Market Roundup
- As U.S. bond market swoons, Fed policymakers sanguine, for now
- U.S. economy can expand for 'quite some time' -Fed Chair Powell
- Saudi Arabia, Russia agreed in Sept to lift oil output, told U.S.
- U.S. VP Pence to tell China: We will not be intimidated in South China Sea
- U.S. Senate Republicans set Kavanaugh procedural vote for as early as Friday
- U.S. Congress, eying China, votes to overhaul development finance
- UK's May plans rushing Brexit through parliament - Bloomberg citing sources
- Brexit bill could go up as new data show rise in EU budget liabilities
- Britain says Russian military intelligence behind host of global cyber attacks
- Australia Aug Trade Balance G&S (A$), 1,604 mln, 1,400M f’cast, 1,551M prev, 1,548M rvsd
Economic Data Ahead
- No major data releases
Key Events Ahead
- (0300 ET/0700 GMT) ECB’s Ewald Nowotny speaks at financial markets conference in Vienna
- (0400 ET/0800 GMT) Bank of Finland Governor Olli Rehn, holds news conference about monetary policy and global economic situation in Helsinki
- (0530 ET/0930 GMT) Keynote speech by ECB’s Daniele Nouy in Vienna
- (0915 ET/1315 GMT) Fed’s Randal Quarles speaks on "Trends in Urban and Rural Community Banks" in St. Louis
- (1030 ET/1430 GMT) Bank of Canada Governor Stephen Poloz: Brief remarks on launch of online resource, money and monetary policy in Canada – Ottawa.
- (1200 ET/1600 GMT) Speech by ECB’s Benoit Coeure at the local French business community in Chateaudun
FX Beat
DXY: The dollar index surged to a 6-week peak after Federal Reserve Chairman Jerome Powell on Wednesday stated that the central bank may raise interest rates above an estimated neutral setting as the U.S. economy continued to expand. The greenback against a basket of currencies trades 0.1 percent up at 96.05, having touched a high of 96.12 earlier, its highest since August 20. FxWirePro's Hourly Dollar Strength Index stood at 128.47 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro slumped to an over 1-1/2 month low, as the uncertainty surrounding Italy's debt pile, fiscal plans and future ties with Europe continued to weigh on investor sentiment. The European currency traded 0.05 percent down at 1.1471, having touched a low of 1.1463 earlier, its lowest since August 20. FxWirePro's Hourly Euro Strength Index stood at -34.42 (Neutral) by 0500 GMT. Investors’ attention will remain on the U.S. unemployment benefit claims, factory orders and speech from Fed Quarles, as Eurozone economic data remains absolutely data empty. Immediate resistance is located at 1.1536 (August 10 High), a break above targets 1.1601 (August 21 High). On the downside, support is seen at 1.1450, a break below could drag it till 1.1415.
USD/JPY: The dollar eased after rising to an 11-month peak earlier in the day on the back of a surge in Treasury yields following upbeat U.S. data and perceived hawkish comments from Federal Reserve Chairman Jerome Powell. The U.S. ADP National Employment Report showed private payrolls rose by 230,000 jobs in September, the largest gain since February. The major was trading 0.1 percent down at 114.44, having hit a high of 114.54, its highest since Nov. 6. FxWirePro's Hourly Yen Strength Index stood at 10.68 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, factory orders and speech from Fed Quarles. Immediate resistance is located at 114.73 (Nov 6 High), a break above targets 115.00 (Mar 9 High). On the downside, support is seen at 113.81 (5-DMA), a break below could take it lower 113.25 (10-DMA).
GBP/USD: Sterling consolidated near an over 3-week low after Prime Minister Theresa May at the Conservative Party's annual conference pledged to stick with her Brexit plans as Britain and the European Union enter another round of negotiations to decide their separation. The major traded flat at 1.2938, having hit a low of 1.2921 earlier; it’s lowest since September 10. FxWirePro's Hourly Sterling Strength Index stood at 41.46 (Neutral) 0500 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3012 (10-DMA), a break above could take it near 1.3090 (September 28 High). On the downside, support is seen at 1.2896 (September 10 Low), a break below targets 1.2855 (August 3 Low). Against the euro, the pound was trading flat at 88.67 pence, having hit a high of 88.59 on Monday, it’s highest since September 20.
AUD/USD: The Australian dollar tumbled to 30-month lows as the greenback surged following upbeat U.S. economic data and comments from Federal Reserve Chairman Jerome Powell. The Aussie trades 0.3 percent down at 0.7079, having hit a low of 0.7075 earlier; it’s lowest since February 2016. FxWirePro's Hourly Aussie Strength Index stood at -133.72 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7058 (Feb 5 Low), a break below targets 0.7005. On the upside, resistance is located at 0.7131 (September 10 High), a break above could take it near 7182 (September 12 High).
NZD/USD: The New Zealand dollar plunged to a 30-month trough as better-than-expected U.S. economic data pushed Treasury yields to near-decade highs. The Kiwi trades 0.4 percent down at 0.6486, having touched a low of 0.6483 earlier, its lowest level since February 2016. FxWirePro's Hourly Kiwi Strength Index was at -122.81 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6535, a break above could take it near 0.6566. On the downside, support is seen at 0.6447 (Feb. 1 Low), a break below could drag it below 0.6381 (Jan. 15 Low).
Equities Recap
Asian shares tumbled, while the dollar rallied to an 11-month peak as robust U.S. economic data drove Treasury yields to their highest since mid-2011.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 1.1 percent.
Tokyo's Nikkei plunged 0.6 percent to 23,975.62 points, Australia's S&P/ASX 200 index rose 0.5 percent to 6,176.30 points and South Korea's KOSPI declined 1.5 percent to 2,274.33 points.
Hong Kong’s Hang Seng traded 1.8 percent lower at 26,610.46 points. Taiwan shares shed 1.3 percent to 10,718.91 points.
Commodities Recap
Crude oil prices surged, hovering towards a 4-year high reached the previous session, despite rising U.S. inventories and after sources said Russia and Saudi Arabia struck a private deal in September to increase crude output. International benchmark Brent crude was trading 0.2 percent up at $86.14 per barrel by 0549 GMT, having hit a high of $86.71 on Wednesday, its highest since November 2014. U.S. West Texas Intermediate was trading 0.1 percent up at $76.27 a barrel, after rising as high as $76.88 on Wednesday, its highest since Nov 2014.
Gold prices declined, extending previous session losses, as robust U.S. economic data and hawkish comments from Federal Reserve policymakers boosted the dollar. Spot gold was 0.1 percent up at $1,196.25 an ounce at 0502 GMT, having hit a high of $1208.17 on Wednesday, its highest since September 21. U.S. gold futures were down 0.1 percent at $1,202.1 an ounce.
Treasuries Recap
The Japanese 10-year government bond yield jumped to near 3-year high during late Asian session tracking a similar movement in the United States Treasuries, following a better-than-expected set of economic data released late yesterday. The yield on the benchmark 10-year JGB note, which moves inversely to its price, jumped 2 basis point to 0.160 percent, the yield on the long-term 30-year note surged 3-1/2 basis points to 0.953 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.108 percent.
The Australian government bonds plunged across the curve during Asian session, tracking a heavy sell-off in the U.S. Treasuries, where 10-year UST yield hits a 7-year high of 3.200 percent. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 5 basis points to 2.698 percent, the yield on the long-term 30-year bond traded 4-1/2 basis points higher at 3.188 percent and the yield on short-term 2-year surged 1-1/2 basis points to 2.001 percent .
The Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries, with the 10-year falling 63 Canadian cents to yield 2.540 percent. The yield on the 10-year touched its highest intraday since April 2014 at 2.548 percent.
