Daily Observations:

Asian stocks rose led by energy stocks oil neared $50/bbl, while the yen slid to a one-month low. Bonds extended losses after a pickup in US non-manufacturing ISM bolstered the case for an interest-rate hike this year. Gold declined for the eighth straight day.

Global Debt:

  • Gross debt in the non-financial sector has more than doubled in nominal terms since the turn of the century, reaching $152 trillion last year, according to the IMF, and is still rising. The figure includes debt held by governments, non-financial firms and households.
  • Current debt levels now sit at a record 225% of world GDP, with two-thirds of liabilities residing in the private sector. The IMF flagged the euro area and China as economies where it deemed particularly important for deleveraging to occur.


  • The ISM services index jumped to 57.1 in September, from 51.4 in August, the highest reading since Oct 2015 and exceeding all economists’ forecasts. The surge was driven by a stellar showing in the employment sub-component, which may bode well for non-farm payrolls this Friday.
  • The Markit US Services PMI rose to 52.3, from 51.9 last month, better than the median estimate of 51.9.
  • Factory orders last month grew 0.2%, slower than the prior month’s 1.4% gain, but nonetheless better than the projected slide of 0.2%.
  • The trade balance in August widened to $41 billion, more than the expected $39 billion, as imports and exports rose 1.2% and 0.8% respectively.
  • The S&P 500 Index added 0.4%, driven by energy shares as oil neared $50/bbl and bank stocks which have been buoyed by increased prospects of higher rates.
  • The benchmark 10yr Treasury yield rose 2bp to 1.70%. According to Fed funds futures pricing data, the probability of a rate hike this year has risen to 64%.
  • The US dollar maintained near its recent highs, as the Bloomberg Dollar Spot Index was steady at its highest level since Sep 20th.


  • Trade balance in August unexpectedly narrowed to a deficit of A$2.01 billion, from A$2.12 billion in July; economists predicted the deficit to widen to A$2.30 billion.

Precious Metals:

  • Spot gold was 0.5% lower at $1,262.22/Oz, following its 3+% plunge yesterday. The key important 200-day moving average lies at $1,259.08/Oz, and could provide some much-needed support for the precious metal.
  • The last time gold was at its 200-day moving average level was back in early February this year, at the start of its rally.
  • Silver for immediate delivery extended losses by 1.7% to $17.5569/Oz earlier today, and is on course to test the next support around the $17/Oz handle.


  • Crude oil for November delivery jumped 2.3% to settle at $49.83/bbl last night, after EIA data yesterday showed a surprise decline in oil stockpiles in the US – its fifth weekly drop. The key resistance at $50/bbl is currently being tested.



  • Spot 1.3698
  • USDSGD continues to struggle to maintain above the 1.3700 handle, with the 200-day moving average of 1.3712 proving to be a tough obstacle.



  • Spot 0.7607
  • AUDUSD was little changed, as the currency pair continues to be supported above the 0.7600 level.



  • Spot 1.3180
  • USDCAD slipped 0.4% to 1.3161, as the Canadian dollar continues to be supported by stronger oil prices despite recent US dollar strength.
  • The currency pair has been testing its 200-day moving average of 1.3220 over the past week.



  • Spot 6.6962
  • Selling momentum is building in China’s currency as mainland financial remains closed for a week-long national holiday as the case for a US rate-hike grows.
  • Offshore yuan fell past 6.7 against the dollar, a level seen as key to the PBOC, for the first time in almost a month before pulling back.



  • Spot 103.41
  • USDJPY extended gains, rising 0.5% to 103.67 last night, the highest level since 6th
  • The downward trend for USDJPY has been broken; the next resistance for the currency pair lies at 104.32, an almost two-month high.



  • Spot 1.2737
  • GBPUSD seemed to have found some footing, having slid for five consecutive sessions.
  • The currency pair was 0.4% higher at 1.2771 last night but pared back some of its gains this morning.



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UEN: 201419754M

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