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Americas Roundup: Dollar index falls to lowest in over a week, Gold extends gains after latest Fed meeting minutes, Wall Street ends at record highs, Oil prices settle up on demand forecasts, Kurdistan tensions-October 12th, 2017


Market Roundup

• US JOLTS Job Openings Aug, 6.082M, 6.125M forecast, 6.170M previous.

• US TR IPSOS PCSI Oct, 59.83, 60.77 previous.

• US Redbook MM 2 Oct, w/e, -1.5%, 0.0 previous.

• US Redbook YY 2 Oct, w/e, 3.2%, 4.1% previous.

• CA TR IPSOS PCSI Oct, 55, 54.33 previous.

• Fed split on inflation intensified at Sept policy meeting –minutes.

• Fed's Evans cautious on rate hikes.

• Fed's Williams 'discouraged' on prospects for tax reform.

• Three-quarters of Americans favor higher taxes for wealthy -Reuters/Ipsos poll.

• Trump says could envision trade deal with Canada without Mexico.

Looking Ahead - Economic Data (GMT)

• 03:15 New Zealand Food Prices Index Sep, 0.6% previous

• 05:20 Japan Corp Goods Price MM Sep, 0.2% forecast, 0.0 previous

• 05:20 Japan Corp Goods Price YY Sep, 3.0% forecast, 2.9% previous

• 06:00 Australia Housing Finance Aug, 0.5% forecast, 2.9% previous

• 06:00 Australia Invent Housing Finance Aug, -3.9% previous

Looking Ahead - Events, Other Releases (GMT)

• 14:30 Fed’s Jerome Powell speaks at the Institute for International Finance Spotlight

• 14:30 Fed’s Lael Brainard participates in a Conference, Washington

• 19:45 BoE’s Andy Haldane is part of a panel at a conference, Washington

• 14:30 ECB President Mario Draghi in a conference organized by IMF

• 14:30 Speech by ECB’s Peter Praet at JPMorgan Investor Seminar in Washington

• 16:00 Outgoing German Finance-Minister Wolfgang Schauble speaking at the IIF

• N/A BoE’S Mark Carney participates in IMF meetings, Washington

• N/A ECB board member Benoit Coeure participates in G20 Deputies meeting

• N/A IMF’S Christine Lagarde and WB’s Jim Yong Kim hold G20 news conferences 

Currency Summaries

EUR/USD is likely to find support at 1.1800 levels and currently trading at 1.1852 levels. The pair has made session high at 1.1857 and hit lows at 1.1829 levels. Euro inched higher against the dollar on Wednesday as the dollar eased after minutes from the Federal Reserve's September policy meeting were in line with expectations, while the euro was higher after Catalonia held off on moving to independence.The euro move helped push the dollar index down for the fourth day in row. The dollar briefly extended its drop after Fed minutes showed that policymakers had a prolonged debate about the prospects of a pickup in inflation and the path of future interest rate rises if it did not. The euro reached a roughly two-week high after Catalonia's leader, Carles Puigdemont, declined to make a formal independence declaration on Tuesday to allow for talks with Madrid. That disappointed many pro-independence supporters but pleased financial markets. The dollar was also affected by U.S. President Donald Trump's spat with Tennessee Senator Bob Corker an influential fellow Republican which raised concerns that Trump's tax reform push may be in jeopardy. The dollar index fell 0.33 percent, while the euro was up 0.4 percent at $1.1853.

GBP/USD is supported in the range of 1.3127 levels and currently trading at 1.3214 levels. It reached session high at 1.3227 and dropped to session low at 1.3169 levels. Sterling steadied against the dollar on Wednesday as investors grew concerned on whether entrenched expectations of higher UK interest rates were reasonable given a backdrop of uncertain Brexit negotiations. Noises around Brexit negotiations grew louder after finance minister Philip Hammond declared the government was planning for all possibilities, including Britain's leaving with no agreement on the terms of its departure. However, that had little impact on sterling with the currency hemmed in tight trading ranges as investors worried that a sharp turnaround in sterling in the currency markets to net long positions may come under pressure. Sterling was slightly trading higher at $1.3225 in the late US session. It briefly hit a day's low of $1.3176 after Hammond's comments. Despite falling projections for British economic growth, futures markets are pricing in 50 basis points of Bank of England rate increases over the next year IRPR, the most in the developed world apart from Canada.But the outlook appeared fragile, with some market watchers including such as Morgan Stanley preferring to sell sterling on rallies on Brexit worries.

USD/CAD is supported at 1.2448 levels and is trading at 1.2476 levels. It has made session high at 1.2478 and lows at 1.2472 levels. The Canadian dollar strengthened against its U.S. counterpart on Wednesday as oil prices rose and the greenback dipped against a basket of major currencies. Prices of oil, one of Canada's major exports, rose for a third day as the Organization of the Petroleum Exporting Countries said the market was gradually tightening after years of oversupply, but that the 2018 outlook was less certain. The uncertainty that President Donald Trump would push through his planned tax reforms pressured the U.S. dollar, while relief that Catalonia had stopped short of formally declaring independence from the rest of Spain boosted the euro. The loonie got a boost on Tuesday from domestic housing starts data that showed less softening than investors had expected, while data on Friday showing a pickup in wages calmed worries that the economy will slow in the second half of the year.But renegotiation of the North American Free Trade Agreement, under which Canada sends about 75 percent of its exports to the United States, could weigh on the currency.The Canadian dollar was last trading at C$1.2459 to the greenback, or 80.05 U.S. cents, its strongest level of the day. It was up 0.2 percent. 

USD/JPY is supported around 112.00 levels and currently trading at 112.46 levels. It peaked to hit session high at 112.58 and made session lows at 112.06 levels. The U.S. dollar declined against the Japanese yen on Wednesday as the dollar weakened after the U.S. Federal Reserve's latest minutes hinted policy-makers are open to an interest rate increase in December despite concerns about weak inflation. Several Fed officials expressed they would like more inflation data in the next few months when deciding on future rate hikes. That view within the Fed raised some doubts among traders that a third rate increase in 2017 would be a sure thing, though it has largely been priced into the futures market. The U.S. central bank should gradually increase interest rates over the next two years, bringing the federal funds rate to 2.5 percent, said San Francisco Fed President John Williams, separately at an event in Utah. Consumer price data on Friday will be scrutinized for confirmation of higher prices, though many analysts have said that data is muddied by recent hurricanes. Adverse weather is seen as having impeded lower-income workers from getting to work more than it did higher-income workers.

Equities Recap

Spanish shares rebounded sharply in a flat European market on Wednesday on hopes that a big political crisis in the euro zone's fourth-largest economy could de-escalate after Catalonia stopped short of declaring formal independence from Madrid.

UK's benchmark FTSE 100 closed down by 0.08 percent, the pan-European FTSEurofirst 300 ended the day down by 0.01 percent, Germany's Dax ended up by 0.18 percent, France’s CAC finished the day down by 0.04 percent.

Major stock indexes rose slightly on Wednesday though internally the S&P 500 showed a strong move toward so-called defensive sectors, while stocks reacted mutedly to the minutes of the most recent Federal Reserve policy meeting.

Dow Jones closed up by 0.17 percent, S&P 500 ended up by 0.17percent, Nasdaq finished the day up by 0.24 percent.

Treasuries Recap

U.S. Treasury prices were little changed on Wednesday after minutes from the Federal Reserve’s September meeting were in line with expectations and after the Treasury Department saw solid demand for three-year and 10-year note supply.

Benchmark 10-year notes were last up 2/32 in price to yield 2.339 percent, down from 2.345 percent on Tuesday.

Commodities Recap

Gold extended gains after September minutes from the U.S. Federal Reserve showed policymakers debated the prospects of a pickup in inflation and the path of future interest rate rises if it did not.

Spot gold was up 0.4 percent at $1,292.88 per ounce by 3:43 p.m. EDT (1943 GMT), while U.S. gold futures for December delivery settled down $4.90, or 0.4 percent, at $1,288.90 per ounce, prior to the release of the minutes.

Oil prices rose for the third day on Wednesday as OPEC forecast higher demand for 2018 and heightened tensions in Kurdistan supported prices.

Brent crude futures rose 33 cents, or 0.6 percent, to settle at $56.94 per barrel. Brent rose 2 percent the previous day.

U.S. West Texas Intermediate (WTI) crude futures CLc1 rose 38 cents, or 0.8 percent, to $51.30 a barrel.

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October 23 07:00 UTC Released

TRConsumer Confidence*

Actual

67.30 %

Forecast

Previous

68.70 %

October 23 01:30 UTC Released

CNChina House Prices YY*

Actual

6.3 %

Forecast

Previous

8.3 %

October 23 10:00 UTC 2828m

GBCBI Trends - Orders

Actual

Forecast

9 Mln ARS

Previous

7 Mln ARS

October 23 12:30 UTC 178178m

FRBusiness Climate

Actual

Forecast

Previous

1.5 %

October 23 12:30 UTC 178178m

FRMarkit Mfg Flash PMI

Actual

Forecast

Previous

-0.31 bln $

October 23 12:30 UTC 178178m

USNational Activity Index

Actual

Forecast

Previous

-0.31 %

October 23 12:30 UTC 178178m

CAWholesale Trade MM

Actual

Forecast

0.6 %

Previous

1.5 %

October 23 14:00 UTC 268268m

EZConsumer Confid. Flash

Actual

Forecast

-1.1 %

Previous

-1.2 %

October 24 00:30 UTC 898898m

JPNikkei Mfg PMI Flash

Actual

Forecast

Previous

52.9 bln $

October 24 06:45 UTC 12731273m

FRBusiness Climate

Actual

Forecast

110 %

Previous

110 %

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