Tuesday 13th October: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei down 0.95 %, Shanghai Composite lost 0.40 %, Hang Seng fell 0.50 %, ASX declined 0.65 %
  • Commodities: Gold at $1153.40 (-0.95 %), Silver at $15.71 (-1.00 %), WTI Oil at $47.50 (+0.80 %), Brent Oil at $50.75 (+0.30 %)
  • Rates: US 10 year yield at 2.05, UK 10 year yield at 1.82, German 10 year yield at 0.58

News & Data:

  • China Trade Balance (Sep): USD 60.34 Bln (exp USD 48.21 Bln prev USD 60.24 Bln)
  • China Exports (YoY) Sep: -3.7% (exp -6.0% prev -5.5%)
  • China Imports (YoY) Sep: -20.4% (exp -16.0% prev -13.8%)
  • Australia NAB Business Conditions (Sep): 9 (prev rev 9)
  • Australia NAB Business Confidence (Sep): 5 (prev 1)
  • Australia ANZ Roy Morgan Weekly Consumer Confidence Index (W/e 11 Oct): 115.6 (prev 110.0)
  • RBA’s Lowe: Economic Fundamentals Strong, Cause For Optimism — BBG
  • Lowe: AUD Fall Helping Economy Adjust To Mining Boom Wind-Down
  • Lowe: We Still Have Flexibility On Interest Rates
  • Lowe: Can't Rule Out Possibility Of Period Of Contraction, But Chance Of Recession Is Low — BBG
  • Fed’s Brainard: Against Removing Policy Support Prematurely — BBG
  • Brainard: Fed Should Wait And See If Risks To Outlook Diminish
  • Brainard: Risks From Abroad Appear Tilted To The Downside

Markets Update:

In the overnight session, risk-off was the theme with equities all lower on the day and safe haven currencies in demand. The Euro and Pound were relatively stable against the US Dollar, but the commodities currencies took a hit after several days of outperformance. AUD/USD reached a high of 0.7381 in yesterday’s NY session, but came under pressure around the Tokyo open and eventually fell to a low of 0.7290. The rally seems stretched in the near-term and further correction might come. Keep an eye on the 0.7230 level for decent technical support. NZD/USD ran into decent resistance at 0.6740 and declined to a low of 0.6656 in Asia, while USD/CAD had a strong bounce off the 1.29 level, reaching 1.3060 earlier. The sharp decline in Oil prices has further added to the upside momentum in USD/CAD.

Upcoming Events:

  • 07:00 BST – German CPI
  • 08:15 BST – Swiss CPI
  • 09:30 BST – UK CPI
  • 10:00 BST – German ZEW Economic Sentiment
  • 10:00 BST – Euro Zone ZEW Economic Sentiment
  • 11:30 BST – BoE MPC member McCafferty speaks
  • 13:00 BST – FOMC Member Bullard speaks

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