24 Oct: Markets steady as markets brace for ECB (Thur) and the Fed Chair announcment

By | October 24, 2017

 

Markets have been relatively steady on Monday with the US$ holding a mostly bid bias as traders looks towards Thursday’s ECB Meeting. The most interesting action was in the Yen, which saw the dollar trade at three-month highs as traders expect the BOJ to continue its loose monetary policy measures after Japanese PM Abe won the snap election. In other markets, US stocks are a little lower after making yet new all time highs. The metals are rangebound, as is WTI.

Tuesday’s focus will be almost entirely on the global flash PMIs and it would note really surprise if markets hold close to current levels which waiting on Thursday’s ECB decision. It appears that the general consensus is that the ECB will announce a 9 month extension of the APP at a reduced pace of EUR30bn per month compared to the current 60 bio pm. Also of note this week is the likely announcement of the next Chair of the Fed, which should produce a decent reaction, one way or the other, in the dollar. I think if Yellen is reappointed there will be some disappointment at the lack of change and possibly a selloff in the dollar. The other leading candidates, Taylor/Warsh, seem more hawkish and would see a decent bounce in the dollar and bond yields, I suspect.

CURRENCIES
EURUSD: 1.1748
Res  1.1760  1.1775  1.1800
Sup  1.1725  1.1700  1.1670
USDJPY: 113.42
Res  113.60  113.85  114.10
Sup  113.25  113.00  112.80
GBPUSD: 1.3198
Res  1.3225  1.3260  1.3300
Sup  1.3160  1.3120  1.3085
USDCHF: 0.9851
Res  0.9865  0.9880  0.9900
Sup  0.9830  0.9810  0.9785
AUDUSD: 0.7805
Res  0.7835  0.7855  0.7880
Sup  0.7795  0.7770  0.7745
NZDUSD: 0.6964
Res  0.6980  0.7000  0.7020
Sup  0.6950  0.6930  0.6900
INDICES / COMMODITIES
S&P: 2562
Res  2565  2570  2575
Sup  2560  2555  2550
DJI: 23214
Res  23295  23350  23400
Sup  23200  23145  23080
ASX SPI: 5866
Res  5890  5910  5925
Sup  5860  5840  5815
XAUUSD: 1282
Res  1285  1290  1295
Sup  1275  1270  1265
XAGUSD: 17.08
Res  17.30  17.45  17.60
Sup  16.85  16.75  16.55
WTI: 51.84
Res  52.55  52.85  53.50
Sup  51.30  50.80  50.10