Global Markets:
- Asian stock markets: Shanghai Composite gained 1.10 %, Hang Seng rose 0.05 %, ASX 200 lost 0.05 %, Nikkei closed for holiday
- Commodities: Gold at $1303 (-0.40 %), Silver at $18.57 (-0.70 %), WTI Oil at $45.78 (+0.95 %), Brent Oil at $47.40 (+1.20 %)
- Rates: US 10 year yield at 1.80, UK 10 year yield at 1.16, German 10 year yield at 1.16
News & Data:
- Australia AiG Performance of Services (Oct): 50.5 (prev 48.9)
- Australia Trade Balance A$ (Sep): -1.227bn (est -1.7bn, prev -2.01bn)
- New Zealand ANZ Commodity Price Index (MoM) Oct: 0.7% (prev 5.10%)
- China Caixin Services PMI (Oct): 52.4 (prev 52)
- Asia stocks subdued, dollar slips on U.S. election tension – RTRS
- Fed holds rates steady, sets stage for December hike – RTRS
- Oil prices rise on Nigeria pipeline attack, weaker dollar – RTRS
Markets Update:
The US Dollar extended losses against most other major currencies amid renewed concerns about US political risks. There were no surprises from the Federal Reserve statement yesterday. They have set the stage for a rate hike next month, and the market sees the odds for that now over 70 %.
USD/JPY came under pressure after the Shanghai open and declined from 103.40 to a low of 102.55 so far. The par is struggling to find support and has already broken below several key levels. The next notable support area now lies at 101.80/85 and it seems likely that it will test it soon.
Meanwhile, EUR/USD rose to 1.1125, and there seems to be little resistance until 1.12 now. Cable has been a bit slower, but managed to make it back above 1.23. Resistance is now seen at 1.2475, the post-flash crash high on October 7th.
The commodity currencies have benefited from the broad USD weakness, although the Australian Dollar is still struggling to break above 0.77. It was rejected off 0.7685 yesterday, and the topside in the Asian session was capped at 0.7683. The New Zealand Dollar however, continues to post fresh highs and is now close to testing 0.7320 resistance.
Upcoming Events:
- 09:30 GMT – UK Services PMI
- 10:00 GMT – Euro Zone Unemployment Rate
- 12:00 GMT – Bank of England Rate Decision
- 12:00 GMT – Bank of England Inflation Report
- 12:00 GMT – Bank of England Meeting Minutes
- 12:30 GMT – US Initial Jobless Claims
- 13:45 GMT – US Services PMI
- 14:00 GMT – US ISM Non-Manufacturing PMI
