Sample Category Title

Notes/Observations

• EU leaders gather for 'moment of truth' Brexit summit; waning optimism on any agreement this week
• UK Sept CPI comes in below expectations and edging closer to BOE target
• Euro Zone Sept Final CPI unrevised and remaining above ECB target for the 4th straight month

Asia:

• China Premier Li: Confident to reach economic goals this year; Q3 GDP would be at reasonable range

Europe:

• France President Macron said to be ready to support a compromise over the Irish border to secure a final Brexit deal
• EU Brexit Negotiator Barnier reportedly was open to possibly extending Brexit transition by one year in exchange for two-tier backstop to avoid Ireland border
• UK Chancellor of the Exchequer Hammond (Fin Min): reportedly warned MPs that Britain would face £36B bill if it did not agree to trade deal with EU

Americas:

• President Trump: My "biggest threat" is the Fed because its "raising rates too fast, and it’s too independent" (Note: Trump has recently increased the frequency of publicly speaking out against the Fed)
• Trump administration announced intent to negotiate a trade agreement with the UK. Would also open trade talks with the EU and Japan.
• TIC data showed that: China again reduced its holdings of US Treasuries (3rd straight monthly decline); Japan also decreased its holdings

Energy

• Weekly API Oil Inventories: Crude: -2.1M v +9.8M prior

Macro

• (DE) Germany: The Hessian state parliamentary election will be held on 28 October. Forschungsgruppe Wahlen has ruling CDU polling at 29%, down 8 points since the 2013 State Election, & SPD also down 8 points at 18% GRN (+7) Hesse is the only German state where the national populist AfD does not have representation in a Landtag (state parliament). Forschungsgruppe Wahlen currently has that party polling at 13% in Hesse with the threshold at 5%.
• (UK) United Kingdom: Today's EU-27 summit was originally scheduled to sign the exit deal and a political declaration outlining the long-time relationship between the EU and the U.K., but with talks put on hold and without an agreement on the Irish border, EU officials now have to decide whether sufficient progress has been made to schedule another summit for November. The signing of a final deal then has to be rushed through parliaments before the official Brexit day at the end of March 2019.
• (CN) China: A financial press poll of companies participating in the Canton Import and Export Fair shows China's exporters are mostly confident they can weather a trade war with the US, but worry about collateral damage it might cause throughout the global economy. The fair lasts for 3 weeks and may offer incremental evidence of the impact of US imposed tariffs and demand from emerging markets. Economic growth in these markets, increasingly important for China in particular as the US and European economies may have peaked, may have weakened in recent months as investors shifted money to developed markets in anticipation of higher interest rates.

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.1% at 365.2, FTSE +0.3% at 7077, DAX -0.3% at 11740, CAC-40 -0.2% at 5180, IBEX-35 -0.3% at 9050, FTSE MIB -0.2% at 19686, SMI +0.1% at 8806, S&P 500 Futures -0.2%]

Market Focal Points/Key Themes:

Equities

• European Indices trade mixed this morning consolidating after sharp rises yesterday following strength in Asia and the US. The FTSE rallies after weaker inflation numbers weakened the pound. Corporate earnings picked up today with the likes of Asos, Asml, Pearson and Akzo Nobel among names trading higher following earnings. Meanwhile Danone is a notable faller following a Rev miss, with Fresenius Medical trading over 15% lower after missing estimates and cutting its outlook. Home builder Crest Nicholson continues to trade under pressure after cutting its out look and the departure of its CEO; Flybe, Barrett Development and Softcat among the other names falling following earnings.
• In the US the Tech Sector continues to outperform after a strong rebound yesterday with Netflix trading sharply higher in the premarket after strong subscriber growth.
• Looking ahead notable earners include bank names USB and M&T bank as well as Abbot Labs and Northern Trust.
• Consumer discretionary: Asos [ASC.UK] +14% (earnings), Pearson Plc [PSON.UK] +4.5% (trading update), Distribuidora Internacional de Alimentacion SA [DIA.ES] -5.0% (said to put entire business under review; confirms Head of Finance suspended), Beter Bed Holding [BBED.NL] -0.3% (earnings; announces business unit restructuring), WPP [WPP.UK] -1%, Huntsworth [HNT.UK] -0.4% (circulated report that growth in UK advertising budgets slows to weakest level in 2.5 yrs)
• Consumer staples: Danone Group [BN.FR] -3.2% (earnings)
• Financials: Crest Nicholson PLC [CRST.UK] -6% (trading update)
• Healthcare: Mediclinic International Ltd [MDC.UK] -20% (trading update), Roche [ROG.CH] +0.9% (earnings), Fresenius Medical Care [FME.DE] -18.5% (preliminary earnings; outlook cut), Fresenius SE & Co [FRE.DE] -12% (narrows outlook), Medivir AB [MVIRB.SE] +3% (enhances focus on clinical stage projects by bank research costs cut)
• Industrials: Softcat [SCT.UK] -9% (earnings)
• Technology: ASML Holdings [ASML.NL] +4.5%, STMicroelectronics [STM.FR] +4%, Infineon [IFX.DE] +2%, AMS AG [AMS.CH] +4.5% (ASML earnings), Nordic Semiconductor [NOD.NO] -8% (earnings)
• Materials: Akzo Nobel [AKZA.NL] +4% (earnings)

Speakers

• ECB’s Praet (Belgium, chief economist): Ageing had pervasive implications for monetary policy; meant that central banks more likely to hit lower bound. ECB forward guidance on rates and reinvestment policy offered an effective combination of instruments to support a durable return of inflation to below but close to 2%
• Various EU officials comment ahead of the Leader Summit
• Luxembourg Foreign Min Asselborn: reiterated view that was unlikely to have a Brexit agreement at today's summit but believed that a 'double backstop' was a realistic solution to Brexit impasse. EU must still be prepared for no deal Brexit. Ball was in UK court, believed Brexit deal was possible by December
• Ireland Foreign Min Coveney: Likely dates would be suggested for an EU-Brexit Summit but no commitment on dates; should not panic if no deal reached this week. No fear that Brexit backstop would be deferred
• France Fin Min Le Maire: Not far from a deal on Brexit; both sides must make an effort. Hoped for a deal in coming weeks. France would stick to plans to reduce debt and cut spending
• Belgium may miss EU's structural deficit goal
• Repubblica poll: Just 44% of Italians would vote to stay in the EU today (EU avg 66%)
• India Trade Body: Cuts 2018-19 sugar production forecast from 35.5M tons to 32.4M tons citing pest infestation in several States
• OPEC said to ask members not to mention price in policy talks

Currencies

• FX markets was focused the EU leaders Summit and the ‘moment of truth’ for the Brexit process. No agreement has been widely telegraphed but key will be for the any mention of an ‘emergency’ EU Brexit Summit that would be held in Nov or Dec period.
• Softer UK CPI data put into question the rate path of UK rates as the Sept inflation edged closer to the BOE target rate. Brexit anxiety also a headwind for the pound in the session. GBP/USD at 1.3140 area (off 0.3%) ahead of the US morning.
• EUR/USD staying within recent ranges as Euro Zone Sept CPI was confirmed at 2.1%. Dealers will look at the FOMC Minutes to gauge the rate path for the US

Fixed Income

• Bund Futures trades at 158.91 up ticks as German 10-year bond yield tests support at 0.48%. A downside break of 157.25 sees 155.69 initially. To the upside 158.50 remains initial resistance.
• Gilt futures trades at 120.81 up 10 ticks following the move in Treasuries. Continued support at 120.50, with a continued move higher targeting 123.93 then 124.00.
• Wednesday's liquidity report showed Tuesday's excess liquidity fell from €1.905T to €1.889T. Use of the marginal lending facility stayed fell from €59M to €56M.
• Corporate issuance saw 3 issuers raise $7.3B in the primary market

Economic Data:

• (EU) EU27 New Car Registrations: -23.5% v +31.2% prior
• (AT) Austria Sept CPI I M/M: 0.8% v 0.0% prior; Y/Y: 2.0% v 2.2% prior
• (PL) Poland Sept Sold Industrial Output M/M: 3.5% v 5.3%e; Y/Y: 2.8% v 4.1%e, Construction Output Y/Y: 16.4% v 18.1%e
• (PL) Poland Sept PPI M/M: 0.45 v 0.3%e; Y/Y: 2.9% v 2.9%e
• (CN) China Sept Aggregate Financing (CNY): 2.21T v 1.55Te
• (CN) China Sept M2 Money Supply Y/Y: 8.3% v 8.3%e, M1 Money Supply Y/Y: 4.0% v 3.9% prior, M0 Money Supply Y/Y: 2.2% v 3.3% prior
• (CN) China Sept New Yuan Loans (CNY): 1.38T v 1.359Te
• (UK) Sept CPI M/M: 0.1% v 0.3%e; Y/Y: 2.4% v 2.6%e; CPI Core Y/Y: 1.9% v 2.0%e; CPIH Y/Y: 2.2% v 2.3%e
• (UK) Sept RPI M/M: 0.0% v 0.1%e; Y/Y: 3.3% v 3.5%e, RPI-X (ex-mortgage interest payment) Y/Y: 3.3% v 3.4%e, Retail Price Index: 284.1 v 284.5e
• (UK) Sept PPI Input M/M: 1.3% v 0.8%e; Y/Y: 10.3% v 9.2%e
• (UK) Sept PPI Output M/M:0.4% v 0.2%e; Y/Y: 3.1% v 2.9%e
• (UK) Sept PPI Output Core M/M: 0.1% v 0.2%e; Y/Y: 2.4% v 2.3%e
• (UK) Aug ONS House Price Index Y/Y: 3.2% v 2.8%e
• (EU) Euro Zone Sept Final CPI Y/Y: % v 2.1%e; CPI Core Y/Y: % v 0.9%e, CPI M/M: % v 0.5%e
• (EU) Euro Zone Aug Construction Output M/M: -0.5% v -0.1% prior; Y/Y: 2.5% v 2.2% prior

Fixed Income Issuance

• (DK) Denmark sold total DKK8.28B in 3-month and 6-month Bills
• (IN) India sold total INR150B vs. INR150B indicated in 3-month, 6-month and 12-month bills
• (SE) Sweden sold SEK1.5B in 0.75% Nov 2029 bonds; Avg Yield: 0.8832% v 0.8375% prior; bid-to-cover: 3.65x v 5.02x prior

Looking Ahead

• (NL) Netherlands Debt Agency (DSTA) announces upcoming DSL bond auction for Oct 23rd
• 05:30 (DE) Germany to sell €1.5 B in 2.5% July 2044 Bonds
• 05:30 (PT) Portugal Debt Agency (IGCP) to sell €0.75-1.0B in 3-month and 12-month bills
• 06:45 (US) Daily Libor Fixing
• 07:00 (RU) Russia to sell RUB10B in OFZ bonds (if any)
• 07:00 (US) MBA Mortgage Applications w/e Oct 12th: No est v -1.7% prior
• 07:00 (ZA) South Africa Aug Retail Sales M/M: -0.8%e v +1.3% prior; Y/Y: -0.1%e v +1.3% prior
• 07:00 (BR) Brazil Oct FGV Inflation IGP-10 M/M: 1.5%e v 1.2% prior
• 07:30 (BR) Brazil Aug Economic Activity Index (Monthly GDP) M/M: 0.2%e v 0.6% prior; Y/Y: 2.0%e v 2.6% prior
• 08:05 (UK) Baltic Dry Bulk Index
• 08:30 (US) Sept Housing Starts: 1.21Me v 1.282M prior; Building Permits: 1.274Me v 1.249M prior (revised from 1.228M)
• 08:30 (CA) Canada Aug Manufacturing Sales M/M: -0.8%e v +0.9% prior
• 09:00 (RU) Russia Sept Real Retail Sales Y/Y: 2.4%e v 2.8% prior
• 09:00 (RU) Russia Sept Unemployment Rate: 4.7%e v 4.6% prior, Real Wages Y/Y: 6.5%e v 7.0% prior, Real Disposable Income: -0.4%e v -0.9% prior
• 09:00 (RU) Russia Sept PPI M/M: No est v 0.2% prior; Y/Y: No est v 15.3% prior
• 09:15 (UK) BOE’s Cunliffe testifies in Treasury Select Committee
• 10:30 (US) Weekly DOE Crude Oil Inventories
• 11:00 (CO) Colombia Aug Industrial Production Y/Y: 3.9%e v 3.5% prior
• 11:00 (CO) Colombia Aug Retail Sales Y/Y: 4.6%e v 3.2 % prior
• 11:30 (EU) EU27 Leaders Summit
• 12:10 (US) Fed’s Brainard (voter, dove)
• 12:30 (DE) ECB’s Weidman (Germany) in Berlin
• 14:00 (US) FOMC Meeting Minutes from Sept 26th meeting
• 15:00 (AR) Argentina Sept National CPI M/M: 6.5%e v 3.9% prior; Y/Y: No est v 34.4% prior

Spot Gold holds positive tone in early Wednesday, despite firmer dollar and reduced safe-haven demand, in renewed attempts through falling 100SMA ($1226). Upside attempts in past two days failed to sustain probes above 100SMA, as double daily candle with long upper shadows signaled strong rejections. Overbought slow stochastic adds to risk of reversal while strong momentum and daily MA's (10, 20, 30, 55SMA) in bullish setup continue to support. Minutes of FOMC Sep meeting are eyed for fresh signals as hawkish tone from the central bank would signal rate hike in Dec and probably more aggressive approach in early 2019, which would boost the greenback and bring yellow metal under stronger pressure. Break above 100SMA would open strong barriers at $1234/38 (weekly 200SMA / Fibo 38.2% of $1365/$1160), break of which would generate strong bullish signal. On the downside, initial support lays at $1220 (session low), followed by former high of 28 Aug at $1214 and top of thick daily cloud at $1213, break of which will be bearish signal.

Res: 1230, 1233, 1234, 1238
Sup: 1220, 1214, 1213, 1209

The British pound has slumped towards the 1.3100 level against the US dollar, after monthly inflation data from the United Kingdom came in weaker than expected. The GBPUSD pair is intraday bearish while trading below the 1.3155 level, sellers will look for a sustained break below the 1.3100 level. Low expectations from upcoming Brexit talks is also containing the upside in sterling.

The GBPUSD pair is intraday bearish while trading below the 1.3155 level, key support is now found at the 1.3100 and 1.3070 levels.

If the GBPUSD pair moves above the 1.3155 level, buyers may test towards the 1.3200 and 1.3258 levels.

The euro is trading back towards the 1.1553 level against the US dollar, after being strongly technically rejected from the 1.1600 level. Buyers need to break above the EURUSD pairs 100-day moving average, at 1.1629, while sellers will attempt a bearish daily close below the 1.1553 level. Traders now look towards the release of the FOMC Meeting Minutes during the US session.

The EURUSD pair is only bullish while trading above the 1.1600 level, key resistance is found at the 1.1629 and 1.1650 levels.

If the EURUSD pair trades below the 1.1553 level, key intraday support is found at the 1.1500 and 1.1470 levels.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.15789
Open: 1.15795
% chg. over the last day: -0.03
Day's range: 1.15559 – 1.15721
52 wk range: 1.0571 – 1.2557

Since the beginning of the current week, the EUR/USD currency pair has been in a sideways trend. Unidirectional trend is not observed. The euro is under pressure after the publication of the ZEW economic sentiment index in Germany, which counted to -24.7 in October instead of -12.3. At the moment, the local support and resistance levels are: 1.15500 and 1.15850, respectively. We recommend opening positions from these marks. Financial market participants expect the publication of the FOMC meeting minutes, which may indicate a further Fed's key interest rate raising.

Economic calendar on 17.10.2018:

Consumer price index in the Eurozone at 12:00 (GMT+3:00);

Statistics on the real estate market in the United States at 15:30 (GMT+3:00);

Publication of the FOMC meeting minutes at 21:00 (GMT+3:00).

The price has fixed between 50 MA and 200 MA, which are strong dynamic support and resistance levels.

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

Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.

Trading recommendations

Support levels: 1.15500, 1.15200, 1.14900
Resistance levels: 1.15850, 1.16200

If the price fixes above the resistance level of 1.15850, the EUR/USD quotes are expected to grow. The movement is tending to 1.16200-1.16400.

An alternative may be a decrease in the EUR/USD currency pair to the level of 1.15200-1.14900.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31509
Open: 1.31783
% chg. over the last day: +0.27
Day's range: 1.31532 – 1.31897
52 wk range: 1.2361 – 1.4345

There is a variety of trends on the GBP/USD currency pair after the publication of ambiguous reports on the UK labor market. Thus, average earnings taking into account bonuses increased by 2.7% in August instead of 2.6%. However, the number of jobless claims rose to 18.5K in August, while experts expected 4.5K. The key support and resistance levels are: 1.31400 and 1.31900, respectively. Investors expect new information regarding the Brexit process. Positions should be opened from the key levels.

Economic calendar on 17.10.2018:

Consumer price index in the UK at 11:30 (GMT+3:00).

Indicators do not send accurate signals: the price has crossed 50 MA and 200 MA.

The MACD histogram is near the 0 mark. There are no signals at the moment.

Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no signals.

Trading recommendations

Support levels: 1.31400, 1.31000, 1.30600
Resistance levels: 1.31900, 1.32300, 1.32600

If the price fixes above the resistance level of 1.31900, the GBP/USD quotes are expected to rise. The movement is tending to 1.32300-1.32600.

An alternative may be the decrease in the GBP/USD currency pair to 1.31000-1.30600.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.29915
Open: 1.29331
% chg. over the last day: -0.43
Day's range: 1.29533 – 1.29546
52 wk range: 1.2059 – 1.3795

The USD/CAD currency pair has been declining. At the moment, quotes are consolidating. Financial markets participants took a wait-and-see attitude before publication of the FOMC meeting minutes. Local support and resistance levels are: 1.29400 and 1.29650, respectively. Positions should be opened from these marks. The USD/CAD currency pair has the potential for further correction.

The news feed on the economy of Canada is calm.

Indicators point to the power of sellers: the price is being traded below 50 MA and 200 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/CAD.

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

Trading recommendations

Support levels: 1.29400, 1.29150, 1.28800
Resistance levels: 1.29650, 1.30000, 1.30300

If the price fixes below the support of 1.29400, it is necessary to look for entry points to the market to open short positions. The target movement level is 1.29150-1.28800.

Alternative option. If the price fixes above the resistance level of 1.29650, the USD/CAD quotes growth is expected. The movement is tending to 1.30000-1.30300.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.767
Open: 112.258
% chg. over the last day: -0.33
Day's range: 112.154 – 112.235
52 wk range: 104.56 – 114.74

Yesterday, the bullish sentiment was observed on the USD/JPY currency pair. The growth of quotes exceeded 50 points. At the moment, the trading instrument is consolidating. Local support and resistance levels are: 112.000 and 112.400, respectively. Positions should be opened from these marks. Trading instrument is tending to recover.

Publication of important economic reports from Japan is not planned.

Indicators do not send accurate signals: the USD/JPY quotes have fixed between 50 MA and 200 MA.

The MACD histogram is in the positive zone, but below the signal line, which gives a weak signal to buy USD/CAD.

Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no accurate signals.

Trading recommendations

Support levels: 112.000, 111.650
Resistance levels: 112.400, 112.750, 113.000

If the price fixes above the resistance level of 112.400, further growth of the USD/JPY quotes is expected. The movement is tending to 112.750-113.000.

Alternative option. If the price fixes below the round level of 112.000, we recommend looking for entry points to the market to open short positions. The target movement level is 111.700-111.500.

The gold price depreciated 0.34% since Tuesday's session. During the previous trading session, the yellow metal passed through the 55-hour SMA to stop the trade at the 1,226.72 mark. During Wednesday's morning hours, the gold was trading between the 55-hour and the 100-hour SMAs at 1,222.53 mark.

In regards to the near-term future, most likely, the gold will trade sideways among the large pattern line and the monthly PP at 1,227.33 mark.

Besides, the 100-hour simple moving average will try to support the rate during the trading session. Most likely, the gold will be traded at the 1,220.00 level on Wednesday.

The US Dollar appreciated 0.43% against the Japanese Yen since Tuesday's session. During the previous trading session, the currency pair broke the 55-hour and the 100-hour SMA to stop the trade at 111.81 mark. During Wednesday's morning hours, the US Dollar was trading between the SMAs at 112.27 mark.

In regards to the near-term future, the US dollar will trade upwards to the monthly PP at 112.60 level due to the support of the 100-hour and 55-hour SMAs.

On the other side, the currency exchange rate could depreciate to pass through the SMAs due to today's US fundamental data releases. Watch out for the news!

The British pound appreciated 0.27% against the US Dollar since Tuesday's session. During the previous session, the rate was passed the support of the 100-hour SMA to stop the trade at the 1.3186 mark. On Wednesday morning, the rate was located between the 100-hour and the 55-hour SMAs to trade at the 1.3174 mark.

In regards to the near-term future, the British pound will keep surging upwards to the weekly R1 at 1.3260 mark due to the support of the 55-hour SMA and the 50.00% Fibo level.

However, today's UK CPI data release at 8:30 GMT may break the predictions for the currency pair to pass through the 50.00% Fibo level during the data release time.

The European Single Currency depreciated 0.09% against the US Dollar since Tuesday's session. During the last trading session, the currency pair was supported by the 55-hour and the 100-hour SMAs to stop the trade at 1.1577 mark. During Wednesday's morning hours, the rate broke the support of the 55-hour and the 100-hour SMAs to trade at 1.1567 mark.

On Wednesday, most likely, the European Single Currency will trade sideways between the SMAs at 1.15600 level due to the rate's resistances and supports.

However, the rate might pass through the weekly PP at 1.1535 or break the 55-hour and 100-hour resistances due to today's US fundamentals

The Australian Dollar has been trading in a two-week descending channel against the Japanese Yen. This decline started after the currency pair reversed from the upper boundary of a long-term channel down at 82.17.

Currently, the exchange rate is trading above a support cluster formed by the combination of the weekly, the monthly and the 50-hour simple moving average at 80.01 regions.

If the support cluster as mentioned above holds, a breakout through the upper boundary of the two weeks descending channel pattern at 80.09 could be expected within this session.

Meanwhile, technical indicators on the 4(H) time frame flash a bullish signal.