Market Roundup
- New Zealand's kingmaker party to make announcement on govt formation Thursday
- Xi says China will let the market play decisive role in resource allocation
- Trump administration again declines to name China currency manipulator
- Catalonia refuses to renounce independence, separatist protesters rally
- UK firms freeze marketing spend as economic uncertainty rises -survey
- BoJ Policy Board Sakurai – Need to stick to current policy
- Underdog centre-left party may outperform expectations in Japan snap poll
- Japan Inc wants Abe election win albeit with fewer seats – Reuters poll
- Trump tax plan hits bump in Senate as Rand Paul weighs 'no' vote
- U.S. senators reach bipartisan deal on Obamacare, Trump indicates support
- China Aug U.S. Treasury securities holding, $1.201 trln vs $1.166 trln in July (Prev $1.166 trln)
- Japan Aug U.S. Treasury holding $1.102 trln vs $1.113 trln in July (Prev $1.113 trln)
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Aug ILO Unemployment Rate, 4.3% eyed, last 4.3%
- (0430 ET/0830 GMT) Great Britain Aug Avg Wk Earnings 3M, 2.1% eyed, last 2.1%
- (0430 ET/0830 GMT) Great Britain Aug Avg Earnings (Ex-Bonus), 2.0% eyed, last 2.1%
Key Events Ahead
- N/A Singapore Markets closed today
- (0410 ET/0810 GMT) ECB's Draghi speaks in Frankfurt
- (0630 ET/1030 GMT) Germany 1.000 bln for 30-year auction
- (0730 ET/1130 GMT) ECB's Angeloni speaks in Berlin
- (0745 ET/1145 GMT) ECB's Praet speaks in Frankfurt
- (0800 ET/1200 GMT) ECB's Nouy speaks in Basel
- (1015 ET/1415 GMT) ECB's Coeure speaks in Frankfurt
FX Beat
DXY: The dollar index rose on expectations that the Federal Reserve would raise interest rates for the third time this year in December. The greenback against a basket of currencies traded up at 93.54, having touched a high of 93.73 in the previous session, its highest since Oct. 10. FxWirePro's Hourly Dollar Strength Index stood at 155.92 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro steadied after falling to a 1-week low in the previous session on data showing United States import prices increased 0.7 percent in September, while the industrial production rebounded to 0.3 percent in the same period. The European currency traded flat at 1.1765, having touched a low of 1.1736 the day before, its lowest since Oct. 9. FxWirePro's Hourly Euro Strength Index stood at -79.44 (Slightly Bearish) by 0400 GMT. Investors’ attention will remain on Eurozone construction output and ECB President Draghi's speech, ahead of U.S. building permits, housing starts, Fed Beige book and Fed official's speeches. Immediate resistance is located at 1.1812 (5-DMA), a break above targets 1.1850. On the downside, support is seen at 1.1736 (Previous Session Low), a break below could drag it near 1.1700.
USD/JPY: The dollar rose against the Japanese yen on speculations that U.S. President Donald Trump will choose a more hawkish Federal Reserve chief with than the current chair, Janet Yellen. The major was trading 0.05 percent up at 112.23, having hit a low of 111.65 on Monday, its lowest since Sept. 26. FxWirePro's Hourly Yen Strength Index stood at -21.19 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. building permits, housing starts, Fed Beige book and Fed official's speeches for further momentum. Immediate resistance is located at 112.42 (10-DMA), a break above targets 112.82. On the downside, support is seen at 112.00, a break below could take it near 111.65 (Previous Session Low).
GBP/USD: Sterling slightly eased, extending losses for the third consecutive session, as the sentiment around the British pound continued to remain undermined by the cautious BoE officials' speeches delivered yesterday. The major traded flat at 1.3186, having hit a high of 1.3337 on Friday, its highest since Oct. 2. FxWirePro's Hourly Sterling Strength Index stood at -120.32 (Highly Bearish) by 0400 GMT. Investors’ focus will remain on series of UK employment data, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3240 (5-DMA), a break above could take it near 1.3287 (21-DMA). On the downside, support is seen at 1.3154 (Previous Session Low), a break below targets 1.3120. Against the euro, the pound was trading flat at 89.22 pence, having hit a high of 88.55 pence on Monday, its highest since Oct. 4.
AUD/USD: The Australian dollar consolidated within a narrow range, ahead of Australian September jobs data due Thursday where employment is estimated to come at +15k. The Aussie trades flat at 0.7846, having hit a high of 0.7897 on Friday, it’s highest since Sept. 25. FxWirePro's Hourly Aussie Strength Index stood at -7.22 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7818 (10-DMA), a break below targets 0.7800. On the upside, resistance is located at 0.7900, a break above could take it near 0.7948.
NZD/USD: The New Zealand dollar eased after Global dairy prices slumped for the second time in a row at an auction, indicating an earlier rally was running out of steam. The Kiwi trades 0.3 percent down at 0.7152, having touched a high of 0.7206 the day before, its highest level since Oct. 2. FxWirePro's Hourly Kiwi Strength Index was at -51.25 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7226, a break above could take it near 0.7270. On the downside, support is seen at 0.7122 (10-DMA), a break below could drag it till 0.7055 (Oct. 10 Low).
Equities Recap
Asian shares consolidated near recent gains, while the greenback held gains near a 1-week high as markets waited to see who will lead the Federal Reserve after Yellen's term expires next February.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent.
Tokyo's Nikkei rose 0.3 percent to 21,391.71 points, Australia's S&P/ASX 200 index gained 0.05 percent to 5,890.50 points and South Korea's KOSPI fell 0.1 percent to 2,481.50 points.
Shanghai composite index climbed 0.1 percent to 3,377.13 points, while CSI300 index was trading 0.5 percent up at 3,931.66 points.
Hong Kong’s Hang Seng was trading 0.2 percent lower at 28,646.25 points. Taiwan shares shed 0.03 percent to 10,720.28 points.
Commodities Recap
Crude oil prices rose, extending gains for the fourth consecutive session, as a decline in U.S. crude inventories and concerns that tensions in the Middle East could disrupt supplies supported prices. International benchmark Brent crude was trading 0.2 percent up at $57.80 per barrel by 0422 GMT, having hit a high of $58.45 on Monday, its highest since Sept. 28. U.S. West Texas Intermediate was trading 0.3 percent higher at $52.04 a barrel, after rising as high as $52.34 on Tuesday, its highest since Sept. 28.
Gold prices steadied after declining to a one-week low in the previous session on speculation that President Donald Trump might choose a policy hawk to head the U.S. Federal Reserve. Spot gold was up 0.1 percent to $1,286.50 an ounce at 0426 GMT, having hit a low of25 on Tuesday, its lowest since Oct. 9. U.S. gold futures for December delivery rose 0.2 percent at $1,288.3 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.3016 percent higher by 0.004 bps, while 5-year yield was 0.007 bps up at 1.963 percent.
The Japanese government bonds remained range-bound as investors remained cautioned ahead of the country’s trade balance data for the month of September, scheduled to be released today by 23:50GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 0.07 percent, the yield on long-term 30-year also tad up at 0.88 percent and the yield on short-term 2-year traded flat at -0.14 percent.
The Australian bonds gained as investors expect weak employment report in September on October 19. In addition, investors still digest little dovish October Reserve Bank of Australia (RBA) meeting minutes. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 4 basis points to 2.734 percent, the yield on the long-term 30-year note also slid nearly 4 basis points to 3.508 percent and the yield on short-term 2-year traded nearly 2 basis points lower at 1.899 percent.
The New Zealand bonds jumped at the time of closing Wednesday after Global dairy prices slumped for the second time in a row at an auction held early on Wednesday. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 4 basis points to 2.92 percent, the yield on 15-year note also plunged 4 basis points to 3.26 percent and the yield on short-term 2-year ended 2-1/2 basis points lower at 2.06 percent.
The Canadian government bond prices were higher across the yield curve, with the two-year up 3 Canadian cents to yield 1.512 percent and the 10-year rising 12 Canadian cents to yield 2.016 percent. The gap between the 2-year yield and its U.S. equivalent, which dropped below parity on Monday for the first time in six weeks, widened by 2.2 basis points to a spread of -3.8 basis points.
