Market Roundup
• US CaseShiller home prices rise 5% vs forecast 5.1%.
• US Markit Svcs PMI flash+51.9 vs 51.1 forecast, 51.0 previous.
• German Finance Minister Schaeuble: rates are too low, cause of serious concern; Reforms needed to spur growth.
• Deutsche Bank shares slump to record low, NordLB halts bond issue due to the volatile market.
• USD gains against euro on Deutsche Bank fears, falls vs MXN short-covering after U.S. debate boosts peso.
• Saudis, Iran dash hopes for OPEC oil deal in Algeria, Iran insists on much higher output targets.
• Goldman cuts Q4 crude oil price forecast by $7 on supply glut, keeps 2017 forecast at USD 52/bbl.
• Saudi energy minister not expecting an agreement at Wednesday meet in Algiers, main debate on o/p levels from Iran, Nigeria & Libya.
• "Hard Brexit" worries pin sterling at six-week lows.
Looking Ahead - Economic Data (GMT)
• No Significant Data
Looking Ahead - Events, Other Releases (GMT)
• 00:20 RBA Asst Gov (Financial System) Malcolm Edey speaks at the Australian Financial Review Retail Summit.
Currency Summaries
EUR/USD is supported at 1.1185 levels and currently trading at 1.1220 levels. The pair has made session high at 1.1228 and hit lows at 1.1188 levels. The euro declined against the dollar on Tuesday, as concerns surrounding Deutsche Bank caused general unease over Europe's banking sector. Deutsche Bank shares hit a record low a day after Germany's biggest lender said it had no need for German government help with a $14 billion U.S. demand to settle claims it missold mortgage-backed securities. Meanwhile, the perception among market participants that Democratic presidential candidate Hillary Clinton's performance in the first U.S. presidential debate was superior to that of Republican candidate Donald Trump boosted the greenback. The euro was last down 0.29 percent at $1.1217, easing from an 11-day high of $1.1278 touched on Monday. The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.15 percent at 95.443.
GBP/USD is supported in the range of 1.2940 levels and currently trading at 1.3011 levels. It reached session high at 1.3026 and dropped to session low at 1.2952 levels. The Sterling initially slipped against the greenback to hit daily lows at 1.2953, but rebounded strongly gaining all the lost ground against the US dollar as the pair found short buying interest. After hitting three-decade low in July, sterling gained 5 percent versus the dollar by early September, as data showed the post-referendum economy holding up better than had been feared. But with parliament back from its summer recess, Brexit worries have come back into investors' radar and have dampened appetite for the currency. Foreign Secretary Boris Johnson spurred sales of sterling last Thursday by saying it was likely London would set the clock ticking early next year under the EU Constitution's Article 50, which gives the sides two years to complete preparations.
USD/CAD is likely to find support at 1.3133 levels and is trading at 1.3203 levels. It has made session high at 1.3281 and lows at 1.3200 levels. The Canadian dollar weakened against US dollar on Monday as oil prices declined and a speech by Bank of Canada Governor Poloz suggested the loonie may need to fall further to support the economy. Canadian policymakers are facing increased pressure to support the country's lackluster economy as infrastructure spending takes a time to kick in and record high debt loads dampen the impact of stimulus cheques. U.S. crude prices were down 3percent after Saudi Arabia and Iran dashed market hopes that the two major OPEC producers would find a compromise this week at the meeting in Algiers to help ease a global glut of crude. The Canadian dollar was last trading at C$1.3198 to the greenback, weaker than Monday’s low of C$1.3160.
AUD/USD is supported around 0.7633 levels and currently trading at 0.7667 levels. It hit session high at 0.7671 and made session lows at 0.7656 levels. The Australian dollar inched higher against US dollar on Tuesday as traders cheered Democrat candidate Hillary Clinton's performance against Republican Donald Trump in the first presidential debate. Markets have tended to see Clinton as the candidate of the status quo, while few are sure what a Trump presidency might mean for U.S. foreign policy, trade or the domestic economy. The Australian dollar was last trading at $0.7667 in the late US session. The Aussie is set to close the month in the black, after falling more than 1 percent in August. In a sign of fading risk aversion, the U.S. dollar edged up against a basket of currencies while the Australian dollar was steady.
Equities Recap
European shares fell on Monday, weighed down by major banking stocks, with Deutsche Bank hitting an all-time low amid concerns over the impact on its finances of a big U.S. fine.
UK's benchmark FTSE 100 closed down by 0.3 percent, the pan-European FTSEurofirst 300 ended the day down by 0.01 percent, Germany's Dax ended down by 0.5 percent, France’s CAC finished the day down by 0.3 percent.
Consumer and technology stocks including Amazon led gains on Wall Street on Tuesday as some investors deemed Democrat Hillary Clinton to have won a presidential debate against Republican rival Donald Trump.
Dow Jones closed up by 0.73 percent, S&P 500 ended up by 0.64 percent, Nasdaq finished the day up by 0.92 percent.
Treasuries Recap
U.S. long-dated Treasury debt yields fell to three-week lows on Tuesday on concerns about ongoing problems at Deutsche Bank, Germany's largest lender, which could delay yet again the timing of the next interest rate hike by the Federal Reserve.
In mid-morning trading, U.S. benchmark 10-year Treasury notes were up 6/32 in price for a yield of 1.566 percent, down from 1.589 percent late on Monday.
U.S. 30-year bonds, meanwhile, rose 31/32 in price, yielding 2.281 percent, down from Monday's 2.327 percent.
On the front-end of the curve, U.S. two-year notes were flat in price for a yield of 0.746 percent, down from 0.759 percent late on Monday.
Commodities Recap
Gold fell on Tuesday as the dollar and stocks gained ground on the view that Democratic U.S. presidential candidate Hillary Clinton got the better of Republican rival Donald Trump in their first debate, denting the safe-haven appeal of bullion and bonds.
Spot gold was down 0.8 percent at $1,327.46 an ounce by 2:39 p.m. EDT (1839 GMT), snapping a six-day winning streak. U.S. gold futures settled down 1 percent at $1,330.40.
Oil fell about 3 percent on Tuesday after Saudi Arabia and Iran dashed market hopes that the two major OPEC producers would find a compromise this week at meeting in Algiers to help ease a global glut of crude.
Brent crude settled down $1.38, or 2.9 percent, at $45.97 a barrel. U.S. West Texas Intermediate (WTI) crude dropped $1.26, or 2.7 percent, to $44.67.
