Market Roundup
- Trump slaps tariffs on $200 bln in Chinese goods, spares some consumer tech
- China commerce minister says U.S. unilateralism, protectionism will hurt global economy
- China unlikely to send trade delegation to U.S. after new tariffs-SCMP
- China's yuan down as US fires fresh trade salvo; stocks steady
- U.S. Senate Judiciary to probe Kavanaugh, accuser in public hearing
- Trump orders more Russia-related probe documents to be declassified
- Leaders of two Koreas meet for high-stakes summit with nuclear talks in jeopardy
- Canada's Freeland returning to Washington for NAFTA talks as time runs short
- Australia's central bank warns trade tensions a "material risk" to upbeat outlook
- India again defers tit-for-tat tariffs against US goods - Hindustan Times
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Jun Industrial Orders MM SA, 3.60% prev
- (0400 ET/0800 GMT) Italy Jun Industrial Orders YY NSA, 4.90% prev
- (0400 ET/0800 GMT) Italy Jun Industrial Sales MM SA, 1.70% prev
- (0400 ET/0800 GMT) Italy Jun Industrial Sales YY WDA, 5.00% prev
Key Events Ahead
- N/A Bank of Japan holds Monetary Policy Meeting (to September 19) in Tokyo
- (0300 ET/0700 GMT) ECB's Mario Draghi speaks at a conference in Paris entitled "Financial supervision and the role of National Authorities in Europe" in Paris
- (0300 ET/0700 GMT) ECB's Francois Villeroy de Galhau speaks at a conference in Paris entitled "Financial supervision and the role of National Authorities in Europe" in Paris
- (0330 ET/0730 GMT) ECB's Daniele Nouy chairs a panel at a financial regulation conference in Paris entitled "Financial supervision and the role of National Authorities in Europe" in Paris
- (0410 ET/0810 GMT) Riksbank's Kerstin af Jochnick will participate in a conference arranged by Moody's: Swedish Real Estate Conference - Are we at the top of the real estate cycle? in Stockholm
FX Beat
DXY: The dollar index plunged to an over 1-1/2 month low as investors braced for Beijing's response to new U.S. tariffs on Chinese goods. The greenback against a basket of currencies trades 0.1 percent down at 94.44, having touched a low of 94.35, its lowest since July 31. FxWirePro's Hourly Dollar Strength Index stood at -18.23 (Neutral) by 0500 GMT.
EUR/USD: The euro surged, extending gains for the second straight session after the European Central Bank board member Benoit Coeure stated that ECB should clarify the pace at which it intends to hike interest rates when the time for further policy tightening nears. The European currency traded 0.1 percent up at 1.1688, having touched a high of 1.1721 on Friday, its highest since Aug 30. FxWirePro's Hourly Euro Strength Index stood at 6.49 (Neutral) by 0500 GMT. Investors’ attention will remain on series of data from the Eurozone economies, and ECB President Draghi's speech, ahead of the U.S. Housing Market Index. Immediate resistance is located at 1.1718 (August 30 High), a break above targets 1.1747 (July 31 High). On the downside, support is seen at 1.1584 (August 31 Low), a break below could drag it till 1.1542 (September 5 Low).
USD/JPY: The dollar rebounded from a 5-day low, after U.S. President Donald Trump impose 10 percent tariffs on about $200 billion worth of Chinese imports, effective Sept. 24 and warned of more tariffs if China retaliated. The major was trading 0.1 percent up at 111.98, having hit a high of 112.16 on Friday, its highest since July 20. FxWirePro's Hourly Yen Strength Index stood at -111.96 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. Housing Market Index. Immediate resistance is located at 112.17 (July 11 High), a break above targets 112.62 (July 12 High). On the downside, support is seen at 111.45 (10-DMA), a break below could take it lower 111.06 (September 11 Low).
GBP/USD: Sterling surged to a fresh 1-1/2 month high, as investors continued to digest the news of progress on the Irish border issue. On Monday, a report published by The Times stated that EU chief negotiator Michel Barnier is working on a blueprint to reduce physical checks at the border between the two Irelands by tracking goods using barcodes on shipping containers. The major traded 0.05 percent up at 1.3164, having hit a high of 1.3165 earlier; it’s highest since July 31. FxWirePro's Hourly Sterling Strength Index stood at 89.25 (Slightly Bullish) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit trade deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3213 (July 26 High), a break above could take it near 1.3274 (July 5 High). On the downside, support is seen at 1.3080 (5-DMA), a break below targets 1.3002 (10-DMA). Against the euro, the pound was trading 0.2 percent down at 88.98 pence, having hit a high of 88.71 earlier, it’s highest since August 2.
AUD/USD: The Australian dollar rallied above the 0.7200 handle as minutes of the Reserve Bank of Australia's September policy meeting sounded upbeat about a strong labour market, a declining currency and resilient household consumption. The Aussie trades 0.6 percent up at 0.7217, having hit a high of 0.7229 on Thursday; it’s highest since September 4. FxWirePro's Hourly Aussie Strength Index stood at 14.84 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7125, a break below targets 0.7085 (September 11 Low). 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 advanced to a near 2-week peak, as investors expect to see a rise in the country’s gross domestic product (GDP) for the second quarter of this year, due to be released tomorrow. The Kiwi trades 0.4 percent up at 0.6599, having touched a high of 0.65607, its highest level since September 6. FxWirePro's Hourly Kiwi Strength Index was at -6.61 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6613 (50.0% retracement of 0.6727 and 0.6500), a break above could take it near 0.6639 (61.8% retracement). On the downside, support is seen at 0.6528 (September 7 Low), a break below could drag it below 0.6500 (September 11 Low).
Equities Recap
Asian shares slumped after Washington announced new tariffs on Chinese imports, escalating trade tensions between both the economies.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent.
Tokyo's Nikkei surged 1.4 percent to 23,420.54 points, Australia's S&P/ASX 200 index declined 0.4 percent to 6,161.50 points, and South Korea's KOSPI gained 0.4 percent to 2,310.97 points.
Shanghai composite index rose 1.6 percent to 2,694.12 points, while CSI300 index traded 1.9 percent up at 3,265.30 points.
Hong Kong’s Hang Seng traded 0.7 percent higher at 27,130.24 points. Taiwan shares shed 0.6 percent to 10,760.21 points.
Commodities Recap
Crude oil prices declined as the latest escalation in the U.S.-China trade war clouded the outlook for crude demand from both the economies. International benchmark Brent crude was trading 0.4 percent down at $77.54 per barrel by 0524 GMT, having hit a high of $80.08 on Wednesday, its highest since May 22. U.S. West Texas Intermediate was trading 0.3 percent down at $68.54 a barrel, after rising as high as $71.24 on Wednesday, its highest since September 4.
Gold prices slumped amid concerns of slowing global trade after the United States imposed a new round of tariffs on Chinese imports. Spot gold fell 0.3 percent at $1,198.21 an ounce at 0526 GMT, having hit a high of $1212.55 on Thursday, its highest since Aug. 28. U.S. gold futures were down 0.2 percent at $1,203.90 an ounce.
Treasuries Recap
The Japanese government bond prices suffered during late Asian session even as market participants expect to see a worse trade balance data for the month of August, scheduled to be released today by 23:50GMT. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained 1/2 basis point higher at 0.115 percent, the yield on the long-term 30-year note climbed 1 basis point to 0.851 percent while the yield on short-term 2-year traded flat at -0.108 percent.
The Australian government bonds slumped across the curve during Asian session after the U.S. 10-year Treasuries yield surged to a near 4-month high on expectations of the Federal Reserve policy tightening. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 2-1/2 basis points to 2.653 percent, the yield on the long-term 30-year bond traded 2-1/2 basis points higher at 3.144 percent and the yield on short-term 2-year climbed 3 basis points to 2.066 percent.
The Canadian government bond prices edged higher across the yield curve, with the 10-year rising 3 Canadian cents to yield 2.342 percent. Still, the 10-year yield held near its highest level in nearly six weeks.
