Wednesday 28th October: European Open Briefing

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Wednesday 28th October: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei up 0.40 %, Shanghai Composite and Hang Seng both fell 0.60 %, ASX dropped 0.15 %
  • Commodities: Gold at $1168 (+0.20 %), Silver at $15.91 (+0.25 %), WTI Oil at $43.23 (+0.10 %), Brent Oil at $46.80 (-0.15 %)
  • Rates: US 10 year yield at 2.04, UK 10 year yield at 1.77, German 10 year yield at 0.45

News & Data:

  • Australia CPI (QoQ) Q3: 0.5% (exp 0.7% prev 0.7%)
  • Australia CPI (YoY) Q3: 1.5% (exp 0.7% prev 0.7%)
  • Australia CPI Trimmed Mean (QoQ) Q3: 0.3% (exp 0.5% prev 0.6%)
  • Australia CPI Trimmed Mean (YoY) Q3: 2.1% (exp 2.4% prev 2.2%)
  • Japan Retail Sales (MoM) Sep: 0.7% (exp 1.1% prev 0.0%)
  • Japan Retail Sales (YoY) Sep: -0.2% (exp 0.4% prev 0.8%)
  • China Westpac-MNI Consumer (Oct): 109.7 (prev 118.2)
  • PBoC Fixes Yuan Reference Rate At 6.3536 (prev 6.3494)
  • ECB's Coeure: If There’s A Risk Of Inflation Moving To 2% Slower Than Forecast Could Cut Deposit Rate — RTRS
  • Coeure: Having Lively Discussions On QE Adjustment

Markets Update:

The Aussie Dollar fell sharply overnight, as CPI data missed expectations. AUD/USD was trading around 0.7190 ahead of the data release and fell to a low to 0.7114. Technical support is now seen around 0.7050/60 and then at 0.70. AUD/NZD broke sub-1.06 post-CPI and fell to a low of 1.0520, which is the March '15 high. A clear break below 1.0520 would then pave the way for a 1.03 test. NZD/USD followed the AUD lower, as it fell from 0.6775 in early Sydney trading to a low of 0.6725. The Reserve Bank of New Zealand will decide today on interest rates and most analysts expect that it will keep them unchanged.

EUR and GBP were quiet overnight. EUR/USD traded within a 1.1025-50 range, while GBP/USD consolidated between 1.5295 and 1.5315. USD/JPY found good support at 120.20 and rose back to 120.50 after the Tokyo open. The main event will be the Fed rate decision today. While there is little doubt that the Fed will keep rates unchanged, the focus will be on the statement, which might provide further clues if a December rate hike is likely or not.

Upcoming Events:

  • 07:00 GMT – German Consumer Sentiment
  • 08:30 GMT – Riksbank Rate Decision
  • 09:00 GMT – Norwegian Unemployment Rate
  • 12:30 GMT – US Trade Balance
  • 18:00 GMT – Federal Reserve Rate Decision
  • 18:00 GMT – FOMC Statement
  • 20:00 GMT – RBNZ Rate Decision
  • 20:00 GMT – RBNZ Monetary Policy Statement

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