Market Roundup
- EUR/USD -0.25%, USD/JPY -0.02%, GBP/USD 0.06%, EUR/GBP -0.28%
- DXY 0.14%, DAX 0.19%, FTSE 0.11%, Brent 1.4%, Gold 0.02%
- Germany Sept Wholesale Price Index YY 3.4% vs 3.2%
- EZ Aug Eurostat Trade NSA, Eur 16.1B vs 23.2B
- May heads for Brussels after Brexit talks deadlock
- Madrid moves towards direct rule over Catalonia as deadline passes
- Canadian small business lending rises in August -PayNet
- White House pitches corporate tax cut as win for workers
- BoJ Gov Kuroda – No excesses in markets, will continue easy policy
- IMF Brekk – Sales tax hike obvious choice for Japan debt woes
- Japan MoF off’ls – G20 didn’t discuss trade, FX, Japan not fx manipulator
- China c. bank chief surprises with gravity-defying 7 pct H2 growth forecast
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of New York is expected to report that New York State manufacturing index rose to 20.75 percent in October after rising 24.40 in September.
- (0830 ET/1230 GMT) The Statistics Canada will report foreign portfolio investment in domestic stocks for the month of August.
- (0830 ET/1230 GMT) The Statistics Canada will release investment in foreign securities figures for the month of August.
- (1030 ET/1430 GMT) The Bank of Canada will release its business outlook report.
- (1745 ET/2145 GMT) The Statistics New Zealand reports its consumer price index for the third quarter. The index rose at an annualized rate of 1.7 percent in the previous quarter, while on a quarterly basis it remained flat.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.52 bn)
- (1400 ET/1800 GMT) European Central Bank's Lautenschlager speaks in Washinton DC
- (2100 ET/0100 GMT) Minneapolis Fed President Neel Kashkari participates in a moderated question-and-answer session at a G100 dinner and discussion event in Minneapolis.
FX Beat
DXY: The dollar index gained following a modest uptick in the U.S. Treasury bond yields. The greenback against a basket of currencies traded 0.1 percent up at 93.17, having touched a low of 92.75 the session before, its lowest since Sept. 26. FxWirePro's Hourly Dollar Strength Index stood at -19.60 (Neutral) by 1000 GMT.
EUR/USD: The euro declined, extending losses for the third consecutive session as political uncertainty over Catalonia's bid for independence and Austria's election outcome, weighed heavily on the major. The European currency traded 0.1 percent down at 1.1801, having touched a high of 1.1879 on Thursday, its highest since Sept. 25. FxWirePro's Hourly Euro Strength Index stood at -97.11 (Slightly Bearish) by 1000 GMT. On the higher side, near term resistance is around 1.1900 and any break above will take the pair to next level till 1.19280 (61.8% retracement of 1.20925 and 1.16621)/1.2000. The near term support is around 1.17980 (100- 4H MA) and any convincing break below will drag it down till 1.1768 (55- day EMA)/1.1720.
USD/JPY: The dollar steadied after declining to an over 2-week high, as an uptick in the U.S. Treasury bond yields supported the bid tone around the greenback. The major was trading flat at 111.80, having hit a low of 111.68 on Friday, its lowest since Sept. 26. FxWirePro's Hourly Yen Strength Index stood at 54.60 (Bullish) by 1000 GMT. On the lower side, any close below 111.65 (34- day EMA) 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 held firm near 2-week highs as investors speculated that the upcoming U.K. economic data this week would strengthened the case of Bank of England hiking interest rate by the end of the year. The major traded 0.2 percent up at 1.3304, having hit a high of 1.3337 on Friday, its highest since Oct. 2. FxWirePro's Hourly Sterling Strength Index stood at 36.68 (Neutral) by 1000 GMT. The near term major resistance is around 1.3337 (20- day MA) and any break above will take the pair to next level till 1.3400/1.3420/1.3460. On the lower side, 1.3230 will be acting as major support and any break below will drag it down till 1.3180/1.3120 level. Against the euro, the pound was trading 0.2 higher at 88.72 pence, having hit a high of 88.55 pence, its highest since Oct. 4.
USD/CHF: The Swiss franc declined, reversing most of its previous session gains, as the dollar steadied on data that showed U.S. consumer prices rose the most in eight months in September. The major trades 0.1 percent up at 0.9753, having touched a low of 0.9705 in the previous session, it’s lowest since Oct. 2. FxWirePro's Hourly Swiss Franc Strength Index stood at -126.38 (Highly Bearish) by 1000 GMT. On the lower side, any break below 0.9705 confirms that jump from 0.9420 ends at 0.98345 and a decline till 0.9580/0.9500 is possible. The near-term resistance is around 0.97730 and any violation above will take the pair to next level till 0.9808/0.9845.
AUD/USD: The Australian dollar eased, halting its 4-day winning streak as a modest uptick in the U.S. Treasury bond yields boosted the U.S. dollar. The Aussie trades 0.2 percent down at 0.7867, having hit a high of 0.7897 in the previous session, it’s highest since Sept. 25. FxWirePro's Hourly Aussie Strength Index stood at 96.78 (Highly Bullish) by 1000 GMT. On the lower side, near term support is around 0.7828 (55- 4H EMA) and any convincing close below will drag the pair till 0.7780/0.7730. The near term resistance is around 0.7919 (233-4H MA) and any break above targets 0.7950/0.8000.
Equities Recap
European shares steadied, despite growing uncertainty over the Catalonia crisis, while the euro slumped amid political uncertainty in the form of an approaching deadline for Catalonia's bid for independence.
The pan-European STOXX 600 index gained 0.1 percent to 391.81 points, while the FTSEurofirst 300 index advanced 0.1 percent to 1,539.23 points.
Britain's FTSE 100 trades 0.1 percent up at 7,543.33 points, while mid-cap FTSE 250 fell 0.1 percent to 20,245.27 points.
Germany's DAX rose 0.2 percent at 13,013.16 points; France's CAC 40 trades 0.1 percent up at 5,357.44 points.
Commodities Recap
Crude oil prices advanced to an over 2-week high as Iraqi forced entered the oil city of Kirkuk, taking territory from Kurdish fighters and triggering concerns over exports from Iraq. International benchmark Brent crude was trading 1.4 percent up at $57.94 per barrel by 1019 GMT, having hit a high of $58.10 earlier, its strongest since Sept. 27. U.S. West Texas Intermediate was trading 1.5 percent higher at $52.14 a barrel, after rising as high as $52.19 earlier, its highest since Sept. 28.
Gold prices rose a near 3-week high above a key psychological level of $1,300, strengthened by worries over Iran. Spot gold was trading 0.1 percent up at $1,304.55 an ounce by 1023 GMT, having hit a high of $1,305.72, the highest since Sept. 26. U.S. gold futures for December delivery were up 0.2 percent at $1,307.50 per ounce.
Treasuries Recap
The U.S. Treasuries traded lower after Federal Reserve Chair Janet Yellen, remained optimistic about the state of the economy, noting that the country’s underlying inflation will improve over time, which slain investors away from safe-haven instruments. The yield on the benchmark 10-year Treasury rose 1 basis point to 2.29 percent, the super-long 30-year bond yields range-bound at 2.81 percent and the yield on short-term 2-year note traded 1-1/2 basis points higher at 1.51 percent.
The UK gilts gained as investors look forward to the release of the country’s consumer price-led inflation index for September, scheduled for October 17, besides BoE Governor Mark Carney’s speech, which will provide further direction to the debt market. The yield on the benchmark 10-year gilts, rose nearly 1 basis point to 1.39 percent, the super-long 30-year bond yields also climbed 1 basis point to 1.93 percent and the yield on the short-term 2-year also traded nearly 1 basis point higher at 0.48 percent.
The German bunds traded flat Monday as investors remained sidelined in any major trading activity amid lack of significant economic data. The German 10-year bond yields, which move inversely to its price, hovered around 0.39 percent, the yield on 30-year note flat at 1.20 percent and the yield on short-term 2-year traded nearly 1 basis point lower at -0.73 percent.
The New Zealand bonds ended the session higher after investors poured into safe-haven assets, following acting Prime Minister Bill English’s comments that it could take until the end of the week to confirm the country’s next government following an inconclusive election last month. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.94 percent, the yield on 7-year note also slipped 1 basis point to 2.94 percent and the yield on short-term 2-year too ended a basis point lower at 2.06 percent.
The Japanese government bonds remained flat after the country’s industrial production for the month of August disappointed market participants coming in at 2.0 percent m/m, down from expectations of and from prior 2.1 percent m/m. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.06 percent, the yield on long-term 30-year tad up at 0.87 percent and the yield on short-term 2-year traded flat at -0.14 percent
The Australian bonds rallied following firmness in U.S. Treasuries owing to lower-than-expected September inflation data. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 2-1/2 basis points to 2.777 percent, the yield on the 15-year note also slid 2-1/2 basis points to 3.065 percent and the yield on short-term 2-year traded 2 basis points lower at 1.918 percent.
