20 Oct: Kiwi lower after election result. Other markets generally choppy but US$ under some pressure.

By | October 20, 2017

 

It has been a busy session on Thursday, led off by the Kiwi in early Europe, which tanked after the announcement of a Labour led coalition. The Kiwi is closing the NY day on its lows and looks as though there will be plenty of downside potential in the days to come. Elsewhere, the Yen and Swiss Franc rebounded strongly, with traders seeking a safe-haven after the Spanish Prime Minister, Rajoy, announced the intention to invoke the so called Article 155 of Constitution to suspend the autonomy of Catalonia. This announcement came after Catalan leader, Puigdemont, refused to withdraw the declaration of independence. The Euro initially spiked lower against all major currencies after the news but then quickly recovered against all but the Yen and Swiss Franc. The US$ has been generally under pressure due to softer US Treasury yields and is closing the day towards the bottom end of its range against most pairs, Kiwi and Cable excepted. In other markets, US stocks have taken a breather from their recent run higher  but have recovered from a brief , sharp sell-off to end up trading sideways just below the all-time highs. The metals are a firm, and WTI a bit lower after data showed a larger than expected build-up of product inventories which continued to weigh on sentiment. Iron Ore was down around 3.5%, which may weigh on the Aud$ today. In terms of US data, the Philadelphia Fed said that its manufacturing index rose to 27.9 this month up from 23.8 in September, beating economists forecast of a reading of 22, while the initial jobless claims decreased 22,000 to a seasonally adjusted 222,000 for the week ended Oct. 13, beating forecasts of a 4,000 decrease.

Friday may see a quiet end to the week, with little data to trade off although Donald Trump will be meeting Janet Yellen at some stage to discuss the upcoming vacancy at the Fed. The NZ Visitor Arrivals will be the only point of focus in Asia, while Europe will be equally thin the just the German PPI, EU Current Account and the UK PSNBR in focus. The US will not add much to the equation either, with just the Existing Home Sales and a speech from the Fed’s Mester on the cards. After the close of play though, Janet Yellen will be speaking which may set up for an interesting open on Monday.

CURRENCIES
EURUSD: 1.1852
Res  1.1860  1.1880  1.1910
Sup  1.1825  1.1800  1.1770
USDJPY: 112.55
Res  112.80  113.15  113.45
Sup  112.30  112.00  111.65
GBPUSD: 1.3154
Res  1.3185  1.3230  1.3285
Sup  1.3120  1.3080  1.3030
USDCHF: 0.9761
Res  0.9785  0.9815  0.9835
Sup  0.9750  0.9735  0.9705
AUDUSD: 0.7878
Res  0.7895  0.7910  0.7930
Sup  0.7860  0.7840  0.7815
NZDUSD: 0.7027
Res  0.7055  0.7085  0.7110
Sup  0.7010  0.6990  0.6970
INDICES / COMMODITIES
S&P: 2561
Res  2565  2570  2575
Sup  2555  2550  2545
DJI: 23118
Res  23150  23200  23250
Sup  23065  23000  22905
ASX SPI: 5858
Res  5885  5900  5925
Sup  5850  5840  5815
XAUUSD: 1290
Res  1295  1300  1305
Sup  1285  1280  1275
XAGUSD: 17.24
Res  17.35  17.45  17.60
Sup  17.10  16.90  16.70
WTI: 51.56
Res  52.60  53.70  54.40
Sup  51.90  51.20  50.70