Asian equities were mixed on Tuesday after Wall Street ended yesterday in red and investors continued to digest news that the UK will begin its official departure from the EU in March 2017.

Better than expected manufacturing data from the U.S. was not welcomed news by investors as it strengthens the case for a Fed rate hike by year end. The ISM manufacturing index rose to 51.5 in September after dipping into negative territory in August, and beat expectations of 50.3.

Although the employment component of the index fell short of the 50 level, indicating jobs are still contracting in the manufacturing sector, new orders and output spiked higher suggesting that business conditions are slowly improving.

The U.S. dollar was the major beneficiary of the improved data and traded at two-week high of 95.95. The greenback was also supported by comments from Fed’s Loretta Mester who suggested the case for a hike in borrowing costs remain compelling at next meeting in November.  I still don’t buy a November rate hike, but the possibility of it happening relies on big surprises on Friday, especially if the economy added more than 200 thousand jobs in September and wage growth exceeded 0.3%.

Yields on U.S. 10-year treasury bonds rose for a third straight day to trade above 1.62. The higher the yields go from current levels the more investors believe that rates in the U.S. will rise which will continue supporting the greenback on the short-run.

RBA’s decision to hold rates steady today did not surprise the markets, and the statement didn’t show any material changes from September, only couple of rephrased sentences. The only major change was the governor of the RBA Philip Lowe who replaced Glenn Stevens. This explains why the Aussie was a little moved by the central bank’s decision.

Looking ahead into the European session, Deutsche Bank will likely steal the show with the return of German markets from Unity Day. The stock received a 14% boost last Friday on hopes that the bank will get a 60% discount on previous announced settlement amount of $14 billion from U.S. Justice Department, but with no updates so far on the case, expect the stock to remain on a roller coaster.  

Disclaimer:This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 90% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD recaptures 1.2050 amid upbeat EZ PMIs, USD decline

EUR/USD is trading above 1.2050 after upbeat Eurozone Preliminary PMIs. The US dollar remains heavily offered across the board amid a mixed market mood, in the wake of Biden's plan for a tax hike. US PMIs awaited. 

EUR/USD News

GBP/USD holds gains below 1.3900 amid upbeat UK data

GBP/USD is consolidating gains below 1.3900, as the US dollar resumes decline after Biden's tax hike plan fuelled rally fades. The UK Retail Sales and PMIs beat expectations, offering support to the pound. 

GBP/USD News

Bitcoin, Ethereum and XRP plummet, breaching critical support levels

Bitcoin price has dropped 12.7% since yesterday and shows no signs of stopping. Ethereum price follows the pioneer crypto’s lead and might retest $2,000 again. Unlike BTC or ETH, XRP price shows signs of recovery as long as it stays above a critical demand zone.

Read more

XAU/USD eases from tops, downside remains cushioned

Gold struggled to capitalize on its intraday positive move to the $1,790 region. A modest bounce in the equity markets, US bond yields exerted some pressure. The prevalent USD selling bias should help limit the downside for the commodity.

Gold News

Bionano Genomics Inc runs into technical resistance, put options may work here

BNGO shares have continued to suffer post the retail meme crowd moving on. BNGO shares bounce from lows as DeMark buy signal flashes on Monday. BNGO shares trend up to resistance at 100 day moving average.

Read more

Majors

Cryptocurrencies

Signatures