Market Roundup
- U.S. tariffs on EU fan growth worries
- Gold rises amid global slowdown worries
- Oil price ease on growing inventories
- Australia Trade Balance misses surplus expectations
- ANZ World Commodity Price Index unchanged in September
Economic Data Ahead
- (0345 ET/0745 GMT) Italy Markit/IHS Svcs PMI
- (0345 ET/0745 GMT) Italy Composite PMI
- (0350 ET/0750 GMT) France Markit Serv PMI
- (0350 ET/0750 GMT) France Markit Comp PMI
- (0355 ET/0755 GMT) Germany Markit Services PMI
- (0355 ET/0755 GMT) Germany Markit Comp Final PMI
- (0400 ET/0800 GMT) Euro Zone Markit Serv Final PMI
- (0400 ET/0800 GMT) Euro Zone Markit Comp Final PMI
- (0430 ET/0830 GMT) United Kingdom Markit/CIPS Serv PMI
- (0430 ET/0830 GMT) United Kingdom Composite PMI
- (0500 ET/0900 GMT) EZ Retail Sales YY
- (0500 ET/0900 GMT) Euro Zone Producer Prices MM
- (0500 ET/0900 GMT) Euro Zone Producer Prices YY
Key Events Ahead
- (0345 ET/0745 GMT) Federal Reserve Bank of Chicago President Charles L. Evans' speech
FX Beat
DXY: The dollar index eased, weighed down by signs of a slowdown in U.S. economic growth and a deepening of global trade tensions. The yields on two-year U.S. Treasury yields declined as downbeat data on manufacturing and the jobs market suggested the trade war with China has damaged the U.S. economy. The greenback against a basket of currencies traded 0.05 percent down at 99.01, having touched a high of 99.67 on Tuesday, its highest since May 2017.
EUR/USD: The euro consolidated within narrow ranges amid concern that the European Central Bank is running out of room to manoeuvre in the face of a weakening economy. The European currency traded flat at 1.0957 having touched a low of 1.0897 on Tuesday, its lowest since May 2017. Investors’ attention will remain on a series of data out from the Eurozone economies and EZ producer price index, retail sales and Markit Service and Composite PMI's, ahead of the U.S. unemployment benefit claims, factory orders, non-manufacturing PMI by Markit and ISM and Fed officials' speech. Immediate resistance is located at 1.0994 (50% retracement of 1.1109 and 1.0879), a break above targets 1.1021 (61.8% retracement). On the downside, support is seen at 1.0929 (5-DMA), a break below could drag it below 1.0904.
USD/JPY: The dollar eased to a 1-week low after data showed hiring by U.S. private employers had slowed in September, indicating that the U.S.-China trade dispute which have pressured manufacturing, could be spilling over to the labor market. Moreover, news that the United States opened a new trade war front by saying it will impose tariffs on $7.5 billion of goods from the European Union further undermined investor sentiment. The major was trading down at 107.15, having hit a low of 106.96 earlier, its lowest since September 24. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, factory orders, non-manufacturing PMI by Markit and ISM and Fed officials' speech. Immediate resistance is located at 107.75 (5-DMA), a break above targets 108.25 (September 13 High). On the downside, support is seen at 106.76 (September 9 Low), a break below could take it near at 106.25 (August 22 Low).
GBP/USD: Sterling consolidated within thin ranges as British Prime Minister Boris Johnson proposed an all-island regulatory zone in Ireland in his final proposal for a Brexit deal before the end of the month. The major traded flat at 1.2295, having hit a low of 1.2204 on Tuesday, it’s lowest since September 4. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2373 (10-DMA), a break above could take it near 1.2400. On the downside, support is seen at 1.2233 (September 9 Low), a break below targets 1.2210 (September 5 Low). Against the euro, the pound was trading 0.1 percent down at 89.11 pence, having hit a low of 89.36 on Tuesday, it’s lowest since Sept. 13.
AUD/USD: The Australian dollar steadied after tumbling to its lowest level in a decade in the previous session on fears that the Reserve Bank of Australia could be forced into unconventional policy measures to save the economy from stagnation if it’s latest round of interest rates cuts fail to stimulate growth. The RBA warned that there could be more cuts to come as it pursues to reduce unemployment and keep inflation between 2 percent and 3 percent. The Aussie trades 0.2 percent up at 0.6717, having hit a low of 0.6670 on Wednesday, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6687, a break below targets 0.6635. On the upside, resistance is located at 0.6754 (10-DMA), a break above could take it near 0.6799 (August 21 High).
NZD/USD: The New Zealand dollar treads water after data showed the ANZ World Commodity Price Index was unchanged in September. The Kiwi trades flat at 0.6267, having touched a low of 0.6203 on Tuesday, its lowest level since September 2015. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6299 (September 23 High), a break above could take it near 0.6362 (September 18 High). On the downside, support is seen at 0.6221, a break below could drag it below 0.6205.
Equities Recap
Asian stocks plunged to a 1-month low after the United States opened a new trade war front by saying it will impose tariffs on $7.5 billion of goods from the European Union.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.8 percent.
Tokyo's Nikkei fell 2.1 percent to 21,321.20 points, Australia's S&P/ASX 200 index slumped 2.1 percent to 6,502.20 points and South Korea's KOSPI declined 1.9 percent to 2,031.91 points
Hong Kong’s Hang Seng traded 0.5 percent lower at 25,904.44 points. Taiwan shares shed 0.7 percent to 10,875.91 points.
Chinese markets will be shut for a week.
Commodities Recap
Crude oil prices steadied after falling to a near 2-month low in the previous session on reports that U.S. crude inventories rose 3.1 million barrels last week, far exceeding expectations for an increase of 1.6 million barrels. International benchmark Brent crude was trading 0.5 percent up at $57.71 per barrel by 0449 GMT, having hit a low of $57.19 the day before, its lowest since August 9. U.S. West Texas Intermediate was trading 0.7 percent higher at $52.40 a barrel, after falling as low as $52.14 on Wednesday, its lowest since August 8.
Gold prices eased after rising by more than 1-percent in the previous session on weaker-than-expected U.S. jobs data that reinforced global economic slowdown fears and raised expectations of further monetary policy easing by the U.S. Federal Reserve. Spot gold was trading 0.1 percent down at $1,498.42 per ounce at 0455 GMT, having touched a low of $1,458.97 on Tuesday, its lowest since August 6. U.S. gold futures were down 0.1 percent at $1,506.4 an ounce.
Treasuries Recap
The Japanese government bond prices rose as weak U.S. data disappointed investors and as Washington opened a new front in its trade dispute with Europe by imposing tariffs. The benchmark 10-year JGB futures rose 0.29 point to 154.92. The 10-year cash JGB yield fell 2 basis points to minus 0.190 percent. In the super-long zone, the 40-year yield fell 3 basis points to 0.430 percent and the 30-year yield fell 2.5 basis points to 0.365 percent, while the 20-year yield was flat at 0.225 percent. At the shorter end of the curve, the two-year yield fell 1.5 basis points to minus 0.325 percent and the five-year yield fell 2 basis points to minus 0.350 percent.
The Australian government bonds jumped during Asian session tracking a similar movement in the United States Treasuries amid surging safe-haven demand ahead of the country’s trade balance data for the month of August, scheduled to be released later today for further direction in the debt market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 3-1/2 basis points to 0.932 percent, the yield on the long-term 30-year bond surged nearly 3 basis points to 1.549 percent and the yield on short-term 2-year remained nearly 1-1/2 basis points higher at 0.654 percent.
