OVERNIGHT DATA AND HEADLINES
• Crude prices rose and global equities markets rallied, with the major U.S. indexes setting record highs, on renewed optimism the U.S. and China are nearing a deal to de-escalate a 16-month trade war that has crimped global growth. Progress was being made on an agreement's details, according to U.S. Commerce Secretary Wilbur Ross, who said trade talks were set to continue with a telephone call on Friday as both sides seek to hammer out a "phase one" pact.
• U.S. retail sales rebounded 0.3% in October, but consumers cut back on purchases of big-ticket household items and clothing, which could temper expectations for a strong holiday shopping season. Economists polled had forecast retail sales gaining 0.2% in October. Compared to October last year, retail sales advanced 3.1%. Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.3% last month. Data for September was revised lower to show the so-called core retail sales slipping 0.1% instead of being unchanged as previously reported.
• October Industrial Production fell by 0.8% MoM, double expectations of a 0.4% decline while Capacity Utilisation was 76.7%, down from 77.5% and below expectations of 77.0%. Across the border, Canadian Existing Home Sales were flat, falling well short of expectations of +1.3%.
• Wall Street's main stock indexes closed at record levels - Dow Jones rose 223 points (0.8%) to 28,004, S&P 500 gained 24 points (0.77%) to 3,120.46 and the Nasdaq added 62 points (0.73%) to 8,540.
• Nigel Farage, the Brexit Party leader, decided to step down from 43 additional constituencies where Labour won, facilitating the way for a Conservative majority. GBP jumped on the headlines which lift chances of the upcoming Parliament passing Johnson’s Brexit deal.
• UK PM Johnson said over the weekend that all Conservative Party candidates have pledged to back his Brexit deal.
• The U.S. DXY was lower, falling 0.17% from 98.22 down towards 97.97, as optimism for the ongoing trade talks with China buoyed trade-linked currencies.
• EUR jumped higher from 1.1015 to 1.1057.
• GBP was higher, rising from 1.2865 lows and breaking through 1.2900 (1.2920 highs on Brexit optimism).
• JPY weakened 0.36% from 108.50 up towards 108.90.
• CNY flitted either side of the key 7 per-dollar level - opened at 7.0047 per dollar, quickly strengthened to 6.9982 before settling back at 7.0081.
• AUD found support at 0.6777, jumping up to 0.6824 highs.
• NZD increased from 0.6370 towards 0.6410 highs.
• AUDNZD found support at 1.0620 lows however jumped up towards 1.0655.
• AUDEUR improved from 0.6150 up towards 0.6170.
• U.S. Treasury yields rose as fresh hopes that the United States and China will reach a deal to de-escalate their trade war boosted risk appetite, and reduced demand for U.S. government bonds.
• Benchmark 10-year notes dropped 4/32 in price to yield 1.83%, up from 1.815% late Thursday.
• Two-year notes dropped 01/32 in price to yield 1.612%.
• Gold prices slipped, on track to break a three-session winning streak as stock markets hit record highs following comments from U.S. officials. Spot gold was down 0.3% at $1,466.78 per ounce.
• China's steel rebar futures clocked their biggest gain in nine weeks, fuelled by demand , while a raft of stimulus measures by the government to shore up its economy also boosted sentiment.
• Copper and other base metals prices were set for weekly falls as concerns that weakening global economic growth is curtailing demand outweighed comments by a U.S. official that a trade deal with China was close. Benchmark LME copper ended up 0.6% at $5,849 a tonne but down more than 1% on the week, slipping towards September's two-year low of $5,518.
• Oil futures gained nearly 2% as comments from a top U.S. official raised optimism for a U.S.-China trade deal, but worries about increasing crude supplies capped prices. Brent crude gained $1.02 (1.6%) to settle at $63.30 a barrel, while West Texas Intermediate crude rose 95 cents (1.7%) to settle at $57.72 a barrel.
ECONOMIC CALENDAR TODAY
• No Australian Economic data today
• US – November NAHB Housing Market index
AUD gained traction in late NY trading rising above the 0.6800 towards 0.6824 highs (0.27%), boosted by renewed hopes of U.S. and China coming to terms on trade.
In an interview with Fox Business Network on Friday, United States Commerce Secretary Wilbur Ross said that there will be a call on trade between officials on Friday and noted that there was a very high probability that they will be able to reach a trade deal with China.
A quiet trading day expected with no major data releases and a relatively quiet week ahead on the data front.
Hong Kong protests and developments in a US-China phase-one trade deal remain the biggest threats to the global risk environment.
The RBA, ECB and FOMC minutes will all be released this week with the latter being closely watched after October’s rate cut. Thursday’s ECB Account of Oct Policy Meeting will provide the final words of outgoing ECB President Draghi while Friday will bring one of the first words from new ECB President Lagarde.
USD & US Treasury yields heavy after data, AUD lifts. Safe havens yen, USD, CHF get sold, AUD/JPY climbs above 74.15
AUD climbs steadily through NY trading, 55 day moving average pierced at 0.6815.Little pullback seen - AUD near day's high late in the session.
Daily RSI rises & cloud top supports, those are concerns for shorts. Monthly RSI lean bearish; resistance levels now @ 10 & 21-DMAs (0.6848 / 0.6855).