Market Roundup
• ECB all but certain to keep buying bonds beyond March, ease QE rules - central bank sources
• Markets no longer price in near-term rate cut from ECB.
• Japan PM Abe adviser Hamada says govt should consider more fiscal stimulus.
• US Sept new home sales miss: 0.593 million vs forecast 0.60 million rate, previous 0.575 million
• US Markit Oct services PMI beats: 54.8 vs forecast 52.3, previous also 52.3.
• Highest US Markit services and composite PMIs since November 2015.
• US services new business index also highest since Nov 2015.
• Many Canada housing markets overvalued -federal agency.
• Brazil consumer confidence extends rise to 6 months, highest since Dec 2014.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Foreign Bond Investment w/e 317.7-previous
• 23:50 Japan Foreign Invest JP Stock w/e 72.0b- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is supported at 1.0851 levels and currently trading at 1.0905 levels. The pair has made session high at 1.0947 and hit lows at 1.0900 levels. The euro initially inched higher against dollar on Wednesday as risk-aversion environment in global markets and uncertainty surrounding Federal Reserve Monetary policy and upcoming US elections weakened the greenback. However, gains for euro were limited as dollar recovered some losses after US home sales data. New U.S. single-family home sales unexpectedly rose in September, pointing to sustained demand for housing even as data for the prior three months were revised lower. The Commerce Department said new home sales increased 3.1 percent to a seasonally adjusted annual rate of 593,000 units last month, pulling them close to a nine-year high touched in July. The euro was last trading at $1.0907 to dollar after touching a six-day high of $1.0945 earlier in U.S. trading. That marked a rebound from a 7-1/2-month low of $1.0848 touched on Tuesday.
GBP/USD is supported in the range of 1.2200 levels and currently trading at 1.2240 levels. It reached session high at 1.2245 and dropped to session low at 1.2209 levels. Sterling recovered against dollar on Wednesday a day after Bank of England (BoE) governor Mark Carney said in a speech that central bank could not ignore the effect of sterling's slide on inflation. Carney said on Tuesday that there were limits to the central bank's ability to overlook the effect of the steep slide about 18 percent since the Brexit on inflation, and it would "undoubtedly" take it into account at its rate-setting meeting next week. This increased expectations that policymakers would leave rates unchanged next week, rather than cut them as many had expected. Sterling rose 0.43 percent to $1.2238, coming off Monday's trough of $1.2081, which was the lowest level since the Oct. 7 "flash crash.
USD/CAD is likely to find support at 1.3283 levels and is trading at 1.3378 levels. It has made intraday high at 1.3384 and lows at 1.3357 levels. The Canadian dollar weakened against US dollar on Wednesday as oil prices fell and increased bets by traders that Bank of Canada will cut interest rates further. The loonie has been weakening against dollar since the Bank of Canada acknowledged last week that it had considered cutting interest rates at its policy meeting. U.S. crude prices settled 78 cents lower at $49.18 a barrel even after a surprise drawdown in U.S. crude inventories, as traders remained cautious that OPEC would be able to cut production come late November. The Canadian dollar was last trading at C$1.3382 per U.S. dollar, or 74.73 U.S. cents, weaker than Tuesday's close of C$1.3352, or 74.90 U.S. cents.
AUD/USD is supported around 0.7600 levels and currently trading at 0.7639 levels. It hit session high at 0.7680 and made session lows at 0.7636 levels. The Australian dollar declined against US dollar on Monday as Aussie was weighted on falling oil prices. Oil prices bounced off session lows for a time after the U.S. government reported a surprise drawdown in crude inventories, but oil ended lower on growing doubts that OPEC would cut production enough to drain a global oversupply. Data out on Wednesday showed Australian consumer prices rose an annual 1.3 percent last quarter, topping forecasts for 1.1 percent. Key measures of underlying inflation favoured by the Reserve Bank of Australia (RBA) on average rose 1.6 percent. The Australian dollar hit low at $0.7636, before recovering slightly to trade at 0.7644.
Equities Recap
European shares fell slightly on Wednesday as investors digested a slew of earnings reports including from Novozymes which touched a two-year low after trimming its full-year outlook.
UK's benchmark FTSE 100 closed down by 0.8 percent, the pan-European FTSEurofirst 300 ended the day down by 0.37 percent, Germany's Dax ended down up 0.4 percent, France’s CAC finished the day down by 0.1 percent.
Quarterly results were the main driver for Wall Street on Wednesday as a decline in Apple shares weighed on the S&P 500 and Nasdaq, while the price-weighted Dow Industrials was buoyed by gains in Boeing.
Dow Jones closed up by 0.17 percent, S&P 500 ended down by 0.17 percent, Nasdaq finished the day down by 0.62 percent.
Treasuries Recap
U.S. Treasury debt prices fell on Wednesday, in line with losses in Europe and Britain, in generally quiet trading ahead of a debt auction later in the session and key U.S. gross domestic product data due on Friday.
In late morning trading, benchmark 10-year Treasury notes were down 9/32 in price to yield 1.791 percent, up from 1.758 percent late on Tuesday.
Earlier in the session, 10-year yields hit a more-than-one-week peak of 1.793 percent.
U.S. 30-year bonds were 23/32 down in price to yield 2.536 percent, up from Tuesday's 2.502 percent.
U.S. two-year note yields were at 0.876 percent, up from Tuesday's 0.863 percent. Earlier in New York trading, two-year yields hit a two-week high of 0.86 percent.
Commodities Recap
Gold prices fell on Wednesday as investor appetite for riskier assets such as equities and crude oil recovered slightly, denting demand for bullion, often considered a safe haven.
Spot gold fell 0.6 percent to $1,265.75 an ounce by 3:05 p.m. EDT (1905 GMT). In the previous session, it hit $1276.67, its highest since Oct. 5.U.S. gold futures settled 0.5 percent lower at $1266.60.
Oil settled down more than 1 percent on Wednesday even after a surprise drawdown in U.S. crude inventories, as traders remained cautious that OPEC would be able to cut production come late November.
Brent crude was down 81 cents, or 1.6 percent, at $49.98 a barrel. It fell as low as $49.65, its lowest since Sept. 30.
