Market Roundup
- Oil falls on Trump's bearish China trade comments
- Gold off 3-week peak
- Dollar recovers from Trump impeachment damage
Economic Data Ahead
- (0900 ET/1300 GMT) Swiss National Bank releases its Quarterly Bulletin.
- (1000 ET/1400 GMT) The U.S. new single-family home sales are expected to have rose 3.5 percent to a seasonally adjusted annual rate of 660,000 units in August. New home sales dropped 12.8 percent in July to a seasonally adjusted annual rate of 635,000 units.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending September 20.
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index rose, reversing most of its previous session losses as investors awaited a host of speeches by members of the Federal Open Market Committee (FOMC) – Evans, Brainard, George and Kaplan for further cues on the U.S. monetary policy outlook. The greenback against a basket of currencies traded 0.3 percent up at 98.65, having touched a high of 98.83 on Monday, its highest since September 12.
EUR/USD: The euro declined as downbeat purchasing managers’ index readings on Monday and a German business sentiment on Tuesday showed economic outlook expectations deteriorating in Europe. The European currency traded 0.3 percent down at 1.0993 having touched a low of 1.0966 on Monday, its lowest since September 12. Immediate resistance is located at 1.1059 (September 10 High), a break above targets 1.1074 (September 17 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 rose, halting a 4-day losing streak, amid speculation more domestic instability would consume Trump’s political capital, making it harder for him to compromise with China on trade or boost spending ahead of a presidential election next year. The major was trading 0.3 percent up at 107.32, having hit a low of 107.04 on Tuesday, its lowest since September 9. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. new home sales data. 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 106.76 (September 6 Low), a break below could take it lower at 106.32 (September 5 Low).
GBP/USD: Sterling plunged to a 1-week low as investors braced for more British political uncertainty in the coming months after the United Kingdom’s Supreme Court ruled that Prime Minister Boris Johnson had unlawfully suspended parliament. The major traded 0.6 percent down at 1.2465, having hit a low of 1.2407 earlier, it’s lowest since September 17. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2526 (September 17 High), a break above could take it near 1.2582 (September 20 High). On the downside, support is seen at 1.2382 (July 17 Low), a break below targets 1.2325 (September 13 Low). Against the euro, the pound was trading 0.6 percent down at 88.65 pence, having hit a high of 87.85 on Friday, it’s highest since May 22.
USD/CHF: The Swiss franc eased after rising for four consecutive sessions, as the greenback rebounded from recent lows. The major trades 0.1 percent up at 0.9863, having touched a low of 0.9843 on Monday, it’s lowest since September 5. On the higher side, near-term resistance is around 0.9923 (September 9 High) and any break above will take the pair to next level till 0.9999 (June 17 High). The near-term support is around 0.9813 (August 22 Low), and any close below that level will drag it till 0.9782 (September 4 Low).
Equities Recap
European shares plunged as an impeachment inquiry into U.S. President Donald Trump and worsening rhetoric on U.S.-China trade relations stoked fears about global economic growth.
The pan-European STOXX 600 index declined 1.3 percent at 384.64 points, while the FTSEurofirst 300 slumped 1.3 percent to 1,512.93 points.
Britain's FTSE 100 trades 0.9 percent down at 7,225.56 points, while mid-cap FTSE 250 eased 1.2 to 19,684.89 points.
Germany's DAX fell 1.1 percent at 12,171.78 points; France's CAC 40 trades 1.5 percent lower at 5,545.56 points.
Commodities Recap
Crude oil prices declined on worries that fuel demand could fall after U.S. President Donald Trump doused recent optimism over China-U.S. trade talks. International benchmark Brent crude was trading 0.5 percent down at $62.07 per barrel by 1111 GMT, having hit a low of $61.93 earlier, its lowest since September 16. U.S. West Texas Intermediate was trading 0.5 percent down at $56.47 a barrel, after falling as low as $56.32 earlier, its lowest since September 16.
Gold prices declined as some investors booked profit, but it was well supported below a 3-week peak hit in the previous session as the launch of a formal impeachment inquiry into President Donald Trump stoked political worries. Spot gold was trading 0.2 percent down to $1,529.56 per ounce, by 1113 GMT, having touched a high of $1,535.58 on Tuesday, its highest since September 5. U.S. gold futures fell 0.2 percent to $1,536.60 per ounce.
Treasuries Recap
The U.S. Treasuries climbed during the afternoon session ahead of a host of speeches by members of the Federal Open Market Committee (FOMC) – Evans, Brainard, George and Kaplan, all scheduled for later in the day and the 5-year auction, due to be held today by 17:00GMT for further direction in the debt market. The yield on the benchmark 10-year Treasury yield suffered 1-1/2 basis points to 1.649 percent, the super-long 30-year bond yield remained tad higher to 2.100 percent and the yield on the short-term 2-year also edged 1-1/2 basis points up to 1.610 percent.
The German bunds traded tad higher during European trading session amid silent trading hours that witnessed data of little economic significance ahead of the country’s GfK consumer climate index for the month of October, scheduled to be released on September 26 by 06:00GMT for further direction in the debt market. The German 10-year bond yield, which move inversely to its price, slipped nearly 1 basis point to -0.611 percent, the yield on 30-year note suffered 1-1/2 basis points to -0.167 percent and the yield on short-term 2-year remained flat at -0.708 percent.
The Australian government bonds jumped during Asian session tracking a similar movement in the U.S. Treasuries after the Conference Board’s consumer confidence index in the United States for the month of September sagged, amid continuing trade tensions and an otherwise, silent trading session that witnessed data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 4 basis points to 0.947 percent, the yield on the long-term 30-year bond slumped nearly 3 basis points to 1.558 percent and the yield on short-term 2-year slipped 1 basis point to 0.746 percent.
