Market Roundup
• Fed expected to cut rates on Thursday
• Traders see 94% chance for 25 basis point rate cut by Fed
• Britain likely to hold election in December
• U.S. consumer confidence fell in October
• US Redbook (YoY) 4.5%,4.3% previous
• US Redbook (MoM) 0.0%,-0.1% previous
• US Aug S&P/CS HPI Composite - 20 s.a. (MoM) -0.2%, 0.1% forecast, 0.1% previous
• US Aug S&P/CS HPI Composite - 20 n.s.a. (MoM) 0.0%, 0.3% forecast, 0.2% previous
• US Aug S&P/CS HPI Composite - 20 n.s.a. (YoY) 2.0%, 2.1% forecast, 2.0% previous
• US Oct CB Consumer Confidence 125.9 , 128.0 forecast, 126.3 previous
• US Sep Pending Home Sales (MoM) 1.5%, 0.9% forecast, 1.4% previous
• US Sep Pending Home Sales Index 108.7, 107.1 previous
• US Oct Dallas Fed Services Revenues 15.4, 12.9 previous
• US Oct Texas Services Sector Outlook 1.8, 6.3 previous
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Sep Retail Sales (YoY) 6.9%, 1.8% previous
• 00:30 Australia HIA New Home Sales (MoM) 7.3% previous
• 00:30 Australia CPI (QoQ) (Q3) 0.5% forecast, 0.6% previous
• 00:30 Australia CPI (YoY) (Q3) 1.7% forecast, 1.6% previous
• 00:30 Australia CPI Index Number (Q3) 114.80 previous
• 00:30 Australia Trimmed Mean CPI (QoQ) (Q3) 0.4% forecast, 0.4% previous
• 00:30 Australia Trimmed Mean CPI (YoY) (Q3) 1.6%, 1.6% previous
• 00:30 Australia Weighted mean CPI (QoQ) (Q3) 0.4% forecast,0.4% previous
• 00:30 Australia Weighted mean CPI (YoY) (Q3) 1.3%, 1.2% previous
• 18:00 US Fed Interest Rate Decision 1.75%, 2.00% previous
• 20:00 Brazil Interest Rate Decision 5.50%,5.50% previous
Looking Ahead - Events, Other Releases (GMT)
• 14:00 Canada BoC Rate Statement
• 15:15 Canada BOC Press Conference
• 17:30 Eurozone ECB's Lautenschlaeger Speaks
• 18:00 US FOMC Statement
Currency Summaries
EUR/USD: The euro strengthened against the U.S. dollar on Tuesday, as investors awaited for the outcome of the U.S. Federal Reserve meeting on Wednesday. The Fed is expected to cut rates on Wednesday and investors will be watching for any indication that further cuts are likely. Fed policymakers are deeply divided on whether the U.S. central bank should be cutting rates. The euro was up 0.09 percent at $1.1110. An index that tracks the dollar versus a basket of six major currencies was down 0.04 at 97.70. Immediate resistance can be seen at 1.1127 (100 DMA), an upside break can trigger rise towards 1.1200 (200 DMA).On the downside, immediate support is seen at 1.1070 (Daily low), a break below could take the pair towards 1.1000 (Psychological level).
GBP/USD: Sterling strengthened against dollar on Tuesday, as Britain looked set for a snap December election, but its recent surge on hopes of a smooth Brexit look may be capped by outside risks that the various election outcomes could bring. Sterling has gained more than 5 percent over the last three weeks against the U.S. dollar, and stocks rallied as fears of Britain crashing out of the European Union faded after European policymakers agreed on a third Brexit extension until Jan. 31. But the growing optimism has been punctured this week as market watchers worried that some of those concerns that have dogged investor sentiment for most of this year may return to haunt the pound if the election result is not a clear one. Immediate resistance can be seen at 1.2905 (Daily High), an upside break can trigger rise towards 1.2950 (24th Oct High).On the downside, immediate support is seen at 1.2800 (Psychological level), a break below could take the pair towards 1.2712 (200 DMA).
USD/CAD: The Canadian dollar declined against its U.S. counterpart on Tuesday, pulling back from an earlier three-month high as oil prices fell and ahead of interest rate decisions this week by the Bank of Canada and the U.S. Federal Reserve. The price of oil, one of Canada’s major exports, fell for a second day, pressured by expectations of a rise in U.S. crude inventories and doubts that OPEC and its allies will cut oil output further in December. U.S. crude oil futures were down 1.6% at $54.93 a barrel. At (1950 GMT), the Canadian dollar was trading 0.3% lower at 1.3067 to the greenback, or 76.53 U.S. cents. Immediate resistance can be seen at 1.3108 (5 DMA), an upside break can trigger rise towards 1.3191 (21 DMA).On the downside, immediate support is seen at 1.3042 (Oct 29thlow), a break below could take the pair towards 1.3000 (Psychological level).
USD/JPY: The dollar dipped against the Japanese yen on Tuesday, ahead of the two-day Federal Reserve policy meeting. Traders are currently pricing in a 97.3% chance of a cut tomorrow, up from 49.2% a month ago, according to CME Group's FedWatch tool. Though there has been no clear commitment to another reduction in borrowing costs from Fed policymakers, a failure to lower rates on Wednesday could risk upending financial markets that are confident another cut is coming. Strong resistance can be seen at 109.00 (200 DMA), an upside break can trigger rise towards 109.32 (Aug 1st high).On the downside, immediate support is seen at 108.68 (11 DMA), a break below could take the pair towards 108.00 (Psychological level).
Equities Recap
European shares closed lower for the first time in seven sessions on Tuesday, as weak earnings dampened optimism surrounding the U.S.-China trade progress.
UK's benchmark FTSE 100 closed down by 0.34 percent, Germany's Dax ended down by 0.02 percent, France’s CAC finished the day up by 0.17 percent.
The S&P 500 eased back from a record high on Tuesday to trade near the unchanged mark as investors weaved through the heart of earnings season and the latest headlines on a potential trade deal between the U.S. and China.
Dow Jones closed down by 0.04 percent, S&P 500 ended down by 0.06 percent, Nasdaq finished the down by 0.58 percent.
Treasuries Recap
U.S. Treasury yields on Tuesday were lower across maturities as the Federal Reserve began its two-day policy meeting after which it is expected to announce its third interest-rate cut this year.
The benchmark 10-year yield was 0.9 basis point lower at 1.844%. The two-year yield, a proxy for market expectations of interest rate policy changes, was flat at 1.648%, with expectations of a rate cut Wednesday fully priced in by the market.
Oil prices were mixed on Tuesday, paring earlier steep losses as investors focused on signs that U.S.-China trade tensions could ease next month and expectations that U.S. refined product stockpiles declined last week.
Brent crude settled at $61.59 a barrel, up 2 cents, after falling as low as $60.66. U.S. West Texas Intermediate crude ended 27 cents lower at $55.54 a barrel, after earlier hitting a session low of $54.61.
