Market Roundup
- EUR/USD -0.09%, USD/JPY 0.25%, GBP/USD -0.58%, EUR/GBP 0.51%
- DXY 0.17%, DAX 0.68%, FTSE 1.06%, Brent 0.83%, Gold -0.15%
- May's Brexit plan goes pop after "humiliation" by EU, British media says
- U.S. sanctions China for buying Russian fighter jets, missiles
- UK budget deficit jumps in August, but little pressure on Hammond
- S&P maintains China's 'A+/A-1' credit rating, stable outlook
- Japan uneasy over Trump pressure on auto as summit, trade talks loom
- EZ Sep Markit Composite Flash PMI, 54.2, 54.4 forecast, 54.5 previous
- Germany Sep Markit Composite Flash PMI, 55.3, 55.4 forecast, 55.6 previous
- France Sep Markit Composite Flash PMI, 53.6, 54.7 forecast, 54.9 previous
- France Q2 GDP QQ Final, 0.2%, 0.2% forecast, 0.2% previous
Economic Data Ahead
- (0830 ET/1230 GMT) Statistics Canada is expected to report that retail sales gained 0.4 percent in July after falling 0.2 percent in June. While excluding autos, retail sales are likely to have risen 0.6 percent, after easing 0.1 percent in the previous month.
- (0830 ET/1230 GMT) The Statistics Canada is expected to report that annual inflation rate slowed to 2.8 percent in August from 3.0 percent in July, while core consumer price index is likely to fall 0.1 percent, compared with a reading of 0.5 percent in July.
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. preliminary Manufacturing PMI for the month of September. The index is likely to rise to 55.0, after posting a final reading of 54.7 in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index rose to 55.0 in September after printing a final reading of 54.8 in August.
- (0945 ET/1345 GMT) Markit Economics will release preliminary U.S. composite PMI for the month of September. The index posted a final reading of 54.7 in the prior month.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- N/A Bank of France Deputy Governor Sylvie Goulard and Bundesbank Board Member Joachim Wuermeling speak in Frankfurt
- N/A World leaders gather at the United Nations for the 73rd annual United Nations General Assembly in New York City.
- N/A Japanese Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer will likely hold a second round of trade talks in the United States.
FX Beat
DXY: The dollar index rebounded from a 2-1/2 month low hit earlier in the day, boosted by expectations for a hawkish Federal Reserve meeting next week. The greenback against a basket of currencies trades 0.2 percent up at 94.04, having touched a low of 93.81y, its lowest since July 9. FxWirePro's Hourly Dollar Strength Index stood at -11.52 (NEutral) by 1000 GMT.
EUR/USD: The euro edged down from a 3-month peak touched above the 1.1800 handle earlier in the session, after data showed Eurozone business growth eased in September, adding to signs that momentum in the currency bloc is well past its peak. The European currency traded 0.1 percent down at 1.1769, having touched a high of 1.1802 earlier, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 14.23 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1820 (June 11 High), a break above targets 1.1852 (June 14 High). On the downside, support is seen at 1.1662 (August 28 Low), a break below could drag it till 1.1609 (September 5 Low).
USD/JPY: The dollar surged to a fresh 2-month high towards the 113.00 handle as Credit Rating Agency Fitch expects Federal Reserve to hike interest rates at both its September and December meetings and to follow up with 3 further rate hikes in 2019. The major was trading 0.2 percent up at 112.72, having hit a high of 112.87 earlier, its highest since July 19. FxWirePro's Hourly Yen Strength Index stood at -104.61 (Highly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. flash Markit PMIs. Immediate resistance is located at 113.00, a break above targets 113.30 (Jan 5 High). On the downside, support is seen at 112.16 (September 19 Low), a break below could take it lower 111.91 (June 12 Low).
GBP/USD: Sterling slumped below the 1.3200 handle after rising to a 2-1/2 month high hit in the previous session, as European Union leaders criticized Prime Minister Theresa May's Chequers blueprint and warned that they are ready for a no-deal Brexit if she failed to give clarity on trade and the Irish border by November. Moreover, data showing Britain's budget deficit unexpectedly widened in August, driven by subdued tax receipts undermined the bid tone around the British pound. The major traded 0.6 percent down at 1.3187, having hit a high of 1.3298 on Thursday; it’s highest since July 10. FxWirePro's Hourly Sterling Strength Index stood at -91.90 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.3314 (June 22 High), a break above could take it near 1.3362 (July 9 High). On the downside, support is seen at 1.3119 (September 18 Low), a break below targets 1.2993 (21-DMA). Against the euro, the pound was trading 0.5 percent down at 89.20 pence, having hit a high of 88.47 on Thursday, it’s highest since July 17.
USD/CHF: The Swiss franc rallied to a 5-month peak despite receding fears of a full-blown U.S.-China trade war. The major trades 0.3 percent down at 0.9561, having touched a low of 0.9548. it’s lowest since April 10. FxWirePro's Hourly Swiss Franc Strength Index stood at -32.79 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9624 (23.6% retracement of 0.9865 and 0.9600) and any break above will take the pair to next level till 0.9670 (38.2% retracement). The near-term support is around 0.9535 and any close below that level will drag it till 0.9500.
Equities Recap
European shares advanced on investors’ view that the U.S.-China trade conflict would be less damaging to global growth than initially feared.
The pan-European STOXX 600 index rallied 0.5 percent at 384.41 points, while the FTSEurofirst 300 index surged 0.6 percent to 1,506.19 points.
Britain's FTSE 100 trades 1.03 percent up at 7,442.90 points, while mid-cap FTSE 250 gained 0.2 percent to 20,596.14 points.
Germany's DAX rose 0.7 percent at 12,410.783 points; France's CAC 40 trades 0.7 percent higher at 5,488.80 points.
Commodities Recap
Crude oil prices surged over 1 percent ahead of a meeting of OPEC in Algeria, while other large crude exporters focused on production increases as U.S. sanctions restrict Iranian exports. International benchmark Brent crude was trading 1.01 percent up at $79.40 per barrel by 1038 GMT, having hit a high of $79.79 on Thursday, its highest since September 12. U.S. West Texas Intermediate was trading 0.8 percent up at $70.71 a barrel, after rising as high as $71.47 on Wednesday, its highest since July 13.
Gold prices declined after rising to a 1-week high as the dollar rebounded amid receding fears of a full-blown Sino-U.S. trade war. Spot gold was 0.2 percent down at $1,205.13 by 1040 GMT, having hit a high of $1209.89 earlier, its highest since September 13 and was set for a 1.3 percent gain this week. U.S. gold futures were up 0.3 percent at $1,215 per ounce.
Treasuries Recap
The Italian bond yields were down up to 4 basis points across the curve, having jumped by up to 12 bps on Thursday. The Germany’s 10-year yield receded to 0.46 percent, having hit a four-month high of 0.506 percent on Thursday.
The yields of some super long Japanese government bonds rose to their highest levels in more than a year, with the 20-year JGB yield up 2.5 basis points at 0.645 percent, its highest since April 2017. The 30-year yield climbed 4 basis points to 0.890 percent, highest since October 2017, and the 40-year yield rose to a 10-1/2-month high of 1.04 percent.
The Australian two-year yields started off the week at 2.01 percent before rising as high as 2.164 percent, a highnot seen since late 2015. However, it has eased back to 2.10 percent, but the increase for the week was still the largest so far this year. In the futures markets, the 10-year bond contract sank 16 ticks in four sessions to touch a three-month low of 97.2350, before steadying on Friday at 97.2800.
