FX News Today

The euro has been heavy, with EUR-USD ebbing to the lower 1.09s in the wake of dovish remarks from ECB boss Draghi after the European close yesterday, who said that the central bank will use all instruments, if warranted. While nothing new, his comments bring into relief the contrast with the Fed’s bias. Upcoming Fed speakers are likely to leave the door open for a possible tightening in December. The AUD remained buoyant, lifted today by healthy Australian retail sales data, which were up 0.4% m/m in September, and news that Australia’s trade deficit had shrunk more than expected in September on the back of a 3% gain in exports. The trade numbers prompted economists to upwardly revision Q3 GDP forecasts. AUD-USD posted a one-week high at 0.7224.

ECB’s Draghi struck a relatively balanced tone in his afterhours speech, expressing confidence that the bank will meet its price stability mandate; neither too high nor too low. He continued to back the success of the asset purchase program in supporting credit for firms and households. He also reiterated that the governing council “is willing and able to act by using all the instruments available within its mandate if warranted,” which was interpreted on the dovish side (with euro dipping to session lows). Draghi also remained concerned over EM growth prospects and other external factors that could impact growth and inflation. He promised to reevaluate the level of accommodation in December.

China’s services PMI (Caixin) improved to 52.0 in October from 50.5 in September. The Caixin composite PMI improved to 49.9 in October from 48.0. The Caixin manufacturing PMI, released earlier this week, showed an improvement to a still contractionary 48.3 in October from 47.2 in September. The official manufacturing PMI was 49.8 in October, matching the 49.8 in September. Overall, the October PMIs show a still shrinking manufacturing sector alongside a more upbeat service sector.

Main Macro Events Today

• EMU Oct Services PMI. The final services reading is expected to be confirmed at 54.2 (med same), which after the upward revision to the manufacturing PMI at the start of the week leaves the composite with a risk to the upside. Economic activity continues to expand and national readings show more broadly balanced growth than last year, which means so far the ECB’s central scenario of a continuing modest recovery remains intact, although the risk from the external side are rising, especially as consumers, which have been propping up domestic demand, are also starting to get concerned about the general economic outlook.
• ADP Employment Change. We expect a 180k October ADP rise that tracks our 180k private and 190k total payroll forecasts, following a likely trimming of the 186k September rise toward the lean 118k private payroll increase in that month. We expect a mining-restrained 15k rise in October goods employment with a 20k rise for construction and a flat factory figure, alongside a 165k climb for service sector jobs.
• US Non-Manufacturing ISM. The October service sector ISM is out today to close out the October measures of producer sentiment. We expect the headline to tick up to 57.0 (median 56.5) from 56.9 in September. Other measures of producer sentiment for the month have been weaker and the ISM ticked down to 50.1 from 50.2 in September. Overall, the ISM-adjusted average for the month looks poised to decline to 49 from 50 in September.
• The Fed Chair Yellen speech.

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.

FX News Today

The RBA left rates unchanged, which pushed the AUD up across the board, but that didn’t deter stock markets, which focused on the fact that the RBA still kept the door open for further easing.

The U.S. ISM slipped to a 50.1 low, the October ISM is at a new two year low of 50.1, with a drop in the employment gauge to a 47.6 six year low that reinforced the pattern of declining producer sentiment.

The U.S. construction spending report beat estimates, with a 0.6% September rise after boosts in the July and August levels, though the surprise included big boosts in the home improvement residual that doesn’t enter GDP calculations, and the remaining construction data signaled downside risk for the next Q3 GDP revision.

Canada RBC manufacturing PMI fell to 48.0, in October from 48.6 in September. The decline puts the index further below the previous multi-year low of 48.7 seen in February, leaving the weakest reading in this indicator’s short history going back to late 2010.

U.K. manufacturing PMI jumped to 55.5, in October from 51.8 in September. This was a much stronger than expected reading and in fact the highest since June last year.

Gold slipped to nearly one-month lows, now trading around $1,1137/ounce, after touching $1,132,66 overnight. The market continues to fret over last week’s FOMC statement, where fears of a December rate hike have weighed heavily on gold prices.

Crude oil prices declined from two week highs, following poor manufacturing PMI readings out of China, which suggest ongoing contraction in manufacturing activity in the world’s second largest oil consuming countries.

Main Macro Events Today

• AUD RBA Interest Rate Decision: RBA held rates steady at 2.00%, matching expectations. The statement was similar to last month, lacking clear guidance and sticking to a cautiously dovish tone that justifies prevailing policy settings while reminding that they have room to cut further if needed. They also maintained the shift to less-negative language about the Australian dollar (first seen in August) remarking that the currency was “adjusting to the significant declines in key commodity prices” versus the previous guidance that “further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices.”

• GBP PMI Construction: The forecast calls for a 58.8 reading down from the last 59.9 number.

• ECB Presidents Draghi’s Speech: Eurozone markets will look for comments from ECB’s Draghi for a clarification of the policy stance after the president seemed to dampen easing hopes in comments from last weekend.

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 GBP is slightly higher, against the EUR and USD after a much stronger than expected U.K. Manufacturing PMI reading. The unexpected jump in the manufacturing PMI, which has lowered the chances that the BoE will remove its implicit tightening bias. Gains against EUR, JPY and USD are modest however.

Eurozone manufacturing PMI, All Eurozone PMI readings apart from Greece are above the 50 point no change mark and even in Greece, confidence is improving further. Still, while the numbers signal a slight uptick in manufacturing output at the start of the last quarter, growth in the manufacturing sector is hardly buoyant and the sector is feeling the strain from the slowdown in emerging market economies, most notably China.

Eurozone stock markets are higher, the FTSE 100 is underperforming and posting slight losses, despite much better than expected PMI readings.

Worries over China’s growth, the official manufacturing PMI held steady at 49.8 in October, disappointing expectations for a bounce back to the 50.0 expansion-contraction line. It’s a third straight sub-50 reading. The non-manufacturing index slipped to to 53.1 from 53.4, still reflecting expansion but is the slowest pace since December 2008.

Greek banks need EUR 14.4 bln recapitalization, the ECB said in its Asset Quality Review, published Saturday, that Greek banks need at least EUR 4.4 bln from shareholders and bondholders to meet the shortfall identified under the current baseline macroeconomic assumptions.

Turkish lira soars, with stocks on Erdogan election success. The currency jumped the most since 2008 according to Bloomberg calculations after Erdogan’s AK Party won the second election this year. This ends months of political deadlock and gave a boost to stocks, as well as bonds, with 10-year yields dropping to the lowest level in three months.

Main Macro Events Today

• GBP U.K. manufacturing PMI: Jumped to 55.5 in October from 51.8 in September. A much stronger than expected reading and in fact the highest since June last year. The new orders number jumped to 56.9 from 52.9 in the previous month and is at the highest level since July 2014. GBP is slightly higher against EUR and USD and the Gilt contract has extended losses on the strong number that will back the arguments to maintain the BoE’s tightening bias.

• EUR Markit Manufacturing PMI: EMU Oct manufacturing PMI revised up to 52.3 from 52.0 reported initially and versus 52.0 in the previous month. National readings had been mixed, but with Spanish and French numbers slightly lower than expected, while the Italian reading surged higher and the German PMI was revised up markedly with the final release.

• USD ISM Manufacturing PMI: The manufacturing index is estimated edging up to 50.5 from 50.2 in September, though that’s just barely in expansionary territory.

• CAD RBC Manufacturing PMI: If the results are in line with consensuses, especially on trade and employment, this would be supportive of the Bank of Canada’s constructive view on the growth and inflation outlook as detailed in the October Monetary Policy Report.

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 USD dropped back, after the Q3 GDP miss, and slightly better claims data.. The meager 1.5% rise in Q3 GDP and small 1k uptick in jobless claims was on balance, as the Fed says, policy will remain very accommodative even with a small lift-off. U.S. equities slipped lower after their impulsive rally yesterday in the wake of the hawkish FOMC hints.

EURUSD rebounded, after German Oct HICP inflation jumped to 0.2% y/y from -0.2% y/y in the previous month. The national CPI rate rose to 0.3% y/y from 0.0% y/y. Stronger than expected numbers, which lift the German headline rate out of negative territory again. The EURUSD rallied to 1.0986 from 1.0900. The German DAX fell off 0.6% after a mix of indicators and news that Deutsche Bank is laying off 35k staff and closing operations in several countries.

GBP U.K. consumer confidence came in weaker than expected, and dropped to 2 from 3 in the previous month. The pound logged a fresh low at 1.5242, making this the seventh straight daily lower low. The latest leg lower comes on the back of a EURUSD dip, though GBP has been on a weakening bias, which followed disappointing Q3 GDP data earlier in the week. GBPUSD closest support is at 1.5300, the Oct 13th low at 1.5200 provides the next downside support after 1.53.

Bank of Japan left policy unchanged, with 8-1 vote in favor of keeping QE steady. The USDJPY had been attempting to hold the 121 area, but fell back to 120.30 lows after the data, before recovering over 120.80. In Asia, Japan’s Nikkei rose just 0.17% while the Shanghai Comp gained 0.36%.

China, the Yuan surged, the most since March following comments from China’s central bank indicating that it will test yuan capital account convertibility in a free trade zone in Shanghai. The People’s Bank of China earlier strengthened its daily onshore reference rate.

Main Macro Events Today

• JPY Japan’s core CPI fell 0.1% y/y in September: which was a smaller decline than expected to match August’s 0.1% drop. But the core CPI (excludes fresh food) has still contracted for two straight months, moving in the opposite direction the BoJ is looking for. Total CPI was flat in September after the 0.2% y/y gain in August. The core-core, which excludes fresh food and energy, grew 0.9% y/y in September after the 0.8% rise in August. Meanwhile, the Tokyo core CPI fell 0.2% y/y in October after a matching 0.2% drop in September. The declines in national core CPI are supportive of further easing, if the BoJ feels it is necessary at this time. Other data showed a steady and expected 3.4% unemployment rate in September but a 0.4% y/y drop in household spending during September that ran contrary to expected growth.

• EUR EMU Inflation: October HICP was seen rising to 0.1% y/y from -0.1% y/y in the previous month, but could surprise on the upside, following the higher than expected German HICP reading yesterday. Inflation may be moving out of negative territory again, but the trajectory remains very weak and a slightly better than expected number is unlikely to deter the doves at the ECB from further easing, although if hawks will feel strengthened in their argument that the central bank already has done enough, especially if the Fed hikes in December, which should also take some pressure of the ECB to hike again.

• CAD GDP: It’s expected for GDP to rise 0.1% in August after the 0.3% gain in July. Further growth in August would contrast with the back to back declines seen from January to May, and track expectations for a rebound in Canada’s economy following the dismal performance in Q1 and Q2. The market anticipates a 3.0% Q3 GDP gain that will marginally outpace the BoC’s cautious 2.5% estimate..

• U.S. Michigan Consumer Sentiment: The second release on October Michigan Sentiment is out later today and its expect the headline to be revised up to 93.0 (median 92.5) from 92.1 in the first release and 87.2 in September. Michigan Sentiment has displayed a fairly consistent trend towards upward revisions in the second release but the October Consumer Confidence measure dropped to 97.6 from 102.6 in September which could signal downside risk for the second Michigan release.

• U.S. Personal Income: September personal income data is out today and should show income up 0.1% (median 0.2%) with consumption growing 0.1% (median 0.2%) as well. There is downside risk to the release from the weak September employment report which saw aggregate income decline by 0.2% for the month on the back of softer hours worked data and a lower headline. Q3 GDP revealed a slower path of consumption which a 3.2% figure versus a stronger 3.9% in Q2.

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

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.