Market Roundup
- Fed seen announcing plans to unwind debt portfolio.
- If threatened, U.S. will 'totally destroy' North Korea, Trump vows.
- Japan PM Abe to push back timing of balancing primary budget.
- Japan August trade surplus Y113.6 bln, Y93.9 eyed, exports +18.1%, imports +15.2%.
- Japan exports best since Nov ’13, to US +21.8%, China +25.8%, Asia +19.9%.
- New Zealand Q2 Current Account q/q, -0.62 bln vs forecast -0.88 bln, last 0.24 bln.
- New Zealand Q2 Current Account y/y, -7.49 bln vs forecast -8.08 bln, laat -8.13 bln.
- UK employers' optimism falls to lowest since Brexit vote.
- Global economy is in better shape, geopolitical risks remain – RBA.
Economic Data Ahead
- (0430 ET/0830 GMT) UK August Retail Sales, 0.2% m/m, 1.1% y/y eyed; last 0.3%, 1.3%.
Key Events Ahead
- N/A ECB Governing Council meeting scheduled in Frankfurt.
- (0535 ET/0935 GMT) Germany E2 bln for 31 year auction.
- (0535 ET/0935 GMT) PT E1.5-1.75/E1.5-1.75 bln for 6/12 months auction.
- (0800 ET/1200 GMT) Sweden's Deputy c.bank Governor Martin Floden speaks in Stockholm.
- (1400 ET/1800 GMT) FOMC rate decision.
FX Recap
USD: The dollar index, which tracks the greenback against a basket of six major rivals, added 0.1 percent to 91.855, holding well above its more than 2-1/2 year low of 91.011 plumbed on Sept. 8.
EUR/USD: The euro was steady on the day, at $1.2014. European Central Bank policymakers disagree on whether to set a definitive end-date for their money-printing programme when they meet in October, raising the chance that they will keep open at least the option of prolonging it again. Pair made intraday high at $1.2019 and low at $1.1986 levels. A sustained close above $1.2034 is requires for the upside rally. Alternatively, reversal from key resistance will drag the parity down towards $1.1838 marks. Immediate support was seen 1.1838 and resistance was seen at 1.2070 marks.
USD/JPY: The yen trades marginally higher against U.S. dollar after trade balance data and was trading around 111.45 marks. Pair made intraday high at 111.64 and low at 111.41 levels. A sustained close above 111.58 is required to take the parity higher towards 112.20, 113.12, 115.37 and 117.42 marks. Alternatively, a daily close below 111.58 will drag the parity down towards 109.23 levels.
GBP/USD: The sterling see-sawed on Tuesday, rising on a report that the UK foreign minister Boris Johnson could resign before the weekend if his demands over Brexit were not met before easing back after Johnson denied he would quit. Sterling rose as much as 3.3 percent last week, jumping more than four cents to $1.3618 on the back of hawkish messages from the BoE and Gertjan Vlieghe, one of the Bank's rate-setters normally considered a dove. The currency is up nearly 19 percent against the dollar this year. The pair was trading around $1.3517 marks.
AUD/USD: The Australian dollar held above the key level of 80 cents on Wednesday as yields on government bonds hit their highest since late 2015, while more domestic banks predicted the central bank will hike rates next year. Pair made intraday high at $0.8034 and low at $0.7999 marks. Immediate support was seen at $0.7955 mark while resistance was seen at $0.8054 mark.
NZD/USD: The New Zealand dollar rose 0.4 percent to $0.7338, not far from a one month high of $0.7344 touched last week.
Equities Recap
Japan’s Nikkei was trading 0.06 pct lower at 20,288.56 points.
Hong Kong’s Hang seng was trading 0.17 percent higher at 28,100.29 points.
Australia’s S&P/ASX 200 was trading 0.16 pct lower at 5,704.11 points.
Shanghai composite index to open down 0.1 pct at 3,352.18 points and China's CSI300 index to open down 0.1 pct at 3,830.15 points.
Taiwan stock was trading around 0.70 pct lower at 10,501.32 points.
India’s NSE Nifty was trading around 0.04 percent lower at 10,143.15 points and BSE Sensex was trading at 0.07 percent higher at 32,425.22 points.
South Korea’s kospi was trading 0.15 percent lower at 2,412.22 points.
Commodities Recap
Oil prices rose on Wednesday after Iraq's oil minister said OPEC and other crude producers were considering extending or even deepening a supply cut to curb a global glut, while a report showed a smaller-than-expected increase in U.S. inventories. U.S. West Texas Intermediate (WTI) crude futures were up 33 cents, or 0.7 percent, at $49.81 a barrel at 0419 GMT. Brent crude futures climbed 23 cents, or 0.4 percent, to $55.37.
Gold was steady on Wednesday, with investors in wait-and-see mode ahead of the outcome of a two-day Federal Reserve meeting in the United States. Spot gold was flat at $1,310.93 an ounce at 0039 GMT. U.S. gold futures for December delivery were up 0.3 percent to $1,314.40 an ounce.
Treasuries Recap
New Zealand government bonds slipped, sending yield 4.5 basis points higher across the curve.
Australian government bond futures eased too, with the three-year bond contract down 2 ticks at 97.770. The 10-year contract edged 1.5 ticks lower to 97.1400.
