Market Roundup
- U.S. invites China to trade talks as tariffs loom -White House adviser
- Canada's Freeland won't hold NAFTA talks, says more work needed
- Fed has room to raise interest rates for some time, Brainard says
- Fed says it whipped U.S. unemployment, maybe too well
- Trump signs order to enable sanctions for U.S. election meddling
- Bank of England to keep rates steady after August rise
- ECB to stay on course to curb stimulus even with wobbly growth
- Turkey rules property sales, rental agreements must be in lira - Official Gazette
- Brazil presidential candidate Bolsonaro has emergency surgery
- Japan Jul Machinery Orders MM, 11.0%, 5.7% f'cast, -8.8% prev
- Japan Jul Machinery Orders YY, 13.9%, 4.7% f'cast, 0.3%
- Japan Reuters Tankan DI, 26, 30 prev
- Australia Aug Employment, 44.0k, 15.0k f'cast, -3.9k prev, -4.3k rvsd
- Australia Aug Unemployment Rate, 5.3%, 5.3% f'cast, 5.3% prev
Economic Data Ahead
- (0200 ET/0600 GMT) Germany Aug CPI Final YY, 2.0% f'cast, 2.0% prev
- (0245 ET/0645 GMT) France Aug CPI (EU Norm) Final YY, 2.6% f'cast, 2.6% prev
- (0700 ET/1100 GMT) Great Britain Sep BOE Bank Rate, 0.75% f'cast, 0.75% prev
- (0700 ET/1100 GMT) Great Britain Sep GB BOE QE Gilts, 435 bln f'cast, 435 bln prev
- (0700 ET/1100 GMT) Great Britain Sep GB BOE QE Corp, 10 bln f'cast, 10 bln prev
- (0745 ET/1145 GMT) EZ Sep ECB Refinancing Rate, 0.00% f'cast, 0.00% prev
- (0745 ET/1145 GMT) EZ Sep ECB Deposit Rate, -0.40% f'cast, -0.40% prev
Key Events Ahead
- (0700 ET/1100 GMT) BoE announces rate decision and publishes the minutes of the meeting
- (0745 ET/1145 GMT) ECB Governing Council meeting, followed by interest rate announcement
- (0830 ET/1230 GMT) ECB President Mario Draghi holds a press conference, after the interest rate meeting
- (1300 ET/1700 GMT) Fed's Bostic speaks on the economic outlook and monetary policy in Jackson, Mississippi
- (1900 ET/2300 GMT) Fed's Kaplan participates in a moderated question-and-answer session before the Dallas Business Club, in Dallas, Texas
FX Beat
DXY: The dollar index surged amid renewed hopes of a new round of U.S.- China trade talks and prospective progress on a NAFTA deal between the United States and Canada. The greenback against a basket of currencies trades 0.1 percent up at 94.89, having touched a low of 94.73 on Wednesday, its lowest since August 31. FxWirePro's Hourly Dollar Strength Index stood at -98.53 (Slightly Bearish) by 0400 GMT.
EUR/USD: The euro surged, extending gains for the fourth straight session, ahead of a policy decision by the European Central Bank scheduled later in the day, where it is all certain to keep policy unaltered, but make only slight changes to its guidance to stay on course to end bond purchases this year and hike interest rates next autumn. The European currency traded 0.1 percent up at 1.1633, having touched a low of 1.1526 on Monday, its lowest since Aug 21. FxWirePro's Hourly Euro Strength Index stood at 24.25 (Neutral) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies and ECB policy decision, ahead of the U.S. unemployment benefit claims, consumer price index, monthly budget statement, and speeches from FOMC members. Immediate resistance is located at 1.1658 (September 6 High), a break above targets 1.1710 (August 29 High). On the downside, support is seen at 1.1578 (21-DMA), a break below could drag it till 1.1542 (September 5 Low).
USD/JPY: The dollar rose, reversing some of its previous session losses, as a report that Washington was seeking a new round of trade talks with Beijing reduced safe-haven demand. Moreover, hopes for progress on a NAFTA deal between the United States and Canada supported investor sentiment. The major was trading 0.2 percent up at 111.41, having hit a high of 111.65 on Wednesday, its highest since September 5. FxWirePro's Hourly Yen Strength Index stood at -135.66 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, consumer price index, monthly budget statement and speeches from FOMC members. Immediate resistance is located at 111.75 (September 5 High), a break above targets 112.15 (August 1 High). On the downside, support is seen at 111.01 (21-DMA), a break below could take it lower 110.68 (August 31 Low).
GBP/USD: Sterling consolidated within narrow ranges after Brexit-supporting lawmakers in British Prime Minister Theresa May's party publicly pledge support for her to stay in power despite disagreeing with her Brexit proposals. Investors’ now await the Bank of England's monetary policy meeting, at which it is expected to keep rates on hold. The major traded flat at 1.3039, having hit a high of 1.3087 on Tuesday; it’s highest since August 2. FxWirePro's Hourly Sterling Strength Index stood at 111.74 (Highly Bullish) 0400 GMT. Investors’ attention will remain on developments surrounding Brexit and BoE policy decision, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3083 (July 19 High), a break above could take it near 1.3144 (August 1 High). On the downside, support is seen at 1.2952 (10-DMA), a break below targets 1.2891 (21-DMA). Against the euro, the pound was trading 0.1 percent down at 89.16 pence, having hit a high of 88.76 on Tuesday, it’s highest since August 2.
AUD/USD: The Australian dollar surged to a 1-week peak after data showed Australian employment jumped 44,000 in August, above forecasts of a 15,000 gain. Moreover, news that the Trump administration had invited Chinese officials to restart trade talks underpinned risk-on sentiment. The Aussie trades 0.2 percent up at 0.7185, having hit a high of 0.7199; it’s highest since September 7. FxWirePro's Hourly Aussie Strength Index stood at 139.50 (Highly Bullish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7139 (5-DMA), a break below targets 0.7070. On the upside, resistance is located at 0.7224 (50.0% retracement of 0.7362 and 0.7085), a break above could take it near 0.7257 (61.8% retracement).
NZD/USD: The New Zealand dollar edged down despite improved risk sentiment following the NAFTA progress and potential talks between the US and China. The Kiwi trades 0.1 percent down at 0.6554, having touched a low of 0.6500 on Tuesday, its lowest level since Jan. 2016. FxWirePro's Hourly Kiwi Strength Index was at 18.90 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6586 (38.2% retracement of 0.6727 and 0.6500), a break above could take it near 0.6613 (50.0% retracement). On the downside, support is seen at 0.6512, a break below could drag it below 0.6473.
Equities Recap
Asian shares rebounded from 14-month lows on news the Trump administration has reached out to China for a new round of trade talks, stirring speculation further tariffs might be avoided.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.6 percent, drifting away from 14-month lows touched the prior day.
Tokyo's Nikkei surged 0.9 percent to 22,805.08 points, Australia's S&P/ASX 200 index declined 0.7 percent to 6,130.10 points, and South Korea's KOSPI gained 0.1 percent to 2,285.86 points.
Shanghai composite index rose 0.3 percent to 2,664.26 points, while CSI300 index traded 0.1 percent up at 3,205.41 points.
Hong Kong’s Hang Seng traded 1.4 percent higher at 26,714.00 points. Taiwan shares added 0.05 percent to 10,727.23 points.
Commodities Recap
Crude oil prices declined, after rising to multi-week peaks in the previous session, as economic concerns raised doubts about ongoing fuel demand growth. International benchmark Brent crude was trading 0.5 percent down at $79.29 per barrel by 0433 GMT, having hit a high of $80.08 on Wednesday, its highest since May 22. U.S. West Texas Intermediate was trading 0.5 percent down at $69.88 a barrel, after rising as high as $71.24 on Wednesday, its highest since September 4.
Gold prices eased after hitting more than 1-week highs the session before, amid hopes for a new round of U.S.-China trade talks. Spot gold 0.1 percent down at $1,205.33 an ounce at 0439 GMT, having hit a high of $1208.38 on Wednesday, its highest since Aug. 31. U.S. gold futures were also mostly steady at $1,211.10 an ounce.
Treasuries Recap
The Japanese government bond prices sagged slightly on hopes of trade talk revival between the U.S. and China. However, today markets would eye the European Central Bank and Bank of England monetary policy decision. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose about 1/2 basis point to 0.112 percent, the yield on the long-term 30-year note also climbed 1/2 basis point to 0.842 percent and the yield on short-term 2-year traded nearly flat at -0.108 percent.
The Australian bonds suffered during Asian trading hours Thursday after the country’s August employment report cheered market participants, besides, a resume of trade talks between the United States and China, which further added to losses in safe-haven instruments. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped nearly 2 basis points to 2.609 percent, the yield on the long-term 30-year bond climbed 1-1/2 basis points to 3.109 percent but the yield on short-term 2-year traded 3 basis points higher at 2.044 percent.
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The 10-year rose 8 Canadian cents to yield 2.329 percent. On Tuesday, the 10-year yield touched its highest intraday in more than one month at 2.340 percent.
