Market Roundup
- US new home sales drop (-11.5%) to near one-year low, lowest since Nov 2014.
- US T-bill rates fall on news of likely US debt deal, debt limit increase would extend until Mar’17.
- Equity markets retreat after four-week run; Oil falls on supply glut concerns, Fed meeting ahead.
- Moody’s: Failure to lift debt ceiling, though unlikely, wouldn’t mean impending US Default.
- Gold rises on dipping USD, uncertainty over Fed; USD dips after impact of China easing fades.
- Economists raise Brazil’s 2016 inflation view to 6.22 percent.
Looking Ahead – Economic Data (GMT)
- 21:45 New Zealand Trade – Imports* Sep 4.77b-previous
- 21:45 New Zealand Trade Balance*Sep forecast-800.0m, -1035.0m-previous
- 21:45 New Zealand Trade Balance YY*Sep -3331.00b-previous
- 21:45 New Zealand Trade – Exports*Sep 3.73b-previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is likely to find support at 1.0996 levels and currently trading at 1.1056 levels. The pair has made session high at 1.1068 and hit lows at 1.1001 levels. The dollar slipped lower against euro on Monday on weaker U.S. bond yields and a decline in U.S. new home sales in September that raised the concerns about the U.S. economy ahead two day Federal Reserve policy meeting. The dollar slipped lower with weaker oil and global stock prices on Monday as investors await possible clues from the U.S. central bank on the timing of an interest rate increase. The Federal Open Market Committee, the Fed’s policy-setting group, is widely expected to leave rates near zero on Wednesday. Fed central bankers are worried about weak global growth and a still relatively strong dollar disrupting U.S. economic growth. The greenback was down 0.3 percent against euro at $1.1044. To the upside, immediate resistance can be seen at 1.1065. To the downside, immediate support level is located at 1.1025 levels.GBP/USD is supported in the range of 1.5302 levels and currently trading at 1.5350 levels. It reached session high at 1.5381 and hit session low at 1.5323 levels. Sterling climbed off a 12-day low against the dollar on Monday, as weaker-than-expected U.S. home sales data dented the greenback. Having recorded its best week since May, the dollar index dipped 0.3 percent, weighed down by September new homes sales figures that revived concerns about the U.S. economy. The British pound rose as high as $1.5383 after the data, having earlier touched $1.5305, its weakest since Oct. 14. Sterling has traded in a range of $1.51 to $1.55 since late September. The U.S. Federal Reserve, which meets later this week and the Bank of England were the two major central banks seen as most likely to raise interest rates this year. To the upside, immediate resistance can be seen at 1.5350. To the downside, immediate support level is located at 1.5325 levels.USD/JPY is supported around 120.52 levels and currently trading at 120.04 levels. It hit session high at 121.08 and made session lows at 120.58 levels. The US Dollar slipped lower against Japanese yen on Monday, after new U.S. single-family home sales fell to near a one-year low in September after two straight months of gains, but a jump in prices suggested that housing remained on solid ground. The Commerce Department said on Monday sales dropped 11.5 percent to a seasonally adjusted annual rate of 468,000 units, the lowest level since November 2014. August’s sales pace was revised down to 529,000 units from the previously reported 552,000 units. However, weak housing data added to fears that a broader global economic slowdown and weak U.S. growth have since dampened expectation for interest rate hike. Although the Fed is not expected to raise rates at this month’s meeting, the market will be watching for clues on its take on the global economy and whether a hike could come in December. To the upside, immediate resistance can be seen at 120.10. To the downside, immediate support level is located at 120.83 levels. USD/CAD is supported at 1.3127 levels and is trading at 1.3159 levels. It has made session high at 1.3170 and lows at 1.3120 levels. The Canadian dollar weakened against the greenback on Monday as the oil prices declined for the second straight session. Crude oil prices slipped as global oversupply pushed fuel storage sites close to capacity. 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 the weak data from US could fuel concerns that the U.S. economy may be dragged by a China-led global economic slowdown. The loonie hit C$1.3117 in the early US session, its strongest level of the day. Its weakest level of the session was C$1.3168. On the data front, Canadian GDP data is due this Friday. To the upside, immediate resistance can be seen at 1.3174. To the downside, immediate support level is located at 1.3125 levels.Equities RecapEuropean slipped lower on Wednesday as expectations of a positive close to the year and continued central bank support before an ECB meeting on Thursday helped investors to shrug off bad earnings news.UK’s benchmark FTSE 100 was down at 04 percent, the pan-European FTSEurofirst 300 ended the day down 0.35 percent, Germany’s Dax ended up 0.1 percent, France’s CAC finished the day down by 0.5 percent.US stocks edged lower on Monday after recent gains as energy shares fell with oil prices and Apple stocks dipped lower a day before its quarterly results.Dow Jones closed down by 0.15 percent, S&P 500 ended down by 0.20 percent, Nasdaq finished the day marginally up 0.04 percent.Treasuries RecapU.S. Treasuries prices rose on Monday, with benchmark yields retreating from two-week highs as stock market losses and disappointing data on domestic new home sales rekindled demand for low-risk government bonds.Benchmark 10-year Treasury notes were up 7/32 in price for a yield of 2.058 percent, down 2.5 basis points from late on Friday.Commodities RecapGold surged higher on Monday after 3-day continuous losses, as the dollar’s bulls paused and uncertainty persisted over the timing of the first Federal Reserve rate increase in a decade.Spot gold was up 0.2 percent at $1,165.85 an ounce by 1516 GMT. The metal had dropped on Friday to $1,158.77, its lowest since Oct. 13, when the dollar soared to its highest level in more than two months.US gold futures for December delivery settled up 0.3 percent at $ 1,166.20 an ounce.Crude prices fell again on Monday, staying under pressure after two straight weeks of losses, on worries that the oversupply in oil products would swell from unseasonably warm weather and the waning maintenance cycle for U.S. refineries.Brent, the global benchmark for crude, settled down 45 cents, or almost 1 percent, at $47.54 a barrel.U.S. crude closed down 62 cents, or 1.4 percent, at $43. crude benchmarks have lost about 10 percent over the past two weeks.
The material has been provided by InstaForex Company – www.instaforex.com