Market Roundup
- Oil prices fall as supply risk premium fades
- US-China trade talks to resume on October 10-11
- China's August industrial profits fall
- Gold set for a weekly loss
Economic Data Ahead
- (0500 ET/0900 GMT) Euro Zone Business Climate September
- (0500 ET/0900 GMT) Euro Zone Economic Sentiment Indicator September
- (0500 ET/0900 GMT) Euro Zone Industrial Confidence September
- (0500 ET/0900 GMT) Euro Zone Services Sentiment September
- (0500 ET/0900 GMT) Euro Zone Consumer Confidence September
Key Events Ahead
- (0315 ET/0715 GMT) European Central Bank Vice President Luis De Guindos' speech
FX Beat
DXY: The dollar index rose, hovering towards a 3-week peak hit in the prior session after China’s top diplomat stated that China was willing to buy more U.S. products and trade talks would yield results if both sides take co-operated to resolve the trade dispute. The greenback against a basket of currencies traded up at 99.23, having touched a high of 99.28 on Thursday, its highest since September 3.
EUR/USD: The euro plunged to a fresh near 2-1/2 year low, as the resignation of Sabine Lautenschlaeger from the European Central Bank’s board amplified doubts around the sustainability of the bank’s stimulus measures. Moreover, concerns about sluggish growth in the bloc and rising fear of recession in Germany further dented the bid tone around the major. The European currency traded flat at 1.0919, having touched a low of 1.0904 earlier, its lowest since May 2017. Investors’ attention will remain on series of data from the Eurozone economies, EZ economic sentiment data and European Central Bank Vice President Luis De Guindos' speech, ahead of the U.S. durable goods, personal consumption expenditures- price index, and Fed officials' speeches Immediate resistance is located at 1.0953 (23.6% retracement of 1.1055 and 1.0904), a break above targets 1.0983 (38.2% retracement). On the downside, support is seen at 1.0885, a break below could drag it below 1.0830.
USD/JPY: The dollar edged lower, halting a 2-day rally as the release of a whistleblower complaint against U.S. President Donald Trump added to uncertainties about the global economy. The major was trading 0.1 percent down at 107.75, having hit a low of 107.04 on Tuesday, its lowest since September 9. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. durable goods, personal consumption expenditures- price index, and Fed officials' speeches. Immediate resistance is located at 108.25 (September 13 High), a break above targets 108.53 (July 1 High). On the downside, support is seen at 107.34 (21-DMA), a break below could take it near at 106.76 (September 6 Low).
GBP/USD: Sterling steadied after tumbling to a 2-week low in the previous session after the European Union’s Brexit negotiator said Britain had yet to provide legal and operational proposals for an agreement on exiting the bloc. The major traded 0.1 percent up at 1.2328, having hit a low of 1.2302 on Thursday, it’s lowest since July 12. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2408 (5-DMA), a break above could take it near 1.2490 (September 23 High). On the downside, support is seen at 1.23282 (September 12 Low), a break below targets 1.2233 (September 9 Low). Against the euro, the pound was trading 0.1 percent up at 88.49 pence, having hit a high of 87.85 last week, it’s highest since May 22.
AUD/USD: The Australian dollar steadied near 3-week low hit earlier in the week amid renewed hopes that next month’s U.S.-China trade talks will bring progress. However, the upside appears limited after Chinese data showed industrial profits fell 2 percent in August from a year earlier to 517.8 billion yuan as weak domestic demand weighed on corporate balance sheets. The Aussie trades traded 0.1 percent up at 0.6757, having hit a low of 0.6739 on Wednesday, it’s lowest since September 3. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6732 (August 28 Low), a break below targets 0.6706 (August 30 Low). On the upside, resistance is located at 0.6781 (September 23 High), a break above could take it near 0.6805 (21-DMA).
NZD/USD: The New Zealand dollar eased after the ANZ Consumer Confidence for September dropped to a 4-year low, down 3.6 percent m/m to 113.9, adding to the country’s worsening economic picture. The Kiwi trades 0.05 percent down at 0.6290, having touched a high of 0.6348 on Wednesday, its highest level since September 18. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6362 (September 18 High), a break above could take it near 0.6398 (August 27 Low). On the downside, support is seen at 0.6255, a break below could drag it below 0.6210.
Equities Recap
Asian shares slumped as political uncertainties in the United States and concerns over the global economy dented investor risk sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan nudged down 0.1 percent.
Tokyo's Nikkei fell 0.8 percent to 21,878.90 points, Australia's S&P/ASX 200 index gained 0.6 percent to 6,716.10 points and South Korea's KOSPI plunged 1.2 percent to 2,049.93 points.
Shanghai composite index rose 0.05 percent to 2,930.05 points, while CSI 300 index traded 0.2 percent up at 3,849.40 points.
Hong Kong’s Hang Seng traded 0.3 percent lower at 25,973.72 points. Taiwan shares shed 0.4 percent to 10,829.68 points.
Commodities Recap
Crude oil prices declined, erasing more of the gains realized after the Sept. 14 attacks on Saudi Arabian oil facilities. International benchmark Brent crude was trading 0.7 percent down at $62.14 per barrel by 0502 GMT, having hit a low of $61.21 on Wednesday, its lowest since September 16. U.S. West Texas Intermediate was trading 0.7 percent lower at $56.08 a barrel, after falling as low as $55.40 on Thursday, its lowest since September 16.
Gold traded surged but was poised to end the week lower, amid political uncertainties in the United States. Spot gold was trading 0.2 percent at $1,506.70 per ounce by 0506 GMT, having touched a low of $1,500.34 on Wednesday, its lowest since September 20 and was down 0.7 percent for the week, after rising about 2 percent last week. U.S. gold futures were 0.2 percent lower at $1,512.6 per ounce.
Treasuries Recap
The short-dated Japanese government bond yields held steady as investors waited for a Bank of Japan decision on bond purchases. The benchmark 10-year JGB futures rose 0.1 point to 155.33. The 10-year JGB yield was flat at minus 0.250 percent. At the short end of the curve, the two-year JGB yield was flat at minus 0.330 percent. In the middle of the curve, the five-year yield was flat at minus 0.370 percent. The 20-year JGB yield fell 1.5 bps to 0.155 percent. The 30-year JGB yield fell 3 bps to 0.305 percent, while the 40-year JGB yield declined 3 bps to 0.370 percent.
The Australian government bonds jumped during Asian session of the last trading day of the week Friday tracking a similar movement in the U.S. Treasuries after President Donald Trump faced accusation from a congressional panel on charges of pressing a foreign government to investigate a potential rival at next year's presidential election. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2 basis points to 0.950 percent, the yield on the long-term 30-year bond also suffered nearly 2 basis points to 1.557 percent and the yield on short-term 2-year slipped 1 basis point to trade at 0.740 percent.
