Market Roundup
- Weak China data weigh on dollar, commodity currencies.
- Stocks weak on Chinese data, oil reverses early North America gains ends -0.89%.
- Gold recovers losses on pessimism over Fed rate hike.
- Fed’s Bullard repeats call for rate increase, says tough for Fed to reverse course & hike in Oct.
- Fed’s Tarullo: Doesn’t think rate hike should come this year, says we don’t have enormous momentum in economy.
- Eight Fed banks call for discount rate hike, up from 5 in July.
- Canada’s Harper says no plans for major change to inflation mandate.
Looking Ahead – Economic Data (GMT)
- 23:30 Australia Consumer Sentiment *Oct -5.6%-previous
- 23:50 Japan Corp Goods Price MM*Sep forecast-0.3%, -0.6%-previous
- 23:50 Japan Corp Goods Price YY* Sep forecast -3.9%, -3.6%-previous
- 01:30 China PPI YY*Sep forecast -5.9%, -5.9%-previous
- 01:30 China CPI YY*Sep forecast -1.8%, 2%-previous
- 01:30 China CPI MM*Sep forecast -0.5%, 0.5%-previous
- 02:00 New Zealand RBNZ Offshore Holdings* Sep 64.6%-previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is likely to find support at 1.1345 levels and currently trading at 1.1380 levels. The pair has made session high at 1.1395 and hit lows at 1.1355 levels. The dollar hit three-week lows against euro on Tuesday and commodity-linked currencies declined as disappointing Chinese import data stoked worries about the global economy and raised bets the Federal Reserve would not raise U.S. interest rates until 2016. China’s exports fell less than expected in September but a sharper fall in imports left economists divided over whether the country’s ailing trade sector is showing signs of turning around. The data was not enough to suggest a greater risk of a hard landing, but it did feed expectations that Beijing will soon add to stimulus measures. The euro rose to $1.14110, a three-week peak, before easing to $1. the data front, EU Industrial Production, Spanish HICP, French HICP, Italian CPI data are set to released from European market on Wednesday. To the upside, immediate resistance can be seen at 1.1394. To the downside, immediate support level is located at 1.1343 levels.GBP/USD is supported in the range of 1.5205 levels and currently trading at 1.5251 levels. It reached session high at 1.5266 and dropped to session low at 1.5201 levels. A surprise fall in British consumer prices in September drove sterling to 3days low against dollar on Tuesday, overturning any positive fallout for the pound from the confirmation of a major merger. The pound had inched higher against the dollar in early trade in Europe on the back corporate deal between SABMiller’s and Anheuser-Busch InBev. But that all turned as data showed British inflation dipped back below zero last month, missing forecasts for a flat reading. Those numbers will be followed on Wednesday by British earnings data, which the Bank of England also watches closely as it considers when to raise interest rates. Sterling was 0.6 percent weaker against the dollar at $1.5255 and hit an eight-month low against the euro at 74.93 pence. On the data front, Average earnings index and Claimant count change data is due this Wednesday. To the upside, immediate resistance can be seen at 1.5264. To the downside, immediate support level is located at 1.5230 levels.USD/JPY is supported around 119.54 levels and currently trading at 119.77 levels. It made session high at 119.83 and hit session lows at 119.54 levels. The dollar edged higher against the safe-haven yen on Tuesday, after continued expectations for a Federal Reserve interest rate liftoff next year rather than in 2015 supported dollar against Japanese yen. Fed Governor Lael Brainard said on Monday the central bank should wait for clear signs that the U.S. economic recovery could weather global financial turbulence before raising interest rates. Brainard’s comments were in contrast to that of other Fed policymakers, including Fed Vice Chair Stanley Fischer, who have said they could support a rate increase in December. On the data front, U.S. small business confidence rose marginally in September as stock market volatility raised concerns about sales growth, suggesting the economy was expanding at a moderate pace.The National Federation of Independent Business said on Tuesday its Small Business Optimism Index gained 0.2 point to 96.1 last month. It said that level was consistent with a 2.5 percent annualized growth rate. To the upside, immediate resistance can be seen at 119.85. To the downside, immediate support level is located at 119.60 levels. USD/CAD is supported at 1.2900 levels and is trading at 1.3019 levels. It has made session high at 1.3080 and lows at 1.2954 levels. The Canadian dollar weakened against its U.S. counterpart on Tuesday, hurt by a sharp fall in oil prices and gloomy trade data out of China. Chinese imports plunged 20 percent in September, casting doubt on the strength of domestic demand in the world’s second largest economy, while oil fell more than 5 percent overnight after a report that OPEC continued to boost production. The Canadian dollar hit C$1.3079 in the early US session, its strongest level of the day. Its weakest level of the session was C$1.2954. On the data front, 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 1.2960 levels.Equities RecapEuropean shares fell on Tuesday after weak Chinese import data, dragged down by auto and mining stocks, though SABMiller soared after accepting a takeover proposal from rival Anheuser-Busch.UK’s benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day up by 0.36 percent, Germany’s Dax ended down by 1.00 percent, France’s CAC finished the day down by 1.1 percent.US stocks ended lower in muted trading on Tuesday on renewed fears of slowing growth in China and a drop in financial stocks ahead of the start of bank earnings.Dow Jones closed down by 0.27 percent, S&P 500 ended down by 0.67 percent, Nasdaq finished the day down 0.87 percent.Treasuries RecapU.S. Treasuries prices rose on Tuesday on concerns over global growth after data showed China’s imports plunged in September, while continued expectations for a Federal Reserve interest rate liftoff next year rather than in 2015 also supported prices.U.S. 30-year Treasury bonds were last up 21/32 in price to yield 2.89 percent, from a yield of 2.93 percent late Friday. Benchmark 10-year notes were last up 13/32 to yield 2.05 percent, from a yield of 2.10 percent late on Friday.Three-year notes were last up 3/32 to yield 0.92 percent, from a yield of 0.96 percent late on Friday.Commodities RecapGold rose on Tuesday, recovering an earlier 1 percent slide on expectations the Federal Reserve will not lift U.S. interest rates this year, which helped push the dollar to three-week lows against the euro.Spot gold was up 0.2 percent at $1,165.91 an ounce at 1:57 p.m. EDT (1757 GMT), off an earlier low of $1,151.16, and below Monday’s three-month high. U.S. gold futures for December delivery settled up 90 cents an ounce at $1,165.40.Oil prices gave up early gains and closed lower on Tuesday after the International Energy Agency rekindled fears that the market remains over supplied.Brent futures for November delivery settled at $49.24 per barrel, down 1.24 percent, or 62 cents. Brent futures were above $50 in earlier trading.U.S. crude settled at $46.66 per barrel, down 0.93 percent, or 44 cents, wiping out early gains of over a dollar on technical trades.
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