Market Roundup
- EUR/USD 0.06%, USD/JPY -0.2%, GBP/USD -0.11%, EUR/GBP 0.19%
- DXY -0.06%, DAX 0.1%, FTSE -0.04%, Brent 0.28%, Gold 0.2%
- The UK preparing for no deal, but no spend on contingency arrangements yet -Hammond
- Early 2018 is crunch time for banks' Brexit decisions - UK official
- Three-quarters of Americans favor higher taxes for wealthy -Reuters/Ipsos poll
- Spain govt formally agreed to ask Catalan govt if it had declared independence or not
- Japan Aug core machinery orders +3.4% m/m, +4.4% y/y, +1.1% and +0.8% eyed
- Japan government ups assessment of sector, picking-up, bodes well for CAPEX
- Oil rises on signs of tighter market, but 2018 looks more uncertain
- Gold prices hold steady ahead of Fed minutes
Economic Data Ahead
- (1000 ET/1400 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of August. The report is expected to show job openings rose to 6.125 million from 6.170 million the month before.
- (1400 ET/1800 GMT) The Federal Open Market Committee issues minutes of its September policy meeting,
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
- (1745 ET/2145 GMT) Statistics New Zealand will release food price index for the month of September. The indicator posted a rise of 0.3 percent in the prior month.
- (1901 ET/2301 GMT) The Royal Institution of Chartered Surveyors (RICS) will report Britain's Housing Price Balance for the month September. The indicator is expected to have decreased to 4 percent from 6 percent in August.
Key Events Ahead
- N/A The United States President Donald Trump meets with Canadian Prime Minister Justin Trudeau at the White House.
- N/A International Monetary Fund Managing Director Christine Lagarde speaks at the Institute of International Finance's annual meeting.
- (1145 ET/1545 GMT) FedTrade operation 30-year Ginnie Mae (max $1.25 bn)
- (1310 ET/1710 GMT) New York Fed Executive Vice President Simon Potter speaks on "American Exit Strategies" at the "Globalisation Dynamics — EU and U.S. Perspectives" conference hosted by the Société Universitaire Européenne de Recherches Financières, in New York.
- (1440 ET/1840 GMT) San Francisco Fed Chief John Williams speaks at a community leaders' event hosted by the San Francisco Fed in Salt Lake City.
- (1450 ET/1850 GMT) European Central Bank Executive Board member Peter Praet's speech.
- (2110 ET/0110 GMT) Atlanta Fed President Raphael Bostic speaks on "Balance Sheet Normalization in the United States" at the "Unconventional Monetary Policy: Lessons Learned" Conference co-hosted by the Hong Kong Monetary Authority, Federal Reserve Board and Atlanta Fed in Hong Kong.
FX Beat
DXY: The dollar index slumped to 2-week lows as investors focus remained on the FOMC meeting minutes, for clues over the central bank's monetary policy outlook for 2018. The greenback against a basket of currencies traded flat at 93.21, having touched a low of 93.06 earlier, its highest since Sept. 29. FxWirePro's Hourly Dollar Strength Index stood at -45.93 (Neutral) by 1000 GMT.
EUR/USD: The euro rallied to a two-week high on relief that Catalonia had stopped short of formally declaring independence from the rest of Spain. The European currency traded 0.1 percent up at 1.1815, having touched a high of 1.1844 earlier, its highest since Sept. 26. FxWirePro's Hourly Euro Strength Index stood at 30.54 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.1863 (233- 4H MA) and any break above will take the pair to next level till 1.1900/1.19280 (61.8% retracement of 1.20925 and 1.16621). The near-term support is around 1.1780 (55- H EMA) and any break below will drag it down till 1.1755 (233- H MA)/1.17370 (61.8% retracement of 1.16620 and 1.18448)/1.1720.
USD/JPY: The dollar declined against the Japanese yen as rising uncertainty over the U.S. President Donald Trump's tax overhaul plan weighed heavily on the greenback. The major was trading 0.2 percent down at 112.22, having hit a low of 111.99 on the prior day, its lowest since Sept. 26. FxWirePro's Hourly Yen Strength Index stood at 47.94 (Neutral) by 1000 GMT. On the lower side, any close below 112 confirms minor weakness, a decline till 111.13/110 likely. Any break above 113.45 confirms minor bullishness, a jump till 114/114.50.
GBP/USD: Sterling edged down after rising for consecutive two sessions, as doubts emerged on whether expectations of higher UK interest rates were reasonable given a backdrop of uncertain Brexit negotiations. The major traded 0.1 percent down at 1.3193, having hit a low of 1.3027 on Friday, its lowest since Sept. 6. FxWirePro's Hourly Sterling Strength Index stood at 63.81 (Bullish) by 1000 GMT. Any break above 1.32300 (55- 4H EMA and support turned into resistance) confirms minor bullishness, a jump till 1.3300/1.3350 likely. On the lower side, near-term support is around 1.3169 (233- 4H MA) and any break below will drag the pair to next level till 1.3130/1.3075. Against the euro, the pound was trading 0.1 low at 89.54 pence, having hit a low of 89.92 pence on Friday, its lowest since Sept. 14.
USD/CHF: The Swiss franc advanced, extending previous session gains, as the greenback eased on U.S. President Donald Trump's public feud with Tennessee Senator Bob Corker, who raised concern that his push for a tax-code overhaul could be harmed. The major trades 0.2 percent down at 0.9736, having touched a high of 0.9836 on Friday, it’s highest since May 17. FxWirePro's Hourly Swiss Franc Strength Index stood at 61.72 (Bullish) by 1000 GMT. On the lower side, 0.9700 will be acting as major support and any break below will drag the pair to next level till 0.9670 (55- day EMA)/0.9640. The near-term resistance is around 0.9770 (support turned into resistance) and any break above will take it to next level till 0.9845/0.9900.
AUD/USD: The Australian dollar climbed, extending gains for the second straight session after an upbeat consumer confidence reading boosted hopes for a rebound in consumption. The Aussie trades 0.1 percent up at 0.7789, having hit a low of 0.7733 on Friday, it’s lowest since Jul. 14. FxWirePro's Hourly Aussie Strength Index stood at -18.39 (Neutral) by 1000 GMT. Immediate support is seen at 0.7725 (Jul. 14 Low), a break below targets 0.7700. On the upside, resistance is located at 0.7814 (10-DMA), a break above could take it near 0.7850.
Equities Recap
European shares rallied, while the euro hit a two-week high as Catalonia leader stopped short of declaring immediate independence from Spain.
The pan-European STOXX 600 index gained 0.05 percent to 390.26 points, while the FTSEurofirst 300 index advanced 0.1 percent to 1,534.91 points.
Britain's FTSE 100 trades 0.05 percent down at 7,535.93 points, while mid-cap FTSE 250 rose 0.05 percent to 20,147.01 points.
Germany's DAX rose 0.05 percent at 12,954.98 points; France's CAC 40 trades 0.1 percent down at 5,356.55 points.
Commodities Recap
Oil prices edged up, extending gains for the third straight day on signs that markets are gradually tightening after years of oversupply. International benchmark Brent crude was trading 0.4 percent up at $56.73 per barrel by 1010 GMT, having hit a low of $55.04 on Wednesday, its weakest since Sept. 19. U.S. West Texas Intermediate was trading 0.7 percent higher at $51.26 a barrel, after falling as low as $49.11 on Monday, its lowest since Sept. 13.
Gold prices steadied as the U.S. dollar slightly eased, while investors awaited minutes from the U.S. Federal Reserve's latest meeting for clues on the outlook for potential rate hikes. Spot gold rose 0.2 percent at $1,289.41 an ounce by 1015 GMT. U.S. gold futures for December delivery eased 0.3 percent to $1,290.50 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.353 percent higher by 0.008 bps, while 5-year yield was 0.011 bps up at 1.956 percent.
The Spanish government bonds were in demand after Catalonia's leader stopped short of making a formal declaration of independence. The10-year government bond yield, which moves inversely to the price, dropped 5 basis points to 1.65 percent in early trade before steadying at 1.67 percent,
The Japanese government bonds mostly edged down. The 10-year cash JGB yield inched up half a basis point to 0.060 percent, while the 10-year JGB futures contract finished down 0.03 point at 150.40. The 20-year JGB yield was steady on the day at 0.590 percent, while the 30-year JGB yield was also flat at 0.880 percent.
The Australian government bond futures were a shade softer, with the three-year bond contract off 1 tick at 97.830. The 10-year contract eased half a tick to 97.1350. The New Zealand government bonds picked up a safe-haven bid, pushing yields down 3 basis points across the curve.
