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Market news

9 October 2019
  • 23:50

    Japan: Core Machinery Orders, y/y, August -14.5% (forecast -10.8%)

  • 23:50

    Japan: Core Machinery Orders, August -2.4% (forecast -2.5%)

  • 22:30

    Schedule for today, Thursday, October 10, 2019

    Time Country Event Period Previous value Forecast
    00:00 Australia Consumer Inflation Expectation October 3.1% 3.2%
    00:30 Australia Home Loans August 5.0% 0.2%
    06:00 Germany Current Account August 22.1 18.1
    06:00 Germany Trade Balance (non s.a.), bln August 21.4  
    06:45 France Industrial Production, m/m August 0.3% 0.3%
    08:30 United Kingdom Industrial Production (YoY) August -0.9% -0.9%
    08:30 United Kingdom Manufacturing Production (YoY) August -0.6% -0.7%
    08:30 United Kingdom Industrial Production (MoM) August 0.1% -0.1%
    08:30 United Kingdom Manufacturing Production (MoM) August 0.3% 0%
    08:30 United Kingdom GDP m/m August 0.3% 0%
    08:30 United Kingdom Total Trade Balance August -0.219  
    09:20 United Kingdom BOE Gov Mark Carney Speaks    
    11:30 Eurozone ECB Monetary Policy Meeting Accounts    
    12:30 U.S. Continuing Jobless Claims 1651 1653
    12:30 Canada New Housing Price Index, YoY August -0.4%  
    12:30 Canada New Housing Price Index, MoM August -0.1% 0%
    12:30 U.S. Initial Jobless Claims 219 219
    12:30 U.S. CPI excluding food and energy, m/m September 0.3% 0.2%
    12:30 U.S. CPI, m/m September 0.1% 0.1%
    12:30 U.S. CPI excluding food and energy, Y/Y September 2.4% 2.4%
    12:30 U.S. CPI, Y/Y September 1.7% 1.8%
    13:00 United Kingdom NIESR GDP Estimate Quarter III 0.1%  
    16:15 U.S. FOMC Member Kashkari Speaks    
    21:30 New Zealand Business NZ PMI September 48.4 49.0
    21:30 U.S. FOMC Member Mester Speaks    
  • 21:47

    New Zealand: Food Prices Index, y/y, September 2.2%

  • 20:08

    Major US stock indices closed in positive territory

    Major US stock indexes rose moderately, as recent media reports have inspired hope for progress in the upcoming high-level trade negotiations between the US and China, which will begin tomorrow.

    Bloomberg reported that the Chinese authorities are still ready to enter into a partial trade deal with the United States, despite the inclusion of several leading Chinese companies specializing in artificial intelligence technologies in the blacklist. In exchange, Beijing will offer non-core concessions, such as the purchase of agricultural products, but will not make concessions on major contentious issues between the two countries.

    In addition, the Financial Times (FT) reported that China is proposing an increase in annual purchases of US agricultural products to conclude an interim agreement between Beijing and Washington that will prevent a new round of tariff increases scheduled for October 15.

    The focus was also on the Fed Chairman's speech at an event in Kansas City. Mr. Powell said the Fed’s strategy and tools were “and remain effective,” and noted that the US economy is in good shape, but it faces a number of risks.

    In addition, market participants analyzed data on the level of vacancies and labor turnover (JOLTS report), which showed that in August the number of vacancies decreased by 1.7% mom to 7.051 million from 7.174 million in July (revised from 7.217 million ) Analysts had expected the number of vacancies to rise to 7.191 million. The level of vacancies decreased by 0.1% and amounted to 4.4%. According to the report, the number of vacancies has changed little in both the private and public sectors. As for industries, the number of vacancies has decreased in the non-durable goods manufacturing sector (-49,000) and in the information sector (-47,000).

    Some attention of investors also attracted the minutes of the September meeting of the Fed. The document said that Fed leaders expressed concern that a slowdown in global economic growth and growing uncertainty in international trade would begin to negatively affect recruitment rates and the US economy as a whole. The protocol also noted that by the September meeting, the Fed had a clearer picture of the continued weak investment, a decline in the manufacturing sector and exports. "One of the risks threatening the economy is associated with the danger of the weakness of investment, production and export activity of companies on their hiring decisions, which would negatively affect household income and expenses," the protocols said. Recall that during the September meeting, the interest rate was reduced by 0.25%, to the range of 1.75% -2%.

    Almost all DOW components recorded an increase (27 out of 30). The leaders of growth were shares of Microsoft Corporation (MSFT; + 1.74%). Outsiders were Johnson & Johnson (JNJ; -2.08%).

    All S&P sectors completed trading in positive territory. The largest growth was shown by the technology sector (+ 1.1%).

    At the time of closing:

    Dow 26,346.28 +182.24 +0.70%

    S&P 500 2,919.40 +26.34 +0.91%

    Nasdaq 100 7,903.74 +79.96 +1.02%

  • 19:50

    Schedule for tomorrow, Thursday, October 10, 2019

    Time Country Event Period Previous value Forecast
    00:00 Australia Consumer Inflation Expectation October 3.1% 3.2%
    00:30 Australia Home Loans August 5.0% 0.2%
    06:00 Germany Current Account August 22.1 18.1
    06:00 Germany Trade Balance (non s.a.), bln August 21.4  
    06:45 France Industrial Production, m/m August 0.3% 0.3%
    08:30 United Kingdom Industrial Production (YoY) August -0.9% -0.9%
    08:30 United Kingdom Manufacturing Production (YoY) August -0.6% -0.7%
    08:30 United Kingdom Industrial Production (MoM) August 0.1% -0.1%
    08:30 United Kingdom Manufacturing Production (MoM) August 0.3% 0%
    08:30 United Kingdom GDP m/m August 0.3% 0%
    08:30 United Kingdom Total Trade Balance August -0.219  
    09:20 United Kingdom BOE Gov Mark Carney Speaks    
    11:30 Eurozone ECB Monetary Policy Meeting Accounts    
    12:30 U.S. Continuing Jobless Claims 1651 1653
    12:30 Canada New Housing Price Index, YoY August -0.4%  
    12:30 Canada New Housing Price Index, MoM August -0.1% 0%
    12:30 U.S. Initial Jobless Claims 219 219
    12:30 U.S. CPI excluding food and energy, m/m September 0.3% 0.2%
    12:30 U.S. CPI, m/m September 0.1% 0.1%
    12:30 U.S. CPI excluding food and energy, Y/Y September 2.4% 2.4%
    12:30 U.S. CPI, Y/Y September 1.7% 1.8%
    13:00 United Kingdom NIESR GDP Estimate Quarter III 0.1%  
    16:15 U.S. FOMC Member Kashkari Speaks    
    21:30 New Zealand Business NZ PMI September 48.4 49.0
    21:30 U.S. FOMC Member Mester Speaks    
  • 19:00

    DJIA +0.87% 26,391.74 +227.70 Nasdaq +1.23% 7,920.04 +96.27 S&P +1.11% 2,925.16 +32.10

  • 16:00

    European stocks closed: FTSE 100 7,166.50 +23.35 +0.33% DAX 12,094.26 +124.06 +1.04% CAC 40 5,499.14 +42.52 +0.78%

  • 15:06

    Fed Chair Powell: Fed's strategy and tools "have been and remain effective"

    • U.S. economy is in a good place but facing some risks
    • "Historically" strong jobs market is benefiting low- and moderate-income communities

  • 14:34

    EIA’s report reveals bigger-than-expected advance in U.S. crude oil inventories

    The U.S. Energy Information Administration (EIA) revealed on Wednesday that crude inventories jumped by 2.927 million barrels in the week ended October 4. Economists had forecast a gain of 1.900 million barrels.

    At the same time, gasoline stocks declined by 1.213 million barrels, while analysts had expected a drop of 0.900 million barrels. Distillate stocks reduced by 3.943 million barrels, while analysts had forecast a decrease of 2.000 million barrels.

    Meanwhile, oil production in the U.S. climbed by 200,000 barrels a day to 12.600 million barrels a day.

    U.S. crude oil imports averaged 6.2 million barrels per day last week, down by 67,000 barrels per day from the previous week.

  • 14:30

    U.S.: Crude Oil Inventories, October 2.927 (forecast 2.609)

  • 14:22

    U.S. job openings decrease in August

    The Job Openings and Labor Turnover Survey (JOLTS) published by the Labor Department on Wednesday showed 1.7 percent m-o-m drop in the U.S. job openings in August.

    According to the report, employers posted 7.051 million job openings in August, compared to the July figure of 7.174 million (revised from 7.217 million in original estimate) and economists’ expectations of 7.051 million. The job openings rate was 4.4 percent in August, down from an unrevised 4.5 percent in the prior month. The report showed that the number of job openings was little changed for total private and for government. The job openings level declined in nondurable goods manufacturing (-49,000 jobs) and in information (-47,000).

    Meanwhile, the number of hires fell by 3.3 percent m-o-m to 5.779 million in August from 5.978 in July. The hiring rate was 3.8 percent, down from 3.9 in July. The number of hires edged up for total private (-219,000) and was little changed for government. The hires level increased in federal government (+35,000).

    The separation rate in August was at 5.638 million or 3.7 percent, compared to 5.810 million or 3.8 percent in July. Within separations, the quits rate was 2.3 percent (-0.1 pp m-o-m), and the layoffs rate was 1.2 percent (flat m-o-m).

  • 14:19

    U.S. wholesale inventories up 0.2 percent in August

    The Commerce Department announced on Wednesday the U.S. wholesale inventories rose 0.2 percent m-o-m in August, the same pace as in July

    Economists had forecast wholesale inventories growing 0.4 percent m-o-m in August.

    According to the report, stocks of durable goods increased 0.3 percent m-o-m after being flat m-o-m in July, while inventories of non-durable goods edged up 0.1 percent m-o-m, following a 0.4 percent m-o-m gain in the previous month. 

    On a y-o-y basis, wholesale inventories surged 6.2 percent.

  • 14:00

    U.S.: JOLTs Job Openings, August 7.051 (forecast 7.191)

  • 14:00

    U.S.: Wholesale Inventories, August 0.2% (forecast 0.4%)

  • 13:52

    UK's economy guided by Brexit developments – Rabobank

    Jane Foley, the senior FX strategist at Rabobank, points out that it is their central view that Brexit will be delayed beyond October 31, but since a delay is not a solution, they see risk that EUR/GBP will be trading close to current levels on a 3-month view.

    • “The Brexit related news reports yesterday reached fresh levels of animosity. One report suggested that the UK government would be prepared to withhold cooperation in security and defence for countries that pushed the UK into a Brexit extension. Given the likelihood of a general election in the UK in the coming months, investors are attempting to read between the lines of many of the recent headlines to try and determine how much is electioneering on the part of the UK government.
    • The FTSE 100 has recovered some of last week’s losses but in the current environment, it would appear that GBP weakness is not sufficient to protect the UK’s largest companies from the impact of slowing global demand. This implies that while Brexit related news remains the primary driver for GBP, investors are likely to be drawn by tomorrow’s releases of UK August production data and monthly GDP.
    • Even if tomorrow’s data releases do not enhance the clouds hanging over the UK economy, slowing global growth and domestic political uncertainty will ensure that GBP remains vulnerable. While the Brexit delay scenario and related 3-month forecast of EUR/GBP0.90 is our central view, on a no-deal Brexit we see scope for EUR/GBP to surge towards parity and on a Brexit deal we would expect EUR/GBP to drop back to the 0.85 area with a downside bias.”

  • 13:34

    U.S. Stocks open: Dow +0.72%, Nasdaq +0.90% S&P +0.76%

  • 13:22

    Before the bell: S&P futures +0.77%, NASDAQ futures +0.83%

    Before the bell: S&P futures +0.77%, NASDAQ futures +0.83%

    U.S. stock-index futures surged on Wednesday,  as the latest media reports said China is open to agreeing a partial trade deal with the United States.


    Global Stocks:

    Index/commodity

    Last

    Today's Change, points

    Today's Change, %

    Nikkei

    21,456.38

    -131.40

    -0.61%

    Hang Seng

    25,682.81

    -210.59

    -0.81%

    Shanghai

    2,924.86

    +11.29

    +0.39%

    S&P/ASX

    6,546.70

    -46.70

    -0.71%

    FTSE

    7,193.17

    +50.02

    +0.70%

    CAC

    5,500.97

    +44.35

    +0.81%

    DAX

    12,119.35

    +149.15

    +1.25%

    Crude oil

    $53.24


    +1.16%

    Gold

    $1,511.80


    +0.53%

  • 13:02

    Fed to announce new plans to grow its balance sheet – Deutsche Bank

    Analysts at Deutsche Bank suggest that the Fed Chair Powell yesterday signaled very strongly that the Fed will announce new plans to grow its balance sheet by purchasing treasury bills. 

    • “He noted that repo markets had experienced “unexpectedly intense volatility” in September and said that “it is clear that without a sufficient quantity of reserves in the banking system, even routine funding pressures can lead to outsized movements in money market interest rates.” He went on to specifically say that “my colleagues and I will soon announce measures to add to the supply of reserves over time.” T-bills rallied, causing swap spreads to widen, as markets moved to price in the expectation for greater and more imminent fed purchases at the front-end of the yield curve.
    • Powell took great pains to emphasize that the new balance sheet expansion is just a technical adjustment and is not a new QE program nor a signal about the monetary policy stance. He did touch briefly on the macro outlook, but just reiterated his usual language about acting “as appropriate to support continued growth.” It’s worth noting that he did cite recent Fed staff research on the labour market, which suggests that job growth has not been as strong as would be indicated by the BLS jobs report.
    • Our US economists had flagged that research and we included it in the EMR two weeks ago. Chicago Fed President Evans also spoke yesterday, saying that he “wouldn’t mind another cut” for a bit more “insurance.” He had been leaning hawkish lately so that’s certainly a dovish shift.”

  • 12:57

    Wall Street. Stocks before the bell

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


    3M Co

    MMM

    152.21

    1.47(0.98%)

    1094

    ALCOA INC.

    AA

    18.76

    0.27(1.46%)

    1902

    ALTRIA GROUP INC.

    MO

    42.19

    0.19(0.45%)

    9022

    Amazon.com Inc., NASDAQ

    AMZN

    1,719.95

    14.44(0.85%)

    28284

    AMERICAN INTERNATIONAL GROUP

    AIG

    53.72

    1.30(2.48%)

    1444

    Apple Inc.

    AAPL

    226.7

    2.30(1.03%)

    317693

    AT&T Inc

    T

    37.29

    0.32(0.87%)

    149657

    Boeing Co

    BA

    375.9

    1.80(0.48%)

    10910

    Caterpillar Inc

    CAT

    119.15

    1.18(1.00%)

    6833

    Chevron Corp

    CVX

    112.2

    0.49(0.44%)

    802

    Cisco Systems Inc

    CSCO

    46.83

    0.44(0.95%)

    29514

    Citigroup Inc., NYSE

    C

    67

    0.60(0.90%)

    11394

    E. I. du Pont de Nemours and Co

    DD

    65.2

    0.28(0.43%)

    380

    Exxon Mobil Corp

    XOM

    67.27

    0.57(0.85%)

    6514

    Facebook, Inc.

    FB

    179.2

    1.45(0.82%)

    51283

    FedEx Corporation, NYSE

    FDX

    138.6

    0.21(0.15%)

    15328

    Ford Motor Co.

    F

    8.59

    0.05(0.59%)

    24896

    Freeport-McMoRan Copper & Gold Inc., NYSE

    FCX

    8.63

    0.12(1.41%)

    20926

    General Electric Co

    GE

    8.31

    0.03(0.36%)

    157162

    General Motors Company, NYSE

    GM

    34.05

    0.17(0.50%)

    6553

    Goldman Sachs

    GS

    199.5

    2.13(1.08%)

    6625

    Google Inc.

    GOOG

    1,199.60

    10.47(0.88%)

    2861

    Hewlett-Packard Co.

    HPQ

    16.46

    0.16(0.98%)

    2548

    Home Depot Inc

    HD

    228.2

    1.53(0.68%)

    694

    Intel Corp

    INTC

    50.27

    0.55(1.10%)

    29556

    International Business Machines Co...

    IBM

    139.42

    1.04(0.75%)

    10553

    Johnson & Johnson

    JNJ

    129.6

    -2.24(-1.70%)

    30771

    JPMorgan Chase and Co

    JPM

    112.75

    0.93(0.83%)

    11210

    McDonald's Corp

    MCD

    212.07

    0.96(0.45%)

    1585

    Merck & Co Inc

    MRK

    83.64

    0.35(0.42%)

    1131

    Microsoft Corp

    MSFT

    136.87

    1.20(0.88%)

    112833

    Nike

    NKE

    92.32

    0.57(0.62%)

    4784

    Pfizer Inc

    PFE

    35.54

    0.11(0.31%)

    4213

    Procter & Gamble Co

    PG

    121.3

    0.37(0.31%)

    4203

    Starbucks Corporation, NASDAQ

    SBUX

    85.6

    0.69(0.81%)

    3609

    Tesla Motors, Inc., NASDAQ

    TSLA

    242

    1.95(0.81%)

    29815

    The Coca-Cola Co

    KO

    53.74

    0.16(0.30%)

    2758

    Twitter, Inc., NYSE

    TWTR

    40

    0.30(0.76%)

    26963

    United Technologies Corp

    UTX

    131.9

    1.11(0.85%)

    2262

    UnitedHealth Group Inc

    UNH

    221.58

    1.47(0.67%)

    2540

    Verizon Communications Inc

    VZ

    59.3

    0.20(0.33%)

    11750

    Visa

    V

    173.99

    1.57(0.91%)

    13348

    Wal-Mart Stores Inc

    WMT

    118.16

    0.58(0.49%)

    1913

    Walt Disney Co

    DIS

    129.45

    0.98(0.76%)

    8568

  • 12:39

    Target price changes before the market open

    Netflix (NFLX) target lowered to $340 at Monness Crespi & Hardt

    Netflix (NFLX) target lowered to $265 at Rosenblatt

  • 12:39

    Downgrades before the market open

    FedEx (FDX) downgraded to Mkt Perform from Outperform at Bernstein; target $153

  • 12:29

    Oil market tightening – TD Securities

    Analysts at TD Securities suggest that, while energy markets may have been tightening, it is increasingly likely that deeper and longer cuts will be required to reach a balanced market.

    • “While the OPEC+ group of producers are likely staying the course with their production curtailment agreement until at least the end of Q1 next year, especially Saudi amid the potential Aramco IPO and Iran/Venezuela amid sanctions and economic turmoil, it is increasingly unlikely the cartel will be able to deliver the required cuts quickly enough to prevent a loosening of conditions next year.
    • Further, there are concerns that Saudi Arabia could have difficulty persuading allies to deepen their curtailments when the cartel meets in December. When the supply side of the equation is the concern, OPEC policy has proven to be successful, but the cartel's effort may prove fruitless when demand is the issue, which raises major concerns for the energy market.”

  • 12:19

    U.S. and China still too far apart - ING

    Raoul Leering, the Head of International Trade Analysis at ING, notes that among all the negative reports about the forthcoming U.S.-China trade talks, some positive signs have emerged as well. 

    • "At first glance, recent news provides at least some reason to be a bit more optimistic about the US-China trade talks, to be resumed this Thursday. President Trump says that a trade deal could be achieved 'sooner than you think' and the news of Chinese companies increasing their purchases of US agricultural goods last week, using a waiver from retaliatory import tariffs, is a sign of good will. Today's news that China could be prepared to buy additional soy beans adds to the optimism that a deal might be struck.
    • At the same time, the US plans to limit the funding of Chinese companies through US capital markets and has announced a blacklist of Chinese companies, along with sanctions against Chinese officials involved in the clamp down on Uighur people in the West of China. This shows that tensions between the two super powers remain high.
    • Regarding the trade issues specifically, caution is warranted. Things have become complicated for President Trump. Polls show US voters are increasingly worried about the effects of his economic (read: trade) policies, and with just over a year to go before the next Presidential election, it would behove him to strike a quick 'mini' deal. This would substantially diminish the economic uncertainty which has caused US business sentiment to plunge and put a lot of investment on hold.
    • But the chances of such a deal happening quickly seem low, as Trump would need to take out at least some of his demands which are clear red lines for China.
    • For now, both American and Chinese negotiators will be reluctant to acquiesce. This means the best obtainable result for the upcoming round of talks would be for the US to put on hold higher US tariffs on the 15 October and 15 December in exchange for a Chinese commitment to step up buying of American agricultural and energy products, or something very similar to this."

  • 11:52

    Spreading slowdown from industry to services points to ongoing weak global growth – ABN AMRO

    Nick Kounis, the head of financial markets research at ABN AMRO, suggests that recent economic data confirm that the slowdown in the global economy will be more protracted with global trade and industry likely to remain weak over the next few months.

    • “We attribute the slowdown in trade and industry to the past tightening of monetary policy – led by the US and China – as well as a confidence shock related to the ongoing trade conflict, which has caused a slump in capital spending.
    • Neither of these factors looks set to reverse quickly. Although the Chinese authorities have been easing monetary and fiscal policy, it remains piecemeal, reflecting their longer-term goals of keeping overall leverage in check. At the same time, the Fed – focused on domestic economic conditions – has judged that there is a need for only modest insurance rate cuts. Meanwhile, uncertainty related to the trade conflict looks set to persist, with no comprehensive deal in sight, despite this week’s US-China talks.
    • Recent data also suggest that the sharp downturn in trade and industrial production has started to spill-over into domestic demand and the services sector. In particular, service sector surveys in the US and eurozone saw significant falls in September, while there has been softening in labour markets in both cases as well. This process is likely to continue, leading to some slowdown in advanced economy consumer demand in the coming months.”

  • 11:29

    Ireland's PM Varadkar: No change to EU position on Brexit

    • We are open to workable proposals on consent for Northern Ireland
    • UK position that Northern Ireland must come out of the EU customs union no matter what of grave difficulty for us

  • 11:07

    U.S. weekly mortgage applications rise

    The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. rose 5.4 percent in the week ended October 4, following an 8.1 percent climb in the previous week.

    According to the report, refinance applications surged 10 percent, while applications to purchase a home fell 1.0 percent.

    Meanwhile, the average fixed 30-year mortgage rate decreased to 3.90 percent from 3.99 percent.

    “U.S. Treasury rates moved sharply lower last week, as data showing weakness in the services sector was a sign that slowing economic growth is not confined to the manufacturing sector,” said MBA’s Joel Kan, Associate Vice President of Economic and Industry Forecasting. “This in turn caused a flight to safety by investors, resulting in mortgage rates dropping across the board.”

  • 10:57
  • 10:36

    T-Bill tweak not enough to dampen USD - ING

    Chris Turner, the head of FX strategy at ING, notes that  Fed Chair Jerome Powell said yesterday the Fed would be addressing last month’s tightness in U.S. money markets with a permanent addition of dollar liquidity – replacing several temporary open market operations currently underway. 

    • "It seems this will involve the Fed buying T-Bills, perhaps worth in the region of US$200 billion. Powell was at pains to stress this was not quantitative easing. 
    • A permanent addition of liquidity could have been taken poorly by the dollar and taken well by high yield FX, but it wasn’t. This because: (i) the programme will be a lot smaller than QE (which at its peak was worth US$85 billion per month), (ii) involves short term securities that can roll off the Fed’s balance sheet quickly and (iii) the market is witnessing very little progress in either US-China trade or Brexit negotiations. 
    • Indeed, US-China relations seem to have deteriorated further, with the US now citing Chinese human rights abuses, in addition to the national security threat, as a reason to blacklist Chinese companies. For today, expect more tough rhetoric between the US and China ahead of tomorrow’s trade meeting. 
    • Tonight also sees the release of September FOMC minutes. The Dot Plot already tells us there was much dissention over the 25 basis point cut, but poor US data since that meeting suggests it will take a lot to shake the market from its conviction (now 83% priced) that the Fed cuts again on 30 October. 
    • Expect the dollar to stay bid against activity FX and we wouldn’t be surprised to see USD/CNH trading above 7.20."

  • 10:23

    China offers to buy extra 10m tonnes of U.S. goods to “reset” the troubled talks - FT reports, citing people briefed on ongoing U.S.-China negotiations

    • “Liu He is coming with real offers, it’s not an empty visit,” told FT one of the people briefed on the talks. “The Chinese are ready to de-escalate.”
    • China's officials seek an interim agreement between Beijing and Washington that will stave off a new round of tariff hikes on October 15
    • Both sides want to “reset” the troubled talks ahead of a potential November meeting between Donald Trump and Xi Jinping at the annual summit of Asia Pacific Economic Conference leaders in Chile in mid-November
    • Liu is offering to boost annual purchases of soy beans to 30m tonnes from current 20m tonnes, despite U.S. sanctions announced this week against Chinese companies and officials allegedly involved in human rights abuses in Xinjiang
    • China is also to make a raft of changes to non-tariff barriers that have long frustrated the U.S. Department of Agriculture (USDA)
    • China hopes its agriculture-related concessions, combined with previously announced market-opening measures in areas such as financial services, to provide the basis for a similar interim agreement with the U.S.

  • 09:59

    ECB vice-president de Guindos raises bar for further rate cuts

    The European Central Bank’s vice-president raised the bar on further interest rate cuts, saying the side effects of the ECB’s easy money policy were becoming more tangible.

    In an interview with Market News, Luis de Guindos also ruled out a “policy U-turn” under the ECB’s incoming president Christine Lagarde and weighed in on a public spat among policymakers on last month’s decision to resume a 2.6 trillion euro bond-buying program.

    The ECB pushed its deposit rate further into negative territory on Sept. 12 - effectively increasing a charge on banks’ idle cash - and investors have priced in a further rate cut by March next year.

    But de Guindos poured cold water on such expectations.

    “My impression is that -0.50% is the correct level at present, and as to any further cut, we will have a good, in-depth discussion in the Governing Council,” de Guindos said.

    “Although we can reduce interest rates further, the side effects of monetary policy are becoming more and more evident and more and more tangible,” he added.

  • 09:39

    FOMC Minutes eyed for future policy clues – TD Securities

    According to analysts at TD Securities, the minutes from the September FOMC will be scrutinized by the market in search for clues regarding the path forward for rates, following the Fed's decision to ease rates again at that meeting.

    “More importantly, the minutes are also likely to shed light on the Fed's thinking about the recent surges in repo market rates. However, this has been partly addressed by Chair Powell, who stated on Tuesday that the Fed "will soon announce measures to add to the supply of reserves over time."

  • 09:20

    Moody’s maintains stable outlook for Chinese banking system amid US-China trade spat

    Moody’s Investors Service, released its latest review report on the Chinese banking system, maintaining a stable outlook.

    "The operating environment for Chinese banks is deteriorating as the escalating trade tensions with the United States will add further pressure to the country's economic growth", Moody's said.

    Nevertheless, Moody's maintained its stable outlook for the Chinese banking system on stable liquidity and adequate capitalization.

    "Despite the ongoing trade tensions and slowing economic growth, accommodative government policies will support the asset quality of Chinese banks over the next 12 to 18 months while capital and liquidity also remain adequate. However, profitability will weaken on declining asset yields due to looser monetary policy and interest rate reform and continued high credit costs to reflect high corporate leverage and a slowing economy", Moody's said.

  • 09:00

    BOE warns U.K. may face economic turmoil in no-deal Brexit

    The Bank of England warned of significant market volatility and “material risks” of economic disruption in the event of a no-deal Brexit at the end of this month.

    The BOE’s Financial Policy Committee, in its last scheduled meeting before the current deadline of Oct. 31, said the financial system is prepared for the fallout of Britain abruptly leaving the European Union. Still, asset prices could fall sharply and financial conditions could deteriorate.

    “Financial stability is not the same as market stability,” the committee said. “Significant further asset price volatility is to be expected in a disorderly Brexit.”

    The BOE said the EU should do more to contain remaining risks to financial markets, including to 17 trillion pounds of non-cleared swaps maturing after October, and that these risks could “amplify volatility or spill back to the U.K.”

    While the BOE has said planning for a no-deal scenario has helped to limit the potential damage to the economy, the central bank’s worst-case scenario still sees a dramatic 5.5% drop in GDP.

    BOE Governor Mark Carney says the goal is to prevent problems in the financial plumbing so that the sector doesn’t make things worse for the broader economy.

  • 08:42

    ‘Huge fears’ about demand are weighing on oil markets - Helima Croft

    Global trade tensions and their potential impact on crude demand are more significant for oil markets than recent attacks on energy infrastructure in the Middle East, according to Helima Croft, the managing director and global head of commodity strategy at RBC Capital Markets.

    “We still have huge fears about demand. That is what’s weighing on this market,” Croft told.

    “The big turn in this market this year was the resumption of the trade war (between the U.S. and China) and as long as we have these trade war fears hanging over this market, OPEC can do what they can in terms of production cuts but the question is: Can you move this market higher?”

    The next significant meeting of OPEC and non-OPEC producers will take place in December. Croft noted that current oil prices are not where most members of the oil-producing group would like them to be. “Prices are nowhere where the producers want at this point. Many producers have break-even prices for their fiscal budgets (that are) in the $80s. So the current price environment is not good for most of the OPEC countries,” she said.

    “The question is does OPEC do a bigger collective cut and does Saudi Arabia, the driver of OPEC policy, take more on their back or are they able to get better compliance (from other producers to cut output)?”

  • 08:30

    GBP/USD jumps to a session high of 1.2290 on report that EU is said to be ready to make major Brexit concession

    The report comes from The Times here and says that the EU is prepared to provide a mechanism for Northern Ireland to leave the Irish backstop after a set number of years.

  • 08:20

    Bank Of France retained its growth forecast for the third quarter

    According to the monthly survey from Bank of France, the economy is set to expand 0.3% in the third quarter, unchanged from the previous estimate.

    Further, data showed that the manufacturing sentiment index dropped to 96 in September from 99 in August.

    Industrial production contracted largely reflecting the weakness in machinery and electronic equipment. However, business leaders expect industrial output to grow again in October.

    In the service sector, the business confidence index came in at 99 in September versus 100 in August.

    Service sector activity slowed in September. Leaders project activity to accelerate in October.

    In construction, the business confidence index rose slightly to 105 from 104 in August. Construction sector activity was up sharply in September.

    Business leaders forecast construction sector activity to continue to grow at a sustained pace in October.

  • 07:59

    US-China trade talks hopes growing – TD Securities

    Analysts at TD Securities point out that following China's increased purchases of US agricultural goods, US tariff delays and President Trump noting that a deal "could happen sooner than you think", hopes of progress during a fresh round of trade talks between senior US and Chinese officials in Washington have grown.

    “The incentive for both sides to get a deal done is intensifying given rising economic pressures on both countries. However, the two sides remain far apart on various structural issues (technology transfers, state subsidies, IP theft etc), which will likely not be resolved quickly. While a complete deal may not happen quickly there is potential for agreement on less contentious issues such as Chinese purchases of US goods in exchange for a rolling back of some US tariffs. Also watch out for any discussion on the CNY in any interim deal as well as whether the next phase of tariffs implementation on October 15 will go ahead.”

  • 07:40

    Irish PM says very difficult to secure Brexit deal by next week

    It will be very difficult to secure a Brexit agreement by next week with big gaps remaining in the British position, Irish Prime Minister Leo Varadkar said following a phone call with his British counterpart, Boris Johnson.

    “I’ll certainly work until the very last moment to secure that (a deal) but not at any cost... I think it will be very difficult to secure an agreement by next week, quite frankly,” Varadkar told Irish national broadcaster RTE.

    “Essentially what the United Kingdom has done is repudiated the deal that we negotiated in good faith with Prime Minister May’s government over two years and has sort of put half of that now back on the table and are saying that’s a concession and of course it isn’t really. There are two big gaps.”

    Johnson has consistently said the United Kingdom will leave the EU on Oct. 31 with or without a deal, though a law passed by parliament demands he write a letter to the EU asking for a delay if he cannot strike an exit deal by Oct. 19.

  • 07:19

    GBP/USD bearish, now targets 1.2140 – UOB

    In opinion of FX Strategists at UOB Group, Cable risks a potential move to the 1.2140 region in the next weeks.

    24-hour view: “Instead of “continue to edge lower to 1.2260”, the decline in GBP yesterday exceeded our expectation as it not only cracked 1.2260 but the next support at 1.2235 as well (overnight low of 1.2196). The rapid drop appears to be running ahead of itself but with no sign of stabilization just yet, GBP could weaken further to 1.2170 (1.2195 as a minor support). On the upside, only a move back above 1.2270 would indicate the current weakness has stabilized (minor resistance is at 1.2250)”.

    Next 1-3 weeks: “The sudden lurch lower and the ease by which GBP cracked the 01 Oct low of 1.2205 came a surprise (overnight low of 1.2195). The price action indicates that the sideway-trading phase that started last Friday (04 Oct, spot at 1.2335) ended sooner than expected. From here, GBP is expected to trade with a downward bias towards 1.2140. At this stage, it is too early to expect a sustained decline below this level (momentum is not as strong as preferred). All in, GBP is expected to stay under pressure unless it can move above the ‘strong resistance’ level of 1.2300”.

  • 06:59

    Germany wants a woman to succeed Lautenschlaeger at ECB - German Finance Minister

    Germany’s Finance Minister Olaf Scholz on Wednesday indicated that he was in favor of a woman succeeding German board member Sabine Lautenschlaeger at the European Central Bank.

    “Pure men-only clubs are not a good idea,” he told private broadcaster n-tv.

    The ECB in September announced that Lautenschlaeger, Germany’s nominee, the only woman on the European Central Bank’s executive board and an outspoken policy hawk, would resign with effect from the end of October.

    Scholz declined to comment on possible candidates for the job but said that he expected that the question of Lautenschlaeger’s succession would be addressed “very quickly”.

  • 06:39

    USD/CHF: Downside corrective near term – Commerzbank

    Karen Jones, analyst at Commerzbank, notes that USD/CHF recently faltered at 1.0026 and failed to register a close above the 1.0018 61.8% retracement.

    “The market has sold off and attention has reverted to the .9868 55 day ma. Failure at the next lower .9799 current September low would push key support at .9716/.9659 to the fore. It is the location of the January, June, mid- and late August lows. Below here sits the .9659 August low and the September 2018 low at .9543. A close above 1.0026 is needed to generate some further upside interest and we suspect this will continue to act as a tough near term barrier. The market is neutral. Above the mid-June high at 1.0014/18 on a closing basis targets the 1.0128 mid November 2018 high.”

  • 06:20

    Britain's Prime Minister Johnson faces cabinet revolt over no-deal Brexit - media

    British Prime Minister Boris Johnson is facing a fresh rebellion in his cabinet, with a group of ministers poised to resign due to concerns that he is leading the country towards a no-deal Brexit, The Times newspaper reported on Wednesday.

    Culture Secretary Nicky Morgan, British Minister for Northern Ireland Julian Smith, Justice Secretary Robert Buckland, Health Minister Matt Hancock and Attorney General Geoffrey Cox are all on a “resignation watch list”, according to The Times report.

    An unnamed cabinet minister cited by the newspaper said that a “very large number” of Conservative members of parliament will quit if it comes to a no-deal Brexit.

    The Times said that ministers had warned Johnson in a cabinet meeting about the “grave” risk of the return of direct rule in Northern Ireland and raised concerns about Dominic Cummings, Johnson’s top adviser. “Cabinet will set the strategy, not unelected officials. If this is an attempt to do that then it will fail”, the report quoted another cabinet minister as saying.

  • 06:01

    Japan: Prelim Machine Tool Orders, y/y , September -35,5%

  • 05:59

    Fed speak amongst market movers today – Danske Bank

    Danske Bank analysts point out that the Fed Chairman Jerome Powell (voter, neutral) will speak again today at the 'Fed listens' event in Kansas but will likely not bring much new compared to his speech yesterday. 

    “Minutes from the latest FOMC meeting will be released tonight . This will give insights into the discussion about the need for further accommodation. However, the meeting took place before the recent weak US service PMI that points to some spill-over to US consumers and the service sector. Also look out for any new comments regarding the upcoming US-China trade talks starting tomorrow in Washington . We may also get more signals regarding possible Chinese retaliation against the US blacklisting of more Chinese companies. However, China may wait until the other side of the trade talks this week before hitting back.”

  • 05:33

    Options levels on wednesday, October 9, 2019

    EUR/USD

    Resistance levels (open interest**, contracts)

    $1.1101 (2798)

    $1.1073 (2042)

    $1.1052 (585)

    Price at time of writing this review: $1.0961

    Support levels (open interest**, contracts):

    $1.0935 (3462)

    $1.0906 (3173)

    $1.0872 (3256)


    Comments:

    - Overall open interest on the CALL options and PUT options with the expiration date November, 8 is 62195 contracts (according to data from October, 8) with the maximum number of contracts with strike price $1,0800 (3627);


    GBP/USD

    Resistance levels (open interest**, contracts)

    $1.2554 (1101)

    $1.2472 (759)

    $1.2404 (294)

    Price at time of writing this review: $1.2211

    Support levels (open interest**, contracts):

    $1.2142 (651)

    $1.2119 (474)

    $1.2060 (1122)


    Comments:

    - Overall open interest on the CALL options with the expiration date November, 8 is 31943 contracts, with the maximum number of contracts with strike price $1,3300 (3785);

    - Overall open interest on the PUT options with the expiration date November, 8 is 18528 contracts, with the maximum number of contracts with strike price $1,2000 (1719);

    - The ratio of PUT/CALL was 0.58 versus 0.58 from the previous trading day according to data from October, 8

     

    * - 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 Tuesday, October 8, 2019

    Raw materials Closed Change, %
    Brent 57.88 -0.48
    WTI 52.47 -0.49
    Silver 17.71 1.72
    Gold 1505.41 0.81
    Palladium 1672 0.69
  • 00:30

    Stocks. Daily history for Tuesday, October 8, 2019

    Index Change, points Closed Change, %
    NIKKEI 225 212.53 21587.78 0.99
    Hang Seng 72.37 25893.4 0.28
    KOSPI 24.52 2046.25 1.21
    ASX 200 29.8 6593.4 0.45
    FTSE 100 -54.73 7143.15 -0.76
    DAX -127.23 11970.2 -1.05
    Dow Jones -313.98 26164.04 -1.19
    S&P 500 -45.73 2893.06 -1.56
    NASDAQ Composite -132.51 7823.78 -1.67
  • 00:15

    Currencies. Daily history for Tuesday, October 8, 2019

    Pare Closed Change, %
    AUDUSD 0.67278 -0.06
    EURJPY 117.288 -0.29
    EURUSD 1.09551 -0.14
    GBPJPY 130.809 -0.73
    GBPUSD 1.22178 -0.58
    NZDUSD 0.62947 0.1
    USDCAD 1.33225 0.11
    USDCHF 0.99282 -0.18
    USDJPY 107.06 -0.15
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