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Market news

7 November 2019
  • 23:30

    Japan: Household spending Y/Y, September 9.5% (forecast 7.8%)

  • 23:30

    Japan: Labor Cash Earnings, YoY, September 0.8% (forecast 0.4%)

  • 23:30

    Schedule for today, Friday, November 8, 2019

    Time Country Event Period Previous value Forecast
    00:30 Australia Home Loans September 1.8% 1.3%
    00:30 Australia RBA Monetary Policy Statement    
    03:00 China Trade Balance, bln October 39.65 40.83
    05:00 Japan Leading Economic Index September 91.9  
    05:00 Japan Coincident Index September 99.0 99.5
    06:45 Switzerland Unemployment Rate (non s.a.) October 2.1% 2.2%
    07:00 Germany Current Account September 16.9 20.4
    07:00 Germany Trade Balance (non s.a.), bln September 16.2  
    07:45 France Trade Balance, bln September -5 -4.8
    07:45 France Industrial Production, m/m September -0.9% 0.3%
    07:45 France Non-Farm Payrolls Quarter III 0.2%  
    13:15 Canada Housing Starts October 221.2 221.2
    13:30 Canada Building Permits (MoM) September 6.1% -2%
    13:30 U.S. FOMC Member Brainard Speaks    
    13:30 Canada Unemployment rate October 5.5% 5.5%
    13:30 Canada Employment October 53.7 15.9
    15:00 U.S. Wholesale Inventories September 0% 0.1%
    15:00 U.S. Reuters/Michigan Consumer Sentiment Index November 95.5 95.9
    18:00 U.S. Baker Hughes Oil Rig Count November 691  
  • 21:34

    Major US stock indices closed in positive territory

    Major US stocks rose slightly amid conflicting reports on US-China trade relations. The focus was also on the new block of strong quarterly reporting of the corporate segment.

    China's Commerce Department said Thursday that Beijing agreed with Washington to phase out existing trade tariffs between the two countries in order to reach the so-called “first phase” trade agreement. In addition, China's Xinhua State News Agency reported that Beijing is also considering lifting restrictions on poultry imports. Then Fox news reported that the US and China want to conclude the first stage of the deal on paper by the end of next week. However, Reuters, citing a source in the White House, reported that the White House plan to reduce tariffs for China is facing stiff internal opposition; and the final decision has not yet been made

    Qualcomm (QCOM) reported quarterly earnings of $ 0.78 per share, up $ 0.07 per share from analysts. The company's revenue also exceeded forecasts. Qualcomm’s results were backed up by licensing operations, primarily through Apple’s licensing agreement (AAPL). QCOM shares jumped 6.3%.

    Both Baidu (BIDU )’s third-quarter earnings and revenues surpassed Wall Street’s expectations, mainly due to an increase in its subscription to its iQiyi (IQ) video streaming service. BIDU shares soared 13.5%.

    Investors also studied the Department of Labor report, which showed that initial US unemployment benefits fell more than expected in the week ending November 2. According to the report, the number of initial applications for unemployment benefits fell to 211,000, which is 8,000 less than the revised level of the previous week at 219,000 people. Economists had expected the number of applications to drop to 215,000 from the 218,000 reported earlier the previous week. The number of requests indicates good conditions in the labor market. In October, employment grew faster than expected, with the addition of 128,000 jobs, despite the General Motors strike striking down 46,000 workers at automakers in Michigan and Kentucky.

    Most of the DOW components completed trading in positive territory (22 of 30). The biggest gainers were Dow Inc. (DOW; + 2.80%). Outsiders were shares of Pfizer Inc. (PFE; -1.86%).

    Most S&P sectors recorded an increase. The base materials sector grew the most (+ 1.0%). The largest decline was shown by the utilities sector (-1.1%).

    At the time of closing:

    Dow 27,674.80 +182.24 +0.66%

    S&P 500 3,085.18 +8.40 +0.27%

    Nasdaq 100 8,434.52 +23.89 +0.28%

  • 20:50

    Schedule for tomorrow, Friday, November 8, 2019

    Time Country Event Period Previous value Forecast
    00:30 Australia Home Loans September 1.8% 1.3%
    00:30 Australia RBA Monetary Policy Statement    
    03:00 China Trade Balance, bln October 39.65 40.83
    05:00 Japan Leading Economic Index September 91.9  
    05:00 Japan Coincident Index September 99.0 99.5
    06:45 Switzerland Unemployment Rate (non s.a.) October 2.1% 2.2%
    07:00 Germany Current Account September 16.9 20.4
    07:00 Germany Trade Balance (non s.a.), bln September 16.2  
    07:45 France Trade Balance, bln September -5 -4.8
    07:45 France Industrial Production, m/m September -0.9% 0.3%
    07:45 France Non-Farm Payrolls Quarter III 0.2%  
    13:15 Canada Housing Starts October 221.2 221.2
    13:30 Canada Building Permits (MoM) September 6.1% -2%
    13:30 U.S. FOMC Member Brainard Speaks    
    13:30 Canada Unemployment rate October 5.5% 5.5%
    13:30 Canada Employment October 53.7 15.9
    15:00 U.S. Wholesale Inventories September 0% 0.1%
    15:00 U.S. Reuters/Michigan Consumer Sentiment Index November 95.5 95.9
    18:00 U.S. Baker Hughes Oil Rig Count November 691  
  • 20:00

    DJIA +0.74% 27,696.70 +204.14 Nasdaq +0.38% 8,442.51 +31.89 S&P +0.34% 3,087.15 +10.37

  • 20:00

    U.S.: Consumer Credit , September 9.51 (forecast 15)

  • 17:00

    European stocks closed: FTSE 100 7,406.41 +9.76 +0.13% DAX 13,289.46 +109.57 +0.83% CAC 40 5,890.99 +24.25 +0.41%

  • 16:02

    BoE: Expect two rate cuts in 2020 - Rabobank

    As expected, the Bank of England MPC kept rates unchanged at 0.75% and analysts at Rabobank note that the forward guidance of a slow rise in rates provides the markets less and less actual guidance, as it has become explicitly conditioned on a happily-ever-after world.

    • "The MPC’s forecasts are based on Johnson’s Brexit-deal and speedy negotiations towards a “Canada-style” FTA. This may prove to be too optimistic and could lead to further downward revisions to their forecasts, which are already quite downbeat on Johnson’s Brexit-deal.
    • It’s very difficult to see how the next UK government will be able to negotiate a Canada-style FTA in just one year, if it’s not keen to ensure a level playing field between the EU and the UK. Keep in mind that it took Canada seven years to get a trade agreement with the EU.
    • The new Governor will be handed an economy that is being put under strain by Brexit. Business investment has been in the doldrums for almost two years and cracks have also started to become visible in the labour market. The uncertainty is hitting the UK economy hard and we therefore expect two rate cuts in 2020."

  • 15:40

    Canada's labour market to continue hot streak with creation of other 25K jobs in October - TDS

    Previewing the Canadian jobs report that will be released on Friday, TD Securities' analysts said that they look for the labour market to continue its hot streak with the creation of other 25K jobs in October, above the market consensus for 15K.

    • "With over 130k jobs created in the last two months, we would typically look for some giveback but expect hiring for the federal election to offset any weakness.
    • Public administration employment has risen by 32K on average during the month of the last three federal elections, although a 21K increase in PA employment over the last four months suggests we could see more modest gains this cycle due to wider usage of early voting.
    • Looking past the election-related hiring we expect a modest unwind of recent gains, with health care and education expected to give back a portion of the 70K jobs created over the last two months. We also expect a slight improvement in earnings which should push wage growth to 4.4% y/y on muted base effects."

  • 15:12

    BoE's November decision surprises markets - ING

    James Smith, a developed market economist at ING, notes that the Bank of England (BoE) has taken markets by surprise, with two members voting for an immediate cut.

    • "At face value, the Bank of England’s latest monetary policy decision is more dovish than expected.
    • In a surprise move, two committee members voted for an immediate 25bp rate cut. Policymakers have also for the first time hinted at easing in their statement, suggesting that monetary policy may need to “reinforce” growth should Brexit uncertainty persist.
    • That suggests (in case there was any doubt) that the Bank is very unlikely to follow through with its signalled rate hikes (should Brexit go smoothly) any time soon.
    • But dig a little deeper, and the Bank's latest report isn't quite as downbeat as the overarching guidance implies.
    • One surprising feature of the latest Bank of England projections is its decision to effectively assume that PM Johnson's Brexit deal will be ratified - taking the UK to a free-trade agreement in the longer-term.
    • While this reflects the Bank's long-standing policy of basing forecasts on government policy, this will all depend on December's election. And while the polls suggest the Conservatives will gain a majority – giving PM Johnson the scope to get the deal ratified in Parliament - there is still a potential for big surprises when the UK goes to the polls next month.
    • We wouldn’t rule out another hung Parliament, which could either prolong the Brexit uncertainty, or alternatively see a Labour-led minority government begin organising a second Brexit referendum.
    • In other words, it's not inconceivable that we see another sizable change to the Bank's projections early next year, depending on who prevails at next month's election."

  • 14:36

    NZD/USD seen sidelined in the near term – UOB

    FX Strategists at UOB Group are expecting NZD/USD to keep the consolidative mood unchanged for the time being.

    • "24-hour view: We highlighted yesterday “NZD could extend its decline but 0.6350 could be out of reach”. NZD subsequently dipped to 0.6360 before trading mostly sideways. Downward pressure has eased and the current price action is viewed as part of a consolidation phase. In other words, NZD is expected to trade sideways for today, likely between 0.6350 and 0.6385.
    • Next 1-3 weeks: There is not much to add to the update from yesterday (06 Nov, spot at 0.6380). As highlighted, we continue to hold the view that Monday’s 0.6466 high is a “short-term top” and NZD is expected to “trade sideways”. However, if NZD were to close below the bottom of the expected 0.6350/0.6450 range, it would suggest 0.6466 is a more significant top than currently expected (and increase the risk of a pullback to 0.6300). The price action within these few days should provide us with more clues."

  • 14:34

    U.S. Stocks open: Dow +0.61%, Nasdaq +0.54%, S&P +0.46%

  • 14:28

    Before the bell: S&P futures +0.35%, NASDAQ futures +0.39%

    U.S. stock-index futures rose on Thursday amid signs of progress in U.S.-China trade relations and a new slew of largely upbeat earnings reports.


    Global Stocks:

    Index/commodity

    Last

    Today's Change, points

    Today's Change, %

    Nikkei

    23,330.32

    +26.50

    +0.11%

    Hang Seng

    27,847.23

    +158.59

    +0.57%

    Shanghai

    2,978.71

    +0.1189

    0.00%

    S&P/ASX

    6,726.60

    +66.40

    +1.00%

    FTSE

    7,424.41

    +27.76

    +0.38%

    CAC

    5,878.42

    +11.68

    +0.20%

    DAX

    13,268.04

    +88.15

    +0.67%

    Crude oil

    $57.29


    +1.67%

    Gold

    $1,485.00


    -0.54%

  • 14:02

    Long EUR/USD at 1.1080 – Westpac

    Analysts at Westpac are recommending to go long on EUR/USD pair at 1.1080 levels for the target price of 1.1280, while maintaining stop loss of 1.1015.

    “Rationale:

    • Recent EZ data have beaten estimates with an apparent shift in trend from ever weaker activity reports
    • Latest German new export and capital orders suggest a floor may been in place for a key driver of EZ’s economy
    • EC has accepted Italy’s Budget proposals suggesting a less aggressive stance on annual assessments
    • Regional rises in yields have lifted French 10yr OATs above zero
    • Improvements in US-China trade stance lifts global risk sentiment and is now USD negative
    • EU officials suggest that there is no imminent risk around EU-US auto negotiations despite lack of a deal
    • Germany’s Fin Min appears to have broken the national hurdle towards the potential of an EU banking union.

    Risks:

    • US-China talks are still some distance from being assured and Dec signing could still be derailed
    • Any deterioration in EU-US trade negotiations even if the mid-November deadline appears to have been pushed forward
    • EC’s lower growth forecasts feed into ECB and cause a further push in accommodative forward guidance
    • Trump Tweets: either against US trade or Fed
    • EUR/USD has been tightly range-bound since mid-Oct. and may fail to find a directional push.”

  • 13:47

    Wall Street. Stocks before the bell

    (company / ticker / price / change ($/%) / volume)


    3M Co

    MMM

    176.15

    2.15(1.24%)

    3644

    ALTRIA GROUP INC.

    MO

    46.08

    0.17(0.37%)

    5007

    Amazon.com Inc., NASDAQ

    AMZN

    1,803.00

    7.23(0.40%)

    17843

    AMERICAN INTERNATIONAL GROUP

    AIG

    55.75

    0.23(0.41%)

    2317

    Apple Inc.

    AAPL

    258.5

    2.03(0.79%)

    226509

    AT&T Inc

    T

    39.3

    0.05(0.13%)

    37195

    Boeing Co

    BA

    356

    3.87(1.10%)

    28264

    Caterpillar Inc

    CAT

    147.1

    1.61(1.11%)

    8591

    Cisco Systems Inc

    CSCO

    48.62

    0.35(0.73%)

    21815

    Citigroup Inc., NYSE

    C

    75.49

    1.07(1.44%)

    33630

    Deere & Company, NYSE

    DE

    177

    1.03(0.59%)

    746

    E. I. du Pont de Nemours and Co

    DD

    71

    0.67(0.95%)

    800

    Exxon Mobil Corp

    XOM

    72

    0.51(0.71%)

    10150

    Facebook, Inc.

    FB

    192.35

    0.80(0.42%)

    41042

    FedEx Corporation, NYSE

    FDX

    165.25

    2.08(1.27%)

    4638

    Ford Motor Co.

    F

    9

    0.08(0.90%)

    199064

    Freeport-McMoRan Copper & Gold Inc., NYSE

    FCX

    10.96

    0.32(3.01%)

    36203

    General Electric Co

    GE

    11.1

    0.08(0.73%)

    200450

    General Motors Company, NYSE

    GM

    38.81

    0.39(1.02%)

    3848

    Goldman Sachs

    GS

    221

    2.58(1.18%)

    6213

    Google Inc.

    GOOG

    1,296.90

    5.10(0.39%)

    3391

    Hewlett-Packard Co.

    HPQ

    19.73

    0.16(0.82%)

    50592

    Home Depot Inc

    HD

    234.85

    0.84(0.36%)

    1657

    HONEYWELL INTERNATIONAL INC.

    HON

    181.05

    0.24(0.13%)

    197

    Intel Corp

    INTC

    58.14

    0.54(0.94%)

    42839

    International Business Machines Co...

    IBM

    138

    0.84(0.61%)

    13778

    Johnson & Johnson

    JNJ

    131.4

    0.44(0.34%)

    4364

    JPMorgan Chase and Co

    JPM

    130.7

    1.40(1.08%)

    9620

    McDonald's Corp

    MCD

    195.59

    1.41(0.73%)

    17139

    Merck & Co Inc

    MRK

    83.4

    0.15(0.18%)

    4300

    Microsoft Corp

    MSFT

    144.57

    0.51(0.35%)

    71251

    Nike

    NKE

    90.65

    1.17(1.31%)

    10775

    Pfizer Inc

    PFE

    37.3

    0.05(0.13%)

    25726

    Procter & Gamble Co

    PG

    119.85

    -0.47(-0.39%)

    5872

    Starbucks Corporation, NASDAQ

    SBUX

    83.15

    0.16(0.19%)

    16372

    Tesla Motors, Inc., NASDAQ

    TSLA

    329.54

    2.96(0.91%)

    107021

    The Coca-Cola Co

    KO

    52.76

    -0.04(-0.08%)

    16581

    Twitter, Inc., NYSE

    TWTR

    29.07

    -0.47(-1.59%)

    380560

    United Technologies Corp

    UTX

    149.15

    0.84(0.57%)

    899

    UnitedHealth Group Inc

    UNH

    251.98

    1.46(0.58%)

    1074

    Verizon Communications Inc

    VZ

    60.2

    0.07(0.12%)

    5864

    Visa

    V

    177.2

    0.43(0.24%)

    15834

    Wal-Mart Stores Inc

    WMT

    120.1

    0.60(0.50%)

    23150

    Walt Disney Co

    DIS

    132.4

    1.13(0.86%)

    61970

    Yandex N.V., NASDAQ

    YNDX

    34.35

    0.15(0.44%)

    1972

  • 13:41

    Downgrades before the market open

    Twitter (TWTR) downgraded to Underperform from In-line at Evercore ISI

  • 13:40

    U.S. weekly jobless claims decrease more than forecast

    U.S. weekly jobless claims decrease more than forecast

    The data from the Labor Department revealed on Thursday the number of applications for unemployment benefits fell more than forecast last week, consistent with strong labor market conditions.

    According to the report, the initial claims for unemployment benefits decreased by 8,000 to a seasonally adjusted 211,000 for the week ended November 2. That was the lowest level in a month.

    Economists had expected 215,000 new claims last week.

    Claims for the prior week were revised upwardly to 219,000 from the initial estimate of 218,000.

    Meanwhile, the four-week moving average of claims rose by 250 to 215,250.

  • 13:30

    U.S.: Continuing Jobless Claims, 1689 (forecast 1683)

  • 13:30

    U.S.: Initial Jobless Claims, 211 (forecast 215)

  • 13:17

    UK's economy is on course for additional fiscal spending – Rabobank

    Analysts at Rabobank suggests that there may not be too many common threads between the UK’s political parties, but it appears that irrespective of the results of the December 12 election, the UK economy is on course for additional fiscal spending.

    • “According to a report published earlier this week by the Resolution Foundation think-tank, UK government spending could be on course to return to levels last seen in the 1970s (relative to GDP) under either a Labour of Tory government.
    • The Institute of Fiscal Studies has this week warned that there was little room for election giveaway if the parties wanted to keep within the current spending rules that state that borrowing should be below 2% of national income. Chancellor Javid has already pledged to borrow more to take advantage of current record low borrowing rates and today has indicated that a Tory government would increase this ceiling to 3% of GDP.
    • Given the current headwinds stemming from the slowdown in global growth and the softening in levels of activity in the UK, this could prove to be a brave assumption.
    • Insofar at the Labour party, LibDems and the Greens are all pledging to increase borrowing if they had election success, the implications for the UK budget are clear. It may also be assumed that the need for further rate cuts from the BoE will be lessened if spending is increased.
    • Having risen 6% or so in October, GBP/USD has subsequently held on to most of its gains based on boosted expectations for a smooth Brexit.
    • In our view there is risk that fears of a disorderly Brexit could re-emerge if trade talks between a Tory government and the EU next year prove difficult. This would raise the risk of the UK crashing out of the EU at the end of the transition phase at the end of 2020. Clearly this would re-open downside risk for the pound.”

  • 13:04

    USD/JPY struggles to extend far beyond 109.00 – Westpac

    Sean Callow, an analyst at Westpac, suggests that the support for USD/JPY from rising US yields is starting to moderate.

    • “The 10 year Treasury yield briefly printed a 6 week high on Tuesday but it looks comfortable around 1.80%, consistent with USD/JPY’s struggle to extend far beyond 109.00.
    • Risk appetite could hardly be more supportive, with global equities reaching fresh record highs this week and USD/JPY 1mth implied volatility retesting April lows around 5%.
    • So it seems unlikely that global risk appetite will be sufficient fuel for a run at 110.
    • Short-covering of speculative positions has probably run its course.
    • With the BoJ’s cautious policy tweaks last week almost forgotten already, this leaves US yields and broad US$ sentiment as key in the week ahead. Resilient DXY short term suggests support on dips towards USD/JPY 108 and some fresh probes above 109 but no major range breakout.”

  • 12:48

    BoE's Governor Carney: Recent Brexit deal creates a possibility of a pick up in UK growth

    • World risks slipping into low growth, low inflation but many of these dynamics occurred first in the UK 
    • Both reduced Brexit uncertainty and stronger world economy assumed in BoE forecasts, but neither is assured
    • Now evidence that households are doing precautionary saving before Brexit
    • Brexit uncertainties are weighing particularly heavily on business investment
    • Reduced chance of a no-deal Brexit has pushed up sterling
    • Brexit agreement reduces risk of no deal significantly
    • Pick up in UK growth likely to be limited by a lack of supply capacity in the economy
    • New BoE Brexit assumptions assume transition occurs over 3 years versus previous much longer transition 


  • 12:35

    USD/JPY faces strong resistance around 109.75 – UOB

    FX Strategists at UOB Group are seeing the up move in USD/JPY to meet a tough barrier at 109.75 in the short-term horizon. 

    • "24-hour view: The rapid deceleration in upward momentum came as a surprise as USD traded in a relatively quiet manner within a 108.84/109.24 range (we were expecting a move above 109.30). Momentum indicators are ‘flat’ now and USD is likely to trade sideways to slightly lower, expected to be between 108.70 and 109.10.
    • Next 1-3 weeks: While we changed our view for USD to “trade sideways” yesterday (05 Nov, spot at 108.60), the rapid surge that quickly approaches the top of the expected range at 109.30 came as a surprise (overnight high of 109.24). The rapid rise and the subsequent strong daily closing at 109.15 (the +0.54% gain is the largest 1-day advance in 1-1/2 months) suggest that a move above the August peak of 109.30 would not be surprising. However, there is a solid resistance at 109.75 and at this stage, the prospect a rise above this level within the next couple of weeks is not high. All in, USD is expected to trade with a firm footing from here as long as 108.45 (‘strong support’ level) is intact."

  • 12:32

    Company News: Baidu (BIDU) quarterly earnings beat analysts’ forecasts

    Baidu (BIDU) reported Q3 FY 2019 earnings of $1.76 per share (versus $2.77 in Q3 FY 2018), beating analysts’ consensus estimate of $1.17.

    The company’s quarterly revenues amounted to $3.929 bln (-4.4% y/y), generally in line with analysts’ consensus estimate of $3.889 bln.

    The company also issues in-line guidance for Q4 FY 2019, projecting revenues of $3.78-4.02 bln versus analysts’ consensus estimate of $3.9 bln.

    BIDU rose to $114.50 (+6.65%) in pre-market trading.

  • 12:12

    BoE maintains Bank Rate at 0.75%

    The Bank of England (BoE) announced its Monetary Policy Committee (MPC) voted by a majority of 7-2 to maintain Bank Rate at 0.75 percent at its September meeting.

    The MPC also voted unanimously to maintain the corporate bond purchases at £10 billion and UK government bond purchases at £435 billion.

    In its statement, the BoE notes:

    • The underlying UK GDP growth has slowed materially this year due to weaker global growth, driven by trade protectionism, and the domestic impact of Brexit-related uncertainties;
    • The perceived likelihood of a no-deal Brexit has fallen markedly and the sterling exchange rate has appreciated after the UK and EU agreed a Withdrawal Agreement and Political Declaration as well as a flexible extension of Article 50 in October;
    • These agreements are expected to remove some of the uncertainty facing businesses and households, and the MPC projects that UK GDP growth will pick up during 2020;
    • Inflationary pressures are projected to lessen in the near term;
    • Monetary policy could respond in either direction to changes in the economic outlook in order to ensure a sustainable return of inflation to the 2% target;
    • The Committee will monitor closely the responses of companies and households to Brexit developments as well as the prospects for a recovery in global growth;
    • If global growth fails to stabilize or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in UK GDP growth and inflation;
    • Provided these risks do not materialize and the economy recovers broadly in line with the MPC’s latest projections, some modest tightening of policy, at a gradual pace and to a limited extent, may be needed to maintain inflation sustainably at the target.

     

  • 12:00

    United Kingdom: BoE Interest Rate Decision, 0.75% (forecast 0.75%)

  • 12:00

    United Kingdom: Asset Purchase Facility, 435 (forecast 435)

  • 11:40

    NZD/USD in a neutral state – Westpac

    Analysts at Westpac note that NZD/USD ran out energy at 0.6465 and is now in a neutral state, needing to sustain a break above 0.6440 for the near-term bullish case to be revived.

    • “Below 0.6335 argues for a decline to 0.6200 during the month ahead.
    • Yesterday’s unemployment data was slightly weaker than expected, causing the NZD to underperform slightly. However, the 4.2% unemployment rate is lower than the RBNZ’s 4.4% forecast. Moreover, wage growth has picked up – still below pre-GFC levels (chart across) but above the RBNZ’s forecast.
    • Next week’s RBNZ MPS is priced by markets as a 70% chance of a 25bp cut, which means a NZD reaction is likely whatever the decision.
    • Multi-month, we remain bearish, targeting 0.6200 by January. We expect the NZD/USD to be weighed down by a stronger USD which should continue to benefit from trade wars and global risks.”

  • 11:18

    UK Finance Minister Javid: We will announce new plans to level up the entire UK in new year in terms of infrastructure

    • Sound framework for public finances continues to be essential
    • Responsible time to invest, time to do that is now
    • Announcing new fiscal rules to take advantage of opportunities to invest
    • First rule will be to have balanced current budget
    • Second fiscal rule will ensure we can invest more but live within our means
    • Third fiscal rule means that is debt servicing costs rise too much we would re-consider plans
    • Lonng term projects like road and rail will not exceed 3% of GDP
    • We will borrow some more to invest
    • Excessive debt would risk achievements of past decade of recovery
    • Debt will be lower at the end of next Parliament than at the start

  • 10:58

    AUD/USD ranges seem set to edge lower – Westpac

    According to Sean Callow, analyst at Westpac, the RBA’s quarterly statement will provide details of the optimistic growth forecast but this week saw a dismal reading on retail sales volumes, which the RBA can only hope is not replicated in the national accounts next month.

    “The upbeat RBA narrative could be rattled if we see weak Q3 wages data on Wed and an uptick in Oct unemployment on Thu. On the positive side, risk appetite remains elevated and spec positioning is already bearish. But with US$ having found its feet as the FOMC’s pause narrative was bolstered by strong NFP and services ISM data, AUD/USD ranges seem set to edge lower. The 200dma at 0.6949 remains firmly intact, with the pair near term more likely to spend time between the 50dma at 0.6810 and 100dma at 0.6850.”

  • 10:40

    UK budget watchdog ordered to cancel new fiscal forecasts

    Britain's independent budget watchdog dropped a plan to publish an updated assessment of the public finances on Thursday after the country's top civil servant decided at the last minute that it would break election rules.

    The Office for Budget Responsibility had been widely expected to revise up its forecasts for Britain's borrowing needs after changes to the way the public accounts are calculated, putting the government on course to break a borrowing cap it had set itself.

    Prime Minister Boris Johnson called a snap Dec. 12 election in a bid to break the Brexit deadlock. His finance minister Sajid Javid said earlier on Thursday that only Johnson's Conservative Party could be trusted with the public finances.

    "We had planned to publish a technical restatement of our March public finance forecast this morning," the OBR said in a statement issued an hour before the new forecasts had been due for release.

    "This will no longer go ahead as the Cabinet Secretary has concluded that this would not be consistent with the Cabinet Office’s General Election Guidance."

  • 10:21

    European Union trims 2019 eurozone growth forecasts

    Europe's economy is settling into a pattern of "subdued" expansion as global trade tensions weigh on the export-oriented bloc, the European Union said, slashing growth expectations and calling for more stimulus.

    Gross domestic product in the 19-member eurozone will grow by 1.1% in 2019, the EU said, cutting its 1.2% forecast from July. The expansion rate is seen rising to 1.2% next year, down from 1.4% previously expected, and remain at 1.2% in 2021.

    The EU's economic outlook is deteriorating as the U.S.-China trade war saps global growth. That in turn is dampening investments and manufacturing in Europe, where domestic demand isn't strong enough to drive robust economic expansion.

    Eurozone growth could be further hampered by a sharper-than-expected slowdown in China's economy, as Beijing tries to cushion the blows from its trade spat with the U.S., the EU said.

    A no-deal Brexit would also exacerbate weaknesses in the manufacturing sector and further erode domestically oriented industries' performance, according to the EU.

  • 10:00

    USD: Short term support? – Westpac

    Richard Franulovich, head of FX strategy at Westpac, suggests that the USD could not find its feet despite a Fed pause and strong payrolls but now that yields are rising it has regained poise, DXY 97.0 likely to provide strong short term support.

    “The 1-3 month trend still looks negative, though. There’s one more leg up for risk appetite on confirmation of a partial US-China deal in Dec (still more likely than not). And while that will lift US yields further and cement a Fed pause, the more consistent trend has seen the USD fall (ex-JPY), as receding tensions take pressure off the more trade/factory-sensitive Asia/Europe economies. The New Year will see impeachment and 2020 elections develop as a more prominent USD driver too. Trump’s tax and trade policies accentuated the US-RoW growth disparity, cementing USD upside, and any lengthening in Trump re-election odds won’t sit well with the USD. Slightly better German data (factory orders, services PMI), cautious German backing for a banking union, a more open minded stance on fiscal stimulus and diminished risk of EU auto tariffs also play to less bullish USD atmospherics into year’s end.”

  • 09:42

    ECB sees modest but positive eurozone growth in second half

    The euro zone economy will continue to grow in the second half of the year, even if only modestly, boosted by private consumption and a small growth in employment, the European Central Bank said in an Economic Bulletin.

    "Incoming data and survey results point to moderate but positive economic growth in the second half of 2019," the ECB said in the bulletin, which is largely consistent with its October policy statement. "This growth pattern can be primarily attributed to weak global trade and prolonged uncertainties."

    "Risks to the global economy remain to the downside amid a further escalation of trade disputes, high uncertainty related to Brexit and a potentially slower recovery in a number of emerging market economies," the ECB added.

  • 09:21

    China's foreign-exchange reserves rose in October

    Official data showed that China's foreign-exchange reserves rose last month amid yuan's rebound against the U.S. dollar.

    The country's hoard of foreign exchange increased $12.73 billion on month to $3.105 trillion in October, according to data released by the People's Bank of China, compared with a consensus forecast of an increase of $21 billion.

    The rise in October was due to valuation effects from a weaker dollar against a basket of currencies and asset price changes as bond prices in major economies dropped, the State Administration of Foreign Exchange said.

    The country's cross-border capital flows have been steady despite rising risks from the global market, the regulator said.

  • 09:00

    Fed has engineered accommodative policy with a third cut – Deutsche Bank

    Deutsche Bank analysts note that the Fed’s Evans repeated similar messages from his FOMC colleagues yesterday, saying that the Fed has engineered accommodative policy with a third cut.

    “He also said that he is comfortable with 2.5% inflation in order to build momentum to get it sustainably to the Fed’s target of 2%. Later on, Williams said that monetary policy was “moderately accommodative”, and on the poor productivity release earlier, said that it is “just being consistent with a kind of ongoing longer-run trend of moderate productivity”.”

  • 08:45

    UK annual house price growth slows to 0.9% in October

    According to the report from Halifax Bank of Scotland, UK house prices in October were 0.9% higher than in the same month a year earlier. In September prices  by rose 1.1%. Economists had expected a 1.4% increase in October

    On a monthly basis, house prices fell by 0.1% after a 0.4% decline in September. Economists had expected a 1.3% increase.

    In the latest quarter (August to October) house prices were 0.2% higher than in the preceding three months (May to July)

    Russell Galley, Managing Director, Halifax, said: “Average house prices continued to slow in October, with a modest rise of 0.9% over the past year. While this is the lowest growth seen in 2019, it again extends the largely flat trend which has taken hold over recent months. A number of underlying factors such as mortgage affordability and wage growth continue to support prices, however there is evidence of consumers erring on the side of caution. We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates political and economic uncertainty.”

  • 08:31

    United Kingdom: Halifax house price index 3m Y/Y, October 0.9% (forecast 1.4%)

  • 08:29

    United Kingdom: Halifax house price index, October -0.1% (forecast 0.3%)

  • 08:15

    GBP/USD to head towards 1.3000? – Commerzbank

    According to Karen Jones, analyst at Commerzbank, GBP/USD pair is easing back from 1.30, and is likely to head back towards the 1.2784 25th June high and the 1.27664/23.6% retracement.

    “It should hold here for another attempt at the psychological resistance at 1.3000. Directly above here we have the 200 week ma at 1.3131 and the 1.3187 May high and these remain our short term targets, however we look for the market to be capped here. The 200 day ma at 1.2706 guards 1.2582. For now, provided dips lower hold over 1.2582 (20th September high), an immediate upside bias is maintained. The 1.3187 May high guards the 1.3382 2019 high. Below 1.2582 lies the 1.2382 17th July low and the 1.2348 uptrend. The uptrend guards 1.2196/94. Below the current October low at 1.2194 lies the early and mid-August lows at 1.2091/15 and major support lies at the 1.1958 September low.”

  • 08:01

    Switzerland: Foreign Currency Reserves, October 779

  • 07:49

    USD/JPY jumps to session tops, back above 109.00 handle, which was caused by optimistic trade-related comments from China.

    China's Commerce Ministry was out with a statement in the last hour, saying that the US and China have agreed to cancel existing tariffs in different phases. The comments helped offset the overnight report, suggesting that phase one deal might be delayed until December and led to a turnaround in the global risk sentiment.

  • 07:45

    EUR/USD: Easing lower very near term – Commerzbank

    Karen Jones, analyst at Commerzbank, suggests that EUR/USD pair is easing lower very near term towards the 55 day ma at 1.1044 and the 50% retracement at 1.1030 and they look for the market to recover from this vicinity.

    “It should then challenge the 200 day ma at 1.1190 and the top of the channel at 1.1276. We would allow for a minor retracement, dips lower are indicated to hold over 1.1073 and 1.1044 (55 day ma). The 55 week ma offers additional resistance at 1.1243. Longer term the critical resistance to overcome is the 200 week ma at 1.1357 and while we would allow for this zone of resistance to hold the initial test, longer term we look for a break higher to feature. This will target 1.1520/70, the 2019 high, as a minimum.Below 1.0879 we have the January 2017 low at 1.0829 and the 78.6% Fibonacci retracement of the 2017-2018 advance at 1.0814.”

  • 07:30

    BoE: No policy change is expected – Deutsche Bank

    Deutsche Bank analysts suggest that in today’s BoE decision, no policy change is expected however Deutsche Bank’s economists expect a dovish message, with the BoE dropping its tightening bias and instead moving towards an easing policy stance.

    “They note that domestically, data have deteriorated sufficiently to warrant more supportive monetary policy. Growth has slowed and is tracking below the Bank's "speed limit" of 1.5% with uncertainty likely weighing further on the near-term growth outlook. Equally, the UK supply side story is also turning softer, with labour market indicators pointing to downside risks for both pay and jobs by Q4 2019 and inflation now expected to remain below target in 2020. As a result our economists no longer forecast a hike next year and instead see an increasing risk of a rate cut at the January Inflation Report - Governor Carney's final MPC meeting.”

  • 07:16

    Germany industrial production fell more than forecast in September

    According to provisional data of the Federal Statistical Office (Destatis), in September 2019, production in industry was down by 0.6% on the previous month on a price, seasonally and calendar adjusted basis. Economists had expected a 0.4% decrease. In August 2019, the corrected figure shows an increase of 0.4% (primary +0.3%) from July 2019.

    In September 2019, production in industry excluding energy and construction was down by 1.3%. Within industry, the production of intermediate goods decreased by 1.3% and the production of capital goods by 1.5%. The production of consumer goods showed a decrease by 0.5%. Outside industry, energy production was up by 2.0% in September 2019 and the production in construction increased by 1.8%.

  • 07:00

    Germany: Industrial Production s.a. (MoM), September -0.6% (forecast -0.4%)

  • 06:40

    Options levels on thursday, November 7, 2019

    EUR/USD

    Resistance levels (open interest**, contracts)

    $1.1201 (2811)

    $1.1153 (3372)

    $1.1117 (3537)

    Price at time of writing this review: $1.1060

    Support levels (open interest**, contracts):

    $1.1047 (2358)

    $1.0999 (3930)

    $1.0950 (3351)


    Comments:

    - Overall open interest on the CALL options and PUT options with the expiration date November, 8 is 77161 contracts (according to data from November, 6) with the maximum number of contracts with strike price $1,1000 (3930);


    GBP/USD

    Resistance levels (open interest**, contracts)

    $1.2955 (1478)

    $1.2912 (972)

    $1.2873 (1850)

    Price at time of writing this review: $1.2842

    Support levels (open interest**, contracts):

    $1.2795 (776)

    $1.2747 (601)

    $1.2698 (295)


    Comments:

    - Overall open interest on the CALL options with the expiration date November, 8 is 25896 contracts, with the maximum number of contracts with strike price $1,3400 (3252);

    - Overall open interest on the PUT options with the expiration date November, 8 is 30435 contracts, with the maximum number of contracts with strike price $1,2100 (3161);

    - The ratio of PUT/CALL was 1.18 versus 1.15 from the previous trading day according to data from November, 6

     

    * - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

    ** - Open interest takes into account the total number of option contracts that are open at the moment.

  • 02:30

    Commodities. Daily history for Wednesday, November 6, 2019

    Raw materials Closed Change, %
    Brent 62.06 -1.8
    WTI 56.31 -1.33
    Silver 17.6 0.11
    Gold 1491.057 0.49
    Palladium 1790.59 0.98
  • 00:30

    Stocks. Daily history for Wednesday, November 6, 2019

    Index Change, points Closed Change, %
    NIKKEI 225 51.83 23303.82 0.22
    Hang Seng 5.24 27688.64 0.02
    KOSPI 1.51 2144.15 0.07
    ASX 200 -36.9 6660.2 -0.55
    FTSE 100 8.57 7396.65 0.12
    DAX 31.39 13179.89 0.24
    Dow Jones -0.07 27492.56 -0
    S&P 500 2.16 3076.78 0.07
    NASDAQ Composite -24.05 8410.63 -0.29
  • 00:30

    Australia: Trade Balance , September 7.18 (forecast 5)

  • 00:15

    Currencies. Daily history for Wednesday, November 6, 2019

    Pare Closed Change, %
    AUDUSD 0.68833 -0.14
    EURJPY 120.594 -0.24
    EURUSD 1.10659 -0.07
    GBPJPY 140.09 -0.39
    GBPUSD 1.2855 -0.21
    NZDUSD 0.63682 -0.09
    USDCAD 1.31823 0.23
    USDCHF 0.9927 0.02
    USDJPY 108.973 -0.17
Market Focus
  • German factory orders unexpectedly fell in October
  • BOJ's Harada says no need to take additional policy steps
  • Eurozone construction activity continues to grow in November
  • Eurozone GDP up by 0.2% during the third quarter, as expected

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

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