Market Roundup
- Oil unchanged amid caution over trade talks
- BoE’s Monetary Policy Committee to keep the Bank Rate at 0.75%
Economic Data Ahead
- (0200 ET/0700 GMT) German Industrial Production
- (0330 ET/0830 GMT) UK Halifax house prices
- (0400 ET/0900 GMT) Italy retail sales
- (0400 ET/0900 GMT) EZ Economic Bulletin
- (0500 ET/1000 GMT) European Commission releases Economic Growth forecasts
Key Events Ahead
- (0700 ET/1200 GMT) BoE monetary policy decision
FX Beat
DXY: The dollar index rallied to a 3-week peak as the Fed signalled there would be no further reductions unless the economy takes a turn for the worse, after cutting interest rates for the third time this year to help sustain U.S. growth. The greenback against a basket of currencies traded flat at 97.99, having touched a high of 98.02 earlier, its highest since October 17.
EUR/USD: The euro plunged to a 3-week low as recent factory surveys showed Germany’s manufacturing sector slipping into recession. Investors now await German industrial output, which is expected to ease 0.4 percent in September after a 0.3 percent increase in the previous month. The European currency traded 0.1 percent down at 1.1058, having touched a low of 1.1054 earlier, its lowest since October 16. Investors’ attention will remain on a series of data from the Eurozone economies, EZ Economic Bulletin and Economic Growth forecasts, ahead of the U.S. economic data, including unemployment benefit claims, consumer credit and Fed Kaplan's speech. Immediate resistance is located at 1.1093 (21-DMA), a break above targets 1.1116 (5-DMA). On the downside, support is seen at 1.1042, a break below could drag it below 1.1012.
USD/JPY: The dollar eased, extending previous session losses, after a senior official in U.S. President Donald Trump’s administration told Reuters the signing of the phase one trade deal could be delayed until December. The major was trading 0.3 percent down at 108.69, having hit a high of 109.25 on Tuesday, its highest since October 30. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, consumer credit and Fed Kaplan's speech. Immediate resistance is located at 109.28 (October 30 High), a break above targets 109.62 (May 31 High). On the downside, support is seen at 108.44, a break below could take it near at 108.24.
GBP/USD: Sterling declined to an over 1-week low as investors turned cautious ahead of a Bank of England meeting later in the day. The central bank's Monetary Policy Committee is expected to vote 9-0 to keep the Bank Rate at 0.75 percent, but markets are focused on how the BoE will respond to uncertainties posed by Britain’s exit from the European Union. The major traded 0.1 percent down at 1.2840, having hit a low of 1.2837 earlier, it’s lowest since October 29. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2949 (October 24 High), a break above could take it near 1.3000. On the downside, support is seen at 1.2806, a break below targets 1.2748. Against the euro, the pound was trading flat at 86.11 pence, having hit a high of 85.85 on Tuesday, it’s highest since October 22.
AUD/USD: The Australian dollar slumped to a 1-week low as investors remain nervous about the risks to the global outlook given the U.S.-China trade war show no signs of a quick resolution. The Aussie trades 0.3 percent down at 0.6867, having hit a low of 0.6861 earlier, it’s lowest since October 30. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6848, a break below targets 0.6821. On the upside, resistance is located at 0.6891, a break above could take it near 0.6912.
NZD/USD: The New Zealand dollar tumbled to a 1-week trough after a senior official of the Trump administration told Reuters a meeting between U.S. and Chinese leaders to sign an interim trade deal could be delayed until December as discussions continue over terms and venue. The Kiwi trades 0.3 percent down at 0.6347, having touched a low of 0.6346 earlier, its lowest level since October 30. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6380 (10-DMA), a break above could take it near 0.6406. On the downside, support is seen at 0.6333, a break below could drag it below 0.6300.
Equities Recap
Asian shares edged lower from multi-month peaks as reports of delays in sealing a preliminary U.S.-China trade deal dented investor sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent.
Tokyo's Nikkei fell 0.2 percent to 23,285.04 points, Australia's S&P/ASX 200 index rallied 1.0 percent to 6,726.60 points and South Korea's KOSPI eased 0.2 percent to 2,140.71 points.
Shanghai composite index declined 0.2 percent to 2,972.88 points, while CSI 300 index traded 0.1 percent down at 3,982.10 points.
Hong Kong’s Hang Seng traded 0.4 percent lower at 27,593.69 points. Taiwan shares shed 0.4 percent to 11,608.21 points.
Commodities Recap
Crude oil prices declined after rising to multi-week peak in the previous session, amid worries that a long-awaited interim deal to dial back a crippling U.S.-China trade war could be delayed. International benchmark Brent crude was trading 0.1 percent down at $61.67 per barrel by 0439 GMT, having hit a high of $63.28 on Wednesday, its highest since September 24. U.S. West Texas Intermediate was trading 0.1 percent down at $56.31 a barrel, after rising as high as $57.81 on Wednesday, its highest since September 24.
Gold prices surged as investors maintained a cautious stance amid signs of a delay in Washington and Beijing signing a long-awaited interim trade deal. Spot gold was trading 0.1 percent up at $1,491.19 per ounce by 0444 GMT, having touched a low of $1,479.27 on Tuesday, its lowest since Oct. 16. while U.S. gold futures were flat at $1,492.9 per ounce.
Treasuries Recap
The Australian government bond yields slumped during Asian session tracking a similar movement in the United States’ counterpart after temporary optimism over the U.S.-China trade deal faded. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 6 basis points to 1.211 percent, the yield on the long-term 30-year bond also slumped 6 basis points to 1.793 percent and the yield on short-term 2-year suffered 4 basis points at 0.869 percent.
