Sample Category Title

Daily Pivots: (S1) 1.0717; (P) 1.0759; (R1) 1.0786; More....

Intraday bias in EUR/CHF remains on the downside, as fall form 1.0936 in progress for retesting 1.0694 low. Decisive break there will resume whole decline from 1.1149. On the upside, above 1.0800 minor resistance will turn intraday bias neutral first. But risk will stay on the downside as long as 1.0860 resistance holds.

In the bigger picture, medium term outlook remains mixed as EUR/CHF is still failing to get rid of 55 week EMA cleanly. On the upside, break of 1.1149 will resume the whole rise from 1.0505 (2020 low). On the downside, break of 1.0694 will revive some medium term bearishness for 1.0505 and below.

The price of crude oil jumped sharply in the overnight session after the latest OPEC+ meeting. Brent, the global benchmark, rose to a seven-year high of $81.71 while the West Texas Intermediate (WTI) rose to $78. Natural gas prices also jumped by more than 3%. In a statement, OPEC and its allies said that they will continue adding 400k barrels of oil per day until the end of 2022. This gradual pace of increase was significantly lower than Joe Biden had requested. According to the Financial Times, Saudi Arabia said that oil prices had not risen parabolically like other commodities to warrant a change in production.

Wall Street stocks declined sharply in the overnight session as investors reflected on the rising oil prices and the potential for higher inflation. The Dow Jones index declined by more than 375 points while the Nasdaq 100 and S&P 500 indices crashed by more than 2.5% and 1.5%, respectively. Analysts expect that higher inflation will push the Federal Reserve to hike interest rates faster than expected. Stocks also fell as investors continued focusing on Evergrande, the embattled Chinese developer. The company halted its stock on Monday ahead of a major transaction. Meanwhile, the debt ceiling crisis has also contributed to the weak stocks.

Facebook, the biggest social media company in the world, was in the spotlight in the overnight session as its stock price crashed by more than 5%. This decline was triggered by a whistleblower who accused the company of prioritizing profits over safety. The whistleblower will testify in Senate later today. Meanwhile, the stock also declined after the company’s key assets like Instagram, Whatsapp, and Facebook experienced a major outage that lasted a few hours. Later today, the key events to watch will be the flash services and composite PMI numbers.

EURUSD

The EURUSD was little changed in the overnight session as investors reflected on the rising bond yields in the United States. The pair is trading at 1.1616, which is slightly below yesterday’s high of 1.1640. On the hourly chart, the pair is a few pips above the 25-day moving average while the MACD is slightly above the neutral level. It has formed what looks like an inverted head and shoulders pattern. Therefore, the pair will likely keep rising as bulls target the key resistance level at 1.1650.

XBRUSD

The XBRUSD pair rallied in the overnight session after the latest OPEC+ meeting. The pair surged to a high of 82.40. On the daily chart, it is above the previous bullish flag pattern shown in yellow. It also rallied above the short and longer-term moving averages while the MACD has continued rising. Therefore, the path of the least resistance for the price is higher, with the next key resistance being at 45.

BTCUSD

The BTCUSD pair held steady as the US dollar index retreated. The pair is trading at 49,060, which was slightly below the highest point during the weekend. The price has jumped above the 25-day and 50-day moving averages while the MACD is above the neutral level. The Relative Vigor Index (RVI) has been falling while the pair has formed a bullish flag pattern. Therefore, the pair will likely keep rising in the near term.

Daily Pivots: (S1) 1.1592; (P) 1.1616; (R1) 1.1644; More...

Intraday bias in EUR/USD remains neutral for consolidation above 1.1561 temporary low. Upside of recovery should be limited by 1.1682 resistance to bring fall resumption. On the downside, break of 1.1561 will target 1.1289 medium term fibonacci level. Nevertheless, sustained break of 1.1682 will bring stronger rebound back towards 1.1908 resistance.

In the bigger picture, sustained break of 1.1602 will argue that rise from 1.0635 (2020 low) has completed at 1.2348. Deeper fall would be seen to 61.8% retracement of 1.0635 to 1.2348 at 1.1289. Note also that rejection by 55 week EMA (1.1830) also carries medium term bearish implication. Firm break of 1.1289 will pave the way to retest 1.0635 low. On the upside, though, break of 1.1908 resistance will revive medium term bullishness and turn focus back to 1.2348 high.

Daily Pivots: (S1) 1.3547; (P) 1.3594; (R1) 1.3655; More...

With breach of 1.3608 support turned resistance, a short term bottom could be formed at 1.3410 already. Intraday bias is mildly on the upside for 1.3749 resistance first, which is close to 55 day EMA (now at 1.3745). On the downside, though, below 1.3530 minor support will retain near term bearishness, and turn bias back to the downside for 1.3410 low. Firm break there will extend the fall from 1.4248 and target 1.3164 medium term fibonacci level next.

In the bigger picture, fall from 1.4248 is at least a correction to the up trend from 1.1409 (2020 low). Such correction could extend to 38.2% retracement of 1.1409 to 1.4248 at 1.3164 before completion. However, considering the rejection by 1.4376 key resistance (2018 high), sustained trading below 1.3164 will argue that it's indeed a bearish trend reversal and would target 61.8% retracement at 1.2493. Nevertheless, break of 1.3912 resistance will revive medium term bullishness and target 1.4248/4376 resistance zone again.

Daily Pivots: (S1) 0.9214; (P) 0.9262; (R1) 0.9294; More....

Intraday bias in USD/CHF remains neutral and further rise is still in favor as long a s0.9214 support holds. On the upside, break of 0.9367 will resume the rise from 0.8925 to 0.9471 key resistance next. On the downside, however, break of 0.9214 will turn bias back to the downside for 0.9017 support again.

In the bigger picture, the strong rally above 55 week EMA (now at 0.9188) now tilts favor to the case of bullish trend reversal. That is, decline from 1.3042 (2016 high) is probably completed at 0.8756 already. Sustained break of 0.9471 resistance should confirm this case and pave the way to retest 1.0342 ahead. However, rejection by 0.9471 will mix up the outlook again and retain some medium term bearishness.

Daily Pivots: (S1) 110.73; (P) 111.02; (R1) 111.20; More...

USD/JPY is staying in consolidation from 112.07 and intraday bias remains neutral. Deeper retreat cannot be ruled out but downside should be contained by 110.44 support to bring another rally. On the upside, above 112.07 will extend larger rise to 61.8% projection of 102.58 to 111.65 from 109.11 at 114.71 next. However, break of 110.44 will dampen the bullish case and turn focus back to 109.11 support.

In the bigger picture, break of 111.71 resistance suggests that the whole corrective decline from 118.65 (2016 high) has completed at 101.18 (2020 low) already. Medium term bullishness is also affirmed as USD/JPY stays well above 55 week EMA (now at 108.60). Sustained trading above 111.71 will affirm this bullish case. Rise from 101.18 could then be resuming whole rally from 98.97 (2016 low) through 118.65. This will now be the preferred case as long as 108.71 support holds.

Daily Pivots: (S1) 1.2547; (P) 1.2600; (R1) 1.2643; More...

USD/CAD's decline form 1.2891, as the third leg of the pattern from 1.2947, could still continue. Below 1.2556 will target 1.2492 support and possibly below. But overall, with 1.2421 support intact, rise from 1.2005 should still be in progress for another rise through 1.2947 at a later stage. Break of 1.2773 resistance will turn bias back to the upside for retesting 1.2947 high.

In the bigger picture, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). It should have completed after hitting 1.2061 (2017 low) and 50% retracement of 0.9406 to 1.4689 at 1.2048. Sustained break of 38.2% retracement of 1.4667 to 1.2005 at 1.3022 will pave the way to 61.8% retracement at 1.3650 and above. Overall, medium term outlook remains neutral at worst with 1.2048/61 support zone intact.

Market movers today

• Final Service PMIs for September will be released across a range of European and Scandinavian countries as well as the US ISM services index.
• Markets will also keep an eye on any remarks from ECB President Lagarde when she speaks at 17:00 CET.
• We expect Reserve Bank of New Zealand (RBNZ) to hike rates by 25bp in its meeting early Wednesday morning, market prices around 85% probability of a hike.

The 60 second overview

OPEC+: The OPEC+ decided to stick to its July decision to increase oil production by 400,000 barrels per day, even though markets had expected an increase given the recent rise energy prices. This was not the case, however, and it supported Brent prices above USD 81/bbl after the meeting, and for example the Saudi Aramco estimates that the recent rise in natural gas prices has already supported oil demand by around 500,000 barrels per day. From now on the outlook remains uncertain, and the limited supply adds to the inflationary pressures created by the higher energy prices.

RBA: The Reserve Bank of Australia held their monetary policy unchanged in its Tuesday morning meeting, as widely expected. At their meeting last month, RBA stuck with the plan to taper asset purchases in September but also extended the QE program until at least February 2022 as the delta variant has delayed the recovery of the Australian economy. The central bank expects reopening this and next month to support a rebound in GDP growth, but it will take until H2 2022 for the Australian economy to reach pre-delta path of growth. While RBA seemed somewhat concerned about the continuing rapid rise in housing prices, the overall inflation pressures still appear muted. While market prices in the first 25bp hike already by late 2022, RBA continues to expect no hikes until 2024, and therefore we expect little support for AUD even if the central bank turns more hawkish after the reopening. Markets were little affected by the release, AUD/USD fell slightly.

Chinese property sector: Evergrande's shares remain suspended from trading, as no further news has been released around the possible sale of its property management unit or the USD 260m debt guarantee that was reportedly due yesterday. Another property developer, Fantasia, missed payment on USD 205m bond which matured yesterday, adding to the overall stress around the sector. On its own, Fantasia is still clearly a smaller developer compared to Evergrande, as it is only China's 60th largest based on its Q1 sales.

Equities: Global equities kicked off the week in red. Risk appetite took a beat as well, visible in the cyclical value trade changing to a defensive/value trade. Energy fared the best, along with utilities and consumer staples. The FANMAG complex, medtech and semis were hit hard, which brought Nasdaq -2.1% lower (back to the June levels). S&P a bit better off, down -1.3%, Dow -0.9% and Russell 2000 -1.1%. Implied volatility slightly higher with VIX at 23. The negative tone is mostly continuing in Asia this morning with Japan dropping -2% and thus nudging at correction territory. Optimism is creeping back in the US though, with futures slightly higher.

FI: Yields ended higher despite the sour risk sentiment with inflation swaps also slightly lower as we are heading into a pick-up in issuance this week while at the same time, ECB has started its 'moderately lower' purchase pace. The coming two weeks will see even higher supply with the net cash flow of more than -50bn in the coming three weeks in total. In SSA space, ESM finalised their funding for the year yesterday with a strong 3y bond supply.

FX: Our bearish NOK view has faced a challenging start to the week with OPEC+ sticking to its 400K/bbl tapering path supporting a further rise in oil prices. Compared with EUR/NOK, EUR/SEK has remained relatively stable within the 10.10-10.20 range.

Credit: The last week's sell-off in particularly the HY segment of credit continued yesterday. Xover widened a further 5bp, which took it to 259bp and Main widened almost 1bp to close in 51bp. HY bonds widened 4-5bp on average while IG held up better and closed unchanged.

Nordic macro

Sweden: Riksbank buys SEK 1.5bn munis, 2bn T-bills, 5bn covered and 1bn linkers during the week starting Tuesday. Debt Office issues 2bn 1059 and 1.5bn 1056 on Wednesday and Kommuninvest also issues different maturities that day.

A triplet of August indicators - PVI, GDP and consumption - is released on Wednesday. Riksbank's Jansson speaks about the economy Thursday and the Debt Office releases the September borrowing requirement that day too.

General trend

• Equity indices generally pare losses [particularly HK].
• TECH lags after Nasdaq drop.
• Energy cos. trade higher after recent rise in crude oil amid OPEC.
• Hang Seng pares over 1% drop [TECH and Property indices are off the lows].
• News related to HK/CN property developers remains in focus [Fantasia, Sinic Holdings]; Evergrande asset sale uncertainty remains; Various property developers’ USD bonds decline amid Fantasia news.
• Nikkei has dropped by >3% [currently off of the lows]; Heavyweights decline (Fast Retailing and Softbank Group); Topix Marine Transportation index extends drop; Japan’s new PM commented on tax on investments.
• S&P ASX 200 Energy index rises, Resources and Financial indices pare declines.
• Rise seen in USD index after prior drop.
• Japan sells 10-yr JGBs at lowest BTC since 2015, yield rose at the auction.
• Shanghai markets are closed for holiday from Oct 1-7 (Fri-Thurs).
• US ISM Services data due later today.

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened 0.0%.
• (AU) China said to be still accepting coal deliveries from Australia despite 'import ban' - FT.
• (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 0.10%; AS EXPECTED; Maintains weekly bond purchases at
• A$4.0B.
• (AU) Australia Aug Trade Balance (A$): 15.1B v 10.7Be (record surplus).
• (NZ) New Zealand Q3 NZIER Business Confidence: -11% v 7% prior; Capacity Utilization: 96.1% v 92.8% prior.
• (AU) Australia Sept AIG Construction Index: 53.3 v 38.4 prior.

Japan

• Nikkei 225 opened -1.4%.
• (JP) Japan MoF sells ¥2.6T v ¥2.6T indicated in 0.1% 10-year JGBs; avg yield 0.0490% v 0.0230% prior; bid to cover: 2.45x v 3.36x prior (lowest BTC since 2015).
• (JP) Said that Japan PM Kishida will appoint Miyazawa as Tax Policy Chief – Nikkei.
• (JP) JAPAN SEPT TOKYO CPI Y/Y: +0.3% V -0.1%E; CPI (EX-FRESH FOOD) Y/Y: 0.1% V 0.2%E.
• (JP) Japan Sept Final PMI Services: 47.8 v 47.4 prelim (confirms 20th month of contraction).
• (JP) Japan PM Kishida: Need to think about tax on investments [comments from Oct 4th].
• (JP) Japan PM Kishida: Spoke with Biden he reaffirmed security treaty commitments, they agreed to meet in person soon.
• (JP) Japan Fin Min Suzuki: Affirms goal of primary balance surplus by FY25; Must provide economic support for suffering businesses without interruption.
• (JP) Japan Econ Min Yamagiwa: Wants to unveil new economic package before end of year; Will be nimble in deploying macroeconomic measures.
• (JP) Japan METI: Current Administration will continue prior admin's ideas on nuclear power.
• (JP) Japan Official Kaneko says to follow Suga mobile phone policy - Japanese press.
• (JP) Japan Chief Cabinet Sec Matsuno: Markets set prices, no comment on market decline today.

Korea

• Kospi opened -0.7%.
• (KR) South Korea sells 30-year bonds: avg yield 2.205% v 1.970% prior (Aug 30th).
• (KR) North Korea reports another missile test (4th time in the last few weeks) of an anti-aircraft weapon – press.

China/Hong Kong

• Hang Seng opened -0.1%; Shanghai Composite closed for holiday.
• (CN) China said to shelve ambitions for an anti sanctions law in Hong Kong after executive from Chinese and HK financials raised concerns that it would put them in a difficult situation – Press.
• (HK) Hong Kong Chief Exec Lam: China has no timetable on Hong Kong anti-sanction law.
• (CN) China Foreign Min: China will take all necessary measures to resolutely crush any Taiwan independence plots (US morning).
• Fantasia [1777.HK]: Misses $206M principal payment on 2021 notes due Oct 4th; shares halted until further notice.
• Fitch downgrades property developer Sinic to C from CCC.
• (HK) Macau said to cancel Saturday public casino law consultation due to coronavirus.
• (CN) China Banking and Insurance Regulatory Commission (CBIRC): To ban loans for speculating on luxury goods such as Moutai; places ban on loans to speculate in commodities and certain luxury goods; Urged banks to ensure funding the demand of coal and steel companies.
• (CN) US National Sec Advisor Sullivan and China Official Yang Jiechi to hold talks in Switzerland - SCMP.

Other

• (TW) China again sent 56 warplanes into Taiwan air defense zone Monday, Taiwan called on China to stop "irresponsible provocative actions".
• (SG) Singapore Sept PMI (whole economy): 53.8 v 52.1 prior (10th consecutive expansion).

North America

• (CN) US Trade Rep Tai: Next steps on China trade will depend on how talks go; Much depends on Chinese response; Will raise concerns about larger industrial policy issues;
• At this point we have not had talks with Chinese officials on intervening issues that have prevented them from meeting 'Phase 1' commitments; Will look at all available tools to address US concerns, including Section 301 probes.
• (US) California Gov Newsom declares state of emergency in Orange County due to oil spill off the coast.

Europe

• (IE) Ireland Sept PMI Services: 63.7 v 63.7 prior (7th consecutive month of expansion).

Levels as of 01:20 ET

• Nikkei 225, -2.5%, ASX 200 -0.4% , Hang Seng flat; Shanghai Composite closed ; Kospi -2%.
• Equity S&P500 Futures: +0.1%; Nasdaq100 +0.2%, Dax flat; FTSE100 +0.4%.
• EUR 1.1622-1.1595 ; JPY 111.20-110.87 ; AUD 0.7296-0.7259 ;NZD 0.6975-0.6937.
• Gold -0.4% at $1,760/oz; Crude Oil +0.1% at $77.72/brl; Copper -0.5% at $4.2145/lb.

Daily Pivots: (S1) 0.7259; (P) 0.7281; (R1) 0.7312; More...

Intraday bias in AUD/USD remains neutral and further fall is mildly in favor with 0.7315 minor resistance intact. n the downside, below 0.7169 will target a test on 0.7105 low. Firm break there will resume whole decline from 0.8006 for 0.6991 support next. On the upside, above 0.7315 minor resistance will turn bias back to the upside for 0.7477 resistance instead.

In the bigger picture, with 0.6991 cluster support (38.2% retracement of 0.5506 to 0.8006 at 0.7051) intact, we're seeing price action from 0.8006 as a correction only. That is, up trend from 0.5506 low would resume after the correction completes. In that case, main focus will be 0.8135 key resistance (2018 high). Sustained break there will carry larger bullish implications. However, sustained break of 0.6991 will argue that the whole medium term trend has indeed reversed.