4 Oct: Strong ADP, soaring US yields, upbeat Powell comments send the US$ higher. Australian TB ahead.

By | October 4, 2018

 

The US$ is stronger again today, underpinned by soaring bond yields after a stronger than expected ADP employment report, showing growth of 230k in September, well above the expected 185K. On top of this, the US PMIs all beat expectations, unlike the EU PMIs which all came in pretty much in line with expectations although Germany missed on both the manufacturing and services readings.  At the end of the session, some upbeat comments from Jerome Powell did the dollar no harm at all, giving it another nudge to the topside. The Euro is lower, and has taken out the important 1.1500 level right on the close as stop losses were triggered in very thin conditions, while US$Jpy soared above 114.00, underpinned by the widening interest rate differentials. The Aud and Kiwi are at new trend lows, while Sterling remained steady, after the UK Prime Minister Theresa May’s Conservative Party conference speech was mostly ignored. In other markets, the US stock indices are relatively steady although the DJI did make yet another new high. The metals gave up the previous day’s gains, while WTI soared to new highs after an early dip, but trader were focused on the upcoming Iranian sanctions and their expected squeeze on supply, despite weekly data showing that US crude stockpiles ballooning four times more than expected. US sanctions on Iranian oil exports will begin on Nov 4 and could take some 3% off the global market’s daily supply.

Thursday will be a thin calendar but will begin with the Australian New Home Sales and Trade Balance for August (exp +$1400 mio). After that it will only be the weekly US August Factory Orders (exp 0.9%) and the weekly Jobless Claims to provide the entertainment. The Fed’s Quarles and the ECB’s Coeure will be today’s speakers.

CURRENCIES
EURUSD: 1.1480
Res  1.1525  1.1545  1.1570
Sup  1.1475  1.1450  1.1425
USDJPY: 114.46
Res  114.50  114.75  115.00
Sup  114.10  113.80  113.50
GBPUSD: 1.2950
Res  1.2980  1.3000  1.3025
Sup  1.2930  1.2915  1.2895
USDCHF: 0.9912
Res  0.9925  0.9940  0.9965
Sup  0.9890  0.9865  0.9830
AUDUSD: 0.7105
Res  0.7130  0.7150  0.7175
Sup  0.7085  0.7060  0.7035
NZDUSD: 0.6510
Res  0.6540  0.6555  0.6570
Sup  0.6500  0.6580  0.6450
INDICES / COMMODITIES
S&P.fs: 2931
Res  2940  2950  2960
Sup  2920  2910  2900
DJ30.fs: 26871
Res  26960  27000  27050
Sup  26790  26730  26655
SPI200.fs: 6155
Res  6175  6195  6225
Sup  6130  6105  6090
XAUUSD: 1198
Res  1205  1210  1215
Sup  1195  1190  1185.
XAGUSD: 14.64
Res  14.75  14.90  15.00
Sup  14.55  14.45  14.35
WTI.fs: 76.20
Res  75.90  77.05  78.20
Sup  74.90  74.00  72.90