Market Roundup
- Trump to meet Yellen Thursday in search for new Fed chair -source
- Spain High Court jails two Catalan separatist leaders pending investigation
- May, Juncker call for faster Brexit talks
- No Brexit deal would raise UK household bills by 260 pounds a year - report
- Japan Oct Reuters Tankan mfg index +31 vs 25, highest since June ’07, non-mfg +30
- US-Japan fail to bridge gap on trade in economic talks
- Japan off’l – US interest in bilateral trade deal with Japan, FX not topic
- Australia's central bank in no rush to match rate hikes abroad
- New Zealand Q3 CPI 0.5% q/q, 1.9% y/y vs 0.0%, 1.7%, forecast 0.4% q/q, 1.8% y/y
- U.S. official says not ruling out eventual direct talks N. Korea
- Trump declares Obamacare 'dead,' urges Democratic help for short-term fix
- U.S. Senate Republicans gain moment on tax reform budget measure
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Sep RPI, 0.3% m/m, 4.0% y/y eyed; last 0.7%, 3.9%
- (0430 ET/0830 GMT) Great Britain Sep Core CPI, 0.3% m/m, 2.7% y/y eyed; last 0.6%, 2.7%
- (0430 ET/0830 GMT) Great Britain Sep CPI, 0.3% m/m, 3.0% y/y eyed; last 0.6%, 2.9%
- (0500 ET/0900 GMT) Germany Oct ZEW Economic Sentiment, 20.0 eyed, last 17.0
- (0500 ET/0900 GMT) Germany Oct ZEW Current Conditions, 89.0 eyed, last 87.9
- (0600 ET/1000 GTM) EU Sep Inflation, Final, 0.4% m/m, 1.5% y/y eyed; last 0.3%, 1.5%
- (0600 ET/1000 GTM) EU Sep Infl Ex Food & Energy, 0.4% m/m, 1.1% y/y eyed; last 0.2%, 1.3%
Key Events Ahead
- N/A BoE's Carney, Ramsden and Tenreyro participate in Treasury Select Committee hearings
- N/A EU General Affairs Council meeting
- (0420 ET/0820 GMT) ECB's Constancio speaks in Lisbon
- (0530 ET/0930 GMT) ECB's Praet speaks in Brussels
- (0630 ET/1030 GMT) Germany 4.000 bln for 2-year auction
- (0700 ET/1100 GMT) Riksbank executive board meeting
FX Beat
DXY: The dollar index rose to a 1-week high, supported by a rise in U.S. Treasury yields following a report that showed President Donald Trump favored a policy hawk as the next Chief of the Federal Reserve. The greenback against a basket of currencies traded 0.1 percent up at 93.39, having touched a high of 93.41 earlier in the session, its highest since Oct. 10. FxWirePro's Hourly Dollar Strength Index stood at 95.38 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro slumped to a 1-week low as investors tracked the Spanish/Catalonia geopolitical developments, whereby the Spanish have given Catalonia until Thursday to drop their independence campaign. The European currency traded 0.1 percent down at 1.1779, having touched a high of 1.1775 earlier, its lowest since Oct. 10. FxWirePro's Hourly Euro Strength Index stood at -120.94 (Highly Bearish) by 0400 GMT. Investors’ attention will remain on Eurozone ZEW Survey and consumer price index, ahead of U.S. import/export price index, industrial production, and NAHB housing market index. Immediate resistance is located at 1.1822 (5-DMA), a break above targets 1.1880. On the downside, support is seen at 1.1775 (Session Low), a break below could drag it near 1.1750.
USD/JPY: The dollar eased after rebounding from an over 2-week low as a renewed bout of risk-aversion across the board, boosted the demand for the safe-haven assets. The major was trading 0.05 percent down at 112.13, having hit a low of 111.65 on Monday, its lowest since Sept. 26. FxWirePro's Hourly Yen Strength Index stood at 107.52 (Highly Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. import/export price index, industrial production, and NAHB housing market index for further momentum. Immediate resistance is located at 112.48 (10-DMA), a break above targets 112.82. On the downside, support is seen at 111.65 (Previous Session Low), a break below could take it near 111.47.
GBP/USD: Sterling steadied after easing from a 2-week high in the previous session, as concerns over Britain's exit from the European Union offset bets that upbeat data this week would put the Bank of England on track for a rate hike by year-end. The major traded 0.1 percent up at 1.3257, having hit a high of 1.3337 on Friday, its highest since Oct. 2. FxWirePro's Hourly Sterling Strength Index stood at 18.35 (Neutral) by 0400 GMT. Investors’ focus will remain on series of UK economic data and BoE Governor Carney's speech, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3333 (21-DMA), a break above could take it near 1.3400. On the downside, support is seen at 1.3202 (10-DMA), a break below targets 1.3175. Against the euro, the pound was trading 0.2 higher at 88.66 pence, having hit a high of 88.55 pence the day before, its highest since Oct. 4.
AUD/USD: The Australian dollar edged down, extending previous session losses, after minutes of the Reserve Bank of Australia's October meeting showed the policy-making were not in a rush to follow its peers abroad and raise interest rates. The Aussie trades down at 0.7848, having hit a high of 0.7897 on Friday, it’s highest since Sept. 25. FxWirePro's Hourly Aussie Strength Index stood at 54.61 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7824 (5-DMA), a break below targets 0.7800. On the upside, resistance is located at 0.7900, a break above could take it near 0.7948.
NZD/USD: The New Zealand dollar declined, after rising to a 2-week high earlier in the session on better-than-expected domestic Consumer Price Index, which rose by 0.5 percent in the September 2017 quarter. On an annualized basis, it rose 1.9 percent in the third quarter, beating expectations of 1.8 percent and previous 1.7 percent. The Kiwi trades 0.1 percent down at 0.7162, having touched a high of 0.7206 earlier, its highest level since Oct. 2. FxWirePro's Hourly Kiwi Strength Index was at 83.64 (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 0.7226, a break above could take it near 0.7270. On the downside, support is seen at 0.7124 (5-DMA), a break below could drag it till 0.7055 (Oct. 10 Low).
Equities Recap
Asian shares gained, while the greenback touched a 1-week high as short-term U.S. bond yields rose after a report showed U.S. President Donald Trump favoring Stanford economist John Taylor to head the Federal Reserve.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent
Tokyo's Nikkei rose 0.3 percent to 21,324.02 points, Australia's S&P/ASX 200 index gained 0.7 percent to 5,889.60 points and South Korea's KOSPI climbed 0.2 percent to 2,485.41 points.
Shanghai composite index rose 0.1 percent to 3,380.42 points, while CSI300 index was trading 0.2 percent up at 3,921.62 points.
Hong Kong’s Hang Seng was trading 0.2 percent higher at 28,747.87 points. Taiwan shares shed 0.5 percent to 10,723.15 points.
Commodities Recap
Crude oil prices eased after rising to multi-week highs in the previous session as escalating fighting in Iraq threatened supplies. International benchmark Brent crude was trading 0.1 percent down at $57.80 per barrel by 0417 GMT, having hit a high of $58.45 the day before, its highest since Sept. 28. U.S. West Texas Intermediate was trading 0.3 percent lower at $51.76 a barrel, after rising as high as $52.34 on Monday, its highest since Sept. 28.
Gold prices declined after rising above the $1,300 level to a three-week high in the previous session amid ongoing tensions over Iran and North Korea as well as recent weak U.S. economic data. Spot gold was down 0.1 percent at $1,292.61 an ounce by 0422 GMT, after hitting a high of $1,305.93 on Monday, the highest since Sept. 26. U.S. gold futures for December delivery settled down 0.1 percent at $1,303.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.3088 percent higher by 0.001 bps, while 5-year yield was 0.001 bps down at 1.954 percent.
The Australian bonds slumped with U.S. Treasuries as market speculation rise on new hawkish Federal Reserve chairperson. However, the October Reserve Bank of Australia meeting minutes failed to steer markets. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2 basis points to 2.777 percent, the yield on the long-term 30-year note also climbed 1-1/2 basis points to 3.553 percent and the yield on short-term 2-year traded nearly 1 basis point higher at 1.917 percent.
The Japanese government bonds trended lower as investors remained sidelined in any major trading activity ahead of the country’s trade balance data for the month of September, scheduled to be released on October 18 by 23:50GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 0.07 percent, the yield on long-term 30-year also tad up at 0.88 percent and the yield on short-term 2-year traded flat at -0.14 percent.
