Menu

Search

  |   Market Roundups

Menu

  |   Market Roundups

Search

Europe Roundup: Sterling gains on renewed Brexit deal hopes, euro halts 2-day losing streak on Draghi's inflation comments, European shares rally - Tuesday, September 25th, 2018

Market Roundup

  • EUR/USD 0.12%, USD/JPY 0.07%, GBP/USD 0.21%, EUR/GBP -0.1%
     
  • DXY -0.1%, DAX -0.23%, FTSE -0.28%, Brent 0.91%, Gold 0.16%
     
  • China says U.S. putting 'knife to its neck', hard to proceed on trade
     
  • Trump, Brexit hit German growth, and xenophobia could hurt economy: BDI
     
  • Germany Aug Wholesale Price Index MM, 0.3%, 0.0% previous, 0.1% revised
     
  • Germany Aug Wholesale Price Index YY, 3.8%, 3.5% previous, 3.6% revised
     
  • BOJ's Kuroda highlights need to look at the downside of easy policy
     
  • UK's Labour opposition says preparing to vote down PM May's Brexit deal
     
  • BoE not yet rethinking Brexit base case, says Vlieghe
     
  • BoE can unwind QE without pushing up yield curve-Vlieghe
     
  • ECB not planning to speed up normalisation, Praet says
     
  • Markets bring forward ECB rate hike bets, see move before Draghi's term ends
     
  • French industry morale fell in September to lowest level since March 2017

Economic Data Ahead

  • (0900 ET/1300 GMT) The S&P Case Shiller house price index probably edged up 6.3 percent in July, compared to 6.3 percent a year ago.
     
  • (0900 ET/1300 GMT) The Federal Housing Finance Agency releases its housing price index for the month of July. The index gained 0.2 percent in June.
     
  • (1000 ET/1400 GMT) Federal Reserve Bank of Richmond will publish it Manufacturing Index for September. The index posted a rise of 24 in the prior month.
     
  • (1000 ET/1400 GMT) The U.S. Conference Board is likely to report that its consumer confidence index declined to 132.0 in September from a reading of 133.4 in August.
     
  • (1630 ET/2030 GMT) API reports its weekly crude oil stock.

Key Events Ahead

  • (0830 ET/1230 GMT) Federal Reserve Bank of Philadelphia issues Non-manufacturing Business Outlook Survey for September.
     
  • (0930 ET/1330 GMT) Guest talk by ECB’s Peter Praet at an event organized by InTouch Capital Markets in London
     
  • (1040 ET/1440 GMT) ECB's Benoit Coeure chairing session II at 3rd ECB Annual Research Conference in Frankfurt
     
  • (1230 ET/1630 GMT) Riksbank’s Jansson to visit SEB London and discuss economic situation and current monetary policy
     
  • N/A  Federal Open Market Committee begins a two-day meeting on interest rate policy.
     
  • N/A Canadian Prime Minister Justin Trudeau and Foreign Minister Chrystia Freeland are due to address the Council on Foreign Relations.
     

FX Beat

DXY: The dollar index eased as the latest round of tariffs in the U.S.-China trade conflict kept investors on edge. The greenback against a basket of currencies trades 0.1 percent down at 94.19, having touched a low of 93.81 on Friday, its lowest since July 9. FxWirePro's Hourly Dollar Strength Index stood at -16.34 (Neutral) by 1000 GMT.

EUR/USD: The euro surged, halting a two-day losing streak after European Central Bank president Mario Draghi expressed confidence in euro zone inflation and wage growth. However, the upside was limited after ECB chief economist Peter Praet stated that the central bank policy will need to remain accommodating for a long time to come, slashing speculation that the ECB was getting ready to tighten policy more rapidly. The European currency traded 0.1 percent up at 1.1760 having touched a high of 1.1815 on Monday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 111.07 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 1.1820 (June 11 High), a break above targets 1.1852 (June 14 High). On the downside, support is seen at 1.1721 (5-DMA), a break below could drag it till 1.1662 (August 28 Low).

USD/JPY: The dollar rallied to an over 2-month peak as investors looked certain that the U.S. Federal Reserve will hike rates for a third time in 2018 on Wednesday and could offer direction on future interest rate hikes. The major was trading 0.1 percent up at 112.87, having hit a high of 112.97, its highest since July 19. FxWirePro's Hourly Yen Strength Index stood at -87.17 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. housing price index, and Richmond Fed Manufacturing Index. Immediate resistance is located at 113.00, a break above targets 113.30 (Jan 5 High). On the downside, support is seen at 112.42 (September 21 Low), a break below could take it lower 112.04 (September 20 Low).

GBP/USD: Sterling extended gains, amid renewed expectations of UK securing a Brexit deal after British Brexit Secretary Dominic Raab stated that he was confident that Britain would make progress and eventually clinch a Brexit deal. The major traded 0.3 percent up at 1.3151, having hit a low of 1.3055 on Friday; it’s lowest since September 13. FxWirePro's Hourly Sterling Strength Index stood at 125.96 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.3172 (September 18 High)), a break above could take it near 1.3215 (September 19 High). On the downside, support is seen at 1.3055 (September 21 Low), a break below targets 1.2896 (September 10 Low). Against the euro, the pound was trading 0.1 percent up at 89.44 pence, having hit a low of 89.95 on Friday, it’s lowest since September 7.

USD/CHF: The Swiss franc fell to a 5-day low as investors sentiment improved ahead of the 2-day U.S. Federal Reserve meeting beginning later in the day. The major trades 0.2 percent up at 0.9665, having touched a low of 0.9542 on Friday. it’s lowest since April 10. FxWirePro's Hourly Swiss Franc Strength Index stood at -100.48 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9706 (50.0% retracement of 0.9865 and 0.9542) and any break above will take the pair to next level till 0.9744 (61.8% retracement). The near-term support is around 0.9588 (September 20 Low) and any close below that level will drag it till 0.9535.

Equities Recap

European shares advanced, supported by gains among oil stocks, while the dollar gained against the yen as the Federal Reserve begins its two-day policy meeting later in the day.

The pan-European STOXX 600 index rallied 0.4 percent at 383.78 points, while the FTSEurofirst 300 index rose 0.5 percent to 1,505.62 points.

Britain's FTSE 100 trades 0.4 percent up at 7,489.59 points, while mid-cap FTSE 250 surged 0.1 percent to 20,518.32 points.

Germany's DAX rose 0.3 percent at 12,385.19 points; France's CAC 40 trades 0.3 percent lower at 5,489.78 points.

Commodities Recap

Crude oil prices surged to their highest in 4-years, boosted by upcoming U.S. sanctions on Iranian crude exports and OPEC and Russia’s reluctance to increase output. International benchmark Brent crude was trading 0.6 percent up at $81.93 per barrel by 1029 GMT, having hit a high of $82.17 earlier, its highest since November 2014. U.S. West Texas Intermediate was trading 0.4 percent up at $72.50 a barrel, after rising as high as $72.71 on Monday, its highest since July 11.

Gold prices steadied as investors turned cautious ahead of a U.S. Federal Reserve meeting, which could provide fresh clues on future interest rate hikes. Spot gold rose 0.1 percent at $1,199.99 by 1031 GMT, having hit a low of $1191.71 on Friday, its lowest since September 11. U.S. gold futures were mostly steady at $1,203.70 an ounce.

Treasuries Recap

The U.S. Treasuries plunged ahead of the country’s 5-year auction, scheduled to be held today by 17:00GMT. Also, this week’s two-day FOMC meeting that concludes on Wednesday, will be closely eyed.  The yield on the benchmark 10-year Treasuries jumped 2-1/2 basis points to 3.102 percent, the super-long 30-year bond yields surged 3 basis points to 3.239 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points higher at 2.839 percent.

The German bunds suffered during European session amid a silent trading session that witnessed data of little economic significance. The German 10-year bond yields, which move inversely to its price, rose 1-1/2 basis points to 0.476 percent, the yield on 30-year note also surged 1-1/2 basis points to 1.136 percent and the yield on short-term 2-year traded nearly 1 basis point higher at -0.543 percent

The New Zealand bonds slumped at the time of closing ahead of the country’s August trade balance data, due to be released today by 22:45GMT and the Reserve Bank of New Zealand’s (RBNZ) monetary policy meeting, scheduled to be concluded on September 26 by 21:00GMT. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, jumped nearly 2 basis points to 2.705 percent, the yield on the long-term 20-year note also surged closed to 2 basis points to 3.020 percent and the yield on short-term 2-year too closed nearly 2 basis points higher at 1.768 percent.

The Australia government bonds slumped across the curve during Asian session following heavy sell-off in the U.S. Treasuries ahead of the FOMC policy decision, where an interest rate hike is fully priced in. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 4-1/2 basis points to 2.755 percent (highest since June 14), the yield on the long-term 30-year bond traded 4 basis points higher at 3.241 percent and the yield on short-term 2-year surged 3 basis points to 2.127 percent.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.