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America's roundup: Dollar falls on hopes for u.s.-china trade talk, S&P, Dow edge up on trade optimism, Gold turns positive, Brent reaches $80 a barrel after fall in U.S. Crude stocks-september 13th, 2018

Source FxWire Pro Wednesday, 12 Sep, 2018 21:07:02 GMT

Market Roundup

• US Aug PPI Final Demand y/y, 2.8%, 3.3% previous, 3.2% forecast.

• US Aug PPI Final Demand m/m, -0.1%, 0.0% previous, 0.2% forecast.

• US Aug PPI ex Food/ Energy y/y, 2.3%, 2.7% previous, 2.7% forecast.

• US Aug PPI ex Food/ Energy m/m, -0.1%, 0.1% previous, 0.2% forecast.

• US 7 Sep w/e MBA Mortgage Applications Composite Index, -1.8%, -0.1% previous.

• US 7 Sep w/e Mortgage Market Index, -1.8%, -0.1% previous.

• CA Q2 Capacity Utilization, 85.55, 86.1% previous, 86.9% forecast, 83.7% revised.

• U.S. officials have reached out to China for new trade talks –sources.

• Fed's Brainard sees more headroom on U.S. interest rates .

• Trump 'definitely' boosted U.S. growth, Fed's Bullard says.

• Some U.S. businesses postponing investment due to trade concerns –Fed.

• Canada sees more NAFTA talks this week, much work remains –source.

• U.S. incomes rose but inequality widened in 2017 – data.

• Sterling rebounds from lows as Brexit rebels pledge loyalty to May

Looking Ahead - Economic Data (GMT)

• 12 Sep 22:45 New Zealand  Aug Food price Index, 0.7% previous 

• 12 Sep 23:00 Japan Sep Reuters Tankan Business Conditions, 30 previous

• 12 Sep 23:50 Japan 8 Sep w/e Foreign Bond Investment, 543.4B previous

• 12 Sep 23:50 Japan 8 Sep w/e Foreign Invest JP Stock, -4.6B previous

• 12 sep 23:50 Japan Aug Corporate Goods Prices m/m, 0.5% previous, 0.1% forecast

• 12 Sep 23:50 Japan Aug Corporate Goods Prices y/y, 3.1% previous, 3.1% forecast

• 12 Sep 23:50 Japan Jul Machinery Orders m/m, -8.8% previous, 5.7% forecast

• 12 Sep 23:50 Japan Jul Machinery Orders y/y, 0.3% previous, 4.7% forecast

• 13 Sep 01:30 Australia Aug Employment, -3.9K previous, 15.0K forecast

• 13 Sep 01:30 Australia Aug Full Time Employment, 19.3K previous

• 13 Sep 01:30 Australia Aug Participation Rate, 65.5% previous, 65.6% forecast

• 13 Sep 01:30 Australia Aug Unemployment Rate, 5.3% previous, 5.3% forecast

Looking Ahead - Events, Other Releases (GMT) 

• 11:00 BoE announces rate decision and publishes the minutes of the meeting in London.

• 11:45 ECB Governing Council meeting, followed by interest rate announcement and press conference by ECB president Mario Draghi in Frankfurt. 

• 17:15 Fed's Atlanta President Raphael Bostic speaks on the economic outlook and monetary policy before the Mississippi Council of Economic Education in Jackson, Mississippi.

• 23:00 Fed's Dallas President Robert Kaplan participates in a session before the Dallas Business Club in Dallas, Texas.

Currency Summaries

EUR/USD is likely to find support at 1.1561 levels and currently trading at 1.1627 levels. The pair has made session high at 1.1648 and hit lows at 1.1586 levels. The euro rose against dollar on Wednesday ahead of an European Central Bank meeting, while dollar slipped as traders remained worried about the trade friction between the United States and China. Traders sought to exit some bearish bets on the single currency, which fell earlier on Wednesday on reports that ECB policymakers will trim their growth forecasts at their meeting on Thursday. The ECB and the Bank of England, which will also hold a policy meeting on Thursday, are widely expected to leave interest rates unchanged. On the data front, U.S. producer prices unexpectedly fell in August, recording their first drop in 1-1/2 years, as declines in the prices of food and a range of trade services offset an increase in the cost of energy products. The producer price index for final demand slipped 0.1 percent last month after being unchanged in July. August's fall in the PPI was the first since February 2017. That further lowered the annual increase in the PPI to 2.8 percent from 3.3 percent in July. Despite the surprise weakness in producer prices reported by the Labor Department on Wednesday, overall inflation is steadily rising, driven by a tightening labor market and robust economy. The euro was up 0.16 percent at $1.1628 and was 0.270.24 percent at 0.89290 pound.

GBP/USD is supported in the range of 1.2960 levels and currently trading at 1.3050 levels. It reached session high at 1.3072 and dropped to session low at 1.2994 levels. The British pound initially declined against the greenback but, bounced back in volatile trading on Wednesday after Brexit-supporting lawmakers in British Prime Minister Theresa May's party publicly pledged support for her to stay in power. The pound had fallen as much as a quarter of a percent to below $1.30 against the dollar after the BBC reported a group of lawmakers in May's ruling Conservative Party had met to discuss how and when they could force her out of her job. But it later rose as lawmakers within her party said they wanted May to stay in power despite disagreeing with her Brexit proposals. Rebellious Conservative lawmakers have condemned May's plans for Britain to remain in a free trade zone for goods with the EU after it leaves the bloc. European Commission head Jean-Claude Juncker on Wednesday also renewed a pledge of close trade and security ties with Britain post-Brexit, helping lift sentiment. The Bank of England meets on Thursday for its monetary policy meeting, at which it is expected to keep rates on hold. The pound has lurched up and down on almost every Brexit-related headline in the past week, as traders struggle to decipher whether Britain can avoid a no-deal Brexit when it leaves the EU.

USD/CAD is supported at 1.2943 levels and is trading at 1.2994 levels. It has made session high at 1.3077 and lows at 1.2978 levels. The Canadian dollar strengthened to a near-two-week high against its U.S. counterpart on Wednesday, boosted by higher oil prices and optimism that a deal with the United States to renew the NAFTA trade pact would be reached. Canadian Foreign Minister Chrystia Freeland is planning to return to Washington to hold more talks on the North American Free Trade Agreement on Thursday but plenty of work remains before the two sides can strike a deal, a well-placed Canadian source said. Canada sends about 75 percent of its exports to the United States, including autos and oil, so a deal could remove a headwind for the country's economy. The price of oil climbed for a second straight day after a larger-than-expected drop in U.S. crude inventories and as U.S. sanctions on Iran added to concerns over global oil supply. Gains for the loonie came as the U.S. dollar lost ground against the euro in advance of the European Central Bank meeting, while traders remained worried about the trade friction between the United States and China. The Canadian dollar was trading 0.6 percent higher at C$1.2998 to the greenback. The currency, which has advanced 1.3 percent so far this week, touched its strongest since Aug. 31 at C$1.2981.

USD/JPY is supported around 110.83 levels and currently trading at 111.25 levels. It peaked to hit session high at 111.56 and made session lows at 111.08 levels. Japanese yen strengthened against the U.S. dollar on Wednesday as investors pared safe-haven holdings of the greenback following a report that senior U.S. officials were seeking to jumpstart trade talks with China. The U.S. currency also came under pressure from a rebound in the euro and sterling after pro-Brexit lawmakers in British Prime Minister Theresa May's party publicly pledged support for her despite disagreeing with her Brexit proposals. Senior U.S. officials led by Treasury Secretary Steven Mnuchin sent invitations to their counterparts in Beijing proposing another round of bilateral trade talks, the Wall Street Journal reported on Wednesday. Anxiety about the escalating U.S.-China trade conflict has hurt the yuan and emerging market currencies as U.S. President Donald Trump has threatened to impose more tariffs on Chinese imports in a bid to address a record U.S. trade deficit with China. An index that tracks the greenback against the euro, yen, sterling and three other currencies was down 0.49 percent at 94.787.

Equities Recap

European shares rose on Wednesday as oil and mining stocks rallied and investors shrugged off worries over trade tensions between the United States and China.

UK's benchmark FTSE 100 closed up by 0.45 percent, the pan-European FTSEurofirst 300 ended the day up by 0.33 percent, Germany's Dax ended up by 0.54 percent, France’s CAC finished the day up by 0.98 percent.

The Dow and S&P 500 ended slightly higher on Wednesday after news of a fresh round of U.S.-China trade talks, while the Nasdaq fell following a decline in Apple Inc shares as the company unveiled larger iPhones but made just minor changes to its offering.

Dow Jones closed up by 0.10 percent, S&P 500 ended up by 0.04 percent, Nasdaq finished the day up by 0.23 percent.

Treasuries Recap

U.S. Treasury yields were steady on Wednesday afternoon following strong demand at auction for $23 billion in new supply of 10-year notes offsetting expectations that Thursday morning's consumer price data release will show swelling inflation.

The 10-year yield was at 2.966 percent, down from Tuesday's close at 2.979 percent. The 30-year yield was last at 3.109 percent, below its last close at 3.124 percent.

Commodities Recap

Oil futures rose on Wednesday, with Brent reaching $80 a barrel, after a larger-than-expected drop in U.S. crude inventories and as U.S. sanctions on Iran added to concerns over global oil supply.

Benchmark Brent crude futures rose 68 cents to settle at $79.74 a barrel. The global benchmark earlier reached $80.13 a barrel, its highest level since May 22.

U.S. West Texas Intermediate (WTI) crude futures rose $1.12 to settle at $70.37 a barrel, a one-week high.

Gold turned positive on Wednesday as the U.S. dollar weakened against a basket of major currencies after hopes grew of concessions by Canada that would resolve disputes over reworking the North American Free Trade Agreement.

Spot gold was up 0.8 percent at $1,206.94 per ounce by 1:37 p.m. EDT (1737 GMT), after hitting its lowest since Aug. 24 at $1,187.21 on Tuesday. U.S. gold futures for December delivery settled up $8.70, or 0.7 percent, at $1,210.90 per ounce.

Source: FxWire Pro
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