Market Roundup
- Japan Inflation still low, acceleration risk low, Kataoka confirmed dove
- Japan Aug output +2.1% m/m, +1.9% eyed, -1.9/+3.5% eyed Sep/Oct, Sep previous -3.1%
- Japan Aug core CPI +0.5% m/m, +0.7% y/y, Tokyo Sep core +0.5% y/y, all as eyed
- Japan Aug jobless 2.8%, jobs-applicants ratio 1.52, unch m/m, jobs market tight
- Japan Aug household spending +0.2% m/m, +0.6% y/y, -0.2% and +1.0% eyed
- BOJ PB Sept minutes – Best say to achieve CPI goal to stick to script
- BOJ ready for more ease on geopolitical risks, deflation, sales tax hike
- White House battles critics over tax plan as lawmakers prepare to act
- Macron's EU vision will bolster Franco-German axis - Merkel
- Greek recovery to strengthen, quick bailout review a must -Bank of Greece chief
- Gold and cash reign as U.S. fund investors pare stocks -Lipper
- Foreign CB US debt holdings -$4.490 bln to $3.371 trln Sept 27 week
- Treasuries -$5.566 bln to $3.046 trln, agencies +$660 mln to $262.2 bln
Economic Data Ahead
- (0200 ET/0600 GMT) Germany Aug Retail Sales Real, 0.5% m/m, 3.2% y/y eyed; last -1.2%, 2.7%
- (0200 ET/0600 GMT) Great Britain Sep Nationwide House Price, 0.1% m/m, 1.9 y/y eyed; last -0.1%, 2.1%
- (0245 ET/0645 GMT) France Aug Consumer Spending MM, 0.3% eyed, last 0.7%
- (0245 ET/0645 GMT) France Sep CPI (EU Norm) Prelim YY, 1.0% eyed, last 1%
- (0400 ET/0800 GMT) Germany Sep Unemployment Rate SA, 5.7% eyed, last 5.7%
- (0430 ET/0830 GMT) Great Britain Q2 GDP, 0.3% q/q, 1.7% y/y eyed; last 0.3%, 1.7%
- (0430 ET/0830 GMT) Great Britain Q2 Current Account GBP, 16.00 bln eyed, last -16.89 bln
- (0430 ET/0830 GMT) Great Britain Aug Mortgage Approvals, 68.000k eyed, last 68.689k
- (0430 ET/0830 GMT) Great Britain Aug Mortgage Lending, 3.600 bln eyed, last 3.601 bln
- (0430 ET/0830 GMT) Great Britain Aug BOE Consumer Credit, 1.350 bln eyed, last 1.179 bln
- (0500 ET/0900 GMT) Italy Sep Consumer Price Prelim, -0.1% m/m, 1.3 y/y eyed; last 0.3%, 1.2%
- (0500 ET/0900 GMT) Italy Sep CPI (EU Norm) Prelim, 1.8% m/m, 1.3 y/y eyed; last 0.1%, 1.4%
Key Events Ahead
- N/A BoE holds '20 Years On' conference in London.
- (0330 ET/0730 GMT) ECB's Nouy speaks in Brussels
- (0400 ET/0800 GMT) Riksbank general council meeting
- (0425 ET/0825 GMT) Norges Bank deputy governors Nicolaisen and Matsen speaks in Hamar
- (0630 ET/1030 GMT) IMF's Lagarde speaks in London
- (0800 ET/1200 GMT) BoE's Cunliffe speaks in Brussels
FX Beat
DXY: The dollar gained across the board on renewed hopes for U.S. tax reforms and the outlook for Federal Reserve policy. The greenback against a basket of currencies traded 0.1 percent up at 93.20, having touched a high of 93.67 the day before, its highest since Aug. 18. FxWirePro's Hourly Dollar Strength Index stood at 37.12 (Neutral) by 0400 GMT.
EUR/USD: The euro consolidated within a narrow range ahead of preliminary Eurozone consumer price index data, which is expected to tick higher to 1.6 percent y/y in September, while the core CPI is seen rising 1.2 percent y/y versus previous figure of 1.3 percent. The European currency traded flat at 1.1783, having touched a low of 1.1717 on Wednesday, its lowest since Aug. 18. FxWirePro's Hourly Euro Strength Index stood at 44.78 (Neutral) by 0400 GMT. Investors’ attention will remain on the Eurozone inflation data, ahead of Fed official speech, personal consumption expenditure, personal income and spending figures. Immediate resistance is located at 1.1827 (61.8% retracement of 1.2005 and 1.1717), a break above targets 1.1883 (10-DMA). On the downside, support is seen at 1.1717 (Sept. 27 Low), a break below could drag it near 1.1700.
USD/JPY: The dollar rose, reversing most of its previous session losses, after data released on Thursday showed the third estimate of the U.S. Q2 real GDP growth at 3.1 percent, beating the market estimate of 3 percent. Moreover, renewed hopes for U.S. tax reform and comments from Federal Reserve Chair Janet Yellen that stressed the need for gradual interest rate hikes, continued to support the major. The pair was trading 0.3 percent up at 112.62, having hit a high of 113.25 on Wednesday, its highest since mid Jul. FxWirePro's Hourly Yen Strength Index stood at -56.01 (Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. personal consumption expenditure, personal income, spending figures and Fed officials' speeches for further momentum. Immediate resistance is located at 113.00, a break above targets 113.50. On the downside, support is seen at 111.97 (10- DMA), a break below could take it near 111.50.
GBP/USD: Sterling eased after a temporary reversal seen in the previous session, as investors remain nervous ahead of series of key macro news from both the UK and US economies. On Thursday, the major rebounded from a 2-week low after Britain's Brexit secretary stated that considerable progress had been made in UK-EU talks. Sterling traded 0.2 percent down at 1.3414, having hit a low of 1.3342 the prior day, its lowest since Sept. 14. FxWirePro's Hourly Sterling Strength Index stood at -32.04 (Neutral) by 0400 GMT. Investors’ focus will remain on UK gross domestic product, consumer credit and MPC member Cunliffe's speech, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3447 (5-DMA), a break above could take it near 1.3570. On the downside, support is seen at 1.3342 (Previous Session Low), a break below targets 1.3300. Against the euro, the pound was trading 0.2 percent down at 87.81 pence, having hit a high of 87.46 pence on Wednesday, its highest since July.
AUD/USD: The Australian dollar eased after a poll showed the economy's central bank is seen certain to keep its cash rate at a record low of 1.5 percent at its monthly policy meeting next week. The Aussie trades 0.2 percent down 0.7839, having hit a low of 0.7799 in the previous session, it’s lowest since Jul. 18. FxWirePro's Hourly Aussie Strength Index stood at -35.29 (Neutral) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7800, a break below targets 0.7770. On the upside, resistance is located at 0.7895 (5-DMA), a break above could take it near 0.7940 (10-DMA).
NZD/USD: The New Zealand dollar declined despite data showing New Zealand's building permits s.a. rose 10.2 percent in August versus previous -0.7 percent. The Kiwi trades 0.3 percent down at 0.7213, having touched a low of 0.7166 in the previous session, its lowest level since Sept. 5. FxWirePro's Hourly Kiwi Strength Index was at -24.87 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7247 (21-DMA), a break above could take it near 0.7277 (Sept. 26 High). On the downside, support is seen at 0.7166 (Previous Session Low), a break below could drag it till 0.7140.
Equities Recap
Asian shares advanced, while the greenback against a basket of currencies eased from a 1-monh high as investors remained concerned over the Trump administration's tax plan and the outlook for Federal Reserve policy.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.
Tokyo's Nikkei fell 0.1 percent to 20,343.77 points, Australia's S&P/ASX 200 index gained 0.3 percent to 5,684.50 points and South Korea's KOSPI climbed 0.7 percent to 2,389.57 points.
Shanghai composite index gained 0.3 percent to 3,350.09 points, while CSI300 index was trading 0.5 percent up at 3,840.35 points.
Hong Kong’s Hang Seng was trading 0.3 percent higher at 27,501.45 points. Taiwan shares added 0.4 percent to 10,333.18 points.
Commodities Recap
Crude oil prices declined, but were on course for another weekly gain as investors speculated that efforts to cut a global glut are working and that the demand outlook is improving. International benchmark Brent crude was trading 0.8 percent down at $57.17 per barrel by 0400 GMT, having hit a high of $59.48 on Tuesday, its strongest since Jul. 2015. U.S. West Texas Intermediate was trading 0.2 percent down at $51.49 a barrel, after rising as high as $52.41 on Tuesday, its highest since April.
Gold prices eased after rebounding from a six-week low in the previous session on the back of a weaker dollar, and remained on course for their biggest monthly fall this year. Spot gold was trading 0.1 percent down at $1,284.83 per ounce at 0405 GMT, having declined to a low of $1277.64 on Thursday, its lowest since Aug. 25 and was on track for a monthly drop of about 2.7 percent. U.S. gold futures for December delivery edged up 0.1 percent to $1,289.80 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.313 percent higher by 0.007 bps, while 5-year yield was 0.006 bps up at 1.901 percent.
The Japanese government bonds sharply rebounded on the last trading day of the week, as investors poured into safe-haven instruments, following worries over the upcoming snap election, called by Prime Minister Shinzo Abe. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1 basis point to 0.06 percent, the yield on long-term 30-year fell nearly 1-1/2 basis points to 0.87 percent and the yield on short-term 2-year traded 1/2 basis point lower at -0.11 percent.
The Australian bonds surged after the yield spread between shorter and longer-dated U.S. Treasuries grew on Thursday in the aftermath of a tax plan that raised concerns about faster growth in the federal deficit and borrowing. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 2-1/2 basis points to 2.84 percent, the yield on the 15-year note also plunged 2-1/2 basis points to 3.12 percent and the yield on short-term 2-year traded nearly 1 basis point higher at 1.97 percent.
