Market Roundup
- Gold at 1-week peak on weak dollar
- Oil steadies after tumbling to multi-week lows
Economic Data Ahead
- (0400 ET/0800 GMT) EZ Industrial Output s.a. (MoM)(Jul)
- (0400 ET/0800 GMT) EZ Industrial Output w.d.a (YoY)(Jul)
Key Events Ahead
- (0745 ET/1145 GMT) ECB Interest Rate Decision
- (0745 ET/1145 GMT) ECB Deposit Rate Decision
FX Beat
DXY: The dollar index slumped, weighed down by the U.S. Federal Reserve's strategy shift to a more tolerant stance on inflation. Markets await the U.S. central bank's two-day meeting set next week for further insights on the monetary policy outlook. The greenback against a basket of currencies traded 0.2 percent down at 93.07, having touched a high of 93.66 on Wednesday, its highest since August 12.
EUR/USD: The euro rose, retreating from a near 1-month low hit in the prior session, after Bloomberg News reported that European Central Bank officials are growing more confident in the block's economic outlook. The ECB is all but certain to keep policy unchanged later in the day but investors will gauge policymakers views on euro's recent rally and its impact on inflation and economic growth. The European currency traded 0.1 percent higher at 1.1819, having touched a low of 1.1752 on Wednesday, its lowest since August 12. Investors’ attention will remain on a series of data from the Eurozone economies and ECB interest rate decision, ahead of the U.S. producer price index, unemployment benefit claims, and wholesale inventories. Immediate resistance is located at 1.1850 (10-DMA), a break above targets 1.1882. On the downside, support is seen at 1.1772, a break below could drag it below 1.1752.
USD/JPY: The dollar nudged lower as foreign exchange traders attention shifted on the European Central Bank's meeting later in the day for further cues on the monetary policy outlook. Moreover, resurgence of coronavirus infections in several countries further dented risk sentiment. The major was trading 0.05 percent lower at 106.12, having hit a low of 105.78 Wednesday, its lowest since September 1. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. producer price index, unemployment benefit claims, and wholesale inventories. Immediate resistance is located at 106.50, a break above targets 106.70. On the downside, support is seen at 105.87, a break below could take it near at 105.60.
GBP/USD: Sterling consolidated above a 6-week low recorded in the prior session, as investors remained on the sidelines on growing concerns that Britain and the European Union will fail to agree a trade deal. The major traded flat at 1.3000, having hit a low of 1.2885 on Wednesday, it’s lowest since July 28. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3053, a break above could take it near 1.3083. On the downside, support is seen at 1.2944, a break below targets 1.2911. Against the euro, the pound was trading 0.2 percent down at 90.93 pence, having hit a low of 91.30 the day before, it’s lowest since July 28.
AUD/USD: The Australian dollar declined amid concerns over worsening diplomatic ties with China over the treatment of the two Australian journalists. The Australian Financial Review's Michael Smith and Bill Birtles from the ABC were rushed out of China this week, having sheltered in Australian diplomatic premises for several days following visits from Chinese state security officers to their homes. Moreover, the bid tone around the major further weakened after data showed the Australia's consumer inflation expectations eased to 3.1 percent in September, compared to 3.3 percent in the prior month. The Aussie trades 0.1 percent down at 0.7278, having hit a low of 0.7191 on Wednesday, it’s lowest since August 26. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7310, a break above could take it near 0.7327. On the downside, support is seen at 0.7242 (21-DMA), a break below targets 0.7215.
NZD/USD: The New Zealand dollar surged, extending previous session rebound as the greenback weakened against a basket of currencies. Moreover, Kiwi bulls continued to digest yesterday's NZ upbeat data that showed the ANZ Business Confidence Index improved from -41.8 in August to -26 in September's advanced estimate, while the ANZ Activity Outlook Index recovered to -8.9 percent from -17.5 percent. The Kiwi trades 0.1 percent higher at 0.6687, having touched a low of 0.6601 on Wednesday, its lowest level since August 27. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6715, a break above could take it near 0.6740. On the downside, support is seen at 0.6641, a break below could drag it below 0.6614.
Equities Recap
Asian shares surged following a bounce on Wall Street, while investors awaited the ECB policy decision followed by a news conference from President Christine Lagarde.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent.
Tokyo's Nikkei surged 0.9 percent to 23,232.86 points, Australia's S&P/ASX 200 index rallied 0.5 percent to 5,908.50 points. South Korea's KOSPI gained 1.3 percent to 2,405.89 points.
Shanghai composite index rose 0.2 percent to 3,260.74 points, while CSI 300 index traded 0.7 percent up at 4,617.00 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 24,515.68 points. Taiwan shares added 0.7 percent to 12,691.75 points.
Commodities Recap
Crude oil prices surged, extending previous session rebound as investors awaited a meeting on September 17 of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia. International benchmark Brent crude was trading 0.2 percent up at $40.62 per barrel by 0449 GMT, having hit a low of $39.29 on Tuesday, its lowest since June 16. U.S. West Texas Intermediate was trading 0.1 percent higher at $37.81 a barrel, after falling as low as $36.15 on Tuesday, its lowest since June 15.
Gold prices held firm near a 1-week peak hit in the prior session as the dollar weakened, while markets await the European Central Bank's monetary policy decision due later in the day. Spot gold was trading 0.05 percent up at $1,946.70 per ounce by 0456 GMT, having hit a low of $1906.62 on Tuesday, its lowest since August 12. U.S. gold futures fell 0.1 percent to $1,953.50.
Treasuries Recap
The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.697 percent.
