Market Roundup
- EUR/USD 0.3%, USD/JPY -0.41%, GBP/USD -0.18%, EUR/GBP 0.51%
- DXY -0.34%, DAX 0.33%, FTSE 0.26%, Brent 0.18%, Gold 0.42%
- Defying Trump, Iran says will boost missile capabilities
- North Korea threatens H-bomb test in Pacific in response to Trump UN speech
- EZ Sep Markit Mfg Flash PMI 58.2 vs 57.4,forecast 57.1
- EZ Sep Markit Serv Flash PMI 55.6 vs 54.7, forecast 54.7
- EZ Sep Markit Comp Flash PMI 56.7 vs 55.7, forecast 55.5
- Germany Sep Markit Mfg Flash PMI 60.6 vs 59.3, forecast 59
- Germany Sep Markit Service Flash PMI 55.6 vs 53.5, forecast 53.8
- Germany Sep Markit Comp Flash PMI 57.8 vs 55.8, forecast 55.8
- Euro zone banks must stop waiting for state help with bad loans: ECB
- "Debt trap" may paralyse central banks with fear - BIS
- OPEC panel to discuss export monitoring, oil pact extension
- UK's May seeks Florentine renaissance for deadlocked Brexit talks
- Japan FinMin Aso: No decision yet to delay budget balancing goal
- IMF says BOJ should maintain stimulus, allow for delay in exit
Economic Data Ahead
- (0830 ET/1230 GMT) Canada CPI Inflation YY (Aug) (mkt 1.5%, prev 1.2%)
- (0830 ET/1230 GMT) Canada CPI BoC Core YY (Aug) (prev 0.9%)
- (0830 ET/1230 GMT) Canada Retail Sales MM (Jul) (mkt 0.1%, prev 0.1%)
- (0945 ET/ 1345 GMT) United States Markit Manufacturing PMI (flash Sep) (mkt 53.0, prev 52.8)
- (0945 ET/ 1345 GMT) United States Markit Services PMI (flash Sep) (mkt 55.9, prev 56.0)
- (0945 ET/ 1345 GMT) United States Markit Composite PMI (flash Sep) (mkt 55.2, prev 55.3)
- (1000 ET/ 1400 GMT) United States Atlanta Fed Business Inflation Expectations (Sep) (prev +1.9% y/y)
- (1400 ET/ 1800 GMT) United States Baker-Hughes Weekly Oil Rig Count (prev 749; -7 w/w, +333 y/y)
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $2.225 bn)
- (1330 ET/1730 GMT) Dallas Fed president Robert Kaplan gives keynote addresses at a conference on global oil supply and demand in Oklahoma.
FX Beat
DXY: The dollar slumped versus the safe haven Japanese yen on the back of rising possibility of North Korea conducting another hydrogen bomb test, this time in the Pacific Ocean. The greenback against a basket of currencies traded 0.3 percent down at 91.94, having touched a high of 92.70 on Wednesday, its highest since Sept. 5. FxWirePro's Hourly Dollar Strength Index stood at 13.77 (Neutral) by 1100 GMT.
EUR/USD: The euro advanced, extending previous session gains, with traders not seeing Sunday's German elections as a risk. Chancellor Angela Merkel is widely expected to win a fourth term in power. The European currency traded 0.2 percent up at 1.1966, having touched a low of 1.1861 on Wednesday, its lowest since Sept. 14. FxWirePro's Hourly Euro Strength Index stood at -40.98 (Neural) by 1100 GMT. The near term resistance is around 1.20343 high made on Sep 20th 2017 and any break above will take the pair to next level till 1.20925/1.2200. On the lower side, near term support is at 1.19500 and any break below will drag it till 1.1900/1.1856 (34- day EMA).
USD/JPY: The dollar declined, after rallying to a 2-month peak in the previous session, weighed down by rising tensions on the Korean peninsula and the sharp divergence between U.S. and Japanese monetary policy. The major was trading 0.4 percent down at 112.03, having hit a high of 112.71 the prior session, its highest since Jul. 17. FxWirePro's Hourly Yen Strength Index stood at -59.36 (Bearish) by 1100 GMT. On the lower side, any break below 111.86 (233- day MA) confirms minor weakness, a decline till 110/108 likely.Any break above 113 confirms minor bullishness, a jump till 114/114.50.
GBP/USD: Sterling consolidated within a tight range against the dollar, while investors waited for a speech by British Prime Minister Theresa May in which she is expected to highlight the issues of the country's foreign policy. The major traded 0.1 percent down at 1.3567, having hit a high of 1.3656 on Wednesday, its highest since June 2016. FxWirePro's Hourly Sterling Strength Index stood at 49.79 (Neutral) by 1100 GMT. The pair on the higher side is facing major resistance around 1.3660 and any break above will take it to next level to 1.3700/1.3800 level. The near term psychological support is around 1.3500 and any break below will drag it down till 1.34500/1.3400. Against the euro, the pound was trading 0.4 percent down at 88.05 pence, having hit a high of 87.74 pence last week, its highest since Jul. 17.
USD/CHF: The Swiss franc gained after falling to a 5-week low in the previous session as rising tensions on the Korean peninsula boosted demand for safe-haven assets. The major trades 0.2 percent down at 0.9688, having touched a high of 0.9747 the day before, it’s highest since Aug. 16. FxWirePro's Hourly Swiss Franc Strength Index stood at -117.21 (Highly Bearish) by 1100 GMT. The short term trend is still bullish as long as support 0.9630 (55- day EMA) holds and any break below will drag it down till 0.9580/0.9525/0.9500. The near term resistance is around 0.97730 and any convincing break above will take it to next level till 0.9808/0.9866 (200- day MA).
AUD/USD: The Australian dollar rebounded after falling to a 3-week trough earlier in the session on the back of a fresh bout of risk aversion, coupled with falling metals and iron ore prices. The Aussie trades 0.5 percent up 0.7969, having hit an early low of 0.7908, it’s lowest since Aug. 31. FxWirePro's Hourly Aussie Strength Index stood at -89.24 (Slightly Bearish) by 1100 GMT. On the lower side, near term support is around 0.79470 (34- day EMA) and any close below will drag the pair till 0.7894 (55 day EMA). The near term resistance is around 0.8125 and any break above targets 0.8200/0.8235.
Equities Recap
European shares gained amid fresh tensions over North Korea, while the euro steadied ahead of this weekend's general election in Germany, where conservative Chancellor Angela Merkel is expected to win a fourth term.
The pan-European STOXX 600 index climbed 0.2 percent to 383.50 points, while the FTSEurofirst 300 index rallied 0.2 percent to 1,507.59 points.
Britain's FTSE 100 trades 0.3 percent up at 7,281.69 points, while mid-cap FTSE 250 gained 0.1 percent to 19,440.72 points.
Germany's DAX rose 0.3 percent at 12,640.84 points; France's CAC 40 trades 0.5 percent higher at 5,293.92 points.
Commodities Recap
Crude oil prices rose to multi-month highs as the market waited to see whether major oil producers would back an extension to output cuts beyond March at a meeting in Vienna. International benchmark Brent crude was trading 0.1 percent up at $56.52 per barrel by 1056 GMT, having hit a high of $56.60 earlier in the day, its strongest since Apr. 12. U.S. West Texas Intermediate was trading 0.5 percent down at $50.44 a barrel, after rising as high as $51.09 earlier in the week, its highest since May. 25.
Gold prices rebounded from a four-week low as the latest tensions between the United States and North Korea prompted investors to seek safe-haven assets. Spot gold was up 0.4 percent at $1,295.68 an ounce by 1103 GMT, after falling to its lowest since Aug. 25 at $1288.01 on Thursday. U.S. gold futures for December delivery climbed 0.4 percent to $1,299.80 an ounce.
Treasuries Recap
The U.S. Treasuries gained as investors await the Federal Open Market Committee (FOMC) members Williams, George’s and Kaplan’s speech, scheduled to be held today by 10:00GMT, 13:30GMT and 17:30GMT respectively. The yield on the benchmark 10-year Treasury fell 1-1/2 basis points to 2.26 percent, the super-long 30-year bond yields slid nearly 2 basis points to 2.79 percent and the yield on short-term 2-year note traded nearly 1 basis point higher at 1.44 percent.
The UK gilts traded flat as investors wait to watch the country’s Prime Minister Theresa May speak on the Brexit update, scheduled today by 19:00GMT. The yield on the benchmark 10-year gilts, hovered around 1.37 percent, the super-long 30-year bond yields flat at 1.94 percent and the yield on the short-term 2-year too traded steady at 0.45 percent.
The German government bunds suffered after the country’s manufacturing PMI for the month of September surged to a 6-1/2 year high, coming in at 60.6, from 59.3 in August. Also, Eurozone’s manufacturing PMI for this month rose to 58.2, from August’s 57.4. The German 10-year bond yields, which moves inversely to its price, rose 1-1/2 basis points to 0.47 percent, the yield on the 30-year note climbed nearly 1 basis point to 1.25 percent and the yield on short-term 2-year traded 1 basis point higher at -0.67 percent.
The New Zealand bonds rose during early Asian session Friday as investors poured into safe-haven instruments, following hovering uncertainties ahead of the September 23 general election. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 4 basis points to 3.07 percent, the yield on 7-year note plunged 41/2 basis points to 2.89 percent and the yield on short-term 2-year ended 3 basis points lower at 2.17 percent.
The Japanese government bonds gained tracking similar momentum in the U.S. counterpart after North Korean leader Kin-Jong-Un said that the North would consider the “highest level of hard-line countermeasure in history” against the United States and that Trump’s comments had confirmed his own nuclear program was “the correct path”. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped nearly 1 basis point to 0.02 percent, the yield on long-term 30-year also fell 1 basis point to 0.82 percent and the yield on short-term 2-year too traded 1 basis point lower at -0.13 percent.
The Australian bonds jumped, tracking strength in the U.S. Treasuries during early Asian session Friday despite a set of inspiring economic data released yesterday amid a silent trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped nearly 4 basis points to 2.79 percent, the yield on 15-year note plunged 3-1/2 basis points to 3.08 percent and the yield on short-term 2-year also traded nearly 3 basis points lower at 1.97 percent.
