2 Nov: US$ pummelled, led by Gbp on positive Brexit story. Metals, stocks higher, Oil down. Mfg PMIs, NFP today.

By | November 2, 2018


The US$ has come under heavy selling pressure on Thursday, on all fronts, beginning in Asia and remaining fairly relentless throughout the day and ending at session lows against most counterparts. The Aud$ initially led the charge after the better than expected Trade Balance yesterday, with Sterling then taking over after a UK official said London was close to agreeing a deal with the EU, giving UK-based financial services firms basic access to EU markets, although the chance of an imminent deal was later played down by both the British Government and EU officials. Mark Carney added to the bullish bias for Cable after the BoE had left interest rates on hold,  hinting at a slightly faster  rate hike path if Brexit goes smoothly. The BOE sent a more hawkish-than-expected message to the market in reiterating a “gradual and limited” monetary stance but indicating that more rate hikes might be needed as there could be overheating in the UK economy in 2H 2019.

In other markets, the metals rallied strongly (Gold; +1.6%) on the back of the softer dollar while WTI is lower again (-2.74%), seemingly on the back of a presidential memorandum on Wednesday in which Donald Trump stated that there is sufficient supply of petroleum from nations other than Iran to permit a reduction in purchases from Tehran. Signs of increased US production also helped push WTI lower.

US stocks rose for a third day, +1%, as investors greeted the latest batch of earnings optimistically amid signs that the Trump administration will ease its trade war with China.

Friday will start with the Australian September Retail Sales (exp 0.3%mm) and Q3 PPI (exp 0.2%qq) and will be followed in Europe by the October EU Mfg PMIs and the UK Construction PMI. The main focus of the session will be the US Jobs/NFP/Average Hourly Earnings (exp 3.7%, +190K, AHE 0.2%mm,3.1%yy). Note that a bunch of economists surveyed by the WSJ expect that today’s jobs report will show that average hourly earnings for private-sector employees rose at better than 3% annualised in October, and would be the first time that the AHE has topped 3% since 2009.Have a good weekend.

Economic data highlights will include:                                                                                      

Fri: Australian Retail Sales, PPI, EU Mfg PMIs, US Jobs/NFP/Average Hourly Earnings data

EURUSD: 1.1408
Res  1.1425  1.1440  1.1460
Sup  1.1390  1.1350  1.1370
USDJPY: 112.65
Res  112.90  113.10  113.40
Sup  112.55  112.30  112.00
GBPUSD: 1.3015
Res  1.3045  1.3090  1.3130
Sup  1.2985  1.2940  1.2890
USDCHF: 1.0020
Res  1.0040  1.0065  1.0095
Sup  1.0000  0.9970  0.9935
AUDUSD: 0.7208
Res  0.7220  0.7235  0.7250
Sup  0.7185  0.7160  0.7135
NZDUSD: 0.6657
Res  0.6670  0.6685  0.6700
Sup  0.6640  0.6620  0.6600
S&P.fs: 2735
Res  2745  2760  2780
Sup  2720  2705  2685
DJ30.fs: 25303
Res  25345  25465  25595
Sup  25195  25070  24945
SPI200.fs: 5802
Res  5825  5850  5875
Sup  5785  5765  5745
XAUUSD: 1233
Res  1240  1245  1250
Sup  1230  1225  1220
XAGUSD: 14.74
Res  14.80  14.90  15.00
Sup  14.65  14.55  14.45
WTI.fs: 63.49
Res  64.15  64.80  65.65
Sup  63.05  62.50  61.80