FOREX News Today

European Outlook: Asian stock markets are mixed, with Japanese markets fluctuating and closed with slight gains after the BoJ left rates unchanged, but lowered the inflation outlook. The Hang Seng is outperforming and mainland Chinese markets are also underpinned, after the official manufacturing PMI improved. The ASX underperformed as AUD strengthened and U.S. and U.K. stock futures are moving higher. Oil prices are up from lows, but the front end WTI future is just above USD 47 per barrel and clearly down from recent highs, amid the lack of an OPEC output deal. In Europe trade is likely to be quieter than usual, with a public holiday in some European countries, including parts of Germany. This will delay the release of final EMU manufacturing PMI numbers until tomorrow, while Switzerland and the U.K. will publish manufacturing PMI data today.

The BoJ left policy unchanged following the conclusion of its latest policy meeting, as had been widely expected. This left the interest rate at -0.1% and QQE unchanged at Y80 tln per year. The central bank also pushed back, once again, the time when it expects inflation to reach the 2% target, now projecting this to happen “around fiscal 2018.” Previously the BoJ had forecast inflation returning to target by the end of fiscal 2017, which ends in March 2018. The ellusive target was first introduced in 2013. Headline core CPI fell to -0.5% y/y in October, while the so-called “core-core” CPI figure was flat y/y, a three-year low and highlighting sluggish consumer demand. The central bank also trimmed its inflation forecasts today, now seeing core CPI at 1.5% in 2017 versus 1.7% previously. On the economy, the BoJ said that the economy would continue to expand moderately, but noted that households haven’t been spending increased income and that the risks to the outlook were skewed to the downside.

FX Update: The Aussie dollar was the standout performing, rallying on the RBA’s decision to leave policy unchanged. AUD-USD and AUD-JPY are registering the biggest movement out of the currencies we track, showing respective gains of 0.7% and 0.8% into the London interbank open. Australia’s weak core inflation data had fed some speculation that the RBA might have opted to make a third rate cut of the year. But the antipodean central bank stood pat and Governor Lowe’s statement was upbeat in outlook, noting that “over the next year, the economy is forecast to grow at close to its potential rate before gradually strengthening” with inflation “expected to pick up gradually over the next two years.” AUDUSD clocked a six-day high at 0.7688 while AUDJPY broke into three-month high terrain. Stronger than expected October manufacturing PMI surveys out of China, with the Caixin version reaching its best level since August 2011, also lifted the Aussie. Elsewhere, currencies generally saw narrow ranges. Cable consolidated gains seen into the London close yesterday, holding around 1.2220-30. EURUSD continued to narrowly orbit the 1.0950 level. USDJPY popped moderately higher after the expected decision by the BoJ to leave policy unchanged with the central bank lowering CPI forecasts and yet again pushing back the time it expects the 2% target to be reached.

US Data reports: Mixed. We saw a moderate 0.3% September personal income gain, but with a solid 0.5% consumption rise, alongside divergent October swings for the Chicago PMI and the Dallas Fed that left both measures below prior estimates. We saw a Chicago PMI drop to a 5-month low of 50.6 from 54.2, and a rise for the Dallas Fed to a still-negative -1.5 in October from -3.7. We saw an ISM-adjusted Dallas Fed drop to 49.6 from 51.2 in October and 50.7 in September.

Carney to stay and extra 12 months: BoE’s Carney will stay on another year, taking his term beyond the expected Article 50 process in order to help secure an orderly transition. This followed a meeting yesterday with PM May,  the UK Finance Minister Hammond says he’s “very pleased” to hear that Carney intends to stay until the end of June 2019.

Main Macro Events Today                

• US manufacturing ISM – The October ISM should reveal a headline increase to 51.7 from 51.5 in September and 49.4 in August. Already released measures of sentiment for October have revealed headline declines. More broadly we expect sentiment to improve in October with the ISM-adjusted average of all measures climbing to 51 after two months at 50 as inventory headwinds dissipate and the mining sector rebounds.

• Canada GDP – Expectations are for a 0.2% rise in September GDP.  The modest gain would follow the back to back surges in August (+0.5%) and July (+0.6%), as the economy, or more specifically oil sands production in the Fort McMurray region, rebounded from the wildfires that shuttered production in May (when GDP fell 0.6%). The energy sector saw continued growth in September, as export volumes grew and higher volumes boosted manufacturing production.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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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.

FOREX News Today

European Outlook: Asian stock markets headed broadly lower, as investors remain focused on the earnings season, with Canon Inc. the biggest drag on the index. U.K. and U.S. stock futures are also down, following on from losses yesterday. Oil prices are up from lows, but the front end WTI (USOil) futures remains firmly below USD 50 per barrel, as U.S. East and Gulf coast stockpiles rose and the country’s production picked up. In Europe Deutsche Bank reports earnings today and the calendar has U.K. Q3 GDP growth data, which is expected to show a sharp deceleration in the quarterly growth rate to 0.3%. The Eurozone has M3 money supply growth and Italian consumer and business confidence data. Elsewhere Norges Bank is expected to keep the deposit rate unchanged at 0.50%. Core European bond futures declined in tandem with stock markets yesterday, as the focus remains on the U.S. rate outlook and the U.S. Presidential Election.

US Earnings – the busiest day : Earnings will remain the focal point again today with several more heavy hitters on tap. The calendar features Alphabet, Amazon, Twitter, Amgen, Baidu, Dow Chemical, Dr Pepper Snapple, Ford Motor, Aetna, Blackstone, Bristol-Myers Squibb, Brunswick, ConocoPhillips, Celgene, Raytheon, Expedia, Choice Hotels, Colgate-Palmolive, VW, Deckers, Hanesbrands, HealthSouth, LinkedIn, MGM Resorts, Nokia, Samsung Electronics, SolarCity, and Stanley Black & Decker.

US Data reports: Revealed big upside September surprises in the advance indicator report for the trade deficit and inventories alongside a 3.1% September new home sales rise that unfortunately followed big downward revisions over the prior three months that trimmed the summer sales spike. The trade and inventory surprises lifted Q3 GDP growth estimates sharply to 3.3% from 2.5%, though there were reductions in Q4 GDP growth to 2.0% from 2.5% as the expected Q4 inventory bounce was “pulled forward” into September. Expectations are now for a September drop in the goods and services trade gap to $36.5 bln from $40.7 bln in August. Also a 0.2% September business inventory increase that incorporates yesterday’s gains of 0.2% for wholesalers and 0.3% for retailers, alongside an assumed 0.1% factory inventory rise.

Germany’s Schaeuble: U.K. can’t have Brexit “A La Carte”. Nothing really new there, with the German finance minister repeating again that single market membership requires the acceptance of the EU’s four freedoms. He also said that the EU can’t show much flexibility, which confirms again that boths sides are heading for a hard Brexit scenario and Schaeuble’s hope that the economic damage for the EU and the U.K should be kept to a minimum, may be hard to achieve.

Main Macro Events Today                

• UK Prelim GDP –  The first post Brexit quarterly reading. So far cable has pivoted around 1.2200, since the flash crash on October 7^th. Announcement watched eagerly in Downing Street and at the BOE. Expectations are for a q/q figure of 0.3%. Last time 0.5% and the subsequently revised up to 0.7%.

• US Core Durable Goods – September figure is seen as edging up 0.2%, after August’s revised 0.1% increase.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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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.

FOREX News Today

European Outlook: Asian stock markets are mostly down, with Japan a notable outperforming (closing up  and indices holding on to modest gains as the Yen continued to decline against the Dollar. U.S. and U.K. stock futures are also heading south as oil prices are down and the front end WTI future is trading below USD 50 per barrel, which has been hitting energy producers. Investors continue to watch earnings reports. ECB’s Draghi once again defended the ECB’s policy in a speech in Germany yesterday evening, while once again calling for support from the fiscal side. Nothing new there that would change the policy outlook.

German GfK consumer confidence: Dropped to 9.7 in November, from 10.0 in October. There is no breakdown for the November projections but the fall back was unexpected and disappointing, especially after the stronger than expected Ifo and PMI readings this week. The breakdown for October showed a marked improvement in business cycle expectations, which jumped to 13.0 from 6.8, the highest reading since June, which suggests that the Brexit shock was short lived. Despite this income expectations declined sharply as did the willingness to buy, although the willingness to save also slumped amid the low interest rate environment. Mixed messages then and at least in Germany it seems Draghi’s policy of easy money is not lifting consumption.

Australian CPI: The Australian dollar rallied following an above-forecast headline in Australian Q3 CPI, which rose 0.7% q/q, above the median expectation for a 0.5% rise. Most expect this should keep the RBA, which had cited concerns about disinflation as prime reasons for cutting rates in May and August this year, from any temptation to cut rates at its policy meeting next week. Core inflation painted a more benign picture, remaining unchanged at 1.5% y/y. AUDUSD lifted to a one-week high at 0.7708, which was a gain of just over 1%, before settling around 0.7690.

US Data reports: Revealed a larger than expected consumer confidence drop to 98.6 in October from a 103.5 (was 104.1) September figure that now sits marginally below the 103.8 cycle-high in January of 2015, alongside a Richmond Fed rise to -4.0 from -8.0 in September and a 3-year low of -11.0 August. We also saw big gains in two August home price indicators of 0.4% for Case-Shiller and 0.7% for the FHFA. The ISM-adjusted Richmond Fed rose to 51.5 from 50.8 in September and a 43-month low of 49.7 in August, as we’re seeing a renewed uptrend in producer sentiment with the bounce in oil prices and a recovery in mining and factory output as the big six-quarter inventory headwind reverses course. Confidence faces a headwind from the November elections, though we have an ongoing lift from low gasoline prices, stock market and home price gains, and an expected GDP bounce after a three-quarter string of lean 1% growth rates through Q2.

Main Macro Events Today                

• US Flash Services PMI  – Expectations are for a slight uptick to 52.4 from a positively revised 52.3 last time.

• US New Home Sales –  New home sales are expected to decrease 1.5% to a 600k unit pace in September from 609k in August. Forecast risk: upward, given the higher NAHB for the month. Market risk: downward, as a run of weak data could impact the path of further rate hikes.

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.

FOREX News Today

European Outlook: Asian stock markets are mostly down, as the positive confidence indicators out of Europe and the U.S. yesterday were overshadowed by weak GDP numbers from South Korea, which weighed on most markets. Topix and Nikkei outperformed, with a weaker Yen underpinning exporters. U.S. and U.K stock futures are also moving higher, oil prices are little changed, and the front end WTI future is trading at USD 50.51 per barrel. After the strong round of PMI readings for the Eurozone yesterday markets will be looking for upside surprises in the German Ifo and French business confidence data, which would keep pressure on Bund futures and continue to underpin Eurozone stocks. The FTSE 100 meanwhile seems set to recover some of yesterday’s losses as the Pound drops against USD and EUR, although Gilt futures should continue to outperform Bunds as strong confidence data fuels ECB tapering speculation.

BoC’s Poloz “Wait and See approach to rate cuts”:  saying that the bank’s “…best plan right now, we think, is to wait for the next 18 months or so.” A two track economy makes monetary policy more difficult, as it is challenging to speed up fast growing parts to offset the slower growing parts, he explained. He said the bank has to “weigh the risk of waiting longer against what are the costs associated with doing something more immediate.” He acknowledged that more easing would put the bank “very close to using unconventional tools. And that’s of course not a decision we take lightly.” As for last week, those uncertainties prevented a rate cut. The comments came in response to questions in his ongoing Q&A with the House of Commons Standing Committee on Finance. His comments appear to squash the prospects for a near term rate cut, which seemed to ramp up significantly with his dovish remarks following the announcement. The loonie firmed, as USDCAD backtracked from nearly 1.3400 to 1.3286 following his comments. Overnight the pair recouped the 1.3300 handle and currently trades at 1.3335.

US Data Reports: US flash Markit PMI jumped 1.7 points to 53.2 in October, after falling 0.5 points to 51.5 in September from 52.0 in August. This is the highest since last October’s 54.1 print. New orders rose to 54.7 from 51.1, though the employment component declined. The better than expected headline is consistent with expectations for a pick up in activity in Q4.

Fedspeak: Chicago Fed dove Evans was true to his leanings – the near-term growth outlook is relatively good, and the labor market improvement is solid. And though those should support higher inflation projections, he remains worried that inflation is still too low while the outlook is uncertain. That’s been his concern for some time, and he continues to stress the need for the Fed to show a commitment to its 2% inflation target. The FOMC should undershoot its employment projection, and overshoot on its inflation goal. Evans is not a voter this year, but he does vote in 2017, along with Harker, Kaplan and Kashkari. Fed’s Bullard reiterated one 25 bp rate hike is likely, though he gave no timing. He thinks that should be sufficient for now and expects the low rate environment to be the norm for the next several years. But he acknowledged that the St Louis Fed’s rate forecast is flatter than those of others on the Committee. That’s pretty much the market’s assessment, where implied Fed funds futures are pricing in about a 67% chance for one 25 bp rate increase in December, with the move not fully priced in until 2018.

Main Macro Events Today                

• German Ifo Business Climate – Expected to tick up slightly to 109.6 from 109.5 last time. A survey of 7,000 German businesses that has a strong track record of correlation to the German and wider Euro area economy. Other figures relate to current business Assessment and Expectations.

• US Consumer Confidence – September Consumer Confidence is expected to decrease to 101.0 from 104.1.This compares to a low of 25.3 in February of 2009. Forecast risk: downward, given the drop in the Michigan headline. Market risk: downward, as weaker data could impact rate hike timelines.

• Carney & Draghi  Speeches – The BOE Governor is up first at 14:30 in front of the House of Lords Economic Affairs committee around 14.30 GMT. He’s there to answer questions on “The economic consequences of the vote to leave the EU and the BOE’s response”. This will be one to keep an eye on as we might see Carney walking that fine line between politics and being an independent central bank.  The ECB President is scheduled at 15:30 for a lecture on stability, equity and monetary policy to the German DIW Economic Institute.

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.

FOREX News Today

European Outlook: Asian stock markets are narrowly mixed, with Japanese bourses managing marginal gains as the Yen falls against the Dollar. Stock futures in the U.S. are down, but U.K. futures are slightly in positive territory after the UK100 managed to close with a marginal gain on Thursday. Eurozone bond and stock markets outperformed yesterday after Draghi managed to dampen tapering fears, while postponing any decisions on future policy to December. Bund futures moved sideways in after hour trade, and oil prices are falling towards USD 50 per barrel, which will dampen investor appetite but Eurozone markets are likely to continue outperforming their U.K. counterparts in the wake of Draghi’s statement yesterday. The data calendar is relatively quiet, with only U.K. public finance data, but the ECB’s survey of professional forecasts will give clues about the inflation outlook and comments from Weidmann may add a more hawkish spin to Draghi’s message yesterday. The GER30 is awaiting earnings reports from Daimler as positive numbers from SAP are underpinning the index ahead of the official open.

Kuroda Speech: BOJ will evaluate appropriate yield curve at every meeting, “ideal” can change depending on economy, not immediately thinking of lowering 80tln yen goal and possible to revise reaching 2% inflation time frame (currently target is for Inflation to hit 2% during 2017) !! He also reemphasized that “buying, selling FX is under the jurisdiction of the Finance Ministry”.

ECB – Decisions on QE Postponed until December: Nothing new from the ECB, with major decisions postponed, pretty much as we expected. While Draghi initially spooked markets by saying that an extension to the QE program hasn’t been discussed today, he still managed to keep investors happy in the end, by adding that an abrupt halt to asset purchases is unlikely. With the current program, which runs until March, confirmed at EUR 80 bln per month, this implies an extension of the asset purchase schedule, even if it may come at somewhat reduced levels.

US Data Reports: Revealed firm Philly Fed component data despite a small headline drop to 9.7 in October from a 19-month high of 12.8, alongside a 13k bounce in initial claims in the BLS survey week to a still respectable 260k that remains consistent with a remarkably lean 253k October average. We also saw a 3.2% September existing home sales rise to a 5.47 mln rate that beat estimates, alongside a 0.2% September leading indicators bounce that reversed a 0.2% August drop. The monthly data appear poised for an upturn into Q4, as the bounce in oil prices is allowing a mining and factory output recovery just as the big six-quarter inventory headwind comes to a close.

Main Macro Events Today                

• Canada Retail Sales – Retail sales are expected to rise 0.3% in August after the 0.1% dip in July. The ex-autos sales aggregate is seen expanding 0.4% in August following the 0.1% dip in July. Gasoline prices dipped just 0.9% in August after the 5.6% plunge in July, according to the CPI . Hence we should see the gasoline station sales component exert a very slight drag on total and ex-autos sales. Vehicle sales downshifted to a slower pace in July, and that modest slowing persisted in August according to industry sales figures. Sales volumes grew 0.3% in July, suggestive of some awaking in the consumer after spending declines from March to June.

• Canada CPI – CPI is also expected to rise 0.2% m/m in September after the 0.2% drop in August. Total CPI is seen accelerating to a 1.4% y/y pace in September from the 1.1% rate in August. A pick-up in gasoline prices is expected to drive the gain in total CPI during September relative to August, contrasting with the hefty gasoline price declines that were a drag on total CPI in July and August. The Bank of Canada’s core CPI is seen rising 0.2% m/m in September after the flat reading in August, leaving a 1.8% y/y pace that is identical to the growth rate in in August.

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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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.

FOREX News Today

European Outlook: Asian stock markets mostly moved higher, as the Dollar strengthened in the wake of the last U.S. presidential debate. The weaker Yen helped to underpin Japanese markets and the most recent rise in oil prices is also helping to underpin investor demand. The front end WTI future has come off highs but is holding comfortably above USD 51 per barrel. In Europe the focus is on the ECB meeting and even if policy is likely to remain on hold today, Draghi will hope to keep his options sufficiently open to avoid a temper tantrum as markets focus on further stimulus beyond the current QE program, which ends in March next year. The European calendar also has U.K. retail sales, BoP and current account data from the Eurozone and Swiss trade data at the start of the session.

BOC Rate Decision: Governor Poloz said they actively discussed adding more monetary stimulus before deciding to leave the policy rate unchanged. He said the Governing Council “actively discussed the possibility of adding more monetary stimulus at this time, in order to return to the economy to full capacity.” Yet, they “identified a number of uncertainties in the current framework that are serving to widen the zone of balance within our risk-management framework.” Those uncertainties include “the macroeconomic effects of the new mortgage rates, the likely path of our exports; the impact of the federal government’s fiscal measures…and the effects on business confidence of the U.S. election.” The revelation that they “actively discussed” the possibility of adding more stimulus is not exactly a surprise. Given where the domestic and global economy currently sit, expectations are that this will continued to be discussed but with the same result (no change in rates) to be the same.

Poor Australian Labour Data: The number of jobs fell last month by 9,800, expectations were for an increase of 15,200, also the previous month was revised down to a fall of 8,600 from a fall of 3,900.  Fulltime employment for September showed a dramatic fall of 53,000 and August was revised down to 10,500 from 11,500. AUD/USD dropped from around 0.7725 to under 0.7700, spent a few minutes chopping in a small range before slipping further and its under 0.7665 currently. Just as doubts were raised after big employment gains in the past, doubts were raised on big employment losses on today’s figures, the -53K for full time jobs in the month result in particular was greeted with questions.

Fedspeak: Dallas Fed moderate (and non-voter) Kaplan sees inflation firming while GDP growth for 2016 will likely average 1.75%, sufficient to drive down unemployment and take some slack out of the labor force. He sees political uncertainty likely affecting capital spending, but once the election is out of the way focus needs to shift to entitlement reform and infrastructure spending. Kaplan also notes that the Fed needs to be “humble” about the limits of monetary policy. Fed’s Potter says the Fed should be prepared to sell MBS, in comments at a Minneapolis Fed conference. Potter is head of the Fed’s Markets Group, so he has a lot of authority behind his words. Though “current FOMC guidance states that the sale of agency MBS is not anticipated…it is prudent for the Desk to be prepared for a wide variety of scenarios, including sales or the need to purchase additional agency MBS.” The large size and structure of the agency MBS market makes it a “desirable choice for conduction operations of the magnitude necessary t have a meaningful impact on financial and macroeconomic conditions.” However, the Fed’s experience with selling MBS is much more limited than purchasing agency paper, he noted. The Fed’s portfolio and possible manipulations of such has been in the news lately, especially after a “twist” operation was broached by Boston Fed’s Rosengren last week.

Main Macro Events Today                

• ECB Rate Announcement & Press Conference –  Even if the ECB more likely to postpone any major decisions until December Draghi will be facing a difficult balancing act at today’s press conference, especially since a Reuters reported suggested that the planned tweaks to the asset purchase program designed to address looming supply shortages could already be discussed this week. At the same time, the question is whether the ECB will extend the QE program beyond March next year, when the current schedule of EUR 80 bln purchases per month is set to end. With growth indicators suggesting ongoing economic expansion and inflation starting to move higher, the ECB clearly is reluctant to add even more stimulus to an already very expansionary policy but the doves at the council will press for a follow up program with the end result likely a gradual phasing out of asset purchases. It will depend on Draghi’s delivery whether this will spook markets as the dreaded “tapering” or whether he can sell it as the further expansion of monetary policy it actually is. For now Draghi will be keeping all his options open and try to deliver a statement that keeps markets guessing and hoping and thus avoids a temper tantrum.

• US Philly Fed Index – October Philly Fed should reveal a headline dip to 6.3 after the September bounce to 12.8 from 2.0 in August. The Empire State Index for October is already out and declined to -6.8 from -2.0 in September. Broadly, expectations are for producer sentiment to trend sideways in October with the ISM-adjusted average of all measures holding at 50 from August and September.

Chief Market Analyst

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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.

FOREX News Today

European Outlook: Better earnings reports from the likes of Goldman Sachs, Bank of America, Netflix, and Johnson & Johnson bolstered Wall Street overnight. European bourses rallied upwards of 1.25% as well, expecting no let up anytime soon of central bank stimulus. Also, U.S. CPI data was a touch light on the core reading, which was likely a positive outcome for stocks too, though it had little impact on Fed rate hike thinking overall. Bonds rallied too, and Treasury yields slipped from earlier highs after the launch Saudi Arabia’s $10-15 bln multi-tranche bond offering. Strong demand for the paper saw hedges easily unwound. The 1.80% level on the 10-year also capped the upside. The dollar stumbled some, leaving USDJPY under 103.90 into the NA close. Stock markets in Asia have followed the NA session and are generally higher. Gold remains in a tight range at USD 1261 and WTI remains north of USD 50.

Chinese Data: Year on Year GDP confirmed at 6.7% with 3Q QoQ also in line at 1.8. Retail sales for September crept up to 10.7% (expectations and previous 10.6%). However, industrial production fell to 6.1% from 6.3% with expectations had been for a slight rise to 6.4%. The details show weaker exports and investments but a growing housing market and rising consumption.  New home sales grew by 43.2% in the first nine months of the year (2015 the growth was 18.25) – credit continues to roll in China.

US Data Reports: The September overall-CPI was 0.3% (median 0.3%), while the core index was 0.1% (median 0.2%). Year over year growth accelerated to 1.5% from 1.1% in September, and the core y/y growth rate was 2.2% from 2.3%. Plunging oil prices kept inflation measures depressed through last winter but we are now seeing a rebound. U.S. NAHB homebuilder sentiment index dipped 2 points to 63 in October, as expected, after surging 6 points to 65 in September. The latter was the strongest reading since October 2015 (and for this business cycle). The present single family index fell 2 points too, to 69 following the 6 point jump to 71 previously. The future index rose 1 point to 72 after the 5 point September rise to 71. The index of prospect buyer traffic slipped 1 point to 46 from 47 (revised down from 48).

Germany’s Schaeuble wants ESM to take over as fiscal watch-dog. That the Stability and Growth Pact is not worth much more than the paper it is written on is pretty evident considering that even the ECB is calling on Germany to use “its fiscal room” to boost growth, even though Germany, may be doing better than other countries, but is also facing a debt burden that is far exceeding the 60% originally laid down in the Maastricht Treaty. The European Commission, which is officially charged with overseeing the implementation of the pact and with issuing fines if necessary, has been very lenient amid intense political pressure. Against that background, German Finance Minister Schaeuble is now proposing that the ESM should take over from the politically dominated Commission to take over as fiscal watchdog. Applying the Pact to the latter may help to make the Eurozone more stable, but seems unlikely to meet with much support even though former ECB chief economist Issing warned that current levels of moral hazard are likely to lead to the failure of the single currency.

Main Macro Events Today                

• BOC Policy Report and Rate Statement – No change to the current 0.50% rate setting is expected at the announcement. A cautiously constructive outlook for growth and inflation is expected which will be consistent with no change in rates for an extended period. The growth and inflation outlook should be trimmed, but recent firm economic data suggest that any reductions from the BoC will be modest. September’s announcement contained the surprise shift that risks to the inflation profile have “tilted somewhat to the downside since July.” August’s CPI confirmed this view.

• UK Earnings and Employment data – Expectations are for average earnings to remain unchanged at 2.3%, claimant count to rise by 3,400 for last month and Unemployment rate also to remain unchanged at 4.9%.

Chief Market Analyst

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