Market Round
- Trump hails Canada, Mexico trade pact as win for U.S. workers
- Australia central bank holds rates at 1.5 pct, as expected
- New Zealand business confidence sinks to 9-year low, puts c.bank on alert
- Japan Inc's inflation expectations slip after BOJ policy change - tankan
- Japan PM Abe keeps key ministers in posts in cabinet reshuffle
- Euro zone worried Italy's deficit-boosting budget plan could revive crisis
- UK PM May Preparing To Offer Trade Concession to EU to Break Brexit Deadlock- The Times
- 'Don't bully us', Britain takes new combative tone to Brexit talks
- Oil firm near 4-year high as Washington's Iran sanctions loom
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Sep Markit/CIPS Cons PMI, 52.5 f'cast, 52.9 prev
- (0500 ET/0900 GMT) EZ Aug Producer Prices MM, 0.2% f'cast, 0.4% prev
- (0500 ET/0900 GMT) EZ Aug Producer Prices YY, 3.9% f'cast, 4.0% prev
Key Events Ahead
- (0355 ET/0755 GMT) Riksbank Deputy Governor Henry Ohlsson will participate in the National Mediation Office's conference – Stockholm
- (0445 ET/0845 GMT) Bank of England Chief Economist Andy Haldane to chair sessions at Rebuilding Macroeconomics Annual Conference – London
- (0500 ET/0900 GMT) EU Economic and Financial Affairs Council meeting – Luxembourg
- (0635 ET/1035 GMT) External Member of the Bank of England’s rate setting, Jonathan Haskel chairs sessions at Rebuilding Macroeconomics Annual Conference – London.
- (1030 ET/1430 GMT) ECB Policymaker Francois Villeroy de Galhau to speak at a conference in Paris about "Ten years after: Is financial stability today better assured?" – Paris
- (1245 ET/1645 GMT) Federal Reserve Chairman Jerome Powell speaks on "The Outlook for Employment and Inflation" before the National Association for Business Economics 60th Annual Meeting - Boston
- (1400ET/1800 GMT) Reserve Bank of Dallas President Robert Kaplan participates in a moderated question-and-answer session - El Paso, Texas.
- N/A ECB Vice-President Luis de Guindos participates in ECOFIN meeting – Luxembourg
FX Beat
DXY: The dollar index rallied to a 3-week peak after data released on Monday showed construction spending edged up in August despite weakness in investment in private residential and nonresidential projects. The greenback against a basket of currencies trades 0.1 percent up at 95.42, having touched a high of 95.37 on Friday, its highest since September 10. FxWirePro's Hourly Dollar Strength Index stood at 80.23 (Slightly Bullish) by 0400 GMT.
EUR/USD: The euro slumped for a fifth straight session after Italian Deputy Prime Minister Luigi Di Maio accused European Union officials of deliberately upsetting financial markets with negative comments about Italy's budget plans. The European currency traded 0.1 percent down at 1.1569 having touched a low of 1.1563 on Monday, its lowest since September 10. FxWirePro's Hourly Euro Strength Index stood at -76.78 (Slightly Bearish) by 0400 GMT. Investors’ attention will remain on Eurozone producer price index, ahead of the U.S. ISM - NY business conditions, total vehicles, and speeches from Fed's Quarles and Powell. Immediate resistance is located at 1.1616 (September 10 High), a break above targets 1.1659 (September 6 High). On the downside, support is seen at 1.1525 (September 10 Low), a break below could drag it till 1.1500.
USD/JPY: The dollar held gain, near an 11-month peak as the newly minted United States-Mexico-Canada Agreement boosted investor risk appetite. The new agreement, called the United States-Mexico-Canada Agreement (USMCA), is aimed at creating more jobs into the United States, with Canada and Mexico accepting more restrictive commerce with the United States. The major was trading 0.1 percent up at 113.95, having hit a high of 114.06 on Monday, its highest since Nov. 8. FxWirePro's Hourly Yen Strength Index stood at -29.07 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. ISM - NY business conditions, total vehicles, and speeches from Fed's Quarles and Powell. Immediate resistance is located at 114.28 (Nov 1 High), a break above targets 114.73 (Nov 6 High). On the downside, support is seen at 113.32 (5-DMA), a break below could take it lower 112.63 (September 26 Low).
GBP/USD: Sterling declined as investors turned cautious ahead of the ruling Conservative party's annual conference this week, where PM Theresa May will defend her plan for leaving the European Union. However, reports that Britain is preparing to make a significant offer to the EU to reach a Brexit deal provided some relief to the British pound bulls'. The major traded 0.1 percent down at 1.3027, having hit a low of 1.3000 on Friday; it’s lowest since September 12. FxWirePro's Hourly Sterling Strength Index stood at -10.65 (Neutral) 0400 GMT. Investors’ attention will remain on UK Markit construction PMI, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3124 (10-DMA), a break above could take it near 1.3193 (September 25 High). On the downside, support is seen at 1.2979 (September 12 Low), a break below targets 1.2896 (September 10 Low). Against the euro, the pound was trading 0.1 percent up at 88.72 pence, having hit a high of 88.59 on Monday, it’s highest since September 20.
AUD/USD: The Australian dollar eased, extending previous session losses, after the Reserve Bank of Australia kept interest rates at 1.5 percent at the end of its October policy meeting, a widely expected decision given subdued inflation and wage growth. The Aussie trades 0.1 percent down at 0.7213, having hit a low of 0.7202 on Friday; it’s lowest since September 18. FxWirePro's Hourly Aussie Strength Index stood at 28.84 (Neutral) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7175 (August 31 Low), a break below targets 0.7144 (September 18 Low). On the upside, resistance is located at 0.7263 (September 25 High), a break above could take it near 7303 (September 21 High).
NZD/USD: The New Zealand dollar tumbled to a near-2 week low after a survey showed domestic business confidence slumped to a 9-year low in the third quarter, opening the door to a possible rate cut if economic growth continues to slow sharply. The Kiwi trades 0.3 percent down at 0.6599, having touched a low of 0.6592 earlier, its lowest level since September 19. FxWirePro's Hourly Kiwi Strength Index was at -15.78 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6658 (September 25 High), a break above could take it near 0.6727 (August 28 High). On the downside, support is seen at 0.6572 (September 19 Low), a break below could drag it below 0.6538 (September 17 Low).
Equities Recap
Asian shares declined, amid cautious views on the global economy curbed risk sentiment, while the greenback surged, boosted by an agreement that saved the North American free trade deal.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 1.0 percent.
Tokyo's Nikkei rallied 0.1 percent to 24,267.21 points, Australia's S&P/ASX 200 index fell 0.6 percent to 6,132.40 points, and South Korea's KOSPI declined 1.1 percent to 2,313.00 points.
Hong Kong’s Hang Seng traded 1.9 percent lower at 27,239.65 points. Taiwan shares shed 1.2 percent to 10,919.63 points.
Commodities Recap
Crude oil prices surged, hovering towards a near 4-year high reached the previous day as markets adjust to the prospect of tighter supply ahead of the U.S. sanctions against Iran that takes effect next month. International benchmark Brent crude was trading 0.1 percent up at $85.00 per barrel by 0447 GMT, having hit a high of $85.43 on Monday, its highest since November 2014. U.S. West Texas Intermediate was trading 0.1 percent up at $75.50 a barrel, after rising as high as $75.75 on Tuesday, its highest since Nov 2014.
Gold prices surged after tumbling in the previous session on news that the United States and Canada reached an agreement to save a North American free trade deal. Spot gold rose 0.4 percent to $1,192.45 at 0452 GMT, having hit a low of $1180.64 on Friday, its lowest since August 17. U.S. gold futures were up 0.3 percent at $1,195 an ounce.
Treasuries Recap
The Australian government bond futures eased in line with global risk, with the three-year bond contract off 1 tick at 97.900, while the 10-year contract dipped 2 ticks to 97.2850.
The New Zealand government bonds traded flat.
The Canadian government bond prices were lower across the yield curve, with the two-year down 13 Canadian cents to yield 2.288 percent and the 10-year falling 69 Canadian cents to yield 2.51 percent. The 10-year yield touched its highest intraday since May 18 at 2.519 percent.
