Menu

Search

  |   Market Roundups

Menu

  |   Market Roundups

Search

Europe Roundup: Sterling hits 3-week low on political uncertainty, dollar index steadies ahead of Fed official's speeches, European shares decline - Thursday, October 5th, 2017

Market Roundup

  • EUR/USD -0.03%, USD/JPY -0.13%, GBP/USD -0.45%, EUR/GBP 0.45%
     
  • DXY 0.08%, DAX -0.22%, FTSE 0.18%, Brent 0.72%, Gold 0.3%
     
  • ECB's Nowotny expects asset purchases to slow at start of next year -Trend
     
  • ECB lowers emergency funding cap for Greek banks to 32.6 bln euros
     
  • German firms must ready for very hard Brexit, says industry group
     
  • Swiss CPI rises to 0.7% y/y from 0.6%, a 6-year best
     
  • A Sky News report said May is not considering resigning
     
  • After speech fiasco, UK minister says ruling Conservatives must stay cool
     
  • Oil steady as talk of new OPEC deal balances U.S. exports
     
  • Gold little changed in quiet trade ahead of U.S. jobs data

Economic Data Ahead

  • (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 7,000 to a seasonally adjusted 265,000 for the week ended Sept. 30, while continuing claims for the week ended Sept. 22 is expected to rise to 1.950 million from previous 1.934 million.
     
  • (0830 ET/1230 GMT) The United States releases trade balance figures for the month of September. The economy's trade deficit is expected to have narrowed to $42.7 billion from $43.7 billion in August.
     
  • (0830 ET/1230 GMT) The Statistics Canada is likely to report that international trade deficit narrowed to C$2.60 billion in August from C$3.04 billion in July.
     
  • (1000 ET/1400 GMT) The United States is likely to report that factory orders increased 1.0 percent in August after posting a fall of 3.3 percent in the prior month.
     
  • (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending September 29.
  • (1950 ET/2350 GMT) Japan releases Foreign Exchange Reserves report for the month of September.
     

Key Events Ahead

  • (0815 ET/1215 GMT) European Central Bank (ECB) Executive Board member Benoît Cœuré's speech.
     
  • (0900 ET/1300 GMT) New York Fed President William Dudley gives welcome remarks before the Treasury Market Practices Group (TPMG) "Best Practices @ 10: a Look Back and a Look Ahead", in New York.
     
  • (0910 ET/1310 GMT)  Federal Reserve Board Governor Jerome Powell Governor speaks on "Treasury Markets and the TMPG".
     
  • (0915 ET/1315 GMT) San Francisco Fed President John Williams gives a keynote speech before the Community Banking in the 21st Century Research and Policy Conference hosted by the Fed Bank of St. Louis.
     
  • (0930 ET/1330 GMT) Philadelphia Fed President Patrick Harker speaks on "Workforce Development" before the Investing in America's Workforce conference hosted by the Fed System in Austin.
     
  • (1145 ET/1545 GMT) FedTrade operation 30-year Ginnie Mae (max $1.25 bn)
     
  • (1330 ET/1730 GMT) Bank of England MPC Member Andrew G Haldane's Speech.
     
  • (1630 ET/2030 GMT) Kansas City Fed President Esther George speaks on "Job Polarization and the U.S. Labor Market".

FX Beat

DXY: The dollar index consolidated within narrow ranges, as investors’ awaited series of Fed officials’ speeches for further clues on the central bank’s monetary policy outlook.  The greenback against a basket of currencies traded flat at 93.51, having touched a high of 93.92 on Tuesday, its highest since Aug. 17. FxWirePro's Hourly Dollar Strength Index stood at -12.50 (Neutral) by 0900 GMT.

EUR/USD: The euro rose, extending gains for the third straight session, ahead of the release of the European Central Bank's latest policy meeting minutes.  The European currency traded 0.1 percent up at 1.1766, having touched a low of 1.1696 on Tuesday, its lowest since Aug. 17. FxWirePro's Hourly Euro Strength Index stood at 27.35 (Neutral) by 0900 GMT. Technically pair is facing strong support at 1.17200 (200- W MA) and any convincing close below that level confirms minor weakness, a decline till 1.16600/1.1600 likely. On the higher side, near-term resistance around 1.17877 (23.6% retracement of 1.20925 and 1.16964) and any break above will take it to next level till 1.1833 (34- day MA)/ 1.1870.

USD/JPY: The dollar eased, extending previous session losses, amid declining U.S. Treasury bond yields and weaker investor sentiment around the European equity markets. The major was trading 0.1 percent down at 112.59, having hit a high of 113.25 last week, its highest since mid-Jul. FxWirePro's Hourly Yen Strength Index stood at 118.66 (Highly Bullish) by 0900 GMT.  On the lower side, any close below 112.15 (233- day MA) confirms minor weakness, a decline till 111.13/110 likely. Any break above 113.20 (161.8% fibo) confirms minor bullishness, a jump till 114/114.50.

GBP/USD: Sterling slumped to a fresh 3-week low against the dollar and the euro as Brexit concerns and the persistent uncertainty in the UK politics continued to weigh heavily on the British pound. Investors now await BoE Chief Economist Andy Haldane and policymaker Ian McAfferty's speech for clues on monetary policy. Sterling traded 0.4 percent down at 1.3191, having hit a low of 1.3174 earlier, its lowest since Sept. 14. FxWirePro's Hourly Sterling Strength Index stood at -90.68 (Slightly Bearish) by 0900 GMT. Any break below 1.3200 confirms minor weakness and any break below targets 1.3160 (Sep 12th low) would drag the pair further down till 1.31060 (61.8% retracement of 1.27739 and 1.36574). Minor bullishness can be seen above 1.3300 (4H Kijun-Sen and 34- 4H EMA) and any break above will take it to next level till 1.3350/1.34350. Against the euro, the pound was trading 0.5 percent down at 89.16 pence, having hit a low of 89.93 pence earlier in the day, its lowest since Sept. 14.

USD/CHF: The Swiss franc edged down, extending previous session losses, as the greenback gained on data that showed U.S. service sector growth hit its fastest in 12 years in September and private employers added more jobs than forecast. The major trades 0.2 percent up at 0.9767, having touched a high of 0.9786 on Tuesday, it’s highest since May. FxWirePro's Hourly Swiss Franc Strength Index stood at -40.53 (Neutral) by 0900 GMT. The short-term trend is still bullish as long as support 0.9649 (55- day EMA) 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 close above will take the pair to next level till 0.9808/0.9845/0.9900.

AUD/USD: The Australian dollar tumbled after the release of worse-than-expected Australian retail sales data highlighted the need for interest rates to remain at record lows. The Aussie trades 0.6 percent down 0.7818, having hit a low of 0.7785 on Tuesday, it’s lowest since Jul. 14. FxWirePro's Hourly Aussie Strength Index stood at -24.13 (Neutral) by 0900 GMT. On the lower side, near-term support is around 0.7800 and any convincing close below will drag the pair till 0.77186/0.7685. The near-term resistance is around 0.7885 (55 –day EMA) and any break above targets 0.7933 (34- day EMA)/0.7976 (20- day MA).

Equities Recap

European shares slumped, following a retreat in Germany's benchmark index from record highs, while sterling fell to three-week lows against the dollar and euro as investors worried about Prime Minister Theresa May's ability to cling onto power.

The pan-European STOXX 600 index slumped 0.3 percent to 389.35 points, while the FTSEurofirst 300 index declined 0.2 percent to 1,530.05 points.

Britain's FTSE 100 trades 0.1 percent up at 7,477.65 points, while mid-cap FTSE 250 fell 0.1 percent to 20,006.16 points.

Germany's DAX eased 0.2 percent at 12,941.73 points; France's CAC 40 trades 0.05 percent lower at 5,360.65 points.

Commodities Recap

Crude oil prices steadied after falling to recent lows as expectations that Saudi Arabia and Russia would extend production cuts boosted market sentiment.  International benchmark Brent crude was trading 0.9 percent up at $56.25 per barrel by 0933 GMT, having hit a low of $55.36 on Wednesday, its weakest since Sept. 20. U.S. West Texas Intermediate was trading 0.6 percent up at $50.17 a barrel, after falling as low as $49.75 the day before, its lowest since Sept. 19.

Gold prices rose, extending gains for the third consecutive session, while the markets awaited the highly influential U.S. non-farm payrolls report on Friday. Spot gold was trading 0.4 percent up at $1,278.53 an ounce at 0936 GMT, having hit its lowest since mid-August at $1,268.21 on Tuesday. U.S. gold futures for December delivery were unchanged at $1,276.90 per ounce.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.321 percent lower by 0.011 bps, while 5-year yield was 0.008 bps down at 1.916 percent.

The Spanish government bond yields rose to their highest level since March. The 10-year bond yield has risen around 19 basis points so far this week, putting it on track for its biggest weekly rise since March. The German 10-year bond yield rose 1 basis point to 0.46 percent, rising in line with most other eurozone bond yields.

The Japanese government bonds edged slightly higher in a cautious market as investors awaited monthly U.S. jobs data due on Friday. The 10-year cash JGB yield inched half a basis point lower to 0.045 percent, while the 10-year JGB futures contract finished up 0.05 point at 150.53. In the super-long zone, the 20-year JGB yield shed half a basis point to 0.570 percent while the 30-year JGB yield was flat at 0.865 percent.

The Australian government bond futures edged higher, with the three-year bond contract up 3 ticks at 97.870. The 10-year contract added 2 ticks to 97.1850. The New Zealand government bonds rose, sending yields about 1 basis point across the curve.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.