U.S. Markets Update on October 9th, 2019

U.S. Markets Update on October 9th, 2019

Dollar slips versus Yen as trade tensions weigh, Wall street dips, gold rises, Oil falls on U.S.-China talks - October 9th, 2019.

Market Roundup

• Safe havens yen, gold shine in flight to safety

• Brexit tensions hit the pound

• Price of U.S. oil decreases 0.2%

• China tones down expectations ahead of trade talks – SCMP

•  Washington expands blacklist on Chinese firms

• FOMC minutes due at 1800 GMT Wednesday

• Canada Sep Housing Starts 221.2K, 217.0K forecast, 226.9K previous

• US Sep Core PPI (MoM) -0.3%, 0.2% forecast 0.3% previous

• US Sep Core PPI (YoY) 2.0%,2.3% forecast, 2.3% previous

• US Sep PPI (YoY) 1.4% , 1.8% forecast  1.8% previous

• US Sep PPI (MoM) -0.3%, 0.1% forecast ,0.1% previous

• Canada Aug Building Permits (MoM) 6.1%, 2.3% forecast 3.2% previous

• US Redbook (MoM) -1.1%,-1.1% previous

• US Redbook (YoY) 5.5%, 5.8%  previous

Looking Ahead - Economic Data (GMT)

• 23:30 Australia Oct Westpac Consumer Sentiment -1.7% previous

• 06:00 Japan Machine Tool Orders (YoY) -37.1% previous

Looking Ahead - Events, Other Releases (GMT)

• 15:00 US Fed Chair Powell Speech

• 15:00 US FOMC Member George Speech

• 18:00   US FOMC Meeting Minutes

Currency Summaries

EUR/USD: The euro declined against the U.S. dollar on Tuesday, as   concerns over China-U.S. trade talks and escalating tensions between London and Brussels sparked investors flight to greenback. On Monday, U.S. and Chinese deputy trade negotiators launched two days of talks aimed at paving the way for the first minister-level negotiations in months on Thursday and Friday. The euro was down 0.12 percent at $1.0957. An index that tracks the dollar versus a basket of six major currencies was down 0.14 at 99.13. Immediate resistance can be seen at 1.0997 (21 DMA), an upside break can trigger rise towards 1.1052 (50 DMA).On the downside, immediate support is seen at 1.0943 (9 DMA), a break below could take the pair towards 1.2900 (Psychological level).

GBP/USD: The British pound declined against dollar on Tuesday, as concerns that, Brexit talks could breaking down weighed on British pound. Britain is due to leave the bloc on Oct. 31, there is little sign London and Brussels can overcome their divisions, and both sides are jostling to avoid blame for a delay or a disorderly no-deal Brexit. By 2030 GMT, the pound extended falls to touch its monthly low of $1.2217, down 0.58 percent. Immediate resistance can be seen at 1.2298 (9 DMA), an upside break can trigger rise towards 1.2372 (21 DMA).On the downside, immediate support is seen at 1.2200 (Daily low), a break below could take the pair towards 1.2154 (Lower BB).

USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Tuesday as investors worried that trade talks this week between the United States and China would do little to help the global growth outlook. The price of oil, one of Canada's major exports, slid on dampened hopes for a U.S.-China trade deal, although unrest in Iraq and Ecuador lent some support to crude prices. U.S. crude oil futures settled 0.2% lower at $56.23 a barrel. At  (2034 GMT), the Canadian dollar was trading 0.10% lower at 1.3322 to the greenback.Immediate resistance can be seen at 1.3363 (Higher BB), an upside break can trigger rise towards 1.3400 (Psychological level).On the downside, immediate support is seen at 1.3273 (Ichimoku Cloud Top), a break below could take the pair towards 1.3247  (100 DMA).

USD/JPY: The U.S. dollar dipped against the yen on Tuesday, as renewed trade-related worries and as an unexpected drop in U.S. producer inflation supported the case for the Federal Reserve room to cut interest rates again later this month. U.S. producer prices unexpectedly fell in September, leading to the smallest annual increase in nearly three years, which could give the Federal Reserve room to cut interest rates again later this month. Investors are waiting for the release of the U.S. Federal Open Market Committee’s minutes from its September meeting, due on Wednesday, for clues to whether the Fed will cut rates. Strong resistance can be seen at 107.66 (100 DMA), an upside break can trigger rise towards 108.00 (Psychological level).On the downside, immediate support is seen at 106.90 (50 DMA), a break below could take the pair towards 106.55 (Lower BB).

Equities Recap

  • European shares fell on Tuesday, as an escalation in U.S.-China trade tensions and Brexit worries along with disappointing corporate news dented sentiment.
  • The UK's benchmark FTSE 100 closed down by 0.76 percent, Germany's Dax ended up by 1.05 percent, and France’s CAC finished the up by 1.18 percent.
  • U.S. stocks tumbled on Tuesday as optimism faded over the outcome of trade talks after a report the Trump administration was moving ahead with efforts to limit capital flows to China and the inclusion of Chinese firms to a blacklist.
  • Dow Jones closed down by 1.19 percent, S&P 500 ended down 1.56 percent, Nasdaq finished the day down  by 1.67 percent.

Treasuries Recap

  • U.S. Treasury yields fell Tuesday morning as expectations of a Federal Reserve interest rate cut in October rose following big declines in producer price index data and an intensification of trade tensions with China.
  • The two-year yield, which is a proxy for investor expectations of changes in interest-rate policy, was last down 2.8 basis points to 1.436%. The benchmark 10-year yield was last 3.1 basis points lower to 1.522%

Commodities Recap

  • Gold prices gained on Tuesday, bouncing off a one-week low touched earlier in the session, as uncertainties over U.S.-China trade talks and Brexit drove a decline in stock markets and prompted investors to seek refuge in the safe-haven metal.
  • Spot gold was up 0.4% at $1,499.67 per ounce at 01:37 p.m. EDT (1737 GMT) after rising as much as 1% to $1,508.31 earlier in the session.U.S. gold futures settled mostly unchanged at $1,503.9 an ounce.
  • Oil prices fell on Tuesday, as Washington’s blacklisting of more Chinese companies dampened hopes for a trade deal between the two countries, though unrest in Iraq and Ecuador lent some support to crude prices.
  • Both Brent crude   and West Texas Intermediate (WTI)   crude had risen by more than 1% earlier in the day, but by 1327 GMT Brent was down 64 cents, or 1.1%, at $57.71 a barrel and WTI   was down 67 cents, or 1.3%, at $52.08.

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