Market Roundup
- EUR/USD -0.21%, USD/JPY 0.06%, GBP/USD -0.24%, EUR/GBP 0.06%
- DXY 0.31%, DAX 0.22%, FTSE -0.13%, Brent 0.68%, Gold 0.12%
- Japan dodges U.S. auto tariffs, for now, as Trump and Abe agree on trade talks
- ECB sees trade conflict slowing global growth
- Italy budget tussle goes down to wire, upsets markets
- EZ Sep Consumer Confidence Final, -2.9, -2.9 forecast, -2.9 previous
- EZ Sep Business Climate, 1.21, 1.19 forecast, 1.22 previous, 1.21 revised
- EZ Sep Economic Sentiment, 110.9, 111.2 forecast, 111.6 previous
- EZ Sep Industrial Sentiment, 4.7, 5.1 forecast, 5.5 previous, 5.6 revised
- EZ Sep Services Sentiment, 14.6, 14.6 forecast, 14.7 previous, 14.4 revised
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 9,000 to a seasonally adjusted 210,000 for the week ended September 21, while continuing claims for the week ended September 14 is expected to rise to 1.684 million from a previous reading of 1.645 million.
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that gross domestic product increased at a 4.2 percent annual rate in the second quarter, same as its second estimate reading reported in August.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the second quarter. The index is expected to rise 1.9 percent, while core PCE is likely to increase 2.0 percent.
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have increased 2.0 percent in August after declining 1.7 percent in July, while goods orders excluding transportation are likely to have risen 0.5 percent after gaining 0.2 percent the prior month.
- (0830 ET/1230 GMT) The U.S. Census Bureau is likely to report that preliminary wholesale inventories rose 0.3 percent in August after posting a gain of 0.6 percent in July.
- (0830 ET/1230 GMT) The United States releases goods trade balance data for the month of August. The economy recorded a trade deficit of $72.05 billion in the previous month.
- N/A Mexico is expected to record a $2,204 million trade deficit in August in non-seasonally adjusted terms, compared to $2,889 million in July.
- N/A Argentina releases its current account data for the second quarter. The economy posted a deficit of $9.6 billion in the first quarter.
- (1000 ET/1400 GMT) The National Association of Realtors is expected to report that U.S. pending home sales decreased 0.4 percent in August after falling 0.7 percent in July
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending September 21
Key Events Ahead
- N/A General Council meeting of the ECB in Frankfurt
- N/A ECB President Mario Draghi, Bank of England Governor Mark Carney, Bank of France Governor Francois Villeroy de Galhau and Irish Central Bank Chief Philip Lane speak at a conference about financial stabilityin Frankfurt
- (0745 ET/1145 GMT) Bank of England's Andy Haldane: Panelist at Institute for Government "In Conversation" with Bronwen Maddox in London
- (0930 ET/1330 GMT) Welcome address by ECB President Mario Draghi at 3rd Annual ESRB conference in Frankfurt
- (1000 ET/1400 GMT) Riksbank's Stefan Ingves participates in a panel discussion on climate change and financial stability, The conference will be arranged by the European Systemic Risk Board (ESRB) in Frankfurt
- (1000 ET/1400 GMT) Bank of England's Mark Carney: Chairing policy panel discussion on "Sustainable Finance" at the Third European Systemic Risk Board Annual Conference in London
- (1300 ET/1700 GMT) Keynote speech by ECB chief economist Peter Praet at Money, Macro and Finance Research Group conference in London
- (1400 ET/1800 GMT) Dallas Fed President Robert Kaplan discusses "What You Really Need to Lead: the Power of Thinking and Acting Like an Owner" at the "Banking and the Economy: a Forum for Minorities in Banking" conference in Charlotte, N.C.
- (1630 ET/2030 GMT) Federal Reserve Chairman Jerome Powell gives brief remarks on the U.S. economy before the Senator Reed's Rhode Island Business Leaders Day event in Washington.
- (1745 ET/2145 GMT) Bank of Canada Governor Stephen Poloz gives a speech on "The Canadian Economy: Disruption and Opportunity" to the Atlantic Provinces Economic Council and the Greater Moncton Chamber of Commerce, and holds a news conference.
FX Beat
DXY: The dollar index rallied to a 1-week peak after the Fed raised rates for the third time in 2018 and still foresees another rate hike in December, three more next year, and one increase in 2020. The greenback against a basket of currencies trades 0.2 percent up at 94.51, having touched a low of 93.81 on Friday, its lowest since July 9. FxWirePro's Hourly Dollar Strength Index stood at 85.85 (Bullish) by 1000 GMT.
EUR/USD: The euro slumped to a 1-week low on media reports that an Italian budget meeting was likely to be delayed, triggering concerns that the ruling parties will push for a bigger deficit target. Moreover, data showing the Euro zone’s economic sentiment indicator eased to 110.9 in September from 111.6 in August dented investor sentiment. The European currency traded 0.2 percent down at 1.1714 having touched a high of 1.1815 on Monday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at -66.52 (Bearish) by 1000 GMT. Immediate resistance is located at 1.1784 (September 20 High), a break above targets 1.1820 (June 11 High). On the downside, support is seen at 1.1662 (August 28 Low), a break below could drag it till 1.1605 (September 5 Low).
USD/JPY: The dollar edged up, hovering towards a 2-1/2 month peak hit in the previous session, as the U.S. Federal Reserve raised interest rates on Wednesday and kept its plans intact to steadily tighten monetary policy. The major was trading 0.1 percent up at 112.78, having hit a high of 113.13 the day before, its highest since July 19. FxWirePro's Hourly Yen Strength Index stood at 109.46 (Highly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, gross domestic product, preliminary wholesale inventories, goods trade balance, personal consumption expenditures, durable goods orders, pending home sales 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 slumped, drifting further away from the 1.3200 handle as investors waited for more Brexit-related headlines ahead of an annual conference next week hosted by Britain's ruling Conservative Party. The major traded 0.2 percent down at 1.3136, having hit a low of 1.3055 on Friday; it’s lowest since September 13. FxWirePro's Hourly Sterling Strength Index stood at 67.39 (Bullish) 1000 GMT. 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 flat at 89.12 pence, having hit a low of 89.95 on Friday, it’s lowest since September 7.
USD/CHF: The Swiss franc tumbled to a 2-week low as the greenback surged ahead of the release of U.S. gross domestic product (GDP) for the second quarter of this year. The major trades 0.5 percent up at 0.9709, having touched a low of 0.9542 on Friday. it’s lowest since April 10. FxWirePro's Hourly Swiss Franc Strength Index stood at -55.86 (Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9744 (61.8% retracement of 0.9865 and 0.9542) and any break above will take the pair to next level till 0.9798 (78.6% retracement). The near-term support is around 0.9588 (September 20 Low) and any close below that level will drag it till 0.9535.
Equities Recap
European shares slumped on reports that Italy's long-awaited budget was likely to be delayed, while the greenback surged to a 1-week peak following the Federal Reserve's interest rate hike.
The pan-European STOXX 600 index rallied 0.2 percent at 384.28 points, while the FTSEurofirst 300 index declined 0.05 percent to 1,508.64 points.
Britain's FTSE 100 trades 0.2 percent up at 7,527.97 points, while mid-cap FTSE 250 declined 0.4 percent to 20,363.53 points.
Germany's DAX fell 0.2 percent at 12,356.40 points; France's CAC 40 trades 0.2 percent lower at 5,504.39 points.
Commodities Recap
Crude oil prices surged, boosted by the prospect of a shortfall in global supply once U.S. sanctions against major crude exporter Iran come into force in just five weeks' time. International benchmark Brent crude was trading 0.2 percent up at $81.80 per barrel by 1038 GMT, having hit a high of $82.52 on Tuesday, its highest since November 2014. U.S. West Texas Intermediate was trading 0.4 percent up at $72.30 a barrel, after rising as high as $72.73 on Tuesday, its highest since July 11.
Gold prices rose as investors largely discounted a U.S. interest rate hike, and on reports of a row in Italy's new government. Spot gold was 0.1 percent up at $1,195.24 an ounce by 1040 GMT, having hit a low of $1190.41 on Wednesday, its lowest since September 11. U.S. gold futures were up 0.1 percent at $1,199.90 an ounce.
Treasuries Recap
The U.S. Treasuries climbed ahead of the country’s gross domestic product (GDP) for the second quarter of this year, scheduled to be released today by 12:30GMT, besides, the initial jobless claims, FOMC member Kaplan’s speech and the 7-year auction, all due for today by 12:30GMT, 16:30GMT and 17:00GMT respectively. The yield on the benchmark 10-year Treasuries slumped nearly 2 basis points to 3.044 percent, the super-long 30-year bond yields slipped 1-1/2 basis points to 3.176 percent and the yield on the short-term 2-year too traded nearly 1-1/2 basis points lower at 2.815 percent.
The German bund yields plunged during European session ahead of European Central Bank (ECB) President Mario Draghi’s speech, scheduled to be delivered today by 13:30GMT and the country’s consumer price inflation (CPI) data for the month of September, also due to be released today by 12:00GMT for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, slumped 4-1/2 basis points to 0.489 percent, the yield on 30-year note also plunged nearly 4-1/2 basis points to 1.105 percent and the yield on short-term 2-year remained 2-1/2 basis points lower at -0.538 percent.
The New Zealand bonds closed higher after the Reserve Bank of New Zealand (RBNZ) remained on hold at its monetary policy meeting, concluded late yesterday. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slumped 3 basis points to 2.683 percent, the yield on the long-term 20-year note plunged nearly 4-1/2 basis points to 2.985 percent and the yield on short-term 2-year closed 1/2 basis point lower at 1.770 percent.
The Japanese government bond prices gained during late Asian session ahead of the country’s unemployment rate and industrial production for the month of August, scheduled to be released today by 23:50GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1/2 basis point to 0.120 percent, the yield on the long-term 30-year note fell nearly 1-1/2 basis points to 0.898 percent and the yield on short-term 2-year remained tad lower at -0.112 percent
The Australia government bonds jumped across the curve during Asian session, tracking a similar movement in the United States counterpart even as the Federal Reserve adopted a rate hike in its monetary policy meeting, held overnight, as was widely anticipated by market participants. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped nearly 3-1/2 basis points to 2.707 percent, the yield on the long-term 30-year bond plunged nearly 4 basis points to 3.191 percent and the yield on short-term 2-year traded 3 basis points lower at 2.069 percent.
