Market Roundup
• US ISM September Manufacturing PMI 51.5 vs forecast 50.3, 49.4 previous.
• US ISM new orders rebound, employment beats but still contracting.
• Colombia peso pummeled after voters reject peace accord.
• Colombian government, rebels hope to revive peace deal after vote.
• Moody's says Colombia peace deal rejection is credit-negative.
• Colombia peace deal rejection could complicate fiscal adjustment strategy -S&P.
• Canada tightens mortgage, tax rules in latest bid to cool housing.
• Chile central bank considered cut before deciding to hold in September.
• Brazil manufacturing PMI 46.0 vs previous 45.7.
• Brazil manufacturing exports tumble on stronger currency.
• Saudi cabinet says eager for oil market stability.
• Mexico's Carstens: Better to act preemptively on inflation risk.
Looking Ahead - Economic Data (GMT)
• 0:30 Australia Building Approvals Aug -7.00% forecast, 11.30% -previous
• 0:30 Australia ANZ Newspaper Job Ads Sep -5.00% - previous
• 0:30 Australia ANZ Internet Job Ads Sep 1.80% - previous
• 5:00 Japan Consumer Confidence. Index Sep 42.0 -previous
• N/A New Zealand Dairy Prices 2wk 1.70% -previous
• N/A New Zealand Milk Auctions 2wk 2975.0T - previous
Looking Ahead - Events, Other Releases (GMT)
• 0330 GMT - Reserve Bank of Australia (RBA) interest rate decision
Currency Summaries
EUR/USD is supported at 1.1180 levels and currently trading at 1.1216 levels. The pair has made session high at 1.1235 and hit lows at 1.1205 levels. The dollar gained against euro on Monday after stronger-than-expected U.S. manufacturing data increased expectations that the Federal Reserve would raise interest rates this year. The U.S. manufacturing data suggested a greater probability of a December move from the U.S. central bank on rate hike decision. The Institute for Supply Management (ISM) said on Monday its index of national factory activity rose to 51.5 from 49.4 the prior month, beating analyst expectations. Levels above 50 indicate the sector is expanding. The dollar index, which measures the greenback against a basket of six major currencies, gained on data showing the U.S. manufacturing sector grew by more than expected in September. The index was last up 0.25 percent. Analysts will look to the U.S. non-farm payrolls report on Friday for more clarity on the U.S. Federal Reserve decision on rate hike.
GBP/USD is supported in the range of 1.2800 levels and currently trading at 1.2855 levels. It reached session high at 1.2871 and dropped to session low at 1.2816 levels. Sterling declined towards 31 year low against the dollar on Monday as the dollar rallied broadly after data showed U.S. manufacturing sector returned to expansion territory in September and investors were worried after a March deadline was set for the start of the formal process that will split Britain from the European Union. Prime Minister Theresa May told her Conservative party's annual conference that she was determined to move on with Brexit and win the right deal in an effort to ease fears inside her party that she may delay the split with the EU. The pound had dropped more than 1 percent against the dollar to as low as $1.2818 before trimming losses in late U.S. trading. It was briefly less than half a cent away from the 31-year low it reached in early July, shortly after the June 23 vote to leave the EU. It was last down 0.9 percent at $1.2863.
USD/CAD is likely to find support at 1.3047 levels and is trading at 1.3098 levels. It has made intraday high at 1.3144 and lows at 1.3090 levels. The Canadian dollar gained slightly against its U.S. counterpart on Monday as U.S. crude oil prices climbed to their highest intraday level in nearly three months before some gains were pared. U.S. crude prices were up more than 1 percent, supported by a planned production cut by the Organization of Petroleum Exporting Countries, although analysts cautioned the persistent supply overhang could temper a longer-lasting rally. The Canadian dollar was last trading at C$1.3115 to the greenback, or 76.28 U.S. cents, slightly stronger than Friday's close of C$1.3117, or 76.24 U.S. cents. Canada's international merchandise trade report for August is due on Wednesday. Investors will be looking to see if exports can maintain the previous month's strength. The September employment report is due on Friday.
AUD/USD is supported around 0.7633 levels and currently trading at 0.7677 levels. It hit session high at 0.7680 and made session lows at 0.7653 levels. Australian dollar inched higher against US dollar on Monday as the Australian dollar was supported by rise in oil prices and risk sentiment improved after reports of Deutsche Bank's was negotiating a smaller fine with the U.S. Department of Justice. The Australian dollar inched towards $0.7671 in the late US session, having traded in a tight quarter-cent range so far. The currency briefly got above 77 cents last week but again failed to sustain the break, a repeat of price action seen for the last couple of months. Investors to await the Reserve Bank of Australia's (RBA) October policy meeting on Tuesday for some impetus. All of the 57 economists polled recently expect the RBA would stand pat on Tuesday, though a majority did still expect one more easing in coming months. Policy makers have been reluctant to ease further in part on concerns ever-lower rates would lead to a debt-driven bubble in home prices.
Equities Recap
European stock markets made minor gains on Monday as a rise in the shares of fund management companies in the wake of a large merger in the sector propped up markets.
UK's benchmark FTSE 100 closed up by 1.2 percent, the pan-European STOXX 600 index ended up 0.1 percent, France’s CAC finished the day up by 0.1 percent.
The fourth quarter got off to a weak start for U.S. stock investors on Monday, with banks and utilities pulling the S&P 500 lower.
Dow Jones closed down by 0.31 percent, S&P 500 ended down by 0.34 percent, Nasdaq finished the day down by 0.24 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday after data showed that U.S. factories ramped up activity in September, boosting expectations of economic growth before Friday's highly anticipated jobs report.
Benchmark 10-year notes were last down 5/32 in price in price to yield 1.62 percent, up from 1.61 percent late on Friday.
Commodities Recap
Gold prices slipped on Monday as the dollar gained on stronger-than-expected U.S. manufacturing data and investors awaited jobs data later this week for clues about whether U.S. interest rates would rise by the year-end.
Spot gold reversed gains to fall 0.3 percent to $1,311.54 an ounce by 3:03 p.m. EDT (1903 GMT), with volumes muted as China markets were closed for the National Day holidays from Oct. 1-9.
U.S. gold futures settled down 0.3 percent at $1,312.70 per ounce.
Oil rose more than 1 percent on Monday, with Brent settling above $50 a barrel the first time since August and U.S. crude hitting three-month highs, after Iran exhorted the need for other oil producers to join OPEC in supporting the market.
Brent settled up 70 cents, or 1.4 percent, at $50.89 a barrel. It was its first close above the key $50 mark since Aug. 19. Brent earlier reached a session peak of $51.14.
U.S. West Texas Intermediate (WTI) crude closed up 57 cents, or 1.2 percent, at $48.81. Prior to settlement, it hit $49.02, its highest since July 5.
