Market Roundup
- EUR/USD 0.22%, USD/JPY 0.06%, GBP/USD 0.09%, EUR/GBP 0.08%
- DXY -0.04%, DAX 0.03%, FTSE 0.05%, Brent 0.64%, Gold -0.12%
- China vows to respond if U.S. takes new steps on trade
- U.S. House Republicans target more tax cuts as elections near
- Great Britain GDP Estimate (mm), 0.3%, 0.2% forecast, 0.1% previous
- Great Britain GDP Estimate (yy), 1.6%, 1.4% forecast, 1.3% previous
- Great Britain Jul Industrial Output (mm), 0.1%, 0.2% forecast, 0.4% previous
- Great Britain Jul Industrial Output (yy), 0.9%, 1.1% forecast, 1.1% previous
- Great Britain Jul Manufacturing Output (mm), -0.2%, 0.2% forecast, 0.4% previous
- Great Britain Jul Manufacturing Output (yy), 1.1%, 1.5% forecast, 1.5% previous
- Great Britain Jul Goods Trade Balance GBP, -9.97 bln, -11.75 bln forecast, -11.38 bln previous, -10.68 bln revised
- EZ Sentix Index, 12.0, 14.6 forecast, 14.7 previous
- UK PM's Brexit plans opposed by 80 rebels in her party - former minister
- Capex drives Japan's fastest expansion since 2016, seen backing growth
- Turkish economic growth dips, lira crisis darkens outlook
- Rouble falls beyond 70 per dollar, c. bank in focus
Economic Data Ahead
- (1500 ET/1900 GMT) The U.S. Federal Reserve is likely to report that consumer credit rose to $13.0 billion in July from $10.21 billion the month before.
Key Events Ahead
- (1200 ET/1600 GMT) Fed's Raphael Bostic speaks on the economic outlook at a fireside chat before the Albany Chamber of Commerce in Albany, Georgia
FX Beat
DXY: The dollar index turned lower amid rising anxiety about the U.S.-China trade war, while investors awaited another interest rate hike by the Federal Reserve later this month. The greenback against a basket of currencies trades 0.05 percent down at 95.30, having touched a high of 95.56 earlier, its highest since September 5. FxWirePro's Hourly Dollar Strength Index stood at 53.80 (Bullish) by 1000 GMT.
EUR/USD: The euro rebounded from a near 3-week low touched earlier in the day, as the dollar eased against the Scandinavian currencies on profits taking after a strong rally in recent weeks. Investors seem to have ignored weaker than expected Eurozone Sentix investor confidence index, which eased to 12.0 in September from 14.7 points in August. The European currency traded 0.1 percent up at 1.1577, having touched a low of 1.1526 earlier, its lowest since Aug 21. FxWirePro's Hourly Euro Strength Index stood at 2.70 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1600 (5-DMA), a break above targets 1.1689 (August 31 High). On the downside, support is seen at 1.1500, a break below could drag it till 1.1465.
USD/JPY: The dollar surged above the 111.00 handle as strong U.S. jobs data cemented market expectations of faster interest rate rises by the Federal Reserve. However, concerns of a potentially major escalation in the U.S.-China trade conflict limited upside. The major was trading 0.1 percent up at 111.13, having hit a low of 110.38 on Friday, its lowest since August 22. FxWirePro's Hourly Yen Strength Index stood at 36.35 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. consumer credit change and FOMC member Raphael W. Bostic's speech. Immediate resistance is located at 111.24 (September 7 High), a break above targets 111.48 (August 24 Low). 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 consolidated within narrow ranges as investors refrained from taking big positions after UK PM May's spokesman stated that PM will hold a Brexit 'no deal' cabinet meeting on Thursday. The major traded flat at 1.2925, having hit a high of 1.3028 on Friday; it’s highest since August 31. FxWirePro's Hourly Sterling Strength Index stood at 97.20 (Slightly Bullish) 1000 GMT. Immediate resistance is located at 1.2982 (September 5 High), a break above could take it near 1.3043 (August 30 High). On the downside, support is seen at 1.2855 (September 3 Low), a break below targets 1.2799 (August 24 Low). Against the euro, the pound was trading 0.2 percent down at 89.50 pence, having hit a high of 89.13 on Friday, it’s highest since August 15.
USD/CHF: The Swiss franc edged down, extending previous session losses, as expectations of an interest rate hike by the U.S. Federal Reserve in September supported the bid tone around the dollar. The major trades 0.5 percent up at 0.9733, having touched a low of 0.9641 on Friday, it’s lowest since February. FxWirePro's Hourly Swiss Franc Strength Index stood at -90.78 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9755 (50.0% retracement of 0.9865 and 0.9641) and any break above will take the pair to next level till 0.9781 (61.8% retracement). The near-term support is around 0.9652 (August 31 Low) and any close below that level will drag it till 0.9585.
Equities Recap
European shares advanced, boosted by gains in baking stocks, while the dollar surged against the yen on expectations of another interest rate hike by the Federal Reserve later this month.
The pan-European STOXX 600 index gained 0.3 percent at 374.99 points, while the FTSEurofirst 300 index surged 0.4 percent to 1,466.90 points.
Britain's FTSE 100 trades 0.3 percent up at 7,295.36 points, while mid-cap FTSE 250 gained 0.1 percent to 20,236.32 points.
Germany's DAX rose 0.2 percent at 11,977.36 points; France's CAC 40 trades 0.3 percent higher at 5,265.31 points.
Commodities Recap
Crude oil prices rallied, extending gains from the previous session as U.S. drilling stalled, while investors anticipated lower supply once new U.S. sanctions against Iran's crude exports come in effect from November. International benchmark Brent crude was trading 0.3 percent up at $77.26 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 $68.05 a barrel, after falling as low as $66.89 on Friday, its lowest since August 22.
Gold prices eased for a second consecutive session as expectations of an interest rate hike by the U.S. Federal Reserve in September and concerns of an escalation in U.S.-China trade tensions supported the bid tone around the dollar. Spot gold was 0.2 percent down at $1,193.70 as of 1028 GMT, having touched a high of $1,126.88 on Thursday, its highest since August 31. U.S. gold futures fell 0.2 percent to $1,198.60 an ounce.
Treasuries Recap
The U.S. Treasuries remained flat amid a muted trading session that witnessed data of little economic significance. However, FOMC member Bostic’s speech, later in the day may provide further insight into the bond market. The yield on the benchmark 10-year Treasuries slipped 1/2 basis point to 2.939 percent, the super-long 30-year bond yields fell nearly 1 basis point to 3.096 percent and the yield on the short-term 2-year traded flat at 2.645 percent.
The United Kingdom’s gilts traded mixed during European session after the country’s manufacturing production for the month of July disappointed market participants, missing expectations as well as down from the previous reading in June. However, Britain’s trade balance for the similar period improved, adding to hopes among investors and thus lending a mixed reading to the debt market. The yield on the benchmark 10-year gilts, rose nearly 1/2 basis point to 1.463 percent, the super-long 30-year bond yields hovered around 1.820 percent while the yield on the short-term 2-year traded nearly 1 basis point lower at 0.755 percent
The Japanese government bonds fell during Asian session after the country’s final gross domestic product (GDP) for the second quarter of this year cheered market participants. Investors will now wait to watch the country’s super-long 30-year auction, scheduled to be held on September 11 for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, traded 1/2 basis point higher at 0.114 percent, the yield on the long-term 30-year note also remained tad higher at 0.849 percent and the yield on short-term 2-year hovered around -0.108 percent.
The Australian bonds plunged on the first trading day of the week tracking strong rise in wages in the United States over the past week. Investors will now be eyeing the country’s employment data for the month of August, scheduled to be released by end of this week for further direction in the debt market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 4 basis points to 2.588 percent, the yield on the long-term 30-year bonds climbed 3 basis points 3.084 percent and the yield on short-term 2-year traded 2-1/2 basis points higher at 2.015 percent.
