Market Roundup
• Oil cools after red hot start the year
• Dollar climbs over 3.3% in best run since Q2 2018
• Canada Aug IPPI (MoM) 0.2%, 0.3% forecast, -0.3% previous
• Canada Aug IPPI (YoY) -1.0% forecast, -1.7% previous
• Canada Aug RMPI (MoM) -1.8%, 1.3% previous
• Canada Aug RMPI (YoY) -6.0%,-8.9% previous
• Brazil Aug Debt-to-GDP ratio 54.8%, 55.6% forecast, 55.8% previous
• Brazil Aug Budget Balance -63.644B, 53.750B forecast, -30.263B previous
• Brazil Aug Budget Surplus -13.450B, -16.690B-16.690B, -2.763B previous
• US Sep Chicago PMI 47.1, 50.2 forecast, 50.4 previous
• US Sep Dallas Fed Mfg Business Index 1.5, 2.7 previous
Looking Ahead - Economic Data (GMT)
• 21:00 New Zealand NZIER Business Confidence (Q3) -34% previous
• 21:00 New Zealand NZIER QSBO Capacity Utilization (Q3) 93.7% previous
• 23:30 Australia Sep AIG Manufacturing Index 53.1 previous
• 23:00 Australia Manufacturing PMI 49.4 forecast, 50.9 previous
• 23:30 Japan Aug Jobs/applications ratio 1.58 forecast,1.59 previous
• 23:30 Japan Aug Unemployment Rate 2.3% forecast, 2.2% previous
• 23:50 Japan Tankan All Big Industry CAPEX (Q3) 7.0% forecast,7.4% previous
• 23:50 Japan Tankan Big Manufacturing Outlook Index (Q3) 1 forecast, 7 previous
• 23:50 Japan Tankan Large Manufacturers Index (Q3) 2 forecast, 7 previous
• 23:50 Japan Tankan Large Non-Manufacturers Index (Q3) 20 forecast, 23 previous
• 01:30 Australia Aug Building Approvals (MoM) 2.1%, forecast, -9.7% -9.7% previous
• 04:30 Australia Oct RBA Interest Rate Decision 0.75% forecast, 1.00% previous
Looking Ahead - Economic Data (GMT)
• 01:00 Canada BoC Gov Council Member Lane Speaks
• 04:30 Australia RBA Rate Statements
• 12:30 US FOMC Member Clarida Speaks
• 13:30 US FOMC Member Bowman Speaks
• 16:65 Eurozone ECB President Draghi Speaks
Currency Summaries
EUR/USD: The euro slipped to two and a half year low against the U.S. dollar on Monday, as concerns about euro zone growth weighed on the single currency, while the greenback benefited from seasonal demand and uncertainty arising from the U.S.-China trade war. German annual inflation unexpectedly slowed for the third consecutive month in September, data showed on Monday. The euro was down 0.37 percent at $1.0900. An index that tracks the dollar versus a basket of six major currencies was down 0.27 at 99.40. Immediate resistance can be seen at 1.0948 (5 DMA), an upside break can trigger rise towards 1.1006 (21 DMA).On the downside, immediate support is seen at 1.0885 (Daily low), a break below could take the pair towards 1.0800 (Psychological level).
GBP/USD: The British pound edged higher against greenback on Monday, as pound shrugged off data pointing to a contraction in the UK economy as investor attention remained focused on Brexit news flow. Data showing the economy contracted at a 0.2% quarterly rate, but grew by 1.3% in the year to June 30. That was higher than estimates for 1.2%, implying continued support from household spending.The pound did not react to the data, given that there have been few signs of progress in breaking the Brexit deadlock with the European Union.By 2017 (GMT),the pound was trading higher 0.08 percent higher against dollar at $1.2293 in the late US session. Immediate resistance can be seen at 1.2348 (21 DMA), an upside break can trigger rise towards 1.2442 (100 DMA).On the downside, immediate support is seen at 1.2263 (50 DMA), a break below could take the pair towards 1.2200 (Psychological level).
USD/CAD: The Canadian dollar was little changed against broadly stronger U.S. counterpart on Monday, as the party of Canadian Prime Minister Justin Trudeau promised billions of dollars of new spending in a campaign platform ahead of next month's federal vote. Trudeau's Liberal Party, which is in a tough battle for re-election, said on Sunday that new spending commitments would require annual deficits of more than C$20 billion over the next four years. The Canadian dollar was trading nearly unchanged at 1.3252 to the greenback, or 75.46 U.S. cents. The currency, which was on track to rise 0.4% for the month, traded in a range of 1.3225 to 1.3260.Immediate resistance can be seen at 1.3258 (9 DMA), an upside break can trigger rise towards 1.3299 (200 DMA).On the downside, immediate support is seen at 1.3227 (Daily low), a break below could take the pair towards 1.3200 (Psychological level).
USD/JPY: The dollar strengthened against Japanese yen on Monday, as uncertainty over the U.S.-China trade war encouraged investors to move into the safety of the greenback. Traders have mostly shrugged off news that the Trump administration was considering de-listing Chinese companies from U.S. stock markets after the reports were hosed down by Treasury officials, but investor sentiment remains fragile. Worries that negotiations between China and the United States will not lead to a trade deal, and deepening political uncertainty in the United States after the start of an impeachment inquiry into President Donald Trump, have unnerved investors and boosted demand for dollars. Strong resistance can be seen at 108.18 (38.2% retracement level), an upside break can trigger rise towards 109.00 (Psychological level).On the downside, immediate support is seen at 108.07 ( 9 DMA), a break below could take the pair towards 107.48 (21 DMA).
Equities Recap
European shares rose on Monday, with a higher open on Wall Street bolstering gains later in the session, while exporters were helped by a decline in the value of the euro.
The UK's benchmark FTSE 100 closed down by 0.24 percent, Germany's Dax ended up by 0.38 percent, and France’s CAC finished the up by 0.66 percent.
U.S. stocks rose on Monday, helped by gains in Apple, Microsoft and Merck & Co as investors set aside worries about the U.S.-China trade war.
Dow Jones closed up by 0.36 percent, S&P 500 ended up 0.50 percent, Nasdaq finished the day up by 0.75 percent.
Treasuries Recap
Longer-dated U.S. Treasury yields rose faster than those at the short end of the yield curve on Monday morning as trade concerns, among other factors, decreased investor appetite for risk.
The two-year note yield was up 0.2 basis point to 1.626%, with the benchmark 10-year note yield up 1.4 basis points to 1.687%. The moves widened the spread between the two- and 10-year note yields - the traditional measure of the yield curve - to 5.7 basis points.
Commodities Recap
Gold fell on Monday as uncertainties around the U.S.-China trade war drove some investors to the safety of the dollar, pressuring assets priced in the U.S. currency.
Spot gold fell 0.4% to $1,490 per ounce at 0743 GMT, after prices hit $1,486.60 in the previous session, their lowest since Sept. 18. U.S. gold futures dipped 0.6% to $1,496.60 per ounce.
Oil prices slipped as the trade war continued to weigh on the growth outlook for China, the world’s largest crude importer. Brent crude futures fell 1.3% to $61.47 a barrel, while U.S. crude dropped 0.9% to $55.43.
