NEWS / Foreign Exchange

European Market Update

• *** ECONOMIC DATA ***
• SP Real Retail Sales Y/Y: 0.4% v 3.7%e [Lowest since June 2006]
• GE Oct Brandenburg CPI: M/M 0.4% v 0.2% prior || Y/Y 2.4% v 2.4% prior
• GE Brandenburg CPI was boosted by seasonal food, clothing, and energy prices as seen in the other German state CPI figures released towards the end of last week.
• GE Oct North Rhine-Westphalia CPI: M/M 0.1% v 0.3% prior || Y/Y 2.6% v 2.6% prior
• UK Sep Mortgage Approvals: 102K v 102Ke [Lowest since August 2005] || Prior revised from 109K to 108K
• Mortgage approvals fall to two-year lows signaling a cooling in the housing market, reinforcing signs of slowing seen in the pre-market release of HomeTrack house prices, which posted declines from last month [[Hometrack House Prices: M/M -0.1% v 0.0% prior  || Y/Y 4.4% v 5.0% prior [Lowest since Sept. 2006]] With many analysts noting that the burden of higher interest rate in the UK has grown, a continued cooling of the UK housing sector is expected to continue in the coming months.
• UK Sep Net Consumer Credit ??1.4B v ??900Me [Highest since January 2006] || Prior revised from ??1.0B to ??1.1B
• UK Sep Net Lending Secured on Dwellings: ??9.8B v ??8.3Be
• UK Sep Final M4 Money Supply: M/M 1.0% v 1.0% prior || Y/Y 12.8% v 12.8% prior
• UK Sep Final Sterling Lending: ??23.7B v ??23.0B prior
• *** FIXED INCOME/FX/COMMODITIES/ERRATUM ***
• Italy sold ?‚¬1.0B in 2.10% September 2017 BTPei with an average yield of 2.14% and a bid-to-cover of 1.868. The auction brought the amount outstanding for the issue up to ?‚¬10.91B. The Bid-to-cover compared to 1.40 at the previous auction.
• The Qatari oil minister said today that OPEC does not have any plans to price oil in any currency other than the Dollar despite the claim that the weak dollar is having a negative impact on the Gulf States. The comments contradict comments made by the Venezuelan energy minister this weekend claiming that OPEC was set to discuss the possibility of a currency basket for oil pricing at its mid-November summit.
• Front month crude oil continues to trade higher, breaking the $93/handle during Asian trading buoyed by the implementation of increased sanction on Iran last week, as well as reduced production in the Gulf area. A few Mexican oil companies, including Pemex, have halted approximately 00K bpd of production due to a cold front in the Gulf of Mexico, but expect to resume production once the cold front passes.
• USD/CAD Tested the 0.9570 level overnight. If the pair were to break below the 0.9570 level it would be the first time since the currency was floated in 1970
• Cristina Fernandez de Kirchner of the center political front Frente para la Victoria has won a substantial majority of votes compared to the other two contenders in the Argentinean presidential elections according to the partial vote count. Kirchner, currently the first lady, would be the country??™s first female leader. The results from the partial vote count are seen leading Argentinean stocks higher today.
• EUR/USD seen trading higher before Wednesday??™s FOMC interest rate decision on expectations that the Fed will cut interest rates by at least 25bps. According to some, the Euro could reach 1.4600 by mid-week, a synthetic all-time high of the pre-Euro launch [that is the former components that make up the Euro, which reached its all time high at 1.4590 in January of 1980, which also happens to correspond with the all-time high in gold]. According to FX chartists, if the Euro breaks 1.4600, further upside is likely.
• Gold reached new 28-year highs above $794.40 during Asian trading on the back of Dollar weakness, making the commodity currencies shine overnight.