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  • Key break here in the 10-year #Treasury yield as it rises to the highest since late June Took out 1.4230 resistance, and the 100-day SMA Eyes now on the 38.2% Fib extension at 1.4775 Also potential falling resistance from March https://t.co/4cI6l210ui
  • The move in rates after this week’s FOMC has continued and the 10 year yield has pushed up to a fresh two-month-high. Get your market update from @JStanleyFX here:https://t.co/CRWhuZ3sxD https://t.co/svHHqN2Zz8
  • S&P 500 contending with its proverbial ‘line in the sand’ as bulls and bears battle for directional control. How we close/trade around the 50-day moving average could serve as a noteworthy bellwether for risk trends headed into next week. I remain cautious below ~4,480. $SPX $ES https://t.co/qogkjs1Sx2
  • USD/JPY trades to a fresh monthly (110.57) amid the pickup in longer-dated US Treasury yields, and the exchange rate may stage a larger advance over the coming days. Get your market update from @DavidJSong here:https://t.co/dlNXOrJnM9 https://t.co/LCQd26W1zF
  • US yields continue to climb, with the 10-year Treasury yield trading above 1.45% $ZN $ZB https://t.co/N4EDfwD3nZ
  • $USDJPY bull thesis appears quite constructive. Technicals show topside breakout above trend resistance following a period of consolidation. Bond yields providing the fundamental catalyst. Eyes on Aug/YTD highs. A broad-based deterioration in market sentiment poses downside risk. https://t.co/AazskXGjHq
  • WTI posting another session of strong gains, currently flirting with the 74 handle $CL #Oil #OOTT https://t.co/oYnm2OYRky
  • The New Zealand Dollar’s bullish breakout attempt in early-September was rebuffed. Price action at the end of the month is telling a different story. Get your market update from @CVecchioFX here:https://t.co/AquMSrssne https://t.co/DtFuFfrS7Q
  • So much for that Evergrande recovery. Shares of the troubled Chinese property developer are down approximately -12% today following yesterday's impressive rally (biggest in a year) https://t.co/Nome25d9Bt
  • Retail trading platform Robinhood announces hire of new Chief Compliance Officer amid regulatory scrutiny
GBPUSD Recovers, AUDUSD Dips, EURUSD Rise Capped - US Market Open

GBPUSD Recovers, AUDUSD Dips, EURUSD Rise Capped - US Market Open

Justin McQueen, Strategist

MARKET DEVELOPMENT – GBPUSD Recovers, AUDUSD Dips, EURUSD Rise Capped

GBP: After yet another large defeat for Theresa May’s deal, GBPUSD is notably firmer this morning. With tonight’s No-Deal Brexit vote likely to be rejected, and an extension to Article 50 likely to be favoured in tomorrow’s vote. However, while an extension to Article 50 may provide a lift to the Pound, gains are likely to be muted given that clarity of Brexit will continue to persist with a range of possibilities existing (General election, Second referendum, PM resignation etc). While GBP implied volatility has dropped ahead of tonight’s vote, headline risk remains with overnight vols implying a move of 106pips.

AUD: Domestic challenges within Australia have once again dented the Aussie as consumer sentiment dropped 4.8%, marking the lowest level since September 2015. Alongside this, Australian 10yr bond yields are now yielding less than 2%, consequently, upside in the Aussie is limited. However, the most important data for the near-term direction for the AUD will be released next, which comes in the form of the Aussie labour report, with close attention on the unemployment rate. The labour market remains one of the bright sparks in the economy, although a sizeable uptick in the unemployment rate could lead to fresh dovish signals from the RBA.

EUR: The Euro has been held within a tight 30pip range with 1.1300 capping for now. Reminder, $2.1bln worth of vanilla options are situated at 1.1300-1.1310. As such, while EURUSD has made an encouraging recovery from sub 1.1200 to 1.1300 since the ECB’s monetary policy decision, bund yields have failed to edge higher to confirm this bounce.

CHART OF THE DAY: AU 10YR SUB 2%

GBPUSD Recovers, AUDUSD Dips, EURUSD Rise Capped - US Market Open

Source: Thomson Reuters

GBPUSD Recovers, AUDUSD Dips, EURUSD Rise Capped - US Market Open

Source: Thomson Reuters, DailyFX

DailyFX Economic Calendar: – North American Releases

GBPUSD Recovers, AUDUSD Dips, EURUSD Rise Capped - US Market Open

IG Client Sentiment

GBPUSD Recovers, AUDUSD Dips, EURUSD Rise Capped - US Market Open

How to use IG Client Sentiment to Improve Your Trading

WHAT’S DRIVING MARKETS TODAY

  1. FTSE 100, S&P 500 Outlook: No-Deal Brexit Vote Likely Rejected” by Justin McQueen, Market Analyst
  2. Crude Oil Price - Headwinds Persist Ahead of Multi-Month High” by Nick Cawley, Market Analyst
  3. Trading Outlook for S&P 500, DAX, Gold Price, Crude Oil & More” by Paul Robinson, Market Analyst
  4. GBPUSD Price: Brexit Deadline Extension Could be Good for Sterling” by Martin Essex, MSTA , Analyst and Editor
  5. Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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