Market Roundup
- EUR/USD 0.2%, USD/JPY -0.37%, GBP/USD -0.03%, EUR/GBP 0.24%
- DXY -0.17%, DAX 0.33%, FTSE 0.02%, Brent 1.11%, Gold 1.12%
- Italian cabinet due to approve budget as EU, markets fret
- Sterling pinned near 1-week low as Brexit talks stall
- Britain's May under mounting pressure to rethink Brexit plan
- Beijing signals possible desire to avoid trade war tipping into FX war
- Turkey to reach year-end economic targets with falling inflation, Albayrak says
- Saudi Currency at weakest in two years on Kashoggi case
- Sears, once a retail titan, files for Chapter 11 bankruptcy
- Humiliating losses in Bavarian election shake Merkel's coalition
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of New York is expected to report that manufacturing activity index in New York State grew to 20 in October from 19 in September.
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that retail sales advanced 0.5 percent in September after rising 0.6 percent in August. While excluding autos, retail sales are likely to have gained 0.3 percent.
- (1000 ET/1400 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.5 percent in August, after rising 0.6 percent in July.
- (1030 ET/1430 GMT) The Bank of Canada releases Business Outlook Survey.
- (1400 ET/1900 GMT) The U.S. reports its monthly budget statement for the month of September. The government is likely to show a budget surplus of $71 billion after posting a deficit of $214 billion in the previous month.
Key Events Ahead
- (1200 ET/1600 GMT) ECB chief banking officer Daniele Nouy speaks at the Solvay Schools Alumni Congress in Brussels.
- (1400 ET/1800 GMT) Vice President of the ECB Luis de Guindos Speaks in Madrid, Spain.
FX Beat
DXY: The dollar index declined to a near 3-week low, as the disappearance of a prominent Saudi journalist stoked geopolitical tensions. The greenback against a basket of currencies trades 0.2 percent down at 95.01, having touched a low of 94.95 on Friday, its lowest since Sept. 28. FxWirePro's Hourly Dollar Strength Index stood at -80.98 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro surged after European Central Bank policymaker Francois Villeroy de Galhau stated that the central bank should keep its policy options open and not let itself be influenced by the Federal Reserve. The European currency traded 0.4 percent up at 1.1597, having touched a high of 1.1610 on Friday, its highest since October 1. FxWirePro's Hourly Euro Strength Index stood at 4.32 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1610 (October 12 High), a break above targets 1.1651 (September 28 High). On the downside, support is seen at 1.1505 (October 2 Low), a break below could drag it till 1.1463 (October 4 Low).
USD/JPY: The dollar slumped to a 1-month low against the Japanese yen as rising geopolitical tension and investor anxiety about the global economy sent investors seeking safety into safe-haven assets. The major was trading 0.4 percent down at 111.74, having hit a low of 111.62 earlier, its lowest since September 13. FxWirePro's Hourly Yen Strength Index stood at 73.72 (Bullish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, monthly budget statement, and business inventories. Immediate resistance is located at 112.58 (September 20 High), a break above targets 112.98 (September 25 High). On the downside, support is seen at 111.35 (September 5 Low), a break below could take it lower 111.06 (September 11 Low).
GBP/USD: Sterling edged up after falling to a near 1-week low earlier in the day on the back of warnings that Brexit talks appear to have hit an impasse before a European Union summit later this week. The major traded 0.1 percent up at 1.3156, having hit a low of 1.3082 earlier; it’s lowest since October 9. FxWirePro's Hourly Sterling Strength Index stood at -99.75 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.3166 (September 24 High), a break above could take it near 1.3215 (October 10 High). On the downside, support is seen at 1.3054 (October 21 Low), a break below targets 1.3003 (October 3 Low). Against the euro, the pound was trading 0.3 down at 88.09 pence, having hit a low of 88.25, it’s lowest since October 5.
USD/CHF: The Swiss franc rallied to a near 2-week peak amid rising diplomatic tensions between Western powers and Saudi Arabia over the disappearance of a journalist. The major trades 0.6 percent down at 0.9857, having touched a low of 0.9848, it’s lowest since October 3. FxWirePro's Hourly Swiss Franc Strength Index stood at 34.84 (Neutral) 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 0.9842 (August 21 Low) and any close below that level will drag it till 0.9800.
Equities Recap
European shares tumbled to a fresh 22-month low, weighed down by threats such as trade wars, rising U.S. yields, Chinese growth, Brexit and the Italy-EU budget row.
The pan-European STOXX 600 index plunged 0.2 percent at 358.95 points, while the FTSEurofirst 300 index eased 0.2 percent to 1,401.01 points.
Britain's FTSE 100 trades 0.05 percent up at 6,997.77 points, while mid-cap FTSE 250 declined 1.0 percent to 18,783.05 points.
Germany's DAX rose 0.4 percent at 11,567.04 points; France's CAC 40 trades 0.2 percent lower at 5,088.49 points.
Commodities Recap
Crude oil prices surged as tension over the disappearance of a prominent Saudi journalist stoked supply worries, however, concerns over the long-term demand outlook limited up. International benchmark Brent crude was trading 0.9 percent up at $81.26 per barrel by 1032 GMT, having hit a low of $79.20 on Friday, its lowest since September 24. U.S. West Texas Intermediate was trading 0.4 percent up at $71.75 a barrel, after falling as low as $70.54 on Thursday, its lowest since September 21.
Gold prices rallied over 1 percent to hit a near 12-week high as investors remain concerned over the impact of the ongoing U.S. - China trade war and higher U.S. interest rates. Spot gold was 1.1 percent up at $1,231.05 an ounce by 1036 GMT, having hit a high of $1233.14, its highest since July 26. U.S. gold futures were up 0.8 percent at $1,231.80 an ounce.
Treasuries Recap
The U.S. Treasuries suffered during late afternoon session as investors wait to see a pick-up in the country’s retail sales for the month of September, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasuries rose 1 basis point to 3.152 percent, the super-long 30-year bond yields surged 1-1/2 basis points to 3.331 percent and the yield on the short-term 2-year traded 1 basis point higher at 2.849 percent.
The German bunds gained during European session as investors wait to watch the country’s ZEW economic sentiment index for the month of October, scheduled to be released on October 16 by 09:00GMT and the eurozone’s consumer price inflation (CPI) for the month of September, due to be released on October 17 by 09:00GMT. The German 10-year bond yields, which move inversely to its price, slipped nearly 1/2 basis point to 0.496 percent, the yield on 30-year note also edged 1/2 basis point lower at 1.122 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points lower at -0.601 percent.
The New Zealand bonds closed higher at the start of the trading week ahead of the country’s consumer price inflation (CPI) data for the third quarter of this year and GlobalDairyTrade (GDT) price auction, scheduled for today by 21:45GMT and on October 16 respectively. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, fell nearly 1-1/2 basis points to 2.668 percent, the yield on the long-term 20-year note slipped 1/2 basis point to 2.978 percent and the yield on short-term 2-year closed 1 basis point lower at 1.838 percent
The Japanese government bonds remained tad higher towards the end of Asian session after the country’s industrial production missed market expectations during the month of August, lower than the reading in July as well. Investors will now eye the trade balance data for September, due to be released on October 17 by 23:50GMT for added direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped nearly 1 basis point to 0.141 percent, the yield on the long-term 30-year note hovered around 0.911 percent and the yield on short-term 2-year too traded tad lower at -0.115 percent.
