Market Roundup
- EUR/USD offered in Europe. Plays 1.1030 to 1.0971.
- GBP/USD continues to retreat from 1.5498 Mon peak. Plays 1.5445-1.5403.
- Aussie off Asia post RBA 0.7220 highs, retreats to 0.7177.
- DXY up 0.2% to 97.146 fm 96.770.
- RBI suspected to have sold Dollars around INR 65.70-Dealers.
- NZ Fronterra auction results due 1400-1600 GMT.
- UK Markit/CIPS Cons PMI 58.8 vs previous 59.9. 58.8 expected.
- Swedish Cbanker Floden: Crown a little undervalued.
- Floden: Uptick in inflation in great part to do with weaker crown.
- German Economy Minister: Sees German economic growth of 1.7% or 1.8% this year and next year.
- RBA holds rates, scope for further easing if needed.
Economic Data Ahead
- (1000 ET/1500 GMT) New orders for U.S. factory goods likely dropped in September for a second straight month. New orders for manufactured goods are expected to have fallen 0.9 percent, after a 1.7 percent drop in August.
- (1330 ET/1830 GMT) U.S. automakers will be releasing auto sales for October. Analysts forecast October sales at 17.7 million vehicles on a seasonally adjusted annualized basis, compared with 18.2 million last month and 16.5 million last October. Domestic car sales likely to have droppped to 5.65 mln from 5.83 mln, while truck sales probably fell to 8.60 mln from 8.88 mln.
- (1200 ET/1700 GMT) Brazil is expected to post a trade surplus of $1.16 billion in October, having notched a $2.94 billion surplus in September.
Key Events Ahead
- (1045 ET/1545 GMT) FedTrade 30-year Ginnie Mae (max $1.075 bn)
- (1400 ET/1900 GMT) ECB President Drgahi’s Speech.
FX BeatUSD: The dollar was little changed with activity reduced by a holiday in Tokyo and as traders shifted focus to Friday’s U.S. non-farm payrolls report, seen as critical in the Fed’s deliberations over whether to lift interest rates in December. The dollar index was barely changed at 96.940 after drifting between 96.635 and 96.965 all of Monday. Against the yen, the greenback was equally restrained, trading flat at 120.72.EUR/USD: The euro was hemmed in a tight $1.1000 to $1.1030 range and last stood at $1.1008, down 0.1 percent on the day. The pair has made a high of 1.10299 at the time of writing and started to retreat from that level. It is currently trading around 1.09875 and overall trend is still weak as long as resistance 1.1100. The minor support is around 1.0950 and break below targets 1.0920/1.0880. On the higher side minor resistance is around 1.10350 and any break above targets 1.1070/1. pair’s further bullishness only above 1.11380.USD/JPY: The pair has made a high of 121.48 on Friday and retreated till 120.28. It is currently trading at 120.77. Overall trend is still weak as long as resistance 121.50 holds. GBP/USD: Sterling held near 10-week highs on a trade-weighted basis at 93.3 and rose against the euro on Tuesday, shrugging off headline data that showed growth in the UK construction sector slowing, with investors focusing on the brighter aspects of the survey. The CIPS/Markit construction Purchasing Managers’ Index (PMI) slipped back to 58.8 in October from 59.9 in September. Sterling was steady against the dollar at $1.5410, and 0.25 percent higher against the euro at 71.27 pence per euro. The pair has made a high of 1.54970 and declined till 1.54037 from that level. Its minor resistance is around 1.5450 and break above will take the pair to 1.5370 till 1.5510. On the downside any break below 1.53980 targets 1.5340/1.5320 in short term, overall bullishness can be seen only above 1.5510.USD/CHF: The pair has made a low of 0.9837 and recovered from that level. Overall trend is still bullish as long as support 0.9820 holds. The minor resistance is around 0.9900 and break above would extend gains till 0.9960/0.9100. On the downside minor support is around 0.9820 and below that level will target 0.9800/0.9757.AUD/USD: Australia’s dollar gained almost 1 percent in a subdued currency market, after the RBA declined to cut interest rates further and as investors’ appetite for risk increased. It rose to as high as $0.7220 after the decision and touched a 6-1/2-year low of $0.6892 early in September when risk appetite globally was at low amid China worries. But the currency rebounded to as high as $0.7382 in mid-October as appetites grew. The pair recovered till 0.7218 after making a low of 0.7068 and is facing strong resistance around 0.7250 and further bullishness is seen only above that level. Overall bullishness can be seen only above 0.7300 and break above targets 0.7360/0.7380. On the lower side minor support is around 0.7160 and break below targets 0.7100/0.7065.Equities RecapA 15-year high for tech stocks on the Nasdaq helped world shares to climb a 2-1/2 month peak on Tuesday, though more engine trouble for Volkswagen and a $5.1 billion cash call by Standard Chartered left Europe feeling flat. The pan-European FTSEurofirst 300 index slipped 0.1 pct, Germany’s DAX slid 0.2 pct to 10,930.50 and France’s CAC-40 shed 0.1 pct to 4,912.22, Britain’s FTSE 100 was little changed at 6,358.97 in early trading.Japan’s stock market is closed due to national holiday. China’s CSI300 Index ended down 0.3 pct at 3,465.49 points, Shanghai Composite Index closed down 0.3 pct at 3,316.70 points while Hang Seng index climbed 0.9 pct to 22,568.43. Commodities RecapCrude oil futures were weighed on by oversupply and worries about USD strengthening on U.S. Fed interest rates hike. Benchmark U.S. crude futures were trading at $46.17 per barrel, after falling in the previous session due to a rise in stockpiles. Internationally traded Brent slipped 15 cents to $48.64, pressurized from Russian production hitting a post-Soviet peak while China’s demand outlook weakened.Gold firmed after a 4-day decline on Tuesday but languished near a four-week low as investors dumped the metal on expectations hike of U.S. rates this year. Spot gold ticked up 0.3 pct to $1,137.05 an ounce, but not too far from a four-week low of $1,132.35 reached in the previous session.Treasuries RecapU.S. 7-year Treasury yields hit fresh over 6-week high of 1.930 pct, 10-year yields rose to 5-week high of 2.189 pct.UK Gilts opened 18 ticks higher than the open, as anticipated, as external core markets underpinned. 10-year cash yields have broken the 50 % of June highs to September lows at 1.93% which is also providing Gilt support. New Zealand government bonds were mixed, with yields between 1 bp lower and 4.5 bps higher. Australian government bond futures eased, with the 3-year bond contract slipping 6 ticks at 98.160. The 10-year contract lost 6.5 ticks to 97.2850, while the 20-year contract dropped down 4.5 ticks at 96.7500.
The material has been provided by InstaForex Company – www.instaforex.com