Monday was a fairly rangebound session for most FX pairs although risk sentiment does remain mildly positive after Donald Trump once again said that the trade talks with China are “coming along great”. He is just repeating what he said on previous occasions and the market showed little reaction, but it has mean that safe haven vehicles – the Jpy and Gold – remain under some downside pressure. He added that he hoped a deal would be signed by the time of the APEC meeting in Chile in mid-November. His comments came after Chinese Vice-Premier Liu He saying on Saturday that “substantial progress” had been made in the negotiations, adding that ending the trade war will benefit the U.S/China and the world in general.
In the FX markets, GbpUsd did break above 1.3000 for the first time since mid May, but that did not last long after the UK Parliament Speaker refused to allow another debate on the Brexit Bill, and Cable is now back to where it was this time yesterday. Otherwise the FX pairs are fairly flat on the day.
In other markets, the main moves were in bonds, which saw yields generally move higher on hopes of an eventual positive trade outcome between the US/China, while WTI was down by around 0.5%. Stocks closed on a firm note, with the S+P back above 3000, on increased hopes of a positive trade outcome from the US/China.
Looking ahead, it is a very thin calendar coming up on Tuesday, and with Japan on holiday the Asian session should be very quiet indeed. Following that, Europe looks set to be rangebound too, although the ECB Bank Lending Survey is due for release, while from the US the only items of note are the October Richmond Fed Mfg Index (exp -14), the September Existing Home Sales (exp +0.1%) and the API Weekly Crude Oil Stock Inventory. Once again it looks likely to be the words of wisdom from the POTUS and any Brexit developments that will drive the direction today. Have a good day.
Economic data highlights will include:
Tue: Japan Bank Holiday, ECB Lending Survey, UK Public Sector Net Borrowing Requirements, CBI Distributive Trade Survey – Trends, US Existing Home Sales, Richmond Fed Mfg Index, API Weekly Crude Oil Stock Inventory, Canada General Election
Market moves, in brief:
FX: DXY 97.32 (+0.19%)
Bonds: US10Y; 1.796% (+2.20%), German 10Y; -0.343% (+11.43%), UK 10Y; +0.670% (+6.61%), Australian 10Y; 1.161% (+3.88%), NZ 10Y; 1.285% (+3.13 %), China 10Y; 3.216% (+1.19%)
Stock Indices: DJI; +0.24%, S+P; +0.64%, NASDAQ; +0.86%, EUStoxx50; +0.58%, FTSE100; +0.18%, Shanghai Composite; +0.05%,
Metals: Gold $1483 oz (-0.48%), Silver $17.55 oz (+0.01%), Copper $2.6455 lb (+0.36%), Iron Ore $90.58 per tonne (NYMEX) (-0.20%),
Oil: WTI $53.41 pb (-0.48%)
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