It has been a choppy but mostly sideways start to the week, with US stocks ending Monday a little lower and the US$ generally fairly steady, although US$Jpy has seen a run higher and the Aud$ and Sterling are trading with a slightly heavy bias. The main news of the day was a report that China has told the US that it is prepared to negotiate a trade deal on issues where there the two parties have a current agreement. This boosted risk sentiment, underpinning US$Jpy in particular, but markets have not gone overboard because Donald Trump has said on many occasions that he wants a whole deal or none at all. Renewed trade negotiations get underway again this week although neither side show any signs of giving ground in what looks likely to be a tense affair. The White House has confirmed that the high-level talks, involving Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will begin on Thursday.
Stocks and oil both ended down by around 0.25%, while the metals were down by around 0.75%.
Tuesday will kick off with a few items in Asia, including the Australian, September ANZ Job Ads (exp 2.8%), NAB Business Confidence/Conditions, Caixin China Services PMI (exp 52.9) and China Foreign Exchange Reserves. Europe will be thin, with just the ECB Non-Monetary Policy Minutes and a speech from the BOE Governor, Mark Carney, while the US will look to the September PPI (exp 0.1%mm, 1.7%yy) and the US NFIB Business Optimism Index although all the focus will be on the Fed Chair, Jerome Powell, who will be speaking late in the day. The API Weekly Crude Oil Stock Inventory are also due. Overall, it seems that it will be trade headlines that dominate direction for much of the week, so a rather nimble stance will be required.Have a good day.
Economic data highlights will include:
Tue: Australian ANZ Job Ads, NAB Business Confidence/Conditions, Caixin China Services PMI, China Foreign Exchange Reserves, Japan Current Account, Eco Watchers Survey, German Industrial Production, BOE Governor, Mark Carney – Speech, ECB Minutes, US NFIB Business Optimism Index, PPI, API weekly Crude Oil Stock Inventory, Fed Speeches; Powell./Evans
Market moves, in brief:
FX: DXY 98.96 (+0.12%)
Bonds: US10Y; 1.553% (+1.76%), German 10Y; -0.576% (+1.84%), UK 10Y; +0.368% (+2.54%), Australian 10Y; 0.899% (-0.04%), NZ 10Y; 1.001% (-0.64 %), China 10Y; 3.124% (-0.33%)
Stock Indices: DJI; -0.22%, S+P; -0.24%, NASDAQ; -0.17%, EUStoxx50; +0.71%, FTSE100; +0.59%, Shanghai Composite; -0.92%,
Metals: Gold $1492oz (-0.84%), Silver $17.43oz (-0.70%), Copper $2.573 lb (+0.41%), Iron Ore $92.55 per tonne (NYMEX) (+0.40%),
Oil: WTI $52.80 pb (-0.23%)
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