Market Roundup
- Trump says he remains unsatisfied with Saudi accounts on Khashoggi
- Trump threatens to cut Central America aid over migrant caravan
- Trump eyeing a 10 percent middle-income tax cut plan
- Russia pledges 'balance' if U.S. quits nuclear pact; Trump eyes more weapons
- Nomura, Chinese government to set up a 150 billion yen fund - source
- UK's May tries to calm Brexit rebels, says deal almost done
- Mexico's next president vows security for banks in Santander meeting
- Refugee offer could strengthen embattled Australian PM's grip on power
Economic Data Ahead
- (0200 ET/0600 GMT) Germany Sep Producer Prices, 0.3% m/m, 2.9% y/y f’cast; 0.3%, 3.1% prev
- (0600 ET/1000 GMT) Great Britain Oct CBI Trends – Orders, -1 f’cast, -1 prev
- (1000 ET/1400 GMT) EZ Oct Consumer Confid. Flash, -3.2 f’cast, -2.9 prev
Key Events Ahead
- (0300 ET/0700 GMT) Riksbank holds executive board meeting, monetary policy meeting No. 5 in Stockholm
- (0630 ET/1030 GMT) BoE Executive Director Andy Haldane gives seminar Launch of the OECD NAEC Innovation Lab in France
- (0830 ET/1230 GMT) Fed Philadelphia issues Non-manufacturing Business Outlook Survey for October in Philadelphia
- (0930 ET/1330 GMT) Fed Minneapolis President Neel Kashkari speaks at a conference in Minneapolis
- (1120 ET/1520 GMT) BoE Governor Mark Carney speaks at a University of Toronto conference.
- (1330 ET/1730 GMT) Fed Atlanta President Raphael Bostic speaks in Baton Rouge
- (1415 ET/1815 GMT) Fed Dallas President Robert Kaplan participates in a summit in Galveston, Texas
- (1815 ET/2215 GMT) Fed Chicago President Charles Evans participates in moderated Q&A at Northwestern University, Evanston
FX Beat
DXY: The dollar index edged up, hovering towards a near 2-week peak touched in the previous session, following a rise in U.S. Treasury yields. The greenback against a basket of currencies trades flat at 96.04, having touched a high of 96.09 on Monday, its highest since October 9. FxWirePro's Hourly Dollar Strength Index stood at 124.24 (Highly Bullish) by 0400 GMT.
EUR/USD: The euro eased, extending previous session losses, amid growing political uncertainty in Europe over Italy's spending plans. The European currency traded 0.1 percent down at 1.1453, having touched a low of 1.1432 on Friday, its lowest since October 9. FxWirePro's Hourly Euro Strength Index stood at -82.00 (Slightly Bearish) by 0400 GMT. Investors’ attention will remain on German producer price index and Eurozone prelim consumer confidence, ahead of FOMC officials' speeches. Immediate resistance is located at 1.1503 (October 9 High), a break above targets 1.1545 (October 10 High)). On the downside, support is seen at 1.1432 (October 9 Low), a break below could drag it till 1.1400.
USD/JPY: The dollar declined after rising to a 12-day high in the previous session, as uncertainty over Brexit negotiations and Italy's free-spending budget sent investors seeking safety in safe-haven assets. The major was trading 0.2 percent down at 112.56, having hit a high of 112.88 on Monday, its highest since October 10. FxWirePro's Hourly Yen Strength Index stood at 86.31 (Slightly Bullish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of FOMC officials' speeches. Immediate resistance is located at 113.13 (September 26 High), a break above targets 113.46 (September 27 High). On the downside, support is seen at 112.04 (September 20 Low), a break below could take it lower 111.62 (September 15 Low).
GBP/USD: Sterling slumped to a near 3-week trough below the 1.3000 handle as stalled talks over the Irish border issue and discord within Britain's ruling Conservatives over Brexit could see Prime Minister Theresa May face a serious leadership challenge. The major traded 0.05 percent down at 1.2956, having hit a low of 1.2952 earlier; it’s lowest since October 4. FxWirePro's Hourly Sterling Strength Index stood at -95.86 (Slightly Bearish) 0400 GMT. Immediate resistance is located at 1.3023 (October 3 High), a break above could take it near 1.3090 (September 28 High). On the downside, support is seen at 1.2941 (October 2 Low), a break below targets 1.2900. Against the euro, the pound was trading flat at 88.39 pence, having hit a low of 88.56 on Monday, it’s lowest since October 4.
AUD/USD: The Australian dollar plunged to a near 2-week low as risks in the Chinese economy and its currency weighed on investor sentiment. The Aussie trades 0.3 percent down at 0.7063, having hit a low of 0.7058 earlier; it’s lowest since October 11. FxWirePro's Hourly Aussie Strength Index stood at -115.15 (Highly Bearish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7040 (October 8 Low), a break below targets 0.7000. On the upside, resistance is located at 0.7106 (October 9 High), a break above could take it near 7159 (October 17 High).
Equities Recap
Asian shares declined, as concerns over Italy's budget and Brexit talks weighed heavily on investor sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 1.4 percent.
Tokyo's Nikkei declined 2.3 percent to 22,087.16 points, Australia's S&P/ASX 200 index slumped 1.1 percent to 5,843.10 points and South Korea's KOSPI plunged 2.4 percent to 2,110.59 points.
Shanghai composite index fell 1.3 percent to 2,620.97 points, while CSI300 index traded 1.6 percent down at 3,217.57 points.
Hong Kong’s Hang Seng traded 2.2 percent lower at 25,588.11 points. Taiwan shares shed 1.8 percent to 9,793.75 points.
Commodities Recap
Crude oil prices declined after Saudi Arabia pledged to play a responsible role in energy markets, however, the downside was limited as markets remained nervous ahead of the U.S. sanctions against Iran's crude exports that start next month. International benchmark Brent crude was trading 0.6 percent down at $79.60 per barrel by 0415 GMT, having hit a low of $78.67 on Thursday, its lowest since September 21. U.S. West Texas Intermediate was trading 0.4 percent down at $69.24 a barrel, after falling as low as $68.50 on Thursday, its lowest since September 14.
Gold prices surged, boosted by political tensions between Saudi Arabia and Western powers, uncertainties around Brexit and Italy's budgetary woes. Spot gold was 0.1 percent up at $1,223.49 an ounce at 0418 GMT, having hit a high of $1233.14 last week, its highest since July 26. U.S. gold futures edged up 0.1 percent to $1,225.30 an ounce.
Treasuries Recap
The Australian government bonds gained across the curve during Asian session on Tuesday tracking firmness in the U.S. Treasuries amid stock market rout. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 2 basis points to 2.688 percent, the yield on the long-term 30-year bond dipped 2-1/2 basis points to 3.163 percent and the yield on short-term 2-year plunged 2 basis points to 2.024 percent.
The Canadian government bond prices were higher across a flatter yield curve, with the two-year up 1.5 Canadian cents to yield 2.292 percent and the 10-year rising 14 Canadian cents to yield 2.484 percent. The gap between Canada's 10-year yield and its U.S. equivalent widened by 1 basis point to a spread of 71.2 basis points in favor of the U.S. bond, its widest since July 24.
