Market Roundup
- GBP/USD -0.15%, EUR/USD -0.3%, USD/JPY +0.35%
- David Tory Brexit Minister may address MPs later Monday
- DXY +0.2%, DAX +0.5%, Brent -0.12%, Iron +1.23%
- Switzerland Sep Unemployment u/adj 3.2% vs 3.2% previous, 3.2% expected
- Switzerland Aug Unemployment adj 3.3% vs 3.4% previous, 3.4% expected
- Germany Aug Trade Bal. E22.2 bln Vs E19.4 bln previous, E20.0 bln expected
- Norway Sept Core CPI 2.9% y/y vs 3.3% previous, 3.3% expected
- Eurozone Oct Sentix vs 5.6 previous, 6.3 expected
- Deutsche Bank was given special treatment in EU stress tests - FT
- Swiss Sight Depos mixed-Domestic down but total depos up
- Kuroda reiterates cb may push back f/ct date to achieve its 2% inflation target-Bbg
- 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
Economic Data Ahead
- (1845 ET/2245 GMT) The Statistics New Zealand will release Electronic Card Retail Sales figures for the month of September. The index posted a decline of 0.4 percent in the previous month.
- (1800 ET/2200 GMT) The New Zealand Institute of Economic Research (NZIER) will report its Business Confidence for the third quarter. The indicator stood at 19 percent in the prior quarter.
- (1901 ET/2301 GMT) The British Retail Consortium (BRC) will report its Like-for-Like Retail Sales for the month of August. The index tumbled at an annualized rate of 0.9 percent in July.
- (1950 ET/ 2350) Japan's Customs Office will release Trade Balance (BOP Basis) figures for the month of August. The economy posted a trade surplus of Y 613.9 billion in the earlier month.
- (1950 ET/ 2350) Japan's Ministry of Finance is likely to report that Current Account (N.S.A) surplus narrowed to 1,539.1 billion yen in August from 1,938.2 billion yen in July.
Key Events Ahead
- (2200 ET/0200 GMT) Federal Reserve Bank of Chicago President Charles Evans speaks on current economic conditions and monetary policy before an Australian Business Economists luncheon.
FX Beat
DXY: The greenback recovered from the downbeat non-farm payroll led-slump as renewed expectations of Fed interest rate hike by end of 2016 and views that candidate Hillary Clinton could win the U.S. presidential election next month, strengthened investors sentiment. The dollar index against a basket of currencies traded 0.1 percent up at 96.79, hovering towards a high of 97.19 hit on Friday, its strongest since July 27.
EUR/USD: The euro declined after rising to an early high of 1.1202 as the dollar recovered from lower-than-expected Non-farm Payrolls led-fall. The greenback strengthened across the board after Cleveland Fed President Loretta Mester comments reinforced markets expectation of an eventual Fed interest rate hike by the end of this year amid improving risk- sentiment. The European currency trades 0.3 percent down at 1.1163, having dropped to a 2-month low in the previous session. The trend line joining May, Aug and Sep high comes around 1.1250 and any break above trend line resistance will take the pair to next level till 1.1300/1.13660 in the short term. On the lower side, any break below 1.1060 (trend line joining 1.09115 and 1.09519) will drag it to lower level till 1.1000/1.0950/1.0910 in the short term.
USD/JPY: The dollar retreated from an early low of 102.81 as markets digested Payrolls figures and priced in higher chances of Fed raising interest rates by the end of this year. The bid tone around the safe-haven Japanese yen also weakened as investors rushed towards riskier assets amid higher oil prices and rallying global equities. The major trades 0.5 percent higher at 103.37, extending gains above the 103.00 handle. The major resistance is around 104.35 (Sept 2 High) and a break above targets 105. On the lower side major support is around 102.20 (daily Kijun-Sen) and any break below 102.20 will drag the pair till 101.66 (10- day MA)/101.
GBP/USD: The British pound edged down, but sustained gains above the 1.2400 handle amid improving risk sentiment. Sterling's trade-weighted index fell to 74.2, its lowest since early 2009 and was down 0.7 percent on the day, as investors continue to wary over the adverse impact on the British economy from its exit from the European Union. The major traded flat at 1.2423, while against the euro, the pound was 0.1 percent down at 89.86 pence. On the lower side, major support is around 1.19900 and any break below will drag the pair to next level till 1.1690. The intraday resistance is around 1.2505 (21- H MA) and any break above targets 1.2675 (90- H EMA)/1.2850(200- HMA) in the short term.
USD/CHF: The Swiss franc declined, reversing most of its previous session gains, as the greenback steadied on views that Democratic candidate Hillary Clinton could win the U.S. presidential election next month. The dollar trades 0.4 percent up at 0.9809, hovering towards a 5-week high of 0.9839 hit on Friday. Data released earlier in the day showed Switzerland's unemployment rate s.a. at 3.3 percent in September, beating consensus and previous 3.4 percent. The pair has broken major resistance at 200- day MA but struggles to close above that level. On the higher side, any close above 0.97920(200-day MA) will take it till 0.9840/0.9880. The short-term weakness can be seen only below 0.9730 and any break below targets 0.9680/0.9630.
AUD/USD: The Australian dollar extended losses below the 0.7600 handle, as the dollar strengthened across the board. The major reversed from weekly bullish gap opening as markets anticipate the Fed would eventually move and hike interest rates before the end of this year, strengthening the bullish sentiment around the US dollar. The Aussie trades at 0.7588, hovering towards a 2-week low of 0.7553 struck on Friday. On the higher side, major resistance is around 0.7636 (10- day MA) and any break above will take the pair till 0.7680/0.7730. The major support is around 0.7550 (90- day EMA) and a break below will drag it till 0.7530/0.7480.
NZD/USD: The New Zealand dollar declined, as the greenback steadied following Friday's comments from Cleveland Fed President Loretta Mester. The Fed official's comments strengthened the prospects of a Fed interest rate hike by the end of this year, which helped the US Dollar to recover from downbeat NFP led-fall. The Kiwi trades 0.4 percent lower at 0.7135, drifting closer to a 2-month low of 0.7109 hit in the previous session. Immediate resistance is located at 0.7200, break above targets 0.7220/ 0.7250. On the downside, support is seen at 0.7110, a break below could drag it lower 0.7000.
Equities Recap
European shares edged up and U.S stock futures gained as investors see Democratic candidate Hillary Clinton winning next month's presidential election.
The pan-European STOXX 600 index increased 0.07 percent at 339.88 points, while the FTSEurofirst 300 index added 0.12 percent at 1,340.39 points.
Britain's FTSE 100 trades 0.23 percent up at 7,060.94 points, while mid-cap FTSE 250 declined 0.06 percent at 17,984.83 points.
Germany's DAX climbed 0.4 percent at 10,539.13 points; France's CAC 40 trades 0.22 percent higher at 4,460.30 points.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent.
Japanese, Canadian, Hong Kong and the United States markets will be closed on account of public holiday.
Australia's S&P/ASX 200 index rose 0.17 percent to 5,476.90 points and South Korea's KOSPI gained 0.15 percent at 2,056.82 points.
Shanghai composite index rose 1.4 percent to 3,048.14 points, while CSI300 index traded 1.2 percent higher at 3,293.87 points.
Commodities Recap
Crude oil edged up after Russian Energy Minister Novak said Russia preferred to freeze oil output, rather than to cut, however, gains were capped as concerns over oil producers agreeing upon an output cut deal weighed on market sentiment. Global benchmark Brent crude was trading 0.4 percent up at $51.85 per barrel at 1008 GMT, after rising to a high of $52.81 in the previous session, its highest since June 9. U.S. West Texas Intermediate crude rose 0.1 percent at $49.60 a barrel, having touched a 4-month high of 50.72 on Friday.
Gold rose, extending gains for the second consecutive session, as investors expect the U.S. interest rate hikes would only be gradual after a recent report showed a slowdown in U.S. job growth. Spot gold was up 0.6 percent at $1,262.54 an ounce by 1019 GMT, pulling away from a low of $1,241.30 hit on Friday, its lowest since June 7. U.S. gold futures rose 1 percent to $1,264.30 an ounce.
Treasuries Recap
Portugal's 10-year bond yield tumbled more than 10 basis points and was on track for its biggest 1-day fall since late June following comments from the country's finance minister Mario Centeno.
The premium that 10-year British government bonds offer over German debt rose to its highest since early July as investors continued to wary over the impact of the decline in sterling since Brexit shock vote. The spread between yields on 10-year British yields and the equivalent German debt widened to 97.9 basis points, up more than two points and the widest since July 1.
Gilts opened 6 ticks lower than the settlement of 127.99 as hard Brexit concerns continued to weigh on the currency.
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.
