Market Brief
The Japanese current account surplus narrowed less-than-expected in August from ¥1,808.6bn to ¥1,653.1bn (versus ¥1,226bn expected). Machinery orders (considered as proxy for capital expenditure) fell 5.7%m/m in August, well below market expectations for an increase of 2.3%m/m and previous month’s contraction of 3.6%m/m. Recent data continue to suggest that the Japanese economy is decelerating and today’s data add to the case for more stimulus from the BoJ on the 30th of October. Data triggered a mini sell-off in Japanese equities with the Nikkei 225 and the Topix index falling 0.99% and 0.79% respectively. USD/JPY continues to move sideways.
In mainland China, stock exchanges reopened after the Golden Week holiday and tried to play catch-up. However, the mixed performances of other Asian regional markets undermined Chinese investors’ optimism. The Shanghai Composite climbed “only“ 3.14% while its tech-heavy counterpart, the Shenzhen Composite, rose 4.15%. Elsewhere, Hong Kong’s Hang Seng fell 1.11%, South Korea’s Kospi rose 0.68%, and in Taiwan the Taiex fell 0.58% while in Singapore shares edge down 0.52%.
AUD/USD is taking a breather around $0.72 after a 1-week rally during which the Aussie appreciated as much as 4.30% against the greenback on improving risk sentiment. However, AUD/USD fell 0.80% overnight as investors took their profits home. In our opinion, there is still room for further Aussie appreciation in the short-term but we remain cautious as the rally may be short-lived. Indeed, the prevailing optimism is disconnect from the region’s fundamentals. In New Zealand, the same story applies, the Kiwi rose as much as 5.70% against the US dollar over the same period and fell 0.77% since then. The closest resistance can be found at $0.6709 (high from August 21st).
In Switzerland, unemployment rate rose to 3.4% (s.a.), matching market’s expectations, from 3.3% a month earlier. Usually, September is a good month for the Swiss economy as companies start to hire again after the summer break. However, it seems that the global uncertainty, together with the strong Swiss franc are crippling the whole machinery of Swiss economy. EUR/CHF is holding ground slightly below the 1.10 threshold as it continues to move sideways around 1.0950.
In Europe and the US, we are heading into a busy day! Traders will look for possible new clues about the potential increase of the bond programme from ECB’s Praet’s speech in Mannheim, Germany, later this afternoon. Federal Reserve’s Bullard, Kocholerlakota and Williams will also speak today. The Fed will release the minutes of its September 16-17th FOMC meeting. The minutes are expected to deliver more insight on why the Fed decided to put its credibility at stake in deciding to leave interest rates unchanged. EUR/USD is trading in low volatility environment and is holding ground around 1.1250.
In UK, the BoE minutes will be a non-event as the majority of MPC’s members will likely vote to maintain rate at 0.50% (8-1 in favour of no-change at the previous meeting). GBP/USD is currently testing the resistance level implied by its 200dma at around 1.5321. On the downside, the cable will find support at 1.5108 (low from October 1st).
Global Indexes | Current Level | % Change |
Nikkei 225 Index | 18141.17 | -0.99 |
Hang Seng Index | 22266.19 | -1.11 |
Shanghai Index | 3148.61 | 3.14 |
FTSE futures | 6293 | -0.01 |
DAX futures | 9930 | -0.17 |
SMI Futures | 8629 | 0.06 |
S&P future | 1974.4 | -0.64 |
Global Indexes | Current Level | % Change |
Gold | 1141.63 | -0.34 |
Silver | 15.62 | -2.74 |
VIX | 18.4 | -5.15 |
Crude wti | 47.95 | 0.29 |
USD Index | 95.48 | -0.01 |
Today's Calendar | Estimates | Previous | Country/GMT |
TU Aug Industrial Production MoM | 0.80% | -1.50% | TRY/07:00 |
TU Aug Industrial Production YoY | 2.10% | 0.30% | TRY/07:00 |
SW Sep Average House Prices | - | - | SEK/07:30 |
IT Bank of Italy Publishes Monthly Report `Money and Banks' | - | - | EUR/09:00 |
SA Aug Mining Production MoM | 0.80% | 1.10% | ZAR/09:30 |
SA Aug Mining Production YoY | 6.30% | 5.60% | ZAR/09:30 |
SA Aug Platinum Production YoY | - | 71.80% | ZAR/09:30 |
SA Aug Gold Production YoY | - | -7.40% | ZAR/09:30 |
UK Oct BOE Asset Purchase Target | 375b | 375b | GBP/11:00 |
UK oct..08 Bank of England Bank Rate | 0.50% | 0.50% | GBP/11:00 |
SA Aug Manufacturing Prod SA MoM | 0.50% | 0.30% | ZAR/11:00 |
SA Aug Manufacturing Prod NSA YoY | 1.40% | 5.60% | ZAR/11:00 |
BZ oct..07 FGV CPI IPC-S | 0.50% | 0.42% | BRL/11:00 |
EC ECB's Praet Speaks in Mannheim, Germany | - | - | EUR/11:10 |
EC ECB account of the monetary policy meeting | - | - | EUR/11:30 |
CA Sep Housing Starts | 202.0k | 216.9k | CAD/12:15 |
US oct..03 Initial Jobless Claims | 274k | 277k | USD/12:30 |
CA Aug New Housing Price Index MoM | 0.20% | 0.10% | CAD/12:30 |
US sept..26 Continuing Claims | 2200k | 2191k | USD/12:30 |
CA Aug New Housing Price Index YoY | - | 1.30% | CAD/12:30 |
US Bloomberg Oct. United States Economic Survey | - | - | USD/12:45 |
US Fed's Bullard to Give Welcome at Symposium on Savings | - | - | USD/13:30 |
US oct..04 Bloomberg Consumer Comfort | - | 43 | USD/13:45 |
UK BOE Deputy Governor Minouche Shafik moderates seminar in Lima | - | - | GBP/16:30 |
US Fed's Kocherlakota Gives Welcoming Remarks in Mankato, MN | - | - | USD/17:00 |
US U.S. Fed Releases Minutes from Sept. 16-17 FOMC Meeting | - | - | USD/18:00 |
NZ RBNZ Assistant McDermott Speaks (Not Public) | - | - | NZD/18:00 |
UK BOE Governor Mark Carney speaks on a panel in Lima | - | - | GBP/18:00 |
US Fed Releases Minutes of Sept. 16-17 FOMC Meeting in Washington | - | - | USD/18:00 |
US Fed's Williams Gives Outlook Speech in Spokane | - | - | USD/19:30 |
NZ Sep Card Spending Retail MoM | 0.40% | 0.50% | NZD/21:45 |
NZ Sep Card Spending Total MoM | - | 0.10% | NZD/21:45 |
CH Sep Foreign Direct Investment YoY CNY | - | 22.00% | CNY/22:00 |
BZ ABPO Sept. Cardboard Sales | - | - | BRL/22:00 |
Currency Tech
EURUSD
R 2: 1.1561
R 1: 1.1330
CURRENT: 1.1281
S 1: 1.1017
S 2: 1.0809
GBPUSD
R 2: 1.5659
R 1: 1.5383
CURRENT: 1.5323
S 1: 1.5089
S 2: 1.4960
USDJPY
R 2: 125.86
R 1: 121.75
CURRENT: 119.70
S 1: 118.61
S 2: 116.18
USDCHF
R 2: 1.0240
R 1: 0.9903
CURRENT: 0.9675
S 1: 0.9513
S 2: 0.9259
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
Recommended Content
Editors’ Picks
EUR/USD stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.