Market Roundup
• US NY Fed Manufacturing Oct, 30.20, 20.70 forecast, 24.40 previous.
• CA Securities Cdns C$ MM Aug, 12.04B, -1.83B previous.
• CA Securities Foreign C$ MM Aug, 9.85B, 23.95B previous.
• Tough US NAFTA demands send the ball back into lobbyists' court.
• Trump upbeat on bipartisan US healthcare fix.
• Bank of Canada survey shows capacity, labor pressures intensify.
• Oil prices jumped as Iraqi forces entered the oil-rich city of Kirkuk.
• Chances of "no deal" Brexit not rising, says UK's Hammond.
Looking Ahead - Economic Data (GMT)
• 03:15 New Zealand CPI QQ Q3, 0.4% forecast, 0.0% previous
• 03:15 New Zealand CPI YY Q3, 1.8% forecast, 1.7% previous
• 04:30 Japan Reuters Tankan D1 Oct, 25 previous
Looking Ahead - Events, Other Releases (GMT)
• 08:20 ECB’s Vítor Constancio at a conference in Lisbon, Portugal
• 09:30 ECB’s Peter Praet in a panel discussion in Brussels, Belgium
• 19:30 BoC’s Carolyn Wilkins at SWIFT Sibos Toronto, Ontario
Currency Summaries
EUR/USD is likely to find support at 1.1734 levels and currently trading at 1.1788 levels. The pair has made session high at 1.1818 and hit lows at 1.1782 levels. The euro dipped against the dollar on Monday as the greenback strengthened as investors repositioned after disappointing inflation data on Friday sent the greenback to its lowest levels in more than two weeks, and with no major U.S. releases on Monday to sway direction. Consumer price data on Friday showed still benign inflation, disappointing investors who had expected it to increase. That came after minutes from the Federal Reserve’s September meeting released on Wednesday showed that Fed policymakers had a prolonged debate about the prospects of a pickup in inflation and the path of future interest rate rises if it did not. The dollar index against a basket of six major currencies rose 0.22 percent to 93.287. It fell to 92.75 on Friday immediately after the consumer price data, the lowest since Sept. 26.Fed Chair Janet Yellen on Sunday reaffirmed the U.S. central bank’s commitment to raising rates gradually, saying that the economy and labor market are strong despite low inflation. Traders expect the Fed to raise rates at its December meeting, but are less bullish on further increases next year, even as Fed projections show that three additional rate hikes are likely in 2018.
GBP/USD is supported in the range of 1.3173 levels and currently trading at 1.3243 levels. It reached session high at 1.3289 and dropped to session low at 1.3222 levels. Sterling declined against the dollar on Monday as the dollar strengthened after an U.S. index of business conditions rose to a three-year high, though it held within broad ranges as investors looked towards a Federal Reserve meeting at the end of the month. With very little in the way of top-tier data from the world's biggest economy this week except for industrial production on Tuesday, every scrap of information will be parsed for clues on the U.S. monetary policy outlook. The New York Fed's empire state current business conditions was 30.2 in October, its highest since September 2014 and blowing past an estimate of 20.7. Expectations of another U.S. rate increase this year have increased to virtually 90 percent from about 50 percent a month ago. An index measuring the dollar against a trade-weighted basket of currencies rose 0.2 percent to briefly hit a day's high of 93.276. Sterling having traded above $1.3290 skidded to hit low of $1.32220 in the early in the early US session, it was last trading at $1.32246.
USD/CAD is supported at 1.2480 levels and is trading at 1.2524 levels. It has made session high at 1.2557 and lows at 1.2511 levels. The Canadian dollar weakened against its U.S. counterpart on Monday as investors were doubtful about a deal being reached to renew NAFTA. U.S. President Donald Trump's administration, which is demanding big changes to the North American Free Trade Agreement, has presented a series of hard-line proposals that partners Canada and Mexico say will be tough to accept. Negotiators at talks to modernize the North American Free Trade Agreement are running out of time and look set to extend the remaining rounds in a bid to meet an end-year deadline as tensions rise, three sources familiar with the matter said on Sunday. Canada sends about 75 percent of its exports to the United States and its economy could suffer if the agreement is not renewed. The Canadian dollar was trading at C$1.2526 to the greenback, or 79.78 U.S. cents, down 0.6 percent. The currency's strongest level of the session was C$1.2512, while it touched its weakest since Oct. 10 at C$1.2556.The loonie lost ground even as prices of oil, one of Canada's major exports, climbed.
AUD/USD is supported around 0.7822 levels and currently trading at 0.7846 levels. It hit session high at 0.7873 and made session lows at 0.7841 levels. The Australian dollar edged lower against the greenback on Monday as investors repositioned from recent gains, while more upbeat economic news from trading partner China underpinned sentiment toward the commodity-heavy currencies. The Aussie dollar was softer at $0.7846, after rallying 1.6 percent last week only to run into resistance around $0.7900. Data out on Monday showed China's producer prices rising at a rapid 6.9 percent annual pace in September, largely driven by strength in commodities. China’s central bank governor predicted the economy would grow a brisk 7 percent in the second half of this year, accelerating from the first six months and defying fears of a slowdown. China publishes its third-quarter gross domestic product number on Thursday, with economists on average expecting growth of 6.8 percent. The main domestic event for the Aussie will be jobs figures for September on Thursday where analysts forecast a smaller rise of 15,000 following August's outsized gain of 54,200.
Equities Recap
Spanish stocks lagged behind a broadly flat European market on Monday as the Catalonia crisis and a profit warning from renewables energy firm Siemens Gamesa weighed.
The UK's benchmark FTSE 100 closed flat, FTSEurofirst 300 ended the day up by 0.07 percent, Germany's Dax ended up by 0.01 percent, and France’s CAC finished the up by 0.2 percent.
Major U.S. stock indexes rose to record high closes on Monday as financial shares recovered from last week's losses and higher oil prices lifted energy shares.
Dow Jones closed up by 0.36 percent, S&P 500 ended up 0.17 percent, Nasdaq finished the day up by 0.27 percent.
Treasuries Recap
U.S. Treasury prices dipped on Monday, weighed by comments over the weekend from Federal Reserve Chair Janet Yellen, and edged lower after the release of a stronger-than-expected report on manufacturing from the New York Federal Reserve.
Benchmark 10-year Treasury notes dropped 4/32 in price to yield 2.296 percent.
Commodities Recap
Gold turned lower on Monday, pressured by profit-taking after extending gains above the $1,300 mark to a three-week high amid ongoing tensions over Iran and North Korea as well as recent weak U.S. economic data.
Spot gold was down 0.6 percent at $1,296.51 an ounce by 2:35 p.m. EDT (1835 GMT). U.S. gold futures for December delivery
settled down 0.1 percent at $1,303.
Crude prices rose 1 percent on Monday as Iraqi forces entered the oil-rich city of Kirkuk, seizing territory from Kurdish fighters and briefly cutting some crude output from OPEC's second-largest producer.
Brent crude futures settled up 65 cents, or 1.1 percent, to $57.82 per barrel while U.S. crude ended 42 cents, or 0.8 percent, higher at $51.87 per barrel.
