|   Market Roundups


  |   Market Roundups


Europe Roundup: Sterling off highs amid persisting no-deal Brexit concerns, greenback gains ahead of Fed policy meeting, oil rallies on Saudi facility attacks- Monday, September 16th, 2019

Market Roundup

  • Oil soars after Saudi supply shock and stocks slide
  • Yen firms after Saudi attacks

Economic Data Ahead

  • (0830 ET/1230 GMT) The Federal Reserve Bank of New York is expected to report that manufacturing activity in New York State declined to 4 in September from 4.8 in August.

Key Events Ahead

  • (0800 ET/1200 GMT) The European Central Bank Executive Board member Philip Richard Lane's speech

FX Beat

DXY: The dollar index surged as investors are certain that the U.S. Federal Reserve will cut interest rate on Wednesday, but divided only over how much. The greenback against a basket of currencies traded 0.5 percent up at 98.03, having touched a low of 97.86 on Friday, its lowest since August 26.

EUR/USD: The euro declined, halting a 2-day rally, as doubts were cast on the impact new stimulus measures announced by the European Central Bank could have on the euro zone’s sluggish economy. The European currency traded 0.2 percent down at 1.1049, having touched a high of 1.1109 in the previous session, its highest since August 27. Immediate resistance is located at 1.1098 (August 28 High), a break above targets 1.1153 (August 23 High). On the downside, support is seen at 1.1030 (September 10 Low), a break below could drag it below 1.0963 (August 30 High).

USD/JPY: The dollar slumped to a near 1-week low, as investors turned cautious after an attack on Saudi Arabian refining facilities that disrupted global oil supply and heightened Middle East tensions. The major was trading 0.3 percent down at 107.75, having hit a low of 107.44 earlier, its lowest since September 10. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. NY empire state manufacturing index. Immediate resistance is located at 108.37 (July 16 High), a break above targets 108.75 (July 25 High). On the downside, support is seen at 107.10 (10-DMA), a break below could take it lower at 106.63 (21-DMA).

GBP/USD: Sterling eased from a 7-week peak touched in the previous session as concern revived that Britain will struggle to secure a deal on the terms of its departure from the European Union. The major traded 0.3 percent down at 1.2452, having hit a high of 1.2504 on Friday, it’s highest since July 25. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2522 (July 24 High), a break above could take it near 1.2578 (July 12 High). On the downside, support is seen at 1.2369 (5-DMA), a break below targets 1.2285 (10-DMA). Against the euro, the pound was trading 0.2 percent down at 88.71 pence, having hit a high of 88.53 on Friday, it’s highest since June 7.

USD/CHF: The Swiss franc edged up as investors remained cautious ahead of the U.S. Federal Reserve's policy meeting on Wednesday, at which it is widely expected to ease interest rates and signal its future policy path. The major trades 0.05 percent down at 0.9895, having touched a high of 0.9946 on Thursday, it’s highest since August 1. On the higher side, near-term resistance is around 0.9949 (July 31 High) and any break above will take the pair to next level till 0.9975 (August 1 High). The near-term support is around 0.9848 (21-DMA), and any close below that level will drag it till 0.9813 (August 22 Low).

Equities Recap

European shares tumbled after four straight sessions of gains as attacks on crude facilities in Saudi Arabia and weak Chinese data added to worries over global growth.

The pan-European STOXX 600 index plunged 0.6 percent at 389.56 points, while the FTSEurofirst 300 declined 0.5 percent to 1,530.13 points.

Britain's FTSE 100 trades 0.2 percent down at 7,353.69 points, while mid-cap FTSE 250 fell 0.8 to 20,041.56 points.

Germany's DAX eased 0.7 percent at 12,379.68 points; France's CAC 40 trades 0.7 percent lower at 5,617.42 points.

Commodities Recap

Crude oil prices surged by more than 10 percent to 4-month highs after an attack on Saudi Arabian oil facilities shut over 5 percent of global supply. International benchmark Brent crude was trading 9.0 percent higher at $65.57 per barrel by 1007 GMT, having hit a high of $68.38 earlier, its highest since May 30. U.S. West Texas Intermediate was trading 8.5 percent up at $59.54 a barrel, after rising as high as $63.20 earlier, its highest since May 21.

Gold prices rallied by more than 1-percent as an attack on Saudi Arabia’s oil facilities dented risk appetite, while investors awaited for clues on monetary easing from major central bank meetings due this week. Spot gold rose 1 percent at $1,503.76 per ounce by 1009 GMT, having touched a low of $1,483.22 on Wednesday, its lowest since August 13. The metal eased 1.2 percent in the previous week on hopes that an end to the U.S.-China trade tiff could be near. U.S. gold futures rose 0.8 percent to $1,511.20 per ounce.

Treasuries Recap

The U.S. Treasury yields plunged during the afternoon session ahead of the Federal Reserve’s monetary policy meeting, scheduled to be held on September 18 by 18:00GMT amid an otherwise muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury yield edged plunged nearly 7 basis points to 1.831 percent, the super-long 30-year bond yield slumped nearly 7-1/2 basis points to 2.303 percent and the yield on the short-term 2-year plummeted 5-1/2 basis points to 1.747 percent.

The German bunds jumped during European trading session ahead of the country’s consumer price inflation (CPI) for the month of August, scheduled to be released on September 18 by 14:30GMT and a host of speeches by members of the European Central Bank (ECB), due through this week, which shall provide further direction in the debt market. The German 10-year bond yield, which move inversely to its price, suffered 2 basis points to -0.475 percent, the yield on 30-year note plunged 4-1/2 basis points to 0.045 percent and the yield on short-term 2-year slipped 1 basis point to -0.716 percent.

The Australian government bonds slumped during Asian trading session tracking a similar movement in the United States Treasuries on burgeoning hopes of a trade deal. Also, stronger-than-expected U.S. retail sales data alleviated concerns about the economic growth outlook. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, edged nearly 1 basis point higher to 1.180 percent, the yield on the long-term 30-year bond remained steady at 1.760 percent while the yield on short-term 2-year hovered around 0.918 percent.

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