Market Roundup
- China unveils new leadership line-up, no obvious Xi successor
- New Zealand protectionist Winston Peters appointed deputy PM, foreign minister
- Australia economy energized by jobs, infrastructure surge - Rtrs poll
- Australia Q3 CPI 0.6% q/q, 1.8% y/y vs 0.2% in Q2, 1.9% forecast 0.8%, 2.0%
- Australia Q3 RBA weighted median CPI 0.3% q/q, 1.9% y/y vs 0.5%, 1.8% in Q2, forecast 0.5%, 2.0%
- Australia Q3 RBA Trimmed Mean CPI 0.4% q/q, 1.8 y/y vs 0.5%, 1.8% in Q2, forecast 0.5%, 2.0%
- Japan may declare end to deflation before 2019 tax hike - sources
- BOJ sees less to fret about low inflation, policy on hold - Rtrs preview
- Nikkei's gains rein in BOJ's fund purchasing – Nikkei
- Japan to consider bigger tax breaks for firms that hike wages
- Catalan secessionists mull snap election as Madrid hangs tough
- Mexico open to NAFTA accord against forex manipulation -minister
- U.S. mortgage supply seen falling in 2018 – MBA
Economic Data Ahead
- (0400 ET/0800 GMT) Germany Oct Ifo Business Climate, 115.2 eyed, last 115.2
- (0400 ET/0800 GMT) Germany Oct Ifo Current Conditions, 123.5 eyed, last 123.6
- (0400 ET/0800 GMT) Germany Oct Ifo Expectation, 107.3 eyed, last 107.4
- (0430 ET/0830 GMT) Great Britain Q3 GDP Prelim, 0.3% q/q, 1.4% y/y eyed; last 0.3%, 1.5%
Key Events Ahead
- N/A Sweden USD 3-year benchmark via Barclays/Citi/JPM
- (0300 ET/0700 GMT) Swedish central bank holds monetary policy meeting no. 5, Stockholm
FX Beat
DXY: The dollar index steadied near 2-week highs, underpinned by reports of Republican senators' support for John Taylor to become the next Federal Reserve chief. The greenback against a basket of currencies traded flat at 93.92, having touched a high of 94.02 on Monday, its highest since Oct. 6. FxWirePro's Hourly Dollar Strength Index stood at 70.50 (Bullish) by 0500 GMT.
EUR/USD: The euro consolidated within narrow ranges, with the near-term focus on Thursday's European Central Bank policy meeting, where the ECB is seen likely to announce that it will cut back its monthly bond purchases, probably from early next year. The European currency traded flat at 1.1761, having touched a low of 1.1725 on Monday, its lowest since Oct. 9. FxWirePro's Hourly Euro Strength Index stood at 64.71 (Bullish) by 0500 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of U.S. new home sales, durable goods orders and housing price index. Immediate resistance is located at 1.1799 (10-DMA), a break above targets 1.1850. On the downside, support is seen at 1.1736, a break below could drag it near 1.1700.
USD/JPY: The dollar eased following a CNBC report citing an aide of Senate leader Mitch McConnell that three GOP Senators may not support the Republican tax bill. The major was trading 0.1 percent down at 113.82, having hit a high of 114.10 on Monday, its highest since Jul. 17. FxWirePro's Hourly Yen Strength Index stood at -19.14 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. new home sales, durable goods orders and housing price index. Immediate resistance is located at 114.10, a break above targets 114.50. On the downside, support is seen at 113.25 (5-DMA), a break below could take it near 112.72 (10-DMA).
GBP/USD: Sterling edged up after declining below the 1.3200 handle in the previous session on growing uncertainty over whether the Bank of England will raise interest rates next week for the first time in over a decade. The major traded up at 1.3136, having hit a low of 1.3087 on Friday, its lowest since Oct. 09. FxWirePro's Hourly Sterling Strength Index stood at -20.13 (Neutral) by 0500 GMT. Investors’ focus will remain on UK gross domestic product, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3207 (10-DMA), a break above could take it near 1.3230. On the downside, support is seen at 1.3113 (Previous Session Low), a break below targets 1.3074. Against the euro, the pound was trading flat at 89.53 pence, having hit a high of 88.86 pence on Monday, its highest since Oct. 17.
AUD/USD: The Australian dollar slumped to its lowest since mid-July after the economy's September-quarter consumer price index figures came in below market expectations, leading investors to further pare back the chance of an interest rate hike in near term. Australia's consumer price index rose 1.8 percent for the year to September, below market forecasts of 2.0 percent. The Aussie trades 0.7 percent down at 0.7721, having hit a low of 0.7715 earlier, it’s lowest since Jul. 17. FxWirePro's Hourly Aussie Strength Index stood at -71.26 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7715 (Session Low), a break below targets 0.7700. On the upside, resistance is located at 0.7800, a break above could take it near 0.7880.
NZD/USD: The New Zealand dollar tumbled to fresh 5-month lows, amid persistent USD demand and NZ political developments. The Kiwi trades down at 0.6900, having touched a low of 0.6881 earlier, its lowest level since May 19. FxWirePro's Hourly Kiwi Strength Index was at -12.37 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6950, a break above could take it near 0.7089. On the downside, support is seen at 0.6881 (Session Low), a break below could drag it till 0.6850.
Equities Recap
Asian shares gained, while the greenback steadied near 2-week highs following a report that Republican senators were leaning towards John Taylor to be the next Federal Reserve chief.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.
Tokyo's Nikkei fell 0.7 percent to 21,650.11 points, Australia's S&P/ASX 200 index climbed 0.1 percent to 5,905.60 points and South Korea's KOSPI advanced 0.1 percent to 2,492.30 points.
Shanghai composite index rose 0.1 percent to 3,392.24 points, while CSI300 index was trading 0.2 percent up at 3,966.80 points.
Hong Kong’s Hang Seng was trading 0.3 percent higher at 28,253.96 points. Taiwan shares added 0.1 percent to 10,750.57 points.
Commodities Recap
Crude oil prices eased after rising to a four-week high in the previous session, as top exporter Saudi Arabia said it was determined to end a supply glut. International benchmark Brent crude was trading 0.1 percent down at $58.39 per barrel by 0432 GMT, having hit a high of $58.46 the day before, its highest since Sept. 18. U.S. West Texas Intermediate was trading 0.2 percent lower at $52.41 a barrel, after rising as high as $52.59 on Tuesday, its highest since Sept. 28.
Gold prices fell to a near 3-week low, weighed down by stronger equities and a firmer dollar amid speculation over who will be the next U.S. Federal Reserve chief. Spot gold was down 0.2 percent at $1,273.31 an ounce by 0436 GMT, having hit its lowest since Oct. 6 at $1,271.82 earlier. U.S. gold futures for December delivery were 0.2 percent lower at $1,275.30 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.370 percent lower by 0.005 bps, while 5-year yield was 0.005 bps down at 2.001 percent.
The Japanese government bonds slumped following weakness in the U.S. Treasuries, but daily bond operation from the Bank of Japan limited the losses. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis points to 0.072 percent, the yield on long-term 30-year climbed 1/2 basis points to 0.875 percent and the yield on short-term 2-year too remained steady at -0.13 percent.
The Australian short-term government bonds gained after third-quarter consumer price inflation missed expectations, remaining below the Reserve Bank of Australia’s target band of 2-3 percent. The yield on short-term 2-year fell 3 basis points to 1.901 percent, 3-year bond yields also slid 3 basis points to 2.062 percent and 1-year note yield declined 2-1/2 basis points to 1.804. On the other hand, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, remained steady at 2.778 percent, the yield on the long-term 30-year note held steady at 3.538 percent.
The Canadian government bond prices were mostly lower across a steeper yield curve, with the two-year down 4 Canadian cents to yield 1.496 percent and the 10-year falling 37 Canadian cents to yield 2.069 percent.
