25 Oct: ECB on hold, UK heading for an election. Euro, Gbp lower. Thin calendar for Friday.

By | October 25, 2019

 

Thursday has been a mostly sideways session, despite plenty of news that had the opportunity to move the markets, although Sterling has seen some gyrations after the UK PM proposed a General Election for December 12th in order to break the never-ending Brexit cycle of going nowhere fast.

In other major news, the ECB left interest rates and forward guidance unchanged, as expected, and Mario Draghi’s final Press Conference was pretty much a non-event.

Elsewhere, the EU Manufacturing PMI was unchanged at 45.7 in October, below expectation of 46.0, while the Services PMI rose slightly to 51.8, up from 51.6, but missed expectation of 51.9. Composite PMI rose to 50.2, up from 50.1.

From the US, the manufacturing PMI came in at 51.5 vs 50.9 expected, while the US September preliminary durable goods orders recorded a fall of -1.1%, vs -0.7% expected. The US jobs market remains healthy despite other signs of weakness in the economy as seen from the release  of the weekly jobs data, where the number of US citizens filing for unemployment benefits unexpectedly fell to a seasonally adjusted 212K for the week ended Oct. 19, against the expected outcome of 215K.

The end result has seen US$, metals and oil all end the day on a firm note, while stocks have finished mixed after a busy corporate reporting session, with the Nasdaq finishing higher on the back of a tech-stock rally. The US$ was underpinned by heavy price action in the Euro and Sterling but also liked the upbeat manufacturing data while choosing to ignore the soft durable goods outcome. On the other hand, the metals moved up, with Gold back above $1500oz as hopes grow for a Fed rate cut at next week’s FOMC Meeting.

Friday will be pretty thin for economic data, with nothing due from Asia, while the European session will look to the German Consumer Confidence Survey (exp 9.8) and the German IFO; Business Climate/Current Assessment/ Expectations (exp 94.5/98.0/91.0). The US will be thin as well with just the Michigan Consumer Sentiment Index (exp 96) on the agenda. Have a good weekend.

Economic data highlights will include:

Fri: German Consumer Confidence, German IFO Business Climate/Expectations, CBI Distributive Trade Survey – Realised, Michigan Consumer Sentiment Index

Market moves, in brief:

FX: DXY 97.66 (+0.93%)

Bonds: US10Y; 1.772% (+0.47%), German 10Y; -0.404% (-2.51%), UK 10Y; +0.546% (-8.49%), Australian 10Y; 1.095% (-1.57%), NZ 10Y; 1.267% (-1.71 %), China 10Y; 3.233% (+0.14%)

Stock Indices: DJI; -0.07%, S+P; +0.12%, NASDAQ; +0.73%, EUStoxx50; +0.40%, FTSE100; +0.93%, Shanghai Composite; -0.02%,

Metals: Gold $1501 oz (+0.65%), Silver $17.79 oz (+1.38%), Copper $2.6685 lb (-0.11%), Iron Ore $90.11 per tonne (NYMEX) (-0.38%),

Oil: WTI $56.17 pb (+0.61%)

CURRENCIES
EURUSD: 1.1107
Res  1.1135  1.1155  1.1180
Sup  1.1090  1.1065  1.1040
USDJPY: 108.63
Res  108.75  109.00  109.20
Sup  108.25  108.00  107.75
GBPUSD: 1.2857
Res  1.2890  1.2935  1.2980
Sup  1.2830  1.2790  1.2745
USDCHF: 0.9922
Res  0.9940  0.9960  0.9980
Sup  0.9900  0.9880  0.9860
AUDUSD: 0.6822
Res  0.6840  0.6865  0.6890
Sup  0.6810  0.6785  0.6760
NZDUSD: 0.6382
Res  0.6395  0.6410  0.6425
Sup  0.6375  0.6360  0.6345
INDICES / COMMODITIES
S&P.fs: 3007.28
Res  3015.00  3025.00  3035.00
Sup  2995.00  2985.00  2975.00
DJ30.fs: 26764.50
Res  26835.00  26935.00  27025.00
Sup  26695.00  26595.00  26500.00
SPI200.fs: 6709
Res  6715  6735  6760
Sup  6690  6660  6635
XAUUSD: 1502.86
Res  1505.00  1510.00  1515.00
Sup  1500.00  1495.00  1490.00
XAGUSD: 17.81
Res  17.90  18.00  18.10
Sup  17.70  17.60  17.50
WTI.fs: 56.11
Res  56.45  57.15  57.90
Sup  55.50  54.75  54.00

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