Market Roundup
- Oil slides on profit taking and as OPEC boosts output, US equities flat.
- Europe shares pause; dollar dips, gold rallies on U.S. rate outlook.
- Fed’s Lockhart: Focus is on orderly process on rate hike that wouldn’t be reversed in short order, more than 100k jobs/month sufficient to push employment rate down.
- Fed’s Lockhart: Slowdown in China unlikely to have direct effect on US econ, Europe more exposed.
- Fed’s Evans: repeats wants ‘very gradual’ rate hikes, biggest risk to US economy is state of global growth s China decelerates, Fed has met goal on job; for inflation, not so much.
- BOE’s Weale: sees higher productivity in northern Europe, U.S.
- OPEC sees more demand for its crude in 2016 as cheap oil hits rivals.
- Swiss president says no need for emergency Swiss franc measures.
Looking Ahead – Economic Data (GMT)
- 21:45 New Zealand Food Price Index* Sep -0.50%-previous
- 23:50 Japan Bank Lending YY Sep 2.70%-previous
- 00:30 Australia NAB Bus Conditions Sep 11-previous
- 00:30 Australia NAB Bus Confidence Sep 1-previous
- 05:00 Japan Consumer Confidence. Index Sep 4-1.7-previous
- –:– CN Exports YY* Sep forecast -6.3%, -5.50%-previous
- –:– CN Imports YY* Sep forecast -15%, -13.80%-previous
- –:– CN Trade Balance USD* Sep forecast- 46.79b, 60.24b-previous
Looking Ahead – Events, Other Releases (GMT)
- 21:45 Australia- RBA Deputy Gov Philip Lowe speaks at the CFA Institute Australia Investment Confidence
Currency SummariesEUR/USD is likely to find support at 1.1315 levels and currently trading at 1.1358 levels. The pair has made session high at 1.1396 and hit lows at 1.1356 levels. The dollar slipped euro on Monday on doubts whether the Federal Reserve would raise interest rates later this year in the face of a weakening global economy. With short-dated U.S. rates pinned at the low-end of their recent trading range, the greenback has weakened especially against the euro. It was almost 10 cents lower against the euro from this year’s highs back in March. Most U.S. central bank officials in recent days have said a rate hike by year-end remains on the table even though they decided to stick with a near zero rate policy last month, citing global risks and market turmoil this summer. U.S. market activity was light due to a U.S. federal holiday.the euro was up 0.2 percent versus the dollar at $1.1378. On the data front, German CPI and German ZEW Economic Sentiment data is due this Tuesday. To the upside, immediate resistance can be seen at 1.1370. To the downside, immediate support level is located at 1.1326 levels.GBP/USD is supported in the range of 1.5300 levels and currently trading at 1.5343 levels. It reached session high at 1.5375 and dropped to session low at 1.5330 levels. Sterling climbed towards a two-week high against the struggling dollar on Monday, as investors cut bets in favour of the greenback on growing confidence that the Federal Reserve will not raise interest rates anytime soon. And while that has pushed back chances of the first rate hike in the UK to well into late 2016, recent comments from Bank of England Governor Mark Carney, who said the bank is not bound to wait for a move in U.S. interest rates before it raises its own, was offering the pound support. Sterling was up 0.3 percent at $1.5360, not far from a two-week high of $1.5382 struck on Friday. The dollar languished near a three-week low versus a basket of major currencies, with Fed vice-chair Stanley Fischer the latest to sound mixed on the chances of a hike by December. To the upside, immediate resistance can be seen at 1.5382. To the downside, immediate support level is located at 1.5315 levels.USD/JPY is supported around 119.80 levels and currently trading at 120.01 levels. It has hit session high at 120.03 and made session lows at 119.87 levels. The US Dollar slipped lower against Japanese yen on Monday on renewed risk appetite after market remained somewhat cautious, taking note that the minutes released by Fed last Thursday revealed most Fed policymakers thought the central bank’s would still consider to rise interest rate by December. However, mixed U.S. economic data and fears that a broader global economic slowdown would affect U.S. growth have since dampened those expectations.The dollar index declined to a three-week low 94.619 before edging to 94.725, down 0.1 percent from late Friday. The greenback was down 0.2 percent against the yen at 119.88 yen. To the upside, immediate resistance can be seen at 120.20. To the downside, immediate support level is located at 119.88 levels.USD/CAD is supported at 1.2960 levels and is trading at 1.3005 levels. It has made session high at 1.3010 and lows at 1.2925 levels. The Canadian dollar weakened against the greenback on Monday as the oil prices tumbled by 5%. Traders took profits after last week’s surge to an 11-week high, and on a report that OPEC continued to boost crude production despite a persistent glut. Federal Reserve officials have been signaling that they planned to hike interest rates for the first time in nearly a decade by the end of the year, but recent soft employment numbers could fuel concerns that the U.S. economy may be dragged by a China-led global economic slowdown. The loonie hit C$1.2025 in the early US session, its strongest level of the day. Its weakest level of the session was C$1.3010. Canadian manufacturing sales and foreign securities purchases data is due this Friday. To the upside, immediate resistance can be seen at 1.3015. To the downside, immediate support level is located at 1.2960levels.Equities RecapEuropean shares ended marginally lower on Monday after reaching one-month highs in a rally last week, with civil aerospace stocks leading the fallers and German utilities soaring after concerns over nuclear costs eased.UK’s benchmark FTSE 100 closed down by 0.69 percent, the pan-European FTSEurofirst 300 ended the day down by 0.16 percent, Germany’s Dax ended up by 0.38 percent, France’s CAC finished the day down by 0.16 percent.U.S. stocks were little changed in muted trading on Monday as investors paused before a busy week of quarterly results from U.S. banks and several Dow 30 companies.Dow Jones closed up by 0.28 percent, S&P 500 ended up by 0.13 percent, Nasdaq finished the day up 0.15 percent.Commodities RecapGold rose to its highest level since early July on Monday as expectations that the Federal Reserve will postpone an expected U.S. interest rate hike beyond the end of the year pressured the dollar to three-week lows against a currency basket.Spot gold reached a peak of $1,169.00 an ounce and was up 0.6 percent at $1,163.96 an ounce at 1401 GMT, while U.S. gold futures for December delivery settled up $8.60 an ounce at $1,164.50.Oil prices tumbled on Monday, settling 5 percent lower as traders took profits after last week’s surge to an 11-week high, and on a report that OPEC continued to boost crude production despite a persistent glut.Both Brent and U.S. crude futures posted the biggest percentage declines since the start of September with the North Sea crude settling down $2.79 at $49.86 and West Texas Intermediate off $2.53 at $47.10.
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