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• Wall Street kicked off the week with a positive vibe, as the Dow Jones climbed 0.9%, the S&P 500 inched up 0.2%, and the Nasdaq nudged 0.1% higher. Treasury yields took a breather, with the 10-year dropping 13 basis points to 4.26%. Meanwhile, oil prices slipped, with crude shedding 3.2% to $68.95 per barrel. The Aussie dollar danced between 0.6487 and 0.65495 against the greenback, before settling at 0.6505/10 as Asia prepared to open shop.
• Asian markets closed with mixed results. Japan’s Nikkei shone bright, jumping 1.3%, while Hong Kong’s Hang Seng and Shenzhen’s index stumbled, losing 0.4% and 0.5% respectively. Down under, the ASX managed a 0.3% gain, with real estate and healthcare sectors leading the charge. The Aussie dollar had a rollercoaster day, starting at 0.6507, peaking at 0.6549 by midday, before retreating to 0.6517 as local trading wrapped up.
• European bourses hit the ground running, with the Stoxx up 0.7%, FTSE adding 0.4%, CAC gaining 0.8%, and DAX rising 0.6%. Across the pond, US 10-year yields eased 6 basis points to 4.34%. Brent crude faced headwinds at $74.55 a barrel. The euro and sterling felt the weight, touching lows of 1.0429 and 1.2535 respectively against the dollar.
• As London broke for lunch, Germany’s IFO business climate index came in at 85.7, just shy of the 86.0 forecast, while IFO expectations surprised slightly on the upside (87.2 vs 87.0 expected). The euro and pound clawed back some ground, reaching 1.0480 and 1.2565.
• The New York morning was relatively quiet, with markets shrugging off some softer-than-expected second-tier data. October’s Chicago Fed National Activity Index printed at -0.40, missing the -0.20 forecast, while November’s Dallas Fed Manufacturing Activity Index landed at -2.7, slightly below the -2.4 expectation.
• Major currencies saw mixed action. The greenback initially softened as US yields dipped, allowing the euro and sterling to reach highs of 1.05305 and 1.2613 respectively. Other pairs saw muted movement until the dollar regained its footing ahead of the London fix, pushing USD/CAD to fresh highs of 1.3992.
• On the geopolitical front, reports emerged of a potential breakthrough between Israel and Lebanon, with an agreement to end the conflict with Hezbollah on the table. The Israeli Security Cabinet was slated to convene on Tuesday to cast their votes on the matter.
Upcoming Events to Monitor:
• JP – Oct. PPI Services y/y
• EU – ECB’s Villeroy Speaks
• US – Nov. Philadelphia Fed Non-Manufacturing Activity
• US – 3Q. House Price Purchase Index q/q
• US – Nov. Conf. Board Consumer Confidence and Nov. Conf. Board Expectations
• US – Nov. Board Present Situation
• US – Oct. New Home Sales
• US – Nov. Richmond Fed Business Conditions and Richmond Fed Manufact. Index
• US – Nov. Dallas Fed Services Activity
• US – FOMC Meeting Minutes
Mid-market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6502 |
| AUD/NZD | 1.1129 |
| AUD/JPY | 100.27 |
| AUD/CNH | 4.7136 |
| AUD/EUR | 0.6196 |
| AUD/GBP | 0.5174 |
| AUD/HKD | 5.0601 |
Chart of the day
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