Market Roundup
- Japan Aug core machinery orders +3.4% m/m, +4.4% y/y; forecast +1.1%, +0.8%
- U.S. flies bombers over Korea as Trump discusses options
- Catalonia baulks at formal independence declaration to allow talks
- Germany to raise economic growth forecast for 2017 to 2 pct - source
- Pledging to tackle inequality, UK PM May seeks identity beyond Brexit
- Scotland can still offer choice on independence from UK-Sturgeon
- Australia Oct Consumer Sentiment +3.6% to 101.4, first time above 100 since Nov 2016
- New Zealand First touts progress in talks to form govt, but decision delayed
- Fed's Kaplan says low 10-year yield an 'ominous' sign
Economic Data Ahead
- (0300 ET/0700 GMT) Spain Sep CPI, 0.2% m/m, 1.8% y/y; last 0.2%, 1.6%
- (0300 ET/0700 GMT) Spain Sep HICP, 0.6% m/m, 1.9% y/y; last 0.2%, 1.9%
Key Events Ahead
- (0400 ET/0800 GMT) Riksbank Deputy Gov Skingsley speaks in Kalmar
- (0500 ET/0900 GMT) Netherlands E6.000 bln for 7-year auction
- (0530 ET/0930 GMT) Portugal E0.600/E0.600 bln for 5/10 years auction
- (0630 ET/1030 GMT) Germany 3.000 bln for 5-year auction
- (0715 ET/1115 GMT) Fed's Evans speaks in Zurich
- (0800 ET/1200 GMT) Norges Bank Deputy Gov Nicolaisen speaks in Leknes
- (1450 ET/1850 GMT) ECB's Praet speaks in New York
FX Beat
DXY: The dollar index drifted further away from a 10-week high scaled recently amid speculation that President Donald Trump's tax overhaul plan would stall. The greenback against a basket of currencies traded flat at 93.26, having touched a low of 93.12 earlier, its highest since Sept. 29. FxWirePro's Hourly Dollar Strength Index stood at -74.80 (Bearish) by 0500 GMT.
EUR/USD: The euro rallied to a near 2-week high, supported by upbeat eurozone economic indicators and a slight ebb in Catalonia concerns. The European currency traded 0.1 percent up at 1.1816, having touched a high of 1.1827 earlier, its highest since Sept. 26. FxWirePro's Hourly Euro Strength Index stood at 136.47 (Highly Bullish) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of Fed official speeches. Immediate resistance is located at 1.1840 (21-DMA), a break above targets 1.1880. On the downside, support is seen at 1.1757 (10-DMA), a break below could drag it near 1.1700.
USD/JPY: The dollar steadied after falling to 2-week lows, supported by Dallas Fed President Robert Kaplan's hawkish comments and a recovery in the U.S. Treasury bond yields. The major was trading flat at 112.46, having hit a low of 111.99 on the prior day, its lowest since Sept. 26. FxWirePro's Hourly Yen Strength Index stood at -36.00 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of Fed official speeches for further momentum. Immediate resistance is located at 113.00, a break above targets 113.40. On the downside, support is seen at 111.99 (Previous Session Low), a break below could take it near 111.65.
GBP/USD: Sterling slightly eased as the dollar gained across the board ahead of the release of the FOMC Sept meeting minutes that could provide further clues on the prospects of December Fed interest rate hike. The major traded 0.1 percent down at 1.3195, having hit a low of 1.3027 on Friday, its lowest since Sept. 6. FxWirePro's Hourly Sterling Strength Index stood at 106.66 (Highly Bullish) by 0400 GMT. Investors’ focus will remain on U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3250 (10-DMA), a break above could take it near 1.3300. 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 89.52 pence, having hit a low of 89.92 pence on Friday, its lowest since Sept. 14.
AUD/USD: The Australian dollar edged higher, extending previous session gains after an upbeat consumer confidence reading boosted hopes for a rebound in consumption. The Aussie trades 0.1 percent up at 0.7784, having hit a low of 0.7733 on Friday, it’s lowest since Jul. 14. FxWirePro's Hourly Aussie Strength Index stood at -6.13 (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 0.7814 (10-DMA), a break above could take it near 0.7850.
NZD/USD: The New Zealand dollar rebounded after falling to a 4-month low in the previous sessions, amid renewed concerns over the economy's political scenario, after the Nationalist Party leader himself announced a deadline of Oct. 12 to declare the new government. The Kiwi trades 0.1 percent up at 0.7076, having touched a low of 0.7055 in the previous session, its lowest level since Jun. 2. FxWirePro's Hourly Kiwi Strength Index was at -105.02 (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 0.7101 (5-DMA), a break above could take it near 0.7149 (10-DMA). On the downside, support is seen at 0.7055 (Previous Session Low), a break below could drag it till 0.7000.
Equities Recap
Asian shares rallied to the highest in a decade as Wall Street touched all-time highs, while the greenback against a basket of currencies fell to two-week lows on worries that President Donald Trump's tax plan could stall.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.5 percent.
Tokyo's Nikkei rose 0.3 percent to 20,880.32 points, Australia's S&P/ASX 200 index gained 0.6 percent to 5,772.10 points and South Korea's KOSPI climbed 0.9 percent to 2,455.48 points.
Shanghai composite index rose 0.1 percent to 3,387.72 points, while CSI300 index was trading 0.3 percent up at 3,899.25 points.
Hong Kong’s Hang Seng was trading 0.1 percent higher at 28,511.39 points. Taiwan shares added 1.03 percent to 10,641.19 points.
Commodities Recap
Crude oil prices rose, extending previous day's gain, on signs that markets are gradually tightening after years of oversupply. International benchmark Brent crude was trading 0.3 percent up at $56.68 per barrel by 0429 GMT, having hit a low of $55.04 on Wednesday, its weakest since Sept. 19. U.S. West Texas Intermediate was trading 0.2 percent higher at $51.04 a barrel, after falling as low as $49.11 on Monday, its lowest since Sept. 13.
Gold prices steadied after hitting a near two-week high in the previous session, boosted by weakness in the U.S. dollar. Spot gold was up 0.1 percent at $1,287.82 an ounce by 0433 GMT, having touched its highest level since Sept. 27 at $1,294.13 in the previous session. U.S. gold futures for December delivery were nearly unchanged at $1,293 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.358 percent higher by 0.014 bps, while 5-year yield was 0.014 bps up at 1.959 percent.
The Australian government bond futures were a shade softer, with the three-year bond contract off 1 tick at 97.830. The 10-year contract eased half a tick to 97.1350.
The New Zealand government bonds picked up a safe-haven bid, pushing yields down 3 basis points across the curve.
The Canadian government bond prices inched higher across the yield curve, with the two-year up half a Canadian cent to yield 1.548 percent and the 10-year up 6 Canadian cents to yield 2.12 percent.
