Market Roundup
- Brexit talks stall before midweek EU summit
- Bavaria election humbles Merkel allies, raising tensions in Berlin
- S.Arabia says will retaliate against any sanctions over Khashoggi case
- U.S. wants "regime change" in Iran - Rouhani
- China c.bank chief says plenty of room for monetary adjustments amid trade row
- U.S. draws China FX into trade dispute as IMF calls for resolution
- China property market feels fresh chill, "winter" is coming
- "Innocent bystanders": Emerging economies struggle to contain capital outflows
- Japan Sep Reuters Tankan DI, 28, 26 prev
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- (0515 ET/0915 GMT) European Union banking regulators and supervisors speak in Brussels.
- (1200 ET/1600 GMT) ECB’s Daniele Nouy speaks at the Solvay Schools Alumni Congress in Brussels.
- (1400 ET/1800 GMT) ECB Vice President Luis de Guindos gives a speech in Madrid, Spain.
- N/A Board member of Deutsche Bank Beermann attends Finance & Law Talk in Frankfurt.
FX Beat
DXY: The dollar index surged after U.S. Treasury Secretary Steven Mnuchin said that Washington wants to include a provision to deter currency manipulation in future trade deals. The greenback against a basket of currencies trades 0.1 percent up at 95.34, having touched a low of 94.95 on Friday, its lowest since Sept. 28. FxWirePro's Hourly Dollar Strength Index stood at -52.35 (Bearish) by 0500 GMT.
EUR/USD: The euro declined, extending previous session losses after European Central Bank President Mario Draghi stated that the Italian officials must stop questioning the euro and need to settle their budget debate as they have already caused damage to firms and households. The European currency traded 0.1 percent down at 1.1549, having touched a high of 1.1610 on Friday, its highest since October 1. FxWirePro's Hourly Euro Strength Index stood at 45.43 (Neutral) by 0500 GMT. Investors’ attention will remain on the U.S. retail sales, monthly budget statement, and business inventories. Immediate resistance is located at 1.1593 (October 3 High), a break above targets 1.1651 (September 28 High). On the downside, support is seen at 1.1505 (October 2 Low), a break below could drag it till 1.1463 (October 4 Low).
USD/JPY: The dollar declined as investor sentiment turned sour due to concerns about a potential decline in China's economic growth amid an ongoing trade war. The major was trading 0.2 percent down at 112.00, having hit a low of 111.83 on Thursday, its lowest since September 18. FxWirePro's Hourly Yen Strength Index stood at 88.53 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales , monthly budget statement, and buiness inventories. Immediate resistance is located at 112.58 (September 20 High), a break above targets 112.98 (September 25 High). On the downside, support is seen at 111.75 (September 14 Low), a break below could take it lower 111.35 (September 5 Low).
GBP/USD: Sterling slumped to a 6-day trough as British efforts to secure a Brexit deal ahead of a key European Union summit kept the British pound bulls' on the sidelines. The major traded 0.2 percent down at 1.3114, having hit a low of 1.3082; it’s lowest since October 9. FxWirePro's Hourly Sterling Strength Index stood at -90.57 (Slightly Bearish) 0500 GMT. Immediate resistance is located at 1.3166 (September 24 High), a break above could take it near 1.3215 (October 10 High). On the downside, support is seen at 1.3054 (October 21 Low), a break below targets 1.3003 (October 3 Low). Against the euro, the pound was trading 0.3 down at 88.08 pence, having hit a low of 88.20, it’s lowest since October 5.
AUD/USD: The Australian dollar extended previous session losses, as the greenback surged amid renewed worries about the impact of a U.S.-China trade war. The Aussie trades 0.1 percent down at 0.7105, having hit a high of 0.7139 on Friday; it’s highest since October 3. FxWirePro's Hourly Aussie Strength Index stood at 73.29 (Slightly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7065 (October 4 Low)), a break below targets 0.7040 (October 8 Low). On the upside, resistance is located at 0.7175 (21-DMA), a break above could take it near 7223 (September 18 High).
NZD/USD: The New Zealand dollar eased as worries over U.S. - China trade disputes and a possible slowdown in the Chinese economy dented investor sentiment. The Kiwi trades 0.1 percent down at 0.6503, having touched a high of 0.6533 on Friday, its highest level since October 3. FxWirePro's Hourly Kiwi Strength Index was at 106.63 (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 0.6566 (21-DMA), a break above could take it near 0.6600. On the downside, support is seen at 0.6480 (5-DMA), a break below could drag it below 6381 (Jan. 15 Low).
Equities Recap
Asian shares declined, weighed down by worries over U.S.-China trade disputes, combined with a possible slowdown in the Chinese economy and higher U.S. borrowing costs.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.8 percent.
Tokyo's Nikkei tumbled 1.8 percent to 22,291.29 points, Australia's S&P/ASX 200 index plunged 0.9 percent to 5,837.10 points and South Korea's KOSPI slumped 0.8 percent to 2,144.96 points.
Shanghai composite index fell 0.8 percent to 2,586.31 points, while CSI300 index traded 0.8 percent down at 3,142.29 points.
Hong Kong’s Hang Seng traded 1.2 percent lower at 25,481.08 points. Taiwan shares shed 1.4 percent to 9,901.12 points.
Commodities Recap
Crude oil prices surged over 1 percent as geopolitical tensions over the disappearance of a prominent Saudi journalist triggered worries about supply, however, concerns about the long-term outlook for demand limited upside. International benchmark Brent crude was trading 1.1 percent up at $81.40 per barrel by 0435 GMT, having hit a low of $79.20 on Friday, its lowest since September 24. U.S. West Texas Intermediate was trading 0.9 percent up at $72.13 a barrel, after falling as low as $70.54 on Thursday, its lowest since September 21.
Gold prices rose, reversing some of its previous session losses as Asian stocks declined on concerns about a potential fall in China's economic growth amid an ongoing trade war and signs of tighter monetary policy by the U.S. Federal Reserve. Spot gold was 0.4 percent up at $1,222.07 an ounce at 0439 GMT, having hit a high of $1226.21 on Thursday, its highest since July 31. U.S. gold futures were up 0.2 percent at $1,224.1 an ounce.
Treasuries Recap
The Japanese government bonds remained tad higher towards the end of Asian session Monday after the country’s industrial production missed market expectations during the month of August, lower than the reading in July as well. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped nearly 1 basis point to 0.141 percent, the yield on the long-term 30-year note hovered around 0.911 percent and the yield on short-term 2-year too traded tad lower at -0.115 percent.
