Market Roundup
- Eurozone current account surplus widened in August
- John Mann expects more than nine Labour lawmakers to back PM Johnson's deal
- Japan estimates U.S. trade deal will boost GDP by 0.8% over 10-20 years
- Japan government downgrades economy view as global slowdown weighs
Economic Data Ahead
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
- N/A U.S. reports its monthly budget statement for the month of September. The government posted a deficit of $200 billion in the previous month
Key Events Ahead
- (1000 ET/1400 GMT) Kansas City Federal Reserve Bank President Esther George
- (1100 ET/1500 GMT) Dallas Federal Reserve Bank President Robert Kaplan will deliver a speech
- (1130 ET/1530 GMT) Vice-Chairman of the Board of Governors of the Federal Reserve System Richard H. Clarida's speech
- (1430 ET/1830 GMT) Bank of Canada Deputy Governor Timothy Lane's speech
FX Beat
DXY: The dollar index plunged amid growing expectations that the Federal Reserve may cut interest rates at the October 30 meeting following this weeks' downbeat U.S. economic data. The greenback against a basket of currencies traded 0.05 percent down at 97.52, having touched a low of 97.50 on Thursday, its lowest since August 26.
EUR/USD: The euro surged, hovering towards an 8-week peak hit in the previous session after data from the European Central Bank showed Euro zone’s current account surplus widened to 27 billion euros in August from 22 billion euros a month earlier. The European currency traded 0.1 percent up at 1.1131, having touched a high of 1.1139 on Thursday, its highest since August 26. Immediate resistance is located at 1.1150, a break above targets 1.1187. On the downside, support is seen at 1.1016, a break below could drag it below 1.1051.
USD/JPY: The dollar slumped as worries surrounding a trade war between the United States and China continued to linger, with China’s third-quarter economic growth slowing more than expected to its weakest pace in almost three decades. The major was trading 0.05 percent down at 108.58 having hit a high of 108.93 on Thursday, its highest since August 1. Investors’ will continue to track the broad-based market sentiment, ahead of Fed officials' speeches. Immediate resistance is located at 108..99 (July 31 High), a break above targets 109.31 (August 1 High). On the downside, support is seen at 108.37, a break below could take it near at 108.02.
GBP/USD: Sterling rose, extending gains for the fourth straight session, on relief that a Brexit deal had been agreed between Britain and the European Union. Members of parliament will vote on the deal on Saturday, the first Saturday session since 1982. The major traded 0.05 percent up at 1.2892, having hit a high of 1.2989 on Thursday, it’s highest since May 13. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3000, a break above could take it near 1.3040. On the downside, support is seen at 1.2800, a break below targets 1.2749 (5-DMA). Against the euro, the pound was trading 0.1 percent down at 86.32 pence, having hit a high of 85.74 the day before, it’s highest since May 8.
USD/CHF: The Swiss franc advanced to an over 3-week peak on deepening economic tensions between the United States and China. The major trades 0.05 percent down at 0.9875, having touched a low of 0.9865, it’s lowest since September 25. On the higher side, near-term resistance is around 0.9914 and any break above will take the pair to the next level till 0.9946. The near-term support is around 0.9843, and any close below that level will drag it till 0.9813.
Equities Recap
European shares plunged, weighed down by losses in the auto sector, while the sharpest contraction in the Chinese economy in nearly three decades exacerbated worries about slowing global growth.
The pan-European STOXX 600 index tumbled 0.6 percent at 392.52 points, while the FTSEurofirst 300 declined 0.1 percent to 1,538.68 points.
Britain's FTSE 100 trades 0.2 percent down at 7,167.85 points, while mid-cap FTSE 250 surged 0.2 to 20,254.99 points.
Germany's DAX rose 0.05 percent at 12,657.60 points; France's CAC 40 trades 0.5 percent lower at 5,647.18 points.
Commodities Recap
Crude oil prices rose slightly as concerns over an economic slowdown in China were offset by bullish signals from both the Chinese and U.S. refining sectors. International benchmark Brent crude was trading 0.2 percent up at $60.01 per barrel by 1027 GMT, having hit a high of $60.66 last week, its highest since September 30. U.S. West Texas Intermediate was trading 0.4 percent higher at $54.30 a barrel, after rising as high as $54.91 last week, its highest since September 30.
Gold prices declined as investors booked profit after the European Union forged a new Brexit deal with Britain, although uncertainties over trade negotiations and the global economy limited downside. Spot gold was trading 0.2 percent lower ar $1,488.26 an ounce by 1029 GMT, having touched a low of $1,473.88 last week, its lowest since October 1. U.S. gold futures fell 0.4 percent to $1,493.
Treasuries Recap
The U.S. Treasuries steadied during the afternoon session ahead of a host of speeches by members of the Federal Open Market Committee (FOMC), namely, George, Kaplan, Kashkari and Kaplan, all scheduled to be delivered later through the day. The yield on the benchmark 10-year Treasury yield remained steady at 1.766 percent, the super-long 30-year bond yield edged tad higher at 2.254 percent and the yield on the short-term 2-year too traded flat at 1.609 percent.
The United Kingdom’s gilts continued to down-trend during European trading hours as optimism continued to flood market sentiments ahead of the Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be delivered today by 17:45GMT. The yield on the benchmark 10-year gilts, jumped nearly 4-1/2 basis points to 0.722 percent, the 30-year yield sky-rocketed nearly 6 basis points to 1.224 percent and the yield on the short-term 2-year gained close to 4 basis points to 0.546 percent.
The German bunds suffered during European session amid silent trading hours that barely witnessed any data of major economic significance, still tracking improvement in investor sentiments, after a draft Brexit deal was agreed upon yesterday that paved the way closer to breaking all ties with the European Union. The German 10-year bond yield, which moves inversely to its price, jumped 2 basis points to -0.386 percent, the yield on 30-year note surged nearly 2-1/2 basis points to 0.112 percent while the yield on short-term 2-year traded nearly flat at -0.659 percent.
The Australian government bonds remained flat during Asian session of the last trading day of the week amid otherwise muted hours that witnessed data of little economic significance. However, market sentiments remained upbeat following the breakthrough Brexit deal, which will smoothen the roadmap to the final exit of Britain from the European Union. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 1.103 percent, the yield on the long-term 30-year bond also remained flat at 1.689 percent and the yield on short-term 2-year too traded steady at 0.770 percent.
