Market Roundup
- EUR/USD -0.04%, USD/JPY 0.24%, GBP/USD -0.33%, EUR/GBP 0.31%
- DXY 0.06%, DAX 0.36%, FTSE 0.43%, Brent 0.09%, Gold -0.24%
- With divorce deal almost done, May repeats rejection of EU proposal on N.Ireland
- Sterling slips as Brexit worries rise before May speech
- Italy tells EU it is sticking to budget plans, but keeping eye on debt, deficit
- Italy 10-yr yield drops by most since June as Moody's keeps outlook stable
- Italy Treasury says Govt conscious its budget policy in sot in line with EU'S stability pact
- German growth could rebound after weak Q3: Bundesbank
- Trump says U.S. to exit landmark nuclear arms pact, Russia threatens retaliation
- UK households grow less confident about their finances in October - IHS Markit
- BOJ warns Japan's bank risk-taking hits near 30-year high
Economic Data Ahead
- (0830 ET/1230 GMT) Statistics Canada will release its wholesale trade figures for the month of August. The indicator is likely to have increased by 0.5 percent, after unexpectedly rising 1.5 percent in July.
- (0830 ET/1230 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of September The index stood at 0.18 in the prior month.
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index surged ahead of Friday's advance Q3 GDP growth figures that could provide a fresh directional impetus. The greenback against a basket of currencies trades 0.1 percent up at 95.78, having touched a high of 96.09 on Friday, its highest since October 9. FxWirePro's Hourly Dollar Strength Index stood at 75.50 (Slightly Bullish) by 1000 GMT.
EUR/USD: The euro tumbled after data showed German economy struggled in the third quarter following on a decline in car manufacturing. Earlier in the day, the major rallied to a 5-day high after the Italian Treasury told the European Commission that it would abide to its contested budget plans, but promised to intervene if it failed to meet its debt and deficit goals. The European currency traded 0.1 percent down at 1.1503, having touched a low of 1.1433 on Friday, its lowest since October 9. FxWirePro's Hourly Euro Strength Index stood at 41.06 (Neutral) by 1100 GMT. Immediate resistance is located at 1.1580 (October 17 High), a break above targets 1.1612 (October 16 High). On the downside, support is seen at 1.1432 (October 9 Low), a break below could drag it till 1400.
USD/JPY: The dollar rallied to a 12-day peak as easing risk around Brexit, the Italy budget plan and trade tensions boosted investor risk sentiment. The major was trading 0.3 percent up at 112.82, having hit a high of 112.87 earlier, its highest since October 10. FxWirePro's Hourly Yen Strength Index stood at -75.15 (Slightly Bearish) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the Chicago Fed National Activity Index. Immediate resistance is located at 113.13 (September 26 High), a break above targets 113.46 (September 27 High). On the downside, support is seen at 112.04 (September 20 Low), a break below could take it lower 111.62 (September 15 Low).
GBP/USD: Sterling slumped as Irish border issue and disagreements within the UK ruling party over Brexit offset signs that Britain and the European Union had settled most of their differences over a separation deal. The major traded 0.4 percent down at 1.3014, having hit a low of 1.3011 on Friday; it’s lowest since October 5. FxWirePro's Hourly Sterling Strength Index stood at -111.34 (Highly Bearish) 1100 GMT. Immediate resistance is located at 1.3132 (October 8 High), a break above could take it near 1.3182 (October 15 High). On the downside, support is seen at 1.2979 (September 12 Low), a break below targets 1.2941 (October 2 Low). Against the euro, the pound was trading 0.3 percent down at 88.31 pence, having hit a low of 88.34, it’s lowest since October 5.
USD/CHF: The Swiss franc plunged to a fresh 2-month low as greenback surged ahead of a host of Federal Open Market Committee’s (FOMC) members speeches throughout this week. The major trades 0.1 percent up at 0.9969, having touched a high of 0.9980 earlier, it’s highest since August 15. FxWirePro's Hourly Swiss Franc Strength Index stood at -45.83 (Neutral) by 1100 GMT. On the higher side, near-term resistance is around 0.9984 (August 6 High) and any break above will take the pair to next level till 1.0010 (July 20 High). The near-term support is around 0.9881 (October 12 Low) and any close below that level will drag it till 0.9842 (August 21 Low).
Equities Recap
European shares rallied on relief over Italy's budget, while the dollar gained yen amid improving risk sentiment.
The pan-European STOXX 600 index rallied 0.4 percent at 362.68 points, while the FTSEurofirst 300 index surged 0.4 percent to 1,426.37 points.
Britain's FTSE 100 trades 0.7 percent up at 7,097.75 points, while mid-cap FTSE 250 gained 0.5 percent to 18,880.00 points.
Germany's DAX rose 0.5 percent at 11,607.02 points; France's CAC 40 trades 0.2 percent higher at 5,096.02 points.
Commodities Recap
Crude oil prices surged, boosted by nervousness over a worsening diplomatic crisis between Saudi Arabia and the West, ahead of U.S. sanctions on Iranian crude supplies. International benchmark Brent crude was trading 0.2 percent up at $80.07 per barrel by 1057 GMT, having hit a low of $78.67 on Thursday, its lowest since September 21. U.S. West Texas Intermediate was trading 0.4 percent up at $69.51 a barrel, after falling as low as $68.50 on Thursday, its lowest since September 14.
Gold prices edged lower, drifting away from a 2-1/2-month peak hit last week as the dollar rebounded from session lows. Spot gold was 0.3 percent down at $1,223.23 an ounce at 1100 GMT, having hit a high of $1233.14 last week, its highest since July 26. U.S. gold futures were up 0.1 percent at $1,229.40 an ounce.
Treasuries Recap
The U.S. Treasuries remained flat during late afternoon session amid a silent trading day that witnessed data of little economic significance. The yield on the benchmark 10-year Treasuries remained tad higher at 3.205 percent, the super-long 30-year bond yields flat at 3.385 percent and the yield on the short-term 2-year also traded steady at 2.912 percent.
The German bunds slumped during European session as investors wait to watch the country’s producer price index (PPI) for the month of September, scheduled to be released on October 23 by 06:00GMT and manufacturing PMI for October, due on October 24 by 07:30GMT. The German 10-year bond yields, which move inversely to its price, jumped nearly 3-1/2 basis points to 0.465 percent, the yield on 30-year note surged 2-1/2 basis points to 1.082 percent and the yield on short-term 2-year traded nearly 3 basis points higher at -0.622 percent.
The Australian government bonds slumped on the first trading day of the week Monday amid a muted trading session that witnessed data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 2-1/2 basis points to 2.717 percent, the yield on the long-term 30-year bond surged nearly 3 basis points to 3.192 percent and the yield on short-term 2-year traded 1 basis point higher at 2.048 percent.
