Market Roundup
- EUR/USD -0.16%, USD/JPY -0.03%, GBP/USD 0.15%, EUR/GBP -0.29%
- DXY 0.11%, DAX -0.79%, FTSE -0.67%, Brent 0.38%, Gold 0.27%
- Strong U.S. job growth expected in September; wages seen rising
- Dollar builds toward six-week high ahead of U.S. jobs data
- EU negotiators see Brexit divorce deal "very close" - sources
- Sterling strengthens after EU Brexit divorce deal "very close" report
- Germany Industrial Orders (m/m), 2.0%, 0.5% forecast, -0.9% previous
- Germany Producer Prices (y/y), 3.1%, 2.9% f'cast, 3.0% previous, 2.9% revised
- Great Britain Halifax House Prices (m/m), -1.4%, 0.2% forecast, 0.1% previous, -0.2% revised
- Italy cuts 2018 economic growth forecast to 1.2 pct
- Japan household spending posts biggest rise in 3 years, signals steady recovery
- U.S. Senate plans procedural vote on Kavanaugh in bitter confirmation fight
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Labor Department releases the non-farm payrolls report for the month of September. The report is likely to show 185,000 jobs were added compared with an increase of 201,000 in August.
- (0830 ET/1230 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of September. The rate stood at 62.7 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Labor Department is expected to report that unemployment rate edged down to 3.8 percent in September from 3.9 percent in August.
- (0830 ET/1230 GMT) The United States' average hourly earnings are likely to rise 0.3 percent in September after climbing 0.4 percent in the month before.
- (0830 ET/1230 GMT) The United States releases trade balance figures for the month of August. The economy's trade deficit is expected to have widened to $53.5 billion in August from $50.1 billion in July.
- (0830 ET/1230 GMT) The Statistics Canada releases the employment report for September. The economy probably added 25,500 jobs, compared to a fall of 51,600 jobs in August, while the participation rate is expected to remain unchanged at 65.3 percent.
- (0830 ET/1230 GMT) Canada's unemployment rate is expected to nudge down to 5.9 percent in September from 6.0 percent in the previous month.
- (0830 ET/1230 GMT) The Statistics Canada is likely to report that international trade deficit expanded to C$0.50 billion in August from C$0.11 billion in July.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
- (1500 ET/1900 GMT) The U.S. Federal Reserve is likely to report that consumer credit declined to $15.0 billion in August from $16.64 billion the month before.
Key Events Ahead
- (1230 ET/1630 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in moderated Q&A session before a community luncheon sponsored by the Federal Reserve Bank of Dallas, in Waco, Texas
- (1240 ET/1640 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic speaks on "Financial Literacy and Economic Education" before the 57th Annual Financial Literacy and Economic Education Conference, in Atlanta
FX Beat
DXY: The dollar index steadied ahead of U.S. jobs data that could provide further clues on how much longer the Fed's aggressive rate-hiking cycle will continue. The greenback against a basket of currencies trades flat at 95.81, having touched a high of 96.12 on Thursday, its highest since August 20. FxWirePro's Hourly Dollar Strength Index stood at 22.70 (Neutral) by 1000 GMT.
EUR/USD: The euro eased, hovering towards a 1-1/2 month low touched in the previous session after Italy cut its economic growth forecast for this year to 1.2 percent from a previous estimate of 1.5 percent and raised the fiscal deficit target to 1.8 percent of gross domestic product for 2018, up from 1.6 percent set by the previous centre-left government. The European currency traded 0.1 percent down at 1.1500, having touched a low of 1.1463 on Thursday, its lowest since August 20. FxWirePro's Hourly Euro Strength Index stood at -27.59 (Neutral) by 1100 GMT. Immediate resistance is located at 1.1536 (August 10 High), a break above targets 1.1601 (August 21 High). On the downside, support is seen at 1.1450, a break below could drag it till 1.1415.
USD/JPY: The dollar consolidated within narrow ranges, as investors await the monthly U.S. employment report that should yield further clues on the pace of monetary tightening. The U.S. nonfarm payrolls report is likely to show 185,000 jobs were added in for the month of September, compared with an increase of 201,000 in August. The major was trading 0.05 percent up at 113.89, having hit a high of 114.54, its highest since Nov. 6. FxWirePro's Hourly Yen Strength Index stood at 49.49 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. non-farm payroll, unemployment data and trade balance and speech from FOMC member Bostic 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 113.39 (10-DMA), a break below could take it lower 112.50 (21-DMA).
GBP/USD: Sterling surged to a 4-day peak against the dollar and to a 2-month high versus the euro after the European Union's Brexit negotiators said they are close to secure a trade deal with Britain. The major traded 0.4 percent up at 1.3039, having hit a low of 1.2921 on Thursday; it’s lowest since September 10. FxWirePro's Hourly Sterling Strength Index stood at 98.69 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.3068 (21-DMA), a break above could take it near 1.3115 (October 1 High). On the downside, support is seen at 1.2979 (September 12 Low), a break below targets 1.2921 (October 4 Low). Against the euro, the pound was trading 0.2 percent up at 88.22 pence, having hit a high of 88.11 earlier, it’s highest since July 9.
USD/CHF: The Swiss franc slumped to a 1-1/2 month low as the greenback continued to outperform other major currencies. The major trades 0.2 percent up at 0.9938, having touched a high of 0.9949 earlier, it’s highest since August 20. FxWirePro's Hourly Swiss Franc Strength Index stood at -42.48 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9953 (August 13 High) and any break above will take the pair to next level till 0.9984 (August 6 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 and were poised for their biggest weekly loss in a month, while the greenback edged up ahead of U.S. non-farm payroll data.
The pan-European STOXX 600 index plunged 0.5 percent at 377.99 points, while the FTSEurofirst 300 index eased 0.4 percent to 1,585.50 points.
Britain's FTSE 100 trades 0.5 percent lower at 7,378.25 points, while mid-cap FTSE 250 declined 0.5 percent to 19,984.88 points.
Germany's DAX fell 0.7 percent at 12,165.16 points; France's CAC 40 trades 0.4 percent lower at 5,389.94 points.
Commodities Recap
Crude oil prices declined, hovering away from 4-year highs despite traders anticipating a tighter market due to U.S. sanctions on Iran's crude exports. International benchmark Brent crude was trading 0.4 percent down at $84.42 per barrel by 1100 GMT, having hit a high of $86.71 on Wednesday, its highest since November 2014. U.S. West Texas Intermediate was trading 0.2 percent down at $74.50 a barrel, after rising as high as $76.88 on Wednesday, its highest since Nov 2014.
Gold prices surged, as investors cautiously awaited the monthly U.S. employment report that should yield further clues on the pace of monetary tightening. Spot gold was 0.3 percent up at $1,202.59 an ounce at 1102 GMT, having hit a high of $1208.17 on Wednesday, its highest since September 21 and was on track to gain 0.6 percent for the week, its biggest weekly gain in six. U.S. gold futures were up 0.1 percent at $1,202.40 an ounce.
Treasuries Recap
The U.S. Treasuries fell ahead of the country’s non-farm payrolls data and unemployment rate for the month of September, scheduled to be released today by 12:30GMT respectively. The yield on the benchmark 10-year Treasuries rose 1 basis point to 3.206 percent, the super-long 30-year bond yields also climbed 1 basis point to 3.365 percent and the yield on the short-term 2-year traded 1/2 basis point higher at 2.885 percent.
The German bunds suffered during late European session after the country’s producer price index (PPI) and factory orders for the month of August beat market expectations, thus weighing on debt prices. The German 10-year bond yields, which move inversely to its price, jumped 2 basis points to 0.556 percent, the yield on 30-year note surged 2-1/2 basis points to 1.159 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.532 percent
The Japanese government bonds gained on the last trading day of the week even as the United States Treasury yields hovered near multi-year highs following a global debt market rout that started yesterday, in line with a better-than-expected set of economic data released Wednesday. The yield on the benchmark 10-year JGB note, which moves inversely to its price, fell 1 basis point to 0.150 percent, the yield on the long-term 30-year note also slipped 1 basis point to 0.943 percent and the yield on short-term 2-year too traded 1 basis point lower at -0.117 percent.
The Australian government bonds traded narrowly mixed during subdued session as investors remain side-lined in any major deal ahead of the U.S. September non-farm payroll data. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded flat at 2.720 percent, the yield on the long-term 30-year bond also remained steady at 3.209 percent and the yield on short-term 2-year down nearly 1 basis point to 1.999 percent.
