Market Roundup
- Tokyo holiday
- BOJ's Kuroda vows to cut rates, buy more assets to fight shocks - Reuters News
- Caixin Sept Services PMI eases slightly to 52 from 52.1 in Aug
- Trump vows to jail Clinton over emails if he wins White House
- Asia shares gain, Mexican peso jumps as markets lengthen odds on Trump
- IMF's Lipton likes Bank of Japan policy revamp, calls for more 'arrows'
- PBOC sets Yuan mid-point at 6.7008 / USD vs last close 6.6745
- China's Yuan trades at lowest level since Sept 2010
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Industrial Output
- (0430 ET/0830 GMT) Eurozone Sentix Index Oct; Reuters poll 6.3; last 5.6
Key Events Ahead
No Significant Event Scheduled
FX Beat
DXY: The greenback steadied as Democratic candidate Hillary Clinton was seen winning U.S. second presidential debate. The dollar index against a basket of currencies traded flat at 96.65, retreating from a low of 94.47 hit after downbeat non-farm-payroll release.
EUR/USD: The euro rose, extending gains from the previous session as the dollar weakened after U.S. employment market report for September came in lower than estimates. On Friday, the major initially declined to a 2-month low, however, it recovered following disappointing U.S. jobs data to close just below the 1.1200 handle. The European currency opened on a bearish gap but managed to close it out as markets continued to digest downbeat US economic data. The trades flat at 1.1192, attempting to extend gains above the 1.1200 level. Markets attention will remain on German trade balance and Eurozone Sentix investor confidence amid subdued trading as the Japanese, Canadian and US markets remain closed. Immediate resistance is located at 1.1220, break above could take it till 1.1238 /1.1258. On the downside, support is seen at 1.1150, break below could drag it till 1.1010.
USD/JPY: The dollar declined, extending losses for the second consecutive session after opening up on a bullish gap. The major initially rose above the 103.00 handle amid improved risk appetite, as Hillary Clinton was seen winning the second US election debate again. However, it reversed the spike in the aftermath of disappointing US monthly jobs report. The Japanese yen trades higher at 102.88, having touched a 4-week low of 104.14 last week. Trading in the pair is likely to remain subdued amid low volumes and minimal liquidity as the Japanese, Canadian and US markets remain closed on account of public holidays. Immediate resistance is located at 103.50, break above targets 103.80/104.00/104.30. On the downside, support is seen at 102.60, break below could take it near 102.20.
GBP/USD: Sterling continues to decline as the Bank of England is still investigating the cause of Friday's sudden price crash. On Friday, the major tumbled from 1.2621, to a 31-year low of 1.1904, however, it trimmed losses to close out just above the 1.2400 handle. Sterling trades 0.2 percent lower at 1.2404, attempting to hold gains above the 1.2400 level. Investors will track overall markets sentiment ahead of U.K's BRC retail sales data. Immediate resistance is located at 1.2584 (5-DMA), break above could take it near 1.2700. On the downside, support is seen at 1.2200, break below targets 1.1900. Against the euro, the pound trades 0.2 percent down at 90.18 pence, having touched a 7-year low of 92.25 in the previous session.
AUD/USD: The Australian dollar declined below the 0.7600 despite having opened up on a bullish gap, as investors await the outcome of a U.S. presidential debate, with markets having increased the probability of Democratic candidate Hillary Clinton's victory. The major bounced from a 2-week low of 0.7553 struck on Friday as the U.S nonfarm payrolls missed the expected number. The Aussie trades 0.1 percent up at 0.7595, having touched an intra-day high of 0.7609. Trading will remain subdued due to a public holiday in Japan, while China's yuan fell to 6-year low after PBoC dropped the midpoint after markets reopened for a week-long national break. Immediate support is seen at 0.7580, break below could drag it till 0.7550/ 0.7530. On the upside, resistance is located at 0.7632 (10-DMA), break above targets 0.7650/0.7690.
NZD/USD: The New Zealand dollar rose slightly but the recovery mode lost steam, as weaker oil prices and risk-off risk sentiment dampened the bid tone around the Kiwi. Moreover, investors have shifted on the sidelines, amid holiday-thinned trading, with the U.S. second presidential debate outcome eyed. The major trades 0.1 percent lower at 0.7155, after declining to a 2-month low of 0.7109 in the previous session. Traders will continue to track broad based market sentiment amid subdued trading activity on account of public holidays in U.S. Japan and Canada. Immediate resistance is located at 0.7200, break above targets 0.7220/ 0.7250. On the downside, support is seen at 0.7110, break below could drag it lower 0.7000.
USD/CNY: China's yuan slumped to a 6-year low, while the offshore-traded yuan dropped to 9-month lows against the dollar after PBoC announced late last week that its foreign exchange reserves declined by more than expected for a third month in September. The central bank set the midpoint at 6.7008 yuan per dollar, its weakest fix since September 2010 and about 0.3 percent weaker than the setting on Sept. 30, following a week-long national holiday.
Equities Recap
Asian shares edged higher as the dollar weakened following worse-than-expected U.S jobs report released on Friday, while markets await the outcome of second U.S. presidential debate between candidates Hillary Clinton and Donald Trump.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent.
Japanese, Canadian, Hong Kong and United States markets will be closed on account of public holiday.
Australia's S&P/ASX 200 index rose 0.17 percent at 5,476.90 points and South Korea's KOSPI gained 0.12 percent at 2,056.52 points.
Shanghai composite index rose 1.14 percent at 3,039.18 points, while CSI300 index traded 0.9 percent higher at 3,285.31 points.
Commodities Recap
Crude oil prices declined, extending previous session losses, as concerns that an OPEC-led plan to restrain output would rein in a global oversupply weighed on market sentiment. International benchmark Brent crude was trading 0.3 percent down at $51.49 per barrel at 0401 GMT, having touched a 4-month high of $52.81 on Friday. U.S. West Texas Intermediate crude eased 0.3 percent at $49.39 a barrel, after rising to 50.72 in the prior session, its highest since June 9.
Gold rose after hitting a 4-month low in the previous session, as the dollar eased on news of unexpectedly downbeat U.S. jobs growth in September. Spot gold was up 0.5 percent at $1,262.09 an ounce by 0407 GMT, having touched a low of $1,241.30 on Friday, its lowest since June 7 and ended about 4.5 percent lower last week. U.S. gold futures rose over one percent to $1,266.10 an ounce.
Treasuries Recap
The 10-year U.S treasury yield on Friday stood at 1.7234 percent, while 5-year at 1.2600 percent.
Australian government bond futures had a soft tone, with the 3-year bond contract off 1 tick at 98.390, while the 10-year contract was down half a tick at 98.8550 having touched its lowest since late June. The 20-year contract was half a tick higher at 97.2600. The spread between the 10-year and 3-year bonds stood at 52 basis points, from 39 basis points late September.
New Zealand government bonds gained, sending yields 1 basis points lower at the short end of the curve.
