Market Roundup
- Bank of Canada holds rates, but cuts 2016, 2017 growth forecasts, USDCAD rallies.
- China's Xi: there will be no hard landing, Chinese econ has entered 'new normal'.
- Citi cuts 2016 global economic growth forecast for 5th straight month, Oil stockpiles jump for second week as imports climb.
- Dollar gains vs emerging market currencies, Aussie, Kiwi on China/commodity woes.
- U.S. debt prices rise on global-economy worries, eye Thurs ECB meet.
- OPEC will keep oil output high, traders say.
- UK's Cameron says seals oil and gas deals worth over 12 billion pounds with China.
- Brazil inflation nears 10 pct in year to mid-October, rate expected to remain steady.
- Brazil opposition files new bid to impeach President Rousseff.
- Biden says he will not seek 2016 Democratic nomination.
Looking Ahead - Economic Data (GMT)
- 23:50 Japan Foreign Bond Investment w/e 1057.0b-previous
- 23:50 Japan Foreign Invest JP Stock w/e 521.1b-previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1318 levels and currently trading at 1.1338 levels. The pair has made session high at 1.1354 and hit lows at 1.1335 levels. The euro slipped marginally lower on Wednesday as trading slowed ahead of Thursday's meeting of the European Central Bank, which may put on hold its bond buying program. The euro declined against the dollar marginally lower in the session by hitting low at $1.1333, having gained to as much as $1.1354 in the earlier European session. The euro fell last week, losing almost 190 pips against the dollar, on speculation ECB chief Mario Draghi will signal an extension of the bank's 1 trillion-euro bond-buying programme or other easing measures. But data showed on Tuesday showed that euro zone banks had loosened their lending standards more than expected over the last few months despite global market volatility, suggesting growing confidence in the economy. That created some doubts Draghi will signal further action this week. To the upside, immediate resistance can be seen at 1.1360. To the downside, immediate support level is located at 1.1327 levels.
GBP/USD is supported in the range of 1.5400 levels and currently trading at 1.5418 levels. It reached session high at 1.5477 and hit session low at 1.5412 levels. Traders betting on a stronger pound failed to drive sterling above $1.55 on Wednesday, before a European Central Bank policy meeting on Thursday that has dominated trade for days. Speculation that the ECB would announce more stimulus to prop up a still-struggling euro zone economy, or at least point the way to that happening within months, weakened the euro at the start of this week. The single currency has recovered since, helped by a handful of cautious comments from ECB officials, leaving major currency markets struggling for direction. On the other hand, Fed policymakers considering the first hike in America's near-zero short term rates in nearly a decade meet next week after blunting widespread expectations of an increase in rates at the Federal Open Market's September session. Expectations of a rate hike next week are low but the FOMC's statement and economic assessments to be issued at the meeting's end on Oct. 28 often rattle markets. To the downside, immediate support level is located at 1.5383 levels. To the upside, immediate resistance can be seen at 1.5430.
USD/JPY is supported around 119.60 levels and currently trading at 119.93 levels. It hit session high at 120.08 and made session lows at 119.87 levels. The dollar rose against Japanese yen on Wednesday after Japanese trade data raised concerns about another recession in the world's third-largest economy.Japan's Ministry of Finance data showed exports rose just 0.6 percent in the year to September, against a 3.4 percent gain expected by economists. Shrinking Japanese sales to China, the world's second-largest economy, hurt the volume of shipments, while the data fed fears that weak overseas demand may have pushed the Japanese economy into recession. Wednesday's data was the first major indicator for September and is part of the calculation of third quarter gross domestic product. A third quarter contraction would put Japan into recession, following the second quarter's negative GDP result, and could force policy makers to offer further stimulus. The greenback, edged higher against the yen, rising 0.1 percent to 120 levels in the mid US session. To the upside, immediate resistance can be seen at 120.10. To the downside, immediate support level is located at 119.80 levels.
USD/CAD is supported at 1.3060 levels and is trading at 1.3136 levels. It has made session high at 1.3140 and lows at 1.3006 levels. The Canadian dollar hit its weakest level in more than two weeks against its U.S. counterpart on Wednesday after the Bank of Canada lowered its growth forecasts for 2016 and central bank held its key interest rate steady but said growth would be slower that previously forecast as lower prices for oil and other commodities was dampening business investment and exports in the resource sector. The Canadian dollar hit C$1.3116 cents, in the minutes after the bank's announcement. It was trading at C$1.3045, just before the news, and had settled on Tuesday at C$1.2982, or 77.03 U.S. cents. The push above C$1.31 was the currency's weakest showing since Oct. 6. The currency was also pulled lower on the day by a fall in crude oil prices. U.S. crude prices were down 2.35 percent to $45.20 a barrel. To the upside, immediate resistance can be seen at 1.3140. To the downside, immediate support level is located at 1.3100 levels.
Equities Recap
European shares crept higher on Wednesday as expectations of a positive close to the year and continued central bank support before an ECB meeting on Thursday helped investors to shrug off bad earnings news.
UK's benchmark FTSE 100 was flat at close, the pan-European FTSEurofirst 300 ended the day flat, Germany's Dax ended up 0.8 percent, France's CAC finished the day up by 0.4 percent.
US stocks slipped lower in choppy trading on Wednesday as insurers and other big healthcare names dropped and Yahoo shares fell following disappointing results.
Dow Jones closed down by 0.27 percent, S&P 500 ended down by 0.58 percent, Nasdaq finished the day down 0.84 percent.
Treasuries Recap
U.S. Treasuries prices rose on Wednesday, breaking a four-day run of losses, as stocks slipped, and disappointing Japanese export data dimmed prospects for a quick rise in U.S. interest rates by reviving worries about world economic growth.
The bellwether 10-year Treasury was up 12/32 in price and yielding 2.03 percent.
U.S. three-year Treasury notes were ahead 1/32 in price to yield 0.90 percent. U.S. five-year notes were up 4/32 and yielding 1.36 percent.
Commodities Recap
Oil prices fell about 2 percent to three-week lows on Wednesday as the U.S. government reported a bigger build than expected in crude stockpiles, although significant drawdowns in gasoline and distillates prevented a steeper slide in crude futures.
U.S. crude settled down $1.09, or 2.4 percent, at $45.20 a barrel. It hit a three-week low of $44.86 earlier.
Global oil benchmark Brent finished down 86 cents, or 1.8 percent, at $47.85 a barrel, after hitting an early October low of $47.50.
Gold fell almost 1 percent on Wednesday for its biggest oneday loss in three weeks on technical selling and long liquidation as the dollar recovered ground versus the euro amid uncertainty over the timing of a Federal Reserve interest rate hike.
Spot gold was down 0.8 percent at $1,167.6 an ounce at 3:34 p.m., EDT (1934 GMT),off a season high of $ 1,179.20.
US gold futures for December delivery settled down $10.0 an ounce, or 0.9percent, at $1,167.1
