It has been a good day for the “risk-on” trade, with the markets being led by reports of progress on a Brexit deal and then by a spate of upbeat earnings reports from the US that beat expectations and brought buyers back to the equities market. These news items saw Cable soar by 200bp and the US stock indices by 1% with JP Morgan, Nike and Microsoft leading the way, and placed downside pressure on the safe haven assets, where the Jpy, Chf and the metals are all lower. The positive mood has also transferred into the global bond yields which have all seen yields head higher as traders took heart from the upbeat corporate earnings, with plenty more results to come over the course of the week. Today sees results from Alcoa, BofA, Morgan Stanley and Netflix among others.
Brexit news is leading the way forward today, and if a deal can be concocted with regard to the customs border with N Ireland, we can expect strong further gains in Cable although there is a long way to go and we should expect to see it remain highly volatile. The longer term charts though do look pretty positive. The US$ is mixed, and after some early strength it has given back some ground against the Euro, which was dragged higher by Sterling, while remaining firm against the Aud$ and the Kiwi which are both under some mild downside pressure.
In other markets, WTI has fallen by 1% due to concerns over fresh troubles in US/ China trade negotiations, with weak economic data and underlining worries about global growth also weighing on the price. Gold and Silver are also both under pressure as safe haven assets were discarded.
Wednesday will begin with the NZ Q3 CPI figures (exp 0.6%qq, 1.4%yy) and the WBC Australian Leading Index although that is about it for the Asian session. Europe will look to the UK CPI (exp 1.8%yy – Sept), PPI, RPI and the EU Trade Balance and CPI (exp 0.2%mm, 0.9%yy; Core 0.4%/1.0%), while the US session will see the September Retail Sales (exp 0.3%mm) and speeches from the Fed’s Brainard and the ECB’s Lane. Have a good day.
Economic data highlights will include:
Wed: NZ Q3 CPI, WBC Australian Leading Index, UK CPI, PPI, RPI, EU Trade Balance, CPI, US Retail Sales, Business Inventories, NAHB Housing Market Index, EIA Crude Oil Stocks Weekly Change
Market moves, in brief:
FX: DXY 98.29 (-0.14%)
Bonds: US10Y; 1.777% (+2.63%), German 10Y; -0.418% (+8.64%), UK 10Y; +0.609% (+9.18%), Australian 10Y; 1.026% (-2.73%), NZ 10Y; 1.162% (-2.66 %), China 10Y; 3.18% (+0.40%)
Stock Indices: DJI; +0.96%, S+P; +1.11%, NASDAQ; +1.27%, EUStoxx50; +1.19%, FTSE100; -0.03%, Shanghai Composite; -0.56%,
Metals: Gold $1480 oz (-0.85%), Silver $17.40 oz (-1.48%), Copper $2.611 lb (-0.87%), Iron Ore $92.62 per tonne (NYMEX) (+0.42%),
Oil: WTI $52.92 pb (-1.03%)
|INDICES / COMMODITIES|