Market Roundup
- Catalan leader under pressure to drop independence
- BOJ Gov Kuroda pledges to stick with quantitative easing
- Japan's Abe takes aim at new parties in opening shots of election campaign
- China says will have no problem meeting 2017 growth target, may beat it
- China Sept survey-based jobless rate in major cities at 4.83 pct, lowest since 2012
- UK consumers spend more to meet higher food and clothing prices
- "Ball in your court" - Britain, EU clash over next Brexit move
- Merkel deems migrant deal good for coalition talks but Greens skeptical
- Eurozone debates bailout fund future, sees backstop, crisis prevention role
- Australia Sep NAB Business Conditions, 14 vs 15
- New Zealand First leader welcomes politically driven drop in NZ$
- Turkey urges U.S. to review visa suspension as lira, stocks tumble
Economic Data Ahead
- (0245 ET/0645 GMT) France Aug Industrial Output, 0.4% eyed, last 0.5%
- (0400 ET/0800 GMT) Italy Aug Industrial Output, 0.1% m/m, 2.8% y/y eyed; last 0.1%, 4.4%
- (0430 ET/0830 GMT) Great Britain Aug Goods Trade Balance GBP, -11.20 bln eyed, last -11.58 bln
- (0430 ET/0830 GMT) Great Britain Aug Manufacturing Output, 1.9% y/y, 0.2% m/m eyed; last 1.9%, 0.5%
- (0430 ET/0830 GMT) Great Britain Aug Industrial Output YY, 0.8% y/y, 0.2% m/m eyed; last 0.4%, 0.2%
- (0430 ET/0830 GMT) Great Britain Aug Construction O/P Vol, 0.2% y/y, 0.0% m/m eyed; last -0.4%, -0.9%
Key Events Ahead
- N/A Economic and Financial Affairs Council meeting in Luxembourg
- (0630 ET/1030 GMT) Germany EI 1.000 bln for 9-year auction
- (0630 ET/1030 GMT) UK 2.500 bln for 20-year auction
- (0800 ET/1200 GMT) Finland E0.800 bln for 5-year auction
FX Beat
DXY: The dollar index edged away from a 10-week high as tensions between the United States and North Korea remained escalated. The greenback against a basket of currencies traded 0.2 percent down at 93.53, having touched a high of 94.27 on Friday, its highest since July. 26. FxWirePro's Hourly Dollar Strength Index stood at -66.27 (Bearish) by 0500 GMT.
EUR/USD: The euro rose to a 6-day high as investors shifted focus on Catalan President Carles Puigdemont's key address to the regional parliament. The European currency traded 0.3 percent up at 1.1771, having touched a low of 1.1669 on Friday, its lowest since Aug. 17. FxWirePro's Hourly Euro Strength Index stood at 62.97 (Bullish) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of U.S. Economic Optimism data and Redbook index. Immediate resistance is located at 1.1800, a break above targets 1.1847 (21-DMA). On the downside, support is seen at 1.1699 (Oct 5 Low), a break below could drag it near 1.1650.
USD/JPY: The dollar continued to consolidate within narrow ranges, amid prevalent positive trading sentiment around Asian equity markets. The major was trading flat at 112.66, having hit a high of 113.43 last week, its highest since July. FxWirePro's Hourly Yen Strength Index stood at 48.05 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. Economic Optimism data and Redbook index for further momentum. Immediate resistance is located at 113.00, a break above targets 113.40. On the downside, support is seen at 112.33 (Previous Session Low), a break below could take it near 112.21.
GBP/USD: Sterling rallied, extending previous session gains, following the release of upbeat UK BRC retail sales data and an upward revision to the labor cost index. Britain's BRC Like-For-Like Retail Sales increased at an annualized rate to 1.9 percent in September from previous 1.3 percent. Sterling traded 0.2 percent up at 1.3165, having hit a low of 1.3027 on Friday, its lowest since Sept. 6. FxWirePro's Hourly Sterling Strength Index stood at 71.02 (Bullish) by 0400 GMT. Investors’ focus will remain on UK manufacturing production, industrial production, and Trade balance report, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3200, a break above could take it near 1.3275 (10-DMA). On the downside, support is seen at 1.3100, a break below targets 1.3027 (Oct 6 Low). Against the euro, the pound was trading 0.1 low at 89.42 pence, having hit a low of 89.92 pence on Friday, its lowest since Sept. 14.
AUD/USD: The Australian dollar rose, halting its 3-day losing streak after the National Bank of Australia stated that the RBA could be ready to hike interest rates in the second half of 2018. The Aussie trades 0.5 percent up at 0.7787, having hit a low of 0.7733 on Friday, it’s lowest since Jul. 14. FxWirePro's Hourly Aussie Strength Index stood at -46.41 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7725 (Jul. 14 Low), a break below targets 0.7700. On the upside, resistance is located at 0.7803 (5-DMA), a break above could take it near 0.7825 (10-DMA).
NZD/USD: The New Zealand dollar rebounded after hitting a fresh four-month low earlier in the session on weaker-than-expected NZ electronic card retail sales data. The major recovered amid resurgent U.S. dollar selling across the board, as tensions between the U.S. and North Korea escalated. The Kiwi trades 0.05 percent up at 0.7067, having touched a low of 0.7055 earlier in the session, its lowest level since Jun. 2. FxWirePro's Hourly Kiwi Strength Index was at -106.39 (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 0.7118 (5-DMA), a break above could take it near 0.7277 (Sept. 26 High). On the downside, support is seen at 0.7055 (Session Low), a break below could drag it till 0.7000.
Equities Recap
Asian shares gained, shrugging off modest losses on Wall Street, while the greenback eased from 10-week highs as tensions between the United States and North Korea continued to escalate.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent.
Tokyo's Nikkei rose 0.6 percent to 20,813.93 points, Australia's S&P/ASX 200 index eased 0.05 percent to 5,738.10 points.
Shanghai composite index eased 0.1 percent to 3,371.50 points, while CSI300 index was trading 0.2 percent down at 3,873.18 points.
Hong Kong’s Hang Seng was trading 0.5 percent higher at 28,457.39 points.
Commodities Recap
Crude oil prices rose, extending previous session gains, as OPEC said there were clear signs the market was rebalancing. International benchmark Brent crude was trading 0.3 percent up at $55.83 per barrel by 0428 GMT, having hit a low of $55.04 the day before, its weakest since Sept. 19. U.S. West Texas Intermediate was trading 0.2 percent higher at $49.62 a barrel, after falling as low as $49.11 in the previous session, its lowest since Sept. 13.
Gold prices rallied to their strongest level in more than a week as renewed concerns over North Korea's nuclear plans strengthened safe-haven demand. Spot gold was up 0.3 percent at $1,286.92 an ounce by 0438 GMT, after touching a high of $1,288.06, its highest level since Sept. 29. U.S. gold futures for December delivery gained 0.6 percent to $1,282.40 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.366 percent lower by 0.002 bps, while 5-year yield was 0.005 bps down at 1.962 percent.
The Australian government bond futures eased, with the three-year bond contract down 2 ticks at 97.84. The 10-year contract fell 1 tick to 97.1400.
The New Zealand government bonds slipped, sending yields 2.5 basis points higher at the long-end of the curve.
