Wednesday 4th November: European Open Briefing

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Wednesday 4th November: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei up 2.20 %, Shanghai Composite gained 2.60 %, Hang Seng rallied 3.25 %, ASX rose 0.15 %
  • Commodities: Gold at $1121.10 (+0.60 %), Silver at $15.29 (+0.33 %), WTI Oil at $47.80 (-0.20 %), Brent Oil at $50.44 (-0.05 %)
  • Rates: US 10 year yield at 2.21, UK 10 year yield at 1.99, German 10 year yield at 0.59

News & Data:

  • Australia Retail Sales (MoM) Sep: 0.4% (exp 0.4% prev 0.4%)
  • Australia Retail Sales Ex-Inflation (QoQ) Q3: 0.6% (exp 0.7% prev 0.8%)
  • Australia Trade Balance (Sep): AUD -2317 Mln (exp AUD -2900 Mln prev AUD -3095 Mln)
  • Japan Nikkei Services PMI (Oct): 52.2 (prev 51.4)
  • Japan Nikkei Composite PMI (Oct): 52.3 (prev 51.2)
  • China Caixin Services PMI (Oct): 52.0 (prev 50.5)
  • China Caixin Composite PMI (Oct): 49.9 (prev 48.0)
  • Hong Kong Nikkei PMI (Oct): 46.6 (prev 45.7)
  • New Zealand Unemployment Rate (Q3): 6.0% (exp 6.0% prev 5.9%)
  • New Zealand Employment Change (QoQ) Q3: -0.4% (exp 0.4% prev 0.3%)
  • New Zealand Employment Change (YoY) Q3: 1.5% (exp 2.5% prev 3.0%)
  • New Zealand Participation Rate (Q3): 68.6% (exp 69.3% prev 69.3%)
  • Dairy Prices Drop By 7.4% — NZ Herald

Markets Update:

The Kiwi Dollar came under pressure after a weak Fonterra auction and worse than expected employment data. In yesterday's NY session, NZD/USD declined from 0.6710 to 0.6650 and overnight, it extended lows to 0.6630. Key support is now seen at 0.6620 and a break below would pave the way for a 0.6480 test. Meanwhile, AUD/NZD continues to rally, being up now almost 300 pips since yesterday morning. Australian Retail Sales data arrived pretty much in line with expectations, so there was little reaction in the FX market. However, the rally in Asian stock markets gave the Aussie Dollar a boost and AUD/USD made it above 0.7220.

EUR/USD was quiet as usual in the Asian session, as it consolidated in a 1.0938-68 range. GBP/USD traded 1.5414-24. USD/JPY failed to benefit from the rise in equities. It rose to 121.40 after the Tokyo open, but ran out of momentum and fell back to 121.15. The Canadian Dollar got supported by the bounce in Oil prices and USD/CAD fell sharply in yesterday's NY session, from 1.3160 to a low of 1.3040. Overnight, there was a weak bounce to 1.3070, but it eventually fell back to 1.3045.

Upcoming Events:

  • 08:45 GMT – Italian Services PMI
  • 08:50 GMT – French Services PMI
  • 08:55 GMT – German Services PMI
  • 09:00 GMT – Euro Zone Services PMI
  • 09:30 GMT – UK Services PMI
  • 10:00 GMT – Euro Zone PPI
  • 13:15 GMT – US ADP Nonfarm Employment Change
  • 13:30 GMT – US Trade Balance
  • 14:45 GMT – US Markit Services PMI
  • 15:00 GMT – US ISM Non-Manufacturing PMI

 

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