Market Roundup
- MSCI considers increasing Chinese share weight in its indexes
- U.S. says Canada not making concessions needed for NAFTA deal
- U.S.-China trade war dims Asia's 2019 growth outlook – ADB
- Trump, Iran's Rouhani exchange threats, insults on U.N.'s world stage
- Trump calls allegations against his high court nominee a 'con game'
- EU has more pressing priorities than Brexit -French finance minister
- EU open to free trade but not Chequers customs plan -document
- New Zealand Aug trade deficit widens to NZ$1.484 bln vs NZ$196 mln July
- New Zealand Sept business confidence, -38.3% vs -50.3% prev
Economic Data Ahead
- (0430 ET/ 0830 GMT) Great Britain Aug Finance Mortgage Apps, 39.584k prev
- (0600 ET/1000 GMT) Great Britain Sep CBI Distributive Trades, 16 f'cast, 29 prev
Key Events Ahead
- N/A ECB Governing Council meeting in Frankfurt. No interest rate announcements scheduled
- (0300 ET/ 0700 GMT) ECB's Yves Mersch and rate setting Governing Council member Jan Smets speak at conference on digital finance in Brussels
- (0535 ET/0935 GMT) Norway Central Bank's Egil Matsen gives speech at a conference hosted by the Federation of Norwegian Industries in Bodo, Norway
- (0800 ET/1200 GMT) ECB's Mario Draghi receives German President Frank-Walter Steinmeier for a visit at the bank's Frankfurt headquarters where they are expected to make short statements
- (1400 ET/1800 GMT) U.S. Federal Reserve's Federal Open Market Committee (FOMC) announces decision on interest rate, followed by statement in Washington D.C.
FX Beat
DXY: The dollar index held gains as investors awaited policy cues from the Federal Reserve, which is widely expected to hike interest rates later in the day. The greenback against a basket of currencies trades flat at 94.15, having touched a low of 93.81 on Friday, its lowest since July 9. FxWirePro's Hourly Dollar Strength Index stood at 20.38 (Neutral) by 0500 GMT.
EUR/USD: The euro consolidated within narrow ranges, after European Central Bank Chief Economist Peter Praet stated that there was nothing new in comments from ECB President Mario Draghi, who had expressed confidence in euro zone inflation and wage growth. The European currency traded flat at 1.1763 having touched a high of 1.1815 on Monday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 47.39 (Neutral) by 0500 GMT. Investors’ attention will remain on ECB non-monetary policy meeting, ahead of the U.S. new home sales and FOMC interest rate decision, economic projections and Fed Powell's speech. Immediate resistance is located at 1.1820 (June 11 High), a break above targets 1.1852 (June 14 High). On the downside, support is seen at 1.1742 (5-DMA), a break below could drag it till 1.1662 (August 28 Low).
USD/JPY: The dollar edged down after rising to a fresh 2-month peak above the 113.00 handle, as investors awaited talks between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe due later in the day to see if the two economies have made progress on bilateral trade following a round of trade negotiations. The major was trading 0.05 percent down at 112.92, having hit a high of 113.02, its highest since July 18. FxWirePro's Hourly Yen Strength Index stood at -16.59 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. new home sales and FOMC interest rate decision, economic projections and Fed Powell's speech. Immediate resistance is located at 113.30 (Jan 5 High), a break above targets 113.69 (Dec 11 High). On the downside, support is seen at 112.42 (September 21 Low), a break below could take it lower 112.04 (September 20 Low).
GBP/USD: Sterling slightly eased after Brexit spokesman Keir Starmer stated Britain's opposition Labour Party is set to vote against any deal Prime Minister Theresa May secures with the European Union and is open to a second referendum with the option of staying in the EU bloc. The major traded 0.05 percent down at 1.3172, having hit a low of 1.3055 on Friday; it’s lowest since September 13. FxWirePro's Hourly Sterling Strength Index stood at 59.33 (Bullish) 0500 GMT. Investors’ attention will remain on the UK CBI distributive trades survey, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3215 (September 19 High), a break above could take it near 1.3244 (July 12 High). On the downside, support is seen at 1.3098 (September 19 Low), a break below targets 1.3055 (September 21 Low). Against the euro, the pound was trading 0.1 percent down at 89.29 pence, having hit a low of 89.95 on Friday, it’s lowest since September 7.
AUD/USD: The Australian dollar surged, halting a 3-day losing streak as recent upbeat labour data forced investors to price in a rate hike by the Reserve Bank of Australia. The Aussie trades 0.2 percent up at 0.7265, having hit a high of 0.7303 on Friday; it’s highest since August 30. FxWirePro's Hourly Aussie Strength Index stood at -15.68 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7213 (September 19 Low), a break below targets 0.7175 (August 31 Low). On the upside, resistance is located at 0.7292 (September 30 High), a break above could take it near 0.7315 (August 30 High).
NZD/USD: The New Zealand dollar rallied after a domestic survey showed a surprising rebound in business sentiment in September from a decade low, while firms' assessment of their own activity also gained momentum. The Kiwi trades 0.3 percent up at 0.6665, having touched a high of 0.6699 on Friday, its highest level since August 30. FxWirePro's Hourly Kiwi Strength Index was at 39.32 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6727 (August 28 High), a break above could take it near 0.6763 (August 8 High). On the downside, support is seen at 0.6630 (August 23 Low), a break below could drag it below 0.6593 (September 3 Low).
Equities Recap
Asian shares advanced as Chinese stocks extended their rebound to hit 8-week peaks on receding fears about the U.S. - China trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.
Tokyo's Nikkei surged 0.4 percent to 24,033.79 points, Australia's S&P/ASX 200 index surged 0.1 percent to 6,192.00 points.
Shanghai composite index rose 0.9 percent to 2,808.36 points, while CSI300 index traded 1.1 percent up at 3,417.09 points.
Hong Kong’s Hang Seng traded 1.5 percent higher at 27,914.21 points. Taiwan shares shed 0.05 percent to 10,974.19 points.
Commodities Recap
Crude oil prices steadied after rising to its highest in nearly 4-years in the previous session despite United States' officials assuring that the market would be well-supplied before sanctions are re-imposed on producer Iran. International benchmark Brent crude was trading 0.3 percent up at $81.81 per barrel by 0515 GMT, having hit a high of $82.52 on Tuesday, its highest since November 2014. U.S. West Texas Intermediate was trading 0.1 percent up at $72.14 a barrel, after rising as high as $72.73 on Tuesday, its highest since July 11.
Gold prices surged, extending previous session gains, as investors waited for details of the U.S. Federal Reserve's two-day meeting that should give clues whether policymakers will raise interest rates for the third time this year. Spot gold was 0.1 percent up at $1,202.02 by 0519 GMT, having hit a low of $1191.71 on Friday, its lowest since September 11. U.S. gold futures little changed at $1,204.6 an ounce.
Treasuries Recap
The Australian government bonds gained across the curve during Asian session following ongoing political turmoil in the U.S. and escalating trade tensions. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 1 basis point to 2.751 percent, the yield on the long-term 30-year bond traded 1-1/2 basis points lower at 3.232 percent and the yield on short-term 2-year dipped 1-1/2 basis points to 2.109 percent.
The Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries, with the 10-year falling 10 Canadian cents to yield 2.462 percent. The 10-year yield touched its highest intraday level since May 22 at 2.472 percent.
