Market Roundup
- EUR/USD 0.17%, USD/JPY -0.43%, GBP/USD 0.19%, EUR/GBP -0.03%
- DXY- 0.17%, DAX -1.9%, FTSE -0.79%, Brent -1.7%, Gold 1.01%
- Germany Sep Producer Prices MM, 0.5%, 0.3% f'cast, 0.3% prev
- Germany Sep Producer Prices YY, 3.2%, 2.9% f'cast, 3.1% prev
- Trump's missile treaty pullout could escalate tension with China
- Euro zone rescue fund sees no cause for panic on Italy but warns of bank woes
- Italy ready to adjust budget if markets disapprove - Il Messaggero
- Great Britain Oct CBI Trends - Orders, -6, -1 f'cast, -1 prev
- "Savage" Khashoggi killing was planned - Turkey's leader
- Iran's oil minister says U.S. sanctions cannot stop crude exports
- Trading volume of China's yuan rises to highest since Aug 2015
Economic Data Ahead
- (1000 ET/1400 GMT) Federal Reserve Bank of Richmond will publish it Manufacturing Index for October. The index posted a rise of 29 in the prior month.
- (0900 ET/1300 GMT) Mexico's national statistics agency will release data on the country's economic growth for the month of August. The economy grew 0.40 percent in July compared with the previous month.
- (1000 ET/1400 GMT) The European Commission releases Eurozone's preliminary Consumer Confidence reading for the month of October. The index posted a final reading of -2.9 in the prior month.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (0930 ET/1330 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari gives opening remarks before the "Innovation in Early Childhood Development and K-12 Education" conference hosted by the Federal Reserve Bank of Minneapolis.
- (1120 ET/1520 GMT) BoE Governor Mark Carney speaks at a University of Toronto conference.
- (1330 ET/1730 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic speaks on the economic outlook and monetary policy before the Committee of 100, in Baton Rouge.
- (1415 ET/1815 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in moderated question-and-answer session before the Galveston Economic Development Partnership 7th Annual Economic Development Summit
- (1815 ET/2215 GMT) Federal Reserve Bank of Chicago President Charles Evans participates in moderated Q&A at Northwestern University.
- (2000 ET/0000 GMT) Federal Reserve Bank of Kansas City President Esther George speaks on "The U.S. Payments System" before panel, "Disruption in the Payments Landscape" at the SIBOS 2018 International Conference.
FX Beat
DXY: The dollar index declined after rising to a 2-week peak earlier in the session, as the yield on the benchmark 10-year Treasuries slumped 4 basis points. The greenback against a basket of currencies trades 0.05 percent down at 95.98, having touched a high of 96.16, its highest since October 9. FxWirePro's Hourly Dollar Strength Index stood at 14.30 (Neutral) by 1000 GMT.
EUR/USD: The euro gained after the head of the Euro zone's rescue fund stated that there was no cause for panic over Italy's free-spending fiscal plans as its effect on other European countries had so far been very limited. The European currency traded 0.2 percent up at 1.1479, having touched a low of 1.1432 on Friday, its lowest since October 9. FxWirePro's Hourly Euro Strength Index stood at 28.87 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1503 (October 9 High), a break above targets 1.1545 (October 10 High)). On the downside, support is seen at 1.1432 (October 9 Low), a break below could drag it till 1.1400.
USD/JPY: The dollar slumped, reversing some of its previous session gains, weighed down by ongoing worries on Brexit, Italy's budget, Saudi isolation, and trade wars. The major was trading 0.5 percent down at 112.30, having hit a high of 112.88 on Monday, its highest since October 10. FxWirePro's Hourly Yen Strength Index stood at 45.89 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of FOMC officials' speeches. Immediate resistance is located at 113.13 (September 26 High), a break above targets 113.46 (September 27 High). On the downside, support is seen at 112.04 (September 20 Low), a break below could take it lower 111.62 (September 15 Low).
GBP/USD: Sterling rebounded from a 2-1/2 week low after British Prime Minister Theresa May stated that a separation deal with the European Union is 95 percent complete and urged fellow lawmakers to support her during the final stages of the negotiations. The major traded 0.2 percent up at 1.2988, having hit a low of 1.2936 earlier; it’s lowest since October 4. FxWirePro's Hourly Sterling Strength Index stood at -114.14 (Highly Bearish) 1000 GMT. Immediate resistance is located at 1.3023 (October 3 High), a break above could take it near 1.3090 (September 28 High). On the downside, support is seen at 1.2924 (October 2 Low), a break below targets 1.2900. Against the euro, the pound was trading 0.1 percent up at 88.33 pence, having hit a low of 88.56 on Monday, it’s lowest since October 4.
USD/CHF: The Swiss franc edged up after falling to a 2-month low in the previous session as ongoing geopolitical tensions dented investor sentiment. The major trades 0.1 percent down at 0.9954, having touched a high of 0.9980 the day before, it’s highest since August 15. FxWirePro's Hourly Swiss Franc Strength Index stood at 103.24 (Highly Bullish) 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 0.9881 (October 12 Low) and any close below that level will drag it till 0.9842 (August 21 Low).
Equities Recap
European shares plunged to their lowest levels in nearly two years, undermined by a disappointing batch of third-quarter results, while Swiss franc, yen surged amid ongoing worries on Brexit, Italy's budget, and Saudi isolation.
The pan-European STOXX 600 index rallied 1.3 percent at 355.02 points, while the FTSEurofirst 300 index slumped 1.3 percent to 1,397.62 points.
Britain's FTSE 100 trades 0.9 percent down at 6,982.45 points, while mid-cap FTSE 250 declined 1.7 percent to 18,444.06 points.
Germany's DAX fell 1.9 percent at 11,302.58 points; France's CAC 40 trades 1.5 percent lower at 4,980.18 points.
Commodities Recap
Crude oil prices declined to a 1-month low after Saudi Arabia said it could supply more crude quickly if needed, ahead of U.S. sanctions on Iran's crude exports that takes effect next month. International benchmark Brent crude was trading 2.05 percent down at $78.42 per barrel by 1012 GMT, having hit a low of $78.35 earlier, its lowest since September 21. U.S. West Texas Intermediate was trading 1.6 percent down at $68.37 a barrel, after falling as low as $68.15, its lowest since September 14.
Gold prices surged by more than 1 percent on the back of worries over political tensions between Saudi Arabia and Western powers, uncertainties around Brexit and Italy's budgetary woes. Spot gold was 1.02 percent up at $1,234.29 an ounce at 1015 GMT, having hit a high of $1236.50, its highest since July 17. U.S. gold futures rose 0.8 percent to $1,234.50 an ounce.
Treasuries Recap
The U.S. Treasuries climbed sharply during late afternoon session amid a silent trading day that witnessed data of little economic significance. The yield on the benchmark 10-year Treasuries slumped 4 basis points to 3.154 percent, the super-long 30-year bond yields suffered by 3 basis points to 3.350 percent and the yield on the short-term 2-year also traded 2-1/2 basis points lower at 2.887 percent.
The United Kingdom’s gilts surged during the afternoon session ahead of the Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be delivered today by 15:20GMT amid a silent trading day that witnessed data of little economic significance. The yield on the benchmark 10-year gilts, slumped 3 basis points to 1.501 percent, the super-long 30-year bond yields fell 2 basis points to 1.902 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points lower at 0.755 percent
The German manufacturing bunds jumped during European session as investors wait to watch the country’s PMI for October, scheduled to be released on October 24 by 07:30GMT and the 5-year auction, due on the same day by 09:40GMT for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, slumped 2 basis points to 0.434 percent, the yield on 30-year note fell 1-1/2 basis points to 1.054 percent and the yield on short-term 2-year traded 1 basis point lower at -0.637 percent.
The Australian government bonds gained across the curve during Asian session tracking firmness in the U.S. Treasuries amid stock market rout. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 2 basis points to 2.688 percent, the yield on the long-term 30-year bond dipped 2-1/2 basis points to 3.163 percent and the yield on short-term 2-year plunged 2 basis points to 2.024 percent.
