CFD Markets News and Forecasts — 16-10-2020

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16.10.2020
20:00
U.S.: Net Long-term TIC Flows , August 27.8
20:00
U.S.: Total Net TIC Flows, August 86.30
19:29
Key events for next week: China's GDP, Britain, Canada and New Zealand consumer price index, Eurozone, Britain and the United States PMI indices

On Monday, at 02:00 GMT, China will report changes in GDP for the 3rd quarter, as well as in fixed asset investment, industrial production and retail trade for September. At 10:00 GMT in Germany the Bundesbank's monthly report will be released. At 12:00 GMT, the Fed's chief Powell will deliver a speech. At 12:30 GMT, Canada will report changes in wholesale trade for August. At 12:40 GMT ECB chief Lagarde will speak. At 14:00 GMT, the US will present the NAHB housing market index for October. At 14:30 GMT in Canada, a Bank of Canada Business Outlook Survey for the 3rd quarter will be released. At 21:00 GMT, New Zealand will publish a NZIER Business Confidence indicator for the 3rd quarter

On Tuesday, at 00:30 GMT, in Australia, the RBA Meeting's Minutes will be released. At 06:00 GMT, Germany will present the producer price index for September. Also at 06:00 GMT, Switzerland will announce a change in the foreign trade balance for September. At 08:00 GMT, the Euro zone will report changes in the current account for August. At 12:30 GMT, the United States will announce changes in housing starts and building permits for September. At 23:30 GMT, Australia will publish an index of leading economic indicators for September.

On Wednesday, at 06:00 GMT, Britain will release the consumer price index and retail price index for September and announce changes in the net amount of public sector debt for September. At 07:30 GMT, ECB President Lagarde will speak. At 12:30 GMT, Canada will publish the consumer price index for September and report changes in retail sales for August. At 14:30 GMT, the US will announce changes in oil reserves according to the Ministry of energy. At 18:00 GMT in the US, the Fed's Beige Book will be released.

On Thursday, at 00:30 GMT Australia will present the indicator of business confidence from NAB for the 3rd quarter. At 06:00 GMT, Germany will release the Gfk consumer climate index for November. At 09:25 GMT Bank of England Governor Bailey will deliver a speech. At 10:00 GMT in Britain, the balance of industrial orders will be released according to the CBI for October. At 14:00 GMT, the US will publish an index of leading indicators for September and announce changes in existing home sales for September. Also at 14:00 GMT, the Euro zone will present the consumer confidence indicator for October. At 21:45 GMT, New Zealand will publish the consumer price index for the 3rd quarter. At 23:01 GMT, Britain will release the GfK consumer confidence indicator for October. At 23:30 GMT, Japan will present the consumer price index for September.

On Friday, at 00:30 GMT, Japan will publish the manufacturing PMI for October. At 06:00 GMT, Britain will announce changes in retail sales for September. At 07:15 GMT, France will release the index of business activity in the manufacturing sector and the index of business activity in the services sector for October. At 07:30 GMT, Germany will publish the index of business activity in the manufacturing sector and the index of business activity in the service sector for October. At 08:00 GMT, Germany will present the IFO business environment indicator, the IFO current situation assessment indicator, and the IFO economic expectations indicator for October. At 08:00 GMT, the Eurozone will release the manufacturing PMI and the services PMI for October. At 08:30 GMT, Britain will present the index of business activity in the manufacturing sector and the index of business activity in the services sector for October. At 13:00 GMT, Belgium will release the business sentiment index for October. At 13:45 GMT, the US will publish the index of business activity in the manufacturing sector and the index of business activity in the services sector for October. At 17:00 GMT, in the US, the Baker Hughes report on the number of active oil drilling rigs will be released.

19:00
DJIA +0.97% 28,770.76 +276.56 Nasdaq +0.52% 11,774.64 +60.77 S&P +0.67% 3,506.82 +23.48
17:01
U.S.: Baker Hughes Oil Rig Count, October 205
16:00
European stocks closed: FTSE 100 5,919.58 +87.06 +1.49% DAX 12,908.99 +205.24 +1.62% CAC 40 4,935.86 +98.44 +2.04%
15:02
BoJ's deputy governor Wakatabe: BoJ won’t directly target exchange rates

  • It may be necessary for the central bank and government to agree on a 2013 joint statement-like arrangement to tackle the (COVID-19) crisis and secure a proper division of labor
  • BoJ has numerous tools and programmes it can expand if it see the need to ease monetary policy further
  • Currency moves are “extremely important” components for Japan’s economy that the central bank is watching carefully
  • If we judge that inflation dynamics would be further eroded or weakened by exchange rate moves, that is time we should think of taking policy action
  • Japan's experience shows monetary easing can be maintained for extended period of time
  • Benefits of monetary easing far outweigh costs
  • Japan's financial sector problems have a lot to do with structural issues like demographics
  • BoJ doesn't set maximum employment as explicit target but must pay close attention to job, income conditions

14:51
New York Fed president Williams: Fed set up to make sure credit is flowing to businesses and state and local entities

  • Says he is optimistic about economic outlook but acknowledges that it's going to be a challenging period
  • COVID hit certain sectors hard, such as travel and arts
  • Demand for the arts is as strong as ever


14:43
U.S. business inventories increase 0.3 percent in August

The Commerce Department announced on Friday that business inventories rose 0.3 percent m-o-m in August, following an unrevised 0.1 percent m-o-m advance in July.

That was slightly below economists’ forecast for a 0.4 percent m-o-m increase.

According to the report, stocks at retailers and wholesalers both rose by 0.4 percent m-o-m, while inventories at manufacturers were flat m-o-m.

14:10
U.S. consumer sentiment index increases more than forecast in early October

A report from the University of Michigan revealed on Friday the preliminary reading for the Reuters/Michigan index of consumer sentiment increased 1.0 percent m-o-m to 81.2 in early October. This was the highest reading since March.

Economists had expected the index would edge up to 80.5 this month from September’s final reading of 80.4.

According to the report, the index of current U.S. economic conditions dropped 3.3 percent m-o-m to 84.9 in October from 87.8 in the previous month. Meanwhile, the index of consumer expectations climbed 4.2 percent m-o-m to 78.8 this month from 75.6 in September.

“Slowing employment growth, the resurgence in covid-19 infections, and the absence of additional federal relief payments prompted consumers to become more concerned about the current economic conditions”, noted Surveys of Consumers chief economist, Richard Curtin. “Those concerns were largely offset by continued small gains in economic prospects for the year ahead,” he added.

14:00
U.S.: Reuters/Michigan Consumer Sentiment Index, October 81.2 (forecast 80.5)
14:00
U.S.: Business inventories , August 0.3% (forecast 0.4%)
13:46
U.S. industrial production unexpectedly declines in September

The Federal Reserve reported on Friday the U.S. industrial production fell 0.6 percent m-o-m in September, following an unrevised 0.4 percent m-o-m advance in August. This was the first monthly decline in industrial production after four consecutive months of gains.

Economists had forecast industrial production would increase 0.5 percent m-o-m in September.

According to the report, manufacturing output decreased 0.3 percent m-o-m in September and the output of utilities fell 5.6 percent m-o-m. Meanwhile, mining production rose 1.7 percent m-o-m in September.

Capacity utilization for the industrial sector decreased 0.5 percentage point m-o-m to 71.5 percent in September. That was 0.4 percentage points below economists’ forecast and 8.3 percentage points below its long-run (1972-2019) average.

In y-o-y terms, the industrial output dropped 7.3 percent in September, following a revised 7.0 percent plunge in the prior month (originally a 7.7 percent decline).

13:36
UK PM Johnson's spokesman: Trade talks with EU are over

  • EU's chief Brexit negotiator Barnier should only come to London next week if he is prepared to discuss all of the issues on basis of a legal text or if he is willing to discuss practicalities on travel and haulage; otherwise, there is no point in Barnier coming
  • There will be tariffs if no EU trade deal

13:33
U.S. Stocks open: Dow +0.54%, Nasdaq +0.41%, S&P +0.39%
13:27
Before the bell: S&P futures +0.40%, NASDAQ futures +0.77%

U.S. stock-index futures rose on Friday, as Pfizer (PFE; +2%) said it might apply for emergency use authorization for its COVID-19 vaccine by the end of next month, while data showed stronger-than-forecast retail sales growth in September. 


Global Stocks:

Index/commodity

Last

Today's Change, points

Today's Change, %

Nikkei

23,410.63

-96.60

-0.41%

Hang Seng

24,386.79

+228.25

+0.94%

Shanghai

3,336.36

+4.17

+0.13%

S&P/ASX

6,176.80

-33.50

-0.54%

FTSE

5,914.31

+81.79

+1.40%

CAC

4,919.55

+82.13

+1.70%

DAX

12,854.19

+150.44

+1.18%

Crude oil

$40.58


-0.93%

Gold

$1,909.50


+0.03%

13:15
U.S.: Capacity Utilization, September 71.5% (forecast 71.9%)
13:15
U.S.: Industrial Production, September -0.6% m/m (forecast 0.5%)
13:15
U.S.: Industrial Production, September -7.3% y/y
12:58
China: Inflation now seen rising at a slower pace in 2020 - UOB

FXStreet reports that UOB Group’s Economist Ho Woei Chen, CFA, reviewed the latest inflation figures in the Chinese economy.

“China’s inflation continued to moderate in September on the back of easing food prices. The Consumer Price Index (CPI) rose 1.7% y/y... Food price inflation eased to 7.9% y/y from 11.2% y/y in August while core inflation (excluding food and energy) was unchanged for the third consecutive month at 0.5% y/y. The higher base of comparison is expected to drive headline inflation down further in 4Q with full-year averaging around 3.0% compared to 3.3% y/y in the first nine months.”

“Producer Price Index (PPI) fell at a marginally larger pace of -2.1% y/y... Headline PPI deflation is likely to continue for the rest of the year but may narrow with firming global demand and commodity prices.”


12:58
Wall Street. Stocks before the bell

(company / ticker / price / change ($/%) / volume)


3M Co

MMM

169.19

0.11(0.07%)

2796

ALCOA INC.

AA

12.38

0.08(0.65%)

18933

ALTRIA GROUP INC.

MO

39.8

0.10(0.25%)

6349

Amazon.com Inc., NASDAQ

AMZN

3,373.83

35.18(1.05%)

64067

American Express Co

AXP

104.96

0.53(0.51%)

1389

Apple Inc.

AAPL

121.86

1.15(0.95%)

1351653

AT&T Inc

T

27.56

0.11(0.40%)

57436

Boeing Co

BA

173.5

9.26(5.64%)

1486624

Caterpillar Inc

CAT

167.5

2.46(1.49%)

18571

Chevron Corp

CVX

73.69

0.18(0.24%)

7210

Cisco Systems Inc

CSCO

40.12

0.15(0.38%)

38617

Citigroup Inc., NYSE

C

43.84

0.23(0.53%)

56613

Exxon Mobil Corp

XOM

34.44

-0.01(-0.03%)

36468

Facebook, Inc.

FB

268.09

1.37(0.51%)

94119

FedEx Corporation, NYSE

FDX

284.21

2.10(0.74%)

16362

Ford Motor Co.

F

7.72

0.10(1.31%)

360770

Freeport-McMoRan Copper & Gold Inc., NYSE

FCX

17.27

0.06(0.35%)

8680

General Electric Co

GE

6.97

0.10(1.45%)

3397047

General Motors Company, NYSE

GM

32.84

0.25(0.77%)

12767

Goldman Sachs

GS

209.67

1.07(0.51%)

17754

Google Inc.

GOOG

1,567.50

8.37(0.54%)

8294

Hewlett-Packard Co.

HPQ

19.73

0.17(0.87%)

3691

Home Depot Inc

HD

288.4

0.86(0.30%)

3820

HONEYWELL INTERNATIONAL INC.

HON

174.25

1.64(0.95%)

3995

Intel Corp

INTC

54.01

0.16(0.30%)

69029

International Business Machines Co...

IBM

125.08

0.19(0.15%)

7733

International Paper Company

IP

46.29

0.74(1.62%)

4041

Johnson & Johnson

JNJ

147.8

0.61(0.41%)

11692

JPMorgan Chase and Co

JPM

102.1

0.38(0.37%)

49470

McDonald's Corp

MCD

229.72

0.08(0.03%)

2527

Merck & Co Inc

MRK

79.3

0.24(0.30%)

37076

Microsoft Corp

MSFT

220.85

1.19(0.54%)

703040

Nike

NKE

129.5

0.50(0.39%)

144279

Pfizer Inc

PFE

37.32

0.77(2.11%)

1099990

Procter & Gamble Co

PG

143.92

0.09(0.06%)

2148

Starbucks Corporation, NASDAQ

SBUX

89.35

0.52(0.59%)

5749

Tesla Motors, Inc., NASDAQ

TSLA

454.15

5.27(1.17%)

437211

The Coca-Cola Co

KO

50.06

0.07(0.14%)

8734

Travelers Companies Inc

TRV

112.69

0.05(0.04%)

1219

Twitter, Inc., NYSE

TWTR

46.26

0.23(0.50%)

36088

UnitedHealth Group Inc

UNH

325.6

1.03(0.32%)

2210

Verizon Communications Inc

VZ

58.32

0.16(0.28%)

11726

Visa

V

200.84

1.29(0.65%)

16364

Wal-Mart Stores Inc

WMT

145.15

0.62(0.43%)

9678

Walt Disney Co

DIS

127.8

0.44(0.35%)

11003

Yandex N.V., NASDAQ

YNDX

59.95

-0.78(-1.28%)

95753

12:51
Upgrades before the market open

Caterpillar (CAT) upgraded to Overweight from Equal Weight at Wells Fargo; target raised to $220

12:47
U.S. retail sales rise more than expected in September

The Commerce Department reported on Friday the sales at U.S. retailers rose 1.9 percent m-o-m in September, following an unrevised 0.6 percent m-o-m increase in August. This was the biggest monthly rise since June.

Economists had expected total sales would advance 0.7 percent m-o-m in September.

According to the report, the largest gains in retail sales were recorded in clothing and accessories (+11 percent m-o-m) and autos (+4 percent m-o-m), while electronics and appliances was the only major sector that declined (-1.6 percent m-o-m).

Excluding auto, retail sales grew 1.5 percent m-o-m in September after a revised 0.5 percent m-o-m advance in the previous month (originally a 0.7percent m-o-m increase), much better than economists’ forecast of a 0.5 percent m-o-m rise.

Meanwhile, closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, and are used in GDP calculations, increased 1.4 percent m-o-m in September after a downwardly revised 0.3 percent m-o-m drop in August (originally a 0.1 percent m-o-m decrease). Economists had forecast core retail sales growing 0.2 percent m-o-m in September.

In y-o-y terms, the U.S. retail sales surged 5.4 percent in September after a revised 2.8 climb in the previous month (originally a 2.6 percent jump). This was the biggest increase since December 2019.

12:30
U.S.: Retail sales, September 1.9% (forecast 0.7%)
12:30
U.S.: Retail sales excluding auto, September 1.5% (forecast 0.5%)
12:30
Canada: Foreign Securities Purchases, August 15.5 bln
12:30
Canada: Manufacturing Shipments, August -2% m/m (forecast -1.4%)
12:30
U.S.: Retail Sales, September 5.4% y/y
12:19
S&P 500 Index to resume the uptrend after testing support at 3420 - Credit Suisse

FXStreet notes that S&P 500 is holding support as expected from the “neckline” to its “head & shoulders” base at 3437/33 and the Credit Suisse analyst team bias remains to view weakness as corrective ahead of an eventual challenge on the 3588 record high.  

“The S&P 500 has seen its expected fall to test and hold support from the ‘neckline’ to its base at 3437/33, also the location of the rising 13-day exponential average, and whilst we would still not rule out a test of the 38.2% retracement of the September/October rally at 3420 we continue to look for a floor here and for the uptrend to then resume.” 

“Resistance remains at 3501/02 initially, with a break above 3528 needed to suggest the pullback is over for strength back to 3550, above which can see resistance at 3565 next and eventually the 3588 high, also essentially the upper end of its ‘typical’ extreme (15% above the 200-day average). Whilst this should clearly be respected we look for a break in due course with the ‘measured base objective’ at 3653.” 

12:03
European session review: GBP retreats as UK PM Johnson's calls to get ready for no-deal Brexit

TimeCountryEventPeriodPrevious valueForecastActual
09:00EurozoneTrade balance unadjustedAugust27.715.114.7
09:00EurozoneHarmonized CPI ex EFAT, Y/YSeptember0.4%0.2%0.2%
09:00EurozoneHarmonized CPISeptember-0.4%0.1%0.1%
09:00EurozoneHarmonized CPI, Y/YSeptember-0.2%-0.3%-0.3%

GBP fell against other major currencies in the European session on Friday after British prime minister Boris Johnson concluded that the UK should get ready for an Australian-style exit from the EU, i.e. an exit without a comprehensive deal on post-Brexit relations between the two sides. "Unless there's a fundamental change of approach, we're going to go to the Australia solution, and we should do it with great confidence," Johnson added. 

On Thursday, the EU leaders sent a firm message that the UK had to compromise on the key outstanding issues - [fisheries, level-playing field and governance] - if there was to be a trade deal. The UK chief Brexit negotiator David Frost said he was "surprised" and "disappointed" by the position of the EU leaders at the summit in Brussels.

Today's announcement by the UK's prime minister disappointed markets, putting pressure on GBP. However, the fact he did not say the UK would quit the talks, capped further decline in the pound.

In response to Boris Johnson's statements, the European Commission president Ursula von der Leyen said that the EU negotiating team would go to London next week to "intensify" talks. "The EU continues to work for a deal, but not at any price. As planned, our negotiation team will go to London next week to intensify these negotiations," she tweeted.

Earlier today, the  RTÉ News reported that a number of the EU sources said that the block's chief Brexit negotiator Michel Barnier would seek "to use the leverage of the EU's energy market as a potential way of unblocking the UK's resistance to granting European fishing fleets ongoing access to British waters".

11:53
UK and EU's chief negotiators, Frost and Barnier, to hold talks later today - Bloomberg reports, citing EU official on the matter
11:30
The incentive for consolidation in the Eurozone banking sector is strong - Natixis

FXStreet notes that if returns to scale are increasing in the banking industry and if the "too big to fail" argument is no longer credible, then there will be consolidation in the European banking sector and large pan-European banks will be created. If returns to scale are indeed increasing, given the importance of fixed costs in banking, then these large banks will be more profitable than European banks today, according to analysts at Natixis.

“A consolidation of the Eurozone banking sector may be triggered by the fact that at the euro-zone level, it is not highly concentrated; there are certainly now increasing returns in banking, given the development of fixed costs: risk analysis, KYC (know your customer), ethics (compliance), new payment technologies, the introduction of Artificial Intelligence, etc.; the existence of pan-European banks would facilitate capital market integration.”

“The remaining issue is that of ‘too big to fail’: normally, bank regulators and governments hate big banks because they have to bail them out if they fail. We do not see this ‘too big to fail’ argument as convincing. In reality, it already applies to mid-sized banks whose failure was seen to be unacceptable. The establishment of the SRM (Single Resolution Mechanism) and the SRF (Single Resolution Fund) brings the management of banking crises to the European level; if large banks are more efficient than mid-sized and small banks thanks to increasing returns to scale, they will be more profitable and therefore less fragile.”

11:21
EU is getting ready for more trade talks in London next week since UK PM Johnson did not say they will walk away from negotiations - Reuters reports, citing sources
11:12
ECB's Governing Council member Villeroy: If greater action is needed due to incoming data, we have the capacity and willingness to act accordingly

  • Our very accommodative monetary policy stance at present is appropriate
  • Given the present uncertainty, it would be a mistake to set an end date for the ECB's pandemic response

11:00
UK's PM Johnson: I have concluded that we should get ready for Australia-style Brexit deal i.e. no-deal
  • The latest EU summit suggests Canada-style deal won't work
  • EU has refused to negotiate seriously, we should get ready for no-deal in January
  • It is clear from EU summit, that we will not be offered same terms as Canada
  • If there's a fundamental change to EU position, we are willing to listen
10:59
USD/CAD to see further upside in the near-term - Credit Suisse

FXStreet notes that USD/CAD reverted sharply higher, completing a minor base to suggest the pair could see further corrective strength in the near-term. Resistance is seen initially at 1.3259/66, then 1.3298, while support moves to 1.3145/43, the Credit Suisse analyst team reports.

“USD/CAD has seen a strong upswing, completing a very small base, with strength now pausing at the 50% retracement of the fall from late September at 1.3260. With the small base in mind, we shift the short-term bias to the upside and see resistance initially at 1.3259/66, then 1.3273, ahead of 1.3298 – the 61.8% retracement – where we would expect another attempt to hold and ideally see the core bear trend resume.” 

“Support is initially seen at 1.3211, then 1.3193/81, beneath which would ease the immediate upside bias and see a direct move back to 1.3145/43. Removal of here would see 1.3117 next, before a move to the October low at 1.3100/3099.”

10:44
USD/JPY: Downside focused on 104.70 - UOB

USD/JPY: Downside focused on 104.70 - UOB

FXStreet reports that in the opinion of FX Strategists at UOB Group USD/JPY risks further losses if the 104.70 level is cleared in the near-term.

24-hour view: “Our expectation for USD to ‘probe 104.90 first before a rebound can be expected’ did not materialize as it traded within a 105.07/105.49 range. The price actions offer no fresh clues and USD could continue to trade sideways for now, likely between 105.05 and 105.55.”

Next 1-3 weeks: “Yesterday, we indicated that the outlook for USD is mixed and held the view that it ‘could trade between 105.00 and 106.00 for a period of time’. The rapid manner by which it approaches the bottom of the range was not exactly expected (overnight low of 105.02) and downward momentum has improved a tad. While the bias is tilted to the downside, USD has to close below 104.70 before a sustained decline can be expected.”

10:19
EUR/CHF completes a large topping structure, support awaits at 1.0679 - Credit Suisse

FXStreet notes that EUR/CHF closed beneath the lower end of the neutral range at 1.01725/22 on Thursday, completing a large top, which is ideally reinforced by a weekly close today. Analysts at Credit Suisse look for further weakness to unfold and see the next support at the 200-day average at 1.0679. 

“EUR/CHF saw a strong break of the lower end of the broad range at 1.0725/22, completing a large top to shift our bias to the downside, which is ideally reinforced by a weekly close.”

“With daily MACD momentum now also clearly pointing lower, we see support initially at 1.0702/00, then 1.0689/88, ahead of the 200-day average at 1.0679. Whilst we would expect this to hold at first, below can see support next at 1.0650, ahead of the low of July and psychological inflection point at 1.0607/00. Beyond here would see support next at the 78.6% retracement of the May/June surge at 1.0593, ahead of the ‘measured top objective’ seen at 1.0580.”

09:58
US Dollar Index: Range-bound with conflicting currents – MUFG

FXStreet reports that according to economists at MUFG Bank, there are now so many macro factors for market participants to focus on it is no wonder that FX markets remain mostly within recent ranges

“We see little change in the two biggest negatives for market sentiment at the moment. The first is the significant re-escalation of COVID-19 in Europe and some signs of re-escalation in the US as well .The second is the failure in the US to reach a deal on a fiscal stimulus package ahead of the election”

“The markets for now remain half-hearted in its conviction on reducing risk. This makes sense for now given the large-scale fiscal stimulus likely in 2021. What that means for inflation and the US deficit outlook point to the strong need for a weaker US dollar in order for these large-scale deficits to be financed going forward.”

“There are two natural market adjustment mechanisms for higher levels of capital requirements in the US – higher rates or a weaker US dollar. We are betting on the Fed following through with its commitment to cap rates, leaving the US dollar as the only viable adjustment mechanism for financing record deficits going forward.”

09:54
Eurozone annual inflation down to -0.3% in September

According to the report from Eurostat, the euro area annual inflation rate was -0.3% in September 2020, down from -0.2% in August. A year earlier, the rate was 0.8%. European Union annual inflation was 0.3% in September 2020, down from 0.4% in August. A year earlier, the rate was 1.2%.

The lowest annual rates were registered in Greece (-2.3%), Cyprus (-1.9%) and Estonia (-1.3%). The highest annual rates were recorded in Poland (3.8%), Hungary (3.4%) and Czechia (3.3%). Compared with August, annual inflation fell in thirteen Member States, remained stable in seven and rose in seven.

In September, the highest contribution to the annual euro area inflation rate came from food, alcohol & tobacco (+0.34 percentage points, pp), followed by services (+0.24 pp), non-energy industrial goods (-0.08 pp) and energy (-0.81 pp).

09:42
Important for ECB policies to remain accommodating - ECB's Visco

Reuters reports that ECB Governing Council member Ignazio Visco said that it is important not to withdraw too early the policies put in place by governments and central banks to counter the impact of the COVID-19 pandemic.

Visco told the economy would not return to the situation pre-dating the virus crisis for another couple of years.

"Policies have to remain extremely accommodating on the fiscal side as well as on the monetary side as we're prepared to do for the euro area as a whole," Visco said.

09:21
Gold to soar to $2300 at the beginning of 2021 – ANZ

FXStreet reports that economists at ANZ Bank maintain a positive outlook for the yellow metal as coronavirus cases are surging all over the world. 

“The outlook for gold is positive amid mounting economic concerns due to COVID-19 surges.”

“Approval of a US relief package will be the trigger for price upside. Accommodative central bank policies and liquidity injections are broadly supporting the market.” 

“Physical demand is recovering ahead of the festive season, so we see the gold price reaching $2,300/oz early next year.”

09:00
European Central Bank could live with some inflation overshoot to help employment - ECB Governing Council member Rehn

Reuters reports that ECB Governing Council member Olli Rehn said that the ECB should follow the U.S. Fed in putting more emphasis on welfare when it's setting policy, even if that would mean inflation exceeded its target temporarily.

Rehn argued that the new economic realities guiding the Fed also applied to Europe. Low unemployment no longer comes at the cost of rapid inflation, so central banks can afford to boost social inclusion.

"If this is the case, from the point of view of economic and social welfare, it makes sense to accept a certain period of overshooting while taking into account the history of undershooting," Rehn said.

09:00
Eurozone: Trade balance unadjusted, August 14.7 (forecast 15.1)
09:00
Eurozone: Harmonized CPI ex EFAT, September 0.2% y/y (forecast 0.2%)
09:00
Eurozone: Harmonized CPI, September 0.1% m/m (forecast 0.1%)
09:00
Eurozone: Harmonized CPI, September -0.3 y/y (forecast -0.3%)
08:40
European Union needs to find right balance for EU-UK deal - Luxembourg

Reuters reports that Luxembourg Prime Minister Xavier Bettel said on Friday that the EU needs to strike a balance on what its members want from future EU-UK relations and not solely focus on a single item, such as fishing rights.

"We are behind the countries for whom fishing is important, as every subject can be important such as, for the internal market, to keep on eye on what could be state aid," Bettel said.

"It is important that as a whole there is a balance and not have a situation where one is a winner and the other is a loser."

08:21
AUD/USD: Year-end forecast of 0.73 intact despite the shift to QE – ANZ

FXStreet reports that economists at ANZ Bank have left the AUD/USD medium-term forecasts of modest appreciation intact, but see some downside risks to the year-end forecast of 0.73. 

“For now, our outlook for global growth is relatively benign, and by extension we expect that the terms of trade can retain their current strength. This will provide some counterweight to the impact that QE can have on the AUD.”

“Our forecast remains predicated on the assumption that 2021 is a better year than 2020” 

“More important to our forecasts will be the sustainability of the global growth pulse, and in this regard, the outcome of the US election and what it means for the fiscal outlook, together with the scale of the second wave of COVID-19 in the northern hemisphere will be more important.” 

“There is some downside risk to our year-end 2020 target for the AUD/USD of 0.73. However, we still think there is value in buying the aussie around 0.70 for the medium-term.” 

07:59
India stocks are ‘attractive’ relative to other emerging markets - Morgan Stanley

CNBC reports that according to Morgan Stanley, Indian stocks have been outperforming other emerging markets for nearly six months and could continue to do so if supportive measures are in place, 

The outperformance began in April but the market’s short-term performance remains hinged to global factors, the U.S. investment bank said.

“We have been arguing that for this outperformance to be sustained, India needs to continue to deliver policy that lifts India’s potential growth in the eyes of market participants,” Ridham Desai, equity strategist, and Sheela Rathi, equity analyst, said in the report.

Three factors have helped India’s strong performance: an improving policy environment, corporate response to the pandemic and “an attractive starting point of valuations,” the bank said.

07:41
We are disappointed by European Union but a deal can be done - British Foreign Secretary

Reuters reports that British Foreign Secretary Dominic Raab said on Friday that Britain is disappointed by the EU's demand that London give more concessions to secure a trade deal but a deal is close and can be done, 

"We are disappointed and surprised by the outcome of the European Council," Raab told .

"We've been told that it must be the UK that makes all of the compromises in the days ahead, that can't be right in a negotiation, so we're surprised by that."

"Having said that, we are close," Raab said of a deal. "With goodwill on both sides we can get there."

07:20
Demand concerns and risk related to US elections to send WTI lower to $36 – TDS

FXStreet reports that Bart Melek, Head of Commodity Strategy at TD Securities, said that OPEC supply is offsetting the positive impact of inventory declines as demand worries linger.

“Following an upbeat week, crude oil stocks again added a positive tone as crude oil inventories dropped another unexpectedly large 3.88 million bbls vs a predicted 2.1 million decline. Adding to this positive is the unexpectedly large 7.2 million bbl distillate stocks decline and the 1.6 million bbl gasoline inventory drop.”

“With the US no longer pursuing a new fiscal stimulus plan which has any chance to be ready before the election, the second wave of COVID-19 is once again reducing economic activity and oil consumption projections. As such, significant crude oil upside is not expected for now.” 

“I suspect that WTI will have a hard time to move much above resistance near $41/bbl, at least in the near-term. And, there is a risk that election-related uncertainty may send it even lower to support just under $36/bbl.” 

06:59
Asian session review: the dollar traded stable against the euro

In today's Asian trading, the US dollar showed no significant changes against the euro and declined moderately against the yen.

The growing number of new coronavirus infections in Europe and the lack of progress in the adoption by the US authorities of a new package of stimulus measures to support the economy are contributing to an increase in demand for safe haven assets. Since the beginning of the COVID-19 pandemic, 38 million 854 thousand 432 cases of coronavirus infection have been recorded worldwide. Johns Hopkins University reported that the number of victims of virus-related diseases has increased to 1 million 97 thousand 359 people.

A number of European countries, including Germany, France and the United Kingdom, have announced new restrictive measures in recent days in an attempt to slow the spread of COVID-19 amid a growing number of infections.

The pound is getting cheaper. Traders ' focus remains on the future of the UK-European Union trade deal. Britain's chief Brexit Negotiator David Frost said he was disappointed with the EU's position on negotiations with London on the parties ' future relationship. He also expressed bewilderment at the statements that in order to achieve a future agreement between the UK and the EU, all initiatives must come from the British side.

The ICE index, which tracks the US dollar against six currencies (the Euro, Swiss franc, yen, canadian dollar, pound sterling and Swedish Krona), fell 0.03%.

06:40
EUR/USD risks a potential decline to 1.1650 – UOB

FXStreet reports that according to FX Strategists at UOB Group, EUR/USD could recede further and re-test the mid-1.1600s in the near-term.

24-hour view: “We highlighted yesterday that ‘there is chance for EUR to edge lower but any weakness is likely limited to a test of 1.1705’. We added, ‘the next support is at 1.1680’. The weakness in EUR exceeded our expectation as EUR dropped to 1.1686 before rebounding. While the decline is oversold, it is too early to expect a sustained recovery. From here, EUR is likely to test the major support at 1.1680 first before a rebound can be expected. For today, a break of the next support at 1.1650 is unlikely. Resistance is at 1.1735, the stronger level is at 1.1765.”

06:36
Options levels on friday, October 16, 2020 EURUSD GBPUSD

EUR/USD

Resistance levels (open interest**, contracts)

$1.1817 (438)

$1.1791 (522)

$1.1769 (536)

Price at time of writing this review: $1.1705

Support levels (open interest**, contracts):

$1.1644 (1049)

$1.1621 (1786)

$1.1593 (896)


Comments:

- Overall open interest on the CALL options and PUT options with the expiration date November, 6 is 52705 contracts (according to data from October, 15) with the maximum number of contracts with strike price $1,1800 (4010);


GBP/USD

Resistance levels (open interest**, contracts)

$1.3045 (268)

$1.3004 (1681)

$1.2973 (213)

Price at time of writing this review: $1.2885

Support levels (open interest**, contracts):

$1.2841 (325)

$1.2806 (243)

$1.2759 (772)


Comments:

- Overall open interest on the CALL options with the expiration date November, 6 is 31602 contracts, with the maximum number of contracts with strike price $1,3950 (3694);

- Overall open interest on the PUT options with the expiration date November, 6 is 23358 contracts, with the maximum number of contracts with strike price $1,2050 (2416);

- The ratio of PUT/CALL was 0.74 versus 0.72 from the previous trading day according to data from October, 15

 

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

06:20
EU passenger car market registered the first increase of the year in September

According to the report from European Automobile Manufacturers' Association (ACEA), in September 2020, the EU passenger car market registered the first increase of the year. Registrations grew by 3.1% last month to reach 933,987 new cars sold across the European Union1. The four largest markets, however, posted mixed results. Losses were seen in Spain (-13.5%) and France (-3.0%), while Italy (+9.5%) and Germany (+8.4%) showed solid gains.

Over the first nine months of 2020, demand for cars contracted by 28.8% in the EU. Seven million units were registered from January to September, almost 2.9 million less than during the same period last year. Indeed, despite last month’s positive results, the impact of COVID-19 still weighs heavily on the cumulative performance of the EU car market. Among the major markets, Spain saw the steepest drop (-38.3%) so far this year, followed by Italy (-34.2%), France (-28.9%) and Germany (-25.5%).

06:00
European Union imposes tariffs on aluminium products from China

Reuters reports that the EU will impose duties of up to 48% on imports of aluminium extrusions from China midway through an investigation into whether Chinese producers are selling at unfairly low prices.

The EU official journal said on Tuesday that the duties, ranging from 30.4 to 48.0%, would apply from Wednesday. The duties are provisional, meaning they will apply until the investigation’s expected completion by April. At that point, the bloc could apply duties for five years.

The European Commission opened an investigation in February into the product widely used in transport, construction and electronics after a complaint from industry body European Aluminium.

China’s metals association has called the complaint groundless.

02:30
Commodities. Daily history for Thursday, October 15, 2020
Raw materials Closed Change, %
Brent 42.92 -0.49
Silver 24.26 0.21
Gold 1907.677 0.38
Palladium 2359.03 0.57
00:30
Stocks. Daily history for Thursday, October 15, 2020
Index Change, points Closed Change, %
NIKKEI 225 -119.5 23507.23 -0.51
Hang Seng -508.55 24158.54 -2.06
KOSPI -19.27 2361.21 -0.81
ASX 200 31.1 6210.3 0.5
FTSE 100 -102.54 5832.52 -1.73
DAX -324.31 12703.75 -2.49
CAC 40 -104.24 4837.42 -2.11
Dow Jones -19.8 28494.2 -0.07
S&P 500 -5.33 3483.34 -0.15
NASDAQ Composite -54.86 11713.87 -0.47
00:30
Schedule for today, Friday, October 16, 2020
Time Country Event Period Previous value Forecast
09:00 (GMT) Eurozone Trade balance unadjusted August 27.9 15.1
09:00 (GMT) Eurozone Harmonized CPI ex EFAT, Y/Y September 0.4% 0.2%
09:00 (GMT) Eurozone Harmonized CPI September -0.4% 0.1%
09:00 (GMT) Eurozone Harmonized CPI, Y/Y September -0.2% -0.3%
12:30 (GMT) Canada Foreign Securities Purchases August -8.5  
12:30 (GMT) Canada Manufacturing Shipments (MoM) August 7% -1.4%
12:30 (GMT) U.S. Retail Sales YoY September 2.6%  
12:30 (GMT) U.S. Retail sales excluding auto September 0.7% 0.5%
12:30 (GMT) U.S. Retail sales September 0.6% 0.7%
13:15 (GMT) U.S. Capacity Utilization September 71.4% 71.9%
13:15 (GMT) U.S. Industrial Production YoY September -7.7%  
13:15 (GMT) U.S. Industrial Production (MoM) September 0.4% 0.5%
13:45 (GMT) U.S. FOMC Member Williams Speaks    
14:00 (GMT) U.S. Reuters/Michigan Consumer Sentiment Index October 80.4 80.5
14:00 (GMT) U.S. Business inventories August 0.1% 0.4%
17:00 (GMT) U.S. Baker Hughes Oil Rig Count October 193  
20:00 (GMT) U.S. Net Long-term TIC Flows August 10.8  
20:00 (GMT) U.S. Total Net TIC Flows August -88.7  
00:15
Currencies. Daily history for Thursday, October 15, 2020
Pare Closed Change, %
AUDUSD 0.70924 -1.01
EURJPY 123.392 -0.09
EURUSD 1.17075 -0.33
GBPJPY 135.991 -0.53
GBPUSD 1.29023 -0.82
NZDUSD 0.65978 -0.92
USDCAD 1.32157 0.57
USDCHF 0.91416 0.14
USDJPY 105.4 0.28

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