Posted at 02 November 2021 / Categories Market Roundups
Market Roundup
• Canada Sep Building Permits (MoM) 4.3%,3.1% forecast, -2.1% previous
• US Redbook (YoY) 16.9%,15.6% previous
• French 12-Month BTF Auction -0.651%,-0.636% previous
• French 3-Month BTF Auction -0.772%,-0.736% previous
• French 6-Month BTF Auction -0.684%, -0.685% previous
• US IBD/TIPP Economic Optimism 43.9,46.8 previous
• New Zealand Global Dairy Trade Price Index 4.3%,2.2% previous
Looking Ahead Economic Data (GMT)
•06:00 Australia Sep Building Approvals (MoM) -2.0% forecast, 6.8% previous
•06:00 Australia Sep Private House Approvals 3.5% previous
Looking Ahead - Events, Other Releases (GMT)
• 03:30 New Zealand RBNZ Gov Orr Speaks
Currency Summaries
EUR/USD: The euro declined on Tuesday as dollar strengthened as the U.S. Federal Reserve kicked off its two-day policy meeting where it was expected to announce it will begin tapering its massive asset purchases put in place at the start of the COVID-19 pandemic . Investors in recent weeks have priced in a wave of tightening from central banks as they bet policymakers are sufficiently concerned about rising inflation to end pandemic-era levels of easing. The dollar index , which measures the greenback against a basket of peer currencies, was up 0.19% at 94.106. Immediate resistance can be seen at 1.1589 (38.2%fib), an upside break can trigger rise towards 1.1611 (9DMA).On the downside, immediate support is seen at 1.1526 (23.6 % fib), a break below could take the pair towards 1.1505 (Lower BB).
GBP/USD: The pound edged lower on Tuesday, hovering around a three-week low, pressured by uncertainty whether the Bank of England will raise interest rates this week. BoE Governor Andrew Bailey has talked of the need to act to contain inflation expectations, with two of the other nine Monetary Policy Committee members voicing similar concerns. Meanwhile, two MPC members say there is little they can do to fix the root cause of accelerating prices: bottlenecks caused by the reopening of the world economy which might fade quickly. Sterling slid 0.4% versus the dollar to $1.3611 at 18.10 GMT, hitting a three-week low. Immediate resistance can be seen at 1.3639 (38.2%fib), an upside break can trigger rise towards 1.3667 (5 DMA).On the downside, immediate support is seen at 1.3563 (23.6%fib), a break below could take the pair towards 1.3547 (Lower BB).
USD/CAD: The Canadian dollar weakened to its lowest level in nearly a week against its U.S. counterpart on Tuesday, as oil prices fell and investors grew cautious ahead of an expected reduction of economic stimulus by the Federal Reserve. The price of oil, one of Canada's major exports, settled 0.2% lower at $83.91 a barrel ahead of weekly U.S. supply reports expected to show a rise in crude inventories. The loonie was trading 0.3% lower at 1.2403 to the greenback, having touched its weakest level since last Wednesday at 1.2424. In October, the currency was up 2.3%, its biggest gain since last November. Immediate resistance can be seen at 1.2432 (50%fib), an upside break can trigger rise towards 1.2480 (61.8%fib).On the downside, immediate support is seen at 1.2377 (38.2%fib), a break below could take the pair towards 1.2311 (23.6%fib).
USD/JPY: The dollar edged higher against the Japanese yen on Tuesday as the Fed kicked off its two-day policy meeting where it was expected to announce it will begin tapering its massive asset purchases put in place at the start of the COVID-19 pandemic. The Fed will release a statement at the end of its two-day meeting on Wednesday, when it is expected to announce the start of tapering its bond-buying program. Markets also are pricing an interest rate hike at the Bank of England meeting on Thursday. The U.S. dollar index, which tracks the greenback against a basket of six currencies, rose 0.181% even as the market has fully priced in a Fed taper announcement .Strong resistance can be seen at 114.29 (23.6%fib), an upside break can trigger rise towards 115.05 (Lower BB).On the downside, immediate support is seen at 113.78(38.2% fib), a break below could take the pair towards 113.36 (50%fib).
Equities Recap
European shares crept up to a record high on Tuesday as a strong outlook from hearing aid maker Demant supported healthcare stocks, although broader gains were stifled by losses in miners and the prospect of major central bank meetings.
UK's benchmark FTSE 100 closed down by 0.19 percent, Germany's Dax ended down by 0.94 percent, France’s CAC finished the day up by 0.49 percent.
Wall Street's main indexes rose on Tuesday to record highs as a strong earnings season continued to lift sentiment for equities, while investors were looking ahead to the outcome of a critical Federal Reserve meeting.
Dow Jones closed up by 0.39% percent, S&P 500 closed up by 0.37 % percent, Nasdaq settled up by 0.34%percent.
Treasuries Recap
U.S. Treasury yields fell and the curve steepened on Tuesday as the market awaited a likely Federal Reserve announcement that it will start tapering its asset purchases, while hoping for clues on seemingly persistent inflation and future interest rate hikes.
The benchmark 10-year yield was last down 2.6 basis points at 1.547%.
Commodities Recap
Gold prices fell on Tuesday as the U.S. dollar and equities gained ahead of a much-awaited U.S. Federal Reserve meeting that could provide a timeline on interest rate hikes amid rising inflationary pressures.
Spot gold was down 0.3% at $1,787.04 per ounce by 01:35 p.m. EDT (1735 GMT). U.S. gold futures settled down 0.4% to $1,789.40.
Oil traded below $85 a barrel on Tuesday, but remained close to a three-year high in choppy trade ahead of weekly U.S. supply reports expected to show a rise in crude inventories as traders also looked toward Thursday's OPEC+ meeting.
U.S. West Texas Intermediate (WTI) crude settled down 14 cents, or 0.2%, to $83.91. Earlier it had dropped more than $1 a barrel. Brent crude settled up 1 cent at $84.72 a barrel, having traded negative for much of the session.