Market Roundup
- Fed’s Williams sees rate rises appropriate in ‘near future’, close call whether to raise or not.
- Dollar gains ahead of ECB meeting, Weak China GDP sees risk CCYs exited.
- Shares sputter on Morgan Stanley results.
- Brent crude drops nearly 3.5 pct, U.S. crude off 2.7 pct.
- U.S. T-bill rates jump on debt ceiling worries.
- ECB’s SSM slightly raises capital demands for euro zone large banks.
- ECB’s Nouy says easy monetary policy is medicine for economy
Looking Ahead – Economic Data (GMT)
- No Significant Data
Looking Ahead – Events, Other Releases (GMT)
- 03:00 Australia- RBA releases minutes of its October monetary policy meeting
Currency SummariesEUR/USD is likely to find support at 1.1300 levels and currently trading at 1.1324 levels. The pair has made session high at 1.1344 and hit lows at 1.1315 levels. The euro retreated to a 10-day low against the dollar on Monday, as investors focused on a European Central Bank meeting later in the week that could pave the way for further stimulus to boost inflation in the euro zone. Though most traders and analysts believe the ECB will wait until its December meeting to announce anything new, they see a risk that additional easing measures could be flagged this Thursday and are betting ECB chief Mario Draghi will at least try to talk the currency down. In early New York trading, the euro was 0.2 percent lower at $1.1324, trimming its losses from a session low of to $1.1308, its weakest since Oct. 9. Against sterling, it fell 0.6 percent to 73.14 pence after dropping to a 3-1/2-week low of 73.05 pence. Many banks were expecting the euro to fall to parity with the dollar by the end of the year as the ECB pumps 60 billion euros into the economy each month. But since dipping below $1.05 in March, it has gained around 9 percent, adding to the deflationary pressures facing the euro zone. To the upside, immediate resistance can be seen at 1.1347. To the downside, immediate support level is located at 1.1300 levels.GBP/USD is supported in the range of 1.5409 levels and currently trading at 1.5463 levels. It reached session high at 1.5492 and hit session low at 1.5457 levels. Sterling rose to a 4-day high against dollar on Monday ,as the investors looked to a speech from Band of England governor Mark Carney this week to see if he reiterates his position that rates in Britain could rise irrespective of whether the Fed tightens its policy or not. On Friday, BOE policy maker Kristin Forbes said rates in Britain would rise sooner rather than later. Forbes ,who is seen as a hawk and an advocate for BOE rate hike ,said Britain had limited direct exposure to the problems seen so far in developing nations, even taking into account how they might hit key trading partners such as Germany the dollar ,sterling was up 0.3 percent at $1.5483 while the euro was down 0.6 percent at 0.6 percent at 73.10 pence its lowest since Sept. Sterling was also boosted by last week planned 69 billion pound takeover of brewer SAB miller by Anheuser-Bush inBev that is likely to see sterling inflows in the short-term. To the downside, immediate support level is located at 1.5420 levels. To the upside, immediate resistance can be seen at 1.5471.USD/JPY is supported around 119.10 levels and currently trading at 119.51levels. It hit session high at 119.54 and made session lows at 118.97 levels. The dollar rose against Japanese yen on Monday, after Weak data from China, the world’s second-biggest economy, caused some hurt to Asian currencies. China’s economic growth dipped below 7 percent for the first time since the global financial crisis, hurt partly by cooling investment, according to a report by the National Bureau of Statistics. September retail spending alone bucked the trend, growing at an annual rate of 10.9 percent, slightly beating forecasts for 10.8 percent. China’s consumer inflation cooled more than expected in September, while producer prices extended their slide to a 43rd straight month, highlighting the urgency for the central bank to tackle deflationary pressures.Data released separately on Monday showed China’s government spending surged almost 27 percent in September from a year ago. Some market watchers believe current growth is much weaker than government figures, though officials deny allegations that the numbers are inflated. To the upside, immediate resistance can be seen at 119.63. To the downside, immediate support level is located at 119.21 levels.USD/CAD is supported at 1.2980 levels and is trading at 1.3014 levels. It has made session high at 1.3028 and lows at 1.2935 levels. The Canadian dollar weakened against its U.S. counterpart on Monday as oil prices tumbled and as voters looked set to elect as prime minister a candidate who was promised to spend on infrastructure to stoke economic growth. After an unusually long 11-week campaign that was considered too close to call for much of it, polls showed a strong prospect that Conservative Prime Minister Stephen Harper’s government will be ousted or reduced to a minority amid a late surge by the Liberal party. If elected, the Liberals, led by Justin Trudeau, plan to run deficits in order to increase spending on infrastructure. The Canadian dollar was at C$1.3021 to the greenback, or 76.80 U.S. cents, by midafternoon, weaker than Friday’s close of C$1.2911, or 77.45 U.S. cents. The Canadian currency has strengthened more than 2 percent this month, in line with a broader move toward riskier assets.But a drop in the price of oil, a major export for Canada, helped drag the loonie down on Monday. U.S. crude prices settled down $1.37 at $45.89 a barrel. To the upside, immediate resistance can be seen at 1.3030. To the downside, immediate support level is located at 1.3000 levels.Equities RecapEuropean equities closed higher on Monday, lifted by gains at Deutsche Bank and pharmaceutical stocks, although weak Chinese data hurt commodity shares.The pan-European FTSEurofirst 300 ended the day up by 0.2 percent, UK’s benchmark FTSE 100 closed down by 0.5 percent, Germany’s Dax ended up by 0.6 percent, France’s CAC finished the day flat.U.S. stocks finished mildly lower on Monday, as Wall Street pondered over downbeat quarterly earnings reports after china’s gross domestic product data.Dow Jones closed up by 0.11 percent, S&P 500 ended up by 0.05 percent, Nasdaq finished the day up 0.39 percent.Treasuries RecapU.S. Treasuries yields mostly rose on Monday after Chinese economic data boosted hopes among investors that slowing overseas growth will not drag on America’s long-running expansion.U.S. 30-year bonds were last down 24/32 in price to yield 2.90 percent, compared to a yield of 2.86 percent late Friday.U.S. three-year Treasury notes were up 1/32 in price to yield 0.89 percent from a yield of 0.90 percent late Friday. U.S. five-year notes were down 2/32 to yield 1.35 percent.The 10-year Treasury notes last yielded 2.05 percent versus 2.02 percent late Friday.Commodities RecapGold eased on Monday as strength in the dollar pulled the metal further from last week’s 3-1/2 month high, though prices were underpinned by uncertainty over the timing of a U.S. rate rise.Spot gold was down 0.1 percent at $1,175.40 an ounce at 1406 GMT, while U.S. December gold futures were down $7.50 an ounce at $1,176.50. Last week the metal hit its highest since late June at $1,190.63 an ounce.Crude oil fell about 4 percent on Monday after a tumble in gasoline futures added pressure to a market slumping on slower growth in china and signs that Iranian oil will return to the market soon following implementation of its nuclear deal.The front-month in Brent, the global crude benchmark settled down $1.87, or 3.7 percent, at $ 48.61 a barrel.US crude’s front month settled down $1.37 or 3 percent, at $ 45.89, in lighter volume trades ahead of Tuesday’s expiry for November as the spot contract.
The material has been provided by InstaForex Company – www.instaforex.com