Market Roundup
- EUR/USD -0.43%, USD/JPY -0.3%, GBP/USD -0.51%, EUR/GBP 0.02%
- DXY 0.32%, DAX -0.61%, FTSE -0.39%, Brent -1.22%, Gold -0.7%
- China shares tumble, central bank's move to aid economy shrugged off
- Salvini broadside pushes Italy/Germany spread to widest in five years
- EZ Sentix Index, 11.4, 11.7 forecast, 12.0 previous
- Germany Industrial Output (m/m), -0.3%, 0.4% forecast, -1.1% previous
- Dollar extends two-week run of gains, data eyed
- China services sector expands in Sept, but costs up and employment shrinks - Caixin PMI
- Oil drops to around $83 on expectations Iran will maintain some exports
Economic Data Ahead
- No major data releases
Key Events Ahead
- (1200 ET/1600 GMT) ECB’s Ewald Nowotny, Austrian Finance Minister Hartwig Loeger and Erste Group Chief Executive Andreas Treichl take part in panel discussion about the future of the financial sector in Vienna.
FX Beat
DXY: The dollar index surged ahead of the release of U.S. CPI data this week, which is expected to increase 0.2 percent on a monthly basis in September, in line with last month's reading and a bigger increase could bolster U.S. rate hike bets in 2019. The greenback against a basket of currencies trades 0.3 percent up at 96.00, having touched a high of 96.12 on Thursday, its highest since August 20. FxWirePro's Hourly Dollar Strength Index stood at 31.09 (Neutral) by 1000 GMT.
EUR/USD: The euro slumped, hovering towards a 1-1/2 month low touched last week, after data showed Eurozone's investor morale deteriorated more than expected in October, amid increasing concerns about Italy's fiscal policies and tighter scrutiny of the car industry's compliance with emissions rules. The European currency traded 0.4 percent down at 1.1473, having touched a low of 1.1463 on Thursday, its lowest since August 20. FxWirePro's Hourly Euro Strength Index stood at -47.50 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1580 (October 2 High), a break above targets 1.1624 (October 1 High). On the downside, support is seen at 1.1450, a break below could drag it till 1.1415.
USD/JPY: The dollar plunged to an over 1-week low, as renewed geopolitical tensions triggered risk-off sentiment, sending investors seeking safety in safe-haven assets. The major was trading 0.3 percent down at 113.34, having hit a high of 114.55 on Thursday, its highest since Nov. 6. FxWirePro's Hourly Yen Strength Index stood at 59.93 (Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, as U.S. markets remain closed on account of Columbus Day. Immediate resistance is located at 114.73 (Nov 6 High), a break above targets 115.00 (Mar 9 High). On the downside, support is seen at 113.51 (10-DMA), a break below could take it lower 113.00.
GBP/USD: Sterling tumbled after rising to an over 1-week peak earlier in the session, as investors re-assessed the chances of a breakthrough in Brexit negotiations after the European Union's Brexit negotiators last week raised expectations that a new British offer could secure a deal with less than 180 days before Britain leaves the EU bloc. The major traded 0.6 percent down at 1.3034, having hit a high of 1.3132 earlier; it’s highest since September 27. FxWirePro's Hourly Sterling Strength Index stood at 115.76 (Highly Bearish) 1000 GMT. Immediate resistance is located at 1.3173 (September 18 High), a break above could take it near 1.3115 (October 1 High). On the downside, support is seen at 1.3017 (5-DMA), a break below targets 1.3000 (September 28 Low). Against the euro, the pound was trading 0.3 percent lower at 88.04 pence, having hit a high of 87.74, it’s highest since June 22.
USD/CHF: The Swiss franc consolidated near a 1-1/2 month low as recent strong U.S. data boosted demand for the greenback. The major trades 0.2 percent up at 0.9933, having touched a high of 0.9955 on Friday, it’s highest since August 20. FxWirePro's Hourly Swiss Franc Strength Index stood at -25.49 (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 0.9894 (August 9 Low) and any close below that level will drag it till 0.9842 (August 21 Low).
Equities Recap
European shares slumped, undermined by fears of higher U.S. interest rates, global protectionism, emerging market weakness, and an Italian budget row.
The pan-European STOXX 600 index plunged 0.7 percent at 373.63 points, while the FTSEurofirst 300 index eased 0.9 percent to 1,566.44 points.
Britain's FTSE 100 trades 0.6 percent lower at 7,275.85 points, while mid-cap FTSE 250 declined 0.6 percent to 19,798.99 points.
Germany's DAX fell 0.6 percent at 12,035.02 points; France's CAC 40 trades 0.8 percent lower at 5,318.39 points.
Commodities Recap
Crude oil declined by more than 1 percent, weighed by expectations that some Iranian oil exports will keep flowing after the U.S. re-imposes sanctions. International benchmark Brent crude was trading 1.1 percent down at $83.09 per barrel by 1014 GMT, having hit a high of $86.71 on Wednesday, its highest since November 2014. U.S. West Texas Intermediate was trading 0.9 percent down at $73.56 a barrel, after rising as high as $76.88 on Wednesday, its highest since Nov 2014.
Gold prices slumped as the dollar rallied after China's central bank eased its domestic policy to support the economy amid concerns of an escalating trade dispute with the United States. Spot gold was down 0.7 percent at $1,194.01 an ounce at 1020 GMT, having hit a high of $1208.17 on Wednesday, its highest since September 21. U.S. gold futures fell 0.5 percent to $1,199.8 an ounce.
Treasuries Recap
The United Kingdom’s gilts climbed during the afternoon session ahead of the country’s manufacturing production for the month of August and trade balance data, scheduled to be released on October 10 by 08:30GMT respectively. The yield on the benchmark 10-year gilts, slumped 3 basis points to 1.694 percent, the super-long 30-year bond yields rose 1 basis point to 2.020 percent and the yield on the short-term 2-year traded nearly 3 basis points lower at 0.894 percent
The German bunds gained during European session after the country’s industrial production for the month of August missed market expectations, albeit improving from the prior reading in July. The German 10-year bond yields, which move inversely to its price, fell nearly 1-1/2 basis points to 0.551 percent, the yield on 30-year note slipped 1 basis point to 1.171 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at -0.554 percent.
The New Zealand bonds closed lower at the start of the trading week tracking a peer movement in the United States’ Treasuries amid an otherwise muted trading session that witnessed data of little economic significance. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, jumped nearly 4 basis points to 2.670 percent, the yield on the long-term 20-year note climbed 2-1/2 basis points to 2.960 percent and the yield on short-term 2-year closed 1-1/2 basis points higher at 1.810 percent.
The Australian government bonds slumped across the curve during Asian session after the U.S. 10-year Treasury yield jumped to a 7-year high. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose over 5 basis points to 2.781 percent (highest since September 26) , the yield on the long-term 30-year bond surged 5 basis points to 3.260 percent and the yield on short-term 2-year up 3 basis points to 2.027 percent.
