1 Nov: Markets mostly steady but Gbp higher ahead of tomorrow’s BOE Meeting. FOMC, ADP & ISM in focus today.

By | November 1, 2017

 

The US$ is mixed on Wednesday, with the main action being seen in Sterling which marched strongly higher ahead of tomorrow’s BOE Meeting at which the first rate hike in 10 years is widely expected. In other markets, US stocks are firm while the metals are heavy, but within a tight range. WTI is chopping around at new 7 month highs, made during the session after the release of the API Weekly Crude Oil Stock Inventory showed a decline in inventories of 5.087 mio barrels.

In terms of data,  the Euro lacked direction after some mixed economic figures that showed some solid growth but sluggish inflation. The EU Q3 GDP growth slowed to 0.6% qq, down from upwardly revised 0.7% qq but beating expectation of 0.5% qq. The annualised growth expanded by 2.5%, the highest since 2011. EU unemployment rate dropped to 8.9% in September, beating expectation of 9.0%, the lowest level in nearly 9 years, since January 2009.Headline CPI slowed to 1.4% yy in October, down from 1.5% yy and missed expectation of 1.5% yy. The Core CPI slowed to 0.9% yy, down from 1.1% yy and below expectation of 1.1% yy. .From the US, the employment cost index rose 0.7% in Q3, in line with expectation, and in annualized terms, by 2.5%, a nine-year high. The S&P Case-Shiller 20 cities house price rose 5.9% yy in August, while the Chicago Purchasing Managers Index came in at 66.2, well above expectations of 61.0.

Wednesday will begin with the NZ employment figure forQ3 (exp 4.7%, Change +0.8%, PR 70.2%) and then we have the Nikkei Mfg PMI and the Caixin China Mfg PMI. After that, with much of Europe on holiday (all saints day), there is nothing, except the UK Mfg PMI, until the US session, when the ADP (exp 225K), the ISM Mfg PMI/Prices Paid and the FOMC Meeting/IR Decision will be released. No change is expected this month ahead of the increasing chance of a Fed rate hike next month.  Also note that the BOEs Cunliffe will be speaking and traders will be look for a hint as to a possible rate hike on Thursday.

CURRENCIES
EURUSD: 1.1645
Res  1.1665  1.1690  1.1720
Sup  1.1625  1.1600  1.1570
USDJPY: 113.63
Res  113.75  114.00  114.45
Sup  113.30  112.95  112.75
GBPUSD: 1.3281
Res  1.3290  1.3310  1.3335
Sup  1.3265  1.3235  1.3205
USDCHF: 0.9973
Res  0.9995  1.0020  1.0040
Sup  0.9960  0.9940  0.9920
AUDUSD: 0.7654
Res  0.7675  0.7700  0.7720
Sup  0.7640  0.7625  0.7600
NZDUSD: 0.6846
Res  0.6885  0.6910  0.6940
Sup  0.6820  0.6800  0.6770
INDICES / COMMODITIES
S&P: 2572
Res  2580  2590  2600
Sup  2560  2555  2550
DJI: 23330
Res  23360  23435  23550
Sup  23275  23195  23150
ASX SPI: 5908
Res  5920  5945  5965
Sup  5890  5875  5855
XAUUSD: 1271
Res  1275  1280  1285
Sup  1270  1265  1260
XAGUSD: 16.70
Res  16.90  17.00  17.15
Sup  16.65  16.50  16.35
WTI: 54.61
Res  54.80  55.20  56.50
Sup  53.90  53.10  52.15