Market Roundup
- EUR/USD 0.19%, USD/JPY -0.11%, GBP/USD 0.08%, EUR/GBP 0.09%
- DXY -0.07%, DAX 0.53%, FTSE 0.22%, Brent -0.96%, Gold 0.05%
- Dollar perched at one-week highs on upbeat Fed
- Great Britain Sep Retail Sales y/y, 3.0%, 3.3% previous, 3.6% forecast, 3.4% revised
- Great Britain Sep Retail Sales Ex-Fuel y/y, 3.2%, 3.5% previous, 3.7% forecast, 3.6% revised
- Germany Sep Wholesale Price Index y/y, 0.4%, 0.3% previous
- To overcome Brexit impasse, May open to extending transition
- Italy's PM defiant on budget, denies coalition rift
- Germany should push Weidmann as ECB chief, Nowotny tells paper
- Yuan closes at over 21-mth low on hawkish Fed and U.S. currency report
- Beyond Brexit: EU fetes Asian leaders in message to Trump
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 2,000 to a seasonally adjusted 212,000 for the week ended Oct. 12, while continuing claims for the week ended Oct. 5 is expected to rise to 1.665 million from a previous reading of 1.660 million.
- (0830 ET/1230 GMT) Philadelphia Federal Reserve manufacturing survey is likely to show that business activity decreased to 20.0 in October from 22.9 in September.
- (0830 ET/1230 GMT) The Statistics Canada releases the employment report for September. The economy added 13,600 jobs in the previous month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending October 12.
- N/A Bank of Mexico publishes the minutes of its latest monetary policy meeting.
Key Events Ahead
- (0915 ET/1315 GMT) Federal Reserve Bank of St. Louis President James Bullard gives presentation on the U.S. economy and monetary policy before the Economic Club of Memphis
- (0930 ET/1330 GMT) Latvian Finance Minister Dana Reizniece-Ozola, Lituanian Finance Minister Migle Tuskiene and Estonian Deputy Secretary-General for Financial Policy Marten Ross speak alongside European Commission's Valdis Dombrovskis on financial stability and capital markets in the Baltics in London.
- (0930 ET/1330 GMT) Bank of Slovenia Deputy Governor Primoz Dolenc speaks at a financial conference in Ljubljana.
- (1215 ET/1615 GMT) Federal Reserve Vice Chairman for Supervision Randal Quarles speaks before an Economic Club of New York luncheon.
FX Beat
DXY: The dollar index declined after rising to a 1-week peak earlier in the day earlier in the day on the back of hawkish Federal Reserve’s September monetary policy meeting minutes. The greenback against a basket of currencies trades 0.1 percent down at 95.52, having touched a high of 95.78, its highest since October 10. FxWirePro's Hourly Dollar Strength Index stood at -3.86 (Neutral) by 1000 GMT.
EUR/USD: The euro rebounded from an over 1-week low after Italy's prime minister denied any division between the two parties in his governing coalition. The European currency traded 0.2 percent up at 1.1527, having touched a high of 1.1621 on Monday, its highest since October 1. FxWirePro's Hourly Euro Strength Index stood at -5.79 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1545 (October 10 High), a break above targets 1.1610 (October 12 High). On the downside, support is seen at 1.1463 (October 4 Low), a break below could drag it till 1.1490 (October 9 Low),.
USD/JPY: The dollar retreated from a 1-week peak as renewed US-China trade war fears triggered a fresh wave of global risk-aversion trade and underpinned the demand for safe-haven Japanese Yen. The major was trading 0.2 percent down at 112.46, having hit a low of 111.73 on Monday, its lowest since September 13. FxWirePro's Hourly Yen Strength Index stood at -90.97 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims and FOMC members Bullard and Quarles' speeches. Immediate resistance is located at 112.87 (September 21 High), a break above targets 113.13 (September 26 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 surged after UK Prime Minister Theresa May's spokeswoman stated that Britain is considering other ways of making progress in Brexit negotiations with the European Union. However, data showing British retail sales fell by the most in six months in September limited upside. The major traded 0.1 percent up at 1.3130, having hit a low of 1.3082 on Monday; it’s lowest since October 9. FxWirePro's Hourly Sterling Strength Index stood at 56.34 (Bullish) 1000 GMT. Immediate resistance is located at 1.3150 (October 9 High), a break above could take it near 1.3215 (October 10 High). On the downside, support is seen at 1.3062 (September 24 Low), a break below targets 1.3028 (October 8 Low). Against the euro, the pound was trading 0.1 percent down at 87.74 pence, having hit a low of 88.25 on Monday, it’s lowest since October 5.
USD/CHF: The Swiss franc edged up after falling to a near 2-month low as renewed geopolitical tensions send investors seeking safety into safe-haven assets. The major trades 0.3 percent down at 0.9924, having touched a high of 0.9959 earlier, it’s highest since August 20. FxWirePro's Hourly Swiss Franc Strength Index stood at -43.63 (Bearish) by 1000 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 edged higher, boosted by upbeat corporate trading updates, while the dollar retreated from recent peaks against the yen amid ongoing concerns the U.S.-China trade conflict could escalate and dent the global economy.
The pan-European STOXX 600 index rallied 0.4 percent at 364.95 points, while the FTSEurofirst 300 index surged 0.3 percent to 1,431.46 points.
Britain's FTSE 100 trades 0.05 percent up at 7,057.31 points, while mid-cap FTSE 250 gained 0.3 percent to 19,064.09 points.
Germany's DAX rose 0.5 percent at 11,770.78 points; France's CAC 40 trades 0.5 percent higher at 5,171.26 points.
Commodities Recap
Crude oil prices declined to an over 3-week low after an industry report showed U.S. crude inventories rose 6.5 million barrels last week, recording the fourth straight weekly increase. International benchmark Brent crude was trading 1.2 percent down at $79.36 per barrel by 1011 GMT, having hit a low of $79.23, its lowest since September 24. U.S. West Texas Intermediate was trading 1.3 percent down at $69.12 a barrel, after falling as low as $69.09, its lowest since September 18.
Gold prices eased as the greenback firmed after minutes of the Federal Reserve's September meeting reinforced expectations of a tighter U.S. monetary policy. Spot gold was trading 0.5 percent down at $1,222.45 an ounce at 1017 GMT, having hit a high of $1233.14 on Monday, its highest since July 26. U.S. gold futures were down 0.2 percent at $1,225.20 an ounce.
Treasuries Recap
The U.S. Treasuries lost ground during late afternoon session after the Federal Reserve’s September monetary policy meeting minutes remained hawkish ahead of the Philadelphia Fed Manufacturing Index for the month of October, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasuries jumped 3-1/2 basis points to 3.215 percent, the super-long 30-year bond yields also surged 3-1/2 basis points to 3.381 percent and the yield on the short-term 2-year traded 2 basis points higher at 2.903 percent.
The United Kingdom’s gilts fell during afternoon session despite a lower-than-expected reading of the country’s retail sales data for the month of September. Market participants will now be looking forward to Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be delivered on October 19 by 15:30GMT for further direction in the debt market. The yield on the benchmark 10-year gilts, rose nearly 1-1/2 basis points to 1.590 percent, the super-long 30-year bond yields gained 1 basis point to 1.970 percent and the yield on the short-term 2-year too traded nearly 1 basis point higher at 0.809 percent.
The New Zealand bonds closed lower amid a muted trading session that witnessed data of little economic significance as investors remain keen to watch China’s gross domestic product for the third quarter of this year, scheduled to be released on October 19 by 02:00GMT. 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 2.718 percent, the yield on the long-term 20-year note remained tad higher at 3.025 percent and the yield on short-term 2-year closed flat at 1.855 percent.
The Australian government bonds slumped during Asian session after the country’s unemployment rate for the month of September surprisingly cheered market expectations. However, the lower-than-expected employment change limited further losses in debt prices. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 3-1/2 basis points to 2.748 percent, the yield on the long-term 30-year bond surged 3-1/2 basis points to 3.219 percent and the yield on short-term 2-year too traded 3-1/2 basis points higher at 2.075 percent.
