Market Roundup
• US NAHB Housing Market index Sep, 64, 67 forecast, 68 previous.
• BOE's Carney sees Brexit pushing up inflation, slowing growth.
• In first visit, Trump urges reform so UN can meet full potential.
• US trade envoy says WTO dispute settlement is 'deficient'.
• Bank of Canada watching the impact of higher rates, stronger C$ -Lane.
• Brazil's inflation likely held near 18-year low in mid-September.
Looking Ahead - Economic Data (GMT)
• 22:00 New Zealand Westpac Consumer Survey Q3, 113.4 previous
• 01:30 Australia Home Price Index Q2, 1.1% forecast, 2.2% previous
Looking Ahead - Events, Other Releases (GMT)
• US Federal Reserve's FOMC starts its two-day meeting on interest rates
Currency Summaries
EUR/USD is likely to find support at 1.1876 levels and currently trading at 1.1951 levels. The pair has made session high at 1.1965 and hit lows at 1.1920 levels. The euro was little changed against the U.S. dollar on Monday as traders focused on this week's meeting of the U.S. Federal Reserve, which is expected to announce it will begin trimming its massive portfolio. The U.S. central bank is widely expected to announce at the conclusion of its meeting on Wednesday that it will begin paring its massive portfolio of Treasuries and mortgage-backed securities, with the reductions likely to start this year. The focus will be on any comments on inflation or other trends that could change the markets' blasé view on the chance of a third hike in December. Less certain is whether the policy-setting Federal Open Market Committee will raise rates again by the end of the year. Interest rate futures traders are pricing in a 57 percent chance of a hike at the December meeting, according to CME Group’s FedWatch Tool. The euro was little changed against the greenback at $1.1950. The euro hit a more than 2-1/2 year high against the dollar earlier in September.
GBP/USD is supported in the range of 1.3375 levels and currently trading at 1.3487 levels. It reached session high at 1.3568 and dropped to session low at 1.3460 levels. The British pound declined from 15-month high against the dollar on Monday as pound came under selling pressure after Bank of England Governor Mark Carney said any coming interest rate rises would be limited and gradual. Speaking at the International Monetary Fund in Washington, Carney reiterated the central bank's message last week that record low-interest rates could rise in coming months, but added that "any prospective increases in Bank Rate would be expected to be at a gradual pace and to a limited extent”. His comments pulled the pound, already lower on the day, down 0.9 percent to the day's low of $1.3465 before it settled around $1.3480, 0.8 percent lower on the day. Brexit headlines were also on investors' radar ahead of a speech in Florence on Friday by British Prime Minister Theresa May. She is likely to address Brexit negotiations that have been postponed to the week of Sept. 25.
USD/CAD is supported at 1.2170 levels and is trading at 1.2287levels. It has made session high at 1.2335 and lows at 1.2191 levels. The Canadian dollar weakened against its U.S. counterpart on Monday as green back firmed ahead of a Federal Reserve policy decision this week and loonie dipped as last week's interest rate hike hopes by the Bank of Canada faded. The greenback stretched its rally from the previous week as expectations swelled that the Federal Reserve would begin paring its massive bond-buying programme and delivers another interest rate increase before year-end. The Canadian dollar was nearly unchanged at C$1.2196 to the greenback, or 81.99 U.S. cents. The currency traded in a range of C$1.2173 to C$1.2215.The loonie has pulled back from a two-year peak earlier this month at C$1.2063 as the boost from recent Bank of Canada interest rate increases has faded. The central bank raised rates in July, for the first time in nearly seven years, and again this month. Its policy rate sits at 1 percent. Prices of oil, one of Canada's major exports, slipped below $50 per barrel but stayed close to multi-month highs amid a drop in shale drilling and as refineries continued to restart after Hurricane Harvey.
USD/JPY is supported around 111.00 levels and currently trading at 111.41 levels. It peaked to hit session high at 111.65 and made session lows at 111.33 levels. The dollar rose to seven-week high against the yen on Monday as the dollar was supported by a rise in U.S. Treasury yields and traders waited for an impending Federal Reserve meeting for clues on whether U.S. interest rates could rise again by year-end. The dollar was up 0.49 percent against the Japanese currency at 111.38 yen. U.S. Treasury prices fell and yields climbed on Monday as investors looked towards the Fed's two-day policy meeting this week for signals on whether an additional interest rate hike is likely this year. The U.S. central bank is widely expected to announce at the conclusion of its meeting on Wednesday that it will begin paring its massive portfolio of Treasuries and mortgage-backed securities, with the reductions likely to start this year. Last week was the greenback's best against the yen since November, up 2.8 percent, as a rise in U.S. yields bolstered its appeal against the low-yielding yen and data showing a pick up in U.S. consumer prices helped kindle expectations that the Fed could hike rates again in December. The dollar index, which tracks the greenback against six major currencies, was little changed at 91.877.
Equities Recap
European shares ended Monday's session close to six-week highs, helped by buoyant global stock markets, stronger financials and a rally in Portugal after the euro zone member regained investment-grade rating.
UK's benchmark FTSE 100 closed up by 0.6 percent, the pan-European FTSEurofirst 300 ended the day up by 0.30 percent, Germany's Dax ended up by 0.4 percent, France’s CAC finished the day up by 0.3 percent.
The S&P 500 clung to a small gain on Monday, led by financial stocks ahead of a Federal Reserve meeting, while Nasdaq pared gains sharply as technology stocks lost ground late in the day.
Dow Jones closed up by 0.28percent, S&P 500 ended up 0.14 percent, Nasdaq finished the day up by 0.08 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday as investors prepared for a potentially more hawkish Federal Reserve at its two-day policy meeting this week after the Bank of England surprised investors last week with talk of a possible rate hike.
Benchmark 10-year notes dropped 8/32 in price to yield 2.229 percent. The yields had fallen to 2.016 percent on Sept. 8, the lowest level since Nov. 10.
Commodities Recap
Gold fell 1 percent on Monday, touching a 2-1/2-week low, as the dollar strengthened and U.S. Treasury yields rose ahead of a two-day Federal Reserve meeting, while a world stock market index surged to a record and Wall Street also hit new highs.
Spot gold was down 1.04 pct at $1,305.46/oz by 2:05 p.m. EDT (18:05 GMT). The most active U.S. gold futures for December delivery settled down $14.40, or 1.09 percent, at $1,310.8 per ounce.
U.S. crude oil prices slipped below $50 per barrel on Monday but stayed close to multi-month highs as traders braced for a potential stockpile build, expected later this week.
U.S. crude futures rose 2 cents to settle at $49.91, while Brent crude futures 1 were down 32 cents at $55.44.
