Market Roundup
- EUR/USD -0.08%, USD/JPY -0.08%, GBP/USD -0.31%, EUR/GBP 0.21%
- DXY 0.09%, DAX -0.47%, FTSE 0.16%, Brent -0.23%, Gold 0.24%
- Dollar gains for a second day as markets eye Fed minutes
- EZ Sep HICP Final y/y, 2.1%, 2.1% previous, 2.1% forecast
- EZ sep HICP Final m/m, 0.5%, 0.2% previous, 0.5% forecast
- Great Britain Sep CPI y/y, 2.4%, 2.7% previous, 2.6% forecast
- Great Britain Sep RPI y/y, 3.3%, 3.5% previous, 3.5% forecast
- Great Britain Sep PPI Input prices y/y NSA, 10.3%, 8.7% previous, 9.2% forecast, 9.4% revised
- Great Britain Sep PPI Output prices y/y NSA, 3.1%, 2.9% previous, 2.9% forecast
- Great Britain Sep PPI Core Output y/y NSA, 2.4%, 2.1% previous, 2.3% forecast, 2.2% revised
- Ageing could leave Europe with longer recessions-ECB
- EU leaders prepare hardball Brexit summit for May
- Trump administration says to open trade talks with EU, UK, Japan
- German BGA trade body lowers 2018 forecast for export growth
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Department of Commerce is expected to report that housing starts decreased to 1.237 million units in September from 1.282 million units in August.
- (0830 ET/1230 GMT) The U.S. building permits are likely to have increased to a 1.280 million-unit pace in September from a 1.249 million-unit pace in August.
- (0830 ET/1230 GMT) Statistics Canada releases manufacturing shipments data for the month of August. Manufacturing sales are likely to have decreased 0.6 percent after rising 0.9 percent in July.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending October 12.
- (1500 ET/1900 GMT) Federal Open Market Committee releases the minutes from its September 25-26 policy meeting in Washington.
Key Events Ahead
- (0915 ET/1315 GMT) BoE’s Cunliffe appears before parliament's Treasury Committee for a re-appointment hearing in London.
- (1215 ET/1610 GMT) Fed’s Brainard speaks at the Federal Reserve Bank of Boston and the Aspen Institute conference, in Boston.
FX Beat
DXY: The dollar index rebounded as the yield on the benchmark 10-year Treasuries surged, while investors awaited the release of the Federal Reserve's September meeting minutes due later in the day. The greenback against a basket of currencies trades 0.2 percent up at 95.32, having touched a low of 94.79 on Tuesday, its lowest since Sept. 27. FxWirePro's Hourly Dollar Strength Index stood at 59.47 (Bullish) by 1000 GMT.
EUR/USD: The euro eased, extending previous session losses, after Germany's BGA trade association lowered its projection for export growth this year to 3.5 percent from the previous forecast of 5 percent, as demand weakened amid rising trade tensions and Britain's departure from the European Union. The European currency traded 0.2 percent down at 1.1551, having touched a high of 1.1621 on Monday, its highest since October 1. FxWirePro's Hourly Euro Strength Index stood at 36.15 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1610 (October 12 High), a break above targets 1.1651 (September 28 High). On the downside, support is seen at 1.1531 (10-DMA), a break below could drag it till 1.1505 (October 2 Low),.
USD/JPY: The dollar surged as geopolitical tensions eased after the U.S. Trade Representative's office told Congress it intends to open trade talks with the European Union, the United Kingdom, and Japan. The major was trading 0.05 percent up at 112.31, having hit a low of 111.62 on Monday, its lowest since September 13. FxWirePro's Hourly Yen Strength Index stood at -42.03 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. building permits, housing starts and FOMC latest policy meeting minutes. Immediate resistance is located at 112.58 (September 20 High), a break above targets 112.98 (September 25 High). On the downside, support is seen at 111.62 (September 15 Low), a break below could take it lower 111.35 (September 5 Low).
GBP/USD: Sterling tumbled towards the 1.3100 handle after data showed British inflation eased more than expected in September to a 3-month low. The economy's consumer price inflation increased at an annual rate of 2.4 percent in September, compared with August's unexpected 6-month high of 2.7 percent. The major traded 0.4 percent down at 1.3128, having hit a low of 1.3082 on Monday; it’s lowest since October 9. FxWirePro's Hourly Sterling Strength Index stood at -48.07 (Neutral) 1000 GMT. Immediate resistance is located at 1.3215 (October 10 High), a break above could take it near 1.3257 (October 12 High). On the downside, support is seen at 1.3120 (10-DMA), a break below targets 1.3054 (October 21 Low). Against the euro, the pound was trading 0.2 percent down at 87.93 pence, having hit a low of 88.25 on Monday, it’s lowest since October 5.
USD/CHF: The Swiss franc fell to a 1-week low as the greenback surged ahead of the release of Federal Open Market Committee’s September 25-26 monetary policy meeting minutes. The major trades 0.2 percent up at 0.9928, having touched a high of 0.9935 earlier, it’s highest since October 9. FxWirePro's Hourly Swiss Franc Strength Index stood at -146.69 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9944 (October 8 High) and any break above will take the pair to next level till 0.9984 (August 6 High). The near-term support is around 0.9881 (October 12 Low) and any close below that level will drag it till 0.9842 (August 21 Low).
Equities Recap
European shares surged, led by gains in technology stocks, while sterling tumbled after UK inflation declined more than the estimate.
The pan-European STOXX 600 index rallied 1.3 percent at 364.56 points, while the FTSEurofirst 300 index tumbled 0.1 percent to 1,431.65 points.
Britain's FTSE 100 trades 0.2 percent up at 7,071.99 points, while mid-cap FTSE 250 declined 0.4 percent to 19,074.86 points.
Germany's DAX fell 0.5 percent at 11,717.61 points; France's CAC 40 trades 0.2 percent lower at 5,164.78 points.
Commodities Recap
Crude oil prices slumped, halting a 3-days winning streak despite industry data showing an unexpected decline in U.S. crude inventories. International benchmark Brent crude was trading 0.7 percent down at $81.02 per barrel by 1044 GMT, having hit a low of $80.51 on Friday, its lowest since September 24. U.S. West Texas Intermediate was trading 0.9 percent down at $71.47 a barrel, after falling as low as $70.54 on Thursday, its lowest since September 21.
Gold prices surged, while the market await the minutes from the U.S. Federal Reserve's latest policy meeting for fresh clues on the pace of interest rate hikes. Spot gold was 0.1 percent up at $1,225.77 per ounce at 1048 GMT, having hit a high of $1233.14 on Monday, its highest since July 26. U.S. gold futures were down 0.4 percent at $1,226.6 an ounce.
Treasuries Recap
The U.S. Treasuries slipped during late afternoon session as investors await the Federal Open Market Committee’s (FOMC) minutes for the September 25-26 monetary policy meeting, scheduled for today at 18:00GMT. The yield on the benchmark 10-year Treasuries rose 1 basis point to 3.165 percent, the super-long 30-year bond yields edged 1/2 basis point higher to 3.336 percent and the yield on the short-term 2-year traded tad higher at 2.870 percent.
The German bunds climbed during European session after the eurozone’s consumer price inflation (CPI) for the month of September, released today, remained unchanged, meeting market expectations as well. The German 10-year bond yields, which move inversely to its price, fell 1-1/2 basis points to 0.474 percent, the yield on 30-year note edged 1 basis point lower at 1.111 percent and the yield on short-term 2-year too traded nearly 1 basis point lower at -0.607 percent.
The New Zealand bonds closed mixed after global dairy prices improved, albeit still in the negative zone at the latest GlobalDairyTrade (GDT) price auction, held late yesterday. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, fell 1 basis point to 2.710 percent, the yield on the long-term 20-year note hovered around 3.023 percent and the yield on short-term 2-year closed nearly 2-1/2 basis points lower at 1.855 percent
The Japanese government bonds remained flat ahead of the country’s trade balance data for the month of September, due to be released today by 23:50GMT and national core consumer price inflation (CPI), due on October 18 by 23:30GMT for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.148 percent, the yield on the long-term 30-year note traded flat at 0.916 percent and the yield on short-term 2-year too remained steady at -0.115 percent.
The Australian government bonds gained across the curve during Asian session as investors hope to see a deterioration in the country’s employment report for the month of September, scheduled to be released on October 18 by 00:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1 basis point to 2.718 percent, the yield on the long-term 30-year bond slumped nearly 2 basis points to 3.187 percent and the yield on short-term 2-year traded nearly 2 basis points lower at 2.038 percent.
