Market Recap
- EUR/USD 0.06%, USD/JPY -0.01%, GBP/USD 0.61%, EUR/GBP -0.55%
- DXY -0.1%, DAX 0.02%, FTSE -0.17%, Brent -0.49%, Gold 0.6%
- Germany Aug Industrial Output MM 2.6% vs 1.90%, forecast 0.7%, revised -0.1%
- ECB still concerned about existing stock of bank bad loans-Mersch
- ECB says eurozone banks well prepared for rate shocks
- Bank of France keeps French Q3 GDP growth forecast at 0.5 pct
- EZ Oct Sentix Index 29.7 vs 28.2, forecast 28.5
- Brexit talks stutter, but EU leaders might give May break
- Oil prices stable after OPEC signals possible further action
- Gold hits 1-week high amid renewed North Korea fears
Economic Data Ahead
- (1000 ET/1400 GMT) The U.S. Conference Board will release its Employment Trends Index figures for the month of September.
- (1845 ET/2245 GMT) The Statistics New Zealand will release Electronic Card Retail Sales figures for the month of September. The indicator posted a decline of 0.2 percent in the previous month.
- (1901 ET/2301 GMT) The British Retail Consortium (BRC) will report its Like-for-Like Retail Sales for the month of September. The index rose at an annualized rate of 1.3 percent in August.
- (1950 ET/2350 GMT) Japan's Ministry of Finance is likely to report that Current Account (N.S.A) surplus expanded to 2,262.4 billion yen in August from 2,320.0 billion yen in July.
- (1950 ET/2350 GMT) Japan's Customs Office will release Trade Balance (BOP Basis) figures for the month of August.The economy posted a trade surplus of 566.6 billion yen in the earlier month.
Key Events Ahead
- N/A The Boards of Governors of the World Bank and the International Monetary Fund (IMF) will assemble for their annual meeting in Washington, October 9-15.
- (1200 ET/1600 GMT) European Central Bank's Executive Board member Sabine Lautenschläger 's speech
FX Beat
DXY: The dollar steadied versus the Japanese yen as strong U.S. wages data released on the weekend boosted investors’ confidence that the Federal Reserve will hike rates in December. The greenback against a basket of currencies traded 0.1 percent down at 93.70, having touched a high of 94.27 on Friday, its highest since July. 26.
EUR/USD: The euro steadied after rebounding from a 7-week low in the previous session, in response to upbeat Eurozone Sentix Investors Confidence data. Data released earlier in the day showed that the investors’ confidence improved to 29.7 in October versus 28.5 expectations. The European currency traded 0.1 percent up at 1.1743, having touched a low of 1.1669 on Friday, its lowest since Aug. 17. The pair has shown a minor jump above 200- W MA at 1.1719 and any close above will take the pair to next level till 1.17650 (55- day EMA and trendline resistance)/1.18325. On the lower side, major support is around 1.16621 (Aug 2017 low) and any break below will take it to next level till 1.15920/1.1500.
USD/JPY: The dollar rebounded from daily lows as the prevalent positive trading sentiment around European equity markets helped to reverse an early dip, led by safe-haven demand on renewed North Korean concerns. The major was trading flat at 112.62, having hit a high of 113.43 on Friday, its highest since mid-July. On the lower side, any close below 112.25 (233- day MA) confirms minor weakness, a decline till 111.13/110 likely. Any break above 113.45 confirms minor bullishness, a jump till 114/114.50.
GBP/USD: Sterling retreated from a 1-month low against the dollar as Prime Minister Theresa May hinted at the weekend that she may be considering a cabinet reshuffle to reassert her authority. Moreover, the British pound was also underpinned by market speculation that the Bank of England would hike rates at the November meeting. Sterling traded 0.7 percent up at 1.3155, having hit a low of 1.3027 on Friday, its lowest since Sept. 6. The intraday term trend is still weak as long as 1.3180 (23.6% retracement of 1.36574 and 1.30272) and any break above will take the pair to next level till 1.3230/ 1.3280 (daily Kijun-Sen)/1.3300. On the lower side, near-term major support is around 1.3015 (100- day MA) and any break below will drag the pair down till 1.2950 (trend line support)/1.28697 (50% fibo) /1.2850. Against the euro, the pound was trading 0.4 rose up at 89.32 pence, having hit a low of 89.92 pence the prior session, its lowest since Sept. 14.
USD/CHF: The Swiss franc eased, reversing some of its previous session gains, as the greenback against a basket of currencies steadied close to its highest level in 10-weeks. The major trades 0.1 percent up at 0.9784, having touched a high of 0.9836 the session before, it’s highest since May 17. The near-term support is around 5- day MA at 0.9759 and any break below will take the pair to next level till 0.9720 (10- day MA)/0.9680. The near-term resistance is around 0.9845 (Trendline joining 1.03350 and 1.00998) and any convincing close above will take it to next level till 0.9900/0.9950.
AUD/USD: The Australian dollar eased, extending losses for the third straight session, as growing market speculation for additional Fed rate hike action in December continued to underpin the U.S. dollar. The Aussie trades 0.2 percent down 0.7759, having hit a low of 0.7733 in the previous session, it’s lowest since Jul. 14. On the lower side, near-term support is around 0.7730 and any convincing close below will drag the pair till 0.77186/0.7685. The near-term resistance is around 0.7825 (23% retracement of 0.8125 and 0.77330) and any break above targets 0.7879 (55- day EMA)/0.7900 (34- day EMA).
Equities Recap
European shares rose following a rise in Spain's benchmark as political risk concerns over Catalonia eased, while the greenback steadied close to its highest level in 10-weeks on growing market conviction for additional Fed rate hike action in December.
The pan-European STOXX 600 index rallied 0.1 percent to 389.80 points, while the FTSEurofirst 300 index gained 0.2 percent to 1,533.30 points.
Britain's FTSE 100 trades 0.2 percent down at 7,508.69 points, while mid-cap FTSE 250 fell 0.3 percent to 20,119.58 points.
Germany's DAX rose 0.05 percent at 12,958.65 points; France's CAC 40 trades 0.01 percent up at 5,371.52 points.
Commodities Recap
Crude oil prices declined, extending previous session losses, despite a number of rigs drilling for new oil in the United States declining. International benchmark Brent crude was trading 0.6 percent down at $55.21 per barrel by 0946 GMT, having hit a low of $55.11 on Friday, its weakest since Sept. 19. U.S. West Texas Intermediate was trading flat at $49.25 a barrel, after falling as low as $49.08 in the previous session, its lowest since Sept. 13.
Gold prices rallied to their strongest level in more than a week as renewed concerns over North Korea's nuclear plans stoked safe-haven demand. Spot gold was 0.6 percent up at $1,282.92 an ounce by 0952 GMT, after falling as low as $49.08 in the previous session, its lowest since Sept. 13. U.S. gold futures for December delivery gained 0.6 percent to $1,282.40 per ounce.
Treasuries Recap
The U.S. and Japan's bond market are closed for a holiday.
The Spanish 10-year government bond yield was down 6.5 basis points at 1.65 percent, hitting a 1-week low and narrowing the gap with German benchmarks.
The Australian government bond futures were mixed, with the three-year bond contract flat at 97.850. The 10-year contract slipped 1 basis points to 97.1450.
The New Zealand government bonds gained, sending yields about 2 basis points higher at the long-end of the curve.
