Sample Category Title

Notes/Observations

• Stock market volatility continue to be the focus
• France Q3 Advance GDP registered a slight miss (QoQ: 0.4% v 0.5%)
• Italy Q3 Preliminary GDP misses expectations (QoQ: 0.0% v 0.2%e)
• Various German State CPI reading were mixed compared to the upcoming national composite reading (due out later today)
• German labor market remained robust with Oct Unemployment Rate retesting post reunification lows (rate steady at 5.1%)

Asia:

• US said to implement next round of China tariffs if Trump talks with Xi fail (expected to meet at G20 on Nov 30th)
• US Commerce Dept said the Chinese company would not be allowed to purchase components from US companies without a special license; effective Oct 30th
• Japan Sept Jobless Rate 2.3% v 2.4%e with Job to applicant ratio hitting its highest level since Jan 1974 (1.64 v 1.63e)

Europe:

• UK Debt Management Office (DMO) cut its 2018/19 Gilt issuance remit by from £106.0B to £97.5B (reduction of £8.5B v £5.0Be.
• UK Office of Budget Responsibility (OBR) stated that it would sell entire RBS stake by 2023 or 2024: to sell £3.6B in shares in 2019/20, £2.5B in 2020/21, and further £20.6B in RBS shares by 2023-24. Stated that Hammond's budget spent the fiscal windfall from lower borrowing rather than saving it
• EU Member States draft recommended ECB and EU Commission review alleged incidents of money laundering at EU banks by mid-2019 and consider taking new measures

Americas:

• President Trump: Predicts 'great deal' with China on trade; could see a trade deal with Brazil happening

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx50 -0.2% at 3,150, FTSE +0.2% at 7,037, DAX -0.3% at 11,299, CAC-40 -0.3% at 4,976, IBEX-35 -0.1% at 8,815, FTSE MIB -0.5% at 18,943, SMI +0.3% at 8,776, S&P 500 Futures +0.3%]

Market Focal Points/Key Themes:

• European Indices trade mixed this morning following a mainly higher session in Asia overnight and mixed US futures following weakness yesterday. The FTSE MIB underperforms after GDP came below exceptions. In another busy day on the corporate front, BP outperforms after strong results, with Volkswagen and Suez also trading higher after results. Notable names trading to the downside include Lufthansa, Reckitt Benckiser, BNP Paribas, Beiersdorft and Schaeffler after earnings. Elsewhere Restaurant Group trades sharply lower after acquiring Wagamama and reporting a decline in YTD LFL sales; Genmab also trades higher after positive top line results of its Phase III MAIA study. Looking ahead notable earners include Lumber Liquidators, Coca Cola, Cognizant Tech, Fiat, Pfizer and HCA among others.

Equities

• Consumer discretionary: Lufthansa [LHA.DE] -8% (earnings), Restaurant Group Plc [RTN.UK] -16% (trading update; acquisition), Straumann Holding [STMN.CH] +2.5% (earnings, raises outlook), Beiersdorf AG [BEI.DE] -1.5% (earnings), WH Smith [SMWH.UK] +3.5% (acquisition)
• Energy: BP Plc [BP.UK] +4% (earnings)
• Financials: BBVA [BBVA.ES] -1.5% (earnings), BNP Paribas [BNP.FR] -4.5% (earnings), Unicredit [ICG.IT] +2% (attributed to Italian press speculation that major Italian banks will pass stress tests on Friday, Nov 2)
• Healthcare: Reckitt Benckiser PLC [RB.UK] -5% (earnings), AstraZeneca [AZN.UK] +0.5% (divests prescription medicine rights), Genmab [GEN.DK] +7% (positive top-line results)
• Industrials: Volkswagen [VOW3.DE] +2.5% (earnings, affirms outlook), Schaeffler AG [SHA.DE] -3.5% (preliminary earnings; outlook cut), Geberit [GEBN.CH] -9% (earnings; outlook cut), Aixtron [AIXA.DE] +15% (earnings)
• Technology: Wirecard [WDI.DE] +0.5% (earnings)
• Utilities: Suez [SEV.FR] +2% (earnings, affirms outlook)

Speakers

• UK Chancellor of the Exchequer Hammond (Fin Min) made the media rounds after yesterday's budget statement. He noted that a no deal Brexit would be a shock and could require fiscal stimulus. Believed that UK would reach a Brexit agreement with EU and a good Brexit deal will allow more public spending
• Italy Dep Fin MIn Garavaglia: Slowing GDP showed the need for investments
• Sweden Central Bank (Riksbank) Gov Ingves reiterated stance that coming rate hikes would be gradual. Reiterated that high household indebtedness is a concern
• Norway Central Bank (Norges) Dep Gov Nicolaisen reiterated view of seeing gradual rate hikes
• Japan PM Abe stated in parliament that to lay the groundwork for beating deflation in the next three years . Specific monetary procedure should be left up to BOJ and reiterated his trust in BOJ Gov Kuroda
• China Foreign Ministry spokesperson Lu Kang: US remarks on trade would not threaten it; to keep own path if US did not cooperate
• China ex-PBoC advisor Seng Songcheng: China should use its FX Reserves to stabilize the exchange rate when needed
• India Govt official stated that the RBI had taken a balanced view on policy rate
• IEA chief Birol stated that saw the oil market tightening in Nov; urged key oil producers to bring more barrels to the market

Currencies/ Fixed Income

• FX markets seemed listless in activity despite the plethora of GDP, inflation and confidence data releases out of Europe. There are a few G7 rate decision later this week (BOJ on Wed, BOE on Thursday) but no major changes were expected on the policy front
• EUR/USD steady at 1.1375 area but continued to see soft data stemming from member States as both France and Italy Q3 GDP data came in below expectations. ECB noted last week that recent incoming economic data had been weaker than expected but it reiterated risks to economic growth were still broadly balanced. The data could put another kink in the ECB 1st potential rate hike plan after the summer of 2019. Chancellor Merkel decision to stand down as leader of the CDU after her party's dismal performance in the German state elections was also a headwind for the Euro as merkel was the key cheerleader for a united Europe. Dealers also noted the possibility of early election for Germany at some point .
• GBP/USD was softer to test 10-week lows below 1.2770 level as analysts noted the Hammond's autumn budget would not translate into a material reversal in the country's high public debt levels for some time as Brexit negotiations was producing a high level of uncertainty over the economic outlook

Economic data

• (NL) Netherlands Oct Producer Confidence Index: 5.9 v 5.7 prior
• (FR) France Q3 Advance GDP Q/Q: 0.4% v 0.5%e; Y/Y: 1.5% v 1.5%e
• (NO) Norway Sept Credit Indicator Growth Y/Y: 5.6% v 5.7%e
• (NO) Norway Sept Retail Sales (with auto/fuel) M/M: -0.7% v +0.2%e
• (FI) Finland Sept House Price Index M/M: +0.7% v -0.6% prior; Y/Y: 1.2% v 0.4% prior
• (FR) France Sept Consumer Spending M/M: -1.7% v -0.4%e; Y/Y: -1.5% v +0.6%e
• (CH) Swiss Oct KOF Leading Indicator: 100.1 v 101.0e
• (DE) Germany Oct CPI Saxony M/M: 0.2% v 0.4% prior; Y/Y: 2.5% v 2.3% prior
• (ES) Spain Oct Preliminary CPI M/M: 0.9% v 0.9%e; Y/Y: 2.3% v 2.2%e
• (ES) Spain Oct Preliminary CPI EU Harmonized M/M: 0.7% v 0.6%e; Y/Y: 2.3% v 2.3%e
• (ES) Spain Sept Adjusted Retail Sales Y/Y: -0.9% v +0.1% prior; Retail Sales (unadj) Y/Y: -3.1% v +0.3% prior
• Austria Sept PPI M/M: 0.3% v 0.3% prior; Y/Y: 3.3% v 3.5% prior
• (HU) Hungary Sept Unemployment Rate: 3.8% v 3.6%e
• (SE) Sweden Aug Non-Manual Workers Wages Y/Y: 2.6% v 2.5% prior
• (DE) Germany Oct Net Unemployment Change: -11K v -12Ke; Unemployment Claims Rate: 5.1% v 5.1%e
• (DE) Germany Oct CPI Brandenburg M/M: 0.1% v 0.3% prior; Y/Y: 2.3% v 2.1% prior
• (DE) Germany Oct CPI Hesse M/M: 0.1% v 0.5% prior; Y/Y: 2.2% v 1.9% prior
• (DE) Germany Oct CPI Bavaria M/M: 0.2% v 0.5% prior; Y/Y: 2.8% v 2.5% prior
• (IT) Italy Q3 Preliminary GDP Q/Q: 0.0% v 0.2%e; Y/Y: 0.8% v 1.0%e
• (ZA) South Africa Q3 Unemployment Rate: 27.5% v 27.4%e
• (PT) Portugal Consumer Confidence Index: -1.1 v -1.4 prior; Economic Climate Indicator: 2.4 v 2.4 prior
• (DE) Germany Oct CPI North Rhine Westphalia M/M: 0.1% v 0.4% prior; Y/Y: 2.4% v 2.3% prior

Fixed Income Issuance

• (DK) Denmark sold total DKK3.0B in 3-month and 6-month Bills
• (ZA) South Africa sold total ZAR2.4B vs. ZAR2.4B indicated in 2023, 2032 and 2048 bonds
• (ID) Indonesia sold total IDR5.625T vs. IDR4.0T target in 6-month Islamic Bills, 2-year, 4-year, 7-year and 15-year Project-based Sukuk (PBS)

Looking Ahead

• (DE) German Oct CPI Rhineland-Palatinate M/M: No est v 0.4% prior; Y/Y: No est v 2.4% prior
• (DE) Germany Oct CPI Baden Wuerttemberg M/M: No est v 0.6% prior; Y/Y: No est v 2.5% prior
• 06:00 (EU) Euro Zone Q3 Advance GDP Q/Q: 0.4%e v 0.4% prior; Y/Y: 1.8%e v 2.1% prior
• 06:00 (EU) Euro Zone Business Climate Indicator: 1.16e v 1.21prior; Consumer Confidence (final reading): -2.7e v -2.7 advance; Economic Confidence: 110.0e v 110.9 prior; Industrial Confidence: 3.9e v 4.7 prior; Services Confidence: 14.0e v 14.6 prior
• 06:00 (IT) Italy Oct Consumer Confidence Index: 115.1e v 116.0 prior; Manufacturing Confidence: 105.0e v 105.7 prior; Economic Sentiment: No est v 103.7 prior
• 06:00 (EU) Daily Euribor Fixing
• 06:00 (IT) Italy Debt Agency (Tesoro) to sell €3.5-4.5B in 5-year and 10-year BTP bonds
• 06:00 (IT) Italy Debt Agency (Tesoro) to sell €-0.5-1.0B in Sept 2025 CCTeu (Floating Rate Note); Avg Yield: % v 1.77% prior; Bid-to-cover: x v 1.67x prior (Sept 27th 2018)
• 06:15 (BE) Belgium Oct CPI M/M: No est v 0.0% prior; Y/Y: No est v 2.4% prior
• 06:15 (CH) Switzerland to sell 3-month Bills
• 06:30 (UK) Weekly John Lewis LFL sales data
• 06:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO)
• 06:30 (HU) Hungary Debt Agency (AKK) to sell in 3-month Bills
• 06:30 (BE) Belgium Debt Agency (BDA) to sell €2.0-2.4B in 3-month and 6-month Bills
• 07:00 (UK) Oct CBI Retailing Reported Sales: 20e v 23 prior; Total Distribution: No est v 26 prior
• 07:00 (IE) Ireland Sept Retail Sales Volume M/M: No est v -3.3% prior; Y/Y: No est v 2.5% prior (revised from 2.6%)
• 07:00 (PT) Portugal Sept Industrial Production M/M: No est v 2.7% prior; Y/Y: No est v 2.9% prior
• 07:00 (PT) Portugal Sept Retail Sales M/M: No est v 1.1% prior; Y/Y: No est v 3.8% prior
• 07:00 (BR) Brazil Sept National Unemployment Rate: 11.9%e v 12.1% prior
• 07:00 (BR) Brazil Oct FGV Inflation IGPM M/M: 0.9%e v 1.5% prior; Y/Y: 10.8%e v 10.0% prior
• 07:45 (US) Weekly Goldman Economist Chain Store Sales
• 07:45 (US) Daily Libor Fixing
• 08:00 (ES) Spain Sept YTD Budget Balance: No est v -€18.9B prior
• 08:00 (ZA) South Africa Sept Budget Balance (ZAR): -5.0Be v -7.9B prior
• 08:55 (US) Weekly Redbook Sales
• 09:00 (US) Aug S&P Case Shiller 20-City M/M: 0.10%e v 0.09% prior; Y/Y: 5.8%e v 5.92% prior; House Price Index (HPI): No est v 213.76 prior
• 09:00 (US) Case-Shiller (overall) HPI Y/Y: No est v 6.00% prior, Overall HPI Index: No est v 205.35 prior
• 09:00 (DE) Germany Oct Preliminary CPI M/M: 0.1%e v 0.4% prior; Y/Y: 2.4%e v 2.3% prior
• 09:00 (DE) Germany Oct Preliminary CPI EU Harmonized M/M: 0.1%e v 0.4% prior; Y/Y: 2.4%e v 2.2% prior
• 09:05 (UK) Baltic Dry Bulk Index
• 09:30 (BE) ECB's Praet (Belgium, chief economist)
• 10:00 (US) Oct Consumer Confidence: 136.0e v 138.4 prior
• 10:00 (MX) Mexico Q3 Preliminary GDP Q/Q: +0.5%e v -0.2% prior; Y/Y: 2.4%e v 2.6% prior
• 10:00 (RU) Russia announces weekly OFZ bond auction (held on Wed)
• 10:10 (DE) ECB's Lautenschlaeger (Germany, SSM)
• 11:00 (MX) Mexico weekly International Reserves data
• 11:30 (US) Treasury to sell 4-Week and 8-Week Bills
• 16:30 (US) Weekly API Oil Inventories
• (MX) Mexico Sept YTD Budget Balance (MXP): No est v -230.8B prior

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.13992
Open: 1.13724
% chg. over the last day: -0.14
Day's range: 1.13604 – 1.13686
52 wk range: 1.1299 – 1.2557

The technical pattern on the EUR/USD currency pair is ambiguous. The euro is still under pressure against the political instability. At the moment, the EUR/USD quotes are consolidating. Local support and resistance levels are: 1.13500 and 1.13800, respectively. Positions should be opened from these marks. In the near future, correction of the trading instrument is not excluded. We expect important economic reports.

The news feed on 30.10.2018:

Report on the labor market in Germany at 10:55 (GMT+2:00);

Consumer confidence index in the US at 16:00 (GMT+2:00).

The price has fixed below 50 MA and 200 MA, which indicates the bearish sentiment.

The MACD histogram is in the negative zone and continues to decline, which gives a signal to sell EUR/USD.

Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which also indicates the bearish sentiment.

Trading recommendations

Support levels: 1.13500, 1.13300, 1.13000
Resistance levels: 1.13800, 1.14300, 1.14700

If the price fixes below the local support level of 1.13500, a further fall in the EUR/USD quotes is expected. The movement is tending to 1.13250-1.13000.

Alternative option. If the price fixes above the resistance of 1.13800, it is necessary to look for entry points to the market to open long positions. The movement is tending to 1.14300-1.14500.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.28274
Open: 1.27968
% chg. over the last day: -0.23
Day's range: 1.27557 – 1.27817
52 wk range: 1.2662 – 1.4378

The GBP/USD currency pair is in a sideways trend. At the moment, the local support and resistance levels are: 1.27600 and 1.28000, respectively. Investors expect new information regarding the Brexit process. We recommend opening positions from the key levels. In the near future, technical correction is not excluded.

The news feed on the UK economy is calm.

Indicators point to the power of sellers: the price has fixed below 50 MA and 200 MA.

The MACD histogram is in the negative zone, below the signal line, which gives a strong signal to sell GBP/USD.

The Stochastic Oscillator is located near the oversold zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.27600, 1.27300
Resistance levels: 1.28000, 1.28400, 1.28800

If the price fixes below the support of 1.27600, a further fall in the GBP/USD currency pair is expected. The movement is tending to 1.27300-1.27000.

Alternative option. If the price fixes above the round level of 1.28000, it is necessary to consider purchases of GBP/USD. The movement is tending to 1.28400-1.28600.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.30958
Open: 1.31303
% chg. over the last day: +0.24
Day's range: 1.31055 – 1.31153
52 wk range: 1.2248 – 1.3387

At the moment, the technical picture on the USD/CAD currency pair is ambiguous. The trading instrument is in a sideways trend. Investors expect additional drivers. Local support and resistance levels are: 1.30900 and 1.31250, respectively. Positions should be opened from these marks.

Today, the news feed on the economy of Canada is calm. We recommend paying attention to the speech by the Bank of Canada governor Poloz.

Indicators do not send accurate signals: the price is testing 50 MA.

The MACD histogram is near the 0 mark.

The stochastic oscillator is in the neutral zone, the %K line is crossing the %D line. There are no accurate signals.

Trading recommendations

Support levels: 1.30900, 1.30500, 1.30100
Resistance levels: 1.31250, 1.31600

If the price fixes above the level of 1.31250, the USD/CAD quotes growth is expected. The movement is movement to 1.31600-1.31800.

An alternative may be the decrease of the USD/CAD currency pair to 1.30500-1.30300.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.862
Open: 112.355
% chg. over the last day: +0.35
Day's range: 112.755 – 112.839
52 wk range: 104.56 – 114.74

Aggressive purchases are observed on the USD/JPY currency pair. During yesterday's and today's trading sessions, the quotes growth exceeded 100 points. The trading instrument has updated local highs. At the moment, the key support and resistance levels are: 112.600 and 112.900, respectively. Positions should be opened from these marks. We recommend paying attention to the news feed on the US economy.

Publication of important economic reports from Japan is not planned.

The price has fixed above 50 MA and 200 MA, which indicates the power of buyers.

The MACD histogram is in the positive zone, above the signal line, which gives a strong signal to buy USD/JPY.

Stochastic Oscillator is in the overbought zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 112.600, 112.250, 112.000
Resistance levels: 112.900, 113.200

If the price fixes below the support level of 112.600, correction of the USD/JPY quotes is expected. The movement is tending to 112.250-112.000.

An alternative may be the further growth of the USD/JPY currency pair to 113.200-113.500.

Yuan under pressure

CNY fell to its lowest level against the USD since 2008, reaching 6.9641 on news that America is preparing new tariffs on all remaining Chinese imports, if talks on 30 November between US President Trump and China's President Xi Jinping fail. The new round of USD 257 billion in tariffs could come into effect as early as December.

Still, China has the fiscal and monetary firepower to support demand while remaining on track for rebalancing. And Trump could be over playing his hand. China's USD surplus is ‘recycled' into US treasuries, which allows Trump to run budget deficits with only marginal effects on interest rates. Removing China's surplus would cause funding cost to rise. Markets continue to punish China in the US-China trade dispute. While US asset have been only marginally weak, Chinese assets have been abandoned. Trump is still pitching that a “great deal” is possible with China. His meeting with President Xi should result into a reduction of US-China trade war tensions.

UK budget weakens pound

Yesterday's UK budget presentation by Chancellor of the Exchequer Philip Hammond took some steam out of sterling. His spending deficit of GBP 15 billion amounts to 1.40% of GDP in 2019, with boosts in healthcare, housing and fuel. The pound was not able to resist to traders' GBP bearish view, putting it among the biggest losers in today's trading session. For now, GBP/USD is trading along 1.2780, its lowest since August 2018, and approaching the 1.2760 range short-term.

Brexit worries continue: the hope that a Brexit agreement would be reached with the EU by 29 March 2019 is fading. Sticking issues relating to the Irish border have not progressed since the European Council Meeting on 17–18 October and are not expected to advance before next EU Council meeting on 13–14 December.

The British pound has fallen to a fresh monthly trading low against the US dollar, following a lack of buying interest above the 1.2800 level during the European trading session. The GBPUSD pair has fallen towards the 1.2760 support level and is strongly bearish while trading below the 1.2785 level. Sellers are now increasingly likely to test towards the current 2018 trading low during the US session.

The GBPUSD pair is strongly bearish while trading below the 1.2785 level, key support is found at the 1.2730 and 1.2660 levels.

If the GBPUSD pair moves above the 1.2800 level, buyers are likely to test towards the 1.2820 and 1.2840 resistance levels.

The euro currency is testing towards the former weekly trading low against the US dollar, after another major technical rejection from the 1.1400 level. Weaker than expected macroeconomic data from the German and Italian economies are also pressuring the EURUSD pair lower. Sellers will attempt to break the 1.1340 support level, while buyers need to breach the 1.1431 resistance level.

The EURUSD pair is strongly bearish while trading below the 1.1380 level, key support is found at the 1.1340 and 1.1300 levels.

If the EURUSD pair trades above the 1.1380 level, key resistance is now found at the 1.1400 and 1.1431 levels.

Eurozone GDP growth slowed notably to 0.2% qoq in Q3, down from 0.4% qoq and missed expectation of 0.4% qoq. For the year, GDP growth slowed to 1.7% yoy, down from 2.2% yoy and missed expectation of 1.9% yoy. For EU28, Q3 GDP growth slowed to 0.3% qoq, down from 0.5% qoq. For the year, EU 28 GDP growth slowed to 1.9% yoy, down from 2.1% yoy.

Also released, Eurozone business climate dropped to 1.01, down from 1.21 and missed expectation of 1.15. Economic confidence dropped to 109.8, down from 110.9, missed expectation of 110.0. Industrial confidence dropped to 2.0, down from 4.7 and missed expectation of 3.9. Services confidence dropped to 13.6, down fro 14.7 and missed expectation of 14.0. Consumer confidence was finalized at -2.7. That is, all confidence indicators deteriorated, and worse than expected.

The pair extends strong recovery into second straight day as the greenback gets boosted by safe-haven buying on renewed concerns about growing tensions on US-China trade conflict.

Fresh bulls nearly fully reversed 112.88/111.37 bear-leg, which was contained by daily cloud on Friday.

Rising and thickening cloud continues to underpin recovery, along with growing bullish momentum and daily MA's turning to positive setup.

Break above pivotal barriers at 112.88 (22 Oct high) and 112.95 (50% of 114.54/111.37 descend/daily Kijun-sen) would signal extension of recovery rally from last Friday's 111.37 spike low and would expose next pivot at 113.33 (Fibo 61.8% of 114.54/111.37).

Broken 10SMA marks support at 112.43, which is expected to keep the downside protected. Only return below 55SMA (112.05) would sour near-term sentiment and shift focus lower.

Res: 112.95, 113.33, 113.79, 114.10
Sup: 112.70, 112.43, 112.05, 111.62

The Euro stands at the back foot on Tuesday but remains within consolidation range which extends into fourth straight day.

Monday's bearish candle weighs on near-term action, with bearish daily techs accompanied with weaker than expected German labor data and Italian GDP, keeping negative bias.

EU GDP and business climate data are in focus for fresh signals, as forecast show slowdown (annualized 1.9% f/c vs 2.1% prev) and business climate Oct 1.14 f/c vs 1.21 prev, but growth remains robust and could partially offset negative impact on weak releases.

Key supports at 1.1314 (200WMA) and 1.1300 (12 Aug low) are still in focus and sustained break here would spark fresh bearish acceleration.

Conversely, bullish signal could be expected on bounce and close above falling 10SMA (1.1432).

Res: 1.1387, 1.1432, 1.1481, 1.1497
Sup: 1.1358, 1.1335, 1.1314, 1.1300

Market volatility going nowhere

US futures may be trading in the green ahead of the open on Tuesday but as we saw at the start of the week, that doesn't necessarily provide much comfort for the session ahead. They've also pared much of the gains from earlier on which doesn't provide any additional hope.

The levels of volatility we're seeing right now isn't going to give anyone confidence that we're not headed for further declines in the markets. We did see a late rally in the US session on Monday which may suggest pessimism isn't quite as rife as it's been in recent weeks although it's difficult to read too much into any rallies at the moment. Any ray of hope seems to be quickly dashed by the market taking another dive lower, this particular correction may well have longer to run.

One reason for optimism has been the market taking reports of more tariffs in December in their stride and not slipping into panic mode as they may have a couple of weeks ago. The tariffs covering the remaining $257 billion of imports would represent a significant ramping up of trade tensions between the world's two largest economies, albeit not an unforeseen one. Trump sounded very optimistic that a great deal will be done but didn't think China is ready, which means further pain ahead, particularly for the latter which is already being impacted by those tariffs that have already been imposed.

US data interesting ahead of Fed meeting next week

We got away relatively unscathed from the data on Monday, with inflation, income and spending figures neither triggering concern about the strength of the economy and impact on interest rates or showing any real weakness. We have a scattering of data throughout the week but all eyes will be on Friday's jobs report, coming less than a week before the November Fed meeting.

While the gathering next week isn't expected to be a 'live' meeting – no change in interest rates – it will be the first since the market went loco, to borrow a phrase from Trump. Given that this appears to have been sparked by comments from the Fed Chairman himself, it would be an opportunity to clarify or even backtrack. I'm not convinced they will yet though although they may include a reference to the market and the fact that further instability could force them to reconsider the timing of future hikes.

Stronger dollar limiting Gold recovery, oil drifts lower

Gold is continuing to trend lower this morning although it has picked up a little since the European open as stocks have moved into negative territory and US futures have reversed most of their gains. The yellow metal is off around 0.4% at the time of writing but given the direction of travel for stock markets currently, these losses may continue to be pared. The dollar has been relatively well bid this morning though which could limit the upside for Gold.

Oil is also not faring too well this morning and has been trending lower in line with the drop off we've seen in stock markets. The API inventory data will be keenly watched today for further evidence that the market isn't quite as tight as it appeared, with the inventory numbers over the last couple of weeks giving investors pause for thought. API reported a huge build last week and another repeat of this should put further downside pressure on Brent and WTI, both of which have had a rather torrid October.

The price is below Camarilla W H3 and Murrey Math 5/8 so we might expect a rejection around 128.25-25 zone. If 128.60 holds we might see a drop towards 128.10, 127.75 with 126.56 as the final target. However, W L3 and 0/8 MM levels provide a very strong confluence but we still need to see a higher risk-off sentiment for E/J pair to reach the final confluence target. Protecting your profits around important levels is advised.