15 Oct: Mostly quiet due to US holiday. Sterling lower. RBA Minutes/China CPI ahead. UK jobs/EU ZEW later.

By | October 15, 2019

It has been a fairly quiet session, being a US holiday, although the US stockmarkets were open and have moved very slightly lower, because the inconclusive US/China trade negotiations seemed to dampen sentiment after some cautious Chinese statements. Traders have now turned their attention toward the 3Q earnings season which begins later today, with expectations rather downbeat for the general outcome because of the ongoing trade concerns and the real chance of a global trade downturn. The FX market saw the Aud and Kiwi give up a little ground because of the downbeat tone but elsewhere it was fairly quiet, with the exception of Sterling, which had a volatile ride following some negative Brexit news over the weekend. Cable fell almost 200b from the high before bouncing around during/after the Queen’s speech, to set the programme for the UK Parliament – essentially an election agenda -, and closed the day 60 points above the lows. There are now 17 days to go before the Brexit divorce date, and the outcome seems as confused as ever although part of the reason for Cable’s late recovery seems to be because of reports that Boris Johnson is edging towards the parliamentary numbers needed to pass a Brexit deal. Reports suggest that some hardline Eurosceptic MPs as well as some pro-deal Labour MPs have indicated they may back a new agreement made with the EU. – We shall see.

In other markets, WTI fell by 2% on Monday after Bloomberg reported that China has more demands from the Trump Administration over tariffs and want more talks to reach a trade deal, contrasting directly with the Donald Trump’s contention that the two sides are getting closer to an agreement.

Tuesday will begin with a busy Asian session, including the NZ Visitor Arrivals (August, exp +2.1%mm) , RBA Minutes, China CPI/PPI (CPI, exp 0.7%mm, 2.9%yy; PPI, exp -1.2%yy) and the Japan Capacity Utilisation, Industrial Production and Tertiary Industry Index. From the UK comes the August Unemployment data (exp 3.8%, Claimant Count Change, +28K) and from the EU we get the German/EU ZEW Economic Sentiment Survey. The US is going to be pretty quiet, with just the New York State Empire Mfg Index on the card, while Kiwi traders will be watching the Global Dairy Trade Index. Have a good day.

Economic data highlights will include:

Tue: NZ Visitor Arrivals , RBA Minutes, China CPI, Japan Capacity Utilisation, Industrial Production, Tertiary Industry Index, UK Unemployment, German/EU ZEW Economic Sentiment Survey, US New York State Empire Mfg Index, Fed’s Bullard Speech

Market moves, in brief:

FX: DXY 98.52 (+0.13%)

Bonds: US10Y; 1.732% (-0.25%), German 10Y; -0.457% (-3.84%), UK 10Y; +0.558% (-10.94%), Australian 10Y; 1.054% (+2.83%), NZ 10Y; 1.194% (+2.28 %), China 10Y; 3.167% (+0.31%)

Stock Indices: DJI; -0.07%, S+P; -0.10%, NASDAQ; -0.05%, EUStoxx50; -0.38%, FTSE100; -0.46%, Shanghai Composite; +1.15%,

Metals: Gold $1492 oz (+0.22%), Silver $17.65 oz (+0.53%), Copper $2.632 lb (+0.15%), Iron Ore $92.23 per tonne (NYMEX) (-0.68%),

Oil: WTI $53.47 pb (-2.39%)

CURRENCIES
EURUSD: 1.1025
Res  1.1040  1.1060  1.1080
Sup  1.1010  1.0990  1.0970
USDJPY: 108.35
Res  108.60  108.85  109.10
Sup  108.10  107.85  107.60
GBPUSD: 1.2560
Res  1.2600  1.2655  1.2715
Sup  1.2520  1.2460  1.2405
USDCHF: 0.9977
Res  0.9980  0.9995  1.0015
Sup  0.9965  0.9950  0.9935
AUDUSD: 0.6772
Res  0.6785  0.6800  0.6815
Sup  0.6755  0.6740  0.6725
NZDUSD: 0.6295
Res  0.6315  0.6340  0.6360
Sup  0.6275  0.6250  0.6225
INDICES / COMMODITIES
S&P.fs: 2965.78
Res  2990.00  3010.00  3030.00
Sup  2950.00  2930.00  2900.00
DJ30.fs: 26745.50
Res  26885.00  27040.00  27180.00
Sup  26625.00  26500.00  26370.00
SPI200.fs: 6597
Res  6620  6645  6670
Sup  6575  6550  6525
XAUUSD: 1491.87
Res  1500.00  1510.00  1520.00
Sup  1480.00  1470.00  1460.00
XAGUSD: 17.64
Res  17.75  17.85  17.95
Sup  17.55  17.45  17.35
WTI.fs: 53.41
Res  53.95  54.40  54.95
Sup  53.00  52.55  52.10