- Dollar index hovers near Friday 95.218 2-week low. Today trading in between 95.912 to 94.451.
- EUR/USD up on day and plays in between 1.1207/1.1289 levels.
- Yen pressured by expectations that BOJ could ease further.
- GBP falls after UK services survey disappoints.
- GBP down to 1.5182 from 1.5220. EUR/GBP rises to 0.7413 from 0.7396 levels.
- UK Markit/CIPS service PMI 53.3 vs 56.0 forecast, 55.6 previous, lowest since April 2013.
- Markit says composite PMI points to UK Q3 GDP +0.5% q/q vs +0.7% Q2.
- Euro zone Markit service final PMI 53.6 vs previous 53.9. 53.9 expected.
- Euro zone October SENTIX index 11.7 vs previous 13.6. 11.6 expected.
- European shares climb as Glencore, Arcelor lift mining stocks.
- DAX up 2%. Tests 9774 from 9646. 9325 was last week's base.
- UK plans GBP 2bn Lloyds Banking Group share sale to private investors.
- Norway September housing prices +6.9% y/y vs 7.7% in August.
- (0830 ET/1230 GMT) Chile August Economic activity.
- (0945 ET/1345 GMT) US September Markit PMI services final; flash 55.6.
- (0945 ET/1345 GMT) US September Markit PMI composite final; flash 55.3.
- (1000 ET/1400 GMT) US September ISM non-manufacturing PMI, 57.7 eyed; last 59.0.
- (1000 ET/1400 GMT) US October employment trends index; last 128.8.
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade operation 30-yr Fannie Mae/Freddie Mac (max $1.775 bn).
FX Recap
USD: The dollar edged lower around 0.4 pct against the euro and dropped against a basket of currencies, after traders pushed back rate hike expectations on the weaker U.S. jobs report. It was marginally higher against the yen at 120.05 yen and the dollar index stood at 95.622, down 0.2 pct from Friday's late U.S. trade.
EUR/USD: The US dollar was easing on Monday and was seen broadly lower as traders sold the greenback amid disappointing payrolls. Today French services PMI for September improved from 50.6 to 51.9, while the German gauge dropped to 54.1 from 54.9 previously. The PMI for the whole euro zone eased to 53.7 and the composite index decreased to 53.6. Later in the day, the non-manufacturing ISM for September is due, expected to soften from 59.0 to 58.0. It made intraday high at 1.1289 and low at 1.1206 levels. Initial support is seen around at 1.1015 and resistance at 1.1560 levels. Option expiry is at 1.1200 (1.7BLN).
USD/JPY: Japanese labour earnings continued to grow at a smaller pace in August, casting further doubt on the government's plan to revive the economy by spurring inflation and wage growth. Average cash earnings rose 0.5% year-on-year in August after rising 0.9% in July and dropping 2.5% in June, according to the Ministry of Health, Labour and Welfare. Pair made intraday high at 120.30 and low at 119.86 levels. Later today market will focus on US macroeconomic data for the further directions. Initial resistance is seen at 123.20 and support is seen at 118.42 levels. Option expiries are at 119.50 (880M), 119.90-120.00 (575M), 121.00 (350M).
GBP/USD: Sterling fell to $1.5182 after the data showed that the UK service sector fell sharply below both forecasts and the previous month's figures. Before the data it was trading at $1.5220, and weakened to 74.13 pence per euro from 73.96 pence. The pound started the week on a positive note but didn't extend the gains further as the UK services PMI posted the weakest rate of growth since April 2013. UK services sector growth slowed to 53.3 in September, from the previous month's 55.6, short of expectations of 56.0. Pair made intraday high at 1.5244 and low at 1.5167 levels. Initial support is seen at 1.5107 and resistance is seen around 1.5725 levels.
NZD/USD: The New Zealand dollar continues to outperform its American counterpart into a fifth straight session on Monday, with pair reaching fresh five-week highs in the upper band of 0.64 handle. The Kiwi bulls remain in the drivers' seat as the greenback continues to suffer from poor non-farm payrolls result due out on Friday, which now diminishes chances of the Fed rate hike this year. It made intraday high at 0.6531 and low at 0.6436 levels. Initial support is seen at 0.6195 and resistance at 0.6605 levels.
AUD/USD: A set of disappointing US data from last week, including non-farm payrolls, added to speculation that Fed will start hiking rates no earlier than in Q1 2016, which dragged the dollar lower across the board. A softer greenback played in favour of commodities and Australian mining companies. Mainland China and Australia markets were closed on Monday for public holidays. Markets now focus on RBA's interest rate decision due tomorrow for the further momentum. Pair made intraday low at 0.7042 levels and high around 0.7111 levels. Initial support is seen at 0.6908 and resistance at 0.7245 levels. Option expiry is at 0.7000 (1.1BLN).
Equities Recap
European and Asian shares were higher on Monday with the pan-European FTSEurofirst 300 stocks index climbing 1.8 pct, U.K's FTSE higher 1.7 pct in early deals. France's CAC40 rose more than 2 percent, Germany's DAX was trading higher 1.5 pct.
Japan's Nikkei closed up 1.6 percent, MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.7 pct, a 2-week high. Chinese markets were closed for a holiday.
Commodities Recap
Oil rose after Russia said it was ready to meet other producers to discuss the market, where prices have more than halved from last year's highs due to a supply glut. Brent was 50 cents higher at $48.63 a barrel by 0930 GMT after ending up 44 cents on Friday. U.S. crude was 50 cents higher at $46.04 a barrel after settling up 80 cents.
Gold slipped as investors turned to riskier assets, but a weaker dollar after a disappointing U.S. jobs report pushed back expectations of a Federal Reserve rate hike to early 2016, helped limit the downside. Spot gold eased 0.3 pct to $1,134.50 an ounce by 0933 GMT.
Treasuries Recap
U.S. 10-year Treasury yields pushed lower still to 1.98 percent.
JGB prices ended the day slightly higher in the 5-yr and longer zone, sending yields down 0.5bp to 1bp from last Friday's afternoon close.
Today, yields on the current 10-yr JGBs moved little at 0.31%, their lowest level since Apr 28, while the current 20-yr and 30-yr JGBs pared large part of their earlier gains into the afternoon close on profit-taking and dealers' short-selling ahead of Thursday's monthly JPY800bn 30-yr JGB auction.
German 10-year Bund yields were 1 basis point higher at 0.52 percent. Spanish 10-year yields were down 3 basis points at 1.76 percent, while Italian yields fell 2 bps to 1.63 percent. Portuguese 10-year yields fell 1.3 basis points to 2.30 percent.
British government bond futures pared losses by around 10 ticks after the services PMI data, and traded at 119.41, 32 ticks down on the day, at 0834 GMT.
NZ government bonds rose with yields 2.5 basis points lower along the curve. Australian government bond futures jumped to 6-week highs, with the 3-year bond contract up 6 ticks at 98.250. The 10-year contract rose 6.5 ticks to 97.4150.
