Time | Country | Event | Period | Previous value | Forecast |
---|---|---|---|---|---|
00:30 (GMT) | Australia | RBA Meeting's Minutes | |||
06:00 (GMT) | Switzerland | Trade Balance | September | 3.4 | |
06:00 (GMT) | Germany | Producer Price Index (YoY) | September | -1.2% | -1.4% |
06:00 (GMT) | Germany | Producer Price Index (MoM) | September | 0% | -0.1% |
08:00 (GMT) | Eurozone | Current account, unadjusted, bln | August | 25.5 | |
09:30 (GMT) | United Kingdom | MPC Member Vlieghe Speaks | |||
12:30 (GMT) | U.S. | Housing Starts | September | 1.416 | 1.45 |
12:30 (GMT) | U.S. | Building Permits | September | 1.47 | 1.505 |
17:00 (GMT) | U.S. | FOMC Member Charles Evans Speaks |
FXStreet notes that having hit a high in the 1.2011 area in early September, EUR/USD subsequently moved into a lower trading band and the pair has been bearish since then. Economists at Rabobank forecast EUR/USD at 1.17 on a one-month view followed by 1.16 on a three-month view.
“From a technical perspective, the price action in EUR/USD has been bearish since September when a break below the key trendline occurred. Technicals also suggest that a strong rebound above this trendline – currently at around 1.1840 – is required to undermine the notion of the wave V below the September 25 low at 1.1612 unfolding in the coming weeks. In our view, fundamentals are also lining up to take EUR/USD towards 1.16 on a three-month view.”
“Already there are delays about the distribution of the EU’s Recovery Fund and any fresh demands for fiscal funds could trigger fresh debates about fiscal support. Against this backdrop, various ECB officials have been keen to air their dovish outlooks which has been preparing the market for more monetary policy action in the coming months.”
FXStreet notes that the US Election season is now well underway, with Congressional and Presidential elections set for November 3. Strategists at HSBC believe there are three possible outcomes and analyze the investment implications of each scenario. The fourth, a Republican sweep, is considered highly unlikely as Democrats are expected to keep control of the House.
“Status quo: Victory for President Trump, with a split Congress. In this scenario, everything remains the same. This would be the most positive outcome for financial markets, simply because it provides the most continuity and clarity around policy.”
“A Biden victory with a split Congress. Expect a small negative impact for markets short-term. Biden is an advocate for higher taxes and greater regulation of key sectors like technology so markets may react negatively immediately. But fiscal stimulus may also increase, boosting the economy and helping markets recover. Moreover, if Republicans keep control of the Senate, many of Biden’s current proposals may not be approved by Congress. This ‘gridlock’ could ironically be good for markets in the months following the US Elections since Biden’s planned changes to the tax and regulatory environment would be more restricted and markets can focus instead on a strengthening economy supported by fiscal and monetary measures.”
“Democratic Clean Sweep: a Biden Presidency with a Democrat-controlled Congress. This would initially be negative for financial markets, but they could soon rebound (after an initial bout of volatility) if spending is raised to stimulate the economy.”
“Trump victory: positive for US domestic stocks, the energy sector and high yield bonds.”
“Biden victory: positive for European stocks and green investment themes.”
The National
Association of Homebuilders (NAHB) announced on Monday its housing market index
(HMI) rose 2 points to 85 in October from an unrevised September reading of 83.
This was the highest reading in the 35-year history of the series.
Economists had
forecast the HMI to remain at 83.
A reading over
50 indicates more builders view conditions as good than poor.
Two of three
HMI components recorded gains this month, hitting their highest levels ever.
The indicator gauging current sales conditions jumped 2 points to 90 in October,
while the measure charting sales expectations jumped 3 points to 88. Meanwhile,
the component measuring traffic of prospective buyers was steady at 74.
NAHB Chairman
Chuck Fowke noted: “Traffic remains high and record-low interest rates are
keeping demand strong as the concept of ‘home’ has taken on renewed importance
for work, study and other purposes in this Covid-era. However, it is becoming
increasingly challenging to build affordable homes as shortages of lots, labor,
lumber and other key building materials are lengthening construction times.”
Meanwhile, NAHB
Chief Economist Robert Dietz said: “The housing market continues to be a bright
spot for the economy, supported by increased buyer interest in the suburbs,
exurbs and small towns. NAHB analysis published last week showed that new
single-family home sales are outpacing starts by a historic margin. Bridging
this gap will require either a gain in construction volume or reductions in
available inventory, which is already at a historic low in terms of month’s
supply.”
FXStreet notes that the outcome of the presidential election and the composition of Congress will have material implications for fiscal policy, the economic outlook and markets. Prediction markets and polls suggest a blue tide is the most likely outcome. As blue wave probabilities firmed the yield curve steepened, equities rallied and the safe-haven USD declined, though reduced odds of a contested election would have also been a factor. A blue wave election outcome should extend these trends into 2021 Q1, according to strategists at Westpac.
“Biden and Democratic Senate: A blue wave should see the USD ease via risk appetite channels, but substantial fiscal support could also shift the US outlook relative to the Eurozone and might bring forward the timing of Fed policy normalisation. That is an unambiguously bullish USD story. We assume risk appetite is the dominant driver in the short-term while the relative growth story would be more of a late 2021 or 2022 story. Markets should enjoy some relief over trade issues too. Biden has a protectionist streak but is likely to adopt a less confrontational approach to China. That should trigger Asian currency gains, though upside may be tempered by the realisation that any tariff reversal could be modest and slow in coming, if at all. Biden’s tariff stance has been ambiguous and confronting China is now a bipartisan issue. Biden may revise or phase out Section 232 steel and aluminum duties on the EU, Canada and Mexico, though not immediately. That, and a likely more conciliatory approach to traditional western allies, including a reduced threat of trade confrontation with the EU, may provide EUR with an additional short-term boost.”
“Trump and Republican Senate: Equity and fixed income markets are likely to price in a relatively less optimistic outlook under a status quo election outcome. The setback for risk appetite should boost the USD. Trump’s tariffs pressured the currencies of trade-dependent countries subject to them, by cutting the competitiveness of their exports to the US and trimming growth prospects. A second term Trump likely prompts a round of Asian currency selling. EUR/USD may be pressured too on expectations that Trump will shift his focus to Europe, long threatened.”
“Biden and Republican Senate: With a blue wave increasingly priced in, a Biden win and continued Republican Senate majority will likely prompt a setback for risk appetite - lower equities, lower yields and a lift in the USD. A smaller Covid relief bill is likely. Biden is likely to rely more on executive authority and rewriting of agency rules in this scenario. Biden would still have a freer hand on the international stage and hopes for reduced trade tensions should still underpin some modest upside for Asian currencies.”
U.S. stock-index futures rose on Monday amid renewed hopes for a last-minute stimulus deal from Washington.
Global Stocks:
Index/commodity | Last | Today's Change, points | Today's Change, % |
Nikkei | 23,671.13 | +260.50 | +1.11% |
Hang Seng | 24,542.26 | +155.47 | +0.64% |
Shanghai | 3,312.67 | -23.69 | -0.71% |
S&P/ASX | 6,229.40 | +52.60 | +0.85% |
FTSE | 5,896.82 | -22.76 | -0.38% |
CAC | 4,943.74 | +7.88 | +0.16% |
DAX | 12,880.69 | -28.30 | -0.22% |
Crude oil | $40.76 | -0.29% | |
Gold | $1,916.00 | +0.50% |
FXStreet reports that FX Strategists at UOB Group forecast USD/CNH to test the 6.6710 level in the next weeks.
24- hour view: “The sudden and sharp sell-off in USD that sent it plummeting to a low of 6.6872 came as a surprise. While oversold, the decline has scope to extend lower but for today, any weakness is likely limited to a test of the month-to-date low of 6.6788 (minor support is at 6.6850)."
Next 1-3 weeks: “While downward momentum is beginning to improve, the recent weakness in USD has yet to fully unwind from oversold conditions. That said, short-term downward has improved and USD is likely to trade with a downward bias towards the major support to 6.6710. Overall, USD is deemed to be under pressure unless it can move above 6.7300 (‘strong resistance’ level).”
(company / ticker / price / change ($/%) / volume)
3M Co | MMM | 171.37 | 0.40(0.23%) | 811 |
ALCOA INC. | AA | 12.64 | 0.02(0.16%) | 10999 |
ALTRIA GROUP INC. | MO | 39.58 | 0.05(0.13%) | 7442 |
Amazon.com Inc., NASDAQ | AMZN | 3,291.20 | 18.49(0.57%) | 81187 |
American Express Co | AXP | 105.14 | 0.23(0.22%) | 2230 |
AMERICAN INTERNATIONAL GROUP | AIG | 30.55 | 0.26(0.86%) | 1476 |
Apple Inc. | AAPL | 119.83 | 0.81(0.68%) | 1537420 |
AT&T Inc | T | 27.44 | 0.11(0.40%) | 112478 |
Boeing Co | BA | 168.8 | 1.45(0.87%) | 200861 |
Caterpillar Inc | CAT | 169.2 | 0.45(0.27%) | 1069 |
Chevron Corp | CVX | 73.18 | 0.29(0.40%) | 9292 |
Cisco Systems Inc | CSCO | 40.13 | -0.03(-0.07%) | 51755 |
Citigroup Inc., NYSE | C | 43.36 | 0.17(0.39%) | 46474 |
Deere & Company, NYSE | DE | 241.74 | 1.68(0.70%) | 223 |
E. I. du Pont de Nemours and Co | DD | 59.73 | 0.56(0.95%) | 680 |
Exxon Mobil Corp | XOM | 34.18 | 0.08(0.23%) | 49371 |
Facebook, Inc. | FB | 267.02 | 1.09(0.41%) | 104326 |
FedEx Corporation, NYSE | FDX | 285.7 | 1.83(0.64%) | 5681 |
Ford Motor Co. | F | 7.71 | 0.04(0.52%) | 174730 |
Freeport-McMoRan Copper & Gold Inc., NYSE | FCX | 17.32 | 0.17(0.99%) | 75528 |
General Electric Co | GE | 7.43 | 0.14(1.92%) | 952826 |
General Motors Company, NYSE | GM | 33.56 | 0.11(0.33%) | 23008 |
Goldman Sachs | GS | 207 | 0.79(0.38%) | 14972 |
Google Inc. | GOOG | 1,577.19 | 4.18(0.27%) | 5799 |
Hewlett-Packard Co. | HPQ | 19.76 | 0.16(0.82%) | 867 |
Home Depot Inc | HD | 289 | 1.34(0.47%) | 3834 |
HONEYWELL INTERNATIONAL INC. | HON | 176.08 | 1.22(0.70%) | 1083 |
Intel Corp | INTC | 54.5 | 0.34(0.63%) | 56788 |
International Business Machines Co... | IBM | 126.55 | 0.62(0.49%) | 32346 |
Johnson & Johnson | JNJ | 148.5 | 0.40(0.27%) | 4916 |
JPMorgan Chase and Co | JPM | 101.55 | 0.04(0.04%) | 31451 |
McDonald's Corp | MCD | 229.5 | 0.13(0.06%) | 1433 |
Merck & Co Inc | MRK | 80.25 | 0.42(0.53%) | 3501 |
Microsoft Corp | MSFT | 220.67 | 1.01(0.46%) | 115102 |
Pfizer Inc | PFE | 38.52 | 0.57(1.50%) | 322248 |
Procter & Gamble Co | PG | 144.94 | 0.55(0.38%) | 8306 |
Starbucks Corporation, NASDAQ | SBUX | 88.75 | 0.23(0.26%) | 7408 |
Tesla Motors, Inc., NASDAQ | TSLA | 445.7 | 6.03(1.37%) | 482223 |
The Coca-Cola Co | KO | 50.2 | 0.17(0.34%) | 17170 |
Twitter, Inc., NYSE | TWTR | 46.05 | 0.24(0.52%) | 16013 |
UnitedHealth Group Inc | UNH | 329.04 | -0.86(-0.26%) | 4419 |
Verizon Communications Inc | VZ | 58.28 | 0.23(0.40%) | 10840 |
Visa | V | 201.13 | 0.87(0.43%) | 6837 |
Wal-Mart Stores Inc | WMT | 145.24 | 0.53(0.37%) | 9138 |
Walt Disney Co | DIS | 127.11 | 0.30(0.24%) | 13616 |
Yandex N.V., NASDAQ | YNDX | 57.81 | -0.18(-0.31%) | 33667 |
Statistics
Canada reported on Monday the wholesale sales rose 0.3 percent m-o-m to CAD65.69
million in August, following a revised 5.2 percent m-o-m jump in July (originally
a 4.3 percent m-o-m increase).
Economists had
forecast a 0.2 percent m-o-m gain for August.
According to
the report, sales increased in four of seven subsectors, led by higher sales in
the building material and supplies (+7.0 percent m-o-m) and the motor vehicle
and motor vehicle parts and accessories (+2.5 percent m-o-m) subsectors. Excluding
motor vehicle and motor vehicle parts and accessories subsector, wholesale
sales edged down 0.1 percent m-o-m.
In y-o-y terms,
wholesale sales increased 3.4 percent in August.
Meanwhile, wholesale inventories were unchanged m-o-m
in August. Inventories grew in four of seven subsectors, with the machinery,
equipment and supplies subsector (+0.9 percent m-o-m) recording the largest gain.
However, this increases were offset by lower inventories in the other three
subsectors, led by drop in the building material and supplies subsector (-2.4
percent m-o-m). The inventory-to-sales ratio remained unchanged at 1.37 from
July to August. This was the lowest level since August 2018.
FXStreet reports that analysts at Credit Suisse apprise that EUR/JPY spotlight remains on the early October low at 123.03/01, a clear break of which can see a fall back to a cluster of supports at 122.38/23, which includes the September low and 38.2% retracement of the uptrend from May.
“EUR/JPY continues to consolidate around the potential uptrend from May and with the EUR TWI holding a top as looked for, we stay biased lower for a clear break and another test of the early October spike low at 123.03/01.”
“A clear break through 1.23.03/01 would warn of a move back to retest the 122.38 late September low, then more likely we think key retracement supports seen at 122.27/23 – including the 38.2% retracement of the entire rally from the May low – which we continue to look to remain a stronger floor. A break though would instead raise the prospect of a deeper setback to the ‘neckline’ to the June/July base at 121.35, with scope for the 200-day average at 121.08.”
FXStreet notes that sterling is indifferent for now as Brexit talks head into the crunch period. The pound is holding its ground with cable trading above the 1.2900-level and EUR/GBP below the 0.9100-level. The lack of pound movement is somewhat surprising considering that Brexit trade negotiations have deteriorated following last week’s EU Summit, economists at MUFG Bank brief.
“The lack of pound weakness strongly suggests that market participants continue to believe that a trade deal will be reached and are not overly concerned by the latest political posturing. Michael Barnier and David Frost are expected to seek a way out of the latest Brexit impasse when they meet today.”
“If a last-minute deal can still be reached before year-end, the end of October/early November is now seen as the real final deadline for talks. In the meantime, we expect market participants’ confidence over a trade deal will be more severely tested. The risk of political miscalculation still exists even if it is in both sides interests to reach a deal.”
October 19
After the Close:
IBM (IBM). Consensus EPS $2.58, Consensus Revenues $17556.66 mln
October 20
Before the Open:
Procter & Gamble (PG). Consensus EPS $1.42, Consensus Revenues $18358.70 mln
Travelers (TRV). Consensus EPS $3.10, Consensus Revenues $7319.14 mln
After the Close:
Netflix (NFLX). Consensus EPS $2.14, Consensus Revenues $6380.59 mln
Snap (SNAP). Consensus EPS -$0.05, Consensus Revenues $550.28 mln
October 21
Before the Open:
Verizon (VZ). Consensus EPS $1.21, Consensus Revenues $31603.75 mln
After the Close:
Tesla (TSLA). Consensus EPS $0.59, Consensus Revenues $8266.79 mln
October 22
Before the Open:
American Airlines (AAL). Consensus EPS -$5.72, Consensus Revenues $2810.45 mln
AT&T (T). Consensus EPS $0.77, Consensus Revenues $41658.59 mln
Coca-Cola (KO). Consensus EPS $0.46, Consensus Revenues $8353.52 mln
Dow (DOW). Consensus EPS $0.28, Consensus Revenues $9553.02 mln
Freeport-McMoRan (FCX). Consensus EPS $0.19, Consensus Revenues $3643.23 mln
After the Close:
Intel (INTC). Consensus EPS $1.11, Consensus Revenues $18258.20 mln
October 23
Before the Open:
American Express (AXP). Consensus EPS $1.34, Consensus Revenues $8702.10 mln
Time | Country | Event | Period | Previous value | Forecast | Actual |
---|---|---|---|---|---|---|
09:00 | Eurozone | Construction Output, y/y | August | -3.4% | -0.9% |
USD fell against other major currencies in the European session on Monday as the latest news regarding stimulus negotiations between the U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin bolstered risk sentiment.
The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, dropped 0.35% to 93.35.
After weekend talks with the U.S. Treasury Secretary Steven Mnuchin, House Speaker Nancy Pelosi set a deadline of Tuesday for settling on terms of a new stimulus package in order to pass it before the November 3 election. According to Pelosi, the 48-hour deadline from Saturday "only relates to if we want to get it done before the election, which we do". In her letter to House Democrats on Sunday, Pelosi said she is "optimistic that we can reach agreement before the election."
However, the U.S. currency remained supported by rising coronavirus infections and uncertainty over the outcome of the presidential election.
According to the latest data from Johns Hopkins University, the number of COVID-19 infected people in the U.S. increased to 8,155,592, the most in the world. Meanwhile, the death toll from coronavirus reached 219,676, also the most in the world. Overall, the total number of confirmed global coronavirus cases rose to 40,076,184 and deaths grew to 1,113,962. Growing coronavirus cases fuel worries about the global economic outlook.
The updated polling data from the RealClear Politics (RCP) show that the gap between President Donald Trump and former Vice President Joe Biden has narrowed. Biden leads Trump by 9 points nationally based on the average of recent polls versus 10 points last week.
FXStreet notes that the prospects for natural gas have improved, especially compared to the depressed prices witnessed over the past year. Art Woo, Director and Senior Economist at the Bank of Montreal (BMO), forecasts Henry Hub to US$2.50/mmbtu in 2021 (previously $2.25) while it has been trading around $1.80 over the past month.
“The increased optimism over natural gas is reflected in the futures market, which suggests that Henry Hub – North America’s benchmark price – could be significantly higher in 2021. The futures market is currently indicating that a producer could theoretically sell all of its natural gas production in 2021 at around US$3/mmbtu. In contrast, Henry Hub has averaged $1.80 over the past month.”
“US natural gas production is expected to decline significantly due to weaker associated gas production from lower shale oil output while US exports of LNG are expected to accelerate on the back of the recent surge in benchmark prices in Europe. These two factors, coupled with the typical seasonal pick-up in natural gas consumption during the winter, are expected to lead to a drawdown in inventories and a tighter market.”
“We revised up our forecast for Henry Hub to US$2.50/mmbtu in 2021 (previously $2.25), compared to an estimate of $1.95 for the whole of 2020.”
FXStreet reports that the Credit Suisse analyst team notes that EUR/GBP remains on the back foot, around 0.9030, down 0.46% intraday, and a clear break of 0.9026/05 should allow weakness to accelerate sharply, with next support at 0.8934.
“With the short-term downtrend from mid-September still intact, today seen at 0.9104/10 and with the EUR TWI Itself now confirming a top in outright terms, our overall bias still leans lower for now.”
“Support is seen at 0.9034 initially, then 0.9005, below which can clear the way for a move to 0.8982 next, the 50% retracement of the uptrend from late April, ahead of 0.8956 and then more important support from the trend channel low at 0.8934, where we would expect fresh buyers to show.”
“Bigger picture, below 0.8866/64 remains needed to mark a more important top.”
Reuters reports that the European Union should gain formal clearance next week to impose tariffs on $4 billion of annual U.S. imports in a dispute over aircraft subsidies, a World Trade Organization document showed on Monday.
The EU won the right to retaliation in its dispute with the United States over subsidies to planemaker Boeing this month.
Under WTO rules, the EU needs to formally notify its plan to impose tariffs to the Dispute Settlement Body (DSB), a committee on which all 164 WTO members sit. According to the DSB agenda, the EU plans to do so at the next meeting on Oct. 26.
This does not necessarily mean the bloc will impose tariffs immediately. The European Commission, which coordinates EU trade policy, also has to consult with the 27 EU governments on the issue.
FXStreet reports that тegative policy rate prospects should stem NZD strength but economists at HSBC don’t expect any large flow impact from a change in the rate sign.
“Negative rate prospects should stem NZD strength, although it is less likely to see any large flow impact from a change in the policy rate sign. In fact, we find that foreign holdings of New Zealand government debt have actually increased by NZD3 B since May 2020, despite the build-up of negative rate expectations and the yield curve dropping back below peers.”
“The AUD and NZD are both exposed to similar external forces as ‘risk-on’ commodity-exporting currencies, meaning it is frequently only the direction of domestic monetary policy that differentiates the two. In other words, a divergent monetary policy outlook should see the NZD underperform the AUD.”
According to first estimates from Eurostat, in August 2020, the seasonally adjusted production in the construction sector rose by 2.6% in the euro area and by 2.4% in the EU, compared with July 2020. In July 2020, production in construction increased by 0.3% in the euro area while it remained stable in the EU.
In August 2020 compared with August 2019, production in construction decreased by 0.9% in the euro area and by 1.5% in the EU.
In the euro area in August 2020, compared with July 2020, building construction increased by 2.8% and civil engineering by 0.7%. In the EU, building construction increased by 2.7% and civil engineering by 0.5%.
In the euro area in August 2020, compared with August 2019, building construction decreased by 1.8%, while civil engineering increased by 2.3%. In the EU building construction decreased by 2.0%, while civil engineering increased by 0.9%.
CNBC reports that veteran investor Mark Mobius warned that a contested outcome in the U.S. presidential election could cause a “dramatic fall” in the stock markets.
“That’s a real issue and a real problem,” Mobius, founding partner of Mobius Capital Partners, told in response to a question on the implications of a disputed election, in which the eventual winner is not finalized until weeks or months after the Nov. 3 vote.
“If that takes place, then we’re really in trouble. The markets will not like it and you’ll see a real correction or maybe a dramatic fall in the market. So that’s a very, very big problem,” Mobius said.
Such an outcome could happen if a candidate deemed to have lost the election refuses to concede, or if he questions the legitimacy of the results.
FXStreet reports that in opinion of FX Strategists at UOB Group, USD/JPY is posed to extend the decline if 104.70 is cleared in the next weeks.
24-hour view: “We highlighted last Friday that ‘the price actions offer no fresh clues and USD could continue to trade sideways for now, likely between 105.05 and 105.55’. USD traded sideways as expected, albeit within a narrower range of 105.17/105.44. The underlying tone has firmed somewhat and USD could edge higher but any advance is unlikely to break the solid resistance at 105.70 (minor resistance is at 105.55). On the downside, a break of 105.15 would indicate the current mild upward pressure has eased.”
Reuters reports that a survey showed more than half of Britain's small and medium-sized manufacturers have taken on debt to cope with reduced demand and disruption to supply chains caused by the COVID-19 pandemic.
The Manufacturing Growth Programme (MGP), an advisory service for smaller industrial companies, said 54% of manufacturers had taken out loans - something that could crimp future investment as they repay their debt.
Around six out of 10 manufacturers surveyed by MGP said orders had dropped and that supplier times had lengthened.
Britain's economy suffered a record slump in the second quarter and data last week showed manufacturing output remained about 9% lower than its pre-pandemic level as of August.
"The results raise important questions about resilience... particularly given the uncertainties in the economy," said Martin Coats, MGP's managing director.
FXStreet reports that economists at Westpac have a slightly positive bias due to clear election result and see potential for NZD/USD gains beyond 0.6620.
“NZD/USD has so far shown a very modest +15 pip reaction to the landslide win by Labour in the NZ general election. Perhaps that is due to pre-election polls which indicated Labour was well ahead of National, which means a comfortable Labour win was already priced into the NZD. In addition, Labour did not campaign on any major new policies.”
“There’s potential for further modest gains during the day ahead, beyond 0.6620. The multi-month outlook remains positive, with potential to rise towards 0.6800 – the top of a multi-month range.”
Time | Country | Event | Period | Previous value | Forecast | Actual |
---|---|---|---|---|---|---|
02:00 | China | Fixed Asset Investment | September | -0.3% | 0.8% | 0.8% |
02:00 | China | Industrial Production y/y | September | 5.6% | 5.8% | 6.9% |
02:00 | China | Retail Sales y/y | September | 0.5% | 1.8% | 3.3% |
02:00 | China | GDP y/y | Quarter III | 3.2% | 5.2% | 4.9% |
In today's Asian trading, the US dollar consolidated against major currencies. The dynamics of trading are influenced by hopes for new measures to stimulate the US economy and concern about the onset of a second wave of coronavirus in Europe, which indicates the likelihood of new stimulus measures from the ECB.
Data on China was also in focus. The National Bureau of Statistics said China's gross domestic product was up 4.9 percent on year in the third quarter of 2020, missing forecasts for a gain of 5.2 percent but still up from 3.2 percent in the three months prior. On a quarterly basis, GDP rose 2.7 percent - again shy of expectations for 3.2 percent and down sharply from the 11.5 percent gain in the previous three months. Industrial production jumped 6.9 percent on year in September - beating forecasts for a gain of 5.8 percent and up from 5.6 percent in August. Retail sales climbed an annual 3.3 percent, exceeding expectations for a rise of 1.8 percent following the 0.5 percent gain in the previous month.
The ICE index, which tracks the US dollar against six currencies (the Euro, Swiss franc, yen, canadian dollar, pound sterling and Swedish Krona), fell 0.01%.
Analysts told CNBC that China might be looking more toward its domestic economy now, but its growth will continue to be crucial for the Asian region.
Calling its latest GDP print “stunning” when the rest of the world is in a “dire” recession due to the pandemic, Cornell University’s Eswar Prasad said: “I think China is going to remain important for demand in the Asian region.”
“And ultimately given the size of its economy, Asia cannot prosper unless China prospers,” the professor told, in response to a question on what China’s economic recovery means for Asia when the world’s second-largest economy is focusing on its domestic growth.
China reported that its third-quarter GDP growth was up 4.9% from a year ago — lower than the 5.2% that economists expected.
“That China was able to grow as fast as it did given the weakness all across the rest of the global economy right now, is quite remarkable,” said Steve Cochrane, chief APAC economist at Moody’s Analytics.
Going forward, however, China needs to focus on its small and medium enterprises which will be important for its growth, the analysts say.
Reuters reports that European Central Bank President Christine Lagarde said that Europe must distribute its 750 billion euro recovery fund for the pandemic-hit economy promptly and should debate creating a permanent fiscal tool for the bloc.
"The Commission's aim is to be able to distribute these funds at the beginning of 2021, and this timeline must be kept," Lagarde said. "We also need rapid progress on the political side, in particular the adoption of the measures by national parliaments."
Lagarde added that funds must be targeted, otherwise they get lost in the "administrative labyrinth," failing to support the real economy's transformation in the post-pandemic world.
She also said that European leaders should consider making the recovery fund permanent, a taboo in some more conservative countries, and should also discuss setting up a permanent budget for the euro zone.
eFXdata reports that Citi flags a scope for Switzerland to be named a currency manipulator by the US.
"In October, Switzerland met the objective criteria to be labeled a currency manipulator by US Treasury. The timing of the US Treasury Foreign Exchange Report has been disrupted over the past 18 months; however, we expect the US Treasury will attempt to get back on schedule by releasing the report this month".
"This provides asymmetric risk/reward for long CHF positions in the coming weeks as countries named currency manipulators tend to see their currencies strengthen," Citi adds.
RTTNews reports that according to the report from the National Bureau of Statistics, China's gross domestic product was up 4.9 percent on year in the third quarter of 2020, missing forecasts for a gain of 5.2 percent but still up from 3.2 percent in the three months prior.
On a quarterly basis, GDP rose 2.7 percent - again shy of expectations for 3.2 percent and down sharply from the 11.5 percent gain in the previous three months.
Industrial production jumped 6.9 percent on year in September - beating forecasts for a gain of 5.8 percent and up from 5.6 percent in August.
Retail sales climbed an annual 3.3 percent, exceeding expectations for a rise of 1.8 percent following the 0.5 percent gain in the previous month.
Fixed asset investment was up 0.8 percent year to date in September, matching forecasts following the 0.3 percent fall a month earlier.
EUR/USD
Resistance levels (open interest**, contracts)
$1.1821 (468)
$1.1797 (522)
$1.1777 (535)
Price at time of writing this review: $1.1705
Support levels (open interest**, contracts):
$1.1661 (1545)
$1.1636 (1830)
$1.1605 (923)
Comments:
- Overall open interest on the CALL options and PUT options with the expiration date November, 6 is 53589 contracts (according to data from October, 16) with the maximum number of contracts with strike price $1,1800 (4042);
GBP/USD
Resistance levels (open interest**, contracts)
$1.3056 (268)
$1.3019 (1681)
$1.2991 (213)
Price at time of writing this review: $1.2925
Support levels (open interest**, contracts):
$1.2830 (243)
$1.2779 (771)
$1.2746 (1819)
Comments:
- Overall open interest on the CALL options with the expiration date November, 6 is 32146 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 23638 contracts, with the maximum number of contracts with strike price $1,2050 (2391);
- The ratio of PUT/CALL was 0.74 versus 0.74 from the previous trading day according to data from October, 16
* - 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.
Raw materials | Closed | Change, % |
---|---|---|
Brent | 42.62 | -0.72 |
Silver | 24.08 | -0.74 |
Gold | 1898.578 | -0.49 |
Palladium | 2325.58 | -1.39 |
Index | Change, points | Closed | Change, % |
---|---|---|---|
NIKKEI 225 | -96.6 | 23410.63 | -0.41 |
Hang Seng | 228.25 | 24386.79 | 0.94 |
KOSPI | -19.68 | 2341.53 | -0.83 |
ASX 200 | -33.5 | 6176.8 | -0.54 |
FTSE 100 | 87.06 | 5919.58 | 1.49 |
DAX | 205.24 | 12908.99 | 1.62 |
CAC 40 | 98.44 | 4935.86 | 2.03 |
Dow Jones | 112.11 | 28606.31 | 0.39 |
S&P 500 | 0.47 | 3483.81 | 0.01 |
NASDAQ Composite | -42.32 | 11671.56 | -0.36 |
Time | Country | Event | Period | Previous value | Forecast |
---|---|---|---|---|---|
02:00 (GMT) | China | Fixed Asset Investment | September | -0.3% | 0.8% |
02:00 (GMT) | China | Industrial Production y/y | September | 5.6% | 5.8% |
02:00 (GMT) | China | Retail Sales y/y | September | 0.5% | 1.8% |
02:00 (GMT) | China | GDP y/y | Quarter III | 3.2% | 5.2% |
09:00 (GMT) | Eurozone | Construction Output, y/y | August | -3.8% | |
11:30 (GMT) | Eurozone | ECB's Yves Mersch Speaks | |||
12:00 (GMT) | U.S. | Fed Chair Powell Speaks | |||
12:30 (GMT) | Canada | Wholesale Sales, m/m | August | 4.3% | 0.2% |
12:40 (GMT) | Eurozone | ECB President Lagarde Speaks | |||
13:00 (GMT) | U.S. | FOMC Member Williams Speaks | |||
14:00 (GMT) | U.S. | NAHB Housing Market Index | October | 83 | 83 |
14:05 (GMT) | United Kingdom | MPC Member Cunliffe Speaks | |||
14:30 (GMT) | Canada | Bank of Canada Business Outlook Survey | |||
15:45 (GMT) | U.S. | FOMC Member Clarida Speaks | |||
16:00 (GMT) | Germany | German Buba President Weidmann Speaks | |||
18:00 (GMT) | U.S. | Federal budget | September | -200 | -124 |
18:20 (GMT) | U.S. | FOMC Member Bostic Speaks | |||
19:00 (GMT) | U.S. | FOMC Member Harker Speaks | |||
21:00 (GMT) | New Zealand | NZIER Business Confidence | Quarter III | -63% | |
23:00 (GMT) | New Zealand | NZIER Business Confidence | Quarter III | -63% | |
23:00 (GMT) | Australia | RBA Assist Gov Kent Speaks |
Pare | Closed | Change, % |
---|---|---|
AUDUSD | 0.70754 | -0.24 |
EURJPY | 123.473 | 0.06 |
EURUSD | 1.17155 | 0.07 |
GBPJPY | 136.029 | 0.03 |
GBPUSD | 1.29066 | 0.03 |
NZDUSD | 0.66027 | 0.07 |
USDCAD | 1.31943 | -0.16 |
USDCHF | 0.91482 | 0.07 |
USDJPY | 105.393 | -0.01 |
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.