FX News Today

FOMC hints of a hike as early as the next meeting, while maintaining the policy holding pattern, the Fed tone was a little less dovish than anticipated as it downgraded concerns over “global economic and financial developments. Yesterday’s FOMC repeated the economy continued expanding at a moderate pace, while leaving policy unchanged at 0%. The tone of the statement, however, is a little less dovish than expected as the Fed removed worries over global developments from its comments. Also the FOMC said “In determining whether it will be appropriate to raise the target range at its NEXT meeting, which suggests some risk for a December rate hike. On the other hand, the Fed downgraded its outlook on jobs, saying the pace of gains has slowed and the unemployment rate has been steady. The FOMC also remains boxed in via its data dependency, because if growth and inflation continue to slow it will be difficult to argue for a December rate hike keeping the markets guessing for at least another month.

The USD is stronger, in the wake of yesterday’s FOMC Fed statement, which has been generally accepted as leaving the possibility of a rate hike in December on the table the EUR has generally weaken off the news. The EURUSD is now bouncing of 3 month lows (1.0890′s).

Japan industrial production rose, 1.0% m/m in the preliminary September report after falling 1.2% m/m in the final August reading. On an annual basis production fell 0.9% y/y after the 0.4% drop in August. Both results were better than expected, with the month comparable gain contrasting with projections for a decline. The improvement tempers the case for further BoJ easing this week.

Crude Oil is up, moving from near $43.50 at the open to highs near $45 ahead of the EIA inventory data, and later to $45.96 highs following a smaller than expected inventory build. A large systematic buy order was reportedly responsible for the early rally, which was fueled by stop-loss buying over the $44 level. The October 22 peak of $46.10 marks the next resistance level.

U.S. advance trade report showed a narrowing, in the deficit to $58.63 bln , for September, unwinding the surge to -$66.60 bln in August from -$59.8 bln in July. Imports declined 2.6% last month following a 1.8% increase in August, while exports rebounded 2.4% after falling 3.1% previously. Data will help fine tune estimates for the upcoming September trade report, due November 4, and suggest narrowing from the $48.3 bln shortfall registered in August.

ECB’s Coeure hints at further easing measures, deposit rate cut discussed. The executive board member said in a speech last night that if the ECB sees “a risk that inflation would go back to 2% much less quickly or in a much more sluggish way than previously expected, that would imply that the de facto real interest rate at this level would be higher”. He added that adjusting the deposit rate is “an open discussion, but its a discussion that has started”. Further confirmation then that the ECB may add further easing measures at the December meeting, when the adjusted set of economic forecasts is also due.

Main Macro Events Today

• EUR Eurozone Prelim CPI: Eurozone preliminary HICP inflation for October, Germany and Spain will release national numbers today. It’s expected German HICP to rise to 0.1% y/y (median same) from -0.2% y/y and the Spanish harmonized rate to lift to -0.9% y/y from -1.1% y/y. Still very low numbers that will keep the doves at the ECB calling for further action in December.

• USD GDP: Analyst expect Q3 GDP growth of 2.0% in the advance report, following 3.9% growth in Q2.Forecast risk: downward, given the potential for a bigger estimated inventory drawdown. Market risk: downward, as a weaker report could delay the Fed rate hike. Final sales growth is pegged at 3.5% in Q3, from 3.9% in Q2. Consumption growth is estimated at 3.6%, versus the same 3.6% in Q2. Fixed investment growth should rise to a 5.5% rate in Q3 from 5.2% in Q2. Equipment spending should expand at a 4.0% pace in Q3 from 0.3% in Q2.Residential construction growth is projected at 12.0% in Q3 from 9.3% in Q2. The intellectual property component should grow at a 5.5% rate in Q3, versus a 8.3% in Q2. Government spending should grow at a 0.8% rate in Q3, after a 2.6% rate in Q2. The chain price index should grow 0.8% in Q3, following a 2.1% Q2 pace. It’s expected that Q4 real GDP growth of 2.5%, with a 0.4% chain price gain.

• USD Initial Jobless Claims: U.S. initial jobless claims are expected to be 268k (median 263k) in the week-ended October 24. Continuing claims are expected to fall to 2,160k for the week-ended October 17. Forecast risk: downward, as volatility concerns could give businesses pause. Market risk: downward, as weaker than expected data could delay rate hike expectations. The 262k mark in the 4/25 release marked the lowest reading of the decade. Claims had been following a volatile downward trajectory since early October of last year. Claims are poised to average 262k in October from 269k in September, 275k in August and 272k in July. Claims revealed monthly averages of 310k-356k in 2013.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

The AUD provided the main action in overnight trade, the AUDUSD fell around 80 pips in making a three-week low at 0.7111, taking out its 50-day moving average at 0.7138 on route.

German GfK consumer confidence declines, confirming the downtrend in recent months. The low interest rate environment is making savings increasingly unattractive. At the same time, income expectations may have remained steady over the month, but have come down markedly since the summer and with business cycle expectations now in negative territory consumers are clearly starting to get concerned about the outlook.

German import price inflation weaker than expected, this continues to be driven by lower oil prices and the annual rate excluding oil related products remains in positive territory. Lower than expected import price inflation will gradual feed through to headline CPI numbers and therefore add to the arguments of the doves at the ECB, with the updated set of staff projections in December likely to bring another adjustment in inflation projections and delivering Draghi the justification for additional easing.

Australia Core CPI was below projections, putting perhaps some pressure on the RBA to ease again. CPI increased 0.5% in Q3. Australia CPI grew at a 1.5% y/y rate, matching the 1.5% y/y rate in Q2. CPI grew at a 1.3% y/y clip in Q1. Total CPI has run below 2.0% since Q4 of 2014, which was a 1.7% rate. The trimmed mean CPI slowed to a 2.1% y/y pace from a 2.2% y/y pace in Q2 and a 2.3% rate in Q1. The weighted median CPI expanded at a 2.2% y/y rate in Q3 after the 2.4% y/y clip in Q2 and the 2.5% clip in Q1.

Japan retail sales fell 0.2% y/y in Sep, September retail sales fell 0.2% y/y after rising 0.8% y/y in August. On the month sales edged up 0.7% versus unchanged previously. Large retailer sales slowed slightly to a 1.7% y/y pace from August’s 1.8%. (28-Oct). Household spending, or PCE rebounded 2.9% y/y in August after falling 0.2% y/y in July, and versus -2.0% y/y in June. (Aug 28). Consumer Confidence (SA) fell to 40.3 in July from 41.7 in June and 41.4 in May. (Aug 10).

Bank of Japan to Expand Stimulus, Slowing inflation growth alongside and a mixed domestic growth backdrop provide the Bank of Japan with the backing to expand already ample policy accommodation. The rate cut by China’s central bank and dovish guidance from the European Central Bank have stacked the deck in favor of further easing measures from the Bank of Japan, as we expect them to pursue a more is better approach to policy.

FOMC likely to hold firm with minimal changes to outlook, The FOMC meets today and tomorrow and there is virtually no chance for any changes in policy. But the policy statement will be scrutinized for any indications that December will be the start of the tightening process. It’s still the case that only the employment mandate is being met, while inflation is still lagging. But weakness in recent real sector data, including today’s September durables report, along with renewed erosion in commodity prices, and the firmer dollar, argue against accelerating growth and don’t suggest inflationary pressures will be on the rise anytime soon. Look for the Fed to modify its language, perhaps shifting its characterization on the economy from moderate to modest. It’s likely to downshift slightly its view on the labor market after say it’s “continued to improve” in the September statement. On inflation the Fed can reiterate it’s running below forecast, while market based measures have moved lower too. These factors put the FOMC in a difficult spot credibility-wise, especially those policymakers who are anxious to tighten now, as data are leaning to the contrary. Policymakers can’t be encouraged by the Q slowdown abroad either, and the more accommodative postures from the ECB, PBoC, and probably the BoJ, keep the Fed in a bind too.

Main Macro Events Today

• USD Goods Trade Balance: The trade deficit has narrowed sharply since recent-highs early in 2012, and hovered close to levels seen in 2009 before the recent string of widening deficits that peaked in April. The September trade deficit is expected to contract 2.7% to -$47.0 bln after expanding 15.6% to -$48.3 bln in August. Exports in September are expected to decline 0.2% while imports show a 0.7% decrease on the month. The U.S. current account deficit narrowed to -$109.7 bln in Q2 from the -$118.3 bln deficit in Q1. Its expected for the deficit to be -$102 bln in Q3.

• USD FOMC Statement: Few expect any move from the Fed this year, let alone in the off-month of October.

• NZD RBNZ Monetary Policy Statement: the New Zealand Institute of Economic Research’s (NZIER) Shadow Board is sending the Reserve Bank (RBNZ) ahead of its Official Cash Rate (OCR) review today . The Board, comprised of nine economists and business leaders, is calling for RBNZ Governor Graeme Wheeler to leave the OCR at 2.75%. Wheeler has cut the OCR by 25 basis points on three occasions this year, indicating in his September Monetary Policy Statement, “Some further easing in the OCR seems likely”. NZIER senior economist Christina Leung recognizes that while inflation is very subdued at 0.4%, the economy will receive a boost.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

Greek bailout payment delayed, Greece is once again behind in the implementation of the agreed reforms and so far only 14 of the 48 “milestones” have been implemented. A delay of the reform plan and the payout likely also means a delay in the reform of the banking and finance system, including the recapitalization of banks.

Commodities were on the defensive, but the CAD was range bound near 1.3160 since the open. The lack of price action came as oil prices were steady near $43.5 – $44.00 and as the risk backdrop remains quiet.

Gold been relatively steady, following last week’s dollar rally inspired sell-off. Gold traded near the two-week low under of $1,160/ounce on Friday, and currently trades at $1165. Copper meanwhile, topped out at $2.381/lb earlier, and have since fallen back to $2.351, with softer U.S. home sales data weighing. Copper remains up on the session.

USDJPY given back some gains, the pair has gained considerable ground since last week, as the dovish ECB and the aggressive PBoC combined to rally the dollar broadly. With the China rate cut having many market players up the BoJ’s ante to add to QE this week, USD-JPY gains may well hold.

Main Macro Events Today

• GBP U.K. Gross Domestic Product: U.K. GDP numbers for Q3, with the quarterly growth rate expected to slow to 0.6% (med same) from 0.7%.

• USD Durable Goods Orders: September durable goods data is out today and should reveal a 0.8% (median -1.0%) decline for orders on the month with shipments unchanged and inventories growing by 0.1%. This compares to respective August figures of -2.3% for orders, -0.2% for shipments and unchanged for inventories. Data in line with analyst forecast would leave the I/S ratio for the month at 1.66 from 1.65 in both August and July.

• USD Consumer Confidence: October Consumer Confidence is out today and should reveal a 104.0 (median 102.8) headline, up from 103.0 in September and 101.3 in August. Other confidence measures have improved in October with Michigan Sentiment rising to 92.1 from 87.2 and the IBD/TIPP Poll rising to 47.3 from 42.0.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.