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Americas Roundup: Dollar lower on weaker than expected retail sales data, Wall Street falls,Gold rises to 2-1/2-mth high on sliding equities, Oil steadies as Saudi tensions balance demand outlook-Oct 16th,2018

Market Roundup

• US Sep Retail Sales m/m, 0.1%, 0.6% forecast ,0.1% previous.

• US Sep Retail Sales Ex-Autos m/m, -0.1%, 0.4% forecast, 0.3% previous, 0.2% revised.

• US Sep Retail Control, 0.5%, 0.4% forecast ,0.1% previous, 0.0% revised.

• US Aug Business Inventories m/m, 0.5%, 0.5% forecast , 0.6% previous, 0.7% revised.

• US Oct NY Fed Manufacturing, 21.10, 19.00 forecast, 19.00 previous.

• U.S. federal government posts widest deficit since 2012.

• Italian cabinet to approve budget on Tuesday as EU, markets fret.

• Global FDI falls 41 pct in H1 2018 after Trump tax reforms - 

• CA Q3 Business Outlook Future Sales Growth, 15%, 6% previous


• EU's Tusk says "let's not give up" on Brexit, but warns of no deal


• Mexico discussed concerns over Canada steel tariffs with Ottawa -source
• Brazil's real, Mexican peso firm as dollar weakens

Looking Ahead - Economic Data (GMT) 

• 15 Oct 21:45 New Zealand Q3 CPI QQ, 0.4% previous, 0.7% forecast 

• 15 Oct 21:45 New Zealand Q3 CPI YY, 1.5% previous, 1.7% forecast

• 16 Oct 01:30 China Sep PPI YY, 4.1% previous, 3.5% forecast

• 16 Oct 01:30 China Sep CPI YY, 2.3% previous, 2.5% forecast

• 16 Oct 01:30 China Sep CPI MM, 0.7% previous, 0.7% forecast

Looking Ahead - Events, Other Releases (GMT) 

• 11:00 German Finance Minister Olaf Scholz speaks to the foreign press association (VAP) on a range of issues in Berlin

• 20:15 San Francisco Fed's Mary Daly gives lecture at Wellesley College in Wellesley, Massachusetts

Currency Summaries
EUR/USD is likely to find support at 1.1456 levels and currently trading at 1.1578 levels. The pair has made session high at 1.1605 and hit lows at 1.1573 levels. The euro strengthened against dollar on Monday ,as rising geopolitical tension and further falls in equity markets kept investors away from the market. European stocks sunk to 22-month lows amid rising tensions between Saudi Arabia and the West after the monarchy warned against trying to punish it for the disappearance of a journalist critical of its regime.That added to a number of concerns for markets globally, including rising oil prices, the ongoing Sino-U.S. trade dispute and a humbling election defeat for Chancellor Angela Merkel's conservative Bavarian allies. Merkel's allies suffered their worst election result since 1950 on Sunday, in a setback that raised tensions within the country's crisis-prone national government . the euro's fortunes over the next few days would be determined in part by the Italian government's annual budget, which the cabinet is due to approve later on Monday .The euro, was little fazed. It rose 0.3 percent to $1.1592 against the dollar as the greenback sold off against a basket of currencies.

GBP/USD is supported in the range of 1.3082 levels and currently trading at 1.3151 levels. It reached session high at 1.3168 and dropped to session low at 1.3125 levels. Britain's pound edged lower against the dollar on Monday as traders approached with more caution before a crucial European Union summit later this week. Less than six months before Britain leaves the bloc negotiators from both sides are trying to overcome the biggest hurdle to a deal - how to keep the UK frontier with the Irish Republic free of border checks after Britain leaves the EU in March. Prime Minister Theresa May said she believed a deal was achievable and urged the EU on Monday not to allow a stand-off over the so-called Irish backstop to derail the talks. But no agreement is in sight.EU negotiator Michel Barnier said a gap still needed to be bridged between his "backstop" demands that Northern Ireland stay in the EU's economic zone and London's rejection of any checks on trade between the province and the British mainland. The pound fell to $1.3080 on Monday, its lowest in almost a week, the currency traded down 0.1 percent. Against the euro it weakened by a similar margin to 88.25 pence.

USD/CAD is supported at 1.2923 levels and is trading at 1.2983 levels. It has made session high at 1.3049 and lows at 1.2953 levels. The Canadian dollar strengthened to hit 5-days high against its U.S. counterpart on Monday , after a quarterly business survey by the Bank of Canada supported bets for another interest rate hike from the central bank as soon as next week. Canadian business optimism remained at near-record levels in the third quarter as companies reported rising pressure on capacity, labor and prices amid signs of stronger sales, the Bank of Canada said. The central bank has hiked interest rates four times since July 2017 to leave its policy rate at 1.50 percent. Chances of another hike at the Oct. 24 announcement stayed at nearly 90 percent after the data, the overnight index swaps market indicated. Last week, the loonie declined 0.6 percent as worries over higher bond yields and the impact of trade tariffs contributed to volatility in global financial markets. The Canadian dollar   was trading 0.4 percent higher at 1.2968 to the greenback, or 77.11 U.S. cents. The currency touched its strongest since Oct. 10 at 1.2955.
USD/JPY is supported around 111.60 levels and currently trading at 111.83 levels. It peaked to hit session high at 111.92 and made session lows at 111.65 levels. The dollar weakened against the Japanese yen on Monday as lower-than-expected US retail sales weakened the greenback . U.S. retail sales barely rose in September as a rebound in motor vehicle purchases was offset by the biggest drop in spending at restaurants and bars in nearly two years. Retail sales edged up only 0.1 percent in the month. Economists polled had forecast an increase of 0.6 percent. It comes after data last week showed that U.S. consumer prices rose less than expected in September, held back by a slower increase in the cost of rent and falling energy prices, as underlying inflation pressures appeared to cool. Global stocks were under pressure, with European shares hitting 22-month lows on the back of a raft of factors including a U.S.-China trade dispute, rising tensions between Saudi Arabia and western powers, stalled Brexit negotiations and concerns over an economic slowdown in China. The yen rose as much as half a percent to 111.60, its strongest since Sept. 13.

Equities Recap

European shares hit their lowest level since December 2016 in early trading after as trade wars, rising U.S. yields, Brexit and the Italy/EU budget row continued to weigh on markets, before recovering modestly to end the day up 0.1 percent.

UK's benchmark FTSE 100 closed up by 0.5 percent, the pan-European FTSEurofirst 300 ended the day up by 0.27 percent, Germany's Dax ended up by 0.9 percent, France’s CAC finished the day up by 0.1 percent.

U.S. stocks ended lower in a choppy trading session on Monday as technology stocks were pressured by lingering worries over interest rates and corporate earnings..
Dow Jones closed down by 0.37 percent, S&P 500 ended down by 0.59 percent, Nasdaq finished the day down by 0.87percent.

Treasuries Recap

U.S. Treasury yields rose on Monday despite stock market volatility stemming from rising borrowing costs and geopolitical risks, while the outlook for U.S. economic growth was tempered by weaker-than-expected data on domestic retail sales.

The yield on 10-year Treasury notes was up 1.5 basis points at 3.156 percent, while the 30-year yield climbed by the same increment to 3.332 percent.

Commodities Recap

Gold rose to its highest level in 2-1/2 months on Monday as a slide in global stock markets, exacerbated by mounting tensions between Western powers and Saudi Arabia, forced investors to find safety and unwind some bearish bets in the metal.

Spot gold gained 0.7 percent to $1,226.50 per ounce by 2:22 p.m. EDT (1822 GMT), having earlier climbed more than 1 percent to touch a peak of $1,233.26, the highest since July 26. U.S. gold futures settled up $8.3, or 0.68 percent, at $1,230.3.

Oil prices steadied on Monday, supported by geopolitical tension over the disappearance of a Saudi journalist that has stoked worries about supplies from Riyadh, but weighed by concern over long-term demand outlook.
Brent crude futures for December delivery rose 35 cents to settle at $80.78 a barrel.

U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 44 cents to settle at $71.78 a barrel.Last week, both contracts fell by more than 4 percent as U.S. stock markets tumbled.
 

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