Market Roundup
- U.S.-China trade doubts grow
- Gold rises as risk sentiment weaken on trade uncertainty
- Oil prices extend slide to third straight day
- RBNZ needs to better explain bank-review benefits: Treasury
Economic Data Ahead
No major economic data releases
Key Events Ahead
- No significant event scheduled
FX Beat
DXY: The dollar index rallied, extending gains for the third straight session, as comments from Federal Reserve Chairman Jerome Powell were interpreted as suggesting further rate cuts later in October were not a done deal. The greenback against a basket of currencies traded 0.05 percent up at 99.13, having touched a low of 98.64 on Thursday, its highest since September 25.
EUR/USD: The euro steadied, halting a 2-day losing streak, after yesterday's news of an unexpected rise in German industrial output suggested the German economy may skip a recession. The European currency traded flat at 1.0949, having touched a high of 1.1006 on Monday, its highest since September 25. Investors’ attention will remain on the U.S. JOLTS Job openings data, wholesale inventories and Fed Chair Powell's speech, amid a lack of economic data from the Eurozone economies. Immediate resistance is located at 1.1019 (61.8% retracement of 1.1109 and 1.0879), a break above targets 1.1059 (78.6% retracement). On the downside, support is seen at 1.0937 (September 25 Low), a break below could drag it below 1.0904.
USD/JPY: The dollar rose, reversing some of its previous session losses, ahead of high-level talks involving Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday. The major was trading 0.1 percent up at 107.17, having hit a low of 106.48 on Thursday, its lowest since September 24. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. JOLTS Job openings data, wholesale inventories and Fed Chair Powell's speech. Immediate resistance is located at 107.46 (10-DMA), a break above targets 107.95 (September 26 High). On the downside, support is seen at 107.08 (October 9 Low), a break below could take it near at 106.62 (September 6 Low).
GBP/USD: Sterling eased, hovering towards a 1-month low touched in the previous session on reports that German Chancellor Angela Merkel and British Prime Minister Boris Johnson had spoken and that she had made clear a deal was overwhelmingly unlikely. The major traded 0.1 percent down at 1.2203, having hit a low of 1.2195 on Tuesday, it’s lowest since September 4. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2292 (5-DMA), a break above could take it near 1.2371 (21-DMA). On the downside, support is seen at 1.2154 (August 28 Low), a break below targets 1.2108 (August 22 Low). Against the euro, the pound was trading 0.1 percent down at 89.78 pence, having hit a low of 89.99 on Tuesday, it’s lowest since Sept. 9.
AUD/USD: The Australian dollar rose after declining for two straight sessions, supported by a subdued greenback demand. The Aussie trades 0.1 percent up at 0.6722, having hit a high of 0.6773 on Friday, it’s highest since October 1. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6687, a break below targets 0.6635. On the upside, resistance is located at 0.6799 (August 21 High), a break above could take it near 0.6803 (September 25 High).
NZD/USD: The New Zealand dollar surged, extending previous session gains, as banks and the government are waiting for the RBNZ’s final decisions on its review, which are due in early December. The Kiwi trades 0.1 percent up at 0.6316, having touched a high of 0.6336 on Friday, its highest level since September 25. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6348 (September 25 High), a break above could take it near 0.6391 (September 16 High). On the downside, support is seen at 0.6266, a break below could drag it below 0.6249.
Equities Recap
Asian shares tumbled as risk sentiment weakened amid the United States and China’s broadening dispute over trade and foreign policy.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.4 percent.
Tokyo's Nikkei declined 0.6 percent to 21,456.38 points, Australia's S&P/ASX 200 index fell 0.7 percent to 6,546.70 points.
Shanghai composite index rose 0.3 percent to 2,921.83 points, while CSI 300 index traded 0.05 percent up at 3,837.87 points.
Hong Kong’s Hang Seng traded 0.8 percent lower at 25,700.36 points. Taiwan shares shed 1.1 percent to 10,889.96 points.
Commodities Recap
Crude oil prices declined, extending losses for the third consecutive session as the prospect of the United States and China striking a trade deal in talks this week dimmed, raising uncertainties for global economic growth and oil demand. International benchmark Brent crude was trading 0.2 percent down at $58.03 per barrel by 0517 GMT, having hit a low of $57.13 on Thursday, its lowest since August 7. U.S. West Texas Intermediate was trading 0.3 percent lower at $52.41 a barrel, after falling as low as $50.97 on Thursday, its lowest since August 7.
Gold prices steadied after rebounding from a 1-week low touched in the previous session, as uncertainties over U.S.-China trade talks and Brexit prompted investors to seek refuge in the safe-haven assets. Spot gold was trading flat at $1,505.47 per ounce by 0520 GMT, having touched a low of $1,486.72 on Tuesday, its lowest since October 2. U.S. gold futures settled mostly unchanged at $1,503.9 an ounce.
Treasuries Recap
The Japanese government bonds closed flat ahead of the country’s producer price index (PPI) for the month of September, scheduled to be released on October 9 by 23:50GMT and the super-long 30-year auction, due to be released on the following day by 03:35GMT, amid ongoing geopolitical tensions and worries over global economic slowdown. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around -0.208 percent, the yield on the long-term 30-year remained flat at 0.375 percent and the yield on short-term 2-year too held steady near -0.319 percent.
The Australian government bonds jumped tracking a similar movement in the United States’ Treasuries after Chairman of the Federal Reserve, Jerome Powell, announced an increase in the size of the central bank’s balance sheet soon. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1 basis point to 0.885 percent, the yield on the long-term 30-year bond also suffered 1 basis point to 1.486 percent and the yield on short-term 2-year remained tad down at 0.638 percent.
