Market Roundup
- EUR/USD 0.12%, USD/JPY 0.20%, GBP/USD -0.17%, EUR/GBP 0.29%
- DXY 0.06%, DAX 0.0%, FTSE 0.12%, Brent -0.30%, Gold 0.03
- UK Sep Markit/CIPS Cons PMI 48.1 vs 51.1, forecast 51
- EZ Aug Producer Prices MM 0.3% vs 0.0%, forecast 0.1%
- Russia threatens relation over U.S. 'break-in' at San Francisco consulate
- Police seek clues to Las Vegas mass shooting, bloodiest in modern U.S. history
- Swedish FSA to propose new measures to slow mortgage debt growth
- Benefits of sales tax hike in Japan outweigh negatives-Moody's
- Oil steadies after steep losses; speculators grow impatient
- Gold falls to 7-week low as dollar firms
Economic Data Ahead
- (1030 ET/1430 GMT) Autodata Corp is expected to report that U.S. auto sales figures rose to an annualized rate of 16.90 million units in September from 16.14 million units in August.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
- (1830 ET/2230 GMT) The Australian Industry Group (AiG) releases its Performance of Services Index for the month of August. The index stood at 53.0 in July.
- (1900 ET/2300 GMT) The British Retail Consortium (BRC) will report its Shop Price Index for the month of September. The index posted a decline of 0.3 percent in the previous month.
Key Events Ahead
- (0830 ET/1230 GMT) Federal Reserve Board Governor Jerome Powell will give a speech on "Regulatory Reform" at a Reuters Conversation on U.S. Financial Regulation in Washington.
- N/A Canadian Prime Minister Justin Trudeau and the premiers of the 10 provinces will meet national indigenous leaders
- N/A Bank of Canada Deputy Governor Sylvain Leduc will give a speech on productivity in the Canadian economy.
- (0945 ET/1345 GMT) FedTrade operation 30-year Fannie Mae and Freddie Mac (max $2.2 bn)
FX Beat
DXY: The dollar gained versus the safe-haven Japanese yen on the back of rising expectations for U.S. interest rates hike by December. The greenback against a basket of currencies traded 0.1 percent down at 93.55, having touched a high of 93.92 earlier, its highest since Aug. 17. FxWirePro's Hourly Dollar Strength Index stood at 76.85 (Slightly Bullish) by 1000 GMT.
EUR/USD: The euro rebounded after falling to a 7-week low earlier in the session as investors cheered better-than-expected Eurozone PPI data, which rose at an annualized rate of 2.5 percent in August from 2.0 percent in July. The European currency traded 0.1 percent up at 1.1745, having touched a low of 1.1694 earlier, its lowest since Aug. 17. FxWirePro's Hourly Euro Strength Index stood at 43.77 (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 1.17650 (55- day EMA) and any break above will take it to next level till 1.17877 (23.6% retracement of 1.20925 and 1.16964)/ 1.1838 (34- day MA)/ 1.1870.
USD/JPY: The dollar rose, extending gains for the third straight session, as a strong reading on U.S. manufacturing activity prompted investors to trim some of their extreme short bets against the greenback. The major was trading 0.2 percent up at 112.95, having hit a high of 113.25 last week, its highest since mid-Jul. FxWirePro's Hourly Yen Strength Index stood at 31.58 (Neutral) by 1000 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 confirms minor bullishness, a jump till 114/114.50.
GBP/USD: Sterling tumbled to a fresh 3-week low after data showed Britain's construction sector activity slowed in September, unexpectedly suffering its sharpest fall since just after last year's Brexit vote. The economy's construction purchasing managers' index survey fell to 48.1 from August's reading of 51.1 and below forecasts of 50.8. Sterling traded 0.1 percent down at 1.3261, having hit a low of 1.3229 earlier, its lowest since Sept. 14. FxWirePro's Hourly Sterling Strength Index stood at -143.01 (Highly Bearish) by 1000 GMT. On the lower side, nearby support is around 1.3250 and any break below will drag the pair down till 1.3200/ 1.3100. The near-term resistance is around 1.3435 and any break above will take it till 1.3465/1.3500/1.3570 (Sep 25th 2017 high). Against the euro, the pound was trading 0.4 percent down at 88.67 pence, having hit a high of 87.46 pence on Wednesday, its highest since July.
USD/CHF: The Swiss franc edged up after falling to a near 5-month low earlier in the day on the back of broad-based U.S. dollar strength. The major flat at 0.9742, having touched a high of 0.9786 earlier, it’s highest since May. FxWirePro's Hourly Swiss Franc Strength Index stood at 35.80 (Neutral) by 1000 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 break above will take it to next level till 0.9808/0.9845/0.9900.
AUD/USD: The Australian dollar slumped to three-month lows after Australia's central bank held rates at a record low 1.50 percent and signalled it was in no rush to follow global policymakers in tightening. The Aussie trades 0.1 percent down 0.7819, having hit a low of 0.7785 earlier, it’s lowest since Jul. 18. FxWirePro's Hourly Aussie Strength Index stood at 26.17 (Neutral) by 1000 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 steadied near 3-month highs following another record-breaking session at Wall Street, while the greenback hit a 1-1/2 month high on the back of rising expectations for U.S. interest rates hike by December.
The pan-European STOXX 600 index climbed 0.02 percent to 390.19 points, while the FTSEurofirst 300 index rallied 0.02 percent to 1,532.90 points.
Britain's FTSE 100 trades 0.1 percent up at 7,446.17 points, while mid-cap FTSE 250 gained 0.3 percent to 20,012.68 points. France's CAC 40 trades 0.2 percent higher at 5,362.95 points.
Commodities Recap
Crude oil prices declined as speculators took profits on some large positions that have built up in the last couple of weeks. International benchmark Brent crude was trading 0.3 percent down at $55.91 per barrel by 1025 GMT, having hit a high of $59.48 last week, its strongest since Jul. 2015. U.S. West Texas Intermediate was trading 0.3 percent down at $50.42 a barrel, after rising as high as $52.41 last week, its highest since April.
Gold prices steadied after falling to a 7-week low earlier in the day, as equities and the dollar were boosted by upbeat economic data and strong U.S. treasury yields. Spot gold was flat at $1,270.65 an ounce by 1027 GMT, after touching its lowest since mid-August at $1,268.21. U.S. gold futures for December delivery shed 0.3 percent to $1,272.60 an ounce.
Treasuries Recap
The U.S. Treasuries lost ground Tuesday amid a muted trading session that lacked data of major economic significance. Also, investors wait to watch the ADP non-farm employment change data for September and Fed Chair Janet Yellen’s speech, scheduled for October 4 by 12:15GMT and 19:15GMT. The yield on the benchmark 10-year Treasury rose nearly 2-1/2 basis points to 2.36 percent, the super-long 30-year bond yields held climbed 3-1/2 basis points to 2.89 percent and the yield on short-term 2-year note also traded nearly flat at 1.49 percent.
The UK gilts plunged Tuesday as investors have largely shrugged-off the fall in the country’s crucial construction PMI for the month of September. Now, investors will remain glued to read the services PMI for September, scheduled to be released on October 4 by 08:30GMT. The yield on the benchmark 10-year gilts, jumped nearly 5 basis points to 1.40 percent, the super-long 30-year bond yields climbed 3-1/2 basis points to 1.91 percent and the yield on the short-term 2-year also traded 3-1/2 basis points lower at 0.46 percent.
The New Zealand bonds gained at the time of closing Tuesday after the nation’s business confidence across firms continued to remain soft, according to a survey conducted by the New Zealand Institute of Economic Research (NZIER) showed today. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1-1/2 basis points to 3.00 percent, the yield on 7-year note also slipped 1-1/2 basis points to 2.84 percent and the yield on short-term 2-year ended 1 basis point lower at 2.10 percent.
The Japanese government bonds remained flat Tuesday as investors traded sideways in ma muted session amid lack of significant economic data. Also, the Bank of Japan’s (BoJ) upbeat Tankan survey indicated that the Japanese economy is on the verge of improvement, which further supressed sentiments in safe haven bond market. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.08 percent, the yield on long-term 30-year rose 1 basis point to 0.88 percent and the yield on short-term 2-year traded flat at -0.11 percent.
The Australian bonds continued to slump Tuesday as investors wait to watch Reserve Bank of Australia’s (RBA) monetary policy decision, scheduled to be held today by 03:30GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 2-1/2 basis points to 2.86 percent, the yield on the 15-year note climbed 2 basis points to 3.16 percent and the yield on short-term 2-year traded 1-1/2 basis points higher at 1.97 percent.
