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FX markets and global equities consolidate

Arnaud Masset

Market Brief

G10 Advancers and Decliners vs USD
SEK 0.38
CHF 0.32
EUR 0.26
DKK 0.26
GBP 0.22
JPY 0.20
NOK 0.11
CAD -0.18
NZD -0.33
AUD -0.54
Global Indexes Current Level % Change
Nikkei 225 Index 18244.06 -1.06
Hang Seng Index 22633.46 -0.43
Shanghai Index 3291.299 0.11
FTSE futures 6343 -0.02
DAX futures 10132 0.34
SMI Futures 8679 0.16
S&P future 2007.6 -0.16
Global Indexes Current Level % Change
Gold 1156.53 -0.63
Silver 15.75 -0.54
VIX 16.17 -5.33
Crude wti 47.41 0.66
USD Index 94.8 -0.04

After rallying for the last two weeks, global equity markets falter as doubt rises. Most Asian equity indices are now back to their pre-NFPs levels and investors are now wondering whether there is still some upside potential as China’s trade data proved that the world’s second biggest economy is not the global growth driver it used to be. Imports continue to fall dramatically with a contraction of 17.7%y/y in yuan term versus 16.5% expected and 14.3% in August. However, exports came in slightly better-than-expected, printing at -1.1%y/y versus -7.4% median forecast and -6.1% in the previous month. In the rest of the world, equity returns were already mixed yesterday with half of European indices trading in negative ground. In Wall Street, stocks were trading slightly higher in thin liquidity conditions but energy and materials stocks felt the heat from the collapse in commodity prices. This morning, metals are pairing losses: gold is down -0.68%, silver -0.60%, palladium -0.05% and platinum -1.13. Copper slides -0.90%, aluminum -0.95%, while iron ore is down -1.83%.

Asian regional equity markets are mostly trading in negative territory on Chinese data. The Japanese Nikkei fell 1.06%, while the broader Topix index slid -0.79%. In mainland China, stocks are holding ground on encouraging Chinese exports figures with the Shanghai Composite up 0.11%, while the Shenzhen Composite rose 0.91%. In Australia, the S&P/ASX fell -0.57%, in New Zealand stocks are up 0.23%, while in South Korea the Kospi index edged down -0.13%.

Commodity currencies erased partially previous gains - AUD/USD down 0.56%, NZD/USD down 0.48%, while the Canadian dollar fell 0.34% against the dollar - driven by lower crude oil prices. AUD/USD has been unable to break the strong resistance standing at around $0.74. On the downside, the pair will find support at 0.7165 (low from October 8th), then 0.6937 (low from September 29th).

In Europe, equity futures are trading without direction, swinging back and forth between positive and negative gains. The Footsie edges down -0.02; the DAX is up 0.34%, while the SMI edges up 0.16%. In France, the CAC 40 falls -0.21%. Overall in Europe, equities edged down -0.19%.

EUR/USD is holding ground between 1.13 and 1.14 as investors await the US inflation report due on Wednesday. A support can be found at 1.1327 (Fib 38.2% on August-September debasement), while on the upside, the 1.14 threshold is the closest resistance. A stronger one can be found at 1.15 (psychological threshold).

Today traders will be watching inflation figures from Sweden and the UK; German ZEW expectations; central banker speech: Bullard from the Fed, Haldane from the BoE and Wheeler from RBNZ.

 

Swissquote Sqore Trade Ideas: http://en.swissquote.com/fx/news/sqore

 

Today's Calendar Estimates Previous Country / GMT
SZ Sep Producer & Import Prices MoM -0.10% -0.70% CHF / 07:15
SZ Sep Producer & Import Prices YoY -6.80% -6.80% CHF / 07:15
SW Sep CPI MoM 0.30% -0.20% SEK / 07:30
SW Sep CPI YoY 0.00% -0.20% SEK / 07:30
SW Sep CPI CPIF MoM 0.40% -0.10% SEK / 07:30
SW Sep CPI CPIF YoY 0.90% 0.80% SEK / 07:30
SW Sep CPI Level - 312.81 SEK / 07:30
NO 3Q House Price Index QoQ - 1.20% NOK / 08:00
UK Bank of England Credit Conditions & Bank Liabilities Surveys - - GBP / 08:30
UK Sep CPI MoM 0.00% 0.20% GBP / 08:30
UK Sep CPI YoY 0.00% 0.00% GBP / 08:30
UK Sep CPI Core YoY 1.10% 1.00% GBP / 08:30
UK Sep Retail Price Index 260 259.8 GBP / 08:30
UK Sep RPI MoM 0.10% 0.50% GBP / 08:30
UK Sep RPI YoY 1.00% 1.10% GBP / 08:30
UK Sep RPI Ex Mort Int.Payments (YoY) 1.10% 1.20% GBP / 08:30
UK Sep PPI Input NSA MoM 0.30% -2.40% GBP / 08:30
UK Sep PPI Input NSA YoY -13.00% -13.80% GBP / 08:30
UK Sep PPI Output NSA MoM -0.10% -0.40% GBP / 08:30
UK Sep PPI Output NSA YoY -1.80% -1.80% GBP / 08:30
UK Sep PPI Output Core NSA MoM 0.00% 0.00% GBP / 08:30
UK Sep PPI Output Core NSA YoY 0.20% 0.10% GBP / 08:30
UK Aug ONS House Price YoY 5.00% 5.20% GBP / 08:30
GE Oct ZEW Survey Current Situation 64 67.5 EUR / 09:00
GE Oct ZEW Survey Expectations 6.5 12.1 EUR / 09:00
EC Oct ZEW Survey Expectations - 33.3 EUR / 09:00
UK BOE's Gertjan Vlieghe Testifies in Front of U.K. Lawmakers - - GBP / 09:00
US Sep NFIB Small Business Optimism 95.5 95.9 USD / 10:00
UK BOE's Ian McCafferty Testifies in Front of U.K. Lawmakers - - GBP / 10:00
BZ Central Bank Weekly Economists Survey - - BRL / 11:25
US Fed's Bullard Speaks on Final Day of NABE Annual Meeting - - USD / 12:00
CA oct..09 Bloomberg Nanos Confidence - 55.6 CAD / 14:00
BZ Central Bank Currency Swap Auction Results - - BRL / 14:50
UK Bank of England official Andrew Haldane speaks in London - - GBP / 17:00
BZ oct..11 Trade Balance Weekly - - BRL / 18:00
NZ RBNZ Governor Wheeler Speaks at INFINZ - - NZD / 20:10
CH Sep New Yuan Loans CNY 900.0b 809.6b CNY / 22:00
CH Sep Money Supply M2 YoY 13.10% 13.30% CNY / 22:00
CH Sep Aggregate Financing CNY 1200.0b 1080.0b CNY / 22:00
CH Sep Money Supply M1 YoY 9.80% 9.30% CNY / 22:00
CH Sep Money Supply M0 YoY 3.00% 1.80% CNY / 22:00
US Sep Monthly Budget Statement $95.0b $105.8b USD / 22:00
Currency Tech
EURUSD
R 2: 1.1561
R 1: 1.1460
CURRENT: 1.1392
S 1: 1.1106
S 2: 1.1017

GBPUSD
R 2: 1.5659
R 1: 1.5383
CURRENT: 1.5371
S 1: 1.5089
S 2: 1.4960

USDJPY
R 2: 125.86
R 1: 121.75
CURRENT: 119.77
S 1: 118.61
S 2: 116.18

USDCHF
R 2: 1.0240
R 1: 0.9903
CURRENT: 0.9601
S 1: 0.9513
S 2: 0.9259
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