Market Roundup
- Beginning of the end for Europe's loose money? ECB to curb stimulus
- Republican tax fight complicates plan to pass budget in U.S. House
- Amid Brexit timetable confusion, UK aims for transition outline by early 2018
- EU envoys start discussion on ties with London after Brexit
- Crisis over Catalan independence nears crucial few days
- New Zealand Prime Minister heads to trade talks with foreign investment ban on her mind
- New Zealand Sept Trade Balance, -1.143.0 mln vs -1.2350 M, rvsd -1.179.0 mln
- Australia Q3 Export, Import Prices, -3.0% imports, -1.6% exports vs -5.7%, -0.1%
- Trump congratulates China's Xi on "extraordinary elevation”
- China will not set target to double GDP from 2021 - party official
- Global investors race for rare $2 billion China sovereign bond issue
- N. Korea diplomat says take atmospheric nuclear test threat 'literally'
- BOJ shouldn't be criticised for missing inflation goal-Japan PM's aide
- UK retailers cut jobs at fastest rate since 2008 – BRC
- UK housing starts on track for 10-year high - industry group
- UK car output falls again in September
- Global growth? Sure. But still not much inflation pressure - Rtrs poll
Economic Data Ahead
- (0400 ET/0800 GMT) Eurozone Sept Money-M3 Annual Growth, 5.0% eyed, last 5.0%
- (0400 ET/0800 GMT) Germany Nov Gfk Consumer Sentiment 10.8 eyed, last 10.8
- (0600 ET/1000 GMT) Great Britain Oct CBI Distributive Trade 15 eyed, last 42
Key Events Ahead
- (0330 ET/0730 GMT) Swedish Central Bank announces rate decision; Monetary Policy Report will be published - Stockholm
- (0400 ET/0800 GMT) Norway Central Bank announces interest rate decision - Oslo
- (0500 ET/0900 GMT) Swedish Central Bank’s press conference on its rate decision - Stockholm
- (0500 ET/0900 GMT) Norges Bank Gov Olsen speaks at Oslo
- (0745 ET/1145 GMT) ECB Governing Council meeting; interest rate announcement - Frankfurt
- (0830 ET/1230 GMT) ECB’s Draghi holds a press meet following the rate decision
FX Beat
DXY: The dollar index fell to a near 1-week low following a slight pull-back in U.S. Treasury yields. The greenback against a basket of currencies traded 0.2 percent down at 93.49, having touched a high of 94.02 on Monday, its highest since Oct. 6. FxWirePro's Hourly Dollar Strength Index stood at -5.57 (Neutral) by 0500 GMT.
EUR/USD: The euro rose to a 6-day high on the expectation that the European Central Bank is likely to begin tapering its EUR 2.3 trillion stimulus program today. The European currency traded 0.1 percent up at 1.1825, having touched a high of 1.1832 earlier in the day, its highest since Oct. 20. FxWirePro's Hourly Euro Strength Index stood at 55.78 (Bullish) by 0400 GMT. Investors’ attention will remain on ECB policy decision, ahead of U.S. unemployment benefit claims, goods trade balance, wholesale inventories and pending home sales data. Immediate resistance is located at 1.1858 (Oct 20 High), a break above targets 1.1900. On the downside, support is seen at 1.1780 (21-DMA), a break below could drag it near 1.1750.
USD/JPY: The dollar eased, having retreated from a 3-month high in the previous session as a softer tone in the Asian equities underpinned the safe-haven Japanese yen. The major was trading 0.2 percent down at 113.52, having hit a high of 114.24 the day before, its highest since Jul. 17. FxWirePro's Hourly Yen Strength Index stood at 40.28 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. unemployment benefit claims, goods trade balance, wholesale inventories and pending home sales data for further clues on the pair. Immediate resistance is located at 114.00, a break above targets 114.30. On the downside, support is seen at 113.24, a break below could take it near 112.85 (10-DMA).
GBP/USD: Sterling edged up to a 1-week high after better-than-expected UK GDP figures released yesterday bolstered expectations that the Bank of England will raise interest rates next week. The major traded 0.1 percent up at 1.3264, having hit a high of 1.3279 earlier, its highest since Oct. 17. FxWirePro's Hourly Sterling Strength Index stood at 72.33 (Bullish) by 0400 GMT. Investors’ focus will remain on UK CBI Distributive Trades Survey, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3300, a break above could take it near 1.3340. On the downside, support is seen at 1.3211 (10-DMA), a break below targets 1.3150. Against the euro, the pound was trading 0.1 percent down at 89.15 pence, having hit a high of 88.79 pence on Wednesday, its highest since Oct. 17.
AUD/USD: The Australian dollar steadied after falling to a 3-1/2 month low in the previous session on the back of slower-than-expected September-quarter consumer price index figures. The Aussie trades flat at 0.7705, having hit a low of 0.7690 the day before, it’s lowest since Jul. 13. FxWirePro's Hourly Aussie Strength Index stood at -129.58 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7690 (Previous Session Low), a break below targets 0.7674 (July 13 Low). On the upside, resistance is located at 0.7733 (78.6% retracement of 0.7883 and 0.7690), a break above could take it near 0.7784.
NZD/USD: The New Zealand dollar slightly edged up after slumping to near a five-month trough the day before as Jacinda Ardern was sworn in as Prime Minister. However, the upside was limited as investors remain worried that the coalition government will take a hard-line stance on immigration and foreign investment. The Kiwi trades up at 0.6890, having touched a low of 0.6860 on Wednesday, its lowest level since May 15. FxWirePro's Hourly Kiwi Strength Index was at -3.26 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6948 (5-DMA), a break above could take it near 0.6990. On the downside, support is seen at 0.6860 (Previous Session Low), a break below could drag it till 0.6830.
Equities Recap
Asian shares consolidated within narrow range, while the euro rose to a 6-day peak ahead of a European Central Bank meeting that could take a major step away from its accommodative policy.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei rose 0.3 percent to 21,765.22 points, Australia's S&P/ASX 200 index climbed 0.2 percent to 5,916.30 points and South Korea's KOSPI advanced 0.05 percent to 2,492.90 points.
Shanghai composite index rose 0.4 percent to 3,409.34 points, while CSI300 index was trading 0.6 percent up at 4,000.80 points.
Hong Kong’s Hang Seng was trading 0.4 percent lower at 28,199.17 points. Taiwan shares shed 0.05 percent to 10,746.93 points.
Commodities Recap
Crude oil prices declined, extending previous session losses after government data showed an unexpected rise in U.S. crude inventories. International benchmark Brent crude was trading 0.1 percent down at $58.34 per barrel by 0402 GMT, having hit a high of $58.71 the day before, its highest since Sept. 18. U.S. West Texas Intermediate was trading 0.2 percent lower at $52.07 a barrel, after rising as high as $52.59 on Tuesday, its highest since Sept. 28.
Gold prices rose after touching a 2-1/2 week low in the previous session on reports that Republican senators favored John Taylor to become the next head of the U.S. Federal Reserve. Spot gold was up 0.3 percent at $1,280.01 an ounce by 0427 GMT, having hit a low of $1,270.88 on Wednesday, the lowest since Oct. 6. U.S. gold futures for December delivery settled up 70 cents, or 0.05 percent, at $1,279 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.417 percent lower by 0.027 bps, while 5-year yield was 0.03 bps down at 2.034 percent.
The Japanese government bonds remained flat during early Asian session as investors remain focused to watch the country’s national consumer price-led inflation index for the month of September, scheduled to be released on October 27. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.06 percent, the yield on long-term 30-year traded flat at 0.86 percent while the yield on short-term 2-year traded 1-1/2 basis points lower at -0.14 percent.
The Australian government bonds slumped after U.S. Treasury yield hit 7-month high of 2.475 percent. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1-1/2 basis points to 2.789 percent, the yield on the long-term 30-year note also jumped 1-1/2 basis points to 3.550 percent and the yield on short-term 2-year traded nearly 1/2 basis point higher at 1.89 percent.
The Canadian government bond prices were higher across a steeper yield curve, with the two-year up 5.5 Canadian cents to yield 1.466 percent and the 10-year rising 18 Canadian cents to yield 2.043 percent.
