Market Roundup
- EUR/USD -0.25%, USD/JPY -0.03%, GBP/USD -0.08%, EUR/GBP -0.16%
- DXY 0.15%, DAX 0.01%, FTSE 0.09%, Brent 0.4%, Gold -0.37%
- New Bank of England deputy says not ready to vote for rate hike
- Greece, confounding creditors, fell in recession again last year
- Great Britain Sept Core CPI YY 2.7% vs 2.7%, forecast 2.7%
- Great Britain Sept CPI YY 3.0% vs 2.9%, forecast 3.0%
- Great Britain Sept RPI YY 3.9% vs 3.9%, forecast 4.0%
- Great Britain Sept PPI Input Prices YY NSA 8.4% vs 7.6%, forecast 8.2%, revised 8.4%
- Great Britain Sept PPI Output Prices YY NSA 3.3% vs 3.4%, forecast 3.3%
- Great Britain Sept PPI Core Output YY NSA 2.5% vs 2.5%, forecast 2.6%
- Germany Oct ZEW Economic Sentiment 17.6 vs 17.0, forecast 20.0
- Germany Oct ZEW Current Conditions 87 vs 87.9, forecast 89
- EZ Sept Inflation Final YY 1.5% vs 1.5%, forecast 1.5%
- EZ Sept Infl Ex Food & Energy YY 1.3% vs 1.3%, forecast 1.1%
- Japan Oct Reuters Tankan mfg index +31, highest since June ’07, non-mfg +30
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Labor Department publishes import and export prices index for the month of September. The import prices are likely to rise 0.4 percent after rising 0.6 percent in August, while exports are expected to have edged up 0.4 percent after advancing 0.6 percent in the prior month.
- (0915 ET/1315 GMT) The Federal Reserve is likely to report that industrial production rose 0.2 percent in September, after declining 0.9 in the prior month.
- (0915 ET/1315 GMT) The Federal Reserve Board is expected to report that capacity utilization edged up to 75.2 percent in September from 75.1 percent in August.
- (1000 ET/1400 GMT) The National Association of Home Builders (NAHB) is expected to report that U.S. Housing Market Index rose to 64 in October, after posting a similar increase in September.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
- (1830 ET/2330 GMT) The Melbourne Institute will release Australia's Westpac Leading Index for the month of September. The index edged down 0.1 percent in the previous month.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade operation 30-year Ginnie Mae (max $1.085 bn)
- (1300 ET/1700 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on "Equitable Transit" before the Northeast Pennsylvania Equitable Transit Summit in Scranton.
- (1530 ET/1930 GMT) Bank of Canada Senior Deputy Governor Carolyn Wilkins will give panel remarks "Blockchain and payments: Lessons learnt and future prospects" at the ongoing SWIFT Sibos in Toronto.
FX Beat
DXY: The dollar index rallied to a one-week high as the U.S. 2-year Treasury yields hit their highest in almost nine years after a report showed that Trump was favoring Stanford economist John Taylor to head the Federal Reserve. The greenback against a basket of currencies traded 0.3 percent up at 93.52, having touched a high of 93.54 earlier in the session, its highest since Oct. 10. FxWirePro's Hourly Dollar Strength Index stood at 71.15 (Bullish) by 1000 GMT.
EUR/USD: The euro tumbled to a 1-week low after the ZEW survey disappointed expectations in both Germany and the Eurozone. The Euro area's economic sentiment fell to 26.7 in October, down from September’s 31.7 and 34.2 previously estimated. The European currency traded 0.1 percent down at 1.1769, having touched a low of 1.1754 earlier, its lowest since Oct. 10. FxWirePro's Hourly Euro Strength Index stood at -132.39 (Highly Bearish) by 1000 GMT. On the lower side, the near term support is around 1.1720 and any convincing break below will drag the pair down till 1.1660. On the higher side, near-term resistance is around 1.1825 and any break above will take it to next level till 1.1880/1.1900/1.1928 (61.8% retracement of 1.20925 and 1.16621)/1.2000.
USD/JPY: The dollar trimmed losses against the Japanese yen, supported by a rise in Treasury yields following a report U.S. President Donald Trump was in favor of a hawk as the next chief of the Federal Reserve. The major was trading 0.05 percent down at 112.13, having hit a low of 111.65 on Monday, its lowest since Sept. 26. FxWirePro's Hourly Yen Strength Index stood at 101.09 (Highly Bullish) by 1000 GMT. On the lower side, any close below 111.65 (34- day EMA) confirms minor weakness, a decline till 111.13/110 likely. Any break above 113.45 confirms minor bullishness, a jump till 114/114.50. The near-term resistance is around 112.30 (55- 4H EMA).
GBP/USD: Sterling slumped, extending previous session losses, after the Bank of England's new deputy governor Dave Ramsden stated that he was not close to vote for an interest rate hike, raising doubts for investors about when the BoE would hike interest rates next. The major traded 0.2 percent down at 1.3221, having hit a high of 1.3337 on Friday, its highest since Oct. 2. FxWirePro's Hourly Sterling Strength Index stood at -41.72 (Neutral) by 1000 GMT. The near-term major resistance is around 1.3325 (20- day MA) and any break above will take the pair to next level till 1.3400/1.3420/1.3460. On the lower side, 1.3230 will be acting as major support and any break below will drag it down till 1.3180/1.3120 level. Against the euro, the pound was trading 0.1 higher at 88.94 pence, having hit a high of 88.55 pence the day before, its highest since Oct. 4.
USD/CHF: The Swiss franc fell to 1-week lows, as the greenback rallied following a rise in the U.S. Treasury yields on talk of more hawkish Fed chair. The major trades 0.2 percent up at 0.9770, having touched a high of 0.9791 earlier, it’s highest since Oct. 10. FxWirePro's Hourly Swiss Franc Strength Index stood at -20.73 (Neutral) by 1000 GMT. On the lower side, any break below 0.9705 confirms that jump from 0.9420 ends at 0.98345 and a decline till 0.9580/0.9500 is possible. The near-term resistance is around 0.97780 and any violation above will take it to next level till 0.9835/0.9900.
AUD/USD: The Australian dollar eased after minutes of the Reserve Bank of Australia's October meeting showed the central bank saw no need to follow its peers abroad and raise interest rates. The Aussie trades down at 0.7844, having hit a high of 0.7897 on Friday, it’s highest since Sept. 25. FxWirePro's Hourly Aussie Strength Index stood at 65.70 (Bullish) by 1000 GMT. On the lower side, near-term support is around 0.7850 (20- 4H EMA) and any convincing close below will drag the pair till 0.7780/0.7730. The near-term resistance is around 0.7917 (233-4H MA) and any break above targets 0.7950/0.8000.
Equities Recap
European shares steadied, supported by some upbeat earning updates from companies, while the dollar strengthened to a one-week high against a basket of major currencies, boosted by a rise in Treasury yields.
The pan-European STOXX 600 index eased 0.05 percent to 391.25 points, while the FTSEurofirst 300 index advanced 0.05 percent to 1,537.97 points.
Britain's FTSE 100 trades 0.1 percent up at 7,530.39 points, while mid-cap FTSE 250 fell 0.4 percent to 20,135.59 points.
Germany's DAX rose 0.02 percent at 13,005.75 points; France's CAC 40 trades 0.1 percent down at 5,359.84 points.
Commodities Recap
Crude oil prices steadied near multi-week highs, as a war between Iraqi and Kurdish forces threatened supplies from northern Iraq. International benchmark Brent crude was trading 0.4 percent up at $58.13 per barrel by 1025 GMT, having hit a high of $58.45 the day before, its highest since Sept. 28. U.S. West Texas Intermediate was trading 0.4 percent higher at $52.11 a barrel, after rising as high as $52.34 on Monday, its highest since Sept. 28.
Gold prices slumped, extending previous session losses, weighed down by a firmer dollar, however, worries over geopolitical tensions in the Middle East and on the Korean peninsula limited losses. Spot gold was down 0.4 percent at $1,288.30 an ounce by 1027 GMT, after hitting a high of $1,305.93 on Monday, the highest since Sept. 26. U.S. gold futures for December delivery slipped 0.9 percent to $1,291.70 per ounce.
Treasuries Recap
The U.S. Treasuries traded range-bound as investors await FOMC member Harker’s speech, scheduled to be held today by17:00GMT. The yield on the benchmark 10-year Treasury flat at 2.31 percent, the super-long 30-year bond yields steady at 2.82 percent and the yield on short-term 2-year note hovered around 1.53 percent.
The UK gilts slumped after the country’s consumer price-led inflation index for the month of September met market expectations, and coming in higher than the previous reading in August. The yield on the benchmark 10-year gilts, traded steady at 1.34 percent, the super-long 30-year bond yields flat at 1.88 percent and the yield on the short-term 2-year also hovered around 0.45 percent.
The New Zealand bonds ended Tuesday’s session lower after the country’s third-quarter consumer price inflation (CPI) beat market expectations. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis point to 2.96 percent, the yield on 7-year note range-bound at 3.30 percent and the yield on short-term 2-year too ended tad higher at 2.09 percent.
The Japanese government bonds trended lower as investors remained side-lined in any major trading activity ahead of the country’s trade balance data for the month of September, scheduled to be released on October 18 by 23:50GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 0.07 percent, the yield on long-term 30-year also tad up at 0.88 percent and the yield on short-term 2-year traded flat at -0.14 percent.
The Australian bonds slumped with U.S. Treasuries as market speculation rise on new hawkish Federal Reserve chairperson. However, the October Reserve Bank of Australia meeting minutes failed to steer markets. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2 basis points to 2.777 percent, the yield on the long-term 30-year note also climbed 1-1/2 basis points to 3.553 percent and the yield on short-term 2-year traded nearly 1 basis point higher at 1.917 percent.
