Tuesday 20th October: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei up 0.15 %, Shanghai Composite fell 0.10 %, Hang Seng lost 0.50 %, ASX declined 0.45 %
  • Commodities: Gold at $1168.50 (-0.40 %), Silver at $15.82 (-0.15 %), WTI Oil at $46.45 (+0.30 %), Brent Oil at $48.75 (-0.20 %)
  • Rates: US 10 year yield at 2.02, UK 10 year yield at 1.83, German 10 year yield at 0.56

News & Data:

  • RBA Meeting Minutes: Overall Growth Expected To Have Strengthened In Q3
  • Spare Capacity In Economy, Domestic Cost Pressures Low
  • RBA: Economy's Rebalancing Increasingly Supported By A$ Fall
  • RBA: More Evidence Of Economy Rebalancing Toward Non-Mining
  • RBA: Labour Market Strengthened More than Expected
  • RBA: Recent Data Raising Concern Over China & East Asia, Weighing On Australian Exports
  • PBoC Fixes Yuan Reference Rate At 6.3614 (prev 6.3527)
  • ECB's Noyer: ECB's QE program is working; currently running at the proper pace

Markets Update:

EUR/USD started the new trading day around 1.1325 and flows were rather light in the Asian trading session. The pair rose to a high of 1.1340 after the Tokyo open and spent the rest of the session in a 1.1330-40 range. The key levels to watch now are 1.1285 to the downside and 1.1395/1.14 to the topside. GBP/USD was slightly more volatile. After falling to a low of 1.5455 at the Sydney open, the pair recovered and made it back to the 1.5480 level. Key resistance is now seen at 1.55 and a clear break above it could pave the way for a test of 1.5650 (September high).

USD/JPY was caught within a 10 pips range overnight. 119.75/80 will be the next obstacle for the pair, while support should be found at 118.90 and 118.05. AUD/USD didn't have a major reaction to the RBA meeting minutes release. It jumped from 0.7255 to 0.7275, but retraced the entire move an hour later. Similar price action in NZD/USD, which followed the Aussie Dollar higher, but the topside was capped at 0.6815 resistance.

Upcoming Events:

  • 01:30 BST – RBA Meeting Minutes
  • 07:00 BST – German PPI
  • 11:00 BST – Bank of England Governor Carney speaks
  • 13:30 BST – US Building Permits
  • 13:30 BST – US Housing Starts
  • 14:00 BST – FOMC Member Dudley speaks
  • 14:15 BST – FOMC Member Powell speaks
  • 16:00 BST – Fed Chair Yellen speaks

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