17 Oct: Poor US Retail Sales undermine stock rally, US$. Brexit still the focus. Australian jobs data coming up.

By | October 17, 2019

Markets are mixed on Thursday although the US$ is under some downside pressure after some weak US data suggested that the downside risks to the US economy are growing which may yet require further easing from the Fed. The US retail sales dropped by -0.3%mm in September, well below the expectation of a +0.3%mm rise, to be the first decline since February. While the dollar moved to a 1 month low against the Euro, it was also under pressure against Sterling, which remains firm on the back of the hopes of a Brexit deal although any outcome has yet to be ratified, and would then still have to be passed through the UK parliament. This is likely to be a major stumbling block, and means that parliament is expected to sit on Saturday, a very rare occurrence as it will be only the 3rd time of doing so since the outbreak of the Second World War in what could be one of the most important Commons’ sessions of the entire Brexit process.

Apart from the dollar index being about 0.3% lower, stocks have ended pretty much flat, while the metals are mixed. Oil pulled back some of the losses of the previous session and ended up by 0.8%, as it bounces around on whatever the latest US/trade headline may bring. Wednesday trade seemed to see traders take the relative quiet in US/China trade negotiations as a sign that officials from the two sides are working on something positive.

Looking ahead, Thursday gets underway with a busy session for the Aud$, with a speech from the RBA’s Guy Debelle which will be followed by the NAB Business Q3 Conditions/Confidence (exp 26) and the Australian jobs data for September (exp 5.3%, +15K). Europe will be thin, with just the UK September Retail Sales (exp 0.0%mm, 3.2%yy) although the US is in for a busy session. This will include the September Housing Starts (exp 1.32 mio), Building Permits (exp 1.35 mio), Capacity Utilisation (exp 77.7%), and Industrial Production (exp -0.1%) and the October Philadelphia Fed Mfg Survey (exp 8) and weekly Jobless Claims (exp 215K).  Fed speakers will include Bowman and Williams.

Note that early tomorrow morning, RBA Governor Lowe will speak at a ‘Governor Talk’ event at the IMF annual meeting (7:00 am AEDT). Have a good day.

Economic data highlights will include:

Thur: RBA’s Debelle Speech, Australian NAB Business Conditions/Confidence, Unemployment, UK Retail Sales, BOE Q3 Credit Conditions, US Housing Starts, Building Permits, Philadelphia Fed Mfg Survey, Capacity Utilisation, Industrial Production, Jobless Claims

Market moves, in brief:                 

FX: DXY 98.00 (-0.3%)

Bonds: US10Y; 1.751% (-1.30%), German 10Y; -0.388% (+7.4%), UK 10Y; 0.614% (+0.80%), Australian 10Y; 1.636% (+2.02%), NZ 10Y; 1.19% (+2.5 %), China 10Y; 3.163% (-0.53%)

Stock Indices: DJI; -0.04%, S+P; -0.23%, NASDAQ; -0.30%, EUStoxx50; +0.02%, FTSE100; -0.61%, Shanghai Composite; -0.41%,

Metals: Gold $1489 oz (+0.56%), Silver $17.39 oz (-0.14%), Copper $2.586 lb (-1.07%), Iron Ore $91.40 per tonne (NYMEX) (-1.32%),

Oil: WTI $53.08 pb (+0.58%)

CURRENCIES
EURUSD: 1.1075
Res  1.1085  1.1100  1.1115
Sup  1.1060  1.1045  1.1025
USDJPY: 108.76
Res  109.00  109.30  109.60
Sup  108.55  108.25  108.00
GBPUSD: 1.2826
Res  1.2875  1.2915  1.2955
Sup  1.2800  1.2750  1.2700
USDCHF: 0.9948
Res  0.9960  0.9980  1.0000
Sup  0.9940  0.9920  0.9900
AUDUSD: 0.6761
Res  0.6770  0.6790  0.6810
Sup  0.6740  0.6720  0.6695
NZDUSD: 0.6292
Res  0.6315  0.6340  0.6360
Sup  0.6275  0.6255  0.6235
INDICES / COMMODITIES
S&P.fs: 2989.78
Res  3000.00  3015.00  3030.00
Sup  2975.00  2960.00  2945.00
DJ30.fs: 26940.00
Res  27020.00  27100.00  27180.00
Sup  26890.00  26805.00  26710.00
SPI200.fs: 6710
Res  6730  6750  6775
Sup  6685  6660  6630
XAUUSD: 1489.64
Res  1495.00  1505.00  1515.00
Sup  1480.00  1470.00  1460.00
XAGUSD: 17.40
Res  17.50  17.60  17.70
Sup  17.35  17.25  17.15
WTI.fs: 53.00
Res  53.70  54.25  54.90
Sup  52.45  51.85  51.30