Market Roundup
• US Sep Chicago Fed National Activity -0.45, 0.15 previous
• US Sep Goods Trade Balance -70.39B, -73.06B previous
• US Sep Retail Inventories Ex Auto 0.3%,-0.2% previous
• US Wholesale Inventories (MoM) -0.3%, 0.2% previous
Looking Ahead - Economic Data (GMT)
• 23:30 Japan Oct Tokyo Core CPI (YoY) 0.7% forecast, 0.5% previous
• 23:30 Japan Oct Tokyo CPI (YoY) 0.4% previous
• 23:30 Japan Oct CPI Tokyo Ex Food and Energy (MoM) -0.3% previous
Looking Ahead - Events, Other Releases (GMT)
• 06:45 Australia RBA Governor Lowe Speaks
Currency Summaries
EUR/USD: The euro gained against the U.S. dollar on Monday, as investors cut long dollar positions ahead of Federal Reserve’s meeting this week. The Fed meeting this week is widely expected to result in a cut in interest rates of 25 basis points, and that has been priced in, but some analysts expect the Fed to sound “hawkish” by signalling it is reluctant to cut rates further. The euro was up 0.19 percent at $1.1100. The dollar index, which measures the U.S. currency against a basket of six currencies, down 0.10% to 97.73.Immediate resistance can be seen at 1.1162 (24th Oct High), an upside break can trigger rise towards 1.1200 (200 DMA).On the downside, immediate support is seen at 1.1074 (25th Oct low), a break below could take the pair towards 1.1000 (Psychological level).
GBP/USD: Sterling strengthened against dollar on Monday, after British lawmakers rejected Prime Minister Boris Johnson’s bid to end the political paralysis around Brexit with a Dec. 12 election. Johnson failed to gain the majority backing in parliament he required for an election, the third time he has failed to do so. The vote took place after the European Union agreed to a three-month flexible Brexit delay. Johnson, who pledged to deliver Brexit on Oct. 31 “do or die”, was forced to request a delay after parliament rejected the sequencing of ratification of his exit agreement.The pound was slightly higher at $1.2162 on Monday, not far from Friday’s low of $1.2800. Immediate resistance can be seen at 1.2885 (5 DMA), an upside break can trigger rise towards 1.2900 (Psychological level).On the downside, immediate support is seen at 1.2788 (Oct 24th low), a break below could take the pair towards 1.2712 (200 DMA).
USD/CAD: The Canadian dollar strengthened to its highest in more than three months against the greenback on Monday after investors boosted bullish bets on the currency and ahead of an interest rate decision this week from the Bank of Canada. The Bank of Canada has been on hold this year even as major central banks such as the U.S. Federal Reserve and the European Central Bank have eased. The Fed is expected to cut rates on Wednesday for the third time since July. That could lower the range for the Fed's benchmark rate below the Bank of Canada's equivalent rate for the first time since December 2016. The Canadian dollar was trading 0.2% higher at 1.3056 to the greenback. Immediate resistance can be seen at 1.3098 (9 DMA), an upside break can trigger rise towards 1.3120 (11 DMA).On the downside, immediate support is seen at 1.3048 (Oct 28thlow), a break below could take the pair towards 1.3000 (Psychological level).
USD/JPY: The dollar strengthened against the Japanese yen on Monday, as optimism that the U.S. and China will reach a trade deal reduced demand for safe haven currencies. U.S. President Donald Trump said on Monday he expected to sign a significant part of the trade deal with China ahead of schedule but did not elaborate on the timing. The comments come after the U.S. Trade Representative’s office and China’s Commerce Ministry said on Friday that U.S. and Chinese officials are “close to finalizing” some parts of a trade agreement, with talks to continue. 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 108.60 (11 DMA), a break below could take the pair towards 108.06 (21 DMA).
Equities Recap
European shares touched their highest level since January 2018 on Monday, boosted by carmakers and miners on hopes that the United States and China were closer to getting a trade deal.
UK's benchmark FTSE 100 closed up by 0.09 percent, Germany's Dax ended up by 0.37 percent, France’s CAC finished the day up by 0.15 percent.
The S&P 500 hit record high at open on Monday on rising hopes of a U.S.-China trade deal, while bets that the Federal Reserve would lower borrowing costs at its policy meeting this week also brightened the mood.
Dow Jones closed up by 0.49 percent, S&P 500 ended up by 0.55 percent, Nasdaq finished the down by 1.01 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday morning after the European Union agreed to a three-month flexible delay of Britain's departure from the European Union.
The benchmark 10-year yield was last up 5.7 basis points to 1.858%, the biggest move across maturities.
Commodities Recap
Gold inched up on Monday, after a near 1% jump in the previous session, as investors awaited a U.S. Federal Reserve rate decision later in the week, while progress in U.S.-China trade talks curbed appetite for safe haven assets.
Spot gold rose 0.2% to $1,506.95 per ounce as of 0700 GMT. U.S. gold futures were up 0.3% at $1,509.60 per ounce.
Oil prices rose on Monday on hopes for a Sino-American trade deal but gains were capped by weak Chinese industrial data.
Brent crude was up 26 cents, or 0.4%, at $62.28 a barrel by 1337 GMT.West Texas Intermediate (WTI) crude rose 20 cents, or 0.3% to $56.86 a barrel.
