Market Roundup
- China factory growth weakest in over 2 yrs, slump in export orders deepens
- Japan's central bank holds fire, cuts inflation f'cast
- Trump targets U.S. birthright citizenship as elections loom
- Merkel says stepping down as CDU leader will not weaken her on world stage
- S&P warns 'no-deal' Brexit likely to tip UK into long recession
- Countering global protectionism, Pacific trade pact to start at end-2018
- Investors hedge their faith in China's faltering yuan
- U.S. says gravely concerned by any non-peaceful means of deciding Taiwan's future
- U.S. charges Chinese intelligence officers for jet engine data hack
- India cenbank governor may consider resigning after rift with govt - CNBC TV18
- Japan Sep Industrial Output Prelim MM SA, -1.1%, -0.3% f’cast, 0.2% prev
- Great Britain Oct GfK Consumer Confidence, -10, -10 f’cast, -9 prev
- Australia Q3 RBA Trimmed Mean CPI YY, 1.8%, 1.9% f’cast, 1.9% prev
Economic Data Ahead
- (0345 ET/0745 GMT) France Oct CPI (EU Norm) Prelim YY, 2.6% f’cast, 2.5% prev
- (0500 ET/0900 GMT) Italy Sep Unemployment Rate, 9.9% f’cast, 9.7% prev
- (0600 ET/1000 GMT) Italy Oct CPI (EU Norm) Prelim YY, 1.8% f’cast, 1.5% prev
- (0600 ET/1000 GMT) Italy Oct Consumer Price Prelim YY, 1.7% f’cast, 1.4% prev
- (0600 ET/1000 GMT) EZ Oct HICP Flash YY, 2.2% f’cast, 2.1% prev
- (0600 ET/1000 GMT) EZ Oct HICP-X F&E Flash YY, 1.2% f’cast, 1.1% prev
- (0600 ET/1000 GMT) EZ Sep Unemployment Rate, 8.1% f’cast, 8.1% prev
- N/A DE Sep Retail Sales YY Real, 0.9% f’cast, 1.6% prev
Key Events Ahead
- (0400 ET/0800 GMT) German Deputy Finance Minister Joerg Kukies speaks at the 2018 Financial Stability Conference in Berlin
- (0500 ET/0900 GMT) ECB policymaker Ewald Nowotny speaks at an economic reporters' club in Vienna
- (0505 ET/0905 GMT) ECB Supervisory Chief Daniele Nouy speaks in Berlin
- (0600 ET/1000 GMT) Swedish Central Bank Governor Stefan Ingves talks about Basel III at Banco de Portugal in Lisbon
- (0700 ET/1100 GMT) Riksbank Governor Stefan Ingves will visit Banco de Portugal and discuss the road to Basel III in Lisbon
- (0815 ET/1215 GMT) Norway Central Bank Governor Oystein Olsen gives a speech to students at The Norwegian University of Life Sciences in Oslo
- (1030 ET/1430 GMT) Fed Board holds meeting to discuss proposed rules that would modify the enhanced prudential standard framework for large banking organizations in Washington
- (1100 ET/1500 GMT) Bank of Spain's Governor, Hernandez de Cos to speak at Economy Commission in Parliament in Madrid
- (1315 ET/1715 GMT) Swiss National Bank Chairman Thomas Jordan gives speech on "Protectionism makes monetary policy difficult" in Bern
- (1615 ET/2015 GMT) Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins to appear before for Standing Senate Committee on Banking, Trade and Commerce in Ottawa
FX Beat
DXY: The dollar index surged to 16-month highs, bolstered by stronger than expected U.S. economic data and continued rate increases by the Federal Reserve. The greenback against a basket of currencies trades up at 97.03, having touched a high of 97.06, its highest since June 26. FxWirePro's Hourly Dollar Strength Index stood at 46.26 (Neutral) by 0500 GMT.
EUR/USD: The euro declined, extending losses for the third straight session, as the greenback surged across the board. Moreover, data showing the eurozone economy grew less than expected in the third quarter continued to weigh on investor sentiment. The European currency traded 0.05 percent down at 1.1342, having touched a low of 1.1335 on Friday, its lowest since August 1.6 FxWirePro's Hourly Euro Strength Index stood at 4.35 (Neutral) by 0500 GMT. Investors’ attention will remain on a series of data from the eurozone economies, and EZ prelim consumer price index, ahead of the U.S. ADP employment change, employment cost index. Immediate resistance is located at 1.1387 (October 30 High), a break above targets 1.1432 (October 25 High). On the downside, support is seen at 1.1301 (August 15 Low), a break below could drag it till 1.1264.
USD/JPY: The dollar rallied to a fresh 3-week peak after data showed U.S. consumer confidence rose to an 18-year high in October, driven largely a robust labour market, indicating strong economic growth could persist in the near term. The major was trading 0.2 percent up at 113.30, having hit a high of 113.32 earlier, its highest since October 9. FxWirePro's Hourly Yen Strength Index stood at -100.76 (Highly Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ADP employment change, employment cost index. Immediate resistance is located at 113.71 (September 28 High), a break above targets 114.10 (October 5 High). On the downside, support is seen at 112.82 (October 8 Low), a break below could take it lower 112.35 (October 22 Low).
GBP/USD: Sterling steadied above the 1.2700 handle after falling to a 2-1/2 month low in the previous session on concerns about Britain's departure from the European Union and worries over the lack of progress on issues including the Irish border. The major traded 0.1 percent up at 1.2711, having hit a low of 1.2695 on Tuesday; it’s lowest since August 16. FxWirePro's Hourly Sterling Strength Index stood at -46.22 (Neutral) 0500 GMT. Investors attention will remain on U.S. fundamental drivers, amid a lack of data from the UK docket. Immediate resistance is located at 1.2754 (August 16 High), a break above could take it near 1.2791 (August 13 High). On the downside, support is seen at 1.2664, a break below targets 1.2640. Against the euro, the pound was trading flat at 89.22 pence, having hit a low of 89.39 on Tuesday, it’s lowest since September 26.
AUD/USD: The Australian dollar declined below the 0.7100 handle, retreating from a 1-week peak after data showed domestic consumer prices stayed moderate last quarter while core inflation eased, cementing views central bank policy will remain accommodative for a long time to come. The Aussie trades 0.2 percent down at 0.7091, having hit a high of 0.7122 on Tuesday; it’s highest since October 22. FxWirePro's Hourly Aussie Strength Index stood at 76.44 (Slightly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7055 (October 23 Low), a break below targets 0.7021 (October 4 Low). On the upside, resistance is located at 0.7125 (October 22 High), a break above could take it near 7159 (September 17 High).
NZD/USD: The New Zealand dollar slumped from a 1-week peak despite a monthly survey of business confidence showing a slight improvement in sentiment for October from the previous month although firms remained pessimistic. The Kiwi trades 0.05 percent down at 0.6552, having touched a high of 0.6572 on Tuesday, its highest level since October 22. FxWirePro's Hourly Kiwi Strength Index was at 122.50 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6628 (October 1 High), a break above could take it near 0.6696 (September 26 High). On the downside, support is seen at 0.6502 (October 25 Low), a break below could drag it below 6465 (October 26 Low).
Equities Recap
Asian shares rebounded from 20-month lows, boosted by a bounce back on Wall Street, while the greenback surged to multi-month peaks on robust U.S. economic data.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.8 percent.
Tokyo's Nikkei surged 2.2 percent to 21,920.46 points, Australia's S&P/ASX 200 index rallied 0.4 percent to 5,830.30 points and South Korea's KOSPI gained 0.7 percent to 2,028.79 points.
Shanghai composite index rose 1.2 percent to 2,597.50 points, while CSI300 index traded 1.2 percent up at 3,146.45 points.
Hong Kong’s Hang Seng traded 0.9 percent higher at 24,811.25 points. Taiwan shares added 2.9 percent to 9,802.13 points.
Commodities Recap
Crude oil prices surged for the first time in three days, however, rising supply and concerns over the outlook for demand limited the upside. International benchmark Brent crude was trading 0.1 percent up at $76.32 per barrel by 0504 GMT, having hit a low of $75.09 on Tuesday, its lowest since August 24. U.S. West Texas Intermediate was trading 0.1 percent up at $66.36 a barrel, after falling as low as $65.37 on Tuesday, its lowest since August 21.
Gold prices slumped to a 3-week low as the greenback touched multi-month highs on robust U.S. economic data and on concerns over an escalation in the U.S.-China trade war. Spot gold was down 0.4 percent at $1,217.43 an ounce at 0510 GMT, having touched a low of $1,215.45 earlier, its lowest since Oct. 11. U.S. gold futures fell 0.3 percent to $1,222.20 an ounce.
Treasuries Recap
The Australian government bonds fell during Asian session as investors have largely shrugged-off the country’s lower-than-expected consumer price inflation (CPI) data for the third quarter of this year, with an additional eye on the retail sales for the month of September, due on November 2 by 00:30GMT for added direction in the debt market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1/2 basis point to 2.620 percent, the yield on the long-term 30-year bond remained tad lower at 3.111 percent and the yield on short-term 2-year too traded 1/2 basis point down at 1.980 percent.
The Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 9 Canadian cents to yield 2.309 percent and the 10-year declined 41 Canadian cents to yield 2.445 percent.
