Market Roundup
- EUR/USD -0.04%, USD/JPY 0.3%, GBP/USD 0.34%, EUR/GBP -0.43%
- DXY 0.05%, DAX 0.22%, FTSE -0.28%, Brent -0.77%, Gold 0.14%
- Under growing EU pressure, May meets her ministers on Brexit
- Sterling rises on labour data, but EU summit fears curb gains
- Germany Oct ZEW Economic Sentiment, -24.7, -10.6 previous, -12.0 forecast
- Germany Aug Import Prices y/y, 4.8%, 5.0% previous, 5.2% forecast, 4.8% revised
- Great Britain Sep Claimant Count Unemployment Overall, 18.5K, 8.7k previous, 7.5K f'cast, 14.2K revised
- Great Britain Aug ILO Unemployment Rate, 4.0%, 4.0% previous, 4.0% forecast
- Italy Sep Consumer Prices Final y/y, 1.4%, 1.5% previous, 1.4% r'vsd, 1.5% forecast
- Italy Aug Trade Balance EU, 0.817B, 2.677B previous, 2.660B revised
- UK workers see strongest growth in basic pay in nearly a decade
- Japan says U.S. has not raised FX manipulation in trade talks
- Rise in Italy's bond yields is "temporary", says deputy PM
Economic Data Ahead
- (0830 ET/1230 GMT) The Statistics Canada will report foreign portfolio investment in domestic stocks for the month of August.
- (0830 ET/1230 GMT) The Statistics Canada will release investment in foreign securities figures for the month of August.
- (0915 ET/1315 GMT) The Federal Reserve is likely to report that industrial production rose 0.3 percent in September, after increasing 0.4 in the prior month.
- (0915 ET/1315 GMT) The Federal Reserve Board is expected to report that capacity utilization edged up to 78.2 percent in September from 78.1 percent in August.
- (1000 ET/1400 GMT) The National Association of Home Builders (NAHB) is expected to report that U.S. Housing Market Index rose to 67 in October after posting a similar increase in September.
- (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 6.945 million from 6.939 million in July.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (1615 ET/2015 GMT) Fed's San Francisco President Mary Daly speaks at Wellesley College, Massachusetts.
FX Beat
DXY: The dollar index consolidated within narrow ranges, amid a mildly positive tone around the U.S. Treasury bond yields, while investors awaited FOMC member Mary Daly’s speech for clues on the Fed's monetary policy outlook. The greenback against a basket of currencies trades flat at 95.04, having touched a low of 94.95 on Friday, its lowest since Sept. 28. FxWirePro's Hourly Dollar Strength Index stood at -93.53 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro eased after data showed German investor morale deteriorated more than expected in October, as concerns about an escalating trade dispute between the United States and China, and worries of a hard Brexit clouded the economy's outlook. The European currency traded 0.1 percent down at 1.1574, having touched a high of 1.1610 on Friday, its highest since October 1. FxWirePro's Hourly Euro Strength Index stood at -31.84 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1610 (October 12 High), a break above targets 1.1651 (September 28 High). On the downside, support is seen at 1.1547 (5-DMA), a break below could drag it till 1.1505 (October 2 Low),.
USD/JPY: The dollar rebounded from a 1-month low as the yields on the U.S. Treasuries surged. The major was trading 0.2 percent up at 112.03, having hit a low of 111.62 on Monday, its lowest since September 13. FxWirePro's Hourly Yen Strength Index stood at -22.71 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. industrial production, capacity utilization, JOLTS job opening, and housing market index. Immediate resistance is located at 112.58 (September 20 High), a break above targets 112.98 (September 25 High). On the downside, support is seen at 111.62 (September 15 Low), a break below could take it lower 111.35 (September 5 Low).
GBP/USD: Sterling rallied above the 1.3200 handle, after data showed basic wages of workers in Britain increased at their fastest pace in nearly a decade over the summer months. However, doubts that a Brexit deal would be reached at a European Union summit this week limited the upside. The major traded 0.5 percent up at 1.3220, having hit a low of 1.3082 on Monday; it’s lowest since October 9. FxWirePro's Hourly Sterling Strength Index stood at 67.27 (Neutral) 1000 GMT. Immediate resistance is located at 1.3257 (October 12 High), a break above could take it near 1.3298 (September 20 High). On the downside, support is seen at 1.3095 (September 25 Low), a break below targets 1.3054 (October 21 Low). Against the euro, the pound was trading 0.5 percent at 87.57 pence, having hit a low of 88.25on Monday, it’s lowest since October 5.
USD/CHF: The Swiss franc declined, retreating from a near 2-week peak touched in the previous session as investor risk sentiment improved. The major trades 0.2 percent up at 0.9879, having touched a low of 0.9848 on Monday, it’s lowest since October 3. FxWirePro's Hourly Swiss Franc Strength Index stood at -114.46 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9934 (October 10 High) and any break above will take the pair to next level till 0.9984 (August 6 High). The near-term support is around 0.9842 (August 21 Low) and any close below that level will drag it till 0.9800.
Equities Recap
European shares rebounded from a 22-month low, boosted by gains in stronger defensive stocks, while sterling surged after UK labour data beat expectations.
The pan-European STOXX 600 index rallied 0.4 percent at 360.64 points, while the FTSEurofirst 300 index surged 0.5 percent to 1,420.30 points.
Britain's FTSE 100 trades 0.3 percent down at 7,010.62 points, while mid-cap FTSE 250 surged 0.7 percent to 18,928.58 points.
Germany's DAX rose 0.2 percent at 11,632.18 points; France's CAC 40 trades 0.05 percent higher at 5,096.18 points.
Commodities Recap
Crude oil prices slumped on evidence of higher U.S. oil production and increasing U.S. crude inventories, however, reports of a decline in Iranian oil exports capped downside. International benchmark Brent crude was trading 0.9 percent down at $80.03 per barrel by 1019 GMT, having hit a low of $79.20 on Friday, its lowest since September 24. U.S. West Texas Intermediate was trading 0.9 percent down at $71.06 a barrel, after falling as low as $70.54 on Thursday, its lowest since September 21.
Gold prices steadied near a 2-1/2-month high touched in the previous session as risk-averse investors sought safety amid rising political tensions and economic uncertainty. Spot gold was 0.1 percent up at $1,228.03 an ounce at 1021 GMT, having hit a high of $1233.14 on Monday, its highest since July 26. U.S. gold futures were flat at $1,230.40 an ounce.
Treasuries Recap
The U.S. Treasuries fell during late afternoon session as investors await the release of the country’s JOLTs job openings data for the month of August, due today by 14:00GMT and FOMC member Daly’s speech, also scheduled for today at 20:15GMT. The yield on the benchmark 10-year Treasuries rose 1 basis point to 3.173 percent, the super-long 30-year bond yields surged nearly 1-1/2 basis points to 3.353 percent and the yield on the short-term 2-year traded 1 basis point higher at 2.870 percent.
The German bunds remained flat during European session after the country’s ZEW economic sentiment index for the month of October disappointed market participants and investors will now be awaiting the eurozone’s consumer price inflation (CPI) for the month of September, due to be released on October 17 by 09:00GMT. The German 10-year bond yields, which move inversely to its price, slipped 1/2 basis point to 0.500 percent, the yield on the 30-year note edged 1 basis point lower at 1.128 percent and the yield on short-term 2-year traded nearly 2 basis points higher at -0.592 percent.
The Japanese government bonds remained tad lower ahead of the country’s trade balance data for the month of September, due to be released on October 17 by 23:50GMT and national core consumer price inflation (CPI), due on October 18 by 23:30GMT for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1/2 basis point to 0.149 percent, the yield on the long-term 30-year note remained tad higher at 0.917 percent and the yield on short-term 2-year traded flat at -0.113 percent.
The Australian government bonds slumped across the curve during Asian session after the Reserve Bank of Australia (RBA) reiterated that the next interest rate move will be a hike, in its October monetary policy meeting minutes, released earlier today. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 2 basis points to 2.723 percent, the yield on the long-term 30-year bond also surged 2 basis points to 3.201 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points higher at 2.054 percent.
