Market Roundup
- Euro at more than two-year lows
- Euro zone economic sentiment hits near five-year low
- Gold set for a weekly loss
- Oil prices headed for a weekly loss
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Commerce Department releases personal income figures for August, which is expected to rise 0.4 percent from 0.1 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the month of August. The index rose at an annualized rate of 1.4 percent in the prior month, while core PCE increased 0.2 percent in July.
- (0830 ET/1230 GMT) The U.S. Personal spending is likely to rise 0.3 percent in the month of August, after surging 0.6 percent in July.
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have decreased 1.0 percent in August after rising 2.0 percent in July, while non-defense capital goods orders excluding aircraft are likely to have stay remained flat after gaining 0.2 percent the prior month.
- (1000 ET/1400 GMT) The University of Michigan is likely to report that the U.S. consumer sentiment index rose to 92.0 in September after posting a similar reading in August.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0830 ET1230 GMT) Federal Reserve Board of Governors member Randal Keith Quarles' speech
FX Beat
DXY: The dollar index steadied after rising to a 3-week peak earlier in the session as investors remained unfazed by the latest political news out of the United States. On Thursday, a whistleblower report stated that Trump abused his office in trying to solicit Ukraine’s interference in the 2020 U.S. election for his political benefit. The greenback against a basket of currencies traded up at 99.20, having touched a high of 99.31 earlier, its highest since September 3.
EUR/USD: The euro plunged to a near 2-1/2 year low after data showed Eurozone economic sentiment plunged as trade tensions depressed confidence in the industry. The bloc's monthly indicator of the economic sentiment fell in September to its lowest level in nearly five years to 101.7 points from 103.1 in August, in a new sign of slowing economic activity. The European currency traded 0.1 percent up at 1.0932, having touched a low of 1.0904 earlier, its lowest since May 2017. Immediate resistance is located at 1.0953 (23.6% retracement of 1.1055 and 1.0904), a break above targets 1.0983 (38.2% retracement). On the downside, support is seen at 1.0885, a break below could drag it below 1.0830.
USD/JPY: The dollar rallied to a 1-week peak, boosted by a slew of U.S. economic data beat expectations and hopes of a quick resolution to the U.S.-China trade war. The major was trading 0.3 percent up at 108.10, having hit a low of 107.04 on Tuesday, its lowest since September 9. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. durable goods, personal consumption expenditures- price index, and Fed officials' speeches. Immediate resistance is located at 108.25 (September 13 High), a break above targets 108.53 (July 1 High). On the downside, support is seen at 107.34 (21-DMA), a break below could take it near at 106.76 (September 6 Low).
GBP/USD: Sterling plunged to a near 3-week low after Bank of England policymaker Michael Saunders hinted at looser monetary policy if Brexit uncertainty persisted against a backdrop of slower global growth. The major traded 0.1 percent down at 1.2301, having hit a low of 1.2270 earlier, it’s lowest since September 9. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2408 (5-DMA), a break above could take it near 1.2490 (September 23 High). On the downside, support is seen at 1.2233 (September 9 Low), a break below targets 1.2208 (August 27 Low). Against the euro, the pound was trading 0.4 percent down at 88.91 pence, having hit a low of 88.96 earlier, it’s lowest since September 13.
USD/CHF: The Swiss franc retreated from a 1-week trough as risk sentiment weakened amid uncertainties around the global growth outlook and a prolonged U.S.-China trade war. The major trades 0.1 percent down at 0.9922, having touched a high of 0.9949 earlier, it’s highest since September 19. On the higher side, near-term resistance is around 0.9956 and any break above will take the pair to next level till 0.9999 (June 17 High). The near-term support is around 0.9900 (21-DMA), and any close below that level will drag it till 0.9865 (September 16 Low).
Equities Recap
European shares gained as hopes of a quick resolution to the U.S.-China trade war offset worries of slowing economic growth and rising political risks.
The pan-European STOXX 600 index surged 0.6 percent at 392.18 points, while the FTSEurofirst 300 rallied 0.5 percent to 1,542.20 points.
Britain's FTSE 100 trades 1.1 percent up at 7,428.76 points, while mid-cap FTSE 250 gained 0.5 to 19,926.34 points.
Germany's DAX rose 0.9 percent at 12,295.27 points; France's CAC 40 trades 0.3 percent higher at 5,637.39 points.
Commodities Recap
Crude oil prices declined and were headed for a weekly loss, weighed down by slowing Chinese economic growth that dampens the demand outlook and a faster-than-expected recovery in Saudi output. International benchmark Brent crude was trading 1.5 percent down at $61.71 per barrel by 1041GMT, having hit a low of $61.21 on Wednesday, its lowest since September 16. U.S. West Texas Intermediate was trading 1.4 percent lower at $55.72 a barrel, after falling as low as $55.40 on Thursday, its lowest since September 16.
Gold prices eased and were on track for its third weekly fall for the month, as a slew of U.S. economic data beat expectations and the greenback held near multi-week highs against major currencies. Spot gold was trading 0.9 percent to $1,491.58 per ounce at 1043 GMT, having touched a low of $1,491.23 earlier, its lowest since September 19 and was down 1 percent for the week after a near 2 percent gain last week. U.S. gold futures were down 0.6 percent lower at $1,506.01 per ounce.
Treasuries Recap
The U.S. Treasuries slumped during the afternoon session ahead of the country’s personal consumption expenditure (PCE), a valuable index for the calculation of consumer price inflation (CPI) for the month of August, scheduled to be released today by 12:30GMT, besides, a speech from Federal Open Market Committee (FOMC) member Harker, due to be delivered today by 16:00GMT. The yield on the benchmark 10-year Treasury yield jumped 3-1/2 basis points to 1.720 percent, the super-long 30-year bond yield surged nearly 4 basis points to 2.166 percent and the yield on the short-term 2-year traded 2 basis points higher at 1.676 percent.
The United Kingdom’s gilts remained during European trading hours amid a slew of external uncertainties concerning Brexit; the week shall end by UK Brexit Secretary Barclay meeting EU Chief Negotiator Barnier in Brussels, although no solid solution is expected to be seen. The yield on the benchmark 10-year gilts, suffered nearly 1-1/2 basis points to 0.507 percent, the 30-year yield hovered around 0.955 percent while the yield on the short-term 2-year slumped nearly 3 basis points to 0.405 percent.
The German bunds remained nearly flat during European trading session Friday amid silent trading hours that witnessed data of little economic significance after the country’s import-export price index disappointed market investors, worsening from the previous reading in July. The German 10-year bond yield, which move inversely to its price, hovered around -0.574 percent, the yield on 30-year note edged tad nearly 1 basis point up to -0.132 percent and the yield on short-term 2-year too traded flat at -0.738 percent.
The Australian government bonds jumped during Asian session of the last trading day of the week tracking a similar movement in the U.S. Treasuries after President Donald Trump faced accusation from a congressional panel on charges of pressing a foreign government to investigate a potential rival at next year's presidential election. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2 basis points to 0.950 percent, the yield on the long-term 30-year bond also suffered nearly 2 basis points to 1.557 percent and the yield on short-term 2-year slipped 1 basis point to trade at 0.740 percent.
