Market Roundup
• US Oct Consumer Confidence, 137.9, 136.0 forecast, 138.4 previous, 135.3 revised.
• US Aug House Prices, S&P Case-Shiller 20 m/m SA, 0.1%, 0.1% forecast, 0.1% previous.
• US Aug House Prices, S&P Case-Shiller 20 m/m NSA, 0.0%, 0.4% forecast, 0.3% previous.
• US Aug House Prices, S&P Case-Shiller 20 y/y, 5.5%, 5.8% forecast, 5.9% previous .
• S&P warns 'no-deal' Brexit likely to tip UK into long recession.
• No second referendum on Brexit -PM May.
• Italy economy stagnates, PM says data justifies expansionary budget.
• EU Commission tells Rome Italian debt is worry for whole euro zone.
• Mexico's Lopez Obrador says peso currency 'slipped,' will recover.
• Brazil would only sell reserves under speculative attack -Bolsonaro adviser .
• Turkish lira firms more than one percent, inflation poses risk.
Looking Ahead - Economic Data (GMT)
• 30 Oct 21:45 New Zealand Sep Building Consents, 7.8% previous.
• 30 Oct 23:50 Japan Sep Industrial Output Prelim m/m SA, -0.3% forecast, 0.2% previous.
• 31 Oct NA Bank of Japan Rate Decision, -0.10% forecast, -0.10% previous.
• 31 Oct 00:00 New Zealand Oct NBNZ Business Outlook, -38.3% previous.
• 31 Oct 00:30 Australia Q3 CPI q/q, 0.4% forecast, 0.4% previous.
• 31 Oct 00:30 Australia Q3 CPI y/y, 1.9% forecast, 2.1% previous.
• 31 Oct 00:30 Australia Q3 CPI Index, 113.0 previous.
• 31 Oct 01:00 China Oct NBS Mfg PMI, 50.6 f'cast, 50.8 previous.
• 31 Oct 01:00 China Oct NBS Non-Mfg PMI, 54.9 previous.
• 31 Oct 05:00 Japan Sep Housing Starts y/y, -0.7% forecast, 1.6% previous.
• 31 Oct 05:00 Japan Oct Consumer Confid. Index, 43.4 previous.
• 31 Oct 05:00 Japan Sep Construction Orders y/y, 0.5% previous.
Looking Ahead - Events, Other Releases (GMT)
• 09:00 ECB's Ewald Nowotny speaks at an economic reporters' club in Vienna
• 09:05 ECB's Daniele Nouy gives keynote speech at the 6th Financial Stability Conference in Berlin
• 10:00 Swedish Central Bank's Stefan Ingves talks about Basel III at Banco de Portugal in Lisbon
• 12:15 Norway Central Bank's Oystein Olsen speaks to students at The Norwegian University of Life Sciences in Oslo
• 14:30 Federal Reserve Board holds open meeting to discuss proposed rules that would modify the enhanced prudential standard framework for large banking organizations in Washington, DC
• 17:15 Swiss National Bank's Thomas Jordan speaks on "Protectionism makes monetary policy difficult", at Berne Economic Society of the Canton of Berne in Bern
Currency Summaries
EUR/USD is likely to find support at 1.3000 levels and currently trading at 1.3044 levels. The pair has made session high at 1.3080 and hit lows at 1.1343 levels. The euro slipped lower against the U.S. dollar on Tuesday as dollar gained on renewed fears of an intensification in the Sino-U.S. trade war. Trump said during an interview with Fox News he thought there could be an agreement with China on trade, but said he had billions of dollars’ worth of new tariffs ready to be imposed if a deal was not possible. The euro, which weakened on Monday on news German Chancellor Angela Merkel would not be seeking re-election as head of the Christian Democrats party, was 0.3 percent lower against the dollar. On the data front, the euro zone economy grew less than expected in the third quarter as the public mood turned darker, with signs of distress in Italy highlighting concerns that the bloc's third-ranked state was becoming one of its weakest links. Meanwhile, U.S. consumer confidence rose to an 18-year high in October, driven largely a robust labor market, suggesting strong economic growth could persist in the near term. The dollar index, which measures the greenback against six major currencies, was 0.25 percent higher at 96.823. Earlier in the session, the index hit a high of 96.948, its strongest since mid-August.
GBP/USD is supported in the range of 1.2718 levels and currently trading at 1.2707 levels. It reached session high at 1.2770 and dropped to session low at 1.2694 levels. Britain's pound declined against the dollar on Tuesday as concern about Britain's departure from the European Union led investors to largely ignore hopes of an end to austerity raised by finance minister Philip Hammond. The pound has weakened 4 percent in October as traders fret over the lack of progress in divorce talks on issues including the Irish border, less than five months before Brexit. Hammond's budget on Monday offered a glimpse of higher spending after a decade of cuts to public services. But he made clear that this will hinge on London getting a trade agreement with Brussels. The pound fell 0.4 percent versus a broadly stronger dollar to $1.2729, its lowest since Aug. 17. It also lost ground against an otherwise under-pressure euro, falling to a one-month low of 89.28 pence. Sterling traders are turning their attention to the Bank of England's monetary policy meeting on Thursday, when it is expected to keep interest rates on hold and detail conditions necessary for policy tightening.
USD/CAD is likely to find support at 1.3100 levels and is trading at 1.3116 levels. It has made intraday high at 1.3147 and lows at 1.3113 levels. The Canadian dollar edged higher against its broadly stronger U.S. counterpart on Tuesday, boosted by gains for stocks and as Bank of Canada Governor Stephen Poloz repeated that more interest rates hikes will be needed to keep inflation in check. Monetary policy in Canada is still stimulative despite an increase in interest rates last week, Poloz told legislators. Last week, the central bank hiked its key interest rate by 25 basis points to 1.75 percent, its fifth increase since July 2017. Money markets expect another hike as soon as January. Major U.S. stock indexes climbed, helped by gains for chip stocks as investors took advantage of cheaper prices following a steep recent pullback for equities. The U.S. dollar rose to a 16-month high against a basket of major currencies amid growing signs the United States economy is outperforming its peers. The Canadian dollar was last trading 0.1 percent higher at 1.3121 to the greenback, or 76.21 U.S. cents. The currency, which on Friday touched 1.3160, its strongest level in more than six weeks, traded in a range of 1.3102 to 1.3147.
USD/JPY is supported around 112.17 levels and currently trading at 113.00 levels. It peaked to hit session high at 112.92 and made session lows at 111.65 levels. The dollar strengthened against the Japanese yen on Tuesday as fears of more U.S. tariffs on Chinese goods helped dollar. Washington was preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between Trump and his counterpart President Xi Jinping fail to ease a trade war, Bloomberg News reported on Monday. The report sparked a wild ride on Wall Street on Monday, with the Dow falling more than 900 points from its high and the benchmark S&P 500 closing within a whisker of confirming correction territory. U.S. Treasury debt, which functions as a safe-haven investment, rises in price in times of volatility.In an interview with Fox News Channel later on Monday, Trump said he thinks there will be "a great deal" with China on trade, but warned new tariffs will be implemented if a deal is not possible. Daily trading volume was at its lowest in more than a week ahead of the ADP private payrolls report and the Treasury refunding announcement due on Wednesday, the Markit PMI Manufacturing Index and the ISM Manufacturing Index on Thursday, and the U.S. non-farm payrolls report on Friday.
Equities Recap
European shares ended a choppy session lower on Tuesday, failing to benefit from a positive open on Wall Street as they buckled under the weight of disappointing earnings and data showing the euro zone economy grew less than expected in the third quarter.
The UK's benchmark FTSE 100 closed up by 0.3 percent, FTSEurofirst 300 ended the day up by 0.10 percent, Germany's Dax ended down by 0.01 percent, and France’s CAC finished the down by 0.01 percent.
Major U.S. stock indexes jumped more than 1 percent on Tuesday, helped by strong gains for chip and transport stocks as investors took advantage of cheaper prices following a steep recent pullback for equities.
Dow Jones closed down by 1.78 percent, S&P 500 ended down 1.58 percent, Nasdaq finished the day up by 1.63 percent.
Treasuries Recap
Yields on U.S. Treasury bonds were steady in light trading on Tuesday as investors held off on making big moves ahead of this week's spate of economic data.
The yield on the benchmark 10-year government note was up around 2 basis points, as were yields on the 30-year bond and two-year note.
Commodities Recap
Gold prices fell on Tuesday as concerns about a further escalation of the U.S.-China trade war boosted the U.S. dollar, eroding bullion's appeal as it tested a key technical support.
Spot gold was down 0.5 percent at $1,23.81 per ounce at 13:35 p.m. EDT (1735 GMT), having touched $1,219.37, its lowest since Oct. 18. U.S. gold futures settled down $2.30, or 0.19 percent, at $1,225.3
Oil prices dropped more than 1 percent on Tuesday on signs of rising supply and concern that global economic growth and demand for fuel will fall victim to the U.S.-China trade war.
Brent crude futures fell $1.43 to settle at $75.91 a barrel, a 1.85 percent decline. U.S. West Texas Intermediate (WTI) crude futures fell 86 cents to settle at $66.18 a barrel, a 1.28 percent drop.
