Market Roundup
- EUR/USD 0.09%, USD/JPY 0.24%, GBP/USD -0.11%, EUR/GBP 0.19%
- DXY -0.08%, DAX 0.19%, FTSE -0.04%, Brent -0.4%, Gold -0.29%
- Catalan leader can't solve crisis by calling elections - Justice Minister
- Trump to press China on North Korea, trade on Beijing visit
- EZ Markit Manufacturing Flash PMI Oct 58.6 vs 58.1, 57.8 forecast
- EZ Markit Service Flash PMI Oct 54.9 vs 55.8, 55.6 forecast
- EZ Markit Composite Flash PMI Oct 55.9 vs 56.7, 56.5 forecast
- Germany Markit Service Flash PMI Oct 55.2 vs 55.6, 55.6 forecast
- Germany Markit Manufacturing Flash PMI Oct 60.5 vs 60.6, 60.2 forecast
- Germany Markit Composite Flash PMI Oct 56.9 vs 57.7, 57.5 forecast
- France Business Climate Oct 111 vs 110, 110.00 forecast
- France Markit Service Flash PMI Oct 57.4 vs 57.0, 56.9 forecast
- France Markit Manufacturing Flash PMI Oct 56.7 vs 56.1, 56.0 forecast
- France Markit Composite Flash PMI Oct 57.5 vs 57.1, 57.0 forecast
- Japan flash Oct manufacturing PMI shows slower growth
- Saudi energy minister says flexible, options open on OPEC oil pact
- Japan to host next round of TPP talks, New Zealand wants changes
- Dismantling of NAFTA would prompt S&P to revisit Mexico rating
Economic Data Ahead
- (0900 ET/1300 GMT) Mexico's annual inflation rate is expected to have increased 6.30 percent in the 12 months through mid-October, while core annual inflation rate is likely to come in at 4.72 percent in the first half of October.
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. preliminary Manufacturing PMI for the month of October. The index is likely edged up to 53.5 after posted a final reading of 53.1 in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index rose to 55.6 in October after printing a final reading of 55.3 in September.
- (0945 ET/1345 GMT) Markit Economics will release preliminary U.S. composite PMI for the month of October. The index posted a final reading of 54.8 in the prior month.
- (1000 ET/1400 GMT) Federal Reserve Bank of Richmond will publish it Manufacturing Index for October. The index posted a rise of 19 in the prior month.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
- (1745 ET/2145 GMT) The Statistics New Zealand will release labor force participation rate for the third quarter. The rate was at 70 percent in the previous quarter.
- (1745 ET/2145 GMT) The Statistics New Zealand reports its unemployment rate for the third quarter. The indicators stood at 4.8 percent in the previous quarter.
- N/A The Canadian government will release its economic and fiscal update.
Key Events Ahead
- N/A The Brazilian central bank meets for a two-day monetary policy committee meeting in Brasilia.
- (1430 ET/1830 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.525 bn)
FX Beat
DXY: The dollar index extended gains on the back of increased odds of a December Fed rate hike and renewed optimism over Trump’s tax overhaul plans. The greenback against a basket of currencies traded up at 93.88, having touched a high of 94.04 the day before, its highest since Oct. 6. FxWirePro's Hourly Dollar Strength Index stood at 121.04 (Highly Bullish) by 1000 GMT.
EUR/USD: The euro steadied after falling to a 2-week low in the previous session as the investors awaited the European Central Bank's policy meeting on Thursday. The central bank is widely expected to signal it will take small steps away from its ultra-easy monetary policy. The European currency traded 0.1 percent up at 1.1757, having touched a low of 1.1725 in the previous session, its lowest since Oct. 9. FxWirePro's Hourly Euro Strength Index stood at 26.16 (Neutral) by 1000 GMT. On the lower side, the near term support is around 1.1720 and any convincing break below will drag the pair down till 1.1660. On the higher side, near-term resistance is around 1.1825 and any break above will take it to next level till 1.1880/1.1900/1.1928 (61.8% retracement of 1.20925 and 1.16621)/1.2000.
USD/JPY: The dollar edged up, hovering towards a 3-month high touched in the previous session, as President Trump stated that he was very close to deciding who should chair the Federal Reserve after interviewing current Fed Chair Janet Yellen, Fed Governor Jerome Powell, Stanford University economist John Taylor, Trump's chief economic advisor Gary Cohn, and former Fed Governor Kevin Warsh. The major was trading 0.2 percent up at 113.68, having hit a high of 114.10 the day before, its highest since Jul. 17. FxWirePro's Hourly Yen Strength Index stood at 7.44 (Neutral) by 1000 GMT. On the lower side, any close below 112.30 (233- day MA) confirms minor weakness, a decline till 111.60 (55- day EMA)/111.13 likely. Any convincing close above 114.10 confirms minor bullishness, a jump till 114.50/115.
GBP/USD: Sterling eased below the 1.3200 handle on uncertainty over whether the Bank of England will hike interest rates next week and over Brexit negotiations. The major traded 0.2 percent down at 1.3177, having hit a low of 1.3087 on Friday, its lowest since Oct. 09. FxWirePro's Hourly Sterling Strength Index stood at 10.61 (Neutral) by 1000 GMT. The near-term major resistance is around 1.3230 and any break above will take the pair to next level till 1.330/1.33374 (Oct 13th, 2017 high). On the lower side, 1.3075 will be acting as major support and any break below will drag it down till 1.30270 /1.3000 level. Against the euro, the pound was trading 0.2 percent down at 89.22 pence, having hit a high of 88.86 pence the prior day, its highest since Oct. 17.
USD/CHF: The Swiss franc traded near a 5-month low, as the greenback continued to gain on prospects of extra tightening by the Federal Reserve. The major trades 0.2 percent up at 0.9865, having touched a high of 0.9881 the day before, it’s highest since May. 16. FxWirePro's Hourly Swiss Franc Strength Index stood at -15.16 (Neutral) by 1000 GMT. On the lower side, near-term support is around 0.9775 (10- day MA) and any break below will drag the pair to next level till 0.9730/0.9705/0.9680. The near-term resistance is around 0.9865 and any convincing break above will take it to next level till 0.9900/0.9950.
AUD/USD: The Australian dollar slumped, extending losses for the third straight session, as sentiment around the greenback continued to remain underpinned on the back of rising treasury yields. The Aussie trades 0.3 percent down at 0.7780, having hit a low of 0.7773 earlier, it’s lowest since Oct. 11. FxWirePro's Hourly Aussie Strength Index stood at -74.60 (Bearish) by 1000 GMT. On the lower side, near-term support is around 0.7730 and any convincing close below will drag the pair till 0.7680/0.7600. The near-term resistance is around 0.7860 (55- day EMA) and any break above targets 0.7900/0.7950/0.8000.
Equities Recap
European shares slumped, while the euro steadied after tumbling to a 2-week low in the previous session as the investors awaited the European Central Bank's policy meeting on Thursday.
The pan-European STOXX 600 index lost 0.1 percent to 390.27 points, while the FTSEurofirst 300 index declined 0.1 percent to 1,534.94 points.
Britain's FTSE 100 trades 0.1 percent lower at 7,521.70 points, while mid-cap FTSE 250 fell 0.2 percent to 20,101.99 points.
Germany's DAX rose 0.2 percent at 13,022.32 points; France's CAC 40 trades 0.2 percent up at 5,394.93 points.
Commodities Recap
Crude oil rebounded from daily lows, boosted by a decline in oil exports from Iraq and an estimated extended fall in U.S. commercial oil stocks. International benchmark Brent crude was trading 0.2 percent up at $57.40 per barrel by 0948 GMT, having hit a high of $58.51 on Wednesday, its highest since Sept. 28. U.S. West Texas Intermediate was trading 0.2 percent higher at $51.94 a barrel, after rising as high as $52.31 on Wednesday, its highest since Sept. 28.
Gold prices declined, falling towards an over 2-week low, as investors braced for the possibility of an early announcement on the next U.S. Federal Reserve chair. Spot gold slipped 0.2 percent to $1,278.31 an ounce by 0951 GMT, after hitting its lowest since Oct. 6 at $1,272.43 in the previous session. U.S. gold futures for December delivery rose 0.1 percent to $1,282.30 per ounce.
Treasuries Recap
The U.S. Treasuries continued to slide in a muted trading session that witnessed data of little economic significance. Also, investors are awaiting the 2-year and 5-year auctions scheduled to be held later today by 17:00GMT and on October 25 by 17:00GMT respectively. The yield on the benchmark 10-year Treasury climbed 2 basis points to 2.39 percent, the super-long 30-year bond yields rose 1-1/2 basis points to 2.90 percent and the yield on short-term 2-year note traded 1 basis point higher at 1.57 percent.
The UK gilts lost ground as investors remained cautioned ahead of the release of the country’s gross domestic product (GDP) for the third quarter of this year, scheduled to be released on October 25. The yield on the benchmark 10-year gilts, jumped 2 basis points to 1.33 percent, the super-long 30-year bond yields rose nearly 1-1/2 basis points to 1.90 percent and the yield on the short-term 2-year traded 1 basis point higher at 0.45 percent.
The German bunds slumped after the country’s manufacturing PMI for the month of October succeeded to cheer markets, coming in tad higher than expectations and from the previous reading in September. The German 10-year bond yields, which move inversely to its price, slumped nearly 2 basis points to 0.43 percent, the yield on 30-year note slid nearly 1-1/2 basis points to 1.24 percent and the yield on short-term 2-year traded 1 basis point lower at -0.72 percent.
The New Zealand bonds closed mixed as investors remained focus on the country’s employment report for the third-quarter of this year, scheduled to be released later today. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 3-1/2 basis points to 3.01 percent, the yield on 20-year note slid 1 basis point to 3.54 percent and the yield on short-term 2-year ended 1 basis point lower at 2.04 percent.
The Japanese government bonds traded narrowly mixed as investors remained sidelined in any major deal in a silent trading session. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.068 percent, the yield on long-term 30-year hovered around 0.88 percent and the yield on short-term 2-year too remained steady at -0.13 percent.
The Australian government bonds jumped tracking a solid development in the U.S. counterpart after hawkish bets cropped up among market participants over the plausible appointment of next Federal Reserve Chair after serving Chair Janet Yellen’s term expires in early February 2018. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 3 basis points to 2.77 percent, the yield on the long-term 30-year note plunged nearly 3-1/2 basis points to 3.54 percent and the yield on short-term 2-year traded nearly 2-1/2 basis points lower at 1.92 percent.
