Market Roundup
- Japan's Motegi, USTR Lighthizer likely to hold trade talks on Sept 21-source
- Trump to target foreign meddling in U.S. elections with sanctions order -sources
- As Trump embraces more tariffs, U.S. business readies public fight
- Juncker to hold firm on Brexit terms, offer close partnership-official
- Russia warns of 'fragile' oil market due to geopolitics, but says it can raise output
- Russia starts biggest war games since Soviet fall near China
- Monster' Hurricane Florence to pummel U.S. Southeast for days
- China c.bank unveils plans to straighten up country's ratings firms
- Brazil's jailed former leader Lula ends presidential bid
- S.Korea jobless rate hits highest since global financial crisis, adds to president's woes
- Australia Sep Consumer Sentiment, -3.0% vs -2.3% prev
Economic Data Ahead
- (0300 ET/0700 GMT) Spain Aug CPI YY Final NSA, 2.2% f'cast, 2.2% prev
- (0300 ET/0700 GMT) Spain Aug HICP Final YY, 2.2% f'cast, 2.2% prev
- (0400 ET/0800 GMT) Italy Jul Industrial Output MM SA, -0.4% f'cast, 0.5% prev
- (0400 ET/0800 GMT) Italy Jul Industrial Output YY WDA, 1.4% f'cast, 1.7% prev
- (0500 ET/0900 GMT) EZ Jul Industrial Production YY, 1.0% f'cast, 2.5% prev
- (1901 ET/2301 GMT) Great Britain Aug RICS Housing Survey, 2 f'cast, 4 prev
Key Events Ahead
- (0530 ET/0930 GMT) Riksbank's Stefan Ingves will participate in a half-day conference on Financial Regulations Post Brexit arranged by the Centre for Philosophy of Natural and Social Science (CPNSS) and the Financial Markets Group (FMG) of the London School of Economics
- (0915 ET/1315 GMT) External Member of the Prudential Regulation Committee at Bank of England, Jill May, and London School of Economics Professor Julia Black: Treasury Select Committee external PRC pre-appointment hearing in London
- (0940 ET/1340 GMT) Fed's President Bullard speaks on the U.S. economy and monetary policy before the CFA Society in Chicago
- (1245 ET/1645 GMT) Fed's Lael Brainard speaks on the economic and monetary policy outlook before a Detroit Economic Club luncheon, in Detroit
- (1400 ET/1800 GMT) Federal Reserve issues the Beige Book of economic condition in Washington D.C.
FX Beat
DXY: The dollar index surged on news that Canada was prepared to offer the United States limited access to the Canadian dairy market as a concession in negotiations to rework the North American Free Trade Agreement. The greenback against a basket of currencies trades 0.05 percent up at 95.15, having touched a high of 95.56 on Monday, its highest since September 5. FxWirePro's Hourly Dollar Strength Index stood at 27.02 (Neutral) by 0500 GMT.
EUR/USD: The euro declined, halting a 2-day winning streak as the greenback gained on an escalation of trade tensions between U.S. and China and its potential effects on the emerging market currencies. The European currency traded 0.2 percent down at 1.1584, having touched a low of 1.1526 on Monday, its lowest since Aug 21. FxWirePro's Hourly Euro Strength Index stood at 11.31 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone industrial production, ahead of the U.S. producer price index and FOMC member Brainard's speech. Immediate resistance is located at 1.1658 (September 6 High), a break above targets 1.1710 (August 29 High). On the downside, support is seen at 1.1542 (September 5 Low), a break below could drag it till 1.1465.
USD/JPY: The dollar eased from a 1-week peak touched earlier in the session on news that China will ask the World Trade Organization next week for permission to impose $7 billion a year in sanctions on the United States for Washington's non-compliance with a ruling in a dispute over U.S. dumping duties. The major was trading 0.1 percent down at 111.40, having hit a high of 111.65 earlier, its highest since September 5. FxWirePro's Hourly Yen Strength Index stood at -102.21 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. producer price index and FOMC member Brainard's speech. Immediate resistance is located at 111.75 (September 5 High), a break above targets 112.15 (August 1 High). On the downside, support is seen at 111.22 (10-DMA), a break below could take it lower 110.68 (August 31 Low).
GBP/USD: Sterling slumped after rising to a near 6-week peak in the previous session, as rising optimism over prospects for a Brexit trade deal with the European Union faded. On Tuesday, the major surged on the European Union's chief negotiator Michel Barnier comments, citing that a Brexit deal was possible in six or eight weeks if negotiators were realistic in their demands. The major traded 0.1 percent down at 1.3013, having hit a high of 1.3087 on Tuesday; it’s highest since August 2. FxWirePro's Hourly Sterling Strength Index stood at 84.50 (Slightly Bullish) 0500 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of economic from the UK docket. Immediate resistance is located at 1.3083 (July 19 High), a break above could take it near 1.3144 (August 1 High). On the downside, support is seen at 1.2950 (10-DMA), a break below targets 1.2876 (21-DMA). Against the euro, the pound was trading 0.05 percent down at 89.05 pence, having hit a high of 88.76 on Tuesday, it’s highest since August 2.
AUD/USD: The Australian dollar tumbled amid concerns of escalating trade tensions between the United States and China after President Donald Trump stated that the U.S. was taking a tough stance with China. The Aussie trades 0.1 percent down at 0.7108, having hit a low of 0.7085; it’s lowest since Feb 2016. FxWirePro's Hourly Aussie Strength Index stood at -55.69 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7070, a break below targets 0.7035. On the upside, resistance is located at 0.7152 (23.6% retracement of 0.7362 and 0.7085), a break above could take it near 0.7192 (38.2% retracement).
NZD/USD: The New Zealand dollar plunged, hovering towards a 2-1/2 year low touched in the previous session, as investors preferred safer haven assets amid deepening tensions over trade tariffs between the United States and China. The Kiwi trades 0.1 percent down at 0.6518, having touched a low of 0.6500 on Tuesday, its lowest level since Jan. 2016. FxWirePro's Hourly Kiwi Strength Index was at -50.84 (Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6553 (23.6% retracement of 0.6727 and 0.6500), a break above could take it near 0.6586 (38.2% retracement). On the downside, support is seen at 0.6473, a break below could drag it below 0.6439.
Equities Recap
Asian shares tumbled to 14-month lows as the latest round of verbal threats in an intensifying U.S.-China trade conflict rattled investor sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.3 percent to record its lowest levels since July 2017.
Tokyo's Nikkei plunged 0.3 percent to 22,604.61 points, Australia's S&P/ASX 200 index declined 0.1 percent to 6,175.90 points, and South Korea's KOSPI eased 0.2 percent to 2,279.27 points.
Shanghai composite index fell 0.2 percent to 2,660.83 points, while CSI300 index traded 0.5 percent down at 3,207.10 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 26,379.70 points. Taiwan shares shed 0.3 percent to 10,722.57 points.
Commodities Recap
Crude oil prices declined, after rising to a 1-week peak earlier in the day following a report of declines in U.S. crude inventories, while looming sanctions against Iran raised expectations of tightening supply. International benchmark Brent crude was trading 0.1 percent down at $79.33 per barrel by 0532 GMT, having hit a high of $79.22 earlier, its highest since September 4. U.S. West Texas Intermediate was trading 0.01 percent down at $69.86 a barrel, after rising as high as $70.12, its highest since September 4.
Gold prices slumped after rebounding from a 2-week low in the previous session, as the dollar gained on fears the U.S.-China trade war could escalate. Spot gold was 0.4 percent down at $1,193.27 an ounce at 0538 GMT, having touched a low of $1,187.63 on Tuesday, its lowest since August 24. U.S. gold futures were mostly steady at $1,202.40 an ounce.
Treasuries Recap
The Australian bonds traded a little lower as market hopes better-than-expected August employment report. Investors remained side-lined amid a muted trading day that is scheduled to witness data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose ½ basis point to 2.591 percent, the yield on the long-term 30-year bond also climbed 1/2 basis point to 3.088 percent but the yield on short-term 2-year down 1/2 basis point to 2.011 percent.
The Canadian 10-year declined 33 Canadian cents to yield 2.325 percent. The 10-year yield touched its highest intraday since Aug. 29 at 2.329 percent.
