Market Roundup
• US Employment trends 128.5 v 128 previous.
• Bank of Italy’s Visco: Negative rates while challenging are becoming normal.
• USD rises broadly; cable falls on weak UK outlook; MXN strengthens after bumps on Trump campaign trail.
• Wall St rises as Clinton seen winner of second debate, Oil reaches 1-yr high after Russia signals joining output cap.
• OPEC chief optimistic of agreement with non-OPEC states on production cut.
• UK Brexit minister Davis says need to move forward on domestic legislation in parallel EU talks.
• Brazil's Temer: confident spending cap to be approved, crucial for country; no plan B.
Looking Ahead - Economic Data (GMT)
• 21:45 New Zealand Electronic Card Retail Sales month Sep -0.4%-previous
• 21:45 New Zealand Election Card Retail Sales YY* Sep 3.7%- previous
• 23:50 Japan Current Account NSA JPY* Aug forecast 1539.1b, 1938.2b- previous
• 00:30 Australia NAB Business Conditions Sep 7- previous
• 00:30 Australia NAB Business Confidence Sep 6- previous
• 00:30 Australia Housing Finance* Aug forecast -2.5%, -4.2%- previous
• 00:30 Australia Invest Housing Finance* Aug 0.5%- previous
• 05:00 Japan Economy Watchers Poll* Sep 45.6- previous
Looking Ahead - Events, Other Releases (GMT)
• 02:00 US Federal Reserve -Chicago President Evans speaks on current economic conditions and monetary policy before an Australian Business Economists luncheon
Currency Summaries
EUR/USD is likely to find support at 1.1100 levels and currently trading at 1.1135 levels. The pair has made session high at 1.1164 and hit lows at 1.1132 levels. The euro declined against US dollar on Monday as the dollar was buoyed by the perception that Hilary Clinton won the second U.S. presidential debate and on expectations that Federal Reserve would most likely raise interest rates in December. The dollar firmed across the board as it continued to benefit from expectations the Federal Reserve would likely raise interest rates in December. Traders expect a 70.2 percent chance that the Fed will hike at a Dec. 13-14 policymakers meeting, up from 66 percent early Friday, according to CME Group's FedWatch tool. Investors are looking to Wednesday's release of minutes of the latest Federal Reserve Open Market Committee meeting to see how close the U.S. central bank was to hiking rates last month. The dollar rose 0.77 percent against the yen to 103.69 yen and climbed against the euro, which fell 0.57 percent to $1.1135. These gains pushed the dollar index up 0.31 percent at 96.932.
GBP/USD is supported in the range of 1.2310 and currently trading at 1.2351 levels. It reached session high at 1.23402 and hit low at 1.2343 levels. Sterling declined to trade below $1.24 on Monday, extending last week's heavy losses, as investors worry that Britain will go for a "hard Brexit" a total split from Europe's single market. Trading in the pound was markedly calmer than on Friday when a "flash crash" wiped out a tenth of its value in a matter of minutes in early Asian trade. But sentiment towards sterling remained gloomy. Losses accelerated last week on Brexit worries after Prime Minister Theresa May set a March start date for formal divorce proceedings and expressed concern about loose monetary policy, which some saw as a thinly veiled attack on the Bank of England. Sterling slipped as much as 0.6 percent to $1.2343, leaving it down almost 5 percent over the past week and almost 17 percent weaker than before Britain's shock vote to leave the European Union on June 23. But that was more than 7 percent clear of the 31-year low of $1.1491 touched on Friday.
USD/CAD is supported at 1.3107 levels and is trading at 1.3171 levels. It has made session high at 1.3265 and lows at 1.3138 levels. The Canadian dollar strengthened against its U.S. counterpart on Monday as U.S. crude oil prices climbed to their highest level in one-year after Russia said it was ready to join a proposed deal to cap oil production in the hope of stemming a two-year price slide. Brent crude prices rose to their highest in a year after Russia said it was ready to join a proposed deal to cap oil production in the hope of stemming a two-year price slide, Russian President Vladimir Putin said in Istanbul. The Organization of the Petroleum Exporting Countries aims to agree on cutting about 700,000 barrels per day, bringing its output to 32.5-33.0 million bpd by the time it meets in Vienna for its policy meeting on Nov. 30. The Canadian dollar was last trading at C$1.3175 to the greenback, stronger than Fridays' close of $1.3289.
AUD/USD is supported around 0.7552 levels and currently trading at 0.7604 levels. It hit session high at 0.7629 and made session lows at 0.7599 levels. The Australian dollar initially firmed against US dollar in the early US session but reversed course as the dollar was buoyed by the perception that Hilary Clinton won the second U.S. presidential debate and expectations the Federal Reserve would most likely raise interest rates in December. Trump and Democratic nominee Hillary Clinton faced off in a Sunday debate less than a month before the elections. It quickly turned into an acrimonious discussion of a 2005 video that emerged on Friday in which Trump uses vulgar language and talks about groping women without consent. The Australian dollar inched up to $0.7629 but ran out of strength to trade at 0.7606 in the late US session, it remained well short of the last week’s $0.7691 peak.
Equities Recap
European shares rose on Monday, reversing earlier weakness as oil stocks rallied on the back of stronger crude prices.
UK's benchmark FTSE 100 closed up by 0.8 percent, the pan-European FTSEurofirst 300 ended the day up by 0.91 percent, Germany's Dax ended up by 1.3 percent, France’s CAC finished the day up by 1.1 percent.
US stocks posted moderate gains in the quiet trading day Monday, recovering part of their losses sustained late last week.
Dow Jones closed up by 0.48 percent, S&P 500 ended up by 0.46 percent, Nasdaq finished the day up by 0.68 percent.
Commodities Recap
Gold recovered on Monday from its biggest weekly drop since November after downbeat U.S. payrolls data on Friday dampened speculation of a near-term interest rate hike and as Chinese buyers returned after the Golden Week holiday.
Spot gold was up 0.2 percent at $1,259.48 an ounce by 2:30 p.m. EDT (1830 GMT), while U.S. gold futures for December delivery settled up 0.7 percent at $1,260.40 per ounce.
Oil prices jumped as much as 3 percent on Monday, with Brent hitting a one-year high after Russia said it was ready to join OPEC in curbing crude output and Algeria called for similar commitments from other non-OPEC producers.
Brent crude hit its highest level since Oct. 9, 2015, reaching $53.73 a barrel, before paring gains to settle $1.21, or 2.3 percent higher at $53.14 a barrel.
U.S. West Texas Intermediate crude rose to its highest since June 9 at $51.60, before easing to end the session at $51.35, up $1.54, or 3.1 percent.
