Market Roundup
- North Korea's Kim asks Trump for another meeting in "very warm" letter
- U.S. Republicans urge more tax cuts as elections near
- Canada's Freeland to hold NAFTA talks on Tuesday as time runs short
- Japan's Renesas to buy U.S. chipmaker IDT for $6.7 bln
- China's steel heartland tests mills' mettle with new smog-busting plan
- Australia Aug NAB Business Conditions, 15 vs prev 12
- Australia Aug NAB Business Confidence, 4 vs prev 7
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Aug Claimant Count Unem Chng, 10.0k f'cast, 6.2k prev
- (0430 ET/0830 GMT) Great Britain Jul ILO Unemployment Rate, 4.0% f'cast, 4.0% prev
- (0430 ET/0830 GMT) Great Britain Jul Employment Change, 28k f'cast, 42k prev
- (0430 ET/0830 GMT) Great Britain Jul Avg Wk Earnings 3M YY, 2.4% f'cast, 2.4% prev
- (0430 ET/0830 GMT) Great Britain Jul Avg Earnings (Ex-Bonus), 2.8% f'cast, 2.7% prev
- (0500 ET/0900 GMT) Germany Sep ZEW Economic Sentiment Net Bal, -14.0 f'cast, -13.7 prev
- (0500 ET/0900 GMT) Germany ZEW Current Conditions Sep Net Bal, 72.0 f'cast, 72.6 prev
Key Events Ahead
- (0310 ET/0710 GMT) Riksbank First Deputy Governor Kerstin af Jochnick will discuss current monetary policy at PwC's event Finansdagen in Stockholm
- (0320 ET/0720 GMT) Head of foreign exchange division at Bank of England Rohan Churm gives a speech at TradeTech FX Europe, Barcelona
- (0630 ET/1030 GMT) British Finance Minister Philip Hammond and his junior ministers take part in a regular question session in parliament, London
- (0845 ET/1245 GMT) Riksbank Governor Stefan Ingves will discuss current monetary policy at an event arranged by Goldman Sachs in London
FX Beat
DXY: The dollar index eases as China cautioned it will respond if the United States takes any new steps on trade. Meanwhile, Canadian Foreign Minister Chrystia Freeland will meet the U.S. Trade Representative in Washington later in the day for another round of talks to renew the NAFTA trade pact. The greenback against a basket of currencies trades 0.05 percent down at 95.10, having touched a high of 95.56 on Monday, its highest since September 5. FxWirePro's Hourly Dollar Strength Index stood at 14.16 (Neutral) by 0400 GMT.
EUR/USD: The euro surged, extending previous session gains, as policymakers at the European Central Bank are widely expected to leave their policy settings unchanged on Thursday. The European currency traded 0.1 percent up at 1.1602, having touched a low of 1.1526 earlier, its lowest since Aug 21. FxWirePro's Hourly Euro Strength Index stood at 59.84 (Bullish) by 0400 GMT. Investors’ attention will remain on Eurozone employment changes, ahead of the U.S. JOLTS Job Opening and wholesale inventories. Immediate resistance is located at 1.1627 (10-DMA), a break above targets 1.1689 (August 31 High). On the downside, support is seen at 1.1526 (10-DMA), a break below could drag it till 1.1465.
USD/JPY: The dollar extended gains for the third straight session, boosted by expectations that the Federal Reserve will increase interest rate this month. The major was trading 0.3 percent up at 111.40, having hit a low of 110.38 on Friday, its lowest since August 22. FxWirePro's Hourly Yen Strength Index stood at -127.77 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. JOLTS Job Opening and wholesale inventories. Immediate resistance is located at 111.53 (September 4 High), a break above targets 111.82 (August 29 Low). On the downside, support is seen at 110.68 (August 31 Low), a break below could take it lower 110.31 (August 17 Low).
GBP/USD: Sterling steadied after rising to a near 6-week peak in the previous session, after the European Union's chief negotiator Michel Barnier stated that a Brexit deal was possible in six or eight weeks if negotiators were realistic in their demands, indicating that the UK may avoid a disorderly no-deal Brexit. The major traded 0.1 percent up at 1.3033, having hit a high of 1.3051 on Monday; it’s highest since August 2. FxWirePro's Hourly Sterling Strength Index stood at 118.50 (Highly Bullish) 0400 GMT. Investors’ attention will remain on UK labour data, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3083 (July 19 High), a break above could take it near 1.3144 (August 1 High). On the downside, support is seen at 1.2934 (10-DMA), a break below targets 1.2863 (21-DMA). Against the euro, the pound was trading 0.05 percent up at 88.95 pence, having hit a high of 88.90 earlier, it’s highest since August 6.
AUD/USD: The Australian dollar bounced back from a 30-month low touched earlier in the session after data showed domestic business conditions rebounded in August as firms reported improved sales and profits. The National Australia Bank's index of business conditions gained 2 points to stand at +15 in August, from previous months reading of 12. The Aussie trades 0.1 percent up at 0.7117, having hit a low of 0.7091; it’s lowest since Feb 2016. FxWirePro's Hourly Aussie Strength Index stood at -28.85 (Neutral) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7070, a break below targets 0.7035. On the upside, resistance is located at 0.7156 (23.6% retracement of 0.7362 and 0.7091), a break above could take it near 0.7195 (38.2% retracement).
NZD/USD: The New Zealand dollar consolidates near 30-month low hit in the prior session, as the spectre of a U.S.-China trade war continued to dent investor sentiment. The Kiwi trades 0.1 percent up at 0.6517, having touched a low of 0.6512 on Monday, its lowest level since Feb. 2016. FxWirePro's Hourly Kiwi Strength Index was at -50.84 (Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6562 (23.6% retracement of 0.6727 and 0.6512), a break above could take it near 0.6593 (38.2% retracement). On the downside, support is seen at 0.6473, a break below could drag it below 0.6439.
Equities Recap
Asian shares slumped for a ninth straight session amid concerns of escalating trade tensions between the United States and China.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.4 percent to record its lowest since July 2017.
Tokyo's Nikkei rose 1.2 percent to 22,640.87 points, Australia's S&P/ASX 200 index surged 0.6 percent to 6,179.10 points, and South Korea's KOSPI eased 0.3 percent to 2,282.91 points.
Shanghai composite index fell 0.2 percent to 2,664.73 points, while CSI300 index traded 0.2 percent down at 3,224.12 points.
Hong Kong’s Hang Seng traded 0.05 percent lower at 26,606.92 points. Taiwan shares added 0.2 percent to 10,752.30 points.
Commodities Recap
Crude oil price rose, extending gains for the third straight session, supported by looming U.S. sanctions against Iran's petroleum industry. However, signs of increased supplies by the United States and Saudi Arabia capped upside. International benchmark Brent crude was trading 0.2 percent up at $77.48 per barrel by 0443 GMT, having hit a low of $75.67 on Thursday, its lowest since August 27. U.S. West Texas Intermediate was trading 0.1 percent higher at $67.57 a barrel, after falling as low as $66.89 on Friday, its lowest since August 22.
Gold prices declined as the dollar was boosted by expectations U.S. interest rate will rise this month and by concerns the U.S.-China trade war could escalate. Spot gold was 0.2 percent down at $1,193.94 an ounce at 0447 GMT, having touched a high of $1,126.88 on Thursday, its highest since August 31. U.S. gold futures were mostly steady at $1,199.60 an ounce.
Treasuries Recap
The Australian bonds traded nearly flat on as investors remained sidelined amid a muted trading day that is scheduled to witness data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded nearly flat at 2.587 percent, the yield on the long-term 30-year bond rose about 1 basis point to 3.084 percent and the yield on short-term 2-year up 1/2 basis point to 2.014 percent.
The Canadian government bond prices were little changed across the yield curve, with the 10-year flat to yield 2.288 percent. The 10-year yield touched its highest intraday since Aug. 30 at 2.312 percent.
