Market Roundup
- Euro near two-year low
- BOJ board debated near-term stimulus in September
- U.S. administration to consider delisting Chinese companies from U.S. stock exchanges
- Oil prices rise as positive China factory data eases demand concerns
- Gold prices decline as fears of trade war ease
Economic Data Ahead
- (0355 ET/0755 GMT) German unemployment change September
- (0355 ET/0755 GMT) German unemployment rate s.a. September
- (0400 ET/0800 GMT) Italy Unemployment August
- (0430 ET/0830 GMT) United Kingdom GDP QQ
- (0430 ET/0830 GMT) United Kingdom GDP YY
- (0500 ET/0900 GMT) Italy prelim consumer price index YY September
- (0500 ET/0900 GMT) Italy prelim consumer price index MM September
- (0500 ET/0900 GMT) EZ unemployment rate August
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index eased, extending prior session losses on news the Trump administration is considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from U.S. stock exchanges. The greenback against a basket of currencies traded down at 99.09, having touched a high of 99.31 on Friday, its highest since September 3.
EUR/USD: The euro eased, reversing some of its previous session gains, weighed down by a weak growth outlook, negative interest rates, quantitative easing and other attempts by the European Central Bank to stimulate the eurozone economy. The European currency traded flat at 1.0936, having touched a low of 1.0904 on Friday, its lowest since May 2017. Investors’ attention will remain on German data and EZ unemployment rate ahead of the U.S. Chicago Purchasing Managers' Index and Dallas Fed Manufacturing Business Index. Immediate resistance is located at 1.0953 (23.6% retracement of 1.1055 and 1.0904), a break above targets 1.0983 (38.2% retracement). On the downside, support is seen at 1.0885, a break below could drag it below 1.0830.
USD/JPY: The Japanese yen surged after the summary of BoJ Sept. 18-19 meeting showed Bank of Japan policymakers debated the feasibility of ramping up stimulus in the near future when they met for a rate review in September, as intensifying overseas risks cloud the economic outlook. The major was trading 0.2 percent down at 107.77, having hit a high of 108.18 on Friday, its highest since September 19. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Chicago Purchasing Managers' Index and Dallas Fed Manufacturing Business Index. Immediate resistance is located at 108.25 (September 13 High), a break above targets 108.53 (July 1 High). On the downside, support is seen at 107.41 (21-DMA), a break below could take it near at 106.76 (September 6 Low).
GBP/USD: Sterling steadied after falling to a 3-week low in the previous session on the back of Bank of England policymaker Michael Saunders' comments, hinting at looser monetary policy if Brexit uncertainty remained prolonged against a backdrop of disappointing global growth. The major traded flat at 1.2291, having hit a low of 1.2284 on Friday, it’s lowest since September 19. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2371 (5-DMA), a break above could take it near 1.2423 (10-DMA). On the downside, support is seen at 1.2233 (September 9 Low), a break below targets 1.2210 (September 5 Low). Against the euro, the pound was trading flat at 88.94 pence, having hit a low of 89.04 earlier, it’s lowest since Sept. 13.
AUD/USD: The Australian dollar tumbled, hovering towards a 3-week low hit in the prior week as markets price in a more than 70 percent chance of the Reserve Bank of Australia reducing the cash rate for the third time this year to 0.75 percent at its October 1 board meeting. The Aussie trades traded 0.2 percent down at 0.6748, having hit a low of 0.6739 on Wednesday, it’s lowest since September 3. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6732 (August 28 Low), a break below targets 0.6706 (August 30 Low). On the upside, resistance is located at 0.6799 (August 21 High), a break above could take it near 0.6829 (September 5 High).
NZD/USD: The New Zealand dollar plunged to a fresh 4-year low, ahead of a slew of second-tier data from New Zealand, including August month’s seasonally adjusted Building Permits, which is expected to decline 2.7 percent versus 1.3 percent fall in the previous month. The Kiwi trades 0.8 percent down at 0.6260, having touched a low of 0.6255 earlier, its lowest level since September 2015. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6362 (September 18 High), a break above could take it near 0.6398 (August 27 Low). On the downside, support is seen at 0.6235, a break below could drag it below 0.6210.
Equities Recap
Asian shares tumbled on news that the U.S. administration is considering delisting Chinese companies from U.S. stock exchanges.
MSCI's broadest index of Asia-Pacific shares outside Japan nudged down 0.1 percent.
Tokyo's Nikkei fell 0.8 percent to 21,755.84 points, Australia's S&P/ASX 200 index tumbled 0.4 percent to 6,688.30 points and South Korea's KOSPI rose 0.5 percent to 2,060.81 points.
Shanghai composite index declined 0.5 percent to 2,916.24 points, while CSI 300 index traded 0.6 percent down at 3,828.80 points.
Hong Kong’s Hang Seng traded 0.6 percent higher at 26,107.06 points.
Commodities Recap
Crude oil prices declined by more than 1 percent to hit a 2-week low, amid concerns world’s top oil exporter Saudi Arabia had restored capacity to 11.3 million barrels per day and an ongoing trade war between U.S. and China. International benchmark Brent crude was trading 1.4 percent down at $60.98 per barrel by 0514 GMT, having hit a low of $60.27 earlier, its lowest since September 16. U.S. West Texas Intermediate was trading 0.4 percent lower at $55.86 a barrel, after falling as low as $54.73 on Friday, its lowest since September 13.
Gold prices plunged as the concerns over an escalation in the U.S.-China trade war eased. Spot gold was trading 0.2 percent down at $1,493.16 per ounce by 0518 GMT, having touched a low of $1,486.79 on Friday, its lowest since September 18. U.S. gold futures were 0.2 percent lower at $1,503.3 per ounce.
Treasuries Recap
The Japanese government bond prices slipped as investors bet that the Bank of Japan could adjust its policy to steepen the yield curve next month. The benchmark 10-year JGB futures fell 0.15 point to 155.02, while the benchmark 10-year cash JGB yield rose 1.5 basis points to minus 0.225 percent. The 20-year JGB yield rose 3 basis points to 0.195 percent while the 30-year JGB yield rose 3.5 basis points to 0.355 percent, near last week’s eight-week high of 0.365 percent. The 40-year JGB yield rose 4.5 basis points to 0.425 percent, just below near three month high of 0.430 percent touched last Thursday.
The Australian government bonds suffered during Asian session of the first trading day of the week Monday as investors await the Reserve Bank of Australia’s (RBA) monetary policy meeting, scheduled to be held on October 1 by 04:30GMT for further direction in the debt market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, climbed 1 basis point to 0.970 percent, the yield on the long-term 30-year bond also jumped nearly 2-1/2 basis points to 1.589 percent while the yield on short-term 2-year hovered around 0.738 percent.
