Market Roundup
- EUR/USD 0.21%, USD/JPY -0.03%, GBP/USD 0.18%, EUR/GBP 0.06%
- DXY -0.15%, DAX -0.44%, FTSE -0.38%, Brent 0.67%, Gold 0.33%
- China won't just play defence in trade war, Global Times says
- ECB should clarify pace of rate hikes when time comes: Coeure
- UK PM May cautions: support my Brexit deal or face no deal
- UK economy will shrink without Brexit deal - IMF
- EZ HICP Final (y/y), 2.0%, 2.0% forecast, 2.0% previous
- Italy Trade Balance EU, 2.677 bln, 1.520 bln previous, 1.623 bln revised
- Italy Global Trade Balance, 5.676 bln previous, 5.071 bln previous, 5.174 bln revised
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of New York is expected to report that NY manufacturing activity index eased to 23.00 in September after rising to 25.6 in the previous month.
- (0830 ET/1230 GMT) The Statistics Canada will report foreign portfolio investment in domestic stocks for the month of July.
- (0830 ET/1330 GMT) The Statistics Canada will release investment in foreign securities figures for the month of July.
Key Events Ahead
- (0900 ET/1300 GMT) Riksbank's Governor Stefan Ingves will participate in a discussion of the lessons learned from the banking crisis of the 1990s in Stockholm
FX Beat
DXY: The dollar index declined, as hopes of fresh trade talks between the United States and China were slashed on reports of new U.S. tariff threat on Chinese goods. The greenback against a basket of currencies trades 0.2 percent down at 94.72, having touched a low of 94.36 on Friday, its lowest since July 31. FxWirePro's Hourly Dollar Strength Index stood at -76.56 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro surged, reversing some of its previous session losses after data showed Eurozone annual inflation rose to 2.0 percent in August, in line with the earlier estimate, while inflation excluding volatile energy and unprocessed food prices came in at 1.2 percent on the year. The European currency traded 0.4 percent up at 1.1662, having touched a high of 1.1721 on Friday, its highest since Aug 30. FxWirePro's Hourly Euro Strength Index stood at -12.48 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1718 (August 30 High), a break above targets 1.1747 (July 31 High). On the downside, support is seen at 1.1584 (August 31 Low), a break below could drag it till 1.1542 (September 5 Low).
USD/JPY: The dollar consolidated within narrow ranges, as investors refrained from taking big positions ahead of U.S. President Donald Trump's announcement on the implementation of U.S. tariffs on an additional $200 billion of Chinese imports. The major was trading flat at 112.03, having hit a high of 112.16 on Friday, its highest since July 20. FxWirePro's Hourly Yen Strength Index stood at -112.64 (Highly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Fed's New York Empire State Manufacturing Index. Immediate resistance is located at 112.17 (July 11 High), a break above targets 112.62 (July 12 High). On the downside, support is seen at 111.59 (5-DMA), a break below could take it lower 111.31 (August 2 Low).
GBP/USD: Sterling rose above the 1.3100 handle, hovering towards a 1-1/2 month peak touched in the previous session, as reports of progress on the Irish border boosted hopes that a Brexit trade deal with the European Union can be struck within the next two months. The major traded 0.4 percent up at 1.3111, having hit a high of 1.3143 on Friday; it’s highest since August 1. FxWirePro's Hourly Sterling Strength Index stood at 3.14 (Neutral) 1000 GMT. Immediate resistance is located at 1.3140 (July 20 High), a break above could take it near 1.3213 (July 26 High). On the downside, support is seen at 1.3026 (September 13 Low), a break below targets 1.2928 (21-DMA). Against the euro, the pound was trading flat at 88.94 pence, having hit a high of 88.76 last week, it’s highest since August 2.
USD/CHF: The Swiss franc held gains near a 5-month peak hit in the prior session as a month-long trade conflict between the U.S. and China rattled investors sentiment. The major trades 0.3 percent down at 0.9641, having touched a low of 0.9634 on Friday, it’s lowest since April 16. FxWirePro's Hourly Swiss Franc Strength Index stood at 93.73 (Slightly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9690 (23.6% retracement of 0.9865 and 0.9634) and any break above will take the pair to next level till 0.9724 (38.2% retracement). The near-term support is around 0.9612 and any close below that level will drag it till 0.9585.
Equities Recap
European shares slumped on news that Washington was set to announce a new round of tariffs on Chinese goods in the latest escalation of their trade war.
The pan-European STOXX 600 index tumbled 0.1 percent at 377.41 points, while the FTSEurofirst 300 index declined 0.2 percent to 1,475.51 points.
Britain's FTSE 100 trades 0.3 percent down at 7,285.59 points, while mid-cap FTSE 250 eased 0.2 percent to 20,334.81 points.
Germany's DAX fell 0.5 percent at 12,069.97 points; France's CAC 40 trades 0.3 percent lower at 5,337.24 points.
Commodities Recap
Crude oil prices surged, reversing most of its previous session losses as investors focused on the impact of U.S. sanctions on Iran. International benchmark Brent crude was trading 0.7 percent up at $78.68 per barrel by 1024 GMT, having hit a high of $80.08 on Wednesday, its highest since May 22. U.S. West Texas Intermediate was trading 0.8 percent up at $68.86 a barrel, after rising as high as $71.24 on Wednesday, its highest since September 4.
Gold prices gained, halting a 2-day losing streak amid increasing U.S.-China trade tensions and prospects of further interest rate hikes by the U.S. Federal Reserve. Spot gold was 0.3 percent up at $1,197.47 an ounce as of 1026 GMT, having hit a high of $1212.55 on Thursday, its highest since Aug. 28. U.S. gold futures were down 0.1 percent at $1,199.80.
Treasuries Recap
The U.S. Treasuries gained during European session amid a quiet trading session, scheduled to witness the release of New York Fed’s manufacturing survey today, followed by the NAHB housing index on Tuesday (both for September). The yield on the benchmark 10-year Treasuries slumped 2 basis points to 2.959 percent, the super-long 30-year bond yields also lost nearly 2 basis points to 3.106 percent and the yield on the short-term 2-year traded 1-1/2 basis point lower at 2.736 percent.
The German bunds suffered on the first trading day of the week after eurozone’s consumer price inflation (CPI) for the month of August, met market expectations. The German 10-year bond yields, which move inversely to its price, slumped 2 basis points to 0.414 percent, the yield on 30-year note slipped 1-1/2 basis points to 1.091 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at -0.555 percent.
The New Zealand bonds slumped at the time of closing as investors expect to see a rise in the country’s gross domestic product (GDP) for the second quarter of this year, scheduled to be released on September 19 by 22:45GMT. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, jumped nearly 3 basis points to 2.608 percent, the yield on the long-term 20-year note surged close to 2 basis points to 2.930 percent and the yield on short-term 2-year closed tad higher at 1.665 percent
The Australian government bonds traded narrowly mixed during Asian session as investors await U.S. President Donald Trump’s announcement of new tariffs on about $200 billion of Chinese imports. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1 basis point to 2.624 percent, the yield on the long-term 30-year bond traded nearly flat at 3.119 percent and the yield on short-term 2-year remained steady at 2.037 percent.
