Market Roundup
- EUR/USD -0.08%, USD/JPY -0.06%, GBP/USD -0.20%, EUR/GBP -0.17%
- DXY 0.06%, DAX -0.13%, FTSE -0.06%, Brent -0.21%, Gold -0.17%
- Fed likely to raise rates, possibly end 'accommodative' policy era
- U.S. has most to lose from trade war, China would benefit: ECB
- As trade war rumbles, China steps up opening of financial markets
- MSCI considers boosting China's index weighting, could add $66 bln of inflows
- With 6 months to go before Brexit, 630 finance jobs have left-Reuters survey
- UK retailers see only slight slowdown after strong summer- CBI
- France Sep Consumer Confidence, 94, 97 forecast, 97 previous, 96 revised
Economic Data Ahead
- (0900 ET/1300 GMT) Swiss National Bank releases its Quarterly Bulletin.
- (1000 ET/1400 GMT) The U.S. new single-family home sales are expected to have surged 0.5 percent to a seasonally adjusted annual rate of 630,000 units in August. New home sales dropped 1.7 percent in July to a seasonally adjusted annual rate of 627,000 units.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending September 21.
- (1400 ET/1800 GMT) The U.S. Federal Reserve concludes its two-day policy meeting and issues a statement on interest rates.
- (1400 ET/1800 GMT) U.S. Federal Reserve's Federal Open Market Committee (FOMC) announces decision on interest rate, followed by statement in Washington D.C.
Key Events Ahead
- (1430 ET/1830 GMT) Federal Reserve Chairman Jerome H. Powell holds a news conference regarding the interest rate
FX Beat
DXY: The dollar index surged as the U.S. Federal Reserve is expected to raise interest rates for the third time this year later in the day, while investors will scrutinize the monetary policy statement for clues as to whether the central bank will ramp up the pace of policy tightening following signs of acceleration in U.S. economic growth. The greenback against a basket of currencies trades 0.2 percent up at 94.26, having touched a low of 93.81 on Friday, its lowest since July 9. FxWirePro's Hourly Dollar Strength Index stood at 61.68 (Bullish) by 1000 GMT.
EUR/USD: The euro eased, reversing most of its previous session gains, after European Central Bank chief economist Peter Praet downplayed comments by ECB President Mario Draghi about relatively vigorous inflation. The European currency traded 0.1 percent down at 1.1751, having touched a high of 1.1815 on Monday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 74.30 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1820 (June 11 High), a break above targets 1.1852 (June 14 High). On the downside, support is seen at 1.1742 (5-DMA), a break below could drag it till 1.1662 (August 28 Low).
USD/JPY: The dollar held gains near a 2-month peak hit earlier in the session, as investors expect the Federal Reserve to raise interest rates for the eighth time since late 2015 and strengthen the case of another rate increase by the end of the year. The major was trading flat at 112.95, having hit a high of 113.02, its highest since July 18. FxWirePro's Hourly Yen Strength Index stood at -71.08 (Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. new home sales and FOMC interest rate decision, economic projections 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 declined, halting a 2-day winning streak as investors remained cautious about the ongoing negotiations between Britain and the EU on a Brexit deal. However, optimism that Britain will secure a deal on its withdrawal from the European Union, due in March limited the downside. The major traded 0.3 percent down at 1.3142, having hit a low of 1.3055 on Friday; it’s lowest since September 13. FxWirePro's Hourly Sterling Strength Index stood at 87.15 (Slightly 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 0.2 percent down at 89.37 pence, having hit a low of 89.95 on Friday, it’s lowest since September 7.
USD/CHF: The Swiss franc eased to a 1-week low as broader currency markets waited for an expected Federal Reserve interest rate hike later in the day. The major trades 0.4 percent up at 0.9682, having touched a low of 0.9542 on Friday. it’s lowest since April 10. FxWirePro's Hourly Swiss Franc Strength Index stood at -147.80 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9706 (50.0% retracement of 0.9865 and 0.9542) and any break above will take the pair to next level till 0.9744 (61.8% 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 consolidated within narrow ranges, as investors refrained from placing big bets ahead of the U.S. Federal Reserve monetary policy outcome, where it is widely expected to hike interest rate.
The pan-European STOXX 600 index rallied 0.04 percent at 384.04 points, while the FTSEurofirst 300 index rose 0.05 percent to 1,506.11 points.
Britain's FTSE 100 trades 0.1 percent up at 7,517.69 points, while mid-cap FTSE 250 declined 0.05 percent to 20,452.32 points.
Germany's DAX fell 0.1 percent at 12,361.32 points; France's CAC 40 trades 0.3 percent higher at 5,495.09 points.
Commodities Recap
Crude oil prices rose and were set for a fifth consecutive monthly quarter of gains, boosted by an impending decline in Iranian exports in the last three months of the year when global demand rises. International benchmark Brent crude was trading 0.2 percent up at $81.71 per barrel by 1029 GMT, having hit a high of $82.52 on Tuesday, its highest since November 2014. U.S. West Texas Intermediate was trading 0.1 percent up at $72.14 a barrel, after rising as high as $72.73 on Tuesday, its highest since July 11.
Gold prices declined as investors were cautious ahead of the conclusion of U.S. Federal Reserve's two-day meeting, where policymakers are expected to hike interest rates for the third time this year. Spot gold was 0.2 percent up at $1,198.26 per ounce by 1031 GMT, having hit a low of $1191.71 on Friday, its lowest since September 11. U.S. gold futures were flat at $1,204.70 an ounce.
Treasuries Recap
The U.S. Treasuries jumped ahead of the Federal Open Market Committee (FOMC) meeting that concludes later today. The yield on the benchmark 10-year Treasuries slumped 2 basis points to 3.083 percent, the super-long 30-year bond yields also plunged nearly 2 basis points to 3.215 percent and the yield on the short-term 2-year traded nearly 1 basis point lower at 2.835 percent.
The German bunds remained mixed during European session ahead of European Central Bank (ECB) President Mario Draghi’s speech, scheduled to be delivered on September 27 by 13:30GMT and the country’s unemployment change report, due to be released September 28 by 07:55GMT. The German 10-year bond yields, which move inversely to its price, remained tad lower at 0.541 percent, the yield on 30-year note slipped 1-1/2 basis points to 1.151 percent and the yield on short-term 2-year remained flat at -0.513 percent.
The New Zealand bonds closed tad lower at the time of closing ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy meeting, scheduled to be concluded today by 21:00GMT. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, rose nearly 1 basis point to 2.713 percent, the yield on the long-term 20-year note also climbed nearly 1 basis point to 3.028 percent and the yield on short-term 2-year too closed nearly 1 basis point higher at 1.775 percent.
The Australia government bonds slumped across the curve during Asian session following heavy sell-off in the U.S. Treasuries ahead of the FOMC policy decision, where an interest rate hike is fully priced in. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 4-1/2 basis points to 2.755 percent (highest since June 14), the yield on the long-term 30-year bond traded 4 basis points higher at 3.241 percent and the yield on short-term 2-year surged 3 basis points to 2.127 percent.
