Daily Observations:

Asian equities rose together with US stock index futures, after the FBI said over the weekend that it maintains the view that Hillary Clinton’s handling of her emails wasn’t a crime. Safe haven assets such as the yen, Swiss franc and gold retreated.

US:

  • October non-farm payrolls rose 161,000, less than the expected 173,000 and the prior figure of an upwardly-revised 191,000. On a more positive note, jobs gains were across the board for most sectors, while wage growth remained strong – 0.4% month-on-month and 2.8% year-on-year increases, beating forecasts of 0.3% and 2.6% respectively.
  • The unemployment rate fell to 4.9% from 5.0%, as expected, while underemployment rate dropped to 9.5% from 9.7%. Labor participation rate declined to 62.8% from 62.9%.
  • The Fed’s Vice Chair Stanley Fischer said jobs and inflation could exceed the central bank’s targets, which may imply some tolerance for an overshoot.
  • The FBI said on Sunday its newly re-opened probe of Hillary Clinton’s emails found nothing to change its original decision not to indict her. The market is viewing this latest news as a positive, at least in the short term, as the US dollar rallied together with stock indices and futures while the yen sank.
  • The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was 0.2% higher today, and looks set to break a losing streak of six straight days.
  • The S&P 500 Index fell 0.2% last Friday, after erasing a 0.5% advance. However, its futures gapped higher this morning and rose by as much as 1.5% following the FBI’s latest statement absolving Clinton.
  • The benchmark 10yr Treasury yield fell 4bps to 1.78% on Friday, but erased losses this morning due to overnight USD strength.

Canada:

  • 43,900 jobs were added in October, down from 67,200 the previous month but soundly exceeding the 15,000 drop that was expected. The better-than-expected employment gains were driven by part-time job growth, which increased by 67,100, offsetting the 23,100 decline in full-time employment.
  • The trade deficit in September ballooned to a record level of C$4.1 billion, as export volumes fell 0.8% month-on-month. According to Statistics Canada, the spike in trade deficit was largely on the back of a one-time purchase related to an offshore oil project which was “exceptionally large”, and excluding that, the trade gap would have narrowed instead.

UK:

  • Prime Minister Theresa May, speaking for the first time since last week’s Article 50 ruling, said over the weekend that Brexit won’t be derailed by judges or lawmakers.

Australia:

  • According to BlackRock Inc., Australia could be stripped of its top credit score by S&P Global Ratings as early as next month if the government’s interim budget review shows further deterioration. Australia is currently the highest yielding issuer among 10 nations with top ratings from the 3 major assessors, and a downgrade could lessen the appeal of Aussie debt for international investors who hold the majority of the country’s sovereign notes.

Hong Kong:

  • Hong Kong property shares tumbled by the most since January after the government announced shock measures to cool the world’s least affordable housing market.
  • In a televised conference, the government announced plans last Friday to raise the stamp duty to 15% for all residential purchases, except for first-time buyers who are permanent residents, up from the existing 8.5% for non-foreigners. For foreigners, the new stamp duty has been raised to an effective 30%, up from 15%.

Precious Metals:

  • Spot gold was 1.3% lower earlier at $1,288.11/Oz, following news that the FBI has cleared Clinton of any wrongdoing, thus dampening demand for safe havens.
  • For gold to maintain its upward momentum, staying above the 200-week moving average of $1,270/Oz will be key.
  • Spot silver declined today as well, and was 1.6% lower at $18.1423/Oz; the metal however has managed to stay above the $18/Oz support handle.

Oil:

  • Crude oil for December delivery dropped 1.3% in New York, after Reuters reported that Saudi Arabia threatened to raise output if other members didn’t agree to cuts. Losses were erased after OPEC Secretary-General Barkindo eased some tension, saying that no threat was made. Crude oil futures as 1.3% higher at $44.64/bbl earlier today.

 

USDSGD:

  • Spot 1.3884
  • USDSGD rose for the first time in a week, by as much as 0.4% to 1.3886 on the back of broad USD strength.
  • On a longer-term basis, the currency pair could find decent support at the 1.3800 level and some resistance at the 1.4000 psychological handle. A 1.4200 target remains a realistic possibility over the next 12 months.

 

AUDUSD:

  • Spot 0.7674
  • AUDUSD was little changed earlier today, erasing gains after the currency pair briefly rose above the 0.7700 handle.

 

USDCAD:

  • Spot 1.3388
  • USDCAD bounced off the 1.3300 handle earlier today before paring back most of its losses. The sudden drop could be attributed to a knee-jerk reaction to the FBI’s reaffirmation over the weekend that Clinton’s use of private email servers wasn’t a crime.

 

USDCNH:

  • Spot 6.7852
  • The PBOC weakened its fixing by 0.31% to 6.7725 to the dollar, the most since 21st Oct.
  • USDCNH rose 0.2% to 6.7853, as the currency pair looks odds on to test the key 6.8000 resistance again in the coming days.

 

USDJPY:

  • Spot 104.21
  • Overnight US dollar strength and renewed risk appetite among investors drove USDJPY higher by as much as 1.3% at 104.48 earlier today.

 

GBPUSD:

  • Spot 1.2460
  • After gaining almost 3% over the past sessions, GBPUSD looks poised to pare some of its gains after falling by as much as 0.5% to 1.2450 earlier today.
  • Given the US presidential elections this week, coupled the Brexit uncertainties lingering in the background, more volatility could be in store for GBPUSD.
  • The 1.2100 handle remains a key support level, while 1.2800 acts as an important resistance handle.

 

© Jachin Capital Pte Ltd

UEN: 201419754M


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