Market Roundup
- N.Korea's Kim wants another Trump summit to speed denuclearization -S.Korea's Moon
- S&P raises outlook on Australia, affirms AAA credit rating
- EU pushes October Brexit agreement, threatens no deal
- U.S. sanctions China for buying Russian fighter jets, missiles
- Accuser of Trump's court nominee sets conditions for testifying
- Japan Aug CPI, Core Nationwide YY, 0.9%, 0.9% f'cast, 0.8% prev
- Japan Aug CPI, Overall Nationwide, 1.3%, 0.9% prev
- Japan Sep Nikkei Mfg PMI Flash, 52.9, 52.5 prev
- Ultra-short obligation funds attract inflows ahead of Fed -Lipper
- U.S. muni bond funds post $140.8 mln in inflows-Lipper
- Foreign CB US debt holdings +$4.270 bln to $3.426 tln Sep 19 week
- Treasuries -$2.387 bln to $3.051 tln, agencies +$6.910 mln to $305.440 bln
Economic Data Ahead
- (0330 ET/0730 GMT) Germany Sep Markit Mfg Flash PMI, 55.7 f'cast, 55.9 prev
- (0330 ET/0730 GMT) Germany Sep Markit Serv Flash PMI, 55.0 f'cast, 55.0 prev
- (0330 ET/0730 GMT) Germany Sep Markit Comp Flash PMI, 55.4 f'cast, 55.6 prev
- (0400 ET/0800 GMT) EZ Sep Markit Mfg Flash PMI, 54.4 f'cast, 54.6 prev
- (0400 ET/0800 GMT) EZ Sep Markit Serv Flash PMI, 54.4 f'cast, 54.4 prev
- (0400 ET/0800 GMT) EZ Sep Markit Comp Flash PMI, 54.4 f'cast, 54.5 prev
Key Events Ahead
- N/A Bank of France's Sylvie Goulard and Bundesbank Board's Joachim Wuermeling speak at conference - Frankfurt
- N/A Turkish Finance Minister Berat Albayrak and his German counterpart Olaf Scholz meet - Berlin
FX Beat
DXY: The dollar index steadied after falling to multi-week lows in the previous session, amid investors' view that the U.S.-China trade conflict would be less damaging to global growth than initially feared. The greenback against a basket of currencies trades 0.05 percent up at 93.93, having touched a low of 93.83 on Thursday, its lowest since July 9. FxWirePro's Hourly Dollar Strength Index stood at -54.38 (Bearish) by 0500 GMT.
EUR/USD: The euro surged to a 2-1/2 month peak after ECB chief economist Peter Praet on Thursday stated that from next year onwards the European Central Bank will need to discuss the expected path of interest rates beyond its initial hike to keep market prices consistent with a slow rise in inflation. The European currency traded 0.05 percent up at 1.1780, having touched a high of 1.1786 earlier, its highest since July 9. FxWirePro's Hourly Euro Strength Index stood at -4.38 (Neutral) by 0500 GMT. Investors’ attention will remain on series of economic data from the Eurozone economies and EZ preliminary Markit PMIs, ahead of the U.S. flash Markit PMIs. Immediate resistance is located at 1.1820 (June 11 High), a break above targets 1.1852 (June 14 High). On the downside, support is seen at 1.1662 (August 28 Low), a break below could drag it till 1.1609 (September 5 Low).
USD/JPY: The dollar rallied to a fresh 2-month high as receding fears of a full-blown U.S.-China trade war dented the safe-haven Japanese yen's demand. Moreover, expectations for a hawkish Federal Reserve meeting next week boosted investor sentiment. The major was trading 0.2 percent up at 112.74, having hit a high of 112.77 earlier, its highest since July 19. FxWirePro's Hourly Yen Strength Index stood at -83.60 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. flash Markit PMIs. Immediate resistance is located at 113.00, a break above targets 113.30 (Jan 5 High). On the downside, support is seen at 112.16 (September 19 Low), a break below could take it lower 111.91 (June 12 Low).
GBP/USD: Sterling held firm near a 2-1/2 month high hit in the previous session, as better-than-expected UK retail sales data and growing optimism that Britain and the European Union are making progress towards a Brexit deal at a summit of EU leaders bolstered British pound bulls' sentiment. The major traded flat at 1.3267, having hit a high of 1.3298 on Thursday; it’s highest since July 10. FxWirePro's Hourly Sterling Strength Index stood at 47.02 (Neutral) 0500 GMT. Investors’ attention will remain on BoE quarterly bulletin report and developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3314 (June 22 High), a break above could take it near 1.3362 (July 9 High). On the downside, support is seen at 1.3200, a break below targets 1.3135 (September 20 Low). Against the euro, the pound was trading 0.1 percent down at 88.82 pence, having hit a high of 88.47 on Thursday, it’s highest since July 17.
AUD/USD: The Australian dollar advanced to a 3-week high as worries over U.S.-China trade war ebbed and global ratings agency upgraded its outlook on Australia's credit standing. S&P Global Ratings revised its outlook on Australia's AAA sovereign rating to stable from negative. The Aussie trades 0.05 percent up at 0.7295, having hit a high of 0.7297; it’s highest since August 30. FxWirePro's Hourly Aussie Strength Index stood at 50.12 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7275 (August 29 Low), a break below targets 0.7213 (September 19 Low). On the upside, resistance is located at 0.7315 (August 30 High), a break above could take it near 0.7362 (August 28 High).
NZD/USD: The New Zealand dollar climbed to a 3-week peak ahead of the Reserve Bank of New Zealand's next policy statement on Sept. 27, where it is considered certain to keep rates at a record low 1.75 percent amid subdued inflation. The Kiwi trades 0.1 percent up at 0.6692, having touched a high of 0.6694 earlier, its highest level since August 30. FxWirePro's Hourly Kiwi Strength Index was at 100.02 (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 0.6763 (August 8 High). On the downside, support is seen at 0.6634 (August 30 Low), a break below could drag it below 0.6593 (September 3 Low).
Equities Recap
Asian shares rallied as investors took a less bearish view on the impact of the U.S.-China trade war on markets.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.
Tokyo's Nikkei surged 0.2 percent to 23,724.04 points, Australia's S&P/ASX 200 index declined 0.3 percent to 6,172.00 points, and South Korea's KOSPI gained 0.8 percent to 2,327.75 points.
Shanghai composite index rose 0.1 percent to 2,733.24 points, while CSI300 index traded 0.1 percent up at 3,314.62 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 27,444.08 points. Taiwan shares shed 0.2 percent to 10,831.41 points.
Commodities Recap
Crude oil prices steadied after declining in the previous session as U.S. President Donald Trump urged OPEC to reduce crude prices ahead of its meeting in Algeria this weekend. International benchmark Brent crude was trading 0.2 percent up at $78.72 per barrel by 0455 GMT, having hit a high of $79.69 on Tuesday, its highest since September 12. U.S. West Texas Intermediate was trading 0.05 percent up at $70.20 a barrel, after rising as high as $71.47 on Wednesday, its highest since July 13.
Gold prices surged to a 1-week high and were on track for its first weekly gain in four, as the dollar eased on receding fears of a full-blown U.S.-China trade war. Spot gold rose 0.2 percent to $1,209.13 by 02458 GMT, having hit a high of $1209.89 earlier, its highest since September 13 and was poised for a 1.3 percent gains this week. U.S. gold futures were up 0.1 percent at $1,212.70 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 3.077 percent higher by 0.001 bps.
The Australian two-year yields started off the week at 2.01 percent before rising as high as 2.164 percent, a highnot seen since late 2015. However, it has eased back to 2.10 percent, but the increase for the week was still the largest so far this year. In the futures markets, the 10-year bond contract sank 16 ticks in four sessions to touch a three-month low of 97.2350, before steadying on Friday at 97.2800.
The Canadian government bond prices were lower across the yield curve, with the 10-year falling 8 Canadian cents to yield 2.431 percent. The 10-year yield touched its highest intraday since May 24 at 2.444 percent.
