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Global treasury yields follow US higher, Australia lags in momentum
Global treasury yields follow the strong rally in US today. Japan 10 year JGB yield rises 0.0214 to 0.162. Let's remember that BoJ "allows" it to fluctuate between -0.1% and 0.1%. It's now way above the top of the band.
German 10 year bund yield is currently up 0.065 at 0.542, back above 0.5 handle. There was a blip earlier this week on Italian budget concerns. But it seems that the new budget deficit targets are relatively well received. There is prospect of heading towards 0.6% handle even though it's still bit far.
Australia 10 year yield also rises 0.067 to 2.718. But judging from the chart, momentum is relatively weaker than the others. That could explain the sluggishness of Aussie.
Japanese Yen Reverses Its Losses In The Asian Session
For the 24 hours to 23:00 GMT, the USD rose 0.72% against the JPY and closed at 114.47.
In the Asian session, at GMT0300, the pair is trading at 114.37, with the USD trading 0.09% lower against the JPY from yesterday’s close.
The pair is expected to find support at 113.82, and a fall through could take it to the next support level of 113.28. The pair is expected to find its first resistance at 114.73, and a rise through could take it to the next resistance level of 115.10.
In absence of key economic releases in Japan today, investor sentiment would be determined by global macroeconomic events.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Swiss Franc Trading Weaker In The Asian Session
For the 24 hours to 23:00 GMT, the USD rose 0.74% against the CHF and closed at 0.9912.
In the Asian session, at GMT0300, the pair is trading at 0.9920, with the USD trading 0.08% higher against the CHF from yesterday’s close.
The pair is expected to find support at 0.9861, and a fall through could take it to the next support level of 0.9801. The pair is expected to find its first resistance at 0.9953, and a rise through could take it to the next resistance level of 0.9985.
With no macroeconomic releases in Switzerland today, investors would look forward to global macroeconomic releases for further directions.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Loonie Extends Its Losses In The Morning Session
For the 24 hours to 23:00 GMT, the USD rose 0.39% against the CAD and closed at 1.2873.
In the Asian session, at GMT0300, the pair is trading at 1.2882, with the USD trading 0.07% higher against the CAD from yesterday’s close.
The pair is expected to find support at 1.2831, and a fall through could take it to the next support level of 1.2780. The pair is expected to find its first resistance at 1.2910, and a rise through could take it to the next resistance level of 1.2938.
Trading trend in the Loonie today is expected to be determined by Canada’s Ivey purchasing managers index for September, set to be released later in the day.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Australia’s Trade Surplus Unexpectedly Widened In August
For the 24 hours to 23:00 GMT, the AUD declined 1.17% against the USD and closed at 0.7104.
LME Copper prices rose 0.2% or $1.0/MT to $6275.0/MT. Aluminium prices rose 4.2% or $86.5/MT to $2166.5/MT.
In the Asian session, at GMT0300, the pair is trading at 0.7093, with the AUD trading 0.15% lower against the USD from yesterday's close.
Overnight data showed that Australia's seasonally adjusted trade surplus unexpectedly widened to A$1604.0 million in August, following a revised surplus of A$1548.00mn in the previous month. Furthermore, the CBA services PMI climbed to a level of 52.2 in September, compared to a reading of 51.8 in the preceding month.
The pair is expected to find support at 0.7057, and a fall through could take it to the next support level of 0.7021. The pair is expected to find its first resistance at 0.7163, and a rise through could take it to the next resistance level of 0.7233.
Moving ahead, investors would keep an eye on Australia's AiG performance of construction index for September and retail sales data for August, scheduled to release overnight.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
Gold: Yellow Metal Trading On A Weaker Footing In The Morning Session
For the 24 hours to 23:00 GMT, Gold declined 0.52% against the USD and closed at USD1202.00 per ounce, amid broad strength in US dollar.
In the Asian session, at GMT0300, the pair is trading at 1200.60, with gold trading 0.12% lower against the USD from yesterday’s close.
The pair is expected to find support at 1196.30, and a fall through could take it to the next support level of 1192.00. The pair is expected to find its first resistance at 1208.60, and a rise through could take it to the next resistance level of 1216.60.
The yellow metal is trading below its 20 Hr and 50 Hr moving averages.
Silver: White Metal Trading Lower In The Asian Session
For the 24 hours to 23:00 GMT, Silver declined 0.54% against the USD and closed at USD14.67 per ounce, tracking losses in gold prices.
In the Asian session, at GMT0300, the pair is trading at 14.62, with silver trading 0.31% lower against the USD from yesterday’s close.
The pair is expected to find support at 14.53, and a fall through could take it to the next support level of 14.44. The pair is expected to find its first resistance at 14.78, and a rise through could take it to the next resistance level of 14.94.
The white metal is trading below its 20 Hr and 50 Hr moving averages.
Crude Oil: Oil Trading A Tad Higher In The Asian Session
For the 24 hours to 23:00 GMT, Crude Oil rose 1.37% against the USD and closed at USD76.23 per barrel, amid prospects of decline in Iranian oil exports due to looming US sanctions.
Meanwhile, the US Energy Information Administration reported that crude oil inventories rose by 8.0 million barrels in the week ended 28 September 2018.
In the Asian session, at GMT0300, the pair is trading at 76.25, with oil trading slightly higher against the USD from yesterday’s close.
The pair is expected to find support at 74.73, and a fall through could take it to the next support level of 73.22. The pair is expected to find its first resistance at 77.33, and a rise through could take it to the next resistance level of 78.42.
Crude oil is trading above its 20 Hr and 50 Hr moving averages
World Bank downgrades East Asia and Pacific growth forecasts
The World Bank downgraded East Asia and Pacific growth forecast in 2018 from 6.6% to 6.3%. It also projected growth to further slow to 6.0% in 2019, down graded from 6.1%. For China, growth is projected to slow to 6.5% in 2018, unrevised. But China's growth projection in 2019 was revised lower from 6.3% to 6.2%.
Sudhir Shetty, World Bank chief economist for East Asia and Pacific region, noted that "the main risks to continued robust growth include an escalation in protectionism, heightened financial market turbulence, and their interaction with domestic fiscal and financial vulnerabilities".
And, he added, "in this context of rising risks, developing EAP economies need to utilize the full range of available macroeconomic, prudential, and structural policies to smooth external shocks and raise potential growth rates."
EUR/JPY Daily Outlook
Daily Pivots: (S1) 130.97; (P) 131.47; (R1) 131.99; More....
AT this point, EUR/JPY is holding above 130.86 resistance turned support and intraday bias remains neutral. On the upside, break of 133.12 will resume the rise from 124.89 and target 137.49 high. However, firm break of 130.86 will argue that whole rise from 124.89 has completed. Deeper fall should then be seen back towards 127.85 support.
In the bigger picture, current development suggests that EUR/JPY has defended key support level of 124.08 key resistance turned support. And, the larger up trend from 109.03 (2016 low) is still in progress. Firm break of 137.49 will target 141.04/149.76 resistance zone next. This will now be the preferred case as long as 127.85 near term support holds.
