Market Roundup
- Top EU court backs Polish consumers over Swiss Franc mortgages
- Poland monitoring banking sector constantly: finance minister
- ECB's de Guindos: markets may be underpricing impact of no-deal Brexit
- Eurozone producer prices fall more than expected in August
- France and EU ready to respond with sanctions in U.S. trade dispute: French minister
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 2,000 to a seasonally adjusted 215,000 for the week ended Sept. 27, while continuing claims for the week ended Sept. 20 is expected to decline to 1.645 million from previous week's reading of 1.650 million.
- (0945 ET/1345 GMT) Financial firm Markit releases final U.S. composite PMI for the month of September. The index posted a final reading of 51 in the previous month.
- (0945 ET/1345 GMT) Markit Economics reports final U.S. services PMI for the month of September. The index posted a final reading of 50.9 in August.
- (1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. non-manufacturing Purchasing Managers' index declined to a final reading of 55.1 in September from 56.4 in August.
- (1000 ET/1400 GMT) The United States is likely to report that factory orders decreased 0.2 percent in August after posting a rise of 1.4 percent in the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending September 27.
Key Events Ahead
- (0830 ET/1230 GMT) Vice-chair for supervision of the Federal Reserve Board of Governors Randal Keith Quarles' speech
- (1000 ET/1400 GMT) Bank of England Monetary Policy Committee member Silvana Tenreyro gives a speech
- (1835 ET/2235 GMT) Vice-Chairman of the Board of Governors of the Federal Reserve System Richard H. Clarida's speech
FX Beat
DXY: The dollar index steadied after falling to a 1-week low in the previous session as investors await the U.S. ISM Non-Manufacturing PMI, which is expected to come in at 55.1 in September, slightly lower figure than prior month’s 56.4. The greenback against a basket of currencies traded 0.05 percent up at 99.07, having touched a high of 99.67 on Tuesday, its highest since May 2017.
EUR/USD: The euro declined after rising to a 1-week peak as Eurozone producer prices fell more than expected in August due to a sharp fall in energy prices. Moreover, a survey showing German service sector sharply lost momentum in September as new business fell for the first time since late 2014 further intensified the selling pressure around the major. The European currency traded 0.1 percent down at 1.0950, having touched a low of 1.0897 on Tuesday, its lowest since May 2017. Immediate resistance is located at 1.0994 (50% retracement of 1.1109 and 1.0879), a break above targets 1.1021 (61.8% retracement). On the downside, support is seen at 1.0929 (5-DMA), a break below could drag it below 1.0904.
USD/JPY: The dollar plunged to a 1-week trough against the Japanese yen as weaker-than-expected U.S. jobs data reinforced economic slowdown fears and raised expectations of further monetary policy easing by the Federal Reserve. Moreover, news that the United States won approval to levy tariffs on $7.5 billion worth of European goods over illegal subsidies handed to Airbus further dented the bid tone around in the pair. The major was trading 0.1 percent down at 107.08, having hit a low of 106.96 earlier, its lowest since September 24. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, factory orders, non-manufacturing PMI by Markit and ISM and Fed officials' speech. Immediate resistance is located at 107.75 (5-DMA), a break above targets 108.25 (September 13 High). On the downside, support is seen at 106.76 (September 9 Low), a break below could take it near at 106.25 (August 22 Low).
GBP/USD: Sterling treads water as investors refrained from taking big positions ahead of a formal European Union response to Britain’s latest Brexit offer. The major traded flat at 1.2290, having hit a low of 1.2204 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 1.2373 (10-DMA), a break above could take it near 1.2400. On the downside, support is seen at 1.2233 (September 9 Low), a break below targets 1.2210 (September 5 Low). Against the euro, the pound was trading 0.1 percent down at 89.11 pence, having hit a low of 89.36 on Tuesday, it’s lowest since Sept. 13.
USD/CHF: The Swiss franc slumped to a 4-month low, as the greenback rebounded from recent lows against a basket of currencies. The major trades 0.4 percent up at 1.0005, having touched a high of 1.0027 earlier, it’s highest since May 31. On the higher side, near-term resistance is around 1.0042 and any break above will take the pair to next level till 1.0084. The near-term support is around 0.9915, and any close below that level will drag it till0.9890 (September 23 Low).
Equities Recap
European shares steadied after recording their worst day since last December on the imposing of U.S. tariffs on a raft of European exports.
The pan-European STOXX 600 index rallied 0.05 percent at 377.73 points, while the FTSEurofirst 300 surged 0.05 percent to 1,484.58 points.
Britain's FTSE 100 trades 0.5 percent down at 7,089.86 points, while mid-cap FTSE 250 fell 0.4 to 19,395.32 points.
France's CAC 40 trades 0.7 percent higher at 5,458.30 points.
Commodities Recap
Crude oil prices steadied after falling to a 2-month low earlier in the day on fears over the worsening global economic outlook. International benchmark Brent crude was trading 0.2 percent up at $57.54 per barrel by 1021 GMT, having hit a low of $57.15 earlier, its lowest since August 9. U.S. West Texas Intermediate was trading 0.3 percent higher at $52.57 a barrel, after falling as low as $52.14 on Wednesday, its lowest since August 8.
Gold prices held firm following an over 1 percent gain in the previous session, as investors awaited more data to gauge the health of the U.S. economy. Spot gold was trading 0.1 percent up at $1,501.27 per ounce by 1027 GMT, having touched a low of $1,458.97 on Tuesday, its lowest since August 6. U.S. gold futures slipped 0.2 percent to $1,504.90 per ounce
Treasuries Recap
The U.S. Treasuries jumped during the afternoon session ahead of the country’s weekly initial jobless claims, scheduled to be released today by 12:30GMT, besides, the ISM non-manufacturing PMI for the month of September, also due today by 14:00GMT. In addition, a host of speeches by members of the Federal Open Market Committee (FOMC), namely, Quarles, Mester and Clarida, due to be delivered later through the day shall add further direction to the debt market. The yield on the benchmark 10-year Treasury yield suffered 2 basis points to 1.577 percent, the super-long 30-year bond yield lost nearly 2-1/2 basis points to 2.066 percent and the yield on the short-term 2-year also fell 2 basis points to 1.464 percent.
The United Kingdom’s gilts climbed during European trading hours Thursday after the country’s services PMI for the month of September, fell into contractionary phase, also failing to meet market expectations. The yield on the benchmark 10-year gilts, plunged nearly 4-1/2 basis points to 0.456 percent, the 30-year yield slumped nearly 4 basis points to 0.951 percent and the yield on the short-term 2-year also lost 4 basis points to 0.345 percent.
The Japanese government bonds jumped at the time of closing following weakness in the Unites States’ economic data released yesterday, amid fresh tensions of a trade tussle with Europe, sparking demand for safe-haven assets. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped 2 basis points to -0.190 percent, the yield on the long-term 30-year suffered 2-1/2 basis points to 0.365 percent and the yield on short-term 2-year slipped 1-1/2 basis points to -0.325 percent.
The Australian government bonds jumped during Asian trading session tracking a similar movement in the United States Treasuries amid surging safe-haven demand ahead of the country’s trade balance data for the month of August, scheduled to be released later today for further direction in the debt market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 3-1/2 basis points to 0.932 percent, the yield on the long-term 30-year bond surged nearly 3 basis points to 1.549 percent and the yield on short-term 2-year remained nearly 1-1/2 basis points higher at 0.654 percent.
