The global financial markets will be off to a slow start on Monday amid a dearth of economic data from around the world. A headline Eurozone trade report and US manufacturing survey will make headlines on this otherwise non-eventful day.
Eurostat, the European Commission’s statistical agency, will release the August trade balance at 09:00 GMT. The seasonally adjusted and non-seasonally adjusted figures will be published.
In terms of geopolitics, Catalonia’s president faces a critical decision that could determine the outcome of the region’s secessionist movement. The Spanish government has given Carles Puigdemont until Monday to clarify whether he has declared independence following the Catalan referendum.
Shifting gears to North America, the New York Federal Reserve Bank will release the Empire State manufacturing index at 12:30 GMT. The monthly report provides a snapshot of business conditions for regional manufacturers.
North of the border, the Bank of Canada (BOC) will issue its Business Outlook Survey at 14:30 GMT. The report provides an overview of business conditions in the Canadian economy. Monday’s report could shed light on how domestic businesses are coping with multiple interest rate hikes.
Earlier in the day, China’s National Statistics Bureau said consumer inflation rose as expected in September, while producer prices shot up more than forecast.
China’s consumer price index (CPI) accelerated 1.6% in the 12 months through September, following a 1.8% increase the previous month. Meanwhile, the producer price index (PPI) rose 6.9% year-over-year, much higher than August’s 6.3% and forecasts calling for the same.
EUR/USD
The euro opened slightly lower in Asian trading but continued to hover above the 1.18 US handle. The EUR/USD rebounded sharply last week as the US dollar weakened against a basket of world peers. The technical picture is neutral, as investors await fresh trading catalysts in the form of economic data and monetary policy. The EUR/USD faces immediate support at 1.1795, followed by 1.1760. On the opposite side of the ledger, immediate resistance is located at 1.1865, followed by 1.1890.
USD/JPY
The USD/JPY is trading in positive territory to start the Monday session, as the greenback continued to trim some of its losses from the previous week. The pair advanced 0.2% overnight to trade just below 112.00. Despite the modest rally, the USD/JPY faces a difficult short-term outlook after prices fell below the 112.20 support region. The pair now faces immediate support at the 26 September low of 1.11.45. Meanwhile, immediate resistance is located at 112.10.
USD/CAD
The USD/CAD advanced on Monday to come within 10 pips of the 1.2500 level. The pair trimmed some of its weekly losses on Thursday and Friday even as oil prices continued to rise. NAFTA talks are in the spotlight for the USD/CAD, and negative headlines from the Trump camp are likely to impact the loonie much more than the greenback.
