Market Roundup
- China's industrial output growth falls to 17-1/2 year low
- China's retail sales up 7.5% in August
- Oil soars after Saudi facility attacks
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Consumer Price Index YoY August
- (0400 ET/0800 GMT) Italy Consumer Price Index (EU Norm) MoM August
- (0400 ET/0800 GMT) Italy Consumer Price Index MoM August
- (0400 ET/0800 GMT) Italy Consumer Price Index (EU Norm) YoY August
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index steadied after tumbling to a near 3-week low in the previous session as investors await the outcome of central bank meetings in the U.S. and Japan this week. The greenback against a basket of currencies traded 0.3 percent up at 98.19, having touched a low of 97.86 on Friday, its lowest since August 26.
EUR/USD: The euro consolidated within narrow ranges as stronger-than-expected Friday's U.S. economic data dented euro bull's sentiment. The European currency traded flat at 1.1069, having touched a high of 1.1109 in the previous session, its highest since August 27. Investors’ attention will remain on a series of data out from the Eurozone economies, ahead of the U.S. NY empire state manufacturing index. Immediate resistance is located at 1.1098 (August 28 High), a break above targets 1.1153 (August 23 High). On the downside, support is seen at 1.1047 (5-DMA), a break below could drag it below 1.0963 (August 30 High).
USD/JPY: The dollar plunged to a near 1-week low, as risk sentiment weakened following an attack on Saudi Arabian refining facilities that disrupted global oil supply and heightened Middle East tensions. The major was trading 0.2 percent down at 107.86, having hit a low of 107.44 earlier, its lowest since September 10. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. NY empire state manufacturing index. Immediate resistance is located at 108.37 (July 16 High), a break above targets 108.75 (July 25 High). On the downside, support is seen at 107.10 (10-DMA), a break below could take it lower at 106.63 (21-DMA).
GBP/USD: Sterling eased after rising to a 7-week peak above the 1.2500 handle in the previous session on hopes that a deal between Britain and the European Union could be secured by October 31. The major traded 0.1 percent down at 1.2478, having hit a high of 1.2504 on Friday, it’s highest since July 25. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2522 (July 24 High), a break above could take it near 1.2578 (July 12 High). On the downside, support is seen at 1.2369 (5-DMA), a break below targets 1.2285 (10-DMA). Against the euro, the pound was trading 0.3 percent down at 88.75 pence, having hit a high of 88.53 on Friday, it’s highest since June 7.
AUD/USD: The Australian dollar declined, reversing most of its previous session gains after data showed China's industrial output expanded at the slowest rate since 2002, a sign of increasing weakness in an economy lashed by trade headwinds and soft domestic demand. Chinese industrial production rose 4.4 percent in August year-on-year, slower than the 4.8 percent growth in July, while separate data showed retail sales growth at 7.5 percent, below expectations of 7.9 percent growth and the 7.6 percent increase in July. The Aussie trades traded 0.1 percent down at 0.6873, having hit a high of 0.6894 on Thursday, it’s highest since July 31. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6848 (September 10 Low), a break below targets 0.6807 (September 6 Low). On the upside, resistance is located at 0.6916 (July 31 High), a break above could take it near 0.6955 (July 26 High).
NZD/USD: The New Zealand dollar fell to a 10-day low, as the slowdown in China's factory and consumer sectors deepened in August due to the U.S. trade war. The Kiwi trades flat at 0.6380, having touched a low of 0.6368 earlier, its lowest level since September 6. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6429 (August 20 High), a break above could take it near 0.6471 (August 13 High). On the downside, support is seen at 0.6340 (August 26 Low), a break below could drag it below 0.6304(August 29 Low).
Equities Recap
Asian shares plunged after data showed China’s industrial production growth skidding to its weakest pace in 17-1/2 years in August.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.4 percent.
Australia's S&P/ASX 200 index rallied 0.1 percent to 6,673.50 points and South Korea's KOSPI surged 0.5 percent to 2,058.65 points.
Shanghai composite index declined 0.2 percent to 3,023.97 points, while CSI 300 index traded 0.6 percent down at 3,949.51 points.
Hong Kong’s Hang Seng traded 1.2 percent lower at 27,038.57 points. Taiwan shares added 0.7 percent to 10,898.13 points.
Commodities Recap
Crude oil prices jumped by more than 10 percent to 4-month highs as the attack on the state-owned producer Saudi Aramco’s processing facilities at Abqaiq and Khurais has cut output by 5.7 million barrels per day. International benchmark Brent crude was trading 10.01 percent higher at $66.17 per barrel by 0522 GMT, having hit a high of $68.38 earlier, its highest since May 30. U.S. West Texas Intermediate was trading 9.1 percent up at $59.74 a barrel, after risining as high as $63.20 earlier, its highest since May 21.
Gold prices surged by 1 percent as an attack on Saudi Arabia’s oil facilities boosted the demand for the safe-haven assets, while investors awaited clues on monetary easing from major central bank meetings due this week. Spot gold was trading 0.9 percent up at $1,502.16 per ounce by 0528 GMT, having touched a low of $1,483.22 on Wednesday, its lowest since August 13. The metal slumped 1.2 percent in the previous week on hopes that an end to the U.S.-China trade tiff could be near. U.S. gold futures rose 0.8 percent to $1,511.20 per ounce.
Treasuries Recap
The Australian government bonds slumped during Asian trading session tracking a similar movement in the United States Treasuries on burgeoning hopes of a trade deal. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, edged nearly 1 basis point higher to 1.180 percent, the yield on the long-term 30-year bond remained steady at 1.760 percent while the yield on short-term 2-year hovered around 0.918 percent by 03:08GMT.
