Wall Street rises on earnings, Brexit optimism

The US reporting season got underway with banks managing to match expectations, though with a damped outlook. Negotiators say they are getting closer to a Brexit deal, though many “gaps” still remain. These two factors helped Wall Street to push higher, but the passing of the US Hong Kong democracy bill has tempered enthusiasm this morning.

US30USD Daily Chart

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The US30 index rose to the highest in three weeks after posting the biggest daily gain in 11 days

The index closed above the 78.6% Fibonacci retracement of the drop from September 12 to October 3 at 26,974 for the first time since September 23. The 100-day moving average has risen to 26,512

US retail sales are expected to rise 0.3% m/m in September following a 0.4% gain in August. The Fed publishes its Beige Book, a barometer of activity in the 12 regional districts, later in the day.

DE30EUR Daily Chart

The Germany30 index advanced to levels not seen since August last year after comments suggested Brexit negotiators are closer to concluding a deal

The next major resistance point could be the July 2018 high of 12,890. The 100-day moving average is at 12,147 today

ZEW surveys on economic sentiment for both Germany and the Euro-zone deteriorated in October, but came in better than market expectations. Euro-zone CPI for September and trade data for August are the only data points on the calendar today.

CN50USD Daily Chart

The China50 index managed to hold on to Monday’s gains to near six-month highs despite China downplaying the progress in the so-called Phase One trade agreement

The index is hovering below the April high of 14,240. The 55- and 100-day moving averages are both rising, closing at 13,541 and 13,463 respectively yesterday

The US passing of the Hong Kong Human Rights and Democracy Act, which requires require an annual review of whether Hong Kong is sufficiently autonomous from Beijing to justify its special trading status, could have a negative impact on China and Hong Kong shares today.

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