Market Roundup
- Trump gives Saudi Arabia benefit of doubt in journalist's disappearance
- Trump administration says to open trade talks with EU, UK, Japan
- Trump widens Fed critique, calls it 'my biggest threat'
- U.S. regains crown as most competitive economy for first time since 2008 - WEF
- China Treasury holdings in August fall to lowest since June 2017 -Treasury data
- EU leaders prepare hardball Brexit summit choice for May
- 'Regional protectionism' in new U.S. trade deal favors Mexico -negotiator
- Australian government braces for voter anger in make-or-break by-election
- Australia's central bank holding out for long-awaited wage recovery
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Sep CPI, 0.2% m/m, 2.6% y/y f’cast; 0.7%, 2.7% prev
- (0430 ET/0830 GMT) Great Britain Sep Core CPI, 0.2% m/m, 2.0% y/y f’cast; 0.8%, 2.1% prev
- (0430 ET/0830 GMT) Great Britain Sep RPI, 0.2% m/m, 3.5% f’cast; 0.9%, 3.9% prev
- (0430 ET/0830 GMT) Great Britain Sep PPI Input Prices NSA, 1.0% m/m, 9.2% y/y f’cast; 0.5% m/m, 8.7% prev
- (0430 ET/0830 GMT) Great Britain Sep PPI Output Prices NSA, 0.2% m/m, 2.9% y/y f’cast; 0.2% m/m, 2.9% prev
- (0430 ET/0830 GMT) Great Britain Sep PPI Core Output NSA, 0.1% m/m, 2.3% y/y f’cast; 0.1%, 2.1% prev
- (0500 ET/0900 GMT) EZ Sep HICP Final, 0.5% m/m, 2.1% y/y f’cast; 0.2%, 2.1% prev
- (0500 ET/0900 GMT) EZ Sep HICP-X F, E, A, T Final, 0.4% m/m, 0.9% y/y f’cast; 0.4%, 0.9% y/y prev
Key Events Ahead
- (0300 ET/0700 GMT) Riksbank executive board meeting in Stockholm.
- (0330 ET/0730 GMT) ECB’s Peter Praet gives keynote speech at "La Caixa" conference in Madrid.
- (0430 ET/0830 GMT) Record of Financial Policy Committee meeting of Oct. 3, 2018 in London.
- (0915 ET/1315 GMT) BoE’s Cunliffe appears before parliament's Treasury Committee for a re-appointment hearing in London.
- (1215 ET/1610 GMT) Fed’s Brainard speaks at the Federal Reserve Bank of Boston and the Aspen Institute conference, in Boston.
- (1500 ET/1900 GMT) Federal Open Market Committee releases the minutes from its September 25-26 policy meeting in Washington.
FX Beat
DXY: The dollar index surged as investors await the release of the Federal Reserve's September meeting minutes due later in the day for clues on the pace of U.S. interest rate hikes. The greenback against a basket of currencies trades 0.1 percent up at 95.19, having touched a low of 94.79 on Tuesday, its lowest since Sept. 27. FxWirePro's Hourly Dollar Strength Index stood at 36.37 (Neutral) by 0500 GMT.
EUR/USD: The euro declined, extending previous session losses, as Italy is on course to introduce a more stringent tax regime for banks, adding further pressure on a sector that is already suffering due to a rise in the country's debt costs. The European currency traded 0.2 percent down at 1.1554, having touched a high of 1.1621 on Monday, its highest since October 1. FxWirePro's Hourly Euro Strength Index stood at -107.41 (Highly Bearish) by 0500 GMT. Investors’ attention will remain on ECB's Praet speech and Eurozone consumer price index, ahead of the U.S. building permits, housing starts, and FOMC latest policy meeting minutes. 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 1.1531 (10-DMA), a break below could drag it till 1.1505 (October 2 Low),.
USD/JPY: The dollar surged to a 5-day peak after data released yesterday showed that U.S. industrial production increased for a fourth straight month in September, boosted by gains in manufacturing and mining output. The major was trading 0.05 percent up at 112.30, having hit a low of 111.62 on Monday, its lowest since September 13. FxWirePro's Hourly Yen Strength Index stood at 43.12 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. building permits, housing starts and FOMC latest policy meeting minutes. 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 declined as investors still remain doubtful that the European Union Summit will yield much progress on the Northern Island border issue that has been blocking a Brexit agreement. British Prime Minister Theresa May will present her view of the Brexit talks to the leaders of the other 27 EU member states at a summit dinner before they discuss among themselves how to proceed. The major traded 0.2 percent down at 1.3163, having hit a low of 1.3082 on Monday; it’s lowest since October 9. FxWirePro's Hourly Sterling Strength Index stood at -41.22 (Neutral) 0500 GMT. Immediate resistance is located at 1.3215 (October 10 High), a break above could take it near 1.3257 (October 12 High). On the downside, support is seen at 1.3120 (10-DMA), a break below targets 1.3054 (October 21 Low). Against the euro, the pound was trading flat at 87.73 pence, having hit a low of 88.25 on Monday, it’s lowest since October 5.
AUD/USD: The Australian dollar edged down despite Reserve Bank of Australia Deputy Governor Guy Debelle reiterating the central bank's optimism that wages would eventually increase as the job market tightened. The Aussie trades 0.1 percent down at 0.7136, having hit a high of 0.7150 on Tuesday; it’s highest since October 3. FxWirePro's Hourly Aussie Strength Index stood at 66.30 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7096 (10-DMA), a break below targets 0.7054 (October 9 Low). On the upside, resistance is located at 0.7172 (21-DMA), a break above could take it near 7223 (September 18 High)
NZD/USD: The New Zealand dollar extended gains for the third straight session, despite the Global Dairy Trade Price Index eased 0.3 percent, with an average selling price of $2,885 per tonne. The Kiwi trades 0.1 percent up at 0.6587, having touched a high of 0.6596 on Tuesday, its highest level since October 3. FxWirePro's Hourly Kiwi Strength Index was at 80.37 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6628 (October 1 High), a break above could take it near 0.6696 (September 26 High). On the downside, support is seen at 0.6522 (5-DMA), a break below could drag it below 6496 (10-DMA).
Equities Recap
Asian shares rallied after robust U.S. earnings reports drove a rebound on Wall Street, while the greenback rose ahead of the Federal Reserve's September meeting minutes release.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.7 percent.
Tokyo's Nikkei rose 1.2 percent to 22,810.08 points, Australia's S&P/ASX 200 index rallied 1.2 percent to 5,939.10 points and South Korea's KOSPI gained 0.9 percent to 2,166.39 points.
Shanghai composite index rose 0.3 percent to 2,553.39 points, while CSI300 index traded 0.2 percent up at 3,108.11 points. Taiwan shares shed 0.05 percent to 9,979.14 points.
Commodities Recap
Crude oil prices declined, halting a 3-day winning streak, despite industry data showed a surprise decline in U.S. crude inventories. International benchmark Brent crude was trading 0.2 percent down at $81.43 per barrel by 0454 GMT, having hit a low of $80.51 on Friday, its lowest since September 24. U.S. West Texas Intermediate was trading 0.1 percent down at $72.01 a barrel, after falling as low as $70.54 on Thursday, its lowest since September 21.
Gold prices slumped following a rise in equities, while investors await minutes from the U.S. Federal Reserve's latest policy meeting for fresh clues on the pace of interest rate hikes. Spot gold was 0.2 percent down at $1,222.04 an ounce at 0457 GMT, having hit a high of $1233.14 on Monday, its highest since July 26. U.S. gold futures were down 0.2 percent at $1,228.30 an ounce.
Treasuries Recap
The Australian government bonds gained across the curve during Asian session as investors hope to see deterioration in the country’s employment report for the month of September, scheduled to be released on October 18 by 00:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1 basis point to 2.718 percent, the yield on the long-term 30-year bond slumped nearly 2 basis points to 3.187 percent and the yield on short-term 2-year traded nearly 2 basis points lower at 2.038 percent.
The Japanese government bonds remained flat ahead of the country’s trade balance data for the month of September, due to be released today by 23:50GMT and national core consumer price inflation (CPI), due on October 18 by 23:30GMT for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.148 percent, the yield on the long-term 30-year note traded flat at 0.916 percent and the yield on short-term 2-year too remained steady at -0.115 percent.
The Canadian government bond prices were mixed across the yield curve, with the 10-year rising 4 Canadian cents to yield 2.497 percent. Earlier this month, the 10-year yield touched its highest level in nearly five years at 2.615 percent.
