America’s roundup: Dollar up on Nafta deal, S&P 500, Dow kick off fourth quarter with gains, Gold dips, Brent hits highest since 2014 ahead of Iran sanctions-oct 2nd,2018
• US Sep Markit Mfg PMI Final, 55.6, 55.6 previous.
• US Sep ISM Manufacturing PMI, 59.8, 60.1 forecast, 61.3 previous.
• US Sep ISM Mfg Prices Paid, 66.9, 71.0 forecast, 72.1 previous.
• US Sep ISM Manuf Employment Index, 58.8, 58.1 forecast, 58.5 previous.
• US Aug Construction Spending m/m, 0.1%, 0.4% forecast, 0.1% previous, 0.2% revised.
• Trump says trade pact with Canada, Mexico will support U.S. jobs.|
• Canada, buoyed by trade deal, to push U.S. on metal tariffs.
• Fed’s Kashkari sees no need for interest rate hikes.
• Boston Fed’s Rosengren: Job market too tight for too long poses risks.
• Argentina peso pops higher on first day of IMF-agreed policy model .
• CA Sep Markit Mfg PMI SA, 54.8, 56.8 previous.
• Tria tells Eurogroup Italy’s budget still under discussion- sources.
• Traders boost Canada interest rate bets as trade deal clips threat to economy.
Looking Ahead – Economic Data (GMT)
• 1 Oct 21:00 New Zealand Q3 NZIER Confidence, -20% previous
• 1 Oct 21:00 New Zealand Q3 NZIER QSBO Capacity, 92.8% previous
• 2 Oct 04:30 Australia Oct RBA Cash Rate, 1.50% previous, 1.50% forecast
• 2 Oct 05:00 Japan Sep Consumer Confid. Index, 43.3 previous
Looking Ahead – Events, Other Releases (GMT)
• Oct 2 06:00 Keynote speech by ECB Supervisory Board Member Pentti
Hakkarainen at ALM Partners’ annual event in Helsinki, Finland.
• Oct 2 07:55 Riksbank Deputy Riksbank Governor Henry Ohlsson will participate in the National Mediation Office’s conference “Economic conditions for wage formation” in Stockholm.
• Oct 2 08:45 Bank of England Chief Economist Andy Haldane: Chairing sessions at Rebuilding Macroeconomics Annual Conference on “Bringing Psychology and Social Sciences into Macroeconomics”, in London.
• Oct 2 10:35 External Member of the Bank of England’s rate setting, Jonathan Haskel: Chairing sessions at Rebuilding Macroeconomics Annual Conference on “Bringing Psychology and Social Sciences into Macroeconomics”, in London.
• Oct 2 14:00 Federal Reserve Vice Chair for Supervision Randal Quarles testifies on “Implementation of the Economic Growth, Regulatory Relief and Consumer Protection Act” before the Senate Banking Committee, in Washington.
• Oct 2 14:30 ECB Policymaker Francois Villeroy de Galhau to speak at a conference in Paris about “Ten years after: Is financial stability today better assured?” in Paris.
• Oct 2 15:15 Panel Participation by Tony Richards, RBA Head of Payments Policy, at the Chicago Payments Symposium
• Oct 2 16:00 Federal Reserve Bank of Richmond President Thomas Barkin gives opening remarks before the “Reinventing Our Communities: Investing in Opportunity” conference in Baltimore.
• Oct 2 16:00 Federal Reserve Chairman Jerome Powell speaks on “A View from the FRB” before the National Association for Business Economics’ 60th Annual Meeting in Boston.
EUR/USD is likely to find support at 1.1525 levels and currently trading at 1.1577 levels. The pair has made session high at 1.1610 and hit lows at 1.1560 levels. The euro dipped against the greenback on Monday on renewed concerns about Italy’s budget, while the Canadian dollar gained after the United States and Canada reached a last-minute deal on Sunday to replace the North American Free Trade Agreement (NAFTA).Italian Deputy Prime Minister Luigi Di Maio accused European Union officials of deliberately upsetting financial markets with negative comments about Italy’s budget plans.He was taking aim at European Economic Affairs Commissioner Pierre Moscovici, who earlier said that Rome’s plans were “obviously” deviating from EU rules on fiscal discipline. The deal between the United States and Canada, meanwhile, keeps intact a three-country, $1.2 trillion open-trade zone that had been about to collapse after nearly a quarter century. The euro was last down 0.27 percent against the greenback at $1.1577.The single currency has been hurt by concerns that a significant increase in Italy’s budget will exacerbate the country’s already high debt levels.
GBP/USD is supported in the range of 1.2980 levels and currently trading at 1.3017 levels. It reached session high at 1.3116 and dropped to session low at 1.3010 levels. Britain’s pound initially rose against the dollar on Monday after Britain’s finance minister said the European Union was willing to do a Brexit deal, but uncertainty surrounding the ruling Conservative Party conference quickly reversed the currency’s fortunes. Prime Minister Theresa at her party’s annual conference this week, will defend her plan for leaving the EU where critics like ex-foreign secretary Boris Johnson could openly defy her.Six months before Britain is due to leave the EU, currency traders are focused on events like the conference and an upcoming EU summit for signs of whether the UK will clinch a deal. Businesses have expressed frustration over the government’s lack of clarity on Brexit and what some see as a decision to put ideology before the economy.Last week, Britain’s opposition Labour Party sought to woo business bosses, although it also proposed a raft of radical economic policies, saying the Conservatives had given them the opportunity to pitch an alternative leftist strategy. Sterling came under pressure last week as optimism for a Brexit trade deal faded and the dollar surged.
USD/CAD is supported at 1.2749 levels and is trading at 1.2813 levels. It has made session high at 1.2827 and lows at 1.2788 levels. The Canadian dollar strengthened against its U.S. counterpart on Monday after a last-minute deal to salvage the trilateral NAFTA trade pact supported bets for another Bank of Canada interest rate hike as soon as this month. The new United States-Mexico-Canada Agreement (USMCA) largely leaves the broad North American Free Trade Agreement intact and maintains current supply chains that would have been fractured under weaker bilateral deals. The Bank of Canada has raised interest rates four times since July 2017. Chances of another hike in October have climbed to 84 percent from 77 percent before data on Friday showing stronger-than-expected domestic economic growth in July. The price of oil, one of Canada’s major exports, was supported by supply concerns before U.S. sanctions against Iran come into force next month. U.S. crude prices were up 0.1 percent at $73.31 a barrel. The Canadian dollar was trading 0.7 percent higher at C$1.2813 to the greenback, or 78.03 U.S. cents. The loonie, which posted on Friday its biggest gain in four months, touched its strongest since May 22 at 1.2788.
USD/JPY is supported around 113.94 levels and currently trading at 113.97 levels. It peaked to hit session high at 114.06 and made session lows at 113.87 levels. The dollar strengthened against Japanese yen on Monday as a pact between the United States and Canada to rescue the trilateral North American Free Trade Agreement with Mexico drove up the dollar. The newly named United States-Mexico-Canada Agreement (USMCA) announced on Sunday preserves a $1.2 trillion open-trade zone that was on the brink of collapse after nearly a quarter century. USMCA is aimed at bringing more jobs into the United States, with Canada and Mexico accepting more restrictive commerce with the United States, their main export partner. It also effectively maintains the current auto sector and largely spares Canada and Mexico from the prospect of U.S. tariffs on their vehicles, although it will make it harder for global auto makers to build cars cheaply in Mexico. Dollar was also supported by solid ISM manufacturing data. The measure of U.S. factory activity retreated from a more than 14-year high in September as growth in new orders slowed, but supply bottlenecks appeared to be easing, suggesting a steady pace of expansion in manufacturing. The data bumped yields up modestly in mid-morning trade.
European shares rose on Monday as a new U.S.-Mexico-Canada trade pact lifted some of the gloom over global trade, while Italian stocks extended Friday’s slide as top EU officials weighed in on the government’s budget plans.
The UK’s benchmark FTSE 100 closed down by 0.01 percent, FTSEurofirst 300 ended the day up by 0.28 percent, Germany’s Dax ended up by 0.8 percent, and France’s CAC finished the up by 0.3 percent.
The Dow and S&P 500 began the fourth quarter on a positive note on Monday, after a last-minute deal to salvage NAFTA as a trilateral pact helped ease trade worries, although major indexes finished off their session highs.
Dow Jones closed up by 0.80 percent, S&P 500 ended up 0.37 percent, Nasdaq finished the day down by 0.12 percent.
Yields on U.S. government bonds rose modestly on Monday, as risk assets rallied off the weekend announcement that the United States and Canada had reached a deal to save NAFTA as a trilateral pact with Mexico.
Yields at the long end of the curve benefited most, with the 30-year bond yield last up 3.7 basis points from Friday’s close to 3.234 percent and the 10-year yield up 2.6 basis points to 3.082 percent. The short end of the curve was little affected, with the two-year yield up less than half a basis point in afternoon trade.
Gold fell on Monday as investors favored riskier assets after the United States and Canada salvaged NAFTA as a trilateral trade pact with Mexico, while expectations that a strong U.S. economy would lead to higher borrowing costs also influenced sentiment.
Spot gold was down 0.3 percent at $1,187.98 per ounce by 1:58 p.m. EDT (1758 GMT), after hitting a six-week low of $1,180.34 in the previous session.
U.S. gold futures for December delivery settled down $4.5, or 0.4 percent, at $1,191.70 per ounce.
Oil futures jumped more than $2 a barrel Monday, rising to levels not seen since November 2014, as U.S. sanctions on Iran loom and a North American trade deal fosters growth.
Brent futures settled at $84.98 a barrel, up $2.25, or 2.7 percent. In post-settlement trade, the contract continued to strengthen, rising to $85.45 a barrel, the first trade above $85 since November 2014. U.S. light crude futures were up $2.05 a barrel at $75.30, the highest since November 2014.
Source: FXWire Money