Market Roundup
- USD/JPY +0.28%, EUR/USD -0.33%, GBP/USD -0.08%
- DXY +0.21%, DAX -0.25%, Brent -0.36%, Iron +3.29%
- South Africa State prosecutors drop charges against Finmin Gordhan
- Norges Bank to sell Fx equivalent NOK 900 mln per day in Nov
- SNB sight deposits w/e Oct 28 domestic banks CHF 451.946 bln vs 451.255
- SNB total sight deposits CHF 518.504 bln vs 518.49 bln previous
- Germany Sept Retail sales 0.4% y/y vs revised 3.8% previous, 1.6% expected
- Germany Sept Retail Sales -1.4% m/m vs revised -0.3% previous, +0.2% expected
- UK Sept BoE Consumer Credit GBP vs 1.574 bln previous, 1.5 bln expected
- UK Sept Mortgage Lending GBP vs 2.943 bln previous, 3.0 bln expected
- EZ Q3 Flash GDP vs 1.6% previous, 1.6% expected
- EZ Oct Flash Inflation y/y vs 0.4% previous, 0.5% expected
- Mark Carney stands ready to serve full 8-year term at BoE - Financial Times
- Coal price rally comes to the rescue of commodity trading giants
- CFTC IMM CTA data – Specs lift USD bets to highest since late Jan
- CFTC EUR net shorts largest since Jan but GBP net shorts lowest since Sept
- CFTC JPY net longs still, up on week
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Commerce Department releases personal income figures for September, which is expected to rise 0.4 percent, after gaining 0.2 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the month of September. The index edged up 0.1 percent in the prior month while core PCE is likely to have increased 0.1 percent after gaining 0.2 percent in August.
- (0830 ET/1230 GMT) The U.S. Personal spending is likely to surge 0.4 percent in September, after staying unchanged in August.
- (0830 ET/1230 GMT) The Statistics Canada releases its Raw Material Price Index for the month of September. The index posted a decline of 0.7 percent in August.
- (0830 ET/1230 GMT) The Statistics Canada will report its industrial producer prices for the month of September. The indicator declined 0.5 percent in the prior month.
- (0830 ET/1230 GMT) Brazil's is likely to report that primary budget deficit surpassed expectations in September.
- (0945 ET/1345 GMT) Chicago Purchasing Managers' Index is likely to show that business conditions rose to 54.0 in October after gaining to 54.2 last month.
- (1030 ET/1430 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of October. The index posted a decline of -3.7 percent in the previous month.
- N/A The Federal Reserve releases its Loan Officer Survey.
- (1930 ET/2330 GMT) Australian Industry Group (AiG) releases its performance of manufacturing index for the month of October. The index stood at 49.8 in September.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade ops 30-Yr Ginnie Mae max $1.275 bln
FX Beat
DXY: The dollar recovered across the board, ahead of the Federal Reserve policy meeting, where it is widely expected to keep its policy on hold on Wednesday. The greenback against a basket of currencies trades 0.2 percent up at 98.59, retreating from a low of 98.24 hit on Friday.
EUR/USD: The euro tumbled, pulling further away from a 1-week high touched on Friday, despite Eurozone's gross domestic product and inflation figures rising in line with estimates. The Eurozone's consumer price index rose at an annualized 0.5 percent, while core prices climbed 0.8 percent over the last 12-months. Meanwhile, the economy expanded at an annual pace of 1.6 percent in the third quarter and 0.5 percent QoQ, matching consensus and previous reading. The euro trades 0.3 percent lower at 1.0946, hovering away from a high of 1.0991 hit the prior day, its strongest since Oct. 20. The short term trend is still weak as long as resistance 1.1035 (21- day MA) holds and any break above will take the pair to next level till 1.10650 (daily Kijun-Sen)/1.11000/1.1140 (100- day MA). The short term trend reversal can happen only if it closes above 1.1173 (200- day MA). On the lower side, any violation below 1.0950 will drag the pair down till 1.0900/1.0850.
USD/JPY: The dollar posted a solid comeback, regaining the 105.00 handle, ahead of the U.S. inflation figures gauged by the PCE and September’s Personal Income/Spending data. On Friday, the major rose to a 3-month high on the back of on stronger-than-expected U.S. GDP growth, which reinforced expectations that the Federal Reserve would raise rates, however, it retreated to low of 104.46 after news that the FBI was investigating newly discovered emails related to Hillary Clinton's private server. The pair trades 0.4 percent up at 104.08, attempting to extend gains above the 105.00 level. The major resistance is around 105.50 and break above targets 105.80/106.30. On the lower side, major support is around 104.34 (daily Tenken- Sen) and any break below targets 103.80 (21- day MA) /102.89.
GBP/USD: Sterling consolidated below 1.2200 handle as worries about the fallout from Britain's vote to leave the European Union weighed on market sentiment. The major has slumped more than 6 percent since the start of October and was on track for its worst month since June when it tumbled following the result of Brexit vote. The Bank of England meets on Thursday to decide on its policy decision, where it is expected to keep the interest rate at 0.25 percent. The pound trades 0.1 percent down at 1.2172, while against the euro, it climbed 0.1 percent to 89.90 pence. The short-term trend is bearish as long as resistance 1.2272 holds and any violation above will take the pair to next level till 1.23325 (Oct 19 High)/1.2400. The immediate support of cable stands at 1.2150 and any indicative break below targets 1.20880 (Oct 11 Low). The short term trend reversal only above 1.3325 level.
USD/CHF: The Swiss franc declined, pulling away from a more than 1-week high as the greenback strengthened on expectations that the Federal Reserve would hike rate by end of this year. The dollar trades 0.1 percent up at 0.9886, hovering away from a low of 0.9857 hit on Friday, it’s lowest since Oct. 20. The short term trend is weak as long as resistance 1.000 holds and any violation above confirms further bullishness, a jump till 1.0040/1.0090 is possible. The minor resistance is around 0.9915 (10- day MA). On the lower side, support stands at 0.9860 and any indicative break below targets0.9780 (200- day MA). The short-term reversal is only above 1.000.
AUD/USD: The Australian dollar extended gains above the 0.7600 handle, despite fall in Melbourne Institute's monthly inflation expectations. However, the upside is likely to remain capped, amid board based greenback recovery. Moreover, Tuesday's RBA monetary policy decision and rate-statement would further assist investors to determine the pair's direction in the near-term. The Aussie trades 0.1 percent up at 0.7602, retreating from a 2-week low of 0.7557 hit on Friday. On the higher side, major resistance is around 0.7645 (23.6% retracement of 0.7587 and 0.77344) and any break above will take the pair till 0.7680/0.7730/0.7760/0.7800. The major support is around 0.7566 (100- day MA) and a break below will drag it till 0.7530/0.7480.
NZD/USD: The New Zealand dollar slumped as investors’ cautiously await FOMC interest rates decision due this week amid uncertainty about the outcome of the U.S. elections. The major initially attempted a minor recovery to fill up the bearish gap opening; however, the recovery ran out of steam as the dollar strengthened across the board. Moreover, New Zealand's M3 money supply rose at an annualized rate of 4.8 percent in September, as compared to a previous reading of 5.3 percent. The Kiwi trades 0.2 percent lower at 0.7148, hovering towards an early low of 0.7137. Immediate resistance is located at 0.7180, a break above targets 0.7200. On the downside, support is seen at 0.7120, a break below could drag it lower 0.7100.
Equities Recap
European shares declined, weighed down by weakest German retail sales in two years and a fall in oil prices, while markets remained cautious on news that the FBI was investigating fresh e-mails linked to U.S presidential candidate Hillary Clinton's private computer server.
MSCI's 47-country 'All World' index was flat and on course for its first monthly fall since June, while MSCI's broadest index of Asia-Pacific shares outside Japan hit a 6-week low.
The pan-European STOXX 600 index decreased 0.55 percent at 338.94 points, while the FTSEurofirst 300 index shed 0.51 percent at 1,339.02 points.
Britain's FTSE 100 trades 0.34 percent lower at 6,972.81 points, while mid-cap FTSE 250 slumped 0.67 percent at 17,527.87 points.
Germany's DAX tumbled 0.43 percent at 10,650.41 points; France's CAC 40 trades 0.79 percent lower at 4,512.59 points.
Tokyo's Nikkei fell 0.12 percent at 17,425.02 points, Australia's S&P/ASX 200 index rose 0.7 percent to 5,321.00 points and South Korea's KOSPI shed 0.56 percent at 2,008.19 points.
Shanghai composite index fell 0.1 percent at 3,100.49 points, while CSI300 index edged down 0.1 percent at 3,336.28 points. Hong Kong’s Hang Seng declined 0.1 percent to 22,934.54 points.
Commodities Recap
Crude oil prices slumped after non-OPEC producers failed to make a specific commitment to join the OPEC in capping oil output levels to balance prices. International benchmark Brent crude was trading 0.1 percent lower at $50.61 per barrel at 0948 GMT, having hit a low of $49.35 on Friday, its lowest since September 30. U.S. West Texas Intermediate crude declined at $48.60 a barrel, after falling to a low of $48.16, its lowest since Oct. 10.
Gold prices tumbled as the dollar steadied ahead of the upcoming Federal Reserve meeting, which could provide fresh insight on the timing of a potential U.S. interest rate hike. Spot gold was trading 0.2 percent down at $1,272.87 an ounce by 0953 GMT, while U.S. gold futures were little changed at $1,277.10.
Treasuries Recap
The U.S. Treasuries were little changed during a relatively quiet session that witnessed data of little significance. The yield on the benchmark 10-year Treasury note hovered around 1.84 percent mark.
The UK gilts traded modestly firmer as investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil. The yield on the benchmark 10-year gilts fell 2 basis points to 1.240 percent, the super-long 40-year bond yield also dipped nearly 2 basis points to 1.72 percent and the yield on short-term 2-year slid 2 basis points to 0.272 percent.
The German bunds traded modestly firmer after recent data showed that the country’s retail sales plummeted during the month of September. We would expect the yields to stay in the range of 0.10-0.20 percent in the short-term, with an upward break likely eventually but not imminently. The yield on the benchmark 10-year bond fell 1 basis point to 0.156 percent, the yield on long-term 30-year note dipped 1-1/2 basis points to 0.790 percent and the yield on short-term 2-year bond slid 1 basis point to -0.627 percent.
The Japanese government bonds traded nearly flat as investors await the Bank of Japan two-day monetary policy meeting, where it is widely expected to keep interest rates on hold. The benchmark 10-year bond yield hovered around -0.04 percent mark, the yield on long-term 30-year Treasury remained steady at 0.51 percent and the yield on short-term 2-year note stood flat at -0.23 percent.
The New Zealand government bonds closed modestly higher as business confidence dipped in October. The yield on the benchmark 10-year bond fell 1 basis point to 2.725 percent, the yield on 7-year note ended nearly 1 basis point lower at 2.408 percent and the yield on short-term 2-year note also slid 1 basis point to 2.020 percent.
The Australian government bond gained as investors remained cautious ahead of Tuesday’s monetary policy meeting for the Reserve Bank of Australia (RBA), where it is widely expected to keep interest rates on hold. The yield on the benchmark 10-year Treasury note fell 3 basis points to 2.355 percent, the yield on 15-year note dipped 2-1/2 basis points to 2.723 percent and the yield on short-term 2-year slid 4-1/2 basis points to 1.655 percent.
