The Opening Bell: Where currencies start on Friday, November 30, 2018

FED FOMC minutes from the November 8 meeting just out:
– Almost all policy makers say rate hike warranted ‘fairly soon’.
– Many said it might be appropriate at some upcoming meetings to begin putting greater emphasis on evaluating incoming data.
Nothing else of note, and very little movement initially from it.

Yesterday the big news was the USD sell off after Powell’s speech, which stole some of the Meeting minutes thunder, with the highlight being the comment that they are just below the neutral rate. As the Market digested this yesterday the USD came back a little, as traders wondered if it got a touch ahead of itself.  Previously the Fed has stated that it is likely to go a bit above neutral anyway, so if the neutral rate is circa 2.5-3.5%, by definition we are indeed just below that. One hike this year and four next year still only takes us to a 3.5% Federal Funds rate, so maybe the comment was not as dovish, and not as big a change in the Feds thinking as it appears.

NZ Business confidence came out at -37.1, the same as last time. At the extremes this was really market moving, but for now has fallen somewhat to the background.

Australian Private Capital Expenditure missed, but it is a volatile data point, and there was little reaction.

Teresa May is out saying the analysis shows the negotiated Brexit Deal is the best deal, and the EU has made it clear it is the only deal. A fairly healthy dose of scaremongering one expects, and a few more headlines like this from May before the December 11th vote will be no surprise.

Nothing too major on the economic calendar for the weekend.

Global equity markets are mixed, Dow -0.24%, S&P 500 -0.19%, FTSE +0.49%, DAX -0.01%, CAC +0.46%, Nikkei +0.39%, Shanghai -1.32%.

Gold prices are up 0.2% trading at $1,224 an ounce. WTI Crude Oil prices have bounced from their lows, currently up 0.2% on this time yesterday trading at $51.88 a barre


Dollar rallies as oil-linked currencies skid amid crude’s price drop

The U.S. dollar inched higher versus its main rivals on Friday, as U.S. traders returned from the Thanksgiving holiday, and investors closely tracked an intensifying decline in crude oil.

The global oil benchmark, Brent for January delivery LCOF9, +1.97%  was down nearly 5%. Growing output continues to weigh on the oil price, despite a recent cold snap. The price drop hurt financial assets across the board, including stocks and commodity-linked currencies.

Don’t miss: 6 key reasons the ‘bottom is falling out’ of oil prices on Black Friday

The Norwegian krone USDNOK, -0.4397%  led developed market losers, trading near its lowest level since May 2017, with one dollar fetching 8.5915 krone, up from 8.5349 late Thursday in New York. Canada’s dollar USDCAD, -0.2947%  also weakened versus its U.S. rival, leaving the greenback to rise to C$1.3208, from C$1.3190.

In emerging markets, oil-linked currencies, the Russian ruble USDRUB, +0.4221%  drifted sharply down, recently at 66.224 ruble per one dollar, compared with 65.603 ruble late Thursday.

As for the greenback’s trade against major rivals, the ICE U.S. Dollar Index DXY, -0.12%  was up 0.1% at 96.830, headed for a 0.4% gain this week.

Elsewhere, European markets continued worrying about Brexit developments ahead of a key summit this weekend.

The future for Gibraltar — a British-held peninsula in the south of Spain — following Brexit is the latest hurdle to emerge during the U.K.’s divorce from Brussels, with Spain demanding to get more of a say in the future of the key transport hub.

Meanwhile, embattled U.K. Prime Minister Theresa May has been trying to appeal to the British public to support the deal she agreed to with the EU on Thursday. The deal had led the pound to climb higher.

On the data front, November PMIs for the eurozone underperformed consensus estimates, with the composite index coming in at 52.4, versus 53 expected, which also weighed on the euro. A reading of at least 50 indicates improving conditions.

The weaker-than-expected data dealt a blow to any investors looking for a eurozone rebound in the fourth quarter, market participants said.

“Continued weakness will have many beginning to doubt the ECB’s ability to hike rates next year,” said Win Thin, global head of currency strategy at Brown Brothers Harriman. “Quantitative easing will undoubtedly end in December but talk of another TLTRO [targeted longer-term refinancing options] is feeding into a more dovish take on the ECB.”



Image result for EMERGING MARKETS-Emerging stocks and currencies fall as Fed stays hawkish

MSCI currency index on track for worst day in over a month

* Turkish lira biggest loser among EM currencies

Nov 9 (Reuters) – Emerging market shares and currencies fell to their lowest in a week on Friday, tracking a global downturn in sentiment after the U.S. Federal Reserve reaffirmed its stand on tightening monetary policy, strengthening the dollar.

A string of rate hikes by the Fed has sucked money out of emerging markets this year, and, with another rise priced in for December, currencies across the developing world are likely to weaken further.

“It is generally a bit of a risk off day today. Markets were expecting a hike in December and there hasn’t been any significant shift in their (Fed) stance,” aid Paul Fage, senior emerging markets strategist at TD Securities.

“EM is going to take its cue from what euro/dollar is doing,” added Fage. The euro was 0.26 percent lower against the dollar.

The emerging market currencies index was down 0.5 percent, on track for its worst day in over a month with the Turkish lira leading losses, down 0.8 percent after the Turkish treasury canceled bond issues for next week due to savings measures.

The South African rand also weakened, down 0.7 percent, giving back gains from earlier this week, as investors took profits and awaited the next market catalyst.

The MSCI’s benchmark emerging equity index fell 1.5 percent with Chinese equities falling for their fifth-straight session.

Over the week, mainland China stocks were weighed down by a mix of weak data, rising pressure on financial companies and concerns of a new board in Shanghai disrupting the already weak A-share market amid looming trade tensions with the U.S.

Hong Kong faced its worst intra-day fall in over two-weeks, down 2.4 percent.

Stocks in Russia declined more than one percent led by energy stocks, while Johannesburg’s blue chips fell for the second consecutive day.

The Polish zloty was on pace to post its biggest weekly decline since late September, while Hungary’s forint clocked weekly loses for a second straight week.

Hungarian Prime Minister Viktor Orban on Friday said the country must be cautious about adopting the euro and should remain open towards other parts of the world.

The Czech Koruna fell 0.2 percent as data showed the consumer price rise in October to be below forecast but in line with the central bank’s target.

For GRAPHIC on emerging market FX performance 2018, see

For GRAPHIC on MSCI emerging index performance 2018, see

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Agamoni Ghosh and Susan Mathew in Bangalore, Editing by William Maclean)


EMERGING MARKETS-LatAm stocks post worst week in three months, currencies dip

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updates stock and currency prices, adds quote) Nov 9 (Reuters) – Latin American stocks recorded their worst weekly performance in three months on Friday, with muted sentiment toward Mexico persisting a day after a senator’s proposal to cap and eliminate certain banking commissions. The proposal has tarnished investor sentiment toward Mexican President-elect Andres Manuel Lopez Obrador’s government, which has yet to take office, despite his signaling on Friday he would not support the bill. The proposal comes less than two weeks after an already started airport megaproject was scrapped following a public consultation. The MSCI index of Latin America stocks fell 0.7 percent on the day, which combined heavy losses in the previous three sessions consigned it to a 3.7 percent drop for the week. While Mexico’s benchmark stock index was little changed after retracing heavy intraday losses following Lopez Obrador’s statement on the banking bill, sentiment toward banking shares remaining cautious. Grupo Financiero Banorte SAB de CV lost 1.8 percent on the day. “The (senator’s) bill adds to the perception of market unfriendliness of the new administration, coming shortly after the airport cancellation,” wrote Dirk Willer, managing director and head of emerging market strategy at Citigroup, in a client note. “We have a bearish bias over the medium term, as (Lopez Obrador) has promised to hold more referendums, possibly over energy reform.” Mexico’s peso firmed about 0.5 percent, making up a fraction of its 1.6 percent slide on Thursday. The country’s central bank has its next meeting scheduled in less than a week’s time. Juan Carlos Alderete, a senior economist for Mexico with Banorte said he expects the central bank to raise rates by 25 basis points to 8 percent, citing factors including higher upside risks to inflation and the high volatility involved in the peso’s recent weakness. Regional foreign exchange markets fared only slightly better, but a firming in Brazil’s real on incoming President Jair Bolsonaro’s comments on pension reform held the MSCI index of Latin America currencies from declining more than 0.6 percent. The right-wing politician said he would like to see some form of pension reform, much watched for among investors, passed this year to make it easier to deal with the fiscal deficit after he takes office on Jan. 1, 2019. The Bovespa index was flat as gains among financial stocks were largely negated by losses in materials with iron ore miner Vale falling 4.2 percent. In Argentina, the peso firmed about 0.2 percent, with traders ascribing the modest move to the central bank adjusting minimum cash balances to curb speculation in the currency.

However, local stocks fell about 2.7 percent on broad-based losses, as the overhang of a decline on Wall Street sent the benchmark to its lowest in more than a week and a half. Chile’s stocks benchmark fell 0.9 percent, as all but four stocks on the benchmark declined.


EMERGING MARKETS-Emerging currencies slide on higher oil, strong dollar

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Nov 12 (Reuters) – Emerging market stocks and currencies fell on Monday, pressured by a strong dollar and rising oil prices with net crude importers bearing the brunt.

The MSCI index of emerging market currencies fell 0.3 percent as the dollar built on last week’s gains and hit a 16-month high, while oil prices rose by more than one percent on Monday as top exporter Saudi Arabia announced a December supply cut.

This hit currencies of net oil importers such as the Indian rupee and the Turkish lira.

“The recent rebound in oil prices is a reminder that it will become increasingly difficult for twin deficit currencies – rupee, rupiah and peso – to smooth currency volatility via rate hikes without hurting the economy, and through interventions without depleting reserves,” said Stephen Innes, head of Asia Pacific trading at Oanda.

But, the bounce in oil prices lifted the currency and stocks in Russia – a net exporter of oil – with the rouble up 0.6 percent and the Moscow stock exchange index climbed by 0.5 percent aided also by a delay to the imposition of U.S. sanction on aluminium giant Rusal.

“Oil is improving sentiment for the rouble today but there is also another driver for the rouble – Rusal sanctions. Some deadlines were extended by U.S. authorities. And we are not seeing any other negative news related to sanctions,” said Vladimir Miklashevsky, a senior economist at Danske Bank.

The Sri Lankan rupee weakened after dollar-bonds fell as President Maithripala Sirisena dissolved parliament on Friday night and called an election for Jan. 5 in a move that will likely deepen the country’s political crisis.

The Chinese yuan extended losses, after its worst week since July as soft economic data last week showed cooling of the economy, while South Africa’s rand was weaker by 0.3 percent as yield-seeking investors continued to back the dollar.

MSCI’s benchmark emerging equity index was down 0.6 percent, trading at its lowest level this month as exchanges in South Korea, India and South Africa declined.

China mainland stocks , however, shined through, snapping a one-week losing streak boosted by a series of stimulus measures, notably the securities regulator making it easier for companies to buy back shares, possible implementation of large scale tax cuts.

Focus also remains on U.S. Vice-President Mike Pence’s attendance at the Association of South East Asian Nations summit this week, which could see him provide clarity on U.S. intentions for improving trade relations with China.

“Trade is always going to be a concern in the current environment for Asia, as about one third of all global trade goes through the region, and it is slowing, which means slower incomes growth across the region,” said Robert Carnell, chief economist and head of research at ING Asia.

In Eastern Europe, Romania’s leu touched its lowest since May last year as consumer price inflation slowed in October.


EMERGING MARKETS-Mexican peso falls most among Latin American currencies

Image result for EMERGING MARKETS-Mexican peso falls most among Latin American currenciesCurrencies in Mexico and Brazil weakened on Monday in line with emerging market currencies elsewhere as the dollar surged to 16-month highs and as concerns on global growth persisted. The euro and pound were weaker due to rising political risk in Italy and Britain, adding to the greenback’s gains from last week when the U.S. Federal Reserve signaled it would stay on its hawkish path. Risk appetite was also pressured by signs of slowing growth in China. The Mexican peso lost the most in the region, down 0.4 percent, while Brazil’s real declined 0.3 percent. The Chilean peso fell 0.3 percent and hit its lowest in a week. Stocks on Brazil’s Bovespa index climbed with energy and material shares leading gains. Financial markets in Colombia were closed for a local holiday.

Key Latin American stock indexes and currencies at 1254 GMT: