Market Roundup
•Mnuchin, Pelosi express hope for new stimulus bill
•U.S. private employment rises in September
•U.S. GDP final estimate shows steep contraction
• US Corporate Profits (QoQ) (Q2) -10.7%, -11.8% previous
• US GDP (QoQ) (Q2) -31.4%,-31.7%forecast,-5.0% previous
• Canada Jul GDP (MoM) 3.0%,3.0% forecast, 6.5% previous
• US Aug Pending Home Sales (MoM 8.8%,3.2% forecast, 5.9% previous
• US Crude Oil Inventories -1.980M,1.569M forecast, -1.639M previous
Looking Ahead - Economic Data (GMT)
•23:50 Japan Tankan All Small Industry CAPEX (Q3) -15.1% forecast, -16.5% previous
•23:50 Japan Tankan Large Manufacturers Index (Q3) -23 forecast, -34 previous
•23:50 Japan Tankan Large Non-Manufacturers Index (Q3) -9 forecast, -17 previous
•23:50 Japan Tankan All Big Industry CAPEX (Q3) 1.3% forecast, 3.2% previous
•00:30 Japan Sep Manufacturing PMI 47.3 forecast, 47.3 previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Fxbeat
EUR/USD: The euro declined against dollar on Friday as chaotic first U.S. presidential debate and rising COVID-19 cases. President Donald Trump and Democratic rival Joe Biden battled over Trump’s record on the coronavirus pandemic, healthcare and the economy in a bad-tempered first debate marked by personal insults and Trump’s repeated interruptions. Republican President Donald Trump and Democratic rival Joe Biden battled over Trump’s record on the coronavirus pandemic, healthcare and the economy in a bad-tempered first debate on Tuesday night marked by personal insults and Trump’s repeated interruptions of Biden.. Immediate resistance can be seen at 1.1768 (55DMA), an upside break can trigger rise towards 1.1800 (50%fib).On the downside, immediate support is seen at 1.1722 (38.2% fib ), a break below could take the pair towards 1.1693(Daily low).
GBP/USD: Sterling rallied in US trading on Wednesday as market makers adjusted their positions on the last day of the month and the third quarter. The pound, which had earlier weakened against both the U.S. dollar and the euro, changed course less than an hour before the 1600 GMT "fixing" time, when traders at major banks give their final reading of the currency. Sterling had edged lower at the start of the day after Britain's lower house of parliament approved legislation on Tuesday giving ministers the power to break its divorce agreement with the European Union. Immediate resistance can be seen at 1.2925(Daily high), an upside break can trigger rise towards 1.2955 (38.2% fib).On the downside, immediate support is seen at 1.2828 (38.2%fib), a break below could take the pair towards 1.2794 (5DMA).
USD/CAD: The Canadian dollar edged higher against its U.S. counterpart on Wednesday as domestic data showed the economy continuing to recover in recent months, with the loonie rebounding from an earlier 8-week low hit amid U.S. political uncertainty. The Canadian economy expanded by 3% in July as businesses across the country continued to reopen from coronavirus shutdowns, Statistics Canada said, with growth seen gaining at a slower 1% month-on-month pace in August. The Canadian dollar was trading 0.2% higher at 1.3366 to the greenback. The greenback was also boosted by quarter-end and month-end portfolio rebalancing. Demand for dollars tends to rise at the end of quarters as portfolio rebalancing and fund transfers require currencies like the euro and sterling to be converted to dollars. Immediate resistance can be seen at 1.3347 (5 DMA), an upside break can trigger rise towards 1.3438 (Daily high).On the downside, immediate support is seen at 1.3295 (11 DMA), a break below could take the pair towards 1.3249 (30 DMA).
USD/JPY: The dollar dipped against the Japanese yen on Wednesday as worries over growth abroad and U.S. political strife increased demand for yen. Tuesday's highly contentious debate between U.S. President Donald Trump and Democratic challenger Joe Biden boosted the dollar earlier, as it reinforced concerns that the outcome of the Nov. 3 presidential election could be contested. The dollar index was last trading little changed on the day at 93.90. The index hit a two-month high last Friday. The dollar fell 0.1% against the yen to 105.55. Strong resistance can be seen at 105.68 (38.2% fib), an upside break can trigger rise towards 105.87 (55 DMA).On the downside, immediate support is seen at 105.42 ( Daily low ), a break below could take the pair towards 105.00(Psychological level).
Equities Recap
European stocks slipped on Wednesday as surging coronavirus cases and a chaotic debate which underlined the risks from the U.S. presidential election sapped risk appetite at the end of a tumultuous month for financial markets.
UK's benchmark FTSE 100 closed down by 0.53 percent, Germany's Dax ended down by 0.51 percent, France’s CAC finished the day up by 0.59 percent.
U.S. stocks jumped on Wednesday as fresh hopes for a new pandemic relief package and upbeat economic data set the major indexes on course to end the quarter on a high note.
Dow Jones closed up by 1.20 percent, S&P 500 closed up by 0.83 percent, Nasdaq settled down by 0.74 percent.
Treasuries Recap
Demand for safe-haven Treasury debt waned on Wednesday, driving yields up, on some signs of progress in negotiations over a coronavirus stimulus bill, which is expected to be voted on in Congress later in the day.
The benchmark 10-year yield was last up 3.7 basis points to 0.682%, having earlier hit its highest since Sept. 10.
Commodities Recap
Gold fell on Wednesday and was on track for its biggest monthly decline in nearly four years, as the dollar benefited from caution that crept into financial markets after the first U.S. presidential debate.
Spot gold fell 0.7% to $1,883.62 per ounce by 0944 GMT, declining 4.3% so far in September, setting it up for its worst monthly performance since November 2016.U.S. gold futures were down 0.8% at $1,888.10 per ounce.
Global benchmark Brent crude pared losses Wednesday and the U.S. crude price rose on hopes that a U.S. economic stimulus deal would support the market, even as concerns about the coronavirus pandemic continued to loom over demand forecasts.
Brent crude for November delivery was up from its session low of $40.30 a barrel. It ended the session down 8 cents at $40.95 a barrel. West Texas Intermediate rose 93 cents, or 2.4% to $40.22 a barrel.
