Market Roundup
- Oil retreats on renewed demand concerns
- Gold hits two-week high on weak U.S. data
- RBA unlikely to cut interest rates again in November
Economic Data Ahead
- (0400 ET/0800 GMT) German IFO Business climate October
- (0400 ET/0800 GMT) German IFO Current Assessment October
- (0400 ET/0800 GMT) German IFO Expectations October
Key Events Ahead
- No significant event scheduled
FX Beat
DXY: The dollar index steadied near a 1-week peak as investors remain focused on next week’s U.S. Federal Reserve policy meeting at which it’s almost certain to cut interest rates for a third time this year. The greenback against a basket of currencies traded flat at 97.67, having touched a low of 97.14 last week, its lowest since August 9.
EUR/USD: The euro consolidated near a 1-week low recorded in the previous session, weighed down by business surveys which point to stagnating economic momentum in the eurozone. The European currency traded flat at 1.1103, having touched a high of 1.1093 on Thursday, its highest since August 14. Investors’ attention will remain on a series of data out of Eurozone economies and German Ifo survey, ahead of the U.S. Michigan consumer sentiment index. Immediate resistance is located at 1.1139 (5-DMA), a break above targets 1.1190. On the downside, support is seen at 1.1075, a break below could drag it below 1.1046.
USD/JPY: The dollar surged as investors awaited the U.S. Federal Reserve meeting ending October 30 and a Bank of Japan meeting ending October 31. The Fed is expected to cut interest rates for a third time this year, while the BOJ is leaning toward keeping policy on hold next week. The major was trading up at 108.56, having hit a low of 108.24 on Wednesday, its lowest since October 15. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Michigan consumer sentiment index. Immediate resistance is located at 108.99 (July 31 High), a break above targets 109.31 (August 1 High). On the downside, support is seen at 108.03 (October 14), a break below could take it near at 107.65.
GBP/USD: Sterling declined, hovering towards a 1-week trough hit in the previous session as Prime Minister Boris Johnson’s call for an election raised more uncertainty over Brexit impasse. Investors now await a meeting later in the day where European Union officials may decide how long they will extend Britain’s deadline to leave the EU beyond the current date of October 31. The major traded 0.05 percent lower at 1.2843, having hit a low of 1.2788 the day before, it’s lowest since October 17. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2913 (5-DMA), a break above could take it near 1.2977. On the downside, support is seen at 1.2800, a break below targets 1.2748. Against the euro, the pound was trading 0.1 percent down at 86.46 pence, having hit a high of 85.74 last week, it’s highest since May 8.
AUD/USD: The Australian dollar rebounded from a 1-week low hit earlier in the session, as the recent comments by Reserve Bank of Australia Governor, Philip Lowe, sharply downgraded the chances of a November rate cut. The Aussie trades 0.2 percent up at 0.6829, having hit a low of 0.6809 earlier, it’s lowest since October 17. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6801, a break below targets 0.6780. On the upside, resistance is located at 0.6850 (5-DMA), a break above could take it near 0.6880.
NZD/USD: The New Zealand dollar plunged to a 1-week trough amid mixed sentiment surrounding the U.S.-China trade deal. The Kiwi trades 0.05 percent down at 0.6380, having touched a low of 0.6366 earlier, its lowest level since October 18. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6400 (5-DMA), a break above could take it near 0.6471 (August 13 High). On the downside, support is seen at 0.6356 (10-DMA), a break below could drag it below 0.6326.
Equities Recap
Asian shares nudged lower as investors were reluctant to take big positions ahead of key central bank policy meetings in the United States and Japan next week against the backdrop of slowing global growth.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.05 percent.
Tokyo's Nikkei gained 0.1 percent to 22,765.35 points, Australia's S&P/ASX 200 index rose 0.7 percent to 6,739.20 points and South Korea's KOSPI eased 0.1 percent to 2,084.00 points.
Shanghai composite index rose 0.2 percent to 2,946.44 points, while CSI 300 index traded 0.3 percent up at 3,883.40 points.
Hong Kong’s Hang Seng traded 0.4 percent lower at 26,707.28 points. Taiwan shares shed 0.2 percent to 11,296.12 points.
Commodities Recap
Crude oil prices declined after three straight days of gains, weighed down by renewed concerns about fuel demand in light of gloomy economic growth forecasts. International benchmark Brent crude was trading 0.3 percent down at $61.29 per barrel by 0518 GMT, having hit a high of $61.88 the day before, its highest since September 30. U.S. West Texas Intermediate was trading 0.3 percent lower at $55.84 a barrel, after rising as high as $56.47 on Thursday, its highest since September 27.
Gold prices declined after rising to a 2-week high in the previous session on weak U.S. economic data that spurred expectations for another interest rate cut by the Federal Reserve later this month. Spot gold was trading 0.1 percent down at $1,502.49 per ounce by 0524 GMT, having hit a high of $1,503.91, its highest since Oct. 10. The metal has gained 0.8 percent this week and is heading for its biggest weekly gain since the week ended Aug. 20. U.S. gold futures were flat at $1,505 per ounce.
Treasuries Recap
The Japanese government bond prices were mostly steady, as investors awaited key central bank policy meetings due next week. The benchmark 10-year JGB futures fell 0.10 point to 154.11. The key 10-year cash JGB yield was flat at minus 0.150 percent. In the super-long zone, the 20-year and the 30-year yields stood flat at 0.240 percent and 0.385 percent, respectively, while the 40-year yield fell 1 basis point to 0.410 percent. At the shorter end of the curve, the two-year and the five-year yields rose 1 basis point each to minus 0.245 percent and minus 0.245 percent, respectively.
