October 19, 2018
Pulse of the Market
· Chances of a Fed rate hike at its meeting in December were priced in at 83.4%
· Data showed that Japanese exports fell for the first time since 2016 in September
· The pound was lower as UK Prime Minister Theresa May faced political tension from her party
· The Canadian dollar drifted lower in yesterday’s session as oil prices slipped
|The U.S dollar was higher yesterday as bond yields rose and minutes from the Federal Reserve’s September meeting supported a rate increase in December. The U.S. dollar index, which tracks the greenback against a basket of other currencies, rose 0.13% to 95.47. Treasury yields were higher on Thursday, with the United States 10-Year note near a one-week high of 3.211% and the 2-year note at a 10-year high. The rise in bond yields came after hawkish Fed minutes showed the central bank’s conviction in gradually increasing interest rates in December and beyond. Chances of a Fed rate hike at its meeting in December were priced in at 83.4%, according to Fed Rate Monitor Tool. The dollar rose against the yen, with USD/JPY decreasing 0.12% to 112.53. Data overnight showed that Japanese exports fell for the first time since 2016 in September, adding to concerns over the impact of the U.S.-China trade war on global growth. Italy’s bonds plunged Thursday just hours after the Treasury successfully conducted a debt-exchange operation as the European Union’s executive body dispatched a letter to the nation’s government and investors sharpened their focus on budget concerns. The euro also fell. The pound has dipped as worries escalate regarding Brexit negotiations reaching a deadlock. Sterling was also negatively impacted by UK retail sales data which showed a decline in consumer spending. Experts caution that the exchange rate could stay “on the back foot” over the weekend. The Office for National Statistics (ONS) has revealed UK retail sales growth contracted 0.8 per cent last month. This decline in sales growth was notably larger than the 0.4 per cent contraction that had been forecast by economists and appeared mostly driven by a sharp fall in food sales. The Canadian dollar drifted lower against its key counterparts yesterday, as oil prices slipped on demand worries following an overnight data showing a large build in US crude inventories last week. Data from the US Energy Information Administration showed that US crude oil inventories rose by 6.5 million barrels last week. That marked the fourth straight weekly build and was almost triple what analysts had forecast. In the previous week ending Oct. 5 also, there was a large build of 6.0 million barrels.
|02:00||China Surveyed Jobless Rate (SEP)||Medium||4.9%||5.0%|
|02:00||China Gross Domestic Product (YoY) (3Q)||High||6.5%||6.6%||6.7%|
|02:00||China Retail Sales (YoY) (SEP)||Medium||9.2%||9.0%||9.0%|
|02:00||China Industrial Production (YoY) (SEP)||Medium||5.8%||6.0%||6.1%|
|06:35||BOJ Kuroda speaks in Tokyo||High|
|08:30||U.K Public Sector Net Borrowing (SEP)||Medium||4.6b||5.9b|
|08:30||U.K Central Government NCR (SEP)||Medium||5.2b|
|08:30||U.K Public Finances (PSNCR) (Pounds) (SEP)||Medium||3.1b|
|12:30||Canada Retail Sales (MoM) (AUG)||Medium||0.4%||0.3%|
|12:30||Canada Consumer Price Index (YoY) (SEP)||High||2.7%||2.8%|
|14:00||U.S Existing Home Sales (MoM) (SEP)||Medium||-0.9%||0.0%|
|15:30||BOE Governor Carney Speaks in New York||High|
The single currency hovered near a one-week low against the dollar today as the European Commission’s criticism of Italy’s populist budget sparked fresh concerns about political tensions in the common currency zone. The euro was relatively flat at $1.1454 on Friday, having fallen 0.4 percent yesterday, its lowest level since Oct. 9. Overall, the EUR/USD traded with a low of 1.1447 and a high of 1.1525 before closing the day around 1.1451 in the New York session.
The Japanese Yen slipped against its most major counterparts in yesterday’s trading session, after the Bank of Japan Governor Haruhiko Kuroda offered an upbeat view on Japanese economy and continued to back low rate strategy to attain inflation goal. Japan’s economy is expected to continue expanding moderately. Overall, the USD/JPY traded with a low of 111.93 and a high of 112.71 before closing the day around 112.18 in the U.S session.
The British Pound was sharply lower yesterday. On the release front, British retail sales dropped 0.8%, weaker than the estimate of -0.4%. In the U.S, key indicators beat their estimate. The Philly Fed Manufacturing Index dropped to 22.2, above the estimate of 19.7 points. On the employment front, jobless claims dropped to 210 thousand. Overall, the GBP/USD traded with a low of 1.3014 and a high of 1.3129 before closing the day at 1.3015 in the New York session.
The Canadian Dollar weakened to a five-week low against its U.S counterpart yesterday as the greenback broadly climbed and oil prices added to a sharp decline the previous day. The decline for the Loonie was driven by strengthening of the U.S dollar rather than anything Canada-specific. The U.S dollar rose to a nine-day high. Overall, USD/CAD traded with a low of 1.3016 and a high of 1.3085 before closing the day at 1.3082 in the New York session.
The Australian Dollar ended yesterday’s trading session lower as risk aversion took over the market. On the local data front yesterday Australian employment report for the month of September showed the economy added a total of 5.6K new jobs, missing the market’s expectations of 15.0K. However, full-time employment was up by 20.3K, with a decline in part-time jobs. Overall, AUD/USD traded with a low of 0.7095 and a high of 0.7149 before closing the day at 0.7097 in the New York session.
EUR/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 38 and lies below the neutral zone. In general, the pair has lost 0.81%.
Currently, GBP/JPY is trading below 14 and above 50, 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 46 reading and lies below the neutral zone. On the whole, the pair has lost 1.14%.
Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 40 reading and lies below the neutral region. In general, the pair has lost 0.54%.
This cross is currently trading below 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is issuing a bearish signal. The Relative Strength Index is above 40 and lies below the neutral region. On the whole, the pair has gained 0.34%.
This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is indicating a bullish tone. The Relative Strength Index is above 57 and lies above the neutral region. In general, the pair has lost 0.70%.
|FOREX Closing Prices for October 18, 2018|
|Daily Pivot Points|
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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