Market Roundup
- EUR/USD -0.12%, USD/JPY -0.15%, GBP/USD -0.07%, EUR/GBP -0.03%
- DXY -0.12%, DAX 0.17%, FTSE -0.2%, Brent -0.03%, Gold -0.11%
- China is "one of the bigger risks" to global economy - BoE's Carney
- EU's Juncker says ties with UK will always be close but Brexit demands remain
- Sterling down on report of potential leadership challenge to UK's May
- Brexit rebels in UK PM May's party discuss ousting her
- Turkish lira weaker ahead of Thursday's central bank rate decision
- EZ Industrial Production (mm), -0.8%, -0.5% forecast, -0.7% previous
- EZ Industrial Production (yy), -0.1%, 1.0% forecast, 2.5% previous
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. producer price index is likely to have increased 0.2 percent in August, while in the 12 months through the same period, it is expected to have advanced 3.2 percent. PPI excluding food and energy probably edged up 0.2 percent, compared to July's reading of 0.1 percent.
- (0830 ET/1230 GMT) Canada's releases industrial capacity utilization data for the second quarter. The indicator expected to have increased 86.9 percent, from a reading of 86.1 percent in the previous quarter.
- (1100 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending September 7.
- (1400 ET/1800 GMT) The Fed issues its Beige Book, a summary of anecdotes on the health of the economy.
Key Events Ahead
- (0940 ET/1340 GMT) Federal Reserve Bank of St. Louis President James Bullard speaks on the U.S. economy and monetary policy before the CFA Society Chicago, in Chicago, Ill.
- (1245 ET/1645 GMT) Federal Reserve Board Governor Lael Brainard updates her views on policy and the economy before a Detroit Economic Club luncheon, in Detroit, Mich.
FX Beat
- DXY: The dollar index gained as data released yesterday showed U.S. job openings rose to a record high in July, indicating a sustained labor market strength and confidence that could soon boost faster wage growth. The greenback against a basket of currencies trades 0.1 percent up at 95.20, having touched a high of 95.56 on Monday, its highest since September 5. FxWirePro's Hourly Dollar Strength Index stood at -17.23 (Neutral) by 1000 GMT.
EUR/USD: The euro declined after data showed production at factories in the euro zone plunged in July for a second consecutive month and by more than expected. The industry output in the 19-country currency bloc fell by 0.8 percent in July and by 0.1 percent year-on-year. The European currency traded 0.1 percent down at 1.1590, having touched a low of 1.1526 on Monday, its lowest since Aug 21. FxWirePro's Hourly Euro Strength Index stood at 41.14 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1658 (September 6 High), a break above targets 1.1710 (August 29 High). On the downside, support is seen at 1.1542 (September 5 Low), a break below could drag it till 1.1465.
USD/JPY: The dollar edged down after rising to a 1-week peak earlier in the session, as investors remained cautious about trade talks between the United States and Canada, while anxiety over the ongoing trade dispute between China and the United States dented sentiment. The major was trading 0.1 percent down at 111.50, having hit a high of 111.65 earlier, its highest since September 5. FxWirePro's Hourly Yen Strength Index stood at -81.07 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. producer price index and FOMC member Brainard's speech. 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 111.22 (10-DMA), a break below could take it lower 110.68 (August 31 Low).
GBP/USD: Sterling tumbled below the 1.3000 handle as reports of a potential leadership challenge to Prime Minister Theresa May weighed on investor sentiment. However, it trimmed some of its early losses after European Commission head Jean-Claude Juncker renewed a pledge of security ties and close trade with Britain after Brexit. The major traded 0.2 percent down at 1.2998, having hit a high of 1.3087 on Tuesday; it’s highest since August 2. FxWirePro's Hourly Sterling Strength Index stood at 110.18 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.3083 (July 19 High), a break above could take it near 1.3144 (August 1 High). On the downside, support is seen at 1.2950 (10-DMA), a break below targets 1.2876 (21-DMA). Against the euro, the pound was trading 0.1 percent down at 89.13 pence, having hit a high of 88.76 on Tuesday, it’s highest since August 2.
USD/CHF: The Swiss franc edged down as the greenback rallied on news that Canada was prepared to offer the United States limited access to the Canadian dairy market as a concession in negotiations to rework the North American Free Trade Agreement. The major trades 0.1 percent up at 0.9735, having touched a high of 0.9758 on Tuesday, it’s highest since September 4. FxWirePro's Hourly Swiss Franc Strength Index stood at -38.54 (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 0.9705 (10-DMA) and any close below that level will drag it till 0.9652 (August 31 Low)
Equities Recap
European shares climbed, boosted by gains in oil and mining stocks, while the greenback surged amid rising tensions between the United States and China.
The pan-European STOXX 600 index advanced 0.3 percent at 376.28 points, while the FTSEurofirst 300 index surged 0.2 percent to 1,468.51 points.
Britain's FTSE 100 trades 0.2 percent down at 7,260.59 points, while mid-cap FTSE 250 gained 0.3 percent to 20,278.67 points.
Germany's DAX rose 0.3 percent at 12,000.31 points; France's CAC 40 trades 0.6 percent higher at 5,313.24 points.
Commodities Recap
Crude oil prices eased after rising to a 1-week high following a drop in U.S. crude inventories and on the prospect of the loss of Iranian supply. International benchmark Brent crude was trading 0.5 percent down at $79.02 per barrel by 1036 GMT, having hit a high of $79.63 earlier, its highest since September 4. U.S. West Texas Intermediate was trading 0.2 percent down at $69.75 a barrel, after rising as high as $70.12, its highest since September 4.
Gold prices declined as the greenback surged amid fears the Sino-U.S. trade war could escalate. Spot gold was down 0.2 percent at $1,196.63 an ounce at 1038 GMT, having touched a low of $1,187.63 on Tuesday, its lowest since August 24. U.S. gold futures were down 0.3 percent at $1,198.90 an ounce.
Treasuries Recap
The U.S. Treasuries gained ahead of the country’s producer price index (PPI) for the month of August and a host of speeches by FOMC members, scheduled for later in the day. The yield on the benchmark 10-year Treasuries fell 1-1/2 basis points to 2.965 percent, the super-long 30-year bond yields also lost 1-1/2 basis points to 3.110 percent and the yield on the short-term 2-year too traded nearly 1-1/2 basis points lower at 2.740 percent.
The German bunds gained during afternoon session after eurozone’s industrial production for the month of July disappointed market participants, missing expectations. The German 10-year bond yields, which move inversely to its price, slumped nearly 2 basis points to 0.415 percent, the yield on 30-year note fell nearly 1-1/2 basis points to 1.094 percent and the yield on short-term 2-year traded 1 basis point lower at -0.550 percent
The New Zealand bonds closed on the downside during late morning session tracking a similar movement in the United States after the latter witnessed a record number of job openings in July amid ongoing trade conflicts between the U.S. and China. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, jumped nearly 2 basis points to 2.615 percent, the yield on the long-term 20-year note surged close to 2-1/2 basis points to 2.950 percent and the yield on short-term 1-year closed 1/2 basis point higher at 1.735 percent
The Australian bonds traded a little lower as market hopes better-than-expected August employment report. Investors remained side-lined amid a muted trading day that is scheduled to witness data of little economic significance. However, traders will eye the August employment report and any major developments in global trade policies. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1/2 basis point to 2.591 percent, the yield on the long-term 30-year bond also climbed 1/2 basis point to 3.088 percent but the yield on short-term 2-year down 1/2 basis point to 2.011 percent.
