the December rate hike. The Fed had surprised the markets in October when it came out with a strongly hawkish report despite the prior month’s weak NFP print. Ahead of the FOMC release, the commodity markets remain bearish.
Commodities continue to remain bearish today especially after comments from China’s premiere who noted that China’s economy was facing considerably pressure. The comments came at an Asian Pacific economic cooperation summit. Gold prices are down -0.29% after a brief test to 1071 earlier in the morning, while WTI Crude Oil is down -0.15% for the day ahead of the weekly Crude oil inventories report.
