Market Roundup
• Donald Trump overtakes Hillary Clinton for the first time since May in ABC poll.
• US Markit Oct Mfg PMI Final 53.4 v 53.2 previous.
• US ISM Oct Mfg PMI 51.9 v 51.7 forecast, 51.5 previous; prices paid 54.5 v 54.0 forecast.
• US ISM Oct Mfg new orders 52.1 v 55.1 previous, employment 52.9 v 50 forecast, 49.7 previous.
• US Construction spending falls 0.4% in Sept v 0.5% forecast.
• Fonterra: Dairy prices rise 11.4%, volumes drop at auction; average selling price NZD 3,327/tonne.
• Atlanta Fed’s: GDPNow model forecast for real GDP growth in Q4 ’16 is 2.3% down from 2.7% on Oct 31.
• Fed to hold rates steady Wednesday, put December hike firmly in view.
• Bank of Canada says considered raising inflation target.
• USD falls vs EUR, rallies against MXN on U.S. election jitters, MXN -1.8%, hits 3-wk low vs USD.
• Eurozone GDP up 0.3% in Q3, same as in Q2; Core inflation falls to 0.7 from 0.8 pct.
• Italy more likely to exit euro zone than Greece - Sentix investor survey.
Looking Ahead - Economic Data (GMT)
• 00:30 Australia Building Approvals* Sep forecast -0.03, -1.80%-previous
• 00:30 Australia Private House Approvals* Sep -1.30%-previous
• 05:00 Japan Consumer Confidence. Index Oct 43-previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1011 levels and currently trading at 1.1060levels. The pair has made session high at 1.1070 and hit lows at 1.1008 levels. Euro rose against the dollar on Monday as euro resumed its recent rally as the dollar stumbled on mounting uncertainty about next week's U.S. presidential election. News on Friday that the FBI was probing newly found emails related to U.S Democratic presidential candidate Hillary Clinton's use of a private server continued to shake traders' confidence in the outcome of the Nov. 8 election. Clinton is viewed as the candidate of the status quo, while there is greater uncertainty over what a victory for Trump might mean for U.S. foreign policy, international trade deals and the domestic economy. The dollar index, which measures the greenback against a basket of six major rivals, fell more than 0.5 percent to its lowest level since Oct. 20 at 97.878. The index had gained 3.1 percent in October to mark its strongest month in just under a year. The euro gained about 0.6 percent against the dollar to a more than two-week high of $1.1046.
GBP/USD is supported in the range of 1.2200 and currently trading at 1.2243 levels. It reached session high at 1.2252 and hit low at 1.2204 levels. The Sterling slightly declined against the greenback on Tuesday as expectations that Britain's economy would suffer due to the country's likely exit from the European Union weighted down on the pound. In the past few days politics has taken front seat, as criticism from some ruling Conservatives and right-leaning newspapers that Mark Carney had taken too political a stance in the run-up to Britain's EU membership referendum had prompted speculation over the past week that the governor might leave before 2018, the scheduled end of his initial term. That uncertainty fuelled jitters over Britain's economic prospects as it heads into negotiations on post-Brexit relations with the European Union. Sterling reached a 12-day high of $1.2281 on Tuesday before easing back to $1.2230 by 1615, 0.1 percent down on the day.
USD/CAD is supported at 1.3351 levels and is trading at 1.3384levels. It has made session high at 1.3392 and lows at 1.3351 levels. The Canadian dollar weakened slightly against its U.S. counterpart on Tuesday after data showed Canadian economic growth slowed as expected in August, reinforcing expectations that the Bank of Canada will maintain its cautious stance. The 0.2 percent advance was in line with economists expectation. July's growth was revised lower to 0.4 percent from an initially reported 0.5 percent increase. The oil-oriented Canadian economy has struggled to gain sustainable momentum since it was hit by a drop in crude prices last year. Growth is seen cooling to 1.5 percent in the final quarter of the year. The central bank opted last month to hold interest rates steady, though it acknowledged it had considered cutting for the third time in two years. The Canadian dollar was last trading at C$1.3393 to the greenback, or 74.67 U.S. cents, slightly stronger than Monday's close of C$1.3411, or 74.57 U.S. cents.
USD/JPY is supported around 100.03 levels and currently trading at 100.27 levels. It peaked to hit session high at 100.56 and made session lows at 100.24 levels. Japanese yen strengthened against US dollar on Tuesday as concerns over the outcome of the U.S. election weighted on the dollar, prompting investors to seek safe-haven assets like gold and Japanese Yen. The announcement of an FBI investigation into Hillary Clinton's use of a private email server during her time as Secretary of State helped send the so-called "fear index" of market volatility to its highest in a month on Tuesday, fuelling risk aversion. The U.S. dollar weakened against a basket of major currencies on U.S. political uncertainty, while the Mexican peso hit a more than three-week low on positioning for a potential victory for Republican presidential candidate Donald Trump. The two-day Federal Open Market Committee meeting starting later on Tuesday will also be closely monitored for clues on the timing of a possible U.S. interest rate hike.
Equities Recap
European shares fell for a seventh straight day on Tuesday, led lower by weaker financial stocks, as uncertainty about next week's U.S. presidential election weighed.
UK's benchmark FTSE 100 closed down by 0.7 percent, the pan-European FTSEurofirst 300 ended the day up by 0.03 percent, Germany's Dax ended down by 1.5 percent, France’s CAC finished the day down by 1.1 percent.
U.S. stocks dipped in a choppy session after the latest round of earnings reports, as a decline in the consumer discretionary sector and interest-rate sensitive stocks outweighed gains in healthcare names.
Dow Jones closed down by 0.58 percent, S&P 500 down by 0.68 percent, Nasdaq finished the day down by 0.69 percent.
Treasuries Recap
U.S. Treasury yields rose on Tuesday, giving back gains from Monday when month-end rebalancing boosted demand for the bonds, as investors waited on the completion of the Federal Reserve's meeting on Wednesday.
Ten-year notes were last down 9/32 in price to yield 1.87 percent, up from 1.83 percent on Monday.
Commodities Recap
Gold, silver and platinum rallied to one-month highs on Tuesday as concerns over the outcome of the U.S. election sparked losses in stocks and the dollar, prompting investors to seek out precious metals as a haven from risk.
Spot gold hit its highest since early October at $1,291.34 an ounce and was up 1.1 percent at $1,290.92 by 3:05 p.m. EDT (1905 GMT). U.S. gold futures for December delivery settled up 1.2 percent at $1,288.
Oil prices settled lower on Tuesday, then tumbled again after hours following a trade group's report of a U.S. crude inventory build nine times larger than forecast.
U.S. West Texas Intermediate (WTI) crude settled down 19 cents at $46.67. During the session, it fell as low as $46.20, its lowest since Sept. 28. After the API report, it fell to $46.27.
Brent crude hit a one-month low at $47.72 before settling down 47 cents at $48.14. In post-settlement trade, it fell to $47.86.
