Market Roundup
- U.S. Sept factory orders fall 1.0 pct vs Rtrs f/c -0.9% for second month.
- SF Fed paper 'Are Wages Useful in Forecasting Price Inflation?' lifts hike sentiment, FF futures still price 50/50 chance for hike Draghi says ECB to review policy in December, willing and able to act.
- SNB's Jordan reiterates policy (neg rates/intervention) to weaken significantly overvalued franc.
- Fonterra dairy prices fall 7.4%, volumes drop at auction -NZ's Fonterra.
- Gold extends slide for fifth session, hits four-week low.
- Copper steadies, looking for clues to Chinese demand.
- U.S. yields keep climbing on Dec. Fed rate hike bets .
- Euro zone yields dip as markets expect Draghi to remain dovish.
- Chile's Vergara: 12-month inflation could drop below 4 pct, before rising again.
Looking Ahead - Economic Data (GMT)
- 21:45 New Zealand HLFS Unemployment Rate* Q3 forecast 6%, 5.9%-previous
- 21:45 New Zealand HLFS Job Growth QQ* Q3 forecast 0.4%, 0.3%- previous
- 21:45 New Zealand HLFS Participation Rate* Q3 forecast 69.3%, 69.3%- previous
- 21:45 New Zealand Labour Cost Index - QQ* Q3 forecast 0.5%, 0.5%- previous
- 21:45 New Zealand Labour Cost Index - YY* Q3 forecast 1.9%, 1.8%- previous
- 22:30 Australia AIG Services Index Oct 52.3- previous
- 0:30 Australia Retail Sales MM* Sep forecast 0.4%, 0.4%- previous
- 00:30 Australia Retail Trade* Q3 forecast 0.7%, 0.8%- previous
- 00:30 Australia Trade Balance G&S (A$)* Sep forecast -3000m, -3095m- previous
- 00:30 Australia Goods/Services Imports* Sep 1%- previous
- 00:30 Australia Goods/Services Exports* Sep 0%-previous
- 05:00 Japan Consumer Confidence. Index* Oct 40.6-previous
- 01:45 China Caixin Services PMI Oct 50.5-previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currencies Summary
EUR/USD is likely to find support at 1.0890 levels and currently trading at 1.0963levels. The pair has made session high at 1.0968 and hit lows at 1.0936 levels. The dollar rose against euro on Tuesday as a jump in U.S. bond yields and generally in-line U.S. economic data buoyed the view that the Federal Reserve may raise interest rates in December. Shorter-dated U.S. Treasuries yields climbed to their highest levels in more than six weeks on continued bets that Friday's U.S. payrolls data for October would be strong enough for the Fed to hike rates at the end of the year. After a bout of profit-taking and risk aversion last week, the greenback rose 0.62 percent to trade at $1.0945 against the euro and 0.34 percent against the yen to 121.16 yen per dollar. The dollar gained 0.17 percent against the pound to $1.5388 and 0.51 percent versus the Swiss franc to 0.9913 francs. To the upside, immediate resistance can be seen at 1.0980. To the downside, immediate support level is located at 1.0930 levels.
GBP/USD is supported in the range of 1.5378 levels and currently trading at 1.5423 levels. It reached session high at 1.5439 and dropped to session low at 1.5357 levels. Sterling survived a rocky session versus the dollar on Tuesday to hold near 10-week highs against a basket of currencies and gain ground against the euro, shrugging off data that showed growth in the British construction sector slowing. Super Thursday has become a quarterly focus for UK markets, with the simultaneous release of the Bank of England's latest quarterly Inflation Report as well as an interest rate decision and the minutes from its latest Monetary Policy Committee (MPC) meeting.The central bank is expected to keep interest rates at their historic lows, with most economists expecting only MPC hawk Ian McCafferty to continue to vote for an immediate hike. But some reckon another of the nine MPC members could join him, with Kristin Forbes and Martin Weale seen as most likely. To the upside, immediate resistance can be seen at 1.5461. To the downside, immediate support level is located at 1.5445 levels.
USD/JPY is supported around 120.50 levels and currently trading at 120.97 levels. It peaked to hit session high at 121.21 and made session lows at 120.93 levels. Japanese yen traded slightly higher against US dollar on Tuesday, after U.S New orders for U.S. factory goods fell for a second straight month in September as the manufacturing sector continues to struggle under the weight of a strong dollar and deep spending cuts by energy companies. The Commerce Department said new orders for manufactured goods declined 1.0 percent after a downwardly revised 2.1 percent drop in August. Factory orders were previously reported to have declined 1.7 percent in August. The dollar rose to a near 12-week high against a basket of currencies on the data, while prices for U.S. government debt fell. U.S. stocks were higher. To the upside, immediate resistance can be seen at 121.12. To the downside, immediate support level is located at 120.85 levels.
USD/CAD is supported at 1.3000 levels and is trading at 1.3055 levels. It has made session high at 1.3068 and lows at 1.3036 levels. The Canadian dollar edged higher against U.S. counterpart on Tuesday, in the backdrop of rising oil prices as investors await comments from a string of U.S. Federal Reserve officials that could strengthen the case for a December rate hike there. Fed Chair Janet Yellen will testify to U.S. Congress on Wednesday, while four other members will make public appearances on the same day. The Fed surprised markets late last month with a specific reference to possibly tightening monetary policy at their December meeting. the Canadian dollar was trading at C$1.3058 to the greenback, , weaker than Monday's close of C$1.3099, or 76.34 U.S. cents. It also made gains versus other key currency counterparts. The currency's strongest level of the session was C$1.3169, while its weakest level was C$1.3036. To the upside, immediate resistance can be seen at 1.3074. To the downside, immediate support level is located at 1.3038levels.
Equities Recap
European shares recovered from a weak start on Tuesday, buoyed by a rise on Wall Street, though weak earnings from Standard Chartered and UBS dampened sentiment in the banking sector.
UK's benchmark FTSE 100 closed up by 0.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.3 percent, Germany's Dax ended down by 0.1 percent, France's CAC finished the day up by 0.2 percent.
A fifth straight day of gains for energy shares drove U.S. stocks higher on Tuesday, while big tech names also helped propel the major indexes.
Dow Jones closed up by 0.51 percent, S&P 500 ended up by 0.28 percent, Nasdaq finished the day up by 0.35 percent.
Treasuries Recap
U.S. benchmark and short-dated Treasury yields hit over six-week highs on Tuesday on continued expectations of a December Federal Reserve interest rate hike, while surging corporate issuance contributed to long-dated yields touching six-week highs.
U.S. two-year notes were last down 1/32 in price to yield 0.7698 percent after hitting a session high of 0.7780 percent and ending Monday at 0.7530 percent.
U.S. five-year notes were last down 4/32 to yield 1.5958 percent after hitting a session high of 1.6020 percent and ending Monday at 1.5640 percent.
Commodities Recap
Gold fell nearly 2 percent to a four-week low on Tuesday, sliding for a fifth straight session as prices came under pressure from a rising dollar and speculation that the U.S. Federal Reserve may lift interest rates this year.
Spot gold was down 1.7 percent at $1,114.70 an ounce at 1:54 p.m. EST (1854 GMT), its biggest drop in 3-1/2 months, having earlier touched its lowest since Oct. 2 at $1,114.10.
U.S. gold futures for December delivery settled down 1.9 percent at $1,114.10 an ounce.
Crude prices rose about 4 percent on Tuesday as a rally in U.S. gasoline and diesel amid an outage on key pipeline system added support to oil markets already boosted by an industry strike in Brazil and force majeure for Libyan crude loadings.
Brent settled up $1.75, or 3.6 percent, at $50.54 a barrel, after hitting a session high at $50.91.
U.S. crude finished up $1.76, or 3.8 percent, at $47.90. The day's peak was $48.36.
