Market Roundup
- Dollar index gains after ADP U.S. August jobs data
- Gold eases as trade optimism lift risk appetite
- Oil set for a weekly gain
Economic Data Ahead
- (0200 ET/0600 GMT) German Industrial production July
- (0245 ET/0645 GMT) France Trade Balance July
- (0245 ET/0645 GMT) France Current Account July
- (0300 ET/0700 GMT) Switzerland Foreign Currency Reserves August
- (0330 ET/0730 GMT) UK Halifax House prices August
- (0400 ET/0800 GMT) Italy retail sales July
- (0430 ET/0830 GMT) UK consumer inflation expectations
- (0500 ET/0900 GMT) EZ gross domestic product Q2
- (0500 ET/0900 GMT) EZ employment change Q2
Key Events Ahead
- (0515 ET/0915 GMT) ECB's De Guindos speech
FX Beat
DXY: The dollar index traded within thin ranges as markets await the U.S. government’s monthly payrolls report as a confirmation of resilience in the labor market. Data released on Thursday showed, U.S. service sector activity accelerated in August and private employers boosted hiring beyond expectations, suggesting that the U.S. economy is in better shape than investors had feared. The greenback against a basket of currencies traded flat at 98.38, having touched a low of 98.09 on Thursday, its lowest since August 28.
EUR/USD: The euro consolidated within narrow ranges as weaker demand from abroad drove a bigger-than-expected decline in Germany's industrial orders in July, indicating that struggling manufacturers could tip the German economy into a recession in the third quarter. Investors have priced in deeper negative interest rates for longer in the eurozone. The European currency traded flat at 1.1037, having touched a high of 1.1084 on Thursday, its highest since August 29. Investors’ attention will remain on a series of data from the Eurozone economies, EZ gross domestic product, employment change numbers and ECB De Guindos' speech, ahead of the U.S. Nonfarm payrolls, unemployment report, and Fed Chair Powell's speech. Immediate resistance is located at 1.1096 (21-DMA), a break above targets 1.1116 (August 27 High). On the downside, support is seen at 1.0999 (5-DMA), a break below could drag it below 1.0963 (August 30 High).
USD/JPY: The dollar steadied near a 1-month peak hit in the previous session as payroll processor ADP said U.S. private hiring came in stronger than expected in August, while it revised lower its job reading for July. Moreover, global trade tensions eased as the U.S.-China trade conflict showed signs of thawing, bolstering investor confidence and reducing demand for safe-haven assets. The major was trading 0.5 percent up at 106.97, having hit a high of 107.23 on Thursday, its highest since August 2. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Nonfarm payrolls, unemployment report, and Fed Chair Powell's speech. Immediate resistance is located at 107.56 (August 2 High), a break above targets 108.00. On the downside, support is seen at 106.38 (5-DMA), a break below could take it lower at 105.73 (September 3 Low).
GBP/USD: Sterling held gains near a 1-month peak after British lawmakers approved legislation to extend the Brexit deadline for the third time and rejected Prime Minister Boris Johnson’s motion to hold a snap election. The major traded flat at 1.2325, having hit a high of 1.2353 on Thursday, it’s highest since July 29. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2383 (July 29 High), a break above could take it near 1.2456 (July 17 High). On the downside, support is seen at 1.2205 (10-DMA), a break below targets 1.2139 (August 30 Low). Against the euro, the pound was trading 0.2 percent down at 89.75 pence, having hit a high of 89.41 earlier, it’s highest since July 25.
AUD/USD: The Australian dollar rose, extending gains for the fourth straight session, as China’s Commerce Ministry showed renewed trade optimism between the U.S. and China, signaling a negotiation round during October. The Aussie trades 0.1 percent up at 0.6818, having hit a high of 0.6829 on Thursday, it’s highest since August 1. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6763 (5-DMA), a break below targets 0.6717 (August 29 Low). On the upside, resistance is located at 0.6867 (August 1 High), a break above could take it near 0.6899 (July 31 High).
NZD/USD: The New Zealand dollar surged, extending gains for the fifth consecutive session, amid renewed U.S.-China trade optimism after the Chinese Commerce Ministry confirmed a call with the U.S. diplomats to have a trade talk in October. The Kiwi trades 0.2 percent up at 0.6390, having touched a high of 0.6395 on Thursday, its highest level since August 27. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6409 (August 23 High), a break above could take it near 0.6441 (August 19 High). On the downside, support is seen at 0.6337 (5-DMA), a break below could drag it below 0.6269 (September 3 Low).
Equities Recap
Asian shares surged amid hopes for easing in U.S.-China trade tensions and as firm U.S. economic data increased risk appetites.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.
Tokyo's Nikkei rallied 0.4 percent to 21,186.65 points, Australia's S&P/ASX 200 index gained 0.5 percent to 6,647.90 points and South Korea's KOSPI surged 0.2 percent to 2,008.41 points.
Shanghai composite index rose 0.05 percent to 2,986.93 points, while CSI 300 index traded 0.1 percent up at 3,929.50 points.
Hong Kong’s Hang Seng traded 0.2 percent higher at 26,572.75 points. Taiwan shares added 0.2 percent to 10,780.64 points.
Commodities Recap
Crude oil prices rose to multi-week highs amid a sharp drawdown in U.S. crude inventories, while trade tensions eased after Washington and Beijing agreed to hold high-level talks next month. International benchmark Brent crude was trading 0.5 percent higher at $61.01 per barrel by 0448 GMT, having hit a high of $62.37 the day before, its highest since August 2. U.S. West Texas Intermediate was trading 0.3 percent up at $56.34 a barrel, after rising as high as $57.72 on Thursday, its highest since August 1.
Gold prices eased after dropping more than 2 percent in the previous session, as stronger U.S. economic data and hopes of a thaw in the U.S.-China trade tensions boosted investor sentiment. Spot gold was trading 0.1 percent down at $1,518.01 per ounce by 0451 GMT, having touched a low of $1,506.03 on Thursday, its lowest since August 23. U.S. gold futures were little changed at $1,526 an ounce.
Treasuries Recap
The U.S. Treasuries fell in price and their yields rebounded from multi-year lows. The 10-year Treasury yield was at 1.536 percent, having risen from a 3-year trough of 1.428 percent plumbed midweek on soft economic data and U.S.-China trade worries.
The Japan’s 10-year government bond yield climbed 3 basis points to minus 0.245percent, putting some distance between a 3-year low of minus 0.295 percent set earlier this week.
