Market Roundup
- EUR/USD -0.09%, USD/JPY 0.26%, GBP/USD 0%, EUR/GBP -0.1%
- DXY 0.09%, DAX -0.5%, FTSE -0.56%, Brent 0.74%, Gold -0.13%
- Sterling rises to five-week high as markets bet on Brexit deal
- Turkish lira little changed as central bank meeting approaches
- China seeks WTO backing for sanctions on U.S. over dumping duties
- EZ Q2 Employment (qq), 0.4%, 0.4% previous
- EZ Q2 Employment (yy), 1.5%, 1.5% previous
- Great Britain Aug Claimant Count Unem Chng, 8.7k, 10.0k forecast, 6.2k previous, 10.2k revised
- Great Britain Jul ILO Unemployment Rate, 4.0%, 4.0% forecast, 4.0% previous
- Great Britain Jul Employment Change, 3k, 28k forecast, 42k previous
- Great Britain Jul Avg Wk Earnings 3M (yy), 2.6%, 2.4% forecast, 2.4% previous
- Great Britain Jul Avg Earnings (Ex-Bonus), 2.9%, 2.8% forecast, 2.7% previous
- Germany ZEW Economic Sentiment, -10.6, -14.0 forecast, -13.7 previous
- Germany ZEW Current Conditions, 76.0, 72.0 forecast, 72.6 previous
- France Q2 Non-Farm Payrolls Rev, 0.00%, 0.20% previous
- UK Conservative eurosceptics fail to agree Brexit plan B - FT
Economic Data Ahead
- (0815 ET/1215 GMT) Canadian Mortgage and Housing Corp will report housing starts for the month of August. The indicator is expected to rise at a seasonally adjusted annualized rate of 210,000 after increasing 206,300 in the previous month.
- (0900 ET/1300 GMT) Mexican statistics agency is likely to report that industrial output bounced to 0.95 percent in July, compared to a rise of 0.3 percent in June.
- (1000 ET/1400 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of July. The report is expected to show job openings rose to 6.680 million from 6.662 million in June.
- (1000 ET/1400 GMT) The U.S. Census Bureau is likely to report that wholesale inventories remained flat at 0.7 percent in July, compared to June.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (0845 ET/1245 GMT) Riksbank Governor Stefan Ingves will discuss current monetary policy at an event arranged by Goldman Sachs in London.
FX Beat
DXY: The dollar index gains as Canada and the United States are still trying to resolve differences over the North American Free Trade Agreement, which also includes Mexico. The greenback against a basket of currencies trades 0.1 percent up at 95.24, having touched a high of 95.56 on Monday, its highest since September 5. FxWirePro's Hourly Dollar Strength Index stood at 14.16 (Neutral) by 0400 GMT.
EUR/USD: The euro declined, reversing early session gains, despite better-than-expected German ZEW survey and Eurozone employment figures. The European currency traded 0.1 percent down at 1.1582, having touched a low of 1.1526 the day before, its lowest since Aug 21. FxWirePro's Hourly Euro Strength Index stood at -72.84 (Bearish) by 1000 GMT. Investors’ attention will remain on Eurozone employment changes, ahead of the U.S. JOLTS Job Opening and wholesale inventories. Immediate resistance is located at 1.1659 (September 6 High), a break above targets 1.1690 (August 31 High). On the downside, support is seen at 1.1526 (21-DMA), a break below could drag it till 1.1465.
USD/JPY: The dollar surged to a 6-day peak amid expectations of Federal Reserve interest rate hike this month and positive developments regarding the U.S. - E.U. trade talks. The major was trading 0.3 percent up at 111.40, having hit a low of 110.38 on Friday, its lowest since August 22. FxWirePro's Hourly Yen Strength Index stood at -16.05 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. JOLTS Job Opening and wholesale inventories. Immediate resistance is located at 111.75 (September 5 High), a break above targets 112.15 (August 1 High). On the downside, support is seen at 110.68 (August 31 Low), a break below could take it lower 110.31 (August 17 Low).
GBP/USD: Sterling rallied to a near 6-week peak above the 1.3000 handle as overnight comments from the European Union's chief negotiator that a Brexit deal was possible within weeks bolstered market sentiment. On Monday, EU's chief negotiator Michel Barnier stated that a Brexit deal was possible in six or eight weeks if negotiators were realistic in their demands. The major traded 0.05 percent up at 1.3029, having hit a high of 1.3087; it’s highest since August 2. FxWirePro's Hourly Sterling Strength Index stood at 109.89 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.3117 (July 18 High), a break above could take it near 1.3144 (August 1 High). On the downside, support is seen at 1.2934 (10-DMA), a break below targets 1.2863 (21-DMA). Against the euro, the pound was trading 0.05 percent up at 88.95 pence, having hit a high of 88.87 earlier, it’s highest since August 2.
USD/CHF: The Swiss franc rebounded after falling to a 1-week low as escalating trade tensions between the United States and China dented investor sentiment. The major trades 0.1 percent down at 0.9739, having touched a high of 0.9758, it’s highest since September 4. FxWirePro's Hourly Swiss Franc Strength Index stood at -15.80 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9781 (61.8% retracement of 0.9865 and 0.9641) and any break above will take the pair to next level till 0.9819 (78.6% retracement). The near-term support is around 0.9709 (10-DMA) and any close below that level will drag it till 0.9652 (August 31 Low)
Equities Recap
European shares tumbled as uncertainty over a trade dispute between Washington and Beijing continued to weigh on investors sentiment.
The pan-European STOXX 600 index plunged 0.3 percent at 374.28 points, while the FTSEurofirst 300 index declined 0.3 percent to 1,462.55 points.
Britain's FTSE 100 trades 0.6 percent down at 7,238.53 points, while mid-cap FTSE 250 eased 0.5 percent to 20,166.41 points.
Germany's DAX fell 0.5 percent at 11,923.63 points; France's CAC 40 trades 0.2 percent lower at 5,260.69 points.
Commodities Recap
Crude oil prices surged as U.S. sanctions eased Iranian crude exports, however, signs of increased supplies by the United States limited gains. International benchmark Brent crude was trading 0.7 percent up at $77.90 per barrel by 1024 GMT, having hit a low of $75.67 on Thursday, its lowest since August 27. U.S. West Texas Intermediate was trading 0.3 percent higher at $67.72 a barrel, after falling as low as $66.89 on Friday, its lowest since August 22.
Gold prices eased as the greenback surged amid expectations of a U.S. interest rate hike this month and on fears of an escalation in the U.S.-China trade war. Spot gold was trading 0.2percent down at $1,193.88 an ounce at 1026 GMT, having touched a high of $1,126.88 on Thursday, its highest since August 31. U.S. gold futures rose 0.1 percent to $1,201.60.
Treasuries Recap
The U.S. Treasuries also lost ground ahead of the country’s 3-year Note auction and JOLTs job openings data for the month of July, scheduled for later in the day. The yield on the benchmark 10-year Treasuries surged 1-1/2 basis points to 2.952 percent, the super-long 30-year bond yields rose 1 basis point to 3.098 percent and the yield on the short-term 2-year too traded nearly 1 basis point higher at 2.723 percent.
The United Kingdom’s gilts slumped during European session after the country’s employment report for the month of July cheered market participants.. The yield on the benchmark 10-year gilts, jumped 3-1/2 basis points to 1.503 percent, the super-long 30-year bond yields surged nearly 2-1/2 basis points to 1.850 percent and the yield on the short-term 2-year also traded nearly 3-1/2 basis points higher at 0.76 percent.
The German bunds suffered during afternoon session after the country’s ZEW economic sentiment for the month of September improved, better than market expectations as well. The German 10-year bond yields, which move inversely to its price, rose 1-1/2 basis points to 0.418 percent, the yield on 30-year note also climbed nearly 1-1/2 basis points to 1.098 percent and the yield on short-term 2-year traded tad higher at -0.551 percent
The Australian bonds traded nearly flat as investors remained sidelined amid a muted trading day that is scheduled to witness data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded nearly flat at 2.587 percent, the yield on the long-term 30-year bond rose about 1 basis point to 3.084 percent and the yield on short-term 2-year up 1/2 basis point to 2.014 percent.
