18 Oct: US$ generally firm, Sterling lower on Brexit woes. Central Bank speakers to dominate today’s action.

The US$ was generally underpinned for much of the session on the back of reports that Stanford University academic,  John Taylor impressed Donald Trump in his Fed chair interview yesterday although it did give back some of those gains late in the day. Taylor is said to want higher interest rates, and sooner rather than later. Also helping the dollar was the US September export/Import price index which came in above expectations. Sterling was the big loser on the day even though the headline UK CPI met expectation, with Brexit woes dampening any upside momentum.  Elsewhere, stocks were steady (with the DJI briefly breaking above 23,000 for the first time on strong corporate results), while the metals were lower due to the strengthening dollar.  In other data on Tuesday, the German ZEW economic sentiment rose 0.6 pts to 17.6 in October, missing expectation of 20.0, while the current situation gauge dropped 0.9 to 87.0 and also missed expectation of 88.5. The EU ZEW economic sentiment tumbled sharply to 26.7, down from 31.7, well off expectation of 34.2. In the US, the Capacity Utilisation/Industrial Production and NAHB Housing Market Index were roughly in line with expectations.

There is very little due from Asia today, with the WBC Leading Index the only point of minor interest. Europe will be busier, with Mario Draghi speaking first thing, and to be closely followed by the UK Jobs data (exp. Claimant Count Change +1k, Unemployment 4.3%). The EU Construction Output data for August is also due. After that we see a deluge of central bank speakers, including Angeloni/Praet/Coeure (ECB) and Kaplan/Dudley (Fed). In terms of data, the US will have the Housing Starts and the Building Permits, both for September.

 

CURRENCIES
EURUSD: 1.1766
Res  1.1785  1.1800  1.1820
Sup  1.1735  1.1715  1.1700
USDJPY: 112.20
Res  112.30  112.50  112.75
Sup  112.00  111.80  111.65
GBPUSD: 1.3189
Res  1.3230  1.3265  1.3285
Sup  1.3155  1.3120  1.3100
USDCHF: 0.9783
Res  0.9795  0.9810  0.9835
Sup  0.9765  0.9750  0.9730
AUDUSD: 0.7845
Res  0.7860  0.7875  0.7890
Sup  0.7830  0.7815  0.7800
NZDUSD: 0.7169
Res  0.7195  0.7210  0.7245
Sup  0.7145  0.7120  0.7090
INDICES / COMMODITIES
S&P: 2557
Res  2560  2565  2570
Sup  2545  2550  2540
DJI: 22963
Res  22970  23000  23050
Sup  22910  22865  22825
ASX SPI: 5865
Res  5880  5900  5925
Sup  5850  5835  5815
XAUUSD: 1285
Res  1290  1295  1300
Sup  1280  1275  1270
XAGUSD: 17.02
Res  17.20  17.30  17.45
Sup  16.95  16.80  16.60
WTI: 51.92
Res  52.30  52.85  53.75
Sup  51.20  50.45  49.70