Market Roundup
- EUR/USD -0.1, USD/JPY 0.04%, GBP/USD 0.25%, EUR/GBP -0.35%
- DXY 0.01%, DAX 1.21%, FTSE 1.42%, Brent 0.7%, Gold -0.48%
- EZ Oct HICP Flash y/y, 2.2%, 2.2% forecast, 2.1% previous
- EZ Sep Unemployment Rate, 8.1%, 8.1% forecast, 8.1% previous
- Germany Sep Retail Sales Real y/y, -2.6%, 0.9% forecast, 1.6% previous, 1.5% revised
- Germany to hike minimum wage to 9.19 euros per hour next year
- France Oct CPI Prelim y/y, 2.5%, 2.6% forecast, 2.5% previous
- China to issue bills in Hong Kong for first time as yuan wobbles
- Yuan set for longest monthly losing streak, more pressure ahead
- Bank of Japan rules out early rate hike, warns of growth, financial risks
- India govt stresses central bank has autonomy as markets tumble
- Italy's president calls on govt to protect savings, keep budget balanced
Economic Data Ahead
- (0815 ET/1215 GMT) Payrolls processor ADP releases U.S. employment report for the month of October. The report is expected to show that 189,000 jobs were added as compared with 230,000 jobs in September.
- (0830 ET/1230 GMT) The U.S. Labor Department will release its employment cost index for the third quarter. The index is expected to increase 0.7 percent, compared to a rise of 0.6 percent in the second quarter
- (0830 ET/1230 GMT) The Statistics Canada releases its Raw Material Price Index for the month of September. The index posted a decline of 4.6 percent in August.
- (0830 ET/1330 GMT) The Statistics Canada will report its industrial producer prices for the month of September. The indicator fell 0.5 percent in the prior month.
- (0830 ET/1330 GMT) The Statistics Canada is expected to report that gross domestic product remained unchanged in August after increasing by 0.2 percent in July.
- (0945 ET/1345 GMT) Chicago Purchasing Managers' Index is likely to show that business conditions eased to 60.0 in October from 60.4 last month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending October 26.
Key Events Ahead
- (0815 ET/1215 GMT) Norway Central Bank Governor Oystein Olsen gives a speech to students at The Norwegian University of Life Sciences in Oslo
- (1030 ET/1430 GMT) Federal Reserve Board holds meeting to discuss proposed rules that would modify the enhanced prudential standard framework for large banking organizations in Washington
- (1100 ET/1500 GMT) Bank of Spain's Governor, Hernandez de Cos to speak at Economy Commission in Parliament in Madrid
- (1315 ET/1715 GMT) Swiss National Bank Chairman Thomas Jordan gives speech on "Protectionism makes monetary policy difficult" in Bern
- (1615 ET/2015 GMT) Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins to appear before for Standing Senate Committee on Banking, Trade and Commerce in Ottawa
FX Beat
DXY: The dollar index nudged down after rising to a 16-month high on U.S.-China trade tensions, concerns about global growth and higher U.S. interest rates. The greenback against a basket of currencies trades 0.1 percent down at 96.90, having touched a high of 97.07, its highest since June 26. FxWirePro's Hourly Dollar Strength Index stood at 10.39 (Neutral) by 1100 GMT.
EUR/USD: The euro extended losses for the third straight session after European Central Bank's Governing Council member Ewald Nowotny stated that recent economic growth figures for the eurozone that came in below the ECB's forecasts included some exceptional items and there was no reason to change the policy outlook. The European currency traded 0.05 percent down at 1.1339, having touched a low of 1.1335 on Friday, its lowest since August 1.6 FxWirePro's Hourly Euro Strength Index stood at -9.09 (Neutral) by 1100 GMT. Immediate resistance is located at 1.1387 (October 30 High), a break above targets 1.1432 (October 25 High). On the downside, support is seen at 1.1301 (August 15 Low), a break below could drag it till 1.1264.
USD/JPY: The dollar trimmed gains after rising to a 3-week peak earlier in the day on the back of data that showed U.S. consumer confidence rose to an 18-year high in October. The major was trading flat at 113.13, having hit a high of 113.33 earlier, its highest since October 9. FxWirePro's Hourly Yen Strength Index stood at -118.35 (Highly Bearish) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ADP employment change, employment cost index. Immediate resistance is located at 113.71 (September 28 High), a break above targets 114.10 (October 5 High). On the downside, support is seen at 112.82 (October 8 Low), a break below could take it lower 112.35 (October 22 Low).
GBP/USD: Sterling rebounded after falling to a 2-1/2 month low in the previous session on worries about Britain's departure from the European Union. Investors now await the Bank of England monetary policy meeting on Thursday, where it is expected to keep interest rates steady and detail conditions necessary for policy tightening. The major traded 0.4 percent up at 1.2749, having hit a low of 1.2695 on Tuesday; it’s lowest since August 16. FxWirePro's Hourly Sterling Strength Index stood at -17.77 (Neutral) 1100 GMT. Immediate resistance is located at 1.2791 (August 13 High), a break above could take it near 1.2827 (August 14 High). On the downside, support is seen at 1.2664, a break below targets 1.2640. Against the euro, the pound was trading 0.4 percent up at 88.89 pence, having hit a low of 89.39 on Tuesday, it’s lowest since September 26.
USD/CHF: The Swiss franc edged down to a fresh 3-1/2 month low as the greenback rallied on stronger than expected U.S. economic data and continued rate increases by the Federal Reserve. The major trades 0.05 percent up at 1.0050, having touched a high of 1.0061, it’s highest since July 13. FxWirePro's Hourly Swiss Franc Strength Index stood at -128.05 (Highly Bearish) by 1100 GMT. On the higher side, near-term resistance is around 1.0068 (July 13 High) and any break above will take the pair to next level till 1.0085 (May 12, 2017, High). The near-term support is around 0.9954 (September 25 Low) and any close below that level will drag it till 0.9937 (September 23 Low).
Equities Recap
European shares advanced, boosted by strong results from financial banks, while sterling bounced back from a 10-week low as traders prepared for more-hawkish-than-expected signals from the BoE.
The pan-European STOXX 600 index gained 1.6 percent at 360.99 points, while the FTSEurofirst 300 index rallied 1.6 percent to 1,421.99 points.
Britain's FTSE 100 trades 1.6 percent up at 7,150.41 points, while mid-cap FTSE 250 surged 1.3 percent to 18,913.13 points.
Germany's DAX rose 1.4 percent at 11,449.72 points; France's CAC 40 trades 2.3 percent higher at 5,094.36 points.
Commodities Recap
Crude oil prices rallied as markets braced for the imposition of U.S. sanctions on Iran next week and as stock markets regained of their recent losses. International benchmark Brent crude was trading 0.3 percent up at $76.47 per barrel by 1059 GMT, having hit a low of $75.09 on Tuesday, its lowest since August 24. U.S. West Texas Intermediate was trading 0.2 percent up at $66.43 a barrel, after falling as low as $65.37 on Tuesday, its lowest since August 21.
Gold prices slumped to a more than 2-week low as global equities rebounded and the dollar touched multi-month highs after upbeat economic data indicated a robust U.S. economy. Spot gold was 0.4 percent lower at $1,217.63 an ounce at 1101 GMT, having touched a low of $1,214.63 earlier in the session, its lowest since Oct. 11. U.S. gold futures fell 0.5 percent to $1,218.7 an ounce.
Treasuries Recap
The U.S. Treasuries suffered during late afternoon session ahead of today’s ADP non-farm employment change for the month of October, scheduled to be released today. The yield on the benchmark 10-year Treasuries jumped 3 basis points to 3.14 percent, the super-long 30-year bond yields also climbed nearly 3 basis points to 3.383 percent and the yield on the short-term 2-year traded 2-1/2 basis points higher at 2.87 percent.
The United Kingdom’s gilts slumped during the afternoon session ahead of the Bank of England’s (BoE) monetary policy decision, scheduled to be unveiled on November 1 by 12:00GMT, followed by Governor Mark Carney’s speech, by 12:30GMT for further direction in the debt market. The yield on the benchmark 10-year gilts, jumped 2-1/2 basis points to 1.423 percent, the super-long 30-year bond yields surged nearly 2-1/2 basis points to 1.842 percent and the yield on the short-term 2-year traded 2 basis points higher at 0.739 percent
The German bunds lost ground during European session following a rise in Eurozone’s consumer price inflation (CPI) data for the month of October, beating market expectations as well. The German 10-year bond yields, which move inversely to its price, rose 1 basis point to 0.382 percent, the yield on 30-year note remained tad higher at 1.026 percent and the yield on short-term 2-year traded nearly flat at -0.654 percent.
The Australian government bonds fell during Asian session as investors have largely shrugged-off the country’s lower-than-expected consumer price inflation (CPI) data for the third quarter of this year, with an additional eye on the retail sales for the month of September, due on November 2 by 00:30GMT for added direction in the debt market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1/2 basis point to 2.620 percent, the yield on the long-term 30-year bond remained tad lower at 3.111 percent and the yield on short-term 2-year too traded 1/2 basis point down at 1.980 percent.
