Market Roundup
- EUR/USD 0.02%, USD/JPY -0.13%, GBP/USD 0.11%, EUR/GBP -0.1%
- DXY 0.01%, DAX 0.08%, FTSE -0.18%, Brent 2.28%, Gold 0.03%
- ECB homes in on 9 more months of bond buying, at lower volumes
- Lawmakers hit out at ECB as bad loans standoff hardens
- Germany's economic upswing to lose some momentum in second year-half - ministry
- British PM May could have more to say on Brexit money at EU summit- spokeswoman
- "They have to pay", EU's Juncker says of Britain
- Germany Sept CPI Final YY 0.1% vs 0.1%, forecast 0.1%
- Germany Sept HICP Final YY 1.8% vs 1.8%, forecast 1.8%
- Trump nails Obamacare with decision to cut off billions in subsidies
- Trump to target Iran nuclear deal, Revolutionary Guard in speech
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that retail sales rose 1.7 percent in September after falling 0.2 percent in August. While excluding autos, retail sales are likely to have gained 0.3 percent, after surging 0.2 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. consumer price index likely increased 0.6 percent in September after advancing 0.4 percent in August, while in the 12 months through September, the CPI is expected to have risen 2.3 percent. Excluding food and energy, the core CPI probably rose 0.2 percent, matching the gain in the previous month.
- (1000 ET/1400 GMT) The University of Michigan is likely to report that U.S. preliminary consumer sentiment index edged down to 95.0 in October, after posting a final reading of 95.1 in September.
- (1000 ET/1400 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.7 percent in August after rising 0.2 percent in July.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- N/A The boards of governors of the World Bank and International Monetary Fund gather in Washington for their annual meeting till Oct. 15.
- (0830 ET/1230 GMT) Boston Federal Reserve President Eric Rosengren gives opening remarks before the conference, "Are Rules Made to be Broken? Discretion and Monetary Policy" hosted by the Federal Reserve Bank of Boston.
- (1015 ET/1415 GMT) European Central Bank Vice-President Vítor Constâncio's speech.
- (1025 ET/1425 GMT) Federal Reserve Bank of Chicago President Charles Evans speaks on the economy and monetary policy in a moderated discussion before the 7th Annual Wisconsin Summit on Financial Literacy in Green Bay.
- (1130 ET/1530 GMT) Dallas Fed President Robert Kaplan participates in moderated Q&A session before the 2017 CFA Institute Fixed Income Management Conference, in Boston.
- (1300 ET/1700 GMT) Federal Reserve Board Governor Jerome Powell speech.
FX Beat
DXY: The dollar index steadied but was on track for its worst week in five, while investors awaited U.S. inflation data. The greenback against a basket of currencies traded flat at 93.12, having touched a low of 92.80 the day before, its lowest since Sept. 26. FxWirePro's Hourly Dollar Strength Index stood at -98.50 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro declined, extending previous session losses, as the greenback steadied ahead of U.S. inflation data and Fed officials' speeches. The European currency traded 0.1 percent down at 1.1823, having touched a high of 1.1879 on Thursday, its highest since Sept. 25. FxWirePro's Hourly Euro Strength Index stood at -33.60 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1900, a break above targets 1.1940. On the downside, support is seen at 1.1794 (5-DMA), a break below could drag it near 1.1773 (10-DMA).
USD/JPY: The dollar tumbled to an over 2-week low, as investors turned cautious ahead of U.S. inflation data that could provide clues on the likelihood of the Federal Reserve hiking interest rates again this year. The major was trading 0.1 percent down at 112.14, having hit a low of 111.99 on Tuesday, its lowest since Sept. 26. FxWirePro's Hourly Yen Strength Index stood at 10.68 (Neutral) by 1000 GMT. Immediate resistance is located at 112.49 (5-DMA), a break above targets 112.82. On the downside, support is seen at 111.99 (Oct. 10 Low), a break below could take it near 111.65.
GBP/USD: Sterling rallied to near 2-week highs after Germany's Handelsblatt newspaper reported that the European Union could offer Britain a two-year transitional Brexit deal. The major traded 0.3 percent up at 1.3293, having hit a high of 1.3323 earlier, its highest since Oct. 10. FxWirePro's Hourly Sterling Strength Index stood at -5.97 (Neutral) by 1000 GMT. Immediate resistance is located at 1.3355 (21-DMA), a break above could take it near 1.3400. On the downside, support is seen at 1.3215 (10-DMA), a break below targets 1.3178 (5-DMA). Against the euro, the pound was trading 0.2 up at 88.95 pence, having hit a low of 90.32 pence on Thursday, its lowest since Sept. 14.
USD/CHF: The Swiss franc edged down, extending losses for the second straight session, as the greenback steadied ahead of U.S. inflation data. The major trades 0.1 percent up at 0.9759, having touched a low of 0.9712 in the previous session, it’s lowest since Oct. 4. FxWirePro's Hourly Swiss Franc Strength Index stood at -19.79 (Neutral) by 1000 GMT. On the lower side, 0.9700 (20- day MA) will be acting as major support and any break below will drag the pair to next level till 0.9640 (Sep 25th, 2017 low)/0.9580. The near-term resistance is around 0.9770 (support turned into resistance) and any break above will take it to next level till 0.9808/0.9845.
AUD/USD: The Australian dollar rallied to a 1-week high despite the release of Bank of Australia's cautious Financial Stability Review report. The Aussie trades 0.3 percent up at 0.7844, having hit a high of 0.7849 earlier, it’s highest since Oct. 5. FxWirePro's Hourly Aussie Strength Index stood at 137.95 (Highly Bullish) by 1000 GMT. Immediate support is seen at 0.7805 (10-DMA), a break below targets 0.7781 (5-DMA). On the upside, resistance is located at 0.7879 (21-DMA), a break above could take it near 0.7900.
Equities Recap
European shares rose to their highest in nearly four months, while the dollar against a basket of currencies steadied as U.S. Treasury yields stayed near recent lows.
The pan-European STOXX 600 index gained 0.3 percent to 391.25 points, while the FTSEurofirst 300 index advanced 0.3 percent to 1,538.19 points.
Britain's FTSE 100 trades 0.2 percent down at 7,541.98 points, while mid-cap FTSE 250 rose 0.1 percent to 20,270.84 points.
Germany's DAX rose 0.05 percent at 12,988.27 points; France's CAC 40 trades 0.01 percent down at 5,360.09 points.
Commodities Recap
Crude oil prices rallied to a 2-week high as strong Chinese oil import data and turmoil in the Middle East pointed towards a rebalancing market. International benchmark Brent crude was trading 1.9 percent up at $57.47 per barrel by 1027 GMT, having hit a high of $57.48 earlier, its strongest since Sept. 29. U.S. West Texas Intermediate was trading 1.7 percent higher at $51.56 a barrel, after rising as high as $51.62 on Monday, its highest since Oct. 2.
Gold prices rose to an over 2-week high, supported by a weaker dollar, while investors awaited key U.S. inflation data for clues on the outlook for potential hikes in U.S. interest rates. Spot gold was up 0.1 percent at $1,294.09 an ounce by 1030 GMT, having touched its highest level since Sept. 26 at $1,298.31 earlier in the session. U.S. gold futures for December delivery gained 0.2 percent at $1,299.30 per ounce.
Treasuries Recap
The U.S. Treasuries traded flat as investors wait to watch the country’s core consumer price-led inflation index for the month of September, scheduled to be released today by 12:30GMT, besides the September core retail sales for September due by the same time. The yield on the benchmark 10-year Treasury hovered around 2.32 percent, the super-long 30-year bond yields range-bound at 2.85 percent and the yield on short-term 2-year note also traded flat at 1.52 percent.
The UK gilts suffered after the European Union has agreed to do every bit on its part to avoid a 'Hard Brexit' by the United Kingdom, leading to investors’ confidence in riskier assets, thus pulling bond prices down. The yield on the benchmark 10-year gilts, rose 1 basis point to 1.39 percent, the super-long 30-year bond yields also climbed nearly 1 basis point to 1.95 percent and the yield on the short-term 2-year traded flat at 0.47 percent.
The German bunds jumped as investors have largely shrugged off the no-change in the country’s consumer price-led inflation index (CPI) for the month of September amid a silent trading session that witnessed less data of economic significance. The German 10-year bond yields, which move inversely to its price, slumped 2 basis points to 0.42 percent, the yield on 30-year note plunged 2-1/2 basis points to 1.22 percent and the yield on short-term 2-year traded 1 basis point lower at -0.71 percent.
The Japanese government bonds remained flat in silent trading session Friday as investors remained sidelined in any major trading activity amid lack of significant economic data. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slid nearly 1 basis point to 0.06 percent, the yield on long-term 30-year hovered around 0.87 percent and the yield on short-term 2-year traded flat at -0.14 percent.
The Australian bonds rallied on the last trading day of the week Friday after the Reserve Bank of Australia (RBA) struck a cautious tone over the country’s rising household debt in its Financial Stability Report for the month of October, published early today. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.81 percent, the yield on the 15-year note also slid nearly 1 basis point to 3.09 percent and the yield on short-term 2-year traded flat at 1.94 percent.
