Market Roundup
- EUR/USD 0.53, USD/JPY 0.03%, GBP/USD 0.76%, EUR/GBP -0.24%
- DXY -0.51%, DAX 0.9%, FTSE 0.04%, Brent -0.87%, Gold 0.77%
- UK, EU close to Brexit deal on financial services - UK official
- Bank of England to stay in "suspended animation" after Halloween meeting
- Great Britain Oct Markit/CIPS Mfg PMI, 51.1, 53.0 forecast, 53.8 previous, 53.6 revised
- Euro rebounds as investor sentiment recovers; sterling surges
- Trade war impact deepens across Asia, but 'real economic shock' yet to hit
- Amid trade war, China premier says Sino-U.S. ties can improve
- China's yuan rebounds to close at strongest in nearly a week
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 213,000 for the week ended Oct. 26, while continuing claims for the week ended Oct. 12 stood at 1.636 million.
- (0830 ET/1230 GMT) The U.S. Labor Department will release preliminary labor costs report for the third quarter. The indicator is expected to nudge up 1.2 percent after posting a decline of 2.0 percent in the previous quarter.
- (0830 ET/1230 GMT) The U.S. Labor Department is likely to report that preliminary non-farm productivity edged lower to 2.0 percent in the third quarter, from a rise of 2.9 percent in the previous quarter.
- (0930 ET/1330 GMT) The Markit will release Canada's Manufacturing PMI for the Month of October. The indicator stood at 54.8 in the prior month.
- (0945 ET/1345 GMT) Financial firm Markit is expected to show that U.S. Manufacturing PMI remained unchanged at 55.9 in the month of October.
- (1000 ET/1400 GMT) The Institute for Supply Management is likely to report that U.S. manufacturing index declined to 59.0 in October from a reading of 59.8 in September.
- (1000 ET/1400 GMT) The Commerce Department is likely to report that construction spending for July stayed unchanged at 0.1 percent in September.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending October 26.
- N/A Autodata Corp releases U.S. auto sales figures for October. Vehicles sales are likely to decline to an annualized rate of 17.10 million units from 17.44 million in September.
Key Events Ahead
- (0800 ET/1200 GMT) Bank of England announces rate decision and publishes the minutes of the meeting, after the rate decision in London
- (0800 ET/1200 GMT) Bank of England to release Inflation Report in London
- (1010 ET/1410 GMT) Fed New York Executive Vice President Kevin Stiroh speaks at Financial Times U.S. Banking Forum in New York
- (1115 ET/1515 GMT) Swiss National Bank (SNB) Executive Board member Fritz Zurbrügg speaks at the NZZ conference in Interlaken, Switzerland
- (1300 ET/1700 GMT) Bank of Canada Deputy Governor Carolyn A. Wilkins gives speech at McGill University Montreal
- (1330 ET/1730 GMT) Bank of Canada Deputy Governor Lawrence Schembri gives introductory remarks at the John Kuszczak Memorial Lecture in Ottawa
- (1500 ET/1900 GMT) Bank of Canada Deputy Governor Timothy Lane moderates a panel discussion on Revisiting the Merits of the Inflation Targeting Policy Framework and its Alternatives in Ottawa
FX Beat
DXY: The dollar index slumped to a 3-day low as the potential for slowing U.S. growth could reduce the prospects of Federal Reserve rate hikes. The greenback against a basket of currencies trades 0.6 percent down at 96.58, having touched a high of 97.20 on Wednesday, its highest since June 26. FxWirePro's Hourly Dollar Strength Index stood at -52.75 (Bearish) by 1000 GMT.
EUR/USD: The euro rebounded as concerns over the strength of Eurozone economy eased. The European currency traded 0.6 percent up at 1.1376, having touched a low of 1.1302 on Wednesday, its lowest since August 15. FxWirePro's Hourly Euro Strength Index stood at 33.22 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1410 (10-DMA), a break above targets 1.1432 (October 25 High). On the downside, support is seen at 1.1264., a break below could drag it till 1.1219.
USD/JPY: The dollar edged up as risk sentiment slightly improved across the board. The major was trading 0.05 percent up at 112.99, having hit a high of 113.38 on Wednesday, its highest since October 9. FxWirePro's Hourly Yen Strength Index stood at -162.40 (Highly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, prelim nonfarm productivity, manufacturing PMI from both Markit and ISM and construction spending. Immediate resistance is located at 113.71 (September 28 High), a break above targets 114.10 (October 5 High). On the downside, support is seen at 112.35 (October 22 Low), a break below could take it lower 112.01 (October 17 Low).
GBP/USD: Sterling surged to a 1-week peak on reports that Britain had secured a deal with Brussels on post-Brexit financial services, adding to optimism about the prospects of reaching a wider deal with Brussels. The major traded 0.8 percent up at 1.2871, having hit a low of 1.2695 on Tuesday; it’s lowest since August 16. FxWirePro's Hourly Sterling Strength Index stood at 34.68 (Neutral) 1000 GMT. Immediate resistance is located at 1.2901 (August 27 High), a break above could take it near 1.2962 (September 6 High). On the downside, support is seen at 1.2700, a break below targets 1.2664. Against the euro, the pound was trading 0.3 percent up at 88.36 pence, having hit a high of 88.05, it’s highest since October 23.
USD/CHF: The Swiss franc retreated from a 1-1/2 year low touched in the previous session as the greenback eased from recent multi-month peaks. The major trades 0.5 percent up at 1.0032, having touched a high of 1.0094, it’s highest since May 2017. FxWirePro's Hourly Swiss Franc Strength Index stood at -146.40 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 1.0100 and any break above will take the pair to next level till 1.0145. The near-term support is around 0.9954 (September 25 Low) and any close below that level will drag it till 0.9937 (September 23 Low).
Equities Recap
European shares rallied to a 2-week high, boosted by strong results from banking and cellular stocks, while sterling surged on Brexit deal hopes.
The pan-European STOXX 600 index gained 0.7 percent at 364.28 points, while the FTSEurofirst 300 index rallied 0.6 percent to 1,431.45 points.
Britain's FTSE 100 trades 0.3 percent down at 7,145.99 points, while mid-cap FTSE 250 surged 1.5 percent to 19,197.66 points.
Germany's DAX rose 0.9 percent at 11,552.91 points; France's CAC 40 trades 0.4 percent higher at 5,111.19 points.
Commodities Recap
Crude oil prices declined, extending losses from the previous session, weighed down by signs of rising supply and increasing concerns that demand may weaken on the prospect of a global economic slowdown. International benchmark Brent crude was trading 0.3 percent down at $74.37 per barrel by 1026 GMT, having hit a low of $74.11 earlier, its lowest since August 23. U.S. West Texas Intermediate was trading 0.1 percent down at $64.80 a barrel, after falling as low as $64.68, its lowest since August 16.
Gold prices rebounded from a 3-week low touched in the previous session as the U.S. dollar eased from multi-month highs. Spot gold was up 0.8 percent at $1,223.10 per ounce at 1033 GMT, having touched a low of $1,211.87 on Wednesday, its lowest since Oct. 11. U.S. gold futures were up 0.9 percent at $1,225.4 an ounce.
Treasuries Recap
The Eurozone government bond yields nudged higher, with the German benchmark 10-year bond yield rising 2 basis points to 0.405 percent. Across the single-currency bloc, most 10-year debt yields were 1-2 bps higher on the day.
The Japanese government bonds slumped after the U.S. 10-year treasury yield rose slightly for the third consecutive day overnight. Investor sentiment improved overnight, resulting in a rebound in global share markets and a lift in U.S. bond yields. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 13 basis points to 0.128 percent, the yield on the long-term 30-year note traded 2-1/2 basis points higher at 0.895 percent and the yield on short-term 3-year traded 1 basis point up at -0.104 percent.
The Australian government bonds slumped across the curve during Asian session as investors’ moved from safe-haven buying after the country's trade surplus jumped to a near 2-year high in September. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 4 basis points to 2.656 percent, the yield on the long-term 30-year bond also jumped 4 basis points to 3.146 percent and the yield on short-term 2-year climbed 3-1/2 basis points to 2.011 percent.
