Market Roundup
• EU keeps UK waiting on Brexit delay
• Markets focus on Fed talks on Oct. 29 and 30
• Traders see 91% chance for 25-bps rate cut by Fed- FEDWATCH
• Price of U.S. oil decreases 1.3%
• Canada Aug Wholesale Sales (MoM) -1.2%,0.3% forecast, 1.4% previous
• US Aug House Price Index (YoY) 4.6%,5.0% previous
• US Aug House Price Index (MoM) 0.2%,0.4%,0.4% previous
• US Aug House Price Index 277.4, 276.9 previous
• US Crude Oil Inventories -1.699M, 2.232M forecast, 9.281M previous
• US Gasoline Inventories -3.107M, -2.267M forecast, -2.562M previous
• US Federal Budget Balance 83.5B forecast, -200.0B previous
Looking Ahead - Economic Data (GMT)
• 23:00 Australia Manufacturing PMI 49.0 forecast, 49.0 50.3 previous
• 23:00 Australia Services PMI 52.2 forecast, 52.4 previous
• 00:30 Japan Oct Manufacturing PMI 49.2 forecast,48.9 previous
• 00:30 Japan Services PMI 52.8 previous
• 05:00 Japan Leading Index 91.7 forecast, 93.7 previous
• 11:45 Eurozone Oct Deposit Facility Rate -0.50% forecast, -0.50% previous
• 11:45 Eurozone ECB Interest Rate Decision 0.00%forecast, 0.00% previous
Looking Ahead - Events, Other Releases (GMT)
• 11:45 Eurozone ECB Monetary Policy Statement
• 12:30 Eurozone ECB Press Conference
Currency Summaries
EUR/USD: The euro strengthened against the U.S. dollar on Wednesday after EU leaders considered whether to give Britain a three-month Brexit extension. Prime Minister Boris Johnson said that if they do so he would call an election by Christmas. However, there are still plenty of hurdles left, and Johnson’s ability to deliver on a “do or die” pledge to get Britain out of the EU by Oct. 31 is in doubt, after parliament rejected a three-day timetable to enact his agreement.The euro was up 0.01% at $1.1132, a near two-month high. Immediate resistance can be seen at 1.1139 (5 DMA), an upside break can trigger rise towards 1.1181(21st Oct High).On the downside, immediate support is seen at 1.1093 (9 DMA), a break below could take the pair towards 1.1012 (21 DMA).
GBP/USD: Sterling edged higher against dollar on Wednesday as European Union leaders consider Britain’s request for a Brexit delay, and are expected to grant a three-month extension to the Oct. 31 deadline for its departure.European Council President Donald Tusk said on Twitter he had recommended late on Tuesday that EU leaders back a delay. British Prime Minister Boris Johnson was forced by parliament to ask for three months, but there is still a chance that some EU countries, notably France, could demand a shorter extension . At 2041 GMT, the pound was up 0.02 percent at $1.2904, having touched $1.30 on Monday. Immediate resistance can be seen at 1.3013 (Oct 21st High), an upside break can trigger rise towards 1.3073 (May 8th high).On the downside, immediate support is seen at 1.2738 (11 DMA), a break below could take the pair towards 1.2714 (200 DMA).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Wednesday, with the currency losing some of its recent positive momentum as oil prices fell and domestic data showed a surprise drop in August wholesale trade. Canadian wholesale trade decreased by 1.2% in August from July on weaker sales in the machinery, equipment and supplies subsector, as well as personal and household goods, Statistics Canada said. Analysts had forecast a 0.3% increase. . At (1932 GMT), the Canadian dollar was trading nearly unchanged at 1.3095 to the greenback. Immediate resistance can be seen at 1.3108 (5 DMA), an upside break can trigger rise towards 1.3178 (11 DMA).On the downside, immediate support is seen at 1.3060 (Lower BB), a break below could take the pair towards 1.3000 (Psychological level).
USD/JPY: The dollar strengthened against the Japanese yen Wednesday amid cheery chatter about the chance of a Sino-U.S. trade deal, while investors were sanguine yet another vote on Brexit would still avert a hard exit for the UK. China and the United States have achieved some progress in their trade talks, Vice Foreign Minister Le Yucheng said on Tuesday, adding that as long as both sides respected each other, no problem could not be resolved. U.S. President Donald Trump sounded upbeat on a China deal on Monday, while White House adviser Larry Kudlow said tariffs on Chinese goods scheduled for December could be withdrawn if talks go well. Strong resistance can be seen at 109.00 (Psychological level), an upside break can trigger rise towards 109.50 (Higher BB).On the downside, immediate support is seen at 107.96 (9 DMA), a break below could take the pair towards 107.31(50 DMA).
Equities Recap
European shares dipped for the first time this week on Wednesday, as warnings from Texas Instruments raised concerns about the global microchip industry, while UK lawmakers hit the pause button on Britain’s exit from the European Union.
UK's benchmark FTSE 100 closed up by 0.67 percent, Germany's Dax ended up by 0.34 percent, France’s CAC finished the day down by 0.07 percent.
Wall Street edged higher on Wednesday, led by gains in Boeing and Apple shares, even as weak earnings from Caterpillar and Texas Instruments raised concerns about the impact of the U.S.-China trade war on global growth.
Dow Jones closed up by 0.17 percent, S&P 500 ended up by 0.28 percent, Nasdaq finished up by 0.19 percent.
Treasuries Recap
U.S. Treasury yields recovered from session lows to close little changed on Wednesday in generally thin trading, as investors consolidated positions amid an overall lack of new catalysts to spur the market in either direction.
In afternoon trading, U.S. 10-year note yields were steady at 1.769% from 1.766% late on Tuesday. Yields on 30-year bonds were also little changed at 2.257%, from 2.251% on Tuesday.
Commodities Recap
Gold firmed on Wednesday as uncertainty over Britain’s upcoming exit from the European Union and concerns over a possible slowdown in the global technology sector weighed on equities, prompting investors to seek refuge in bullion.
Spot gold was up 0.3% at $1,492.01 per ounce as of 1146 GMT. U.S. gold futures rose 0.5% to $1,495 per ounce.
Oil rose nearly 2% on Wednesday after government data showed a surprise draw in U.S. crude stocks and as the prospect of deeper output cuts by OPEC and its allies offered support.
Brent crude futures were up 94 cents, or 1.6%, at $60.64 a barrel at 12:27 p.m. CDT (1727 GMT). West Texas Intermediate (WTI) crude futures were up 96 cents, or 1.8%, to $55.44 per barrel.
