Market Roundup
- RBNZ to hold its interest rates on Wednesday
- Gold steadies below 2-week peak
- Oil slips on global demand concerns
Economic Data Ahead
- (0400 ET/0800 GMT) German IFO- Expectations September
- (0400 ET/0800 GMT) German IFO- Current Assessment September
- (0400 ET/0800 GMT) German IFO- Business Climate September
Key Events Ahead
- (0555 ET/0955 GMT) Reserve Bank of Australia Governor Philip Lowe's speech
- (0800 ET/1200 GMT) European Central Bank Vice-president Luis De Guindos' speech
FX Beat
DXY: The dollar index surged as Chinese importers’ decision to buy 10 boatloads of U.S. soybeans seen as a positive sign leading in to trade negotiations next month. The greenback against a basket of currencies traded up at 98.65, having touched a high of 98.83 on Monday, its highest since September 12.
EUR/USD: The euro declined, extending losses for the third straight session after dismal manufacturing and services data elevated concerns about the state of the eurozone economy. Eurozone business growth stalled in September, dragged down by shrinking activity in Germany. The European currency traded down at 1.0989 having touched a low of 1.0966, its lowest since September 12. Investors’ attention will remain on German IFO surveys and European Central Bank Vice-president Luis De Guindos' speech, ahead of the U.S. housing price index and consumer confidence. Immediate resistance is located at 1.1025 (5-DMA), a break above targets 1.1059 (September 10 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, halting a 3-day losing streak, as investors looked for signs of progress from U.S.-China trade negotiations. U.S. Treasury Secretary Steven Mnuchin told that discussions were scheduled in two weeks and that he and U.S. Trade Representative Robert Lighthizer would meet Chinese Vice Premier Liu He. The major was trading 0.1 percent up at 107.47, having hit a low of 107.31 on Monday, its highest since September 10. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. housing price index and consumer confidence. 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 107.11 (21-DMA), a break below could take it lower at 106.62 (September 6 Low).
GBP/USD: Sterling declined, hovering towards a near 1-week low hit in the previous session, as investors looked for signs of progress in Britain’s Brexit talks and awaited a Supreme Court ruling on whether Prime Minister Boris Johnson misled Queen Elizabeth over his reasons for suspending parliament this month. The major traded flat at 1.2428, 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 1.2476 (5-DMA), a break above could take it near 1.2526 (September 17 High). On the downside, support is seen at 1.2382 (July 17 Low), a break below targets 1.2312 (September 12 Low). Against the euro, the pound was trading flat at 88.40 pence, having hit a high of 87.85 on Friday, it’s highest since May 22.
AUD/USD: The Australian dollar rose on comments by the U.S. Treasury Secretary Steve Mnuchin, confirming the Chinese Vice Premier’s trade visit to the United States in the next week. However, the upside appears limited amid growing expectations for the RBA to cut the official interest rate to 0.75 percent on Oct. 1 following last week's worse than expected unemployment rate. The Aussie trades traded flat at 0.6775, 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 0.6803 (21-DMA), a break above could take it near 0.6861 (July 31 High).
NZD/USD: The New Zealand dollar steadied ahead of the Reserve Bank of New Zealand’s monetary policy decision tomorrow, 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 flat at 0.6287, 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 0.6332 (September 19 High), a break above could take it near 0.6352 (21-DMA). On the downside, support is seen at 0.6235, a break below could drag it below 0.6200.
Equities Recap
Asian shares rose as risk sentiment improved after U.S. Treasury Secretary Steven Mnuchin said U.S.-China trade talks will resume next month.
MSCI's broadest index of Asia-Pacific shares outside Japan nudged up 0.1 percent.
Tokyo's Nikkei gained 0.1 percent to 22,098.84 points, Australia's S&P/ASX 200 index declined 0.05 percent to 6,748.90 points and South Korea's KOSPI surged 0.5 percent to 2,101.04 points.
Shanghai composite index rose 0.3 percent to 2,985.48 points, while CSI 300 index traded 0.3 percent up at 3,901.64 points.
Hong Kong’s Hang Seng traded 0.3 percent higher at 26,288.01 points. Taiwan shares shed 0.1 percent to 10,918.01 points.
Commodities Recap
Crude oil prices eased, extending losses for the third straight session as weak manufacturing data from Europe and Japan focused market attention on the gloomy outlook for demand. International benchmark Brent crude was trading 0.1 percent down at $64.41 per barrel by 0517 GMT, having hit a high of $69.64 last week, its highest since May 30. U.S. West Texas Intermediate was trading 0.2 percent up at $58.35 a barrel, after falling as low as $57.33 on Monday, its lowest since September 16.
Gold prices declined after rising to a more than 2-week peak in the previous session on global slowdown fears and tensions in the Middle East, while an improved U.S.-China trade tone limited gains. Spot gold was trading 0.2 percent at $1,519.31 per ounce by 0522 GMT, having touched a high of $1,526.74 on Monday, its highest since September 6. U.S. gold futures were down 0.3 percent at $1,527.1 per ounce.
Treasuries Recap
The Japanese government bonds jumped at close on Monday after returning from a long weekend holiday, following closure for Autumn Equinox as investors await the release of the Bank of Japan’s (BoJ) minutes of the July monetary policy meeting, today by 23:50GMT for further direction in the bond market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged 20 basis points to -0.240 percent, the yield on the long-term 30-year suffered nearly 2 basis points to 0.337 percent and the yield on short-term 2-year slumped 16 basis points to -0.319 percent.
The Australian government bonds edged tad higher during Asian session of the second trading day of the week Tuesday amid a muted session that witnessed data of little economic significance amid burgeoning worries for global growth after the release of weak European economic data yesterday. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped tad 1/2 basis point to 0.987 percent, the yield on the long-term 30-year bond also remained an inch lower at 1.583 percent and the yield on short-term 2-year hovered around 0.752 percent.
