Market Roundup
- EUR/USD 0.03%, USD/JPY 0.28%, GBP/USD 0.09%, EUR/GBP -0.08%
- DXY -0.03%, DAX 0.68%, FTSE 0.12%, Brent 0.41%, Gold -0.49%
- In Trump win, Canada, U.S. deal saves NAFTA as trilateral pact
- Canadian dollar jumps after trade deal; euro struggles
- EZ Markit Manufacturing Final PMI, 53.2, 53.3 forecast, 53.3 previous
- Germany Markit/BME Manufacturing PMI, 53.7, 53.7 forecast, 53.7 previous
- Great Britain Markit/CIPS Manufacturing PMI, 53.8, 52.5 forecast, 52.8 previous, 53.0 revised
- France Markit Manufacturing PMI, 52.5, 52.5 forecast, 52.5 previous
- Italy Markit/ ADACI Manufacturing PMI, 50.0, 50.3 forecast, 50.1 previous
- EZ Unemployment Rate, 8.1%, 8.2% forecast, 8.2% previous
- Germany Retail Sales YY Real, 1.6%, 1.5% forecast, 0.8% previous, 0.9% revised
- Great Britain BOE Consumer Credit, Aug, 1.118 bln, 1.300 bln forecast, 0.817 bln previous, 0.838 bln revised
- Britain's Hammond says UK can cope with no-deal Brexit
- EU Commission set to reject Italy's budget plans in November -newspaper
Economic Data Ahead
- (0930 ET/1330 GMT) The Markit will release Canada's Manufacturing PMI for the Month of September. The indicator stood at 56.8 in the prior month.
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of September. The index is likely to show a final reading of 55.4 after rising 55.6 in the previous month.
- (1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. manufacturing Purchasing Managers' index eased to 60.5 in September from a final reading of 60.1 in August.
- (1000 ET/1400 GMT) The Commerce Department is likely to report that U.S. construction spending increased 0.4 percent in August after rising 0.1 percent in the previous month.
Key Events Ahead
- (0902 ET/1302 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic participates in a panel on "Economic Development" before the Inclusive Economic Development Council Conference.
- (1050 ET/1450 GMT) BoE's Silvana Tenreyro chairs session at Rebuilding Macroeconomics Annual Conference on - London
- (1100 ET/1500 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari participates in a town hall meeting - Minnetonka, Minnesota
- (1100 ET/1500 GMT) Eurozone Finance Ministers meet to discuss deeper euro zone integration - Luxembourg
- (1215 ET/1615 GMT) Federal Reserve Bank of Boston President Eric Rosengren speaks on "U.S. Outlook/Monetary Policy" before the National Association for Business Economics 60th Annual Meeting.
- (1315 ET/1715 GMT) BoC's Timothy Lane speaks at Haskayne Business School, Calgary, Canada
- N/A ECB’s Mario Draghi and Benoit Coeure participate in Eurogroup meeting - Luxembourg
- N/A Fed Philadelphia and Richmond co-sponsor "Reinventing Our Communities: Investing in Opportunity" – Baltimore
FX Beat
DXY: The dollar index held gains near a 3-week peak amid optimism about a reconstituted free trade agreement among the United States, Canada, and Mexico. The greenback against a basket of currencies trades 0.1 percent up at 95.15, having touched a high of 95.37 on Friday, its highest since September 10. FxWirePro's Hourly Dollar Strength Index stood at 61.66 (Bullish) by 1000 GMT.
EUR/USD: The euro tumbled, hovering closer to a near 3-week low touched on Friday after data showed Euro zone manufacturing growth slowed further to a two-year low at the end of the third quarter. Moreover, data showing German retail sales edged down unexpectedly for the second month in a row in August intensified the selling pressure around the major. The European currency traded 0.1 percent down at 1.1598, having touched a low of 1.1570 on Friday, its lowest since September 11. FxWirePro's Hourly Euro Strength Index stood at -2.86 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1698 (September 17 High), a break above targets 1.1757 (September 27 High). On the downside, support is seen at 1.1570 (September 28 Low), a break below could drag it till 1.1525 (September 10 Low).
USD/JPY: The dollar surged to a fresh to a 10-month peak as optimism on the trade war front was boosted by a new U.S.-Mexico-Canada agreement. Additionally, the Fed projections for four more increases by the end of 2019 and another in 2020 continued to support the dollar bulls' sentiment. The major was trading 0.3 percent up at 113.97, having hit a high of 114.05 earlier, its highest since Nov. 8. FxWirePro's Hourly Yen Strength Index stood at -126.16 (Highly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. construction spending, manufacturing PMI from both Markit and ISM, and speeches from Fed's Bostic and Rosengren. Immediate resistance is located at 114.28 (Nov 1 High), a break above targets 114.73 (Nov 6 High). On the downside, support is seen at 113.09 (5-DMA), a break below could take it lower 112.63 (September 26 Low).
GBP/USD: Sterling rebounded from a near 3-week low touched in the prior session after Britain's finance minister Philip Hammond stated that the European Union was willing to do a Brexit deal. However, uncertainty surrounding the ruling Conservative Party conference limited the British pounds upside. The major traded 0.1 percent up at 1.3041, having hit a low of 1.3000 on Friday; it’s lowest since September 12. FxWirePro's Hourly Sterling Strength Index stood at -89.25 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.3113 (5-DMA), a break above could take it near 1.3193 (September 25 High). On the downside, support is seen at 1.2979 (September 12 Low), a break below targets 1.2896 (September 10 Low). Against the euro, the pound was trading 0.05 percent up at 89.00 pence, having hit a high of 88.72 on Friday, it’s highest since September 21.
USD/CHF: The Swiss franc tumbled to an over 2-month low as investor risk sentiment improved after the United States and Canada agreed to update the North American Free Trade Agreement. The major trades 0.1 percent up at 0.9830, having touched a high of 0.9847 earlier, it’s highest since August 24. FxWirePro's Hourly Swiss Franc Strength Index stood at -25.61 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9865 (August 24 Low) and any break above will take the pair to next level till 0.9900. The near-term support is around 0.9719 (September 11 Low) and any close below that level will drag it till 0.9687 (September 4 Low).
Equities Recap
European shares advanced, boosted by optimism on the trade war front, while the greenback rallied on the back of a new U.S.-Mexico-Canada agreement.
The pan-European STOXX 600 index surged 0.3 percent at 384.39 points, while the FTSEurofirst 300 index rallied 0.2 percent to 1,507.09 points.
Britain's FTSE 100 trades 0.1 percent higher at 7,514.43 points, while mid-cap FTSE 250 gained 0.7 percent to 20,458.17 points.
Germany's DAX rose 0.7 percent at 12,330.41 points; France's CAC 40 trades 0.3 percent higher at 5,511.03 points.
Commodities Recap
Crude oil prices gained, hovering closer to its highest since November 2014, boosted by supply concerns before U.S. sanctions against Iran come into force next month. International benchmark Brent crude was trading 0.2 percent up at $83.08 per barrel by 1013 GMT, having hit a high of $83.37 on Friday, its highest since November 2014. U.S. West Texas Intermediate was trading 0.2 percent down at $73.39 a barrel, after rising as high as $73.70 on Friday, its highest since July 11.
Gold prices declined as the greenback surged in the wake of indications from the U.S. Federal Reserve last week that it will pursue a tighter monetary policy. Spot gold was 0.5 percent down at $1,185.78 by 1023 GMT, having hit a low of $1180.64 on Friday, its lowest since August 17. U.S. gold futures slipped 0.5 percent to $1,190.60 an ounce.
Treasuries Recap
The U.S. Treasuries plunged ahead of the country’s ISM manufacturing PMI for the month of September, scheduled to be released today by 14:00GMT. The yield on the benchmark 10-year Treasuries jumped 3 basis points to 3.087 percent, the super-long 30-year bond yields surged nearly 4 basis points to 3.234 percent and the yield on the short-term 2-year traded 1-1/2 basis points higher at 2.835 percent.
The United Kingdom’s gilts slumped during European session after the country’s manufacturing PMI for the month of September beat market expectations and investors will now be focusing on the construction PMI for the similar period, scheduled to be released on October 2 by 08:30GMT for further insight into the debt market. The yield on the benchmark 10-year gilts, jumped 2-1/2 basis points to 1.599 percent, the super-long 30-year bond yields surged nearly 3 basis points to 1.941 percent and the yield on the short-term 2-year traded 2-1/2 basis points higher at 0.846 percent.
The Japanese government bond prices traded mixed on the first trading day of the week amid a silent trading session that witnessed data of little economic significance ahead of the country’s household spending data for the month of August, scheduled to be released later this week for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1/2 basis point to 0.130 percent, the yield on the long-term 30-year note jumped 1-1/2 basis points to 0.926 percent and the yield on short-term 2-year slipped nearly 1 basis point to -0.111 percent.
The Australian government bonds remained a little higher during Asian session ahead of the Reserve Bank of Australia (RBA) monetary policy decision, where no change in communication is expected from the central bank. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 1 basis point to 2.665 percent, the yield on the long-term 30-year bond traded flat at 3.160 percent and the yield on short-term 2-year dipped 1 basis point to 2.031 percent.
