Market Roundup
- New US-Mexico-Canada trade deal to be signed in late Nov.-U.S. official
- FBI probe is the next battle in war over Kavanaugh
- As Brexit divisions widen, PM May challenges Brexit critics
- China factory sector hurt in September as trade frictions bite
- South Korea's factory activity rebounds, fastest growth in 5-1/2 years
- Brent oil rises to 4-year high ahead of Iran sanctions, traders eye more hikes
- Japan Sep Nikkei Mfg PMI, 52.5, 52.9 prev
- Japan Q3 Tankan Big Mfg Idx, 19, 22 f'cast, 21 prev
- Japan Q3 Tankan All Big Capex Est, 13.4%, 14.2% f'cast, 13.6% prev
Economic Data Ahead
- (0350 ET/0750 GMT) France Sep Markit Mfg PMI, 52.5 f'cast, 52.5 prev
- (0355 ET/0755 GMT) Germany Sep Markit /BME Mfg PMI, 53.7 f'cast, 53.7 prev
- (0400 ET/0800 GMT) EZ Sep Markit Mfg Final PMI, 53.3 f'cast, 53.3 prev
- (0430 ET/0830 GMT) Great Britain Sep Markit/CIPS Mfg PMI, 52.5 f'cast, 52.8 prev
- (0430 ET/0830 GMT) Great Britain Aug BoE Consumer Credit, (GBP), 1.30 bln f'cast, 0.817 bln prev
- (0430 ET/0830 GMT) Great Britain Aug Mortgage Lending (GBP), 3.20 bln f'cast, 3.19 bln prev
- (0430 ET/0830 GMT) Great Britain Aug Mortgage Approvals, 64.50k f'cast, 64.76k prev
- (0500 ET/0900 GMT) EZ Aug Unemployment Rate, 8.2% f'cast, 8.2% prev
Key Events Ahead
- (0902 ET/1302 GMT) Fed Atlanta's Raphael Bostic participates in panel on "Economic Development" - Atlanta
- (1050 ET/1450 GMT) BoE's Silvana Tenreyro chairs session at Rebuilding Macroeconomics Annual Conference on - London
- (1100 ET/1500 GMT) Fed Minneapolis's Neel Kashkari participates in a town hall meeting - Minnetonka, Minnesota
- (1100 ET/1500 GMT) Eurozone Finance Ministers meet to discuss deeper euro zone integration - Luxembourg
- (1215 ET/1615 GMT) Fed Boston's Eric Rosengren speaks on "U.S. Outlook/Monetary Policy" - Boston
- (1315 ET/1715 GMT) BoC's Timothy Lane speaks at Haskayne Business School, Calgary, Canada
- N/A ECB’s Mario Draghi and Benoit Coeure participate in Eurogroup meeting - Luxembourg
- N/A Fed Philadelphia and Richmond co-sponsor "Reinventing Our Communities: Investing in Opportunity" – Baltimore
FX Beat
DXY: The dollar index surged, drifting closer to a near 3-week peak, after the U.S. and Canada reached a deal, with Canada agreeing to a side-letter arrangement effectively capping automobile exports to the United States. The greenback against a basket of currencies trades 0.1 percent up at 95.21, having touched a high of 95.37 on Friday, its highest since September 10. FxWirePro's Hourly Dollar Strength Index stood at 121.82 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro slumped, extending losses for the fourth straight session after the European Central Bank board member Benoit Coeure stated that the central bank expects interest rates to stay at their current level through the summer of next year and the easing of economic stimulus measures to be gradual. On Friday, the major tumbled to a near 3-week low after the Italian government agreed to set a higher than expected budget deficit target. The European currency traded 0.1 percent down at 1.1590 having touched a low of 1.1570 on Friday, its lowest since September 11. FxWirePro's Hourly Euro Strength Index stood at -37.46 (Neutral) by 0500 GMT. Investors’ attention will remain on series of data from the Eurozone economies, EZ Markit manufacturing PMI, and the unemployment rate, ahead of the U.S. construction spending, manufacturing PMI from both Markit and ISM, and speeches from Fed's Bostic and Rosengren. Immediate resistance is located at 1.1698 (September 17 High), a break above targets 1.1757 (September 27 High). On the downside, support is seen at 1.1570 (September 28 Low), a break below could drag it till 1.1525 (September 10 Low).
USD/JPY: The dollar rallied to a 10-month peak after the United States and Canada reached a framework deal to update the North American Free Trade Agreement. The major was trading 0.2 percent up at 113.87, having hit a high of 113.96 earlier, its highest since Nov. 8. FxWirePro's Hourly Yen Strength Index stood at -14.17 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. construction spending, manufacturing PMI from both Markit and ISM, and speeches from Fed's Bostic and Rosengren. Immediate resistance is located at 114.28 (Nov 1 High), a break above targets 114.73 (Nov 6 High). On the downside, support is seen at 113.09 (5-DMA), a break below could take it lower 112.63 (September 26 Low).
GBP/USD: Sterling consolidated near a 3-week low, as investors' optimism for a Brexit trade deal declined ahead of the ruling Conservative party's annual conference this week. The major traded flat at 1.3028, having hit a low of 1.3000 on Friday; it’s lowest since September 12. FxWirePro's Hourly Sterling Strength Index stood at -54.33 (Bearish) 0500 GMT. Investors’ attention will remain on UK Markit manufacturing PMI, consumer credit, mortgage approvals, and M4 money supply, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3113 (5-DMA), a break above could take it near 1.3193 (September 25 High). On the downside, support is seen at 1.2979 (September 12 Low), a break below targets 1.2896 (September 10 Low). Against the euro, the pound was trading 0.1 percent down at 88.94 pence, having hit a high of 88.72 on Friday, it’s highest since September 21.
AUD/USD: The Australian dollar eased ahead of the Reserve Bank of Australia' policy meeting on Tuesday, where it is certain to keep rates at 1.5 percent. The RBA is expected to keep rates on hold until early 2020, given subdued inflation and wages at home. The Aussie trades 0.2 percent down at 0.7210, having hit a low of 0.7202 on Friday; it’s lowest since September 18. FxWirePro's Hourly Aussie Strength Index stood at -29.09 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7175 (August 31 Low), a break below targets 0.7144 (September 18 Low). On the upside, resistance is located at 0.7263 (September 25 High), a break above could take it near 7303 (September 21 High)
NZD/USD: The New Zealand dollar gained as investors awaited the New Zealand Institute of Economic Research's (NZIER) Quarterly Survey of Business Opinion (QSBO) due on Tuesday. The Kiwi trades flat at 0.6614, having touched a low of 0.6598 on Friday, its lowest level since September 19. FxWirePro's Hourly Kiwi Strength Index was at 4.73 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6658 (September 25 High), a break above could take it near 0.6727 (August 28 High). On the downside, support is seen at 0.6593 (September 3 Low), a break below could drag it below 0.6561 (September 18 Low).
Equities Recap
Asian shares eased amid holiday-thinned trading, while the greenback surged after the United States and Canada agreed on a deal to save a trilateral trade agreement in North America.
MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.1 percent.
Tokyo's Nikkei rallied 0.5 percent to 24,245.76 points, Australia's S&P/ASX 200 index fell 0.6 percent to 6,172.30 points,
Taiwan shares added 0.4 percent to 11,051.80 points, and South Korea's KOSPI declined 0.2 percent to 2,339.37 points.
Commodities Recap
Crude oil prices surged, hovering towards its highest since November 2014 ahead of U.S. sanctions against Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries that takes effect in November. International benchmark Brent crude was trading 0.3 percent up at $83.15 per barrel by 0515 GMT, having hit a high of $83.38 on Friday, its highest since November 2014. U.S. West Texas Intermediate was trading 0.05 percent up at $73.55 a barrel, after rising as high as $73.70 on Friday, its highest since July 11.
Gold prices declined as the dollar held gains after recording a near 3-week high in the previous session in the wake of the U.S. Federal Reserve's plans last week for multiple interest rate hikes by 2020. Spot gold was 0.2 percent down at $1,189.19 at 0519 GMT, having hit a low of $1180.64 on Friday, its lowest since August 17. U.S. gold futures were down 0.3 percent at $1,193.0 an ounce.
Treasuries Recap
The Japanese government bond prices traded mixed on the first trading day of the week amid a silent trading session that witnessed data of little economic significance ahead of the country’s household spending data for the month of August, scheduled to be released later this week for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1/2 basis point to 0.130 percent, the yield on the long-term 30-year note jumped 1-1/2 basis points to 0.926 percent and the yield on short-term 2-year slipped nearly 1 basis point to -0.111 percent.
The Australian government bonds remained a little higher during Asian session, ahead of the Reserve Bank of Australia (RBA) monetary policy decision, where no change in communication is expected from the central bank. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 1 basis point to 2.665 percent, the yield on the long-term 30-year bond traded flat at 3.160 percent and the yield on short-term 2-year dipped 1 basis point to 2.031 percent.
