Market Roundup
- Japan PM's ruling bloc seen nearing 2/3 majority in Oct 22 lower house poll-Nikkei
- Japan Sep domestic corp goods prices +0.2% m/m, +3.0% y/y, as eyed, highest in 9 yrs
- Global banks are after Japan’s cash – Nikkei
- Spain gives Catalan leader 8 days to drop independence
- In Brexit poker, clock narrows transition options
- Fed divided on inflation intensified at September policy meeting
- Asked to explain 'calm before the storm' remark, Trump talks North Korea
- Trump vows tax plan to boost economy; poll cites views on wealthy
- Trump says open to bilateral Canada, Mexico pacts if NAFTA talks fail
- New Zealand house prices rise 0.6 pct annually in September-REINZ
- New Zealand held in suspense as kingmaker weighs coalition options
Economic Data Ahead
- (0245 ET/0645 GMT) France Sep CPI (EU Norm) Final, -0.1% m/m, 1.1% y/y eyed; last 0.6%, 1.1%
- (0330 ET/0730 GMT) Sweden Sep CPIF, 0.4 m/m, 2.5% y/y eyed, last -0.1%, 2.3%
- (0330 ET/0730 GMT) Sweden Sep CPI, 0.4% m/m, 2.4% y/y; last -0.2%, 2.1%
- (0600 ET/1000 GMT) EU Aug Industrial Production, 0.5% m/m, 2.6% y/y eyed; last 0.1%, 3.2%
Key Events Ahead
- N/A ECB's Coeure participates in G20 Deputies meeting
- N/A BoE's Carney participates in IMF meetings in Washington
- (0530 ET/0930 GMT) Riksbank Deputy Gov Ohlsson speaks in Norrkoping
- (0600 ET/1000 GMT) Italy E4.000/E2.000/E1.500 bln for 3/7/30 year auction
- (1030 ET/1430 GMT) ECB's Draghi speaks in Washington
- (1030 ET/1430 GMT) ECB's Praet speaks in Washington
- (1030 ET/1430 GMT) Fed's Powell speaks in Washington
- (1200 ET/1600 GMT) Germany's Schauble speaks in Washington
- (1330 ET/1730 GMT) Riksbank Deputy Governor Skingsley speaks in Washinton
- (1530 ET/1930 GMT) Riksbank Governor Ingves speaks in Washington
- (1545 ET/1945 GMT) BoE'S Haldane speaks in Washington
- (1545 ET/1945 GMT) ECB's Coeure speaks in Washington
- (1610 ET/2010 GMT) ECB's Lautenschlager speaks in Washington
FX Beat
DXY: The dollar index eased to 2-week lows as Federal reserves' latest policy meeting minutes hinted at uncertainty on the inflation outlook. The greenback against a basket of currencies traded 0.1 percent at 92.84, having touched a low of 92.82 earlier, its lowest since Sept. 26. FxWirePro's Hourly Dollar Strength Index stood at -112.20 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro rose to an over 2-week high on expectations that the European Central Bank would announce at its policy meeting later this month that it would wind back its 2.3 trillion euro bond-buying programme. Moreover, the major was also found support after Catalonia stopped short of formally declaring independence from Spain. The European currency traded 0.1 percent up at 1.1874, having touched a high of 1.1878 earlier, its highest since Sept. 26. FxWirePro's Hourly Euro Strength Index stood at 65.72 (Bullish) by 0400 GMT. Investors’ attention will remain on Eurozone industrial production, ahead of U.S. producer price index, unemployment benefit claims and FOMC official's speeches. Immediate resistance is located at 1.1900, a break above targets 1.1940. On the downside, support is seen at 1.1795 (21-DMA), a break below could drag it near 1.1768 (10-DMA).
USD/JPY: The dollar eased against the Japanese yen after minutes from the U.S. Federal Reserve's latest meeting suggested some central bankers are still concerned about persistently low inflation. The major was trading 0.1 percent down at 112.35, having hit a low of 111.99 on Tuesday, its lowest since Sept. 26. FxWirePro's Hourly Yen Strength Index stood at -24.84 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. producer price index, unemployment benefit claims and FOMC official's speeches for further momentum. Immediate resistance is located at 112.82, a break above targets 113.40. On the downside, support is seen at 111.99 (Oct. 10 Low), a break below could take it near 111.65.
GBP/USD: Sterling climbed to a 1-week high as narrowing monetary policy divergence between the Federal Reserve and Bank of England supported the sentiment around the pound. The major traded 0.1 percent up at 1.3259, having hit a high of 1.3265 earlier, its highest since Sept. 6. FxWirePro's Hourly Sterling Strength Index stood at 65.72 (Bullish) by 0400 GMT. Investors’ focus will remain on BoE Credit conditions survey, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3300, a break above could take it near 1.3352 (21-DMA). On the downside, support is seen at 1.3150 (5-DMA), a break below targets 1.3027 (Oct 6 Low). Against the euro, the pound was trading 0.1 low at 89.59 pence, having hit a low of 89.92 pence on Friday, its lowest since Sept. 14.
AUD/USD: The Australian dollar rallied to a 1-week peak after data showed domestic consumer inflation expectations rose 4.3 percent in October from previous 3.8 percent. The major was also supported by better-than-expected investment lending for homes and home loans report, which came in at 4.3 percent and 1.0 percent in August, respectively. The Aussie trades 0.3 percent up at 0.7811, having hit a high of 0.7823 earlier, it’s highest since Oct. 5. FxWirePro's Hourly Aussie Strength Index stood at -7.37 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7777 (5-DMA), a break below targets 0.7700. On the upside, resistance is located at 0.7850, a break above could take it near 0.7887.
NZD/USD: The New Zealand dollar rebounded to a 1-week high as the greenback was weakened broadly after the FOMC minutes came in dovish and showed that the policymakers’ remains concerned over the inflation prospects. The Kiwi trades 0.4 percent up at 0.7105, having touched a high of 0.7118 earlier in the session, its highest level since Oct. 5. FxWirePro's Hourly Kiwi Strength Index was at -57.96 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7137 (10-DMA), a break above could take it near 0.7170. On the downside, support is seen at 0.7055 (Oct 10 Low), a break below could drag it till 0.7000.
Equities Recap
Asian shares traded near a decade high, boosted by a bullish run in global equity markets, while the greenback eased to 2-week lows after the Federal Reserve minutes showed a cautious view over inflation.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.2 percent.
Tokyo's Nikkei rose 0.4 percent to 20,959.38 points, Australia's S&P/ASX 200 index gained 0.4 percent to 5,794.50 points and South Korea's KOSPI climbed 0.6 percent to 2,471.87 points.
Shanghai composite index fell 0.3 percent to 3,378.25 points, while CSI300 index was trading 0.01 percent up at 3,902.87 points.
Hong Kong’s Hang Seng was trading 0.4 percent higher at 28,504.79 points. Taiwan shares added 0.6 percent to 10,711.44 points.
Commodities Recap
Crude oil prices slightly eased as U.S. fuel inventories increased despite efforts by OPEC to cut production and rebalance the market. International benchmark Brent crude was trading 0.05 percent down at $56.61 per barrel by 0416 GMT, having hit a low of $55.04 on Monday, its weakest since Sept. 19. U.S. West Texas Intermediate was trading 0.02 percent lower at $50.99 a barrel, after falling as low as $49.11 on Monday, its lowest since Sept. 13.
Gold prices rose to an over 2-week high amid a muted U.S. dollar after minutes from the U.S. Federal Reserve's September policy meeting revealed low inflation concerns. Spot gold was up 0.3 percent at $1,294.55 an ounce by 0427 GMT, having touched its highest level since Sept. 27 at $1,295.35 earlier in the session. U.S. gold futures for December delivery climbed 0.6 percent to $1,296.10 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.335 percent lower by 0.009 bps, while 5-year yield was 0.014 bps down at 1.941 percent.
The Japanese government bonds traded range-bound as investors remained sidelined in any major trading activity amid lack of significant economic data. 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 tad lower at 0.87 percent and the yield on short-term 2-year traded flat at -0.14 percent.
The Australian bonds tilted slightly on the upside tracking similar movement in the U.S. Treasuries after the Federal Reserve policymakers remain largely divided over the inflation outlook of the country and the path of rate hikes in the economy. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.83 percent, the yield on the 15-year note also slid 1 basis point to 3.11 percent and the yield on short-term 2-year traded flat at 1.95 percent.
The New Zealand bonds ended Thursday’s session on a higher note after the Federal Reserve policymakers remained concerned over the sluggish pace of inflation in the economy. However, the upside was limited after members continued to signal the possibility of a third rate hike this December. At the time of closing, the yield on the benchmark 10-year Treasury note fell 1 basis point to 3.00 percent, the yield on 7-year note also slipped 1 basis point to 2.83 percent and the yield on short-term 2-year too ended a basis point lower at 2.08 percent.
