Market Roundup
- Trump, Xi upbeat on U.S.-China trade; U.S. targets more Chinese firms
- EU floats new Irish border compromise in tentative Brexit plan -FT
- Japan's PM says he won't force sales tax hike if shock hits economy
- U.S. job growth seen accelerating; strong annual wage gain expected
- Pompeo says 'handful more weeks' before U.S. responds to Khashoggi killing
- China lifts yuan midpoint by most in over 2 mths amid signs of easing trade tensions
- Poll-Euro rebound still on cards but conviction starting to waver
- U.S. fund investors bail on bonds in final week of October -Lipper
- Foreign CB US debt holdings -$19.802 bln to $3.414 tln Oct 31 week
- Treasuries -$18.145 bln to $3.042 tln, agencies -1.636 bln to $305.424 bln
- Australia Q3 Retail Trade, 0.2%, 0.4% f’cast, 1.2% prev, 1.0% rvsd
- Australia Q3 PPI YY, 2.1%, 1.5% prev
Economic Data Ahead
- (0300 ET/0700 GMT) Germany Import Prices YY, 4.6% f’cast, 4.8% prev
- (0445 ET/0845 GMT) Italy Oct Markit/ADACI Mfg PMI, 49.6 f’cast, 50.0 prev
- (0450 ET/0850 GMT) France Oct Markit Mfg PMI, 51.2 f’cast, 51.2 prev
- (0455 ET/0855 GMT) Germany Oct Markit/BME Mfg PMI, 52.3 f’cast, 52.3 prev
- (0500 ET/0900 GMT) EZ Oct Markit Mfg Final PMI, 52.1 f’cast, 52.1 prev
- (0530 ET/0930 GMT) Great Britain Oct Markit/CIPS Cons PMI, 52.0 f’cast, 52.1 prev
Key Events Ahead
- (0430 ET/0830 GMT) Swedish Central Bank Minutes from the Monetary Policy to be published in Stockholm
- (0900 ET/1300 GMT) Fed New York hosts public Town Hall meeting related to the Federal Reserve System's Strategies for Improving the U.S. Payment System initiative in New York
FX Beat
DXY: The dollar index declined to a 1-week low after U.S. President Donald Trump and Chinese President Xi Jinping expressed optimism about resolving the trade disputes ahead of a planned meeting at the end of November in Argentina. The greenback against a basket of currencies trades 0.05 percent down at 96.26, having touched a low of 96.19, its lowest since October 24. FxWirePro's Hourly Dollar Strength Index stood at -112.07 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro steadied near a 1-week peak, on expectations the European Central Bank will end its quantitative easing (QE) programme in December and raise interest rates in the second half of 2019.The European currency traded 0.1 percent up at 1.1423, having touched a low of 1.1302 on Wednesday, its lowest since August 15. FxWirePro's Hourly Euro Strength Index stood at 56.12 (Bullish) by 0500 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead the U.S. nonfarm payroll, unemployment data, trade balance and factory orders. Immediate resistance is located at 1.1432 (October 25 High), a break above targets 1.1476 (October 24 High). On the downside, support is seen at 1.1368 (5-DMA), a break below could drag it till 1.1302 (October 31 Low).
USD/JPY: The dollar surged, halting a 2-day losing streak, as investors awaited U.S. payroll figures, which are expected to have risen 190,000 in October from 134,000 in the previous month, with average hourly earnings seen increasing 0.2 percent in October after recording a 0.3 percent gain the previous month. The major was trading 0.3 percent up at 112.96, having hit a high of 113.38 on Wednesday, its highest since October 9. FxWirePro's Hourly Yen Strength Index stood at -178.34 (Highly Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. nonfarm payroll, unemployment data, trade balance and factory orders. Immediate resistance is located at 113.71 (September 28 High), a break above targets 114.10 (October 5 High). On the downside, support is seen at 112.35 (October 22 Low), a break below could take it lower 112.01 (October 17 Low).
GBP/USD: Sterling held gains after rising to an over 1-week peak in the previous session on report that UK is close to secure a financial services deal with Brussels, and as the Bank of England kept interest rates steady but indicated future interest rate hikes would be slightly faster if Brexit goes smoothly. The major traded 0.1 percent up at 1.3010, having hit a low of 1.2695 on Tuesday; it’s lowest since August 16. FxWirePro's Hourly Sterling Strength Index stood at 34.30 (Neutral) 0500 GMT. Investors attention will remain on UK Markit construction PMI, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3103 (October 19 High), a break above could take it near 1.3192 (October 17 High). On the downside, support is seen at 1.2936 (October 23 Low), a break below targets 1.2867 (October 24 Low). Against the euro, the pound was trading 0.2 percent down at 87.85 pence, having hit a high of 87.57 on Thursday, it’s highest since October 16.
AUD/USD: The Australian dollar rallied to an over 1-month peak on the back of better-than-expected domestic producer price index and a strong rally in risk assets globally. The Aussie trades 0.5 percent up at 0.7244, having hit a high of 0.7250 earlier; it’s highest since September 23. FxWirePro's Hourly Aussie Strength Index stood at 189.27 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7164 (October 13 Low), a break below targets 0.7112 (October 16 Low). On the upside, resistance is located at 0.7275 (September 19 High)., a break above could take it near 0.7300.
NZD/USD: The New Zealand dollar advanced to a 1-month peak, on signs that a trade war between China and the United States could be contained. The Kiwi trades 0.4 percent up at 0.6677, having touched a high of 0.6689, its highest level since September 26. FxWirePro's Hourly Kiwi Strength Index was at 163.58 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6727 (August 28 High), a break above could take it near 0.6750. On the downside, support is seen at 0.6630 (September 25 Low), a break below could drag it below 6599 (October 1 Low).
Equities Recap
Asian shares rallied after the U.S. and Chinese presidents raised hopes of a thaw in trade tensions, while the greenback eased ahead of highly influential U.S. jobs report.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 1.4 percent.
Tokyo's Nikkei gained 2.6 percent to 22,243.66 points, Australia's S&P/ASX 200 index rallied 0.2 percent to 5,849.20 points and South Korea's KOSPI advanced 3.5 percent to 2,095.16 points.
Shanghai composite index rose 2.5 percent to 2,670.94 points, while CSI300 index traded 3.3 percent up at 3,280.16 points.
Hong Kong’s Hang Seng traded 3.5 percent higher at 26,292.54 points. Taiwan shares added 0.6 percent to 9,906.59 points.
Commodities Recap
Crude oil prices rose, supported by concerns from the start of U.S. sanctions next week against Iran's petroleum exports. International benchmark Brent crude was trading 0.1 percent up at $72.82 per barrel by 0453 GMT, having hit a low of $74.44 earlier, its lowest since August 21. U.S. West Texas Intermediate was trading 0.1 percent up at $63.57 a barrel, after falling as low as $63.15 on Thursday, its lowest since April 9.
Gold prices declined, after rising about 1.5 percent in the previous session, as the dollar surged ahead of the U.S. payrolls data due later in the day. Spot gold was trading percent down at $1,232.98 per ounce by 0457 GMT, having touched a low of $1,211.87 on Wednesday, its lowest since Oct. 11. U.S. gold futures were down 0.4 percent at $1,233.8 per ounce.
Treasuries Recap
The Australian government bonds slid during Asian session after investors have shrugged-off the lower-than-expected fall in retail sales for the month of September; however, gains in the country’s producer price index (PPI) for the third quarter of this year, helped cushion further losses in debt prices. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, remained tad higher at 2.657 percent, the yield on the long-term 30-year bond rose 1-1/2 basis points to 3.159 percent and the yield on short-term 2-year jumped nearly 2 basis points to 2.027 percent.
The New Zealand bonds closed lower tracking United States’ Treasuries amid a muted trading session that witnessed data of little economic significance. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, rose climbed 2 basis points to 2.615 percent, the yield on the long-term 20-year note rose 1 basis point to 2.915 percent and the yield on short-term 2-year closed 1-1/2 basis points higher at 1.840 percent.
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 2.5 Canadian cents to yield 2.326 percent and the 10-year climbed 10 Canadian cents to yield 2.481 percent.
