Global Markets:
- Asian stock markets: Nikkei down 1.85 %, Shanghai Composite lost 0.60 %, Hang Seng fell 1.40 %, ASX 200 declined 1.15 %
- Commodities: Gold at $1292 (+0.40 %), Silver at $18.43 (+0.05 %), WTI Oil at $46.30 (-0.80 %), Brent Oil at $47.85 (-0.60 %)
- Rates: US 10-year yield at 1.82, UK 10-year yield at 1.28, German 10-year yield at 0.17
News & Data:
- Australia Building Approvals (MoM) Sep: -8.7%(est. -3.00%, prev. -1.80%)
- Australia Building Approvals (YoY) Sep: -6.4% (est. 2.10%, prev. 10.10%)
- New Zealand Unemployment Rate Q3: 4.9% (est. 5.10%, prev. 5.10%)
- New Zealand Employment Change (QoQ) Q3: 1.4% (est. 0.60%, prev. 2.40%)
- New Zealand Participation Rate Q3: 70.1% (est. 69.70%, prev. 69.70%)
- New Zealand Average Hourly Earnings (QoQ) Q3: 0.3% (est. 1.00%, prev. 0.80%)
- New Zealand 2-year Inflation Expectations (QoQ) Q4: 1.68% (prev. 1.65%)
- Japan Monetary Base (YoY) Oct: 22.1% (prev. 22.70%)
- UK BRC Shop Price Index (YoY) Oct: -1.7% (prev. -1.80%)
- NIESR Prospects for UK Economy: 2% GDP growth in 2016, 1.4% in 2017; article 50 will impact growth next year
- PBOC sets USD/CNY mid-point at 6.7562 (prev. fix. 6.7734, prev. close 6.7680)
- BoJ's Kuroda: Japan potential growth rate is 0.5% or lower; risks are to the downside for economic outlook – RTRS
- BoJ’s Kuroda: Ready to Take Further Monetary Policy Action If Required
- BoJ’s Kuroda: Strong likelihood 2% inflation target hit by 2018
Markets Update:
It's risk-off in markets again, as traders and investors are concerned about US political risks. Trump's chance of winning the US election have increased as Hillary Clinton's campaign has been hurt by the FBI investigation. A Trump victory would put stocks worldwide under strong pressure and lead to a rush into safe-havens (JPY, CHF and Gold), while the Dollar and risk currencies (CAD, MXN…) would suffer.
Overnight, the Euro extended gains against the Dollar and rose to a high of 1.1075. EUR/USD remains very well bid, and support is now seen at 1.1020 & 1.0990. GBP/USD continues to consolidate and was stuck in a 1.2220-50 range in Asia.
USD/JPY declined sharply yesterday and extended losses overnight, falling to a low of 103.65. Much will depend on the Fed tonight, but a break below 103.15 support could intensify negative momentum and signal a move towards 102.
Commodity currencies were mixed. The Canadian Dollar declined along with Oil, while the Australian Dollar fell amid the broad risk-off sentiment. However, the New Zealand Dollar rallied against most currencies overnight after better than expected employment data and an uptick in inflation expectations. NZD/USD rose from 0.7160 to 0.7230.
Upcoming Events:
- 08:45 GMT – Italian Manufacturing PMI
- 08:50 GMT – French Manufacturing PMI
- 08:55 GMT – German Manufacturing PMI
- 08:55 GMT – German Unemployment Rate
- 08:55 GMT – German Employment Change
- 09:00 GMT – Euro Zone Manufacturing PMI
- 09:30 GMT – UK Construction PMI
- 12:15 GMT – US ADP Nonfarm Employment Change
- 14:30 GMT – US Crude Oil Inventories
- 18:00 GMT – Federal Reserve Rate Decision
- 18:00 GMT – FOMC Statement
