Market Roundup
• NAHB housing market index 65 in Sept vs revised 59 in Aug, highest in 11-mos; NAHB Sept Index Of Prospective Buyers 48 versus 44 in Aug.
• Oil up 2 pct on producer deal speculation, gasoline dips on profit-taking; Venezuela hints at OPEC/non-OPEC deal this month.
• Italy PM Renzi tells Buba’s Weidmann to fix Germany's bank problems, after Weidmann had urged Italy to cut its huge public debt.
• Brazil's Meirelles says pension reform key to avoid insolvency, recovery of confidence shows government on right path.
• Merkel: accepts share of responsibility for Berlin defeat, declines comment on whether she will run in ’17 federal election.
• DoubleLine’s Gundlach: 1.70% is new 1.55%, Fed won’t hike but will include hawkish no-hike language.
Looking Ahead - Economic Data (GMT)
• 01:30 Australia Home Price Index Q2 forecast 2.5%, -0.2%-previous
Looking Ahead - Events, Other Releases (GMT)
• --:-- Japan- Bank of Japan holds Monetary Policy Meeting (to Sept. 21)
• 01:30 Australia Reserve Bank of Australia to release minutes of its September monetary policy meeting
Currency Summaries
EUR/USD is likely to find support at 1.1149 levels and currently trading at 1.1177 levels. The pair has made session high at 1.1198 and hit lows at 1.1165 levels. Euro inched higher against US dollar on Monday as the greenback stumbled on expectations that the U.S. Federal Reserve will not raise interest rates this week. Recent weak U.S. economic data has boosted bets that the Fed will skip the chance to raise rates in the upcoming meeting, but investors will assess Chair Janet Yellen's speech on Wednesday to see if the central bank plans to hike as soon as December. The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.38 percent at 95.744 after hitting a 15-day high of 96.108 on Friday. The euro was last up 0.24 percent against the dollar at $1.1176.
GBP/USD is supported in the range of 1.3000 and currently trading at 1.3034 levels. It reached session high at 1.3090 and hit low at 1.3019 levels. Sterling made modest recovery on Monday after its worst week in 10, as buyers stepped in after it fell below $1.30 for the first time in a month on Friday. The pound skidded more than 2 percent against the dollar last week after the Bank of England left the door open to a further cut in interest rates by the end of the year, and as investors worried that Britain's negotiations to leave the European Union could have a negative impact on the economy. But having touched $1.3000 on Friday, sterling climbed 0.4 percent on Monday to trade at $1.3030 in the late US session. The BoE kept rates at record lows last week but signalled that it would cut them again before the end of the year. It cut rates to 0.25 percent in early August and relaunched an asset-purchase programme to cushion the economic blow from Brexit.
USD/CAD is supported at 1.3147 levels and is trading at 1.3207 levels. It has made session high at 1.3208 and lows at 1.3148 levels. The Canadian dollar declined against its U.S. counterpart on Monday, as the loonie was pressured after oil-induced bounce faded and traders took a cautious approach to pending U.S. central bank monetary policy decision. Oil prices initially rose but reversed course on skepticism over Venezuela's bid to talk up a potential OPEC output freeze and on indications U.S. crude stockpiles had risen last week. The Canadian dollar was last trading at C$1.3200 to the greenback. Canadian inflation and retail sales data are due on Friday. The annual inflation rate is forecast to have edged up to 1.4 percent in August, while investors will be looking for signs that the federal government's new child benefit checks gave a boost to retail sales. Meanwhile, Bank of Canada Governor Stephen Poloz is set to give a speech on Tuesday followed by a press conference.
AUD/USD is supported around 0.7493 levels and currently trading at 0.7534 levels. It hit session high at 0.7572 and made session lows at 0.7531 levels. The Australian dollar edged higher against US dollar on Monday as its U.S counterpart slipped with few expecting a Federal Reserve interest rate hike this week. Trading volume was light amid a market holiday in Japan and a dearth of U.S. economic data. Apart from the Fed, investor focus will also be on the Bank of Japan's policy meeting on Sept. 20-21. The Australian dollar rose 0.57 percent to $0.7536, its highest level since Sept. 13. Traders are looking for a break above $0.7567 for further gains in the currency. The central bank will release the minutes of its September meeting on Tuesday. The Reserve Bank of Australia's new governor Philip Lowe will appear before a parliamentary economics committee on Thursday, his first official appearance as chief.
Equities Recap
European shares edged higher on Monday in a modest rebound after two straight weeks of losses, led by financials and commodity stocks.
UK's benchmark FTSE 100 closed up by 1.5 percent, the pan-European FTSEurofirst 300 ended the day up by 1.02 percent, Germany's Dax ended up by 1 percent, France’s CAC finished the day up by 1.5 percent.
US stocks ended little changed on Monday, with gains in big bank stocks offsetting a drag from Apple, as investors braced for the Federal Reserve meeting later this week.
Dow Jones closed down by 0.02 percent, S&P 500 ended up by 0.04 percent, Nasdaq finished the day down by 0.18 percent.
Treasuries Recap
U.S. Treasuries yields slipped on Monday as traders booked profits made on curve-steepening bets ahead of monetary policy meetings this week at the Bank of Japan and the U.S. Federal Reserve.
Benchmark 10-year Treasury notes were up 2/32 in price for a yield of 1.694 percent, down 0.7 basis point from late on Friday.
Commodities Recap
Oil rallied on Monday before settling off its highs on skepticism over Venezuela's bid to talk up a potential OPEC output freeze and on indications, U.S. crude stockpiles had risen last week.
Brent crude futures settled up 18 cents, or 0.4 percent, at $45.95 a barrel. It rallied more than 2 percent earlier, reaching $46.93.
U.S. West Texas Intermediate (WTI) crude futures closed up 27 cents, or 0.6 percent, at $43.30. The session high was $44.15.
Gold prices rose on Monday as the dollar slipped but gains were capped by jitters ahead of a Federal Reserve monetary policy meeting and a rise in U.S. government bond yields.
Spot gold was up 0.3 percent at $1,313.39 an ounce by 3:32 p.m. EDT (1932 GMT), compared with a low of $1,306.26 hit on Friday, its weakest since Sept. 1.
U.S. gold futures settled up 0.6 percent at $1,317.80.
