Market Roundup
- Germany open for short Brexit extension to allow smooth ratification - Maas
- Gold consolidates as investors seek clarity on Brexit
- Oil dips as U.S. stocks rise
Economic Data Ahead
- (0830 ET/1230 GMT) Statistics Canada is expected to reports that wholesale trade rose 0.3 percent in August after rising 1.7 percent from July.
- (0900 ET/1300 GMT) The Federal Housing Finance Agency releases its housing price index for the month of August. The index gained 0.4 percent in July.
- (1000 ET/1400 GMT) The European Commission releases Eurozone's preliminary Consumer Confidence reading for the month of October. The index posted a final reading of -6.5 in the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending October 18.
Key Events Ahead
- No significant event scheduled
FX Beat
DXY: The dollar index advanced ahead of a Federal Reserve policy meeting next week, where policymakers are expected to cut interest rates by 0.25 percentage point. The greenback against a basket of currencies traded 0.1 percent up at 97.63, having touched a low of 97.14 on Friday, its lowest since August 9.
EUR/USD: The euro plunged to a near 1-week low, as incoming European Central Bank President Christine Lagarde has hinted she may want to harness the institution’s asset purchase program to fight climate change. The European currency traded 0.1 percent down at 1.1113, having touched a high of 1.1179 on Monday, its highest since August 14. Immediate resistance is located at 1.1150, a break above targets 1.1190. On the downside, support is seen at 1.1101, a break below could drag it below 1.1070 (10-DMA).
USD/JPY: The dollar trimmed losses after falling to a 1-week low as U.S. President Donald Trump said earlier this week that efforts to end the trade war with China were going well, a view echoed by Chinese Vice Foreign Minister Le Yucheng on Tuesday. The major was trading 0.05 percent down at 108.44, having hit a low of 108.24 earlier, its lowest since October 15. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. housing price index. Immediate resistance is located at 108.99 (July 31 High), a break above targets 109.31 (August 1 High). On the downside, support is seen at 108.03 (October 14), a break below could take it near at 107.65.
GBP/USD: Sterling eased, extending previous session losses after the British parliament voted to approve the withdrawal deal but rejected the tight timetable to legislate on the deal in time for the October 31 deadline. The major traded 0.1 percent low at 1.2862, having hit a low of 1.2841 earlier, it’s lowest since October 18. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2960, a break above could take it near 1.3102. On the downside, support is seen at 1.2800, a break below targets 1.2748. Against the euro, the pound was trading 0.1 percent down at 86.36 pence, having hit a high of 85.74 on Thursday, it’s highest since May 8.
USD/CHF: The Swiss franc tumbled for the third straight session, amid easing trade tensions between China and the United States. The major trades 0.1 percent up at 0.9904, having touched a low of 0.9839 on Friday, it’s lowest since September 5. On the higher side, near-term resistance is around 0.9926 (10-DMA) and any break above will take the pair to the next level till 0.9946. The near-term support is around 0.9828, and any close below that level will drag it till 0.9799.
Equities Recap
European shares consolidated within narrow ranges as warnings from Texas Instruments raised concerns about the global microchip industry.
The pan-European STOXX 600 index advanced 0.05 percent at 394.68 points, while the FTSEurofirst 300 rallied 0.05 percent to 1,548.50 points.
Britain's FTSE 100 trades 0.5 percent up at 7,244.34 points, while mid-cap FTSE 250 declined 0.2 to 20,149.77 points.
Germany's DAX rose 0.3 percent at 12,791.32 points; France's CAC 40 trades 0.3 percent lower at 5,642.57 points.
Commodities Recap
Crude oil prices declined on data showing a bigger-than-expected rise in U.S. crude stocks, although the prospect of deeper output cuts by OPEC and its allies offered support. International benchmark Brent crude was trading 0.7 percent down at $59.17 per barrel by 1030 GMT, having hit a high of $60.26 last week, its highest since October 14. U.S. West Texas Intermediate was trading 0.8 percent lower at $53.89 a barrel, after rising as high as $54.60 last week, its highest since October 14.
Gold prices surged as investors awaited more clarity on the Brexit issue and the U.S.-China trade war. Spot gold was trading 0.4 percent up at $1,492.69 per ounce by 1032 GMT, having touched a low of $1,480.73 on Tuesday, its lowest since October 16. U.S. gold futures rose 0.3 percent to $1,492.20 per ounce.
Treasuries Recap
The U.S. Treasuries surged during the afternoon session ahead of the country’s housing market data, scheduled for later today, after yesterday’s existing home sales. Also, the 5-year Note auction, due to be held today by 17:00GMT shall provide further direction to the debt market. The yield on the benchmark 10-year Treasury yield slumped nearly 2-1/2 basis points to 1.743 percent, the super-long 30-year bond yield suffered nearly 2 basis points to 2.234 percent and the yield on the short-term 2-year plummeted nearly 3 basis points to 1.564 percent.
The United Kingdom’s gilts rallied during European trading hours Wednesday as investors their shifted attention towards riskier assets amid the possibility of an extension of the Brexit deadline beyond this month. The yield on the benchmark 10-year gilts, slumped 3 basis points to 0.679 percent, the 30-year yield suffered 2 basis points to 1.212 percent and the yield on the short-term 2-year plunged nearly 3 basis points to 0.510 percent.
The German 10-year bund yield slumped to 1-week low during European session as investors remain worried over the October 31 Brexit deadline and the uncertainties surrounding it. Also, the European Central Bank’s (ECB) monetary policy meeting, scheduled to be held on October 24 by 11:45GMT shall provide further direction to the debt market. The German 10-year bond yield, which move inversely to its price, slumped 3-1/2 basis points to -0.405 percent, the yield on 30-year note plunged 5 basis points to 0.076 percent and the yield on short-term 2-year traded nearly 2-1/2 basis points down at -0.674 percent.
The Australian government bonds traded tad higher during Asian session tracking a similar movement in the U.S. Treasuries following news on Brexit until the final exit on October 31 and China trade uncertainties. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 2-1/2 basis points to 1.176 percent, the yield on the long-term 30-year bond surged 2 basis points to 1.763 percent while the yield on short-term 2-year traded flat at 0.802 percent.
