Market Roundup
- Trump intends to nominate ex-Fed economist Liang for Fed board seat -White House
- Trump defends Supreme Court nominee as accuser faces deadline
- U.S. ready to resume North Korea talks, seeks denuclearization by 2021
- Alibaba's Jack Ma says U.S.-China trade war ends 1 mln U.S. jobs promise – Xinhua
- Britain's May appeals to EU leaders but no sign of Brexit deal
- Japan's Abe likely to win party vote but faces Trump trade challenge
- Japan hit by another cryptocurrency heist, $60 million stolen
- Canada PM urges some U.S. flexibility in NAFTA, talks seen slow
- Divisive Brazil election careens into 'dangerous' polarization
- NZ quarterly growth hits fastest in 2 years, but challenges loom
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Aug Retail Sales MM, -0.2% f'cast, 0.7% prev
- (0430 ET/0830 GMT) Great Britain Aug Retail Sales YY, 2.3% f'cast, 3.5% prev
- (0430 ET/0830 GMT) Great Britain Aug Retail Sales Ex-Fuel MM, -0.2% f'cast, 0.9% prev
- (0430 ET/0830 GMT) Great Britain Aug Retail Sales Ex-Fuel YY, 2.5% f'cast, 3.7% prev
- (1000 ET/1400 GMT) EZ Sep Consumer Confidence Flash Net Bal, -2.00 f'cast, -1.90 prev
Key Events Ahead
- (0300 ET/0700 GMT) Riksbank Deputy Governor Cecilia Skingsley will hold a breakfast presentation on the economic situation and current monetary policy in Stockholm
- (0330 ET/0730 GMT) German Finance Minister Olaf Scholz holds a speech on "100 years of sales tax" in Berlin
- (0330 ET/0730 GMT) Swiss National Bank (SNB) Monetary policy assessment in Zurich
- (0400 ET/0800 GMT) Norway's Central Bank holds Announcement of the Executive Board's interest rate decision and publication of Monetary Policy followed by press conference in Oslo
- (1115 ET/1515 GMT) Bundesbank President Jens Weidmann speaks in Freiburg, Germany
- (1200 ET/1600 GMT) Federal Reserve issues Quarterly Financial Accounts of the United States (Z.1) in Washington
- (1320 ET/1720 GMT) ECB's Peter Praet Address on “Challenges to monetary policy normalization” at conference “Sustainable Policy Responses – EU and US Perspectives” organized by SUERF in New York City.
FX Beat
DXY: The dollar index declined, extending losses for the third straight session after China imposed new retaliatory levies on about $60 billion worth of U.S. goods. The greenback against a basket of currencies trades 0.1 percent down at 94.48, having touched a low of 94.32 on Wednesday, its lowest since July 31. FxWirePro's Hourly Dollar Strength Index stood at -40.49 (Neutral) by 0500 GMT.
EUR/USD: The euro rose, extending previous session gains, as the greenback eased on relief that the U.S.-China trade war may not be as severe as markets expected. The European currency traded 0.1 percent up at 1.1679, having touched a high of 1.1724 on Tuesday, its highest since Aug 28. FxWirePro's Hourly Euro Strength Index stood at 4.70 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone prelim consumer confidence, ahead of the U.S. existing home sales and unemployment benefit claims data. Immediate resistance is located at 1.1718 (August 30 High), a break above targets 1.1747 (July 31 High). On the downside, support is seen at 1.1584 (August 31 Low), a break below could drag it till 1.1542 (September 5 Low).
USD/JPY: The dollar eased, drifting further away from a 2-month peak touched in the previous session, as investors remained cautious amid concerns over Brexit, NAFTA, and the U.S.- China trade dispute. The major was trading 0.1 percent down at 112.18, having hit a high of 112.44 on Wednesday, its highest since July 20. FxWirePro's Hourly Yen Strength Index stood at -96.26 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. existing home sales and unemployment benefit claims data. Immediate resistance is located at 112.62 (July 12 High), a break above targets 112.92 (July 17 High). On the downside, support is seen at 111.76 (September 17 Low), a break below could take it lower 111.35 (September 5 Low).
GBP/USD: Sterling consolidated within narrow ranges, after rising to 2-month highs in the previous session on the back of upbeat UK inflation data. However, it erased gains after the Times reported that Prime Minister Theresa May had rejected an improved offer from the European Union to solve the Irish border issue. The major traded 0.05 percent down at 1.3150, having hit a high of 1.3214 on Wednesday; it’s highest since July 17. FxWirePro's Hourly Sterling Strength Index stood at 44.37 (Neutral) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit trade deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3244 (July 12 High), a break above could take it near 1.3274 (July 5 High). On the downside, support is seen at 1.3098 (September 19 Low), a break below targets 1.3056 (10-DMA). Against the euro, the pound was trading 0.05 percent down at 88.83 pence, having hit a high of 88.61 on Wednesday, it’s highest since August 2.
AUD/USD: The Australian dollar edged down after rising to near 2-week peak in the previous session on the back of Chinese Premier Li Keqiang's comments, citing that Beijing wouldn’t devalue the yuan to make its exports more competitive. The Aussie trades 0.1 percent down at 0.7257, having hit a high of 0.7275 on Wednesday; it’s highest since August 30. FxWirePro's Hourly Aussie Strength Index stood at 115.29 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7221 (21-DMA), a break below targets 0.7169 (10-DMA). On the upside, resistance is located at 0.7286 (August 17 High), a break above could take it near 0.7303 (78.6% retracement of 0.7362 and 0.7085).
NZD/USD: The New Zealand dollar rallied to a near 3-week peak after data showed NZ's economy grew at its fastest in two years last quarter, forcing investors to trim bets of a cut in RBNZ’s official interest rates. The economy's gross domestic product grew 1 percent in the second quarter, double the pace of the previous quarter. The Kiwi trades 0.5 percent up at 0.6649, having touched a high of 0.6653 earlier, its highest level since August 31. FxWirePro's Hourly Kiwi Strength Index was at 168.10 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6677 (78.6% retracement of 0.6727 and 0.6500), a break above could take it near 0.6700). On the downside, support is seen at 0.6538 (September 17 Low), a break below could drag it below 0.6500 (September 11 Low).
Equities Recap
Asian shares rallied as investors took a less bearish view on the impact of the U.S.-China trade war on markets.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.
Tokyo's Nikkei surged 0.2 percent to 23,724.04 points, Australia's S&P/ASX 200 index declined 0.3 percent to 6,172.00 points, and South Korea's KOSPI gained 0.8 percent to 2,327.75 points.
Shanghai composite index rose 0.1 percent to 2,733.24 points, while CSI300 index traded 0.1 percent up at 3,314.62 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 27,444.08 points. Taiwan shares shed 0.2 percent to 10,831.41 points.
Commodities Recap
Crude oil prices surged amid another drawdown in U.S. inventories, coupled with strong U.S. gasoline demand and signs OPEC may not increase output to address easing supplies from Iran. International benchmark Brent crude was trading 0.4 percent up at $79.01 per barrel by 0448 GMT, having hit a high of $79.69 on Tuesday, its highest since September 12. U.S. West Texas Intermediate was trading 0.6 percent up at $71.22 a barrel, after rising as high as $71.47 on Wednesday, its highest since July 13.
Gold prices rose as the dollar weakened amid easing U.S.-China trade tensions and ahead of next week's U.S. Federal Reserve meeting. Spot gold was 0.1 percent up at $1,205.50, as of 0458 GMT, having hit a high of $1212.55 on Thursday, its highest since Aug. 28. U.S. gold futures were up 0.2 percent at $1,210.20 an ounce.
Treasuries Recap
The Japanese government bond prices remained tad lower during late Asian session as investors are hoping to see a slight rise in the country’s consumer price inflation (CPI) figures, due to be released today for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered at 0.119 percent, the yield on the long-term 30-year note rose 1/2 basis point to 0.857 percent and the yield on short-term 2-year also remained tad higher at -0.103 percent.
The Australian government bonds slumped across the curve during Asian session after the U.S. 10-year Treasuries yield surged to 4-month high on expectations of the Federal Reserve policy tightening. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1-1/2 basis points to 2.718 percent, the yield on the long-term 30-year bond traded 1 basis point higher at 3.207 percent and the yield on short-term 2-year climbed 1-1/2 basis points to 2.137 percent by 03:20GMT.
The Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries, with the 10-year falling 27 Canadian cents to yield 2.420 percent. The 10-year yield touched its highest intraday since May 24 at 2.431 percent.
