Market Roundup
- Trump sends Pompeo to Riyadh over Khashoggi; Saudis may blame official
- May says Irish backstop can't derail deadlocked Brexit talks
- Japan says U.S. has not raised FX manipulation in trade talks
- Two Koreas, UN Command hold first talks on disarming border
- Growing impact: a third of Japan Inc hurt by U.S.-China trade war -Reuters poll
- Italy approves deficit-hiking budget, awaits EU's verdict
- Australia's RBA on watch for credit drought as banks tighten lending spigots
- China Sep PPI YY, 3.6%, 3.5% f’cast, 4.1% prev
- China Sep CPI YY, 2.5%, 2.5% f’cast, 2.3% prev
- China Sep CPI MM, 0.7%, 0.7% f’cast, 0.7% prev
- New Zealand Q3 CPI QQ, 0.9%, 0.7% f’cast, 0.4% prev
- New Zealand Q3 CPI YY, 1.9%, 1.7% f’cast, 1.5% prevY
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Sep Claimant Count Unem Chng, 7.5k f’cast, 8.7k prev
- (0430 ET/0830 GMT) Great Britain Aug ILO Unemployment Rate, 4.0% f’cast, 4.0% prev
- (0430 ET/0830 GMT) Great Britain Aug Employment Change, 11k f’cast, 3k prev
- (0430 ET/0830 GMT) Great Britain Aug Avg Wk Earnings 3M YY, 2.6% f’cast, 2.6% prev
- (0430 ET/0830 GMT) Great Britain Aug Avg Earnings (Ex-Bonus), 2.9% f’cast, 2.9% prev
- (0500 ET/0900 GMT) Germany Oct ZEW Economic Sentiment, -12.0 f’cast, -10.6 prev
- (0500 ET/0900 GMT) Germany Oct ZEW Current Conditions, 74.5 f’cast, 76.0 prev
Key Events Ahead
- (1615 ET/2015 GMT) Federal Reserve Bank of San Francisco President Mary Daly gives lecture at Wellesley College in Massachusetts.
FX Beat
DXY: The dollar index gained after data released by the Treasury Department showed a $119 billion budget surplus in September, which was larger than expected and a record for the month. The greenback against a basket of currencies trades 0.1 percent up at 95.17, having touched a low of 94.95 on Friday, its lowest since Sept. 28. FxWirePro's Hourly Dollar Strength Index stood at -28.98 (Neutral) by 0400 GMT.
EUR/USD: The euro declined after the Italian cabinet signed off on an expansionary 2019 budget, boosting welfare spending and hiking the deficit to set up a face-off with authorities in Brussels over compliance with European Union rules. The European currency traded 0.1 percent down at 1.1569, having touched a high of 1.1610 on Friday, its highest since October 1. FxWirePro's Hourly Euro Strength Index stood at -10.22 (Neutral) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies and ZEW survey - EZ economic sentiment, ahead of the U.S. industrial production, capacity utilization, JOLTS job opening, and housing market index. Immediate resistance is located at 1.1610 (October 12 High), a break above targets 1.1651 (September 28 High). On the downside, support is seen at 1.1547 (5-DMA), a break below could drag it till 1.1505 (October 2 Low),.
USD/JPY: The dollar surged after data showed U.S. consumer spending gained strong momentum at the end of the third quarter that could provide a boost to economic growth despite anticipated drags from weak exports and a struggling housing market. The major was trading 0.3 percent up at 112.08, having hit a low of 111.62 on Monday, its lowest since September 13. FxWirePro's Hourly Yen Strength Index stood at 111.47 (Highly Bullish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. industrial production, capacity utilization, JOLTS job opening, and housing market index. Immediate resistance is located at 112.58 (September 20 High), a break above targets 112.98 (September 25 High). On the downside, support is seen at 111.62 (September 15 Low), a break below could take it lower 111.35 (September 5 Low).
GBP/USD: Sterling consolidated within narrow ranges, as investors await more clarity over the post-Brexit status of Britain's land border with Ireland. The major traded flat at 1.3143, having hit a low of 1.3082 on Monday; it’s lowest since October 9. FxWirePro's Hourly Sterling Strength Index stood at -107.87 (Highly Bearish) 0400 GMT. Immediate resistance is located at 1.3166 (September 24 High), a break above could take it near 1.3215 (October 10 High). On the downside, support is seen at 1.3054 (October 21 Low), a break below targets 1.3003 (October 3 Low). Against the euro, the pound was trading flat at 88.00 pence, having hit a low of 88.25, it’s lowest since October 5.
AUD/USD: The Australian dollar eased after the minutes of the Reserve Bank of Australia's October policy meeting showed it still expected to raise their borrowing costs, but saw no strong case for a move anytime soon. The Aussie trades 0.1 percent down at 0.7122, having hit a high of 0.7148 on Monday; it’s highest since October 3. FxWirePro's Hourly Aussie Strength Index stood at 31.25 (Neutral) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7101 (10-DMA), a break below targets 0.7065 (October 4 Low). On the upside, resistance is located at 0.7174 (21-DMA), a break above could take it near 7223 (September 18 High)
NZD/USD: The New Zealand dollar rallied to a near 2-week peak after domestic consumer price inflation rose 0.9 percent in the September quarter, surpassing the 0.7 percent expected. The annual pace of 1.9 percent was almost close to the Reserve Bank of New Zealand's mid-range target of 2 percent, slashing chances for an easing in policy. The Kiwi trades 0.2 percent up at 0.6563, having touched a high of 0.6595 on Monday, its highest level since October 3. FxWirePro's Hourly Kiwi Strength Index was at 82.42 (Slightly Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6628 (October 1 High), a break above could take it near 0.6696 (September 26 High). On the downside, support is seen at 0.6500 (5-DMA), a break below could drag it below 6427 (October 9 Low).
Equities Recap
Asian shares rebounded from a 19-month trough touched last week, despite increasing tensions between Saudi Arabia and the West.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.3 percent.
Tokyo's Nikkei rose 0.8 percent to 22,466.00 points, Australia's S&P/ASX 200 index rallied 0.6 percent to 5,869.90 points and South Korea's KOSPI gained 0.2 percent to 2,149.06 points.
Shanghai composite index fell 0.2 percent to 2,561.86 points, while CSI300 index traded 0.3 percent down at 3,117.93 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 25,415.67 points. Taiwan shares aded 0.8 percent to 9,981.10 points.
Commodities Recap
Crude oil prices surged on signs Iranian oil exports this month have fallen from September ahead of U.S. sanctions against Iran that are set to take effect in November. International benchmark Brent crude was trading 0.3 percent up at $81.02 per barrel by 0445 GMT, having hit a low of $79.20 on Friday, its lowest since September 24. U.S. West Texas Intermediate was trading 0.2 percent up at $71.81 a barrel, after falling as low as $70.54 on Thursday, its lowest since September 21.
Gold prices consolidated after rising to near a 2-1/2 month high in the previous session on the back of rising political tensions and economic uncertainty. Spot gold was 0.05 percent up at $1,226.35 an ounce at 0449 GMT, having hit a high of $1233.14 on Monday, its highest since July 36. U.S. gold futures were up 0.1 percent at $1,231.20 an ounce.
Treasuries Recap
The Australian government bond futures eased in line with Treasuries, with the 3-year bond contract off 2 ticks at 97.870. The 10-year contract dipped 3 ticks to 97.2650.
The Canadian government bond prices were lower across a flatter yield curve, with the 10-year falling 5 Canadian cents to yield 2.506 percent.
