Market Roundup
- U.S., China impose fresh tariffs with no trade talks in sight
- China to issue white paper on U.S. trade frictions - Xinhua
- OPEC, Russia rebuff Trump's call for immediate boost to oil output
- Accuser of Trump's Supreme Court nominee to testify on Thursday
- Britain's Labour to vote on keeping second Brexit referendum on table
- Canada PM says informal NAFTA talks likely in next few days at U.N.
- Indian refiners may reduce oil imports as crude prices soar, rupee struggles
- German govt agrees solution to spymaster crisis that threatened coalition
Economic Data Ahead
- (0400 ET/0800 GMT) Germany Sep Ifo Business Climate New, 103.2 f'cast, 103.8 prev
- (0400 ET/0800 GMT) Germany Sep Ifo Curr Conditions New, 106.1 f'cast, 106.4 prev
- (0400 ET/0800 GMT) Germany Sep Ifo Expectations New, 100.2 f'cast, 101.2 prev
- (0600 ET/1000 GMT) Great Britain Sep CBI Trends - Orders Net bal, 7 prev
Key Events Ahead
- N/A Roundtable with Nestor Espenilla, Governor of the Bangko Sentral NG Pilipinas in London
- (0900 ET/1300 GMT) ECB President Draghi speaks to the European Parliament's ECON committee in a regular hearing in Brussels
- (1130 ET/1530 GMT) Swedish Central Bank First Deputy Governor Kerstin af Jochnick talks about the Riksbank's history and on the development of money in Sundsvall, Sweden
- (1950 ET/2350 GMT) Bank of Japan releases minutes of monetary policy meeting held on July 30 and 31 in Tokyo
FX Beat
DXY: The dollar index rallied as President Donald Trump's second round of 10 percent tariffs covering $200 billion of Chinese exports come into effect later on Monday. The greenback against a basket of currencies trades 0.1 percent up at 94.33, having touched a low of 93.81 on Friday, its lowest since July 9. FxWirePro's Hourly Dollar Strength Index stood at -46.45 (Neutral) by 0500 GMT.
EU/USD: The euro eased, having retreated from a 3-month peak in the previous session, as the greenback surged ahead of this week's U.S. Federal Reserve meeting, where it is expected to provide further guidance on future rate hikes. The European currency traded 0.05 percent down at 1.1742 having touched a high of 1.1802 on Friday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 77.71 (Slightly) by 0500 GMT. Investors’ attention will remain on the Chicago Fed National Activity Index and Dallas Fed Manufacturing Business Index. Immediate resistance is located at 1.1820 (June 11 High), a break above targets 1.1852 (June 14 High). On the downside, support is seen at 1.1708 (5-DMA), a break below could drag it till 1.1662 (August 28 Low).
USD/JPY: The dollar steadied as investors look ahead to an almost certain rate hike from the Federal Reserve on Wednesday. However, the upside appears limited as investors reacted to news China had canceled trade talks with the United States. The major was trading flat at 112.58, having hit a high of 112.87 on Friday, its highest since July 19. FxWirePro's Hourly Yen Strength Index stood at -35.68 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Chicago Fed National Activity Index and Dallas Fed Manufacturing Business Index. Immediate resistance is located at 113.00, a break above targets 113.30 (Jan 5 High). On the downside, support is seen at 112.16 (September 19 Low), a break below could take it lower 111.91 (June 12 Low).
GBP/USD: Sterling steadied near a 1-week low touched in the previous session after British Prime Minister Theresa May stated that talks with the European Union hit an impasse after the EU leaders rejected her "Chequers" plan without any concrete reasons. The major traded flat at 1.3075, having hit a low of 1.3055 on Friday; it’s lowest since September 13. FxWirePro's Hourly Sterling Strength Index stood at -45.35 (Neutral) 0500 GMT. Investors’ attention will remain on UK Financial Policy Committee Statement, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3158 (5-DMA), a break above could take it near 1.3215 (September 19 High). On the downside, support is seen at 1.3000, a break below targets 1.2896 (September 10 Low). Against the euro, the pound was trading 0.05 percent up at 89.73 pence, having hit a low of 89.95 on Friday, it’s lowest since September 7.
AUD/USD: The Australian dollar slumped after China has snubbed the idea of any more trade talks with the U.S. and also summoned the U.S. ambassador in Beijing and postponed military talks in protest against a U.S. decision to sanction a Chinese military agency. The Aussie trades 0.4 percent down at 0.7255, having hit a high of 0.7303 on Friday; it’s highest since August 30. FxWirePro's Hourly Aussie Strength Index stood at 21.23 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7237 (August 24 Low), a break below targets 0.7213 (September 19 Low). On the upside, resistance is located at 0.7292 (September 30 High), a break above could take it near 0.7315 (August 30 High).
NZD/USD: The New Zealand dollar extended previous session losses, as the Reserve Bank of New Zealand is all but certain to hold rates steady and reinforce its dovish stance on policy on Thursday, amid concerns over a slump in business confidence, easing migration and a cooling housing market. The Kiwi trades 0.3 percent down at 0.6660, having touched a high of 0.6699 on Friday, its highest level since August 30. FxWirePro's Hourly Kiwi Strength Index was at 94.78 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6727 (August 28 High), a break above could take it near 0.6763 (August 8 High). On the downside, support is seen at 0.6634 (August 30 Low), a break below could drag it below 0.6593 (September 3 Low).
Equities Recap
Asian shares tumbled amid holiday-thinned trading as China's decision to cancel talks with the United States stoked fears of a protracted trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8 percent.
Australia's S&P/ASX 200 index declined 0.1 percent to 6,186.90 points, Hong Kong’s Hang Seng traded 1.8 percent lower at 27,435.26 points.
Commodities Recap
Crude oil prices surged over 1 percent, as U.S. markets tightened just weeks ahead of Washington's plan to impose new sanctions against Iran. International benchmark Brent crude was trading 1.4 percent up at $79.81 per barrel by 0503 GMT, having hit a high of $80.10 on Friday, its highest since May 22. U.S. West Texas Intermediate was trading 1.1 percent up at $71.60 a barrel, after rising as high as $71.77 on Friday, its highest since July 11.
Gold prices edged lower as the dollar steadied on news that China has cancelled trade talks with the United States, while investors eyed this week's U.S. Federal Reserve meeting for guidance on future rate hikes. Spot gold eased 0.1 percent to $1,197.528 by 0513 GMT, having hit a low of $1191.71 on Friday, its lowest since September 11. U.S. gold futures were unchanged at $1,200.60 an ounce.
Treasuries Recap
The Australian government bonds traded a little higher during Asian session after China canceled trade talks with the U.S. following a recent escalation in trade tensions. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 1 basis point to 2.706 percent, the yield on the long-term 30-year bond traded 1-1/2 basis points lower at 3.192 percent and the yield on short-term 2-year dipped 1-1/2 basis points to 2.096 percent.
The Canadian government bond prices were lower across the yield curve, with the 10-year falling 8 Canadian cents to yield 2.431 percent.
