Market Roundup:
- Trump's U.N. envoy Haley resigns, rules out 2020 run for office
- Trump renews Fed criticism, says raising rates too fast
- Trump repeats threat of more tariffs if China retaliates on trade
- Hurricane Michael gains strength as Floridians flee to higher ground
- Global financial stability risks rising with trade tensions, IMF says
- EXCLUSIVE-EU supervisors monitoring Italian banks' liquidity, no cause for alarm
- UK, EU make progress in Brexit negotiations over Irish backstop -ITV
- Japan Aug Machinery Orders MM, 6.8%, -4.0% f’cast, 11.0% prev
- Japan Aug Machinery Orders YY, 12.6%, 1.6% f’cast, 13.9% prev
- Australia consumer sentiment bounces modestly in Oct-survey
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Aug GDP Estimate, 0.1% m/m, 1.6% y/y f'cast; 0.3%, 1.6% prev
- (0430 ET/0830 GMT) Great Britain Aug Industrial Output 0.1% m/m, 1.0% y/y f'cast; 0.1%, 0.9% prev
- (0430 ET/0830 GMT) Great Britain Aug Manufacturing Output, 0.1% m/m, 1.1% y/y f'cast; -0.2%, 1.1% prev
- (0430 ET/0830 GMT) Great Britain Aug Goods Trade Balance GBP, -10.90 bln f’cast, -9.97 bln prev
Key Events Ahead
- (0510 ET/0910 GMT) BoE’s Andy Haldane speaks at the Advisory, Conciliation and Arbitration Service Future of Work Conference in London
- (1215 ET/1615 GMT) Fed Chicago’s Evans speaks on current economic conditions and monetary policy in Flint, Michigan
- (1700 ET/2100 GMT) Fed Atlanta’s Bostic participates in a discussion at the National Association of Corporate Directors in Atlanta
- N/A Riksbank’s Ohlsson discusses current monetary policy and the economic situation in Gothenburg
FX Beat
DXY: The dollar index slumped to a 1-week low as the U.S. Treasury yields came off their highs. The greenback against a basket of currencies trades 0.1 percent down at 95.56, having touched a low of 95.55 earlier, its lowest since October 3. FxWirePro's Hourly Dollar Strength Index stood at -74.15 (Slightly Bearish) by 0300 GMT.
EUR/USD: The euro rose, hovering away from a 1-1/2 month low touched in the previous session after Italian Economy Minister Giovanni Tria stated that Italy will take necessary steps to restore calm if market turbulence turns into a financial crisis. The European currency traded 0.2 percent up at 1.1509, having touched a low of 1.1432 on Tuesday, its lowest since August 20. FxWirePro's Hourly Euro Strength Index stood at -62.79 (Bearish) by 0300 GMT. Investors’ attention will remain on the ECB's non-monetary policy meeting and ECB Mersch speech, ahead of the U.S. producer price index, wholesales inventories and Fed officials' speeches. Immediate resistance is located at 1.1549 (October 5 High), a break above targets 1.1593 (October 3 High). On the downside, support is seen at 1.1450, a break below could drag it till 1.1415.
USD/JPY: The dollar steadied, halting a four-day losing streak as strong U.S. economy and a steady path for rate hikes by the Federal Reserve underpinned the bid tone around the pair. The major was trading 0.1 percent up at 113.03, having hit a low of 112.82 on Monday, its lowest since September 27. FxWirePro's Hourly Yen Strength Index stood at 106.77 (Highly Bullish) by 0300 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. producer price index, wholesales inventories and Fed officials' speeches. Immediate resistance is located at 113.65 (5-DMA), a break above targets 114.10 (October 5 High). On the downside, support is seen at 112.74 (September 25 Low), a break below could take it lower 112.40 (September 24 Low).
GBP/USD: Sterling surged to a 2-week peak as rising hopes of a breakthrough in Brexit negotiations boosted investor sentiments. The major traded 0.2 percent up at 1.3168, having hit a high of 1.3173 earlier; it’s highest since September 27. FxWirePro's Hourly Sterling Strength Index stood at 113.60 (Slightly Bullish) 0300 GMT. Investors’ attention will remain on the UK industrial output, manufacturing production, goods trade balance, and NIESR GDP estimate, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3217 (September 26 High), a break above could take it near 1.3250. On the downside, support is seen at 1.3060 (5-DMA), a break below targets 1.3000 (September 28 Low). Against the euro, the pound was trading flat at 87.40 pence, having hit a high of 87.33, it’s highest since June 21.
AUD/USD; The Australian dollar surged to a 1-week peak, as U.S. Treasury yields retraced from a 7-year peak, while prices for key commodity exports benefited from Chinese demand. The Aussie trades 0.4 percent up at 0.7127, having hit a high of 0.7130 earlier; it’s highest since October 3. FxWirePro's Hourly Aussie Strength Index stood at 17.40 (Neutral) by 0300 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7042 (October 2 Low), a break below targets 0.7005. On the upside, resistance is located at 0.7150 (10-DMA), a break above could take it near 7182 (September 12 High).
NZD/USD: The New Zealand dollar rose, extending gains for the third straight session, as the greenback eased following a decline in the U.S. Treasury yields. The Kiwi trades 0.3 percent up at 0.6491, having touched a low of 0.6424 on Monday, its lowest level since February 2016. FxWirePro's Hourly Kiwi Strength Index was at 32.16 (Neutral) by 0300 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6519 (October 4 High), a break above could take it near 0.6566. On the downside, support is seen at 0.6400, a break below could drag it below 6381 (Jan. 15 Low).
Equities Recap
Asian shares consolidated within a thin range after world stocks tumbled to an 8-week low the day before on increasing concerns about global economic growth.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei rallied 0.3 percent to 23,539.24 points, Australia's S&P/ASX 200 index rose 0.2 percent to 6,049.80 points and South Korea's KOSPI tumbled 0.9 percent to 2,234.06 points.
Shanghai composite index fell 0.05 percent to 2,719.64 points, while CSI300 index traded 0.3 percent declined at 3,278.02 points. Hong Kong’s Hang Seng traded 0.6 percent higher at 26,325.75 points.
Commodities Recap
Crude oil prices declined after the IMF lowered its global growth forecasts, however, the downside was limited as Hurricane Michael churned towards Florida, causing the shutdown of nearly 40 percent of U.S. Gulf of Mexico crude output. International benchmark Brent crude was trading 0.1 percent down at $84.76 per barrel by 0503 GMT, having hit a low of $82.64 on Monday, its lowest since October 1. U.S. West Texas Intermediate was trading 0.1 percent down at $74.60 a barrel, after falling as low as $73.10 on Monday, its lowest since October 1.
Gold prices edged up, extending previous session gains as the greenback eased following a drop in the long-dated U.S. Treasury yields. Spot gold rose 0.05 percent at $1,189.66 an ounce at 0512 GMT, having hit a low of $1183.42 on Monday, its lowest since September 28. U.S. gold futures rose 0.3 percent to $1,194.50 an ounce.
Treasuries Recap
The New Zealand government bond prices and Australian bond futures firmed a touch in line with Treasuries. The 3-year Aussie bond futures contract rose half a tick to 97.860, while the 10-year contract added 2.5 ticks to 97.2350.
The Canadian government bond prices were higher across a flatter yield curve. The 10-year climbed 23 Canadian cents to yield 2.574 percent. On Friday, the 10-year yield touched its highest intraday level since January 2014 at 2.615 percent.
