America's Roundup: Dollar falls on CPI miss, signs of U.S.-China trade reset, Wall Street gains, Gold slips, Oil drops 2 pct from 4-mth highs as economic concerns threaten demand-September 14th, 2018

Market Roundup

• US Aug Core CPI m/m, SA, 0.1%, 0.2% previous, 0.2% forecast.

• US Aug Core CPI y/y, NSA, 2.2%, 2.4% previous, 2.4% forecast.

• US Aug CPI m/m, SA, 0.2%, 0.2% previous, 0.3% forecast.

• US Aug CPI y/y, NSA, 2.7%, 2.9% previous, 2.8% forecast.

• US Aug Federal Budget Deficit, -214.00B, -77.00B previous, -156.50B forecast.

• US 8 Sep w/e Initial Jobless Claims, 204K, 203K previous, 205K revised, 210K forecast.

• US 8 Sep w/e Jobless Claims 4-Wk Average, 208.00K, 209.50K previous, 210.00K revised.

• US 1 Sep w/e Continued Jobless Claims, 1.696M, 1.707M previous, 1.711M revised.

• Trump denies pressure for trade deal as China welcomes U.S. talks invite.

• Impact of U.S. tax reform may last longer than expected -Fed's Bostic.

• ECB stays on course to curb stimulus even as growth risks rise.

• Bank of England holds rates steady, sees more Brexit uncertainty .

• UK will pay “substantially” less to EU in event of no Brexit deal –Raab.

• BOE's Carney says UK house prices would fall more than 35 pct after no-deal Brexit – the Times.

• Argentine peso weakens to new record low close of 39.9 per dollar.

• Turkish central bank raises rates sharply, boosts lira.

• Italy's 5-Star keeps up pressure on economy minister over budget.

• CA Jul New Housing Price Index, 0.1%, 0.1% previous, 0.1% forecast.

Looking Ahead – Economic Data (GMT)

• 13 Sep 22:30 New Zealand Aug Manufacturing PMI, 51.2 previous

• 14 Sep 02:00 Australia Sep TR IPSOS Primary Consumer Sentiment Index, 54.42 previous

• 14 Sep 02:00 Japan Sep TR IPSOS Primary Consumer Sentiment Index, 44.84 previous

• 14 Sep 02:00 China Sep TR IPSOS Primary Consumer Sentiment Index. 78.44 previous

• 14 Sep 02:00 China Aug Urban Investment y/y, 5.5% previous, 5.5% forecast

• 14 Sep 02:00 China Aug Industrial oputput y/y, 6.0%, 6.0% previous

• 14 Sep 02:00 China Aug Retail Sales y/y, 8.8% previous, 8.8% forecast

• 14 Sep 04:30 Japan Jul Industrial Output Rev, -0.1% previous

• 14 Sep 04:30 Japan Jul Capacity utilization m/m,SA, -2.2% previous

Looking Ahead – Events, Other Releases (GMT) 

• 07:00 ECB policymaker Jan Smets speaks at a conference on the fallout from the crisis for the real economy and interest rates in Brussels.

• 08:00 National Bank of Austria's Governor Ewald Nowotny takes part in panel discussion on banking in Vienna.

• 10:00 BoE Governor Mark Carney gives Whitaker Lecture at Dublin.

• 10:30 Norway Deputy Governor Jon Nicolaisen gives a speech in a seminar in Oslo.

• 12:00 Anders Vredin, Head of the Riksbank's General Secretariat, participates in a panel discussion at the Belgian Financial Forum and SUERF conference in Brussels.

• 13:00 Fed's Chicago President Charles Evans speaks on current economic condition and monetary policy, in Fort Wayne, Indiana.

Currency Summaries

EUR/USD is likely to find support at 1.1667 levels and currently trading at 1.1690 levels. The pair has made session high at 1.1693 and hit lows at 1.1680 levels. The euro rose on Thursday as dollar eased after data showed U.S. consumer prices increased less than expected in August, paring traders' outlook that domestic inflation is accelerating. Signs of reduced trade tensions between China and the United States after Washington reached out to Beijing on Wednesday to restart trade talks also pressured the greenback. The U.S. Labor Department said its Consumer Price Index, the government's broadest inflation gauge, rose 0.2 percent in August, less than the 0.3 percent increase projected by analysts polled by Reuters. Despite the CPI miss, traders did not change their view the Federal Reserve would raise key short-term interest rates by a quarter point to 2.00 percent-2.25 percent at its policy meeting in two weeks. They also anticipated the Fed would increase rates for a fourth time this year in December. An index that tracks the dollar against six major rivals. hit a near six-week low at 94.428. It was last trading down 0.19 percent at 94.623.

GBP/USD is supported in the range of 1.2978 levels and currently trading at 1.3108 levels. It reached session high at 1.3122 and dropped to session low at 1.3081 levels. Sterling firmed against the dollar on Thursday after a media report that Britain and the European Union had made progress on the Irish border question, a major hurdle to agreeing a Brexit deal. A report published by Bloomberg said that the UK had agreed to an EU request for information that could help end a dispute over the Irish border. The EU has made a so-called “backstop” proposal to guarantee an open UK-EU land border in Ireland a condition for any divorce deal before Britain leaves the bloc on March 29, 2019. Sterling was also helped on Thursday by the Bank of England raising its forecast for third-quarter GDP growth, to 0.5 percent from 0.4 percent. The BoE's Monetary Policy Committee voted 9-0 to leave interest rates at 0.75 percent, a month after tightening policy for only the second time since the 2009 financial crisis. Most economists are not predicting a further rate rise until after Britain leaves the EU in March 2019. The pound, already up after disappointing U.S. inflation data hurt the dollar, extended its gains to hit as high as $1.3124, It was last trading at 1.3108.

USD/CAD is supported at 1.2961 levels and is trading at 1.2995 levels. It has made session high at 1.3026 and lows at 1.2975 levels. The Canadian dollar strengthened to a two-week high against its U.S. counterpart on Thursday as worries receded of an escalated trade dispute between the United States and China and as the greenback broadly fell. Signs of movement in the U.S.-China trade stand-off and a bumper interest rate hike in emerging market trouble spot Turkey sent world shares higher as risk appetite returned. Canada exports many commodities and runs a current account deficit, so its economy could be hurt if the global flow of trade or capital slows. The U.S. dollar weakened against a basket of major currencies following data that showed U.S. consumer prices rose at a slower pace than analysts expected. The loonie has been boosted this week by higher oil prices and optimism that a deal to renew the North American Free Trade Agreement would be reached. The price of oil, one of Canada's major exports, slipped back from four-month highs as investors focused on the risk that emerging market crises and trade disputes could dent demand even as supply tightens. The Canadian dollar was last trading 0.1 percent higher at C$1.2998 to the greenback. The currency touched its strongest since Aug. 30 at C$1.2976.

USD/JPY is supported around 111.00 levels and currently trading at 111.97 levels. It peaked to hit session high at 111.98 and made session lows at 111.36 levels. The dollar gained against the Japanese yen on Thursday as investors switched to riskier assets instead of seeking a safe haven Japanese yen, amid hopes for a new round of U.S.-China trade talks. Senior U.S. officials sent an invitation to their Chinese counterparts to hold another bilateral trade meeting, raising speculation about a subtle shift in Washington's policy. The outreach comes as more than 85 U.S. industry groups launched a coalition on Wednesday to take a fight public against President Donald Trump's trade tariffs. On the data front, U.S. consumer prices rose less than expected in August as increases in gasoline and rents were offset by declines in healthcare and apparel costs, and underlying inflation pressures also appeared to be slowing.The Labor Department said on Thursday its Consumer Price Index increased 0.2 percent last month after a similar gain in July. In the 12 months through August, the CPI increased 2.7 percent, slowing from July's 2.9 percent rise. An index that tracks the dollar against six major rivals   hit a near six-week low at 94.428. it was last trading down 0.19 percent at 94.623.

Equities Recap

Europe's trade-sensitive autos and mining shares climbed on Thursday on news of fresh U.S.-China trade talks, though the broader market lost momentum after central bank decisions and new U.S. sanctions on Russian and Chinese tech firms.

UK's benchmark FTSE 100 closed down by 0.49, the pan-European FTSEurofirst 300 ended the day down by 0.05 percent, Germany's Dax ended up by 0.22 percent, France’s CAC finished the day down by 0.02 percent.

Apple led a rebound in technology shares and boosted all three major U.S. stock indexes on Thursday, while trade worries eased after China said it was open to fresh talks with the United States.

Dow Jones closed up by 0.55 percent, S&P 500 ended up by 0.51 percent, Nasdaq finished the day up by 0.73 percent.

Treasuries Recap

U.S. Treasury yields retraced losses on Thursday afternoon as the market digested an earlier U.S. government report showing that consumer prices rose less than expected in August, and after solid demand for 30-year bonds at auction.

The yield on the 30-year bond fell 2.9 basis points following the CPI data release to 3.092 percent, before recovering to 3.095 percent.

The yield on the two-year note was last at 2.757 percent, up from a session low of 2.736 percent. The yield on the 10-year note was last at 2.959, up from 2.944 percent earlier in the day.

Commodities Recap

Gold prices slid on Thursday as investors purchased riskier assets instead of seeking a safe haven in gold, amid hopes for a new round of U.S.-China trade talks.

Spot gold declined 0.3 percent to $1,202.30 per ounce by 1:34 p.m. EDT (1734 GMT), after earlier hitting its highest level since Aug. 28 at $1,212.49. U.S. gold futures for December delivery settled down $2.70, or 0.2 percent, at $1,208.20 per ounce.

Oil prices fell more than 2 percent on Thursday, with Brent slipping back from four-month highs as investors focused on the risk that emerging market crises and trade disputes could dent demand even as supply tightens.

Brent crude oil fell $1.65, or 2 percent, to $78.09 per barrel by 2:10 p.m. EDT (1810 GMT). The global benchmark on Wednesday hit $80.13, its highest level since May 22.U.S. light crude was down $1.82, or 2.6 percent, to $68.55 a barrel.

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