Americas Roundup: Dollar falls for third day running, Gold rises, Wall Street rises to record highs, helped by Wal-Mart, U.S. Treasuries pare gains on Catalan news, Oil rises 2 percent on signs rebalancing underway-October 11th 2017

Market Roundup

• US NFIB Business Optimism Survey Sep, 103, 135.30 previous.

• US Redbook MM w/e, -1.5%, 0.0% previous.

• US Redbook YY w/e, 3.2%, 4.1%.

• CA House Starts, Annualized Sep, 217.1k, forecast 210k, 223.2k previous.

• CA Building Permits MM Aug, -5.5%, forecast -1.0%, -3.5% previous.

• Catalan leader proclaims independence but suspends it pending talks.

Looking Ahead – Economic Data (GMT)

• 05:20 Japan Machinery Orders MM Aug, forecast 1.1%, 8.0% previous

• 05:50 Japan Machinery Orders YY Aug, forecast 0.8%, -7.5% previous

• 05:30 Australia Consumer Sentiment Oct, 2.5% previous

Looking Ahead – Events, Other Releases (GMT)

• 18:50 ECB board member Peter Praet will give speech at SUERF Conference

• 17:10 Fed official Simon Potter speaks at SUERF

• 11:15 Fed’s Charles Evans participates in a discussion, Zurich

• 18:00 Fed’s FOMC minutes from its September policy meeting

• N/A IMF’s Christine Lagarde speaks at Institute of International Finance

Currency Summaries

EUR/USD is likely to find support at 1.1741 levels and currently trading at 1.1815 levels. The pair has made session high at 1.1823 and hit lows at 1.1778 levels. Euro rose sharply against the dollar on Tuesday as Germany rang up its best month for exports in a year in August and expectations grew that the European Central Bank may consider scaling back its asset purchases. The currency's rise this year had lost some momentum in recent days following Catalonia's Oct. 1 referendum to break away from Spain. The euro has fallen more than 3 percent against the dollar over the last month, but underlying economic data has shown resilience. German exports rose 3.1 percent in August, their strongest month in a year, putting Europe's economic engine on track for a solid 2017. The euro gained 0.6 percent to $1.1805, its strongest since Oct. 2, after overnight comments from Sabine Lautenschlaeger, an ECB executive board member, calling for the ECB to roll back asset purchases in 2018.The ECB is expected to decide on Oct. 26 whether to continue bond purchases next year. Signals from policymakers suggest they will opt for lower volumes but also an extension of the scheme, possibly by six or nine months. The euro's strength also came at the expense of the dollar, which has receded from a 10-week high on tensions between the United States and North Korea over the latter's nuclear weapons program.

GBP/USD is supported in the range of 1.3151 levels and currently trading at 1.3208 levels. It reached session high at 1.3222 and dropped to session low at 1.3171 levels. Sterling firmed against a weaker dollar on Tuesday, as forecast-beating British industry data cemented expectations that the Bank of England will raise interest rates for the first time in over a decade at its next policy meeting in November. British factories had their strongest two months of 2017 in July and August, data showed earlier on Tuesday, suggesting the BoE remains on track to raise interest rates soon, though the deficit in trade in goods hit an all-time high. The Office for National Statistics (ONS) said manufacturing output rose by a monthly 0.4 percent in August, faster than a forecast for output to rise 0.2 percent in a poll of economists. Sterling climbed on the data and built on those gains later in the day, dragged up by a euro that was lifted by strong data from Germany, which weighed on the dollar. By 1900 GMT it was up 0.6 percent on the day at $1.3201, leaving it around 1.5 percent higher than its lows at the end of last week, when it recorded its worst performance in a year.

USD/CAD is supported at 1.2460 levels and is trading at 1.2509 levels. It has made session high at 1.2511 and lows at 1.2480 levels. The Canadian dollar strengthened against its U.S. counterpart on Tuesday as oil prices rose and the greenback turned lower against a basket of major currencies. Prices of oil, one of Canada's major exports, were supported by Saudi Arabian export cuts for November and comments from OPEC and trading companies that the market is rebalancing after years of oversupply. U.S. crude prices were up 1.73 percent at $50.44 a barrel. The U.S. dollar broadly fell after stronger-than-expected German trade data boosted the euro. Data showed that the value of Canadian building permits fell 5.5 percent in August, surpassing forecasts for a decline of 1.0 percent. In separate data, seasonally adjusted housing starts rose to 217,118 in September, compared with a revised 225,918 units in August. The Canadian dollar was trading at C$1.2496 to the greenback, or 80.03 U.S. cents, up 0.4 percent. The currency's weakest level of the session was C$1.2555, while it touched its strongest since Thursday at C$1.2495.

USD/JPY is supported around 111.77 levels and currently trading at 112.40 levels. It peaked to hit session high at 112.45 and made session lows at 111.97 levels. The U.S. dollar weakened against the Japanese yen on Tuesday as geopolitical tensions in Spain and North Korea increased demand for safe-haven Japanese yen. Investors were particularly wary on Tuesday as Pyongyang celebrated the founding of its ruling party, a day after Russia and China both called for restraint on North Korea following a Twitter post from U.S. President Donald Trump hinting that military action was on his mind. In Spain, the leader of Catalonia's government called for a reduction in tensions in its standoff with Madrid over a bid in the wealthy northeastern region for independence. Investors were also focused on who is likely to be the next Federal Reserve Chair, after Fed Governor Jerome Powell was reported as cancelling a speech scheduled for Friday. Powell is viewed as a frontrunner for the job along with former governor Kevin Warsh, who is seen as more hawkish. The Fed will release minutes from its September policy meeting on Wednesday.

Equities Recap

European bourses ended the day slightly lower on Tuesday as investors braced themselves for a possible unilateral declaration of independence at the Catalan parliament, which, it is anticipated, would lead to turmoil on Spanish markets and beyond.

UK's benchmark FTSE 100 closed up by 0. 4 percent, the pan-European FTSEurofirst 300 ended the day down by 0.01 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day down by 0.1 percent.

Wall Street touched record intraday highs on Tuesday, helped by a surge in Wal-Mart Stores, while Amazon and technology stocks lost ground investors focused on upcoming quarterly reports.

Dow Jones closed up by 0.31 percent, S&P 500 ended up 0.24 percent, Nasdaq finished the day up by 0.11 percent.

Treasuries Recap

U.S. Treasury prices pared gains on Tuesday after Catalonia's leader proclaimed independence for the region but suspended the effects pending talks, easing some immediate concerns about violent clashes on the issue.

Benchmark 10-year Treasury notes were up 7/32 in price to yield 2.343 percent after falling as low as 2.319 percent.

Commodities Recap

Gold touched its highest in nearly two weeks on Tuesday, supported by a softer dollar and geopolitical tensions in Spain and North Korea, though gains were capped by expectations of another U.S. interest rate increase.

Spot gold was up 0.5 percent at $1,289.81 an ounce by 1:53 p.m. EDT (1753 GMT), having touched its highest since late September at $1,294.25.U.S. gold futures for December delivery settled up 0.7 percent at $1,293.80.

Oil prices rose about 2 percent on Tuesday, supported by Saudi Arabian export cuts in November and comments from OPEC and trading companies that the market is rebalancing after years of oversupply.

Brent crude settled up 82 cents, or 1.5 percent, at $56.61 a barrel while U.S. crude rose $1.34, or 2.7 percent, to settle at $50.92.

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