Market Roundup
- Gold prices edge lower
- Oil gains on Saudi supply disruption
- Kiwi at 4-year low as political tensions prevail
Economic Data Ahead
- (0315 ET/0715 GMT) France Markit Mfg Flash PMI
- (0315 ET/0715 GMT) France Markit Service Flash PMI
- (0315 ET/0715 GMT) France Markit Comp Flash PMI
- (0330 ET/0730 GMT) Germany Markit Mfg Flash PMI
- (0330 ET/0730 GMT) Germany Markit Service Flash PMI
- (0330 ET/0730 GMT) Germany Markit Comp Flash PMI
- (0400 ET/0800 GMT) Euro Zone Markit Mfg Flash PMI
- (0400 ET/0800 GMT) Euro Zone Markit Service Flash PMI
- (0400 ET/0800 GMT) Euro Zone Markit Comp Flash PMI
Key Events Ahead
- No significant event scheduled
FX Beat
DXY: The dollar index rallied after the United States removed tariffs from more than 400 Chinese products in response to requests from U.S. companies. The greenback against a basket of currencies traded 0.1 percent up at 98.54, having touched a high of 98.14 on Friday, its lowest since August 16.
EUR/USD: The euro steadied after tumbling in the previous session, as investors awaited Eurozone preliminary manufacturing and service purchasing manager indices (PMI) for further clues on the strength of the economy. The European currency traded flat at 1.1023, having touched a high of 1.1109 earlier in the week, its highest since August 27. Investors’ attention will remain on the Eurozone preliminary Markit manufacturing, service and composite PMI's and ECB President Draghi's speech, ahead of the U.S. Markit flash PMI's and New York Fed President John Williams speech. Immediate resistance is located at 1.1084 (September 5 High), a break above targets 1.1109 (September 13 High). On the downside, support is seen at 1.0996 (September 20 Low), a break below could drag it below 1.0963 (August 30 High).
USD/JPY: The dollar surged, reversing most of its previous session losses, as investor’s risk appetite improved after talks in Washington between U.S. and Chinese trade deputies were described as productive and constructive, with October’s high-level talks remaining on track. The major was trading 0.2 percent up at 107.73, having hit a high of 108.47 on Thursday, its highest since August 1. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. Markit flash PMI's and New York Fed President John Williams speech. Immediate resistance is located at 108.04 (5-DMA), a break above targets 108.63 (July 5 High). On the downside, support is seen at 107.44 (September 16 Low), a break below could take it lower at 107.01 (21-DMA).
GBP/USD: Sterling declined, extending prior session losses, after Ireland’s foreign minister said Britain and the European Union were not yet close to a Brexit deal. The major traded 0.2 percent down at 1.2447, having hit a high of 1.2582 on Friday, it’s highest since July 25. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2526 (September 17 High), a break above could take it near 1.2605 (June 17 High). On the downside, support is seen at 1.2392 (September 17 High), a break below targets 1.2312 (21-DMA). Against the euro, the pound was trading 0.2 percent down at 88.50 pence, having hit a high of 88.29 on Friday, it’s highest since May 22.
AUD/USD: The Australian dollar steadied after falling to a 2-1/2 week trough in the previous session after China’s state news agency reported that trade discussions in Washington were constructive and that both the countries will discuss the details of the next round of talks, scheduled for October. The Aussie traded 0.2 percent up at 0.6774, having hit a low of 0.6760 on Friday, it’s lowest since September 4. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6753 (September 4 Low), a break below targets 0.6717 (August 29 Low). On the upside, resistance is located at 0.6802 (21-DMA), a break above could take it near 0.6861 (July 31 High).
NZD/USD: The New Zealand dollar rose, halting a 3-day losing streak, ahead of the Reserve Bank of New Zealand’s monetary policy meeting on Wednesday, where it is expected to keep the official cash rate at the record low of 1.00 percent, but keep the door open to cut interest rates. The Kiwi trades 0.1 percent higher at 0.6264, having touched a low of 0.6255 on Friday, 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 0.6315 (5-DMA), a break above could take it near 0.6361 (10-DMA). On the downside, support is seen at 0.6235, a break below could drag it below 0.6200.
Equities Recap
Asian shares tumbled as investors waited for more clarity on the U.S.-China trade talks after recent negotiations.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.3 percent.
Australia's S&P/ASX 200 index rallied 0.3 percent to 6,749.70 points and South Korea's KOSPI surged 0.05 percent to 2,091.70 points.
Shanghai composite index fell 0.9 percent to 2,977.08 points, while CSI 300 index traded 1.1 percent down at 3,890.66 points.
Hong Kong’s Hang Seng traded 0.7 percent lower at 26,311.62 points. Taiwan shares shed 0.1 percent to 10,919.02 points.
Commodities Recap
Crude oil prices rose, reversing most of its previous session losses amid concerns about oil supply disruptions from Saudi Arabia and elevated tensions in Middle East. International benchmark Brent crude was trading 0.5 percent up at $64.97 per barrel by 0515 GMT, having hit a high of $69.64 last week, its highest since May 30. U.S. West Texas Intermediate was trading 0.5 percent up at $58.73 a barrel, after rising as high as $63.33 last week, its highest since May 21.
Gold prices declined after rising to a 1-1/2 week peak earlier in the session as risk appetite improved after the U.S. Trade Representative described last week’s U.S.-China trade talks as productive. Spot gold was trading 0.1 percent down at $1,515.32 per ounce by 0518 GMT, having touched a high of $1,519.47 earlier, its highest since September 12. U.S. gold futures were up 0.3 percent at $1,519.8 per ounce.
Treasuries Recap
The Australian government bonds jumped during Asian session of the first trading day of the week Monday amid a muted session that witnessed data of little economic significance ahead of the Reserve Bank of Australia’s (RBA) Governor Philip Lowe’s speech, scheduled to be delivered on September 24 by 09:55GMT amid a wave of global geopolitical tensions. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 7 basis points to 0.986 percent, the yield on the long-term 30-year bond slumped nearly 6 basis points to 1.580 percent and the yield on short-term 2-year suffered nearly 3 basis points to 0.752 percent.
