Market Roundup
- Dollar, UST yields fall as weak U.S., Chinese data cloud Fed rate hike outlook.
- Sterling sees biggest gain in 5 months after UK jobs boost, despite weak earnings.
- U.S. retail sales barely rise, hit by lower gasoline receipts, auto purchases rise.
- U.S. business inventories unchanged for second straight month, sales fall.
- Beige Book suggests more uneven growth in Aug-Oct (NY Fed).
- UK jobless rate hits 7-year low, Pay growth not as strong as expected, GBP rises.
- Elliott Mgmt’s Singer: Institutions should hold 5-10 percent in gold.
Looking Ahead – Economic Data (GMT)
- 21:30 New Zealand Manufacturing PMI* Sep 55-previous
- 00:30 Australia New Motor Vehicle Sales m/m *Sep -1.60%-previous
- 00:30 Australia Employment* Sep forecast- 5.0k, 17.4k-previous
- 00:30 Australia Full Time Employment *Sep 11.5k-previous
- 00:30 Australia Participation Rate* Sep forecast-65%, 65.00%-previous
- 00:30 Australia Unemployment Rate*Sep – forecast 6.3%, 6.20%-previous
- 04:30 Japan Industrial Output Rev* Aug -0.50%-previous
- 04:30 Japan Capacity Utilization Index Change MM* Aug -0.20%-previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is likely to find support at 1.1400 levels and currently trading at 1.1471 levels. The pair has made session high at 1.1490 and hit lows at 1.1408 levels. The dollar fell to a 7-week low against a euro on Wednesday as more signs of slowing growth in the United States and China raised doubts the U.S. Federal Reserve will raise interest rates later this year. Data on the world’s two biggest economies hinted at disinflationary pressure due to flagging domestic demand with U.S. retail sales barely growing in September. This weakening backdrop may cause Fed policymakers to abandon plans for a possible rate increase later this year until they see evidence of U.S. demand and inflation improve. Earlier China’s price data showed annual consumer inflation growth slowed to 1.6 percent in September, below a forecast 1.8 percent rise and 2.0 percent increase in August. The euro reached a seven-week high against the greenback. It was last up nearly 1 percent at $1.1487.GBP/USD is supported in the range of 1.5390 levels and currently trading at 1.5468 levels. It reached session high at 1.5493 and dropped to session low at 1.5401 levels. Sterling delivered its best daily performance in five months on Wednesday after Britain’s unemployment rate hit its lowest since mid-2008, more evidence for the UK being one of Europe’s few economic bright spots and biggest financial draws. The pound has been bolstered by the confirmation of a major merger deal in the buyout of brewer SABMiller, but the big banks are deeply divided on the prospects for the months ahead after a reeling in of expectations of higher official interest rates. The Office for National Statistics said,Britain’s unemployment rate fell to 5.4 percent in the three months to August, down from 5.5 percent in the three months to July, Yet sterling’s rise was stellar. It had gained 1.3 percent on the day to $1.5447, its biggest daily rise since May and taking it to the highest in almost a month. To the upside, immediate resistance can be seen at 1.5495. To the downside, immediate support level is located at 1.5430 levels. USD/JPY is supported around 118.05 levels and currently trading at 118.88 levels. It made session high at 119.56 and hit session lows at 118.63 levels. . The U.S. dollar slipped lower against the safe-haven Japanese yen on Wednesday in the wake of a disappointing U.S. data, which suggested the Federal Reserve would remain accommodative for longer in raising interest rate. U.S. retail sales barely rose in September and producer prices recorded their biggest decline in eight months. The Commerce Department said retail sales edged up 0.1 percent last month largely as cheaper gasoline pushed service station receipts down 3.2 percent. Giving the report a weak tone, sales in August were revised down to show them unchanged instead of rising 0.2 percent. Against the yen, the dollar hit a 1-1/2 week low, last 0.8 percent lower to 118.75 yen. To the upside, immediate resistance can be seen at 118.20. To the downside, immediate support level is located at 118.65 levels. USD/CAD is supported at 1.2890 levels and is trading at 1.2931 levels. It has made session high at 1.3015 and lows at 1.2912 levels. The Canadian dollar strengthened by nearly 1 percent against green back on Wednesday, helped by stabilization in oil prices and as investors second guessed whether the Federal Reserve will raise interest rates this year as had been anticipated. The loonie resumed its recent rally after a round of disappointing US economic data ,as well as worries about a slowdown in the Chinese economy added to some analysts’ views that fed might wait until next Year to begin lifting rates. The uncertainty surrounding the Fed’s timeline sent the US dollar to a seven week low against a basket of currencies, to the benefits of Canadian dollar. The move helped the loonie breakthrough technical resistance around C$1.30.the loonie has gained more than 3 percent this month so far ,though it is down more than 11percent the start percent since the start of the year as it has been hit by the drop in oil prices of oil . To the upside, immediate resistance can be seen at 1.980. To the downside, immediate support level is located at 1.2890 levels.Equities RecapEuropean shares ended lower for a third consecutive session on Wednesday on disappointing U.S. earnings and concerns about deflationary pressures in China.UK’s benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 0.67 percent, Germany’s Dax ended down by 1.04 percent, France’s CAC finished the day down by 0.51 percent.U.S. stocks ended lower on Wednesday as Wal-Mart’s weak forecast spooked investors, wiping more than $20 billion off the retailer’s market value.Dow Jones closed down by 0.93 percent, S&P 500 ended down by 0.48 percent, Nasdaq finished the day down 0.29 percent.Treasuries RecapUS treasury yields hit their lowest levels in over a week on Wednesday after weaker than expected U.S retail sales and producer prices data supported views the Federal Reserve would delaya rate hike until 2016U.S. 30-year Treasury bonds were last up 1-4/32 in price to yield 2.84 percent, from a yield of 2.90 percent late Tuesday. Benchmark 10-year notes were last up 21/32 to yield 1.98 percent, from a yield of 2.06 percent late on-year notes were last up 4/32 to yield 0.56 percent, from a yield of 0.63 percent late on Tuesday.Commodities RecapGold rallied to 3-1/2 month highs on Wednesday, as soft U.S. data and concerns over deflationary pressures in China fueled expectations the U.S. Federal Reserve will hold off raising interest rates, pressuring stocks and the dollar.Spot gold peaked at $1,188.20 an ounce, its highest since June 23, and was up 1.6 percent at $1,187.56 an ounce at 3:09 p.m. EDT (1909 GMT). U.S. gold futures for December delivery settled up 1.2 percent at $1,179.80 an ounce.Oil prices settled slightly lower on Wednesday, staying under pressure this week as concerns of a growing global supply glut negated the view of recent weeks that declining U.S. production would buoy prices.Brent, the London-traded global benchmark for crude, settled down 9 cents, or 0.2 percent, at $49.15 a barrel. It fell a penny short of $2.80, or more than 5 percent, on Monday. U.S. crude settled down 2 cents at $46.64.
The material has been provided by InstaForex Company – www.instaforex.com