Market Roundup
- China Q3 GDP, 6.8% vs 6.9%, forecast 6.8%
- China Sep Industrial Output, 6.6% vs 6.0%, forecast 6.2%
- China Sep Retail Sales, 10.3% vs 10.1%, forecast 10.2%
- China cbank governor says yuan band not key issue at the moment
- New Zealand kingmaker set to announce which party it will back for govt
- Catalonia to press ahead with independence if Madrid suspends autonomy
- Trying to unlock Brexit, Britain's May to make offer on EU citizens
- Trump to announce Fed chair decision in "coming days" -White House
- BoJ DepGov Nakaso – Will adjust yield curve as need to achieve 2% CPI
- Japan Sep trade surplus Y670.2 bln, Y559.8 bln eyed, exp +14.1% y/y, imp +12.0%
- Japan Sep Exports to US +11.1%, China +29.3%, Asia +18.7%, crude imp vol -5.3%
- MoF flow data wk-ended Oct 14 – Japanese buy net Y153.7 bln foreign stocks
- Y269.7 bln for-bonds bought too, foreign investors buy Y840.7 bln JPN stks
- Australia annual jobs growth zoomed to 3.1 %, fastest since April 2008
- Australia Sep Employment, 19.8k vs 54.2k, revised 53.0k, forecast 15.0k
- Australia Sep Unemployment Rate, 5.5% vs 5.6%, forecast 5.6%
Economic Data Ahead
- (0330 ET/0730 GMT) Sweden Sep Unemployment Rate, 6.0% eyed, last 6.0%
- (0430 ET/0830 GMT) Great Britain Sep Retail Sales, -0.1% m/m, 2.1% y/y eyed; last 1.0%, 2.4%
- (0430 ET/0830 GMT) Great Britain Sep Retail Sales Ex-Fuel MM, 0.1% eyed, last 1.0%
Key Events Ahead
- (0300 ET/0700 GMT) Riksbank executive board meeting
- (0530 ET/0930 GMT) Spain E1.500/E1.000/E1.000/E0.500 bln for 3/7/10/29 year auctions
- (0550 ET/0950 GMT) France E1.750/E3.750/E1.500 bln for 4/6/7 year auctions
- (0630 ET/1030 GMT) UK 2.500 bln 10 year auction
- (0650 ET/1050 GMT) France E0.500/E0.750/E0.500 bln for 8/10/15 year auctions
FX Beat
DXY: The dollar index consolidated within narrow ranges as the benchmark U.S. 10-year Treasury yield touched a one-week high of 2.352 percent the day before on the back of expectations for tighter global monetary policy. The greenback against a basket of currencies traded flat at 93.42, having touched a high of 93.80 in the previous session, its highest since Oct. 9. FxWirePro's Hourly Dollar Strength Index stood at 36.85 (Neutral) by 0500 GMT.
EUR/USD: The euro rose after rebounding from an over 1-week lows the prior day, as investors shifted their focus on the European Central Bank's policy meeting coming up next week. The European currency traded 0.1 percent up at 1.1803, having touched a low of 1.1730 the day before, its lowest since Oct. 9. FxWirePro's Hourly Euro Strength Index stood at 71.00 (Bullish) by 0400 GMT. Investors’ attention will remain on developments surrounding Catalonia declaration, ahead of U.S. unemployment benefit claims and Fed George's speech. Immediate resistance is located at 1.1820, a break above targets 1.1880. On the downside, support is seen at 1.1785 (5-DMA), a break below could drag it near 1.1730.
USD/JPY: The dollar rallied to a near 2-week high above the 113.00 handle, supported by this week's rise in U.S. bond yields, while investors awaited the U.S. President Donald Trump's decision on the next chair of the Federal Reserve. The major was trading 0.1 percent up at 112.99, having hit a high of 113.09 earlier, its highest since Oct. 6. FxWirePro's Hourly Yen Strength Index stood at -66.37 (Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. unemployment benefit claims and Fed George's speech for further momentum. Immediate resistance is located at 113.20, a break above targets 113.60. On the downside, support is seen at 112.80, a break below could take it near 112.43 (10-DMA).
GBP/USD: Sterling steadied above the 1.3200 handle after retreating from a 6-day low in the prior session after figures from the British Retail Consortium (BRC) showed that showed that like-for-like retail sales rose 1.9 percent in September, compared to a 0.4 percent rise a year earlier. The major traded 0.1 percent up at 1.3217, having hit a low of 1.3140 on Wednesday, its lowest since Oct. 12. FxWirePro's Hourly Sterling Strength Index stood at 15.14 (Neutral) by 0400 GMT. Investors’ focus will remain on UK retail sales data, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3250, a break above could take it near 1.3304 (21-DMA). On the downside, support is seen at 1.3175, a break below targets 1.3120. Against the euro, the pound was trading flat at 89.29 pence, having hit a high of 88.55 pence on Monday, its highest since Oct. 4.
AUD/USD: The Australian dollar rose, extending previous session gains, after data showed domestic unemployment rate declined to 5.5 percent, its lowest reading since May, which itself was the lowest since early 2013. While employment climbed a seasonally adjusted 19,800 in September, beating forecasts for a 15,000 rise, and recording 12 straight months of gains. The Aussie trades 0.1 percent up at 0.7854, having hit a high of 0.7897 on Friday, it’s highest since Sept. 25. FxWirePro's Hourly Aussie Strength Index stood at -8.82 (Neutral) by 0500 GMT. Investors will continue to digest domestic employment report, ahead of U.S. economic releases. Immediate support is seen at 0.7840, 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 slumped to a 1-week low as investors remained cautious ahead of a much-awaited announcement on the new government following an inconclusive election last month. The Kiwi trades 0.6 percent down at 0.7109, having touched a low of 0.7081 earlier, its lowest level since Oct. 12. FxWirePro's Hourly Kiwi Strength Index was at -151.60 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7182 (21-DMA), a break above could take it near 0.7206. On the downside, support is seen at 0.7081 (Session Low), a break below could drag it till 0.7055 (Oct. 10 Low).
Equities Recap
Asian shares steadied near decade highs, while the dollar touched a 2-week high against the yen on the back of a rise in the U.S. Treasury yields.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.2 percent.
Tokyo's Nikkei rose 0.3 percent to 21,435.58 points, Australia's S&P/ASX 200 index gained 0.1 percent to 5,896.10 points and South Korea's KOSPI declined 0.4 percent to 2,471.60 points.
Shanghai composite index fell 0.5 percent to 3,366.06 points, while CSI300 index was trading 0.4 percent down at 3,927.74 points.
Hong Kong’s Hang Seng was trading 0.2 percent lower at 28,639.80 points. Taiwan shares added 0.5 percent to 10,776.39 points.
Commodities Recap
Crude oil prices declined, after rising to multi-week highs in the previous session on continuous supply cuts led by OPEC, tensions in the Middle East and lower production in the United States. International benchmark Brent crude was trading 0.2 percent down at $58.10 per barrel by 0413 GMT, having hit a high of $58.51 on Wednesday, its highest since Sept. 28. U.S. West Texas Intermediate was trading 0.1 percent lower at $51.96 a barrel, after rising as high as $52.31 the day before, its highest since Sept. 28.
Gold prices slumped to an over 1-week low, as the dollar held firm near recent highs on the back of strong U.S. Treasury yields. Spot gold was 0.1 percent down at $1,278.85 an ounce at 0418 GMT, having hit a low of $1,276.57 earlier in the session, its lowest since Oct. 9. U.S. gold futures for December delivery were flat at $1,283 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.341 percent higher by 0.002 bps, while 5-year yield was 0.001 bps up at 1.988 percent.
The Australian bonds slumped on better-than-expected September employment report, sending the benchmark 10-year bond yields over four basis points. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose more than 4 basis points to 2.779 percent, the yield on the long-term 30-year note also climbed nearly 4 basis points to 3.548 percent and the yield on short-term 2-year traded nearly 3-1/2 basis points higher at 1.952 percent.
The New Zealand government bonds closed lower following weakness in the U.S. Treasuries; however, investors still remain cautious as the country waited for the outcome of government coalition negotiations. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, gained 3-1/2 basis points to 2.955 percent, the yield on 15-year note also jumped 3 basis points to 3.29 percent and the yield on short-term 2-year ended 2-1/2 basis points higher at 2.09 percent.
The Canadian government bonds were lower across a steeper yield curve in sympathy with U.S. Treasuries as global equity markets climbed. The two-year dipped 0.5 Canadian cent to yield 1.514 percent and the 10-year declined 17 Canadian cents to yield 2.037 percent. The gap between Canada's 2-year yield and its U.S. equivalent widened a further 1.5 basis points to a spread of -5.3 basis points.
