Market Roundup
- U.S. House of Representatives launches a formal impeachment inquiry into Trump
- Oil eases after Trump's comments weaken trade talk optimism
- U.S. consumer confidence plunges in September
Economic Data Ahead
- (0400 ET/0800 GMT) Switzerland ZEW Survey - expectations September
- (0600 ET/1000 GMT) UK CBI distributive trades survey - Realized September
Key Events Ahead
- No significant event scheduled
FX Beat
DXY: The dollar index steadied after tumbling on news that Democrats in the U.S. House of Representatives launched a formal impeachment inquiry into Trump, accusing him of seeking foreign help to smear Democratic rival Joe Biden ahead of next year’s election. The greenback against a basket of currencies traded 0.2 percent up at 98.52, having touched a high of 98.83 on Monday, its highest since September 12.
EUR/USD: The euro declined, reversing most of its previous session gains, as weak eurozone economic data raised concerns the economy was struggling to gain traction despite additional measures of stimulus by the European Central Bank earlier this month. The European currency traded 0.2 percent down at 1.0997 having touched a low of 1.0966 on Monday, its lowest since September 12. Investors’ attention will remain on European Central Bank’s non-monetary policy meeting and ECB executive board member Benoît Cœuré's speech, ahead of the U.S. new home sales data. Immediate resistance is located at 1.1059 (September 10 High), a break above targets 1.1074 (September 17 High). On the downside, support is seen at 1.0963 (August 30 High), a break below could drag it below 1.0927 (September 12 High).
USD/JPY: The dollar steadied after falling to a 2-1/2 week low in the previous session on news that the U.S. lawmakers launched a formal impeachment inquiry into President Donald Trump. On Tuesday, House Speaker Nancy Pelosi announced the House would initiate a formal inquiry, stating that Trump appeared to have undermined national security and violated the U.S. Constitution, following reports Trump sought foreign help to smear Democratic presidential front-runner Joe Biden. The major was trading 0.3 percent up at 107.34, having hit a low of 107.04 on Tuesday, its lowest since September 9. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. new home sales data. Immediate resistance is located at 107.92 (July 1 High), a break above targets 108.53 (July 1 High). On the downside, support is seen at 106.76 (September 6 Low), a break below could take it lower at 106.32 (September 5 Low).
GBP/USD: Sterling eased amid growing uncertainty over a possible general election and the eventual outcome of Britain’s impending exit from the European Union. On Tuesday, the British pound rose after the UK Supreme Court ruled Prime Minister Boris Johnson’s decision to suspend parliament was unlawful. The major traded 0.2 percent down at 1.2465, having hit a high of 1.2526 on Thursday, 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 1.2582 (September 20 High). On the downside, support is seen at 1.2412 (September 23 Low), a break below targets 1.2382 (July 17 Low). Against the euro, the pound was trading 0.1 percent down at 88.23 pence, having hit a high of 87.85 on Friday, it’s highest since May 22.
AUD/USD: The Australian dollar tumbled after Trump said Beijing had failed to keep promises it made when China joined the World Trade Organization in 2001 and was engaging in predatory practices that had cost millions of jobs in the United States and other countries. The Aussie trades traded 0.3 percent down at 0.6779, 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 0.6829 (10-DMA), a break above could take it near 0.6861 (July 31 High).
NZD/USD: The New Zealand dollar surged to a 1-week peak after the Reserve Bank of New Zealand kept interest rates on hold, as widely expected. The country's central bank held the official cash rate at a record-low 1.0 percent, but said there is scope for more fiscal and monetary stimulus to support the economy amid intensifying global trade and demand pressures. The Kiwi trades flat at 0.6323, 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 0.6362 (September 18 High), a break above could take it near 0.6398 (August 27 Low). On the downside, support is seen at 0.6297 (5-DMA), a break below could drag it below 0.6235.
Equities Recap
Asian shares slumped after U.S. lawmakers called for an impeachment inquiry into President Donald Trump, adding to the prospects of prolonged political uncertainty.
MSCI's broadest index of Asia-Pacific shares outside Japan plunged 0.8 percent.
Tokyo's Nikkei eased 0.4 percent to 22,020.15 points, Australia's S&P/ASX 200 index declined 0.6 percent to 6,710.20 points and South Korea's KOSPI tumbled 1.3 percent to 2,073.39 points.
Shanghai composite index fell 1.0 percent to 2,955.43 points, while CSI 300 index traded 0.8 percent down at 3,870.98 points.
Hong Kong’s Hang Seng traded 1.2 percent lower at 25,953.81 points. Taiwan shares shed 0.4 percent to 10,873.01 points.
Commodities Recap
Crude oil prices steadied after tumbling to a 1-1/2 week low in the previous session on worries about falling fuel demand after U.S. President Donald Trump’s comments doused optimism over China-U.S. trade talks and reignited concerns on global economic growth. International benchmark Brent crude was trading 0.4 percent up at $62.57 per barrel by 0458 GMT, having hit a high of $69.64 last week, its highest since May 30. U.S. West Texas Intermediate was trading 0.3 percent up at $56.67 a barrel, after falling as low as $56.66 on Tuesday, its lowest since September 16.
Gold prices declined after rising to a near 3-week high in the previous session on news that the U.S. lawmakers launched a formal impeachment inquiry into President Donald Trump. Spot gold was trading 0.3 percent down at $1,528.06 per ounce by 0536 GMT, having touched a high of $1,535.58 on Tuesday, its highest since September 5. U.S. gold futures were down 0.1 percent at $1,539.5 per ounce.
Treasuries Recap
The short-dated Japanese government bond yields tumbled on expectations of further interest rate cuts by the Bank of Japan, while long-dated debt yields rose after soft 40-year JGB auction results. The 40-year yield last stood at 0.420 percent, up 2.5 basis points on the day. The yield spread between five- and 40-year yields jumped to 81 basis points, the widest since March, earlier in the session. The key 10-year yield fell 1.5 basis points to minus 0.260 percent and the 20-year yield dropped half a basis point to 0.175 percent, while the 30-year yield rose 1 basis point to 0.355 percent. The benchmark 10-year JGB futures rose 0.31 point to 155.34, its all-time closing high.
The Australian government bonds jumped during Asian session Wednesday tracking a similar movement in the U.S. Treasuries after the Conference Board’s consumer confidence index in the United States for the month of September sagged, amid continuing trade tensions and an otherwise, silent trading session that witnessed data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 4 basis points to 0.947 percent, the yield on the long-term 30-year bond slumped nearly 3 basis points to 1.558 percent and the yield on short-term 2-year slipped 1 basis point to 0.746 percent.
