Market Roundup
- Bank of England set to raise rates for the first time since 2007
- Fed keeps rates unchanged, remains on road to December hike
- Trump expected to name Powell as next Federal Reserve chair on Thursday
- After delay, Republicans in U.S. Congress prepare to introduce tax bill
- At least two dead in shooting inside suburban Denver Walmart
- People's Bank of China seen supporting yuan around Trump visit
- Ousted Catalan leader says will not return to Spain to testify
- China's Xi says hopes to promote relations with N. Korea -KCNA
- Australia Sept Building Approvals, 1.5% vs 0.4%
- Australia Sept Trade Balance G&S (A$), 1.745 mln vs 989 mln, forecast 873 mln
- TPP talks without U.S. near final stretch ahead of APEC
- New Zealand job ads rise 0.9 pct in October - ANZ survey
Economic Data Ahead
- (0450 ET/0850 GMT) France Oct Markit Mfg PMI, forecast 56.7, last 56.7
- (0455 ET/0855 GMT) Germany Oct Markit/BME Mfg PMI, forecast 60.5, last 60.5
- (0455 ET/0855 GMT) Germany Oct Unemployment Chg SA, forecast -10k, last -23k
- (0500 ET/0900 GMT) Eurozone Oct Markit Mfg Final PMI, forecast 58.6, last 58.6
- (0530 ET/0930 GMT) Great Britain Oct Markit/CIPS Cons PMI, forecast 48.1, last 48.1
Key Events Ahead
- (0500 ET/0900 GMT) Norway Central Bank reports financial stability 201 - Oslo
- (0715 ET/1115 GMT) Norges Bank Deputy Governor Egil Matsen speaks at Trondheim
- (0800 ET/1200 GMT) BoE announces rate decision, will release latest inflation report - London
- (0830 ET/1230 GMT) Fed's Powell participates at ARRC roundtable - New York
- (1215 ET/1615 GMT) Fed's Dudley participates at ARRC roundtable - New York
FX Beat
DXY: The dollar index fell to a 1-week low on overnight comments from the U.S. house tax committee Chairman Brady, stating that the tax bill will only have temporary cut in the corp rate from 35 percent to 20 percent. The greenback against a basket of currencies traded 0.3 percent down at 94.53, having touched a low of 94.41 earlier, its lowest since Oct. 26. FxWirePro's Hourly Dollar Strength Index stood at -60.09 (Bearish) by 0500 GMT.
EUR/USD: The euro rose to a 1-week high, as the greenback eased following a decline in the U.S. Treasury yields. The European currency traded 0.3 percent up at 1.1654, having touched a high of 1.1617 earlier, its highest since Oct. 26. FxWirePro's Hourly Euro Strength Index stood at 55.59 (Bullish) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of U.S. unemployment benefit claims, nonfarm productivity, and unit labour costs data. Immediate resistance is located at 1.1676 (61.8% retracement of 1.1837 and 1.1674), a break above targets 1.1706 (50.0% retrace). On the downside, support is seen at 1.1593 (Oct. 30 Low), a break below could drag it lower 1.1550.
USD/JPY: The dollar declined below the 114.00 handle, reversing some of its previous session gains, ahead of a U.S. tax bill that will be unveiled after a one-day delay. The major was trading 0.2 percent up at 113.92, having hit a low of 112.95 on Tuesday, its lowest since Oct. 20. FxWirePro's Hourly Yen Strength Index stood at -96.45 (Slightly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. unemployment benefit claims, nonfarm productivity, and unit labour costs data for further momentum. Immediate resistance is located at 114.30, a break above targets 114.60. On the downside, support is seen at 113.56 (10-DMA), a break below could take it near 112.99 (21-DMA).
GBP/USD: Sterling gained as investors will be focused on the degree of unity among Bank of England rate-setters as they gauge the likelihood of further rate hikes. The major traded 0.3 percent up at 1.3278, having hit a high of 1.3320 the day before, its highest since Oct. 16. FxWirePro's Hourly Sterling Strength Index stood at 38.40 (Neutral) by 0400 GMT. Investors’ focus will remain on BoE interest rate decision and central bank governor Carney's speech, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3300, a break above could take it near 1.3338. On the downside, support is seen at 1.3203 (5-DMA), a break below targets 1.3180. Against the euro, the pound was trading 0.1 percent down at 87.77 pence, having hit a high of 87.33 pence the prior day, its highest since mid-June.
AUD/USD: The Australian dollar rose to a 1-week high after data showed approvals to build new homes climbed to a seven-month peak in September, while the country posted its longest run of trade surpluses in over four decades. The Aussie trades 0.5 percent up at 0.7715 having hit a high of 0.7726 earlier in the session; it’s highest since Oct. 25. FxWirePro's Hourly Aussie Strength Index stood at 48.73 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7648 (Previous Session Low), a break below targets 0.7600. On the upside, resistance is located at 0.7725 (61.8% retracement of 0.7883 and 0.7625), a break above could take it near 0.7755 (50% retracement).
NZD/USD: The New Zealand dollar rallied to a 1-week peak, in the wake of aggressive selling seen in the U.S. dollar across the board following overnight comments from the U.S. house tax committee Chairman Brady. The Kiwi trades 0.6 percent up at 0.6925, having touched a high of 0.6941 earlier, its highest level since Oct. 24. FxWirePro's Hourly Kiwi Strength Index was at 166.97 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6968 (61.8% retracement of 0.7206 and 0.6818), a break above could take it near 0.7013 (50.0% retracement of 0.7206 and 0.6818). On the downside, support is seen at 0.6800, a break below could drag it till 0.6780.
Equities Recap
Asian shares hit fresh a 10-year high after the U.S. Federal Reserve expressed optimism about the economy, cementing the case for a rate hike by the end of this year.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.
Tokyo's Nikkei rose 0.1 percent to 22,431.30 points, Australia's S&P/ASX 200 index fell 0.1 percent to 5,931.70 points and South Korea's KOSPI eased 0.5 percent to 2,545.57 points.
Shanghai composite index slumped 0.5 percent to 3,377.50 points, while CSI300 index was trading 0.4 percent down at 3,981.99 points.
Hong Kong’s Hang Seng was trading 0.1 percent lower at 28,565.65 points. Taiwan shares added 0.05 percent to 10,809.51 points.
Commodities Recap
Crude oil prices edged up, reversing some of the previous session losses as U.S. crude inventories fell despite a rise in production. International benchmark Brent crude was trading 0.1 percent up at $60.52 per barrel by 0352 GMT, having hit a high of $61.68 the day before, its highest since July 2015. U.S. West Texas Intermediate was trading flat at $54.25 a barrel, after rising as high as $55.19 the prior day, its highest since Feb. 23.
Gold prices rallied to a 1-week high after the U.S. Federal Reserve left interest rates unchanged, while investors awaited an announcement on a new chair for the central bank later in the day. Spot gold was 0.4 percent up at $1,280.01 per ounce at 0359 GMT, having touched its highest since Oct. 26 at $1281.28 earlier. U.S. gold futures for December delivery edged up 0.1 percent to $1,278.60.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.361 percent lower by 0.015 bps, while 5-year yield was 0.015 bps down at 2.008 percent.
The Japanese bonds gained after the Bank of Japan bought more of long-term bonds in its daily market operations. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 0.056 percent, the yield on long-term 30-year also slipped 1 basis point to 0.847 percent and the yield on short-term 2-year traded steady at -0.158 percent.
The Australian bonds gained following firmness in the U.S. Treasuries after President Donald Trump nominate Federal Reserve Governor Jerome Powell to lead the U.S. central bank, hinting the monetary policy would be consistent at the current pace. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 5-1/2 basis points to 2.660 percent, the yield on the long-term 30-year note also dipped 5-1/2 basis points to 3.421 percent and the yield on short-term 2-year slid 2-1/2 basis points to 1.824 percent.
The New Zealand bonds gained at the time of closing as political uncertainties continued to hover around, sending bond prices higher amid a muted trading session that witnessed data of little economic significance. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.91 percent, the yield on the 20-year note tad lower at 3.46 percent and the yield on short-term 2-year also slid 1 basis point to 1.99 percent.
The Canadian government bond prices were lower across the yield curve, with the two-year down 4.5 Canadian cents to yield 1.416 percent and the 10-year falling 18 Canadian cents to yield 1.974 percent.
