US equities pared losses after a stop-gap US spending bill was agreed, the S&P500 closing down 0.1%. Bond yields fell and the defensive US dollar rose slightly. Commodities, Brent crude oil futures fell 0.6% to $50.00, copper fell 1.3%, iron ore rose 1.6% to $159.95 – a nine-year high, and gold rose 0.2%.
AUD/USD: 0.7520 – 0.7568
EUR/USD: 1.2106 – 1.2163
GBP/USD: 1.3135 – 1.3379
USD/JPY: 103.83 – 104.15
USD/CAD: 1.2721 – 1.2892
NZD/USD: 0.7074 – 0.7104
AUD/JPY: 78.15 – 78.73
AUD/NZD: 1.0622 – 1.0655
The markets eyes are firmly focussed on the ongoing Brexit negotiations with hopes of a deal rising on Monday morning after yet both parties agreed to extend talks into Sunday afternoon. GBP/USD traded to a high of 1.3379 in early Monday trade after closing last week at 1.3222.
Germany announced a hard lockdown beginning on Wednesday in response to the growing Coronavirus cases. The emergence of some other Eurozone economies from nationwide lockdowns is expected to provide minimal support to growth in December. France entered the first phase of its gradual reopening on November 28 while Ireland ended its nationwide restrictions on December 2. Mobility levels are still far from normal and nationwide restrictions were largely extended in other Eurozone economies, especially Germany where COVID cases continues to rise.
AUD/USD continued to push higher into the weekend with the next level of offering interest expected ahead of 0.7600. Demand continues to dominate order books with the closest level expected ahead of 0.7500 and again between 0.7450/70.
Event Risk Data Today
Australia: The Federal government's MYEFO may be released sometime this week. We assess that the government's budget deficit forecast for 2020/21 will be trimmed, lowered from $213.7bn currently, to be approaching $200bn (10% of GDP).
New Zealand: Business conditions have been firming ahead of the November Business NZ PSI. Net migration is set to remain low in October due to continued border restrictions.
Euro Area: Industrial production will come under pressure in November due to restrictions at year end (market f/c: 2.0%).