Market Roundup
- Australia Aug Employment, 54.2k vs forecast 15.0k, rvsd 29.2k last 27.9k
- Australia Aug Unemployment rate, 5.6% vs forecast 5.6%, last 5.6%
- BoE to balance Brexit, inflation as it seeks right rate note
- China Aug Industrial output y/y, 6% vs forecast 6.6%, last 7.5%
- China Aug Urban investment y/y, 7.8% vs forecast 8.2%, last 8.3%
- China Aug Retail sales y/y, 10.1% vs forecast 10.5%, last 10.4%
- ECB's chief economist calls for "steady hand" on easy policy
- London house prices record biggest fall since 2008 - RICS
- Higher gasoline prices boost U.S. producer inflation
- Trump says rich might pay more in taxes, talks with Democrats
- North Korea threatens nuke/missile test into ocean near Japan – Japan NTV
- Japanese buy net Y306.1 bln for-bonds, Y198.7 bln bonds, Y40.6 bln bills
- Foreign investors buy net Y555.8 bln JGBs, Y1.9092 trln bills latest week
- Foreign investors also sell net Y644.6 bln Japanese stocks Sept 9 week
- Many on tenterhooks pre-SNB, too early to change script?
Economic Data Ahead
- (0245 ET/0645 GMT) France Aug CPI (EU Norm) final, 0.6% m/m, 1.0% y/y eyed; last -0.4%, 1.0%
- (0330 ET/0730 GMT) Switzerland Q3 3M Target LIBOR rate, -0.75% eyed, last -0.75%
- (0400 ET/0800 GMT) Italy Aug Consumer prices final, 0.3% m/m, 1.2% y/y eyed; last 0.3%, 1.2%
- (0400 ET/0800 GMT) Italy Aug CPI (EU Norm) final, 0.1% m/m, 1.4 y/y eyed; last 0.1%, 1.4%
- (0700 ET/1100 GMT) Great Britain Sep BOE Bank rate, 0.25% eyed, last 0.25%
- (0700 ET/1100 GMT) Great Britain Sep BOE QE Gilts, 435 bln eyed, last 435 bln
- (0700 ET/1100 GMT) Great Britain Sep BOE QE Corp, 10 bln eyed, last 10 bln
Key Events Ahead
- NA/ ECB's Smets and Jazbec speak in Slovenia
- (0300 ET/0700 GMT) Swedish Deputy Central Bank Governor Per Jansson speaks in Stockholm
- (0330 ET/0730 GMT) Swiss National Bank monetary policy assessment
- (0530 ET/0930 GMT) Ireland E1.0/E1.0 bln for 9/10 year auction
- (0700 ET/1100 GMT) BOE announces its rate decision and publishes the minutes of the meeting
- (1130 ET/1530 GMT) ECB's Mersch speaks in Tallinn
FX Beat
DXY: The dollar gained versus some of its major peers as traders awaited the U.S. consumer inflation data later in the day for clues on the possible timing of the Federal Reserve's next rate hike. The greenback against a basket of currencies traded 0.1 percent up at 92.48, having touched a low of 91.01 last week, its lowest since Jan 2015. FxWirePro's Hourly Dollar Strength Index stood at 94.82 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro fell to an over 1-week low as tax reform talk in the United States boosted the treasury yields. Investors now await the U.S. data, which is expected to show the consumer price index ticked up in August, partly because of a slight rise in gasoline prices. The European currency traded 0.1 percent down at 1.1874, having touched a low of 1.1870 earlier, its lowest since Sept. 5. FxWirePro's Hourly Euro Strength Index stood at -1.67 (Neutral) by 0500 GMT. Investors’ attention will remain on series of economic data from the Eurozone economies, ahead of U.S. consumer price index and unemployment benefits claims data. Immediate resistance is located at 1.1935 (10-DMA), a break above targets 1.1972 (5-DMA). On the downside, support is seen at 1.1849 (Sept. 1 Low), a break below could drag it near 1.1823 (August 31 Low)).
USD/JPY: The dollar rallied to a near 1-month high on the back of news that the U.S. tax reform guidance would be announced by September 25, renewing optimism over the US President Donald Trump's pro-growth economic agenda. Moreover, easing geopolitical concerns despite North Korea’s rejection of the new sanctions imposed by the UN Security Council supported the upside in the major. The major was trading flat at 110.48, having hit a high of 110.73 earlier, its highest since Aug. 16. FxWirePro's Hourly Yen Strength Index stood at -72.36 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. consumer price index and unemployment benefits claims data for further momentum. Immediate resistance is located at 110.90, a break above targets 111.70. On the downside, support is seen at 109.99 (78.6% retracement of 107.31 and 110.73), a break below could take it near 109.46 (21-DMA).
GBP/USD: Sterling traded just above the 1.3200 handle after retreating from a one-year high in the previous session on the back of weaker than expected Britain's wage growth data. Investors now await the Bank of England monetary policy decision due later in the day. Sterling traded flat at 1.3206, having hit a high of 1.3328 the day before, its highest since September 2016. FxWirePro's Hourly Sterling Strength Index stood at 52.88 (Bullish) by 0500 GMT. Investors’ focus will remain on the BoE monetary policy outcome, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3250, a break above could take it near 1.3300. On the downside, support is seen at 1.3160 (Sept. 12), a break below targets 1.3082 (21-DMA). Against the euro, the pound was trading 0.1 percent up at 89.90 pence, having hit a high of 89.81 pence on Wednesday, its highest since Aug. 3.
AUD/USD: The Australian dollar rebounded after declining for three straight sessions as domestic jobs data surpassed expectations and helped offset strength in its U.S. counterpart. However, downbeat Chinese urban investment coupled with weaker than expected industrial production and retail sales figures limited the upside in the major. The Aussie trades 0.2 percent up at 0.8004, having hit a high of 0.8124 last week, it’s strongest since May 2015. FxWirePro's Hourly Aussie Strength Index stood at- 59.78 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7968 (38.2% retracement of 0.7871 and 0.8124), a break below targets 0.7931 (23.6% retracement of 0.7871 and 0.8124). On the upside, resistance is located at 0.8026 (5-DMA), a break above could take it near 0.8100.
NZD/USD: The New Zealand dollar declined, extending previous session losses after a survey showed New Zealand's Opposition Labour Party retained the lead over governing National Party. Voter support for the governing national party stood at 40 percent, while support for labour party was at 44 percent. The major trades 0.2 percent down at 0.7227, having touched a high of 0.7337 last week, its highest level since Aug. 21. FxWirePro's Hourly Kiwi Strength Index was at 82.06 (Slightly Bullish) by 0600 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7303 (Previous Session High), a break above could take it near 0.7340. On the downside, support is seen at 0.7211 (Session Low), a break below could drag it till 0.7131 (August 31 Low).
Equities Recap
Asian shares eased from a 10-year high on the back of weaker than expected Chinese economic data, while the dollar rose ahead of U.S. inflation data due later in the day.
MSCI's broadest index of Asia-Pacific shares outside Japan slightly eased 0.1 percent after rising to its highest since 2007 the day before.
Tokyo's Nikkei fell 0.3 percent to 19,807.44 points, Australia's S&P/ASX 200 index declined 0.1 percent to 5,738.70 points and South Korea's KOSPI climbed 0.2 percent to 2,365.24 points.
Shanghai composite index eased 0.4 percent to 3,369.59 points, while CSI300 index was trading 0.4 percent down at 3,830.82 points.
Hong Kong’s Hang Seng was trading 0.5 percent lower at 27,767.20 points. Taiwan shares added 0.2 percent to 10,553.57 points.
Commodities Recap
Crude oil prices eased after rising to multi-month highs in the previous session on the back of a forecast for firmer global oil demand by the International Energy Agency. International benchmark Brent crude was trading 0.05 percent down at $55.00 per barrel by 0500 GMT, having hit a high of $55.18 on Wednesday, its strongest since Apr. 18. U.S. West Texas Intermediate was trading 0.2 percent down at $49.21 a barrel, after rising as high as $49.37 the day before, its highest since Sept. 6.
Gold prices eased to its lowest level in two weeks, as investors shifted their attention on U.S. consumer inflation data later in the day for clues on the timing of further interest rate hikes. Spot gold was down at $1,321.81 an ounce by 0505 GMT, after earlier dropping to its lowest since Sept. 1 at $1,319.03. U.S. gold futures for December delivery were down 0.3 percent at $1,324.50 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.190 percent lower by 0.005 bps, while 5-year yield was 0.005 bps down at 1.768 percent.
The Japanese government bonds traded on the downside after the country’s industrial production declined as initially estimated in July, at the same levels as was witnessed in June. The yield on the benchmark 10-year Treasury note hovered around 0.02 percent, the yield on long-term 30-year rose 1/2 basis point to 0.83 percent and the yield on short-term 2-year traded flat at -0.14 percent.
The Australian 10-year bond yields surged to 7-week high after investors moved away from safe-haven assets, following higher-than-expected employment report for the month of August that ignited signals of a promising economic performance of the country. The yield on the benchmark 10-year Treasury note jumped 6 basis points to 2.73 percent, the yield on 15-year note also surged 6 basis points to 3.03 percent and the yield on short-term 2-year traded 4 basis points higher at 1.94 percent.
The New Zealand bonds slumped at the time of closing after a private survey revealed an upbeat consumer confidence amid a silent trading session that witnessed data of least economic significance. At the time of closing, the yield on the benchmark 10-year Treasury note jumped 7-1/2 basis points to 2.93 percent, the yield on 7-year note surged 6-1/2 basis points to 2.79 percent and the yield on short-term 2-year ended 3-1/2 basis points higher at 2.06 percent.
The Canadian government bond prices were lower across the yield curve, with the 10-year falling 12 Canadian cents to yield 2.058 percent. The yield reached its highest intraday since November 2014 at 2.074 percent.
