Market Roundup
- EUR/USD 0.21%, USD/JPY -0.02%, GBP/USD -0.12%, EUR/GBP 0.27%
- DXY -0.01%, DAX 0.29%, FTSE 0.03%, Brent 0.86%, Gold 0.13%
- EZ Economic Sentiment Sept 113.0 vs 111.9, 112.0 forecast
- EZ Business Climate Sept 1.34 vs 1.09, 1.08 revised, 1.11 forecast
- EZ Consumer Conf. Final Sept -1.2 vs -1.2, -1.5 revised, -1.2 forecast
- Japan calls snap election as new party roils outlook
- Carney: BoE can't be expected to nullify Brexit hit to economy
- ECB's inflation objective should be symmetrical: Liikanen
- ECB to discuss adjusting, not ending stimulus: Praet
- Fitch says ANC infighting to hit South Africa growth
- Oil steadies as North Iraq, Kurdish pipeline stays open
- Gold hits over 1-month low; palladium races past platinum
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 11,000 to a seasonally adjusted 270,000 for the week ended Sept. 22 while continuing claims for the week ended Sept. 15 is expected to rise to 1.99 million from previous 1.98 million.
- (0830 ET/1230 GMT) The U.S. Census Bureau is likely to report that preliminary wholesale inventories rose 0.4 percent in August after posting a gain of 0.6 percent in July.
- (0830 ET/1230 GMT) The United States releases goods trade balance data for the month of August. The economy recorded a trade deficit of $65.0 billion in the previous month.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the preliminary personal consumption expenditures (PCE) price index for the second quarter. The index is expected to rise 0.3 percent, while core PCE is likely to increase 0.9 percent after posting similar gains in the first quarter.
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that gross domestic product increased at a 3.0 percent annual rate in the second quarter.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending September 18.
- (1400 ET/1800 GMT) Mexico's central bank meets to decide its interest rate and is expected to leave its benchmark rate unchanged at 7.00 percent.
- (1745 ET/2145 GMT) The Statistics New Zealand releases building permits seasonally adjusted data for the month of August. The index posted a fall of 0.7 percent in July.
- (1901 ET/2301 GMT) The GfK Group will release Britain's consumer confidence index for the month of September. The index is expected to decline to 11 after slumping to 10 in August.
- (1930 ET/2330 GMT) Japan's Statistics Bureau will release its National Consumer Price Index for the month of August. The index posted an annualized rise of 0.4 percent in the previous month.
- (1930 ET/2330 GMT) Japan's Statistics Bureau is expected to report that unemployment rate remained unchanged at 2.8 percent for the month of August.
- (1930 ET/2330 GMT) Japan's overall household spending probably rose 1.0 percent in August after tumbling 0.2 percent in July.
- (1950 ET/2350 GMT) Japan's Ministry of Economy, Trade and Industry releases Retail Trade data for August. The index posted a rose of 1.8 percent in July.
Key Events Ahead
- (0945 ET/1345 GMT) Kansas City Fed President Esther George speaks on "the U.S. economy and monetary policy" at "Banking and the Economy: A Forum for Minority Bankers", hosted by the Federal Reserve Bank of Kansas City.
- (1000 ET/1400 GMT) Federal Reserve Vice Chair Stanley Fischer speaks on "developments in central banking" before the Bank of England Independence 20 Years On conference in London.
- (1145 ET/1545 GMT) FedTrade operation 15-year Fannie Mae and Freddie Mac (max $500 mn)
- (1430 ET/1830 GMT) FedTrade operation 30-year Ginnie Mae (max $1.25 bn)
FX Beat
DXY: The dollar reversed it early gains against the euro and the yen, following a minor retreat in the U.S. Treasury bond yields. The greenback against a basket of currencies traded 0.2 percent down at 93.29, having touched a high of 93.67 earlier in the day, its highest since Aug. 18. FxWirePro's Hourly Dollar Strength Index stood at 91.38 (Slightly Bullish) by 1000 GMT.
EUR/USD: The euro rebounded from recent lows after data showed Euro zone economic sentiment improved more than expected in September, reaching levels last seen in July 2007. The European currency traded 0.2 percent up at 1.1772, having touched a low of 1.1717 the day before, its lowest since Aug. 18. FxWirePro's Hourly Euro Strength Index stood at -25.64 (Neutral) by 1000 GMT. Technically pair is facing strong support at 1.17200 (200- W MA) and any convincing break below that level confirms minor weakness, a decline till 1.16600/1.1600 likely. On the higher side, near term resistance around 1.17800 (high reached after making a low of 1.17180) and any break above will take it to next level till 1.1836 (50- day MA)/ 1.1870.
USD/JPY: The dollar trimmed gains after rising to 2-1/2 month highs as a minor pull-back in the U.S. Treasury bond yields seems to have prompted some profit taking. The major was trading flat at 112.80, having hit a high of 113.25 the day before, its highest since mid Jul. FxWirePro's Hourly Yen Strength Index stood at 54.06 (Bullish) by 1000 GMT. On the lower side, any close below 112 (233- day MA) confirms minor weakness, a decline till 111.13/110 likely. Any break above 113 confirms minor bullishness, a jump till 114/114.50.
GBP/USD: Sterling declined to a two-week low after the Governor of the Bank of England Mark Carney stated that the central bank could not be expected to nullify the likely damage to the economy from Brexit. The major traded 0.05 percent down at 1.3378, having hit a low of 1.3342 earlier, its lowest since Sept. 14. FxWirePro's Hourly Sterling Strength Index stood at 28.20 (Neutral) by 1000 GMT. On the lower side, nearby support is around 1.33148 (38.2% retracement of 1.36574 and 1.27631) and any break below will drag the pair down till 1.3250/1.3200. The near term resistance is around 1.3400 and any break above will take it till 1.34295/1.3460 (38.2% fibo)/1.3500. Against the euro, the pound was trading 0.3 percent down at 87.96 pence, having hit a high of 87.46 pence in the previous session, its highest since July.
USD/CHF: The Swiss franc declined, extending losses for the third straight session as the greenback climbed to a one-month high on hopes that U.S. President Donald Trump's administration may be making progress on tax reforms. The major trades 0.2 percent up at 0.9742, having touched a high of 0.9769 in the previous session, it’s highest since Aug. FxWirePro's Hourly Swiss Franc Strength Index stood at 164.94 (Bullish) by 1000 GMT. The short term trend is still bullish as long as support 0.9630 (233-4H MA) holds and any break below will drag the pair down till 0.9580/0.9565/0.9525. The near term resistance is around 0.97730 (Aug 8th 2017 high) and any convincing break above will take it to next level till 0.9808/0.9845.
AUD/USD: The Australian slumped to a fresh 2-month low as Wednesday's U.S. durable goods orders data, reinforced market expectations that the Fed would raise interest rates further in December. The Aussie trades 0.4 percent down 0.7817, having hit a low of 0.7799 earlier, it’s lowest since Jul. 18. FxWirePro's Hourly Aussie Strength Index stood at -163.79 (Highly Bearish) by 1000 GMT. On the lower side, near term support is around 0.7800 and any close below will drag the pair till 0.77186/0.7685. The near term resistance is around 0.7900 (55 –day EMA) and any break above targets 0.7938 (34- day EMA)/0.7976 (20- day MA).
Equities Recap
European shares edged up following gains in financial stocks, while the dollar advanced to a one-month high against a basket of currencies on hopes that U.S. President Donald Trump's administration may be making progress on tax reforms.
The pan-European STOXX 600 index climbed 0.05 percent to 385.65 points, while the FTSEurofirst 300 index rallied 0.05 percent to 1,516.28 points.
Britain's FTSE 100 trades 0.05 percent up at 7,316.10 points, while mid-cap FTSE 250 gained 0.2 percent to 19,598.82 points.
Germany's DAX rose 0.3 percent at 12,699.97 points; France's CAC 40 trades 0.2 percent higher at 5,291.45 points.
Commodities Recap
Crude oil prices rallied amid rising tension in northern Iraq following the semi-autonomous Kurdistan region's vote for independence in a referendum. International benchmark Brent crude was trading 1.3 percent up at $58.39 per barrel by 0955 GMT, having hit a high of $59.48 on Tuesday, its strongest since Jul. 2015. U.S. West Texas Intermediate was trading 1.4 percent up at $52.73 a barrel, after rising as high as $52.83 earlier, its highest since April.
Gold prices steadied after declining to over one-month lows as the dollar rose on expectations of a U.S interest rate hike in December. Spot gold gained 0.2 percent at $1,284.25 per ounce at 0658 GMT, having declined to a low of $1277.64 earlier in the session, its lowest since Aug. 25. U.S. gold futures for December delivery fell 0.5 percent to $1,281.30.
Treasuries Recap
The U.S. Treasuries slumped, as investors wait to watch the country’s second-quarter GDP, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasury climbed nearly 4 basis points to 2.34 percent, the super-long 30-year bond yields surged 3-1/2 basis points to 2.89 percent and the yield on short-term 2-year note traded 1/2 basis point higher at 1.49 percent.
The UK gilts remained on the downside Thursday, following a speech by Bank of England (BoE) Governor Mark Carney’s and the country’s Prime Minister Theresa May at a conference in London. The yield on the benchmark 10-year gilts, rose 1-1/2 basis points to 1.40 percent, the super-long 30-year bond yields climbed 1 basis point to 1.95 percent and the yield on the short-term 2-year also traded flat at 0.46 percent.
The German government bunds continue on a downtrend Thursday as investors wait to watch the release of eurozone’s consumer price-led inflation index for the month of September, due on September 29 by 09:00GMT. The German 10-year bond yields, which moves inversely to its price, jumped nearly 2-1/2 basis points to 0.49 percent, the yield on 30-year note also surged 2-1/2 basis points to 1.29 percent and the yield on short-term 2-year traded 1-1/2 basis points higher at -0.68 percent.
The New Zealand bonds remained flat at the time of closing Thursday after the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision, failed to infuse any major changes in the debt market. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 3.00 percent, the yield on 7-year note flat at 2.85 percent and the yield on short-term 2-year ended 1 basis point lower at 2.10 percent.
The Japanese government bonds slumped, following similar movement in the U.S. cousin, after President Donald Trump on Wednesday promised that his newly released tax reform plan would deliver American businesses and families some of the lowest tax rates in nearly a century, and do so with bipartisan support in Congress. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 2 basis points to 0.07 percent, the yield on long-term 30-year climbed nearly 4 basis points to 0.88 percent and the yield on short-term 2-year traded 1 basis point higher at -0.12 percent.
The Australian bonds slumped, tracking weakness in the U.S. counterpart after the latter faced broad selling pressure on Wednesday after Fed chair Janet Yellen remained steadfast in her view that gradual rate rises are needed despite soggy inflation. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 4-1/2 basis points to 2.84 percent, the yield on the 15-year note also climbed 4-1/2 basis points to 3.11 percent and the yield on short-term 2-year traded 1-1/2 basis points higher at 1.97 percent.
