Market Roundup
- Japan Sept mfg PMI – final 52.9, flash 52.6, Aug final 52.2, sectoral growth up
- BoJ seen trimming inflation outlook in October meeting - Nikkei
- BoJ September Tankan – Big mfg DI +22, big non-mfg +23, +18/+23 eyed
- DIs eyed at +19, +19 in December, previous +16, +20, USD eyed at 109.29
- Though sentiment among smaller firms lagging, general mood at decade high
- China Sep NBS Manufacturing PMI, 52.4 vs 51.7, f'cast 51.5
- China Sep NBS Non-Mfg PMI, 55.40 vs 53.40
- China Sep Caixin Mfg PMI Final 51.0 vs 51.6, f'cast 51.5
- China makes targeted reserve requirement rate cut to boost lending to small firms
- Under pressure, PM May says she can steer Britain through Brexit
- Catalan leader opens door to secession from Spain after vote
- Chastened Merkel faces pressure to embrace Macron on Europe
- Trump to top U.S. diplomat: Don't bother talking to North Korea
- Australia home prices slow as Sydney suffers rare fall
- New Zealand's "kingmaker" to start talks with both major parties this week
- Speculators up U.S. dollar net short bets to highest in five years-CFTC
Economic Data Ahead
- (0315 ET/0715 GMT) Spain Sep Manufacturing PMI, 53.00 eyed, last 52.40
- (0330 ET/0730 GMT) Czech Republic Sep Markit PMI, 55.40 eyed, last 54.90
- (0345 ET/0745 GMT) Italy Sep Markit/ADACI Mfg PMI, 56.80 eyed, last 56.30
- (0350 ET/0750 GMT) France Sep Markit Mfg PMI, 56.00 eyed, last 56.00
- (0355 ET/0755 GMT) Germany Sep Markit/BME Mfg PMI, 60.60 eyed, last 60.60
- (0400 ET/0800 GMT) Italy Aug Unemployment Rate, 11.20% eyed, last 11.30%
- (0400 ET/0800 GMT) EU Sep Markit Mfg Final PMI, 58.20 eyed, last 58.20
- (0430 ET/0830 GMT) Great Britain Sep Markit/CIPS Mfg PMI, 56.40 eyed, last 56.90
- (0500 ET/0900 GMT) EU Aug Unemployment Rate, 9.00% eyed, last 9.10%
Key Events Ahead
- N/A Norway Central Bank holds conference in Oslo
- (0530 ET/0930 GMT) Bank of Spain Gov Linde speaks in Madrid
- (0900 ET/1300 GMT) ECB's Praet speaks in London
FX Beat
DXY: The dollar gained across the board following a rise in the U.S. Treasury yields. The greenback against a basket of currencies traded 0.3 percent up at 93.35, having touched a high of 93.67 on Thursday, its highest since Aug. 18. FxWirePro's Hourly Dollar Strength Index stood at 51.64 (Neutral) by 0400 GMT.
EUR/USD: The euro eased, reversing some of its previous session gains as investors monitored the aftermath of an independence vote in Spain's Catalonia. The European currency traded 0.3 percent down at 1.1778, having touched a low of 1.1717 on Wednesday, its lowest since Aug. 18. FxWirePro's Hourly Euro Strength Index stood at 119.65 (Highly Bullish) by 0400 GMT. Investors’ attention will remain on series of Markit manufacturing PMIs from the Eurozone economies, ahead of U.S. ISM manufacturing PMI and construction spending data. Immediate resistance is located at 1.1827 (61.8% retracement of 1.2005 and 1.1717), a break above targets 1.1870 (10-DMA). On the downside, support is seen at 1.1717 (Sept. 27 Low), a break below could drag it near 1.1700.
USD/JPY: The dollar rallied, extending previous session gains on growing expectations for a Federal Reserve interest rate hike in December. The pair was trading 0.3 percent up at 112.79, having hit a high of 113.25 on Wednesday, its highest since mid Jul. FxWirePro's Hourly Yen Strength Index stood at -45.31 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. ISM manufacturing PMI and construction spending data for further momentum. Immediate resistance is located at 113.00, a break above targets 113.50. On the downside, support is seen at 112.13 (10- DMA), a break below could take it near 112.00.
GBP/USD: Sterling continued to slump after data released on Friday showed Britain's economy had recorded its weakest annual growth since 2013 in the second quarter of the year. The major traded 0.2 percent down at 1.3373, having hit a low of 1.3342 on Thursday, its lowest since Sept. 14. FxWirePro's Hourly Sterling Strength Index stood at -45.10 (Neutral) by 0400 GMT. Investors’ focus will remain on UK MArkit manufacturing PMI, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3427 (5-DMA), a break above could take it near 1.3471 (10-DMA). On the downside, support is seen at 1.3349 (Previous Session Low), a break below targets 1.3300. Against the euro, the pound was trading 0.1 percent up at 88.06 pence, having hit a high of 87.46 pence on Wednesday, its highest since July.
AUD/USD: The Australian dollar declined, extending previous session losses as the crude oil prices eased after a survey highlighted a slight increase in OPEC production in September. The Aussie trades down 0.7826, having hit a low of 0.7799 on Thursday, it’s lowest since Jul. 18. FxWirePro's Hourly Aussie Strength Index stood at -119.45 (Highly Bearish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7800, a break below targets 0.7770. On the upside, resistance is located at 0.7869 (5-DMA), a break above could take it near 0.7923 (10-DMA).
NZD/USD: The New Zealand dollar tumbled as the bid tone around the U.S. dollar kept growing bigger across the board. The Kiwi trades down at 0.7199, having touched a low of 0.7166 on Thursday, its lowest level since Sept. 5. FxWirePro's Hourly Kiwi Strength Index was at -4.21 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7248 (21-DMA), a break above could take it near 0.7277 (Sept. 26 High). On the downside, support is seen at 0.7166 (Sept. 29 Low), a break below could drag it till 0.7140.
Equities Recap
Asian shares rose after upbeat economic data from China, Japan and South Korea supported a sustained pickup in global growth, while the euro eased as investors remained cautious on an independence vote in Spain's Catalonia.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Tokyo's Nikkei rose 0.1 percent to 20,384.27 points, Australia's S&P/ASX 200 index gained 0.8 percent to 5,729.50 points and Taiwan shares added 0.7 percent to 10,458.58 points.
Liquidity was relatively thin, with China, South Korea and Hong Kong markets closed for public holidays.
Commodities Recap
Crude oil prices declined, extending losses for the fifth consecutive session, after a survey pointed to a slight increase in OPEC production in September. International benchmark Brent crude was trading 0.4 percent down at $56.47 per barrel by 0405 GMT, having hit a high of $59.48 on Tuesday, its strongest since Jul. 2015. U.S. West Texas Intermediate was trading 0.2 percent down at $51.47 a barrel, after rising as high as $52.41 on Tuesday, its highest since April.
Gold prices slumped to its lowest in nearly seven weeks earlier in the session as the U.S. dollar advanced on the back of growing expectations for a Federal Reserve interest rate hike in December. Spot gold was trading 0.3 percent down at $1,275.47 an ounce by 0409 GMT, after earlier touching its lowest since mid- August at $1274.01. U.S. gold futures for December delivery shed 0.5 percent to $1,278.90 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.355 percent higher by 0.029 bps, while 5-year yield was 0.025 bps up at 1.952 percent.
The Japanese government bonds slumped after Reuters’ Tankan rose unexpectedly in Q3. This shows that the big manufacturers have more confidence in business conditions than they have had for a decade as global demand adds momentum to economic recovery. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, more than 1 basis point to 0.076 percent, the yield on long-term 30-year rose nearly 1 basis point to 0.88 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.11 percent.
The Australian bonds slumped on the first trading day of the week as investors hope to witness a hawkish tone form the Reserve Bank of Australia (RBA) in its monetary policy statement, scheduled to be held on October 3 by 03:30GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 4 basis points to 2.83 percent, the yield on the 15-year note also urged 4 basis points to 3.16 percent and the yield on short-term 2-year traded 3-1/2 basis points higher at 2.00 percent.
