Market Roundup
- Wall Street gives up early gains, Dollar up vs yen, euro, GBP slips after weak data; BoE eyed.
- US JOLTS Job Open Jul +5.753m, forecast- 5.288m, +5.323m-prev; Record High.
- ECB’s Praet says market partly reversed QE impact on bank funding.
- Bank of Canada holds rate at 0.5%, says past cuts still giving stimulus.
- Hedge fund short-covering in oil has further to run (CFTC data).
- US TR IPSOS PCSI Sep 53.9, 54.2-previous.
- Canada BoC Rate Decision N/A 0.5%, forecast 0.5%, 0.5%-previous.
- Canada TR IPSOS PCSI Sep 49.1, 49.8-previous.
- Brazil TR IPSOS PCSI Sep 34.2, 37.8-previous.
- Mexico TR IPSOS PCSI Sep 40.5, 39.3-previous.
- Mexico12-Month Inflation Aug 2.59%, forecast 2.62%, 2.74%-previous.
Looking Ahead – Economic Data (GMT)
- 22:45 New Zealand ElectCard Retail Sales month Aug 0.4%-previous.
- 22:45 New Zealand Elec Card Retail Sales YY* Aug 5.6%-previous.
- 23:50 Japan Foreign Bond Investment w/e 900.3b-previous.
- 23:50 Japan Foreign Invest Japan Stock w/e -630.3b-previous.
- 23:50 Japan Corp Goods Price MM* Aug forecast -0.4%, -0.2%-previous.
- 23:50 Japan Corp Goods Price YY* Aug forecast -3.3%, -3%-previous.
- 23:50 Japan Machinery Orders MM* Jul forecast -3.7%, -7.9%-previous.
- 23:50 Japan Machinery Orders YY* Jul forecast -10.5%, 16.6%-previous.
- 01:30 Australia Employment* Aug forecast -5.0k, 38.5k-previous.
- 01:30 Australia Full Time Employment* Aug 12.4k-previous.
- 01:30 Australia Participation Rate* Aug forecast -65%, 65.1%-previous.
- 01:30 Australia Unemployment Rate* Aug forecast -6.2%, 6.3%-previous.
- 01:30 China PPI YY* Aug forecast–5.5%, -5.4%-previous.
- 01:30 China CPI YY* Aug forecast -1.8%, 1.6%-previous
- 01:30 China CPI MM* Aug forecast 0.4%, 0.3%-previous
Looking Ahead – Events, Other Releases (GMT)
- 21:00 New Zealand RBNZ Interest Rate N/A forecast- 2.75%, 3%-previous
Currency Summaries
EUR/USD is likely to find support at 1.1177 levels and currently trading at 1.1204 levels. The pair has made session high at 1.1207 and hit lows at 1.1150 levels. The dollar rose on Wednesday, following equities rallies on Wall Street, Europe and Asia that reassured investors and weakened the demand for the low-yielding euro. The euro was also hurt by widening interest rate differentials between two-year U.S. Treasury yields and their comparable German bunds. The euro was down 0.3 percent at $1.1169 in the session. Many traders said the dollar, which benefits from U.S. interest rates that are higher than those of other big economies, was likely to show limited gains or losses through next week. U.S. Federal Reserve policymakers may announce an interest rate hike on Sept. 17 at the end of a two-day meeting. Analysts believe a rate increase would boost the greenback. To the upside, immediate resistance can be seen at 1.1215. To the downside, immediate support level is located at 1.1177 levels.
GBP/USD is supported in the range of 1.5332 levels and currently trading at 1.5362 levels. It reached session high at 1.5390 and dropped to session low at 1.5350 levels. Sterling fell against the dollar on Wednesday after data showed manufacturing output fell hard in July, keeping pressure off the Bank of England to raise interest rates any time soon. Investors are betting there will be no change from the BoE’s nine-strong monetary policy committee (MPC) when they meet on Thursday to decide on when to raise rates, with just one member expected to vote in favour of an immediate hike. But the accompanying minutes will be watched for clues on future rises. Manufacturing output slumped in July which came at -0.8% against analyst expectation of 0.2%. Factory output suffered its first year-on-year fall in nearly two years, hit by an earlier than usual summer shutdown of vehicle production lines but also by weaker demand from other major economies, reflecting concerns about global growth. To the upside, immediate resistance can be seen at 1.5375. To the downside, immediate support level is located at 1.5350 levels.
USD/JPY is supported around 120.32 levels and currently trading at 120.48 levels. It peaked to hit session high at 121.71and made session lows at 120.42 levels. The dollar rose against Japanese yen on Wednesday, after stock markets in Wall Street, Europe and Asia rallied on Wednesday on hopes of stimulus measures in China Prospects for government fiscal stimulus set the stage for a 2 percent rally in European stocks. Wall Street was up 0.75 percent in early trading that reflected a shift to riskier bets by many investors rattled by China’s unexpected devaluation last month and a withering equities decline. The yen was off more than 1 percent against the dollar after Japan’s Nikkei jumped 7.7 percent. It was the biggest single-day gain for the stocks index in nearly seven years and came after Prime Minister Shinzo Abe raised hopes of more fiscal stimulus by his government. To the upside, immediate resistance can be seen at 121.18. To the downside, immediate support level is located at 120.34 levels.
USD/CAD is supported at 1.3226 levels and is trading at 1.3208 levels. It has made session high at 1.3266 and lows at 1.3193 levels. The Canadian dollar rallied against its U.S. counterpart on Wednesday, touching its strongest level of the session after the Bank of Canada kept its key interest rate unchanged. The central bank, which had already cut interest rates twice this year by 25 basis points each time, held its target for the overnight rate steady at 0.5 percent, stating that the previous cuts were still stimulating the economy. The Bank of Canada expressed some caution, however, over the impact of extremely volatile crude oil prices and global markets jittery about China’s growth prospects. The loonie, which was stronger against most of its key currency counterparts following the rate decision, had briefly weakened to C$1.3275 after the decision was announced before quickly rallying to C$1.3155. The Canadian dollar traded in the range of C$1.3150 and C$1.3250 to the greenback in the US session. To the upside, immediate resistance can be seen at 1.3276. To the downside, immediate support level is located at 1.3243 levels.
Equities Recap
European shares climbed for a third session to a two-week high on Wednesday, with miners tracking a rally in metals prices on expectations that the world’s top consumer, China, would take further steps to boost its economy.
UK’s benchmark FTSE 100 closed up by 1.2 percent, the pan-European FTSEurofirst 300 ended the day up by 1.4 percent, Germany’s Dax ended up by 0.40 percent, France’s CAC finished the day up by 1.5 percent.
U.S. stocks ended the day down more than one percent on Wednesday in another volatile session, led by a drop in Apple shares and a decline in energy shares. Dow Jones closed down by 1.43 percent, S&P 500 ended down by 1.38 percent Nasdaq finished the day down 1.16 percent.
Treasuries Recap
U.S. Treasury yields fell on Wednesday as higher yields lured fund managers and other investors back to the market, and after an auction of new 10-year notes saw solid demand.
Benchmark 10-year notes were last up 3/32 in price to yield 2.18 percent, after earlier rising as high as 2.25 percent, the highest since Aug. 7.
Commodities Recap
Gold fell to a four-week low on Wednesday as stock markets strengthened and the dollar firmed, though prices remained hemmed into a narrow range ahead of next week’s Federal Reserve meeting.
Spot gold was down 1.2 percent at $1,107.61 an ounce at 2:32 p.m. EDT (1832 GMT), after dropping 1.8 percent to $1,101.11, the lowest since Aug. 11. U.S. gold futures for December delivery settled down 1.7 percent at $1,102 an ounce.
Oil prices fell nearly 4 percent on Wednesday, pressured by ample supply and concerns about demand being curbed by slowing economic growth.
Brent crude fell $1.94, or 3.92 percent, to settle at $47.58 after climbing 4 percent in the previous session.U.S. crude dropped $1.79, or 3.9 percent, to settle at $44.15, having eased on Tuesday as trading resumed after the Monday’s Labor Day holiday.
The material has been provided by InstaForex Company – www.instaforex.com