- EUR/USD down to 1.1208 from 1.1261 levels.
- Euro crosses off. EUR/GBP 0.7380 from 0.7428. EUR/CHF 1.0907 from 1.0945 levels.
- UK Q2 GDP 0.7% q/q, 2.4% y/y vs previous 0.7%/2.6%. 0.7%/2.6% expected.
- UK Q2 Business invest 1.0% q/q, 3.1% y/y vs previous 2.9%/5.0%.
- UK Q2 Current account -16.767bln vs previous -24.00bln. -22.25bln expected.
- UK September Nationwide house price, +3.8% y/y vs previous 3.2%, 3.8% expected.
- Euro zone September inflation -0.1% vs previous 0.1%. 0.0% expected.
- Euro zone August Unemployment rate 11.0% vs previous 11.0% revised. 10.9% expected.
- Germany September Jobless rose 2k vs previous -6k revised. -5k expected.
- Switzerland September KOF indicator 100.4 vs previous 101.2 revised. 100.9 expected.
- DAX up from 2015 9325 low, 2.3% up on the day to 9691.
- (0815 ET/1215 GMT) US September ADP national employment, +194k eyed; last +190k.
- (0830 ET/1230 GMT) Canada GDP Data.
- (0900 ET/1300 GMT) Chilean manufacturing Production.
- (0930 ET/1330 GMT) Brazil Central bank report on the Federal Budget.
- (0945 ET/1345 GMT) US September Chicago PMI, 53.0 eyed; last 54.4.
- (1130 ET/1530 GMT) Brazil Capital flow and foreign reserve Data.
Key Events Ahead
- (0830 ET/1230 GMT) FRB New York's Dudley speaks at SIFMA liquidity forum; New York City.
- (1030 ET/1430 GMT) IMF Lagarde speaks at Council of Americas event in Washington, DC.
- (1500 ET/1900 GMT) St Louis Fed Bullard speaks at St Louis conference.
FX Recap
EURUSD: The euro slid 0.3 percent to $1.1215 as investors focused on the prospect of a negative euro zone inflation reading that would boost expectations of further asset purchases by the ECB. It was down against the pound and the yen, hurt by weak German retail sales for August. The CPI estimate for September year-on-year declined from 0.2% to -0.1%, while the core gauge remained at 0.9%. The reaction was pretty small and the EUR/USD pair was seen near daily lows, trading around $1.1208. Further releases have seen the unemployment in the euro bloc ticking higher to 11.0% during August, up from the 10.9% previous and initially forecasted. Pair is supported above 1.1200 levels. It made intraday high at 1.1261 and low at 1.1202. Initial support is seen around at 1.1015 and resistance at 1.1560 levels. Option expiries are at 1.1100 (989M), 1.1200-10 (1.6BLN), 1.1230 (320M).
USDJPY: The US dollar remains heavily bid versus its Japanese counterpart in the mid-European trades, now pushing USD/JPY towards daily high around 120.31 levels. Japanese retail sales grew for the fifth month in a row in August, but the pace of growth halved compared to July, signalling consumer confidence was subdued. Japan's industrial output fell for the second month in a row in August, suggesting the economy remains on a sluggish recovery path. Retail sales rose 0.8% year-on-year in August and Industrial output fell 0.5% month-on-month in August. Pair is supported above 120.00 levels. Pair made intraday high at 120.31 and low at 119.68 levels. Initial resistance is seen at 123.20 and support is seen at 118.42 levels. Option expiries are at 120.00 (720M), 121.00 (885M).
USD/CHF: The greenback is trading higher against the Swiss franc on Wednesday, extending its two-day decline from the six-week high at ₣0.9845 reached on September 25. Today Switzerland UBS consumption indicator released with 1.63 vs previous 1.59 level. Moreover, KOF economic indicator released with negative numbers at 100.4 vs previous 101.2 levels. Pair made intraday high at 0.9755 and low at 0.9706 levels. Initial support is seen at 0.9663 and resistance is seen around 0.9815 levels. Option expiry is at 0.9700 (761M).
GBPUSD: Sterling climbed after the data showed Britain's current account deficit narrowed sharply in the three months to June, it rose to $1.5180, up from around $1.5155 immediately before the release, and leaving it up 0.2 pct on the day. Against the euro, it rose 0.4 pct to 73.965 pence. The UK economy remained steady in the second quarter despite a slight downward revision to the annual GDP growth. The overall output was helped by a healthier trade balance, and steady growth in household consumption. Pair made intraday high at 1.5213 and low at 1.5131 levels. Initial support is seen at 1.5185 and resistance is seen around 1.5725 levels. Option expiries are at 1.5050 (306M), 1.5250 (301M).
NZDUSD: A consolidation mood on the markets pushed commodity currencies higher and helping them to regain some lost ground, while safe havens fell. The kiwi turned on the dime as equities stabilized, recovering from below $0.63 seen at end of last week to $0.64 once again. The NZD/USD added 0.53% to $0.6379 on Wednesday. The ANZ Business Outlook survey showed that a net 18.9% of businesses were pessimistic in September, up from a net 29.1% which were pessimistic last month. It made intraday high at 0.6393 and low at 0.6332 levels. Initial support is seen at 0.6195 and resistance at 0.6511 levels.
AUDUSD: The Australian dollar advanced against its US namesake on Wednesday as traders' risk appetite improved. Pair was up 0.58% at $0.7021 in Sydney on Wednesday afternoon, from $0.6981 where the pair closed in New York on Tuesday. Australian building approvals fell back in August after a solid rise in July, although the drop in consents last month was mostly down to the often volatile non-house dwelling sector and July consents were revised upwards. Total building approvals were down 6.9% month-on-month in August. Pair made intraday high at 0.7038 and low at 0.6979 levels. Initial support is seen at 0.6908 and resistance at 0.7245 levels. Option expiries are at 0.6900 (4.2BLN), 0.7000 (515M), 0.7100 (3.7BLN).
Equities Recap
Stocks are on track to end the quarter with gains on Wednesday, despite exposed to global economic slowdown and commodity sector rout.
FTSEuroFirst 300 index of leading pan-European shares moved 1.9 pct up, Germany's DAX and France's CAC 40 both were up 2.3 pct. Britain's FTSE 100 surged 2 pct and U.S. stock futures rose around 1 pct in early trades.
Japan's Nikkei ended up 2.7 pct seeing an unexpected drop in industrial output, paring losses for the quarter to 14.1 pct, its deepest since 2010. MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.8 pct, after falling down to its lowest since June 2012 on Tuesday on fearing the impact of China's economic slowdown on the country.
Commodities Recap
Oil prices fell on Wednesday after an unexpected high build in U.S. crude inventories, further evidence of a persistent global oversupply. U.S. crude (WTI) dropped by 10 cents and was at $45.13 a barrel by noon, and ended September 11 pct down.
Gold eased on Wednesday, posting its biggest quarterly loss in a year as USD appreciated and the market waited for clarity U.S. interest rate rise timing. Spot gold plunged by 0.4 pct at $1,122.90 an ounce at noon, while U.S. gold futures for December delivery were down by $4.90 an ounce at $1,121.90.
Treasuries Recap
Yields on U.S. Treasury bonds went up. The 10-yr yield rose 3 bps up to 2.08 pct as comparable German yields were little changed.
German 10-year Bund yields edged up 1 bp to 0.60 pct, just above one-month lows of 0.57 pct touched on Tuesday. 2-year German bond yields were steady at -0.25 pct. Italian and Spanish 10-year yields rose about 2 bps to 1.72 and 1.89 pct respectively. Portuguese 10-year debt outperformed, with 10-year yields falling 4.5 bps to 2.41 pct.
JGB prices closed lower on the day, with the 5s/30s curve steepening by 3bp from yesterday's afternoon close. Super-long JGBs opened softer, sending yields up 1bp from yesterday, and then extended their earlier losses in relatively thin trading, after the BoJ published the results of its JGB buying operations around noon.
UK Gilts opened 11 ticks lower than the settlement of 119.18, as expected, as lower trading volumes into month end allowed equities a respite from recent declines. Dec Gilts were a tick higher after UK's Q2 GDP release at 118.95.
New Zealand government bonds opened softer tone with yields 2 bps higher along the curve. Australian government bond futures retreated from multi-week highs, with the 3-year bond contract off 2 ticks at 98.210. The 10-yr contract dropped 2.5 ticks down to 97.3650.
