Market Roundup
• Swiss Aug Trade Balance 5.055B, 4.500B forecast, 5.246B previous
• UK Aug Public Sector Net Borrowing 19.78B, 14.75B forecast, 9.62B previous
• Sweden Aug Unemployment Rate 8.5%forecast, 8.0% previous
• Belgium Sep Consumer Confidence 8, 5 previous
• US Sep CBI Industrial Trends Orders 22, 15forecast, 18 previous
Looking Ahead –Economic Data (GMT)
•12:30 Canada Aug New Housing Price Index (MoM) 0.4% previous
• 12:30 US Aug Building Permits (MoM) 2.3% previous
• 12:30 US Aug Building Permits 1.600M forecast, 1.630M previous
• 12:30 US Aug Housing Starts 1.555M forecast, 1.534M previous
• 12:30 US Aug Housing Starts (MoM) -7.0% previous
• 12:30 US Current Account (Q2) -191.0B forecast, -195.7B previous
•12:55 US Redbook (YoY) 15.3% previous
Looking Ahead - Events, Other Releases (GMT)
•14:30 ECB President Lagarde Speaks
Fxbeat
EUR/USD: The euro edged higher against dollar on Tuesday as markets appeared to calm from a sell-off a day earlier driven by fears around Chinese property developer Evergrande's debt woes and their implications for global growth. As markets stabilised after Monday's selloff, investors remained broadly cautious. A currency market volatility gauge climbed to its highest levels since end-July. Immediate resistance can be seen at 1.1742 (50%fib), an upside break can trigger rise towards 1.1776(61.8%fib).On the downside, immediate support is seen at 1.1703(38.2%fib), a break below could take the pair towards 1.1660 (23.6%fib).
GBP/USD: Sterling held near four-week lows on Tuesday as investors evaluated the direction the Bank of England would take at an upcoming policy meeting, while broader risk sentiment remained under pressure due to Chinese property company Evergrande’s debt troubles. In an important week for monetary policy, the Federal Reserve and BoE are among a dozen central banks hosting their meetings, which kept major currencies confined to their ranges. The pound gained 0.2% to $1.3680, edging up marginally from previous day’s low of $1.364 its weakest level since Aug. 23. Immediate resistance can be seen at 1.3696(38.2%fib),an upside break can trigger rise towards 1.3751 (23.6%fib).On the downside, immediate support is seen at 1.3647(50%fib), a break below could take the pair towards 1.3598(61.8%fib).
USD/CHF: The dollar declined against the Swiss franc on Tuesday as worries about the fallout from property developer Evergrande's solvency issues spooked financial markets and lifted safe-haven currencies like yen and swiss franc. Market sentiment has been rattled by the potential contagion from Evergrande, which is trying to raise funds to pay a host of lenders, suppliers and investors. A deadline for an $83.5 million interest payment on one of its bonds is due on Thursday, and the company has $305 billion in liabilities. At (GMT 09:16), greenback dipped 0.26% versus the Swiss franc to 0.9247. Immediate resistance can be seen at 0.9331 (23.6%fib), an upside break can trigger rise towards 0.9400 (Psychological level).On the downside, immediate support is seen at 0.9301(20DMA), a break below could take the pair towards 0.9227(38.2%fib).
USD/JPY: The dollar initially rose against yen on Tuesday as but gave up most of the ground as investors sought safety in the yen as potential default by property developer China Evergrande raised concerns. Default fears continued to stalk China Evergrande Group despite efforts by its chairman to lift confidence in the embattled property company. Financial markets looked for possible intervention by Beijing to stem any domino effects across the global economy. The dollar was trading 0.12% higher versus the dollar at 109.51 after hitting daily high of 109.90. Strong resistance can be seen at 110.02(23.6%fib), an upside break can trigger rise towards 110.28(Higher BB).On the downside, immediate support is seen at 109.62(38.2%fib), a break below could take the pair towards 109.33(50%fib).
Equities Recap
European shares rose on Tuesday after their biggest fall in two months on easing worries about the spillover from the crisis at China’s Evergrande, although gains were capped by fears major central banks could announce a tapering in stimulus.
At (GMT 10:30),UK's benchmark FTSE 100 was last trading up at 1.20% percent, Germany's Dax was up by 1.43 % percent, France’s CAC was last up by 1.42% percent.
Commodities Recap
Gold prices held steady on Tuesday, buoyed by a subdued dollar, although price action was limited as investors awaited the U.S. Federal Reserve policy meeting for more clarity on its tapering plans.
Spot gold was little changed at $1,764.46 per ounce at 0907 GMT, while U.S. gold futures were up 0.1% to $1,765.00 per ounce.
Oil prices rose on Tuesday, after sharp losses the previous session, amid tighter U.S. supplies, ending days of losses as global markets remain haunted by the potential impact on China's economy of a crisis at heavily indebted property group China Evergrande.
Brent crude gained $1.01, or 1.4%, to $74.93 a barrel by 0941 GMT, having fallen by almost 2% on Monday. The October West Texas Intermediate (WTI) contract , which expires later on Tuesday, was up 99 cents, or 1.4%, at $71.28.
