Brexit Archives - The Industry Spread

Gold Gains, Equities Retreat and Bitcoin Back Below 8,000

October 23, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Bitcoin, Brexit, Sino-U.S. trade talks

Asian Indices ended lower today after the UK Parliament voted the Brexit plan but rejected the timetable to take the UK out of the EU.

Investors turn cautious in equities after a revenue warning from Texas instruments. Fed Chair Jerome Powell signalled further interest rate cuts and the resumption of bond purchases. Investors increased their bets that the Fed will cut interest rates BY 25 bp at its next meeting in October to protect the economy from slowing growth and the effects of the trade tensions.

The Hang Seng index is 0.81% lower at 26,786. The Shanghai Composite is 0.08% lower at 2,951, while in Singapore, the FTSE Straits Times is 0.60% lower at 3,142. The ASX 200 in Australia is 0.35% lower at 6,648.

European indices started the day lower. DAX is trading 0.23% lower at 12,722, CAC40 is 0.56 per cent lower at 5,625 while the FTSE MIB in Milan is 0.38 per cent lower at 22,400. In London, FTSE 100 is trading 0.01% lower at 7,212. The United Kingdom is scheduled to leave the EU on October 31.

In commodities markets, WTI crude oil trades 0.72 per cent lower at $54.09 as global growth worries weigh on crude. Brent oil is trading 0.45% lower at $59,43 per barrel as oil world supply will be affected by the global slowdown. Gold gains and trades higher at 1,489, as the short term momentum turns bearish after the price trades below the 50-day moving average. On the upside, strong resistance stands at 1,555.13 yearly high while support is at 1,458 the recent low.

In cryptocurrencies, Bitcoin (BTCUSD) momentum is neutral as it trades lower at 7,943, hitting the daily low at 7,893 and the daily high at 8,111. Bitcoin short term momentum is neutral now as the cryptocurrency trades above the 200-day moving average but below the 50-day moving average. Immediate support for BTC stands now at $7,686 recent low, while next support stands at 7,406 the low from June 2nd. On the upside, resistance now stands at 8,801 recent high and then at 9,000 round figure. Ethereum (ETHUSD) trades lower at 165,75 with capitalisation now to 18.32 billion, on the upside, the immediate resistance stands at 317 recent high while the support stands at 136 the low from May 6th, LTCUSD trades higher at 52.04. The crypto market cap capitalization now stands above $216.38 billion.

On the Lookout: New Zealand Trade Balance (YoY) came in at $-5.21B, beating forecasts of $-5.49B in September.

New Zealand Trade Balance (MoM) came in at $-1242M, below forecasts ($-1112M) in September.

United States API Weekly Crude Oil Stock fell from previous 10.5M to 4.45M on October 18.

Central bank of China set the Yuan rate (USDCNH) at 7.0752 versus yesterday settlement at 7.0668.

Trading Perspective: In forex markets, USD index trades 0.01 per cent higher at 97.53, the Aussie dollar trades 0.12 per cent lower at 0.6847, while NZDUSD trades 0.06% lower at 0.6401.

GBPUSD trades 0.02% lower at 1.2868 as we are getting closer to the Brexit deadline. Major support now stands at 1.2078 recent low which if broken, might accelerate the slide further towards 1.20. On the upside, immediate resistance now stands at 1.3010 recent high while more offers will emerge at 1.3050 round figure.

In Sterling futures markets open interest decreased by 3,800 contracts, volume increased by around 40.000 contracts.

EURUSD trades 0.02% higher at 1.1126 as the pair momentum is bullish. Immediate resistance for the pair stands at 1.1156 yesterday’s high. On the downside, immediate support stands at 1.1115 today’s low and then at 1.1003 the previous week low.

In euro futures markets open interest increased by 3,300 contracts, the volume increased by around 19.600 futures contracts.

USDJPY Daily Chart

USDJPY is trading 0.08% lower at 108.39 having hit the daily low at 108.24 and the daily high at 108.50. USDJPY pair will find support at 104.44 the low from August 23rd. On the upside, immediate resistance for the pair now stands at 108.93 yesterday’s high, and then at 109.06 the 200-day moving average.

In Yen futures markets open interest decreased by 252 contracts, volume decreased by around 428 futures contracts.

USDCAD is trading 0.05% higher at 1.3099 the pair will find immediate support at 1.3017 the YTD low while extra support stands at 1.30 round figure. On the upside, immediate resistance now stands at the 1.3356 high from September 3rd before an attempt to 1.3450 high from 31st May.

USDCAD Daily Chart

Equities Gain on Trade Talk Cues, Brexit Woes Cap Gains

October 22, 2019 by Karthik Subramanian Leave a Comment Filed Under: Market News - US Open Tagged: Brexit, Donald J. Trump, Sino-U.S. trade talks

The UK parliament vote on Brexit deal eyed amid lack of high impact macro data. Optimism surrounding the trade deal keeps market bulls underpinned.

Summary: The global equity market started off on a positive note following headlines-driven momentum. Comments from US President Trump last Friday stating that phase 1 of the trade deal is likely to be signed by Mid-November and comments from Chinese vice Premier Liu He ensuring efforts to sign a trade deal boosted investor risk appetite. The headlines are leading speculative traders into the hamster wheel as the situation surrounding the trade deal has been repetitive over the last couple of months with historic data hinting at recurring price patterns in risk assets and investor reaction to headlines.

While the European market followed cues from Asian markets and opened on a positive note, developments surrounding Brexit hit a snag, capping gains of risk assets. Hopes and expectations of positive quarterly earnings reports from major firms kept market bulls underpinned in the European session resulting in European equities seeing positive price action across today’s session.

In the forex market, prevalent risk appetite helped major currency pairs trade positive while USD remained steady against major global currencies, mostly unchanged from where it was last Friday.

Precious Metals: Rare metals continue to trade flat today, but the bias was mostly in favor of rare metals as cheaper USD helped bring in fund flow from EM markets. Developments in geopolitical events with both trade deal and Brexit seeing extension continued to influence caution in global investors, which in turn boosted demand for safe-haven assets given lack of progress over a prolonged timeframe.

Crude Oil: Crude Oil price fell today as concerns of global economic growth weighed down crude oil bulls despite prevalent trade deal optimism. As headlines hinted at an extension of the deadline for both Brexit and Phase-1 trade deal, the impact of the same on global economic growth weighed influenced caution in the global market, causing demand to supply ratio to skew in favor of crude oil bear.

AUD/USD: The pair today saw a sharp spike in price action with price scaling fresh monthly highs as the positive tone in comments from RBA governor Philip Lowe, strong jobs data and optimism surrounding Sino-U.S. trade talk cues helped improve risk appetite. While the pair scaled above mid-0.68 handle further gains was capped as pick up in US bond yields underpinned USD adding pressure to AUD bulls.

On The Lookout: With earnings season entering full swing, investors focus is now on quarterly data reports causing geopolitical events to take a backseat. While geopolitical events continue to see fresh developments, the focus of traders has shifted to quarterly data for directional bias as all major geopolitical events have been stuck in a loop with clear lack of solid progress, be it in favourable or unfavourable direction. Comments from US & China representatives continued to boost optimism surrounding trade deal, but the deadline has been pushed back by a month, which suggests that key issues remain unresolved between two parties.

Boris

On Brexit front, UK lawmakers forced PM Boris Johnson to submit their demand and send a request for Brexit deadline extension to the EU by delaying a key parliamentary vote on the Brexit deal. The parliamentary vote is expected to occur later today, but headlines continue to influence speculation and doubt on outcome possibilities with bias in favor of rejection of EU approved Brexit draft. On the earnings calendar, the US market is set to see quarterly data from Cadence Design, Celanese, Halliburton, and Zions.

Trading Perspective: The forex market is set to see positive price action as trade talk cues keep risk appetite and market bulls underpinned by USD, and it is likely to cap gains as USD bulls gained strength owing to a pick-up in US bond yields. US stock and index futures trading in the international market saw positive activity on account of optimistic comments from US President Trump & Chinese vice Premier Liu He on trade deal proceedings. Prevalent risk appetite suggests positive opening of Wall Street, but range bound and muted activity is expected across the session amid lack of further high impact macro data updates and headlines.

EUR/USD: The pair held steady above the 1.1157 handle for the most part of the day, but Brexit woes continue to weigh down the pair. A decline below intra-day lows of 1.1148 could push the pair towards a critical support zone of 1.1140/37 handle in case USD continues to gain momentum on pick up in US bond yields. But if USD holds steady, the pair is likely to remain steady above mid-1.11 handle during North American market hours.

GBP/USD: The pair opened on a positive note and hit an intra-day high of 1.3013 as traders expect less messy Brexit following the UK lawmakers move to force PM Johnson to request Brexit extension. Hopes for less messy Brexit keeps pair steady above mid-1.29 handle for most of the day, which combined with firm USD on pick up in US bond yields capped gains. Traders now lookout for UK parliament vote on EU approved Brexit draft later today for short term directional cues.

USD/CAD: The pair declined to fresh 2½ months lows on trade deal optimism and prevalent risk-on investor sentiment in the forex market. But a decline in crude oil price, pressure ahead of Canadian elections, and a slowdown in USD selling activity owing to pick up in US bond yields helped prevent further declines. Traders now wait for local headlines from Canada and the US in North American market hours for fresh short term directional cues and profit opportunities.

GBPUSD Higher on Positive Brexit Developments and Bitcoin Above 8,000

October 22, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Bitcoin, Brexit, Sino-U.S. trade talks

Asian Indices ended higher today as investors turn cautious amid a new Brexit deal delay and positive Brexit developments.

Meanwhile, for one more week, the focus will be on the US and China’s partial trade deal. Chinese Government wants to proceed with further discussions before signing the phase one trade deal.

Last week, Fed Chair Jerome Powell signalled further interest rate cuts and the resumption of bond purchases. Investors increased their bets that the FOMC will cut interest rates at its next meeting on October to protect the economy from slowing growth and the effects of the trade tensions. The Hang Seng index is trading 0.09% higher at 26,742. The Shanghai Composite is 0.05% higher at 2,939, while in Singapore, the FTSE Straits Times is 0.95% higher at 3,143. The ASX 200 in Australia ended flat at 6,652.

European indices started higher the day, DAX trading 0.41 higher at 12,688, CAC40 is 0.08 per cent lower at 5,640 while the FTSE MIB in Milan is 0.43 per cent higher at 22,416. In London, FTSE 100 is trading 0.47% higher at 7,184. The UK is scheduled to leave the EU on October 31.

In commodities markets, WTI crude oil trades 0.39 per cent lower at $53.66 as global growth worries weigh on crude. Brent oil is trading 0.77% lower at $58,96 per barrel as oil world supply will be affected by the global slowdown. Gold trades lower at 1,491, as the short term momentum turns bearish after the price trades below the 50-day moving average. On the upside, strong resistance will be met at 1,555.13 yearly high while support is at 1,458 the recent low.

BTCUSD Daily Chart

In cryptocurrencies, Bitcoin (BTCUSD) momentum is neutral as Bitcoin trades higher at 8,204, hitting the daily low at 8,176 and the daily high at 8,262. Bitcoin short term momentum is neutral now as it trades above the 200-day moving average ut below the 50-day moving average. Immediate support for BTC stands now at $7,686 recent low, while next support stands at 7,406 the low from June 2nd. On the upside, resistance now stands at 8,801 recent high and then at 9,000 round figure. Ethereum (ETHUSD) trades higher at 173,15 with capitalisation now to 18.92 billion, on the upside, the immediate resistance stands at 317 high while the support stands at 136 the low from May 6th, Litecoin (LTCUSD) trades flat at 53.66. The crypto market cap capitalization now stands above $222.54 billion.

On the Lookout: Germany Producer Price Index (YoY) came in at -0.1% above forecasts of -0.3% in September. Germany Producer Price Index (MoM) came in at 0.1% above expectations of -0.1% in September.

Japan All Industry Activity Index (MoM) came in at 0% topping expectations of -0.1% in August.

The central bank of China set the Yuan rate (USDCNH) at 7.0680 versus yesterday settlement at 7.0769.

Trading Perspective: In forex markets, USD index trades 0.08 per cent higher at 97.22, the Aussie dollar trades 0.31 per cent higher at 0.6878, while NZDUSD trades 0.42% higher at 0.6410.

GBPUSD trades 0.10% lower at 1.2987 as we are getting closer to the Brexit deadline. Major support now stands at 1.2078 recent low which if broken, might accelerate the slide further towards 1.20. On the upside, immediate resistance now stands at 1.3010 recent high while more offers will emerge at 1.3050 round figure.

In Sterling futures markets open interest decreased by 2,800 contracts, volume decreased by around 123.000 futures contracts.

GBPUSD Daily Chart

EURUSD trades 0.04% lower at 1.1165 as the pair momentum now turns bullish. Immediate resistance for the pair stands at 1.1179 the daily high. On the downside, immediate support stands at 1.1149 today’s low and then at 1.1003 the previous week low.

In euro futures markets open interest increased by 890 contracts, the volume also decreased by around 92.000 futures contracts.

USDJPY is trading 0.17% higher at 108.56 having hit the daily low at 108.28 and the daily high at 108.65. USDJPY pair will find support at 104.44 the low from August 23rd. On the upside, immediate resistance for the pair now stands at 108.93 yesterday’s high, and then at 109.06 the 200-day moving average.

In Yen futures markets open interest decreased by 2.200 contracts, volume decreased by around 30,600 futures contracts.

USDCAD is trading 0.13% lower at 1.3105 the pair will find immediate support at 1.3017 the YTD low while extra support stands at 1.30 round figure. On the upside, immediate resistance now stands at the 1.3356 high from September 3rd before an attempt to 1.3450 high from 31st May.

Pound, Euro Gain on Brexit Deal, Lowe Remarks Lift Aussie

October 18, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, EUR-USD, Forex, FX trading, GBP-USD, Sino-U.S. trade talks, USD/JPY

Summary: Brexit continued to take centre-stage in FX. Sterling soared anew, hitting 1.2898 after reports that the UK and EU agreed a tentative Brexit deal. The Pound gained and The Euro rallied to 1.1140, near 2-month highs, easing to settle at 1.1125 at the New York close. Though the deal still needs to be ratified by British lawmakers, both currencies kept their gains. Weaker US data continued to erode support for the Dollar, which saw broad-based weakness against its Rivals. The Dollar Index (USD/DXY) a popular gauge of the Greenback’s value against a basket of 6 foreign currencies, fell 0.4% to 97.60 from 98.00 yesterday. The Australian Dollar soared 1% to 0.6825 (0.6762) lifted by a fall in the Jobless rate to 5.2% from 5.3%. The Aussie also got support from comments by RBA Governor Philip Lowe, speaking at the IMF Conference in Washington DC. Lowe said that negative rates are extraordinarily unlikely in Australia. The Dollar was marginally lower against the Yen at 108.64 from 108.75. Emerging and Asian Currencies all recorded gains versus the struggle US Dollar. Wall Street stocks extended gains to finish within record highs amid a cluster of mostly positive earnings reports. The Dow closed at 27,035. while the S&P 500 rallied 0.18% to 2,999.

US Industrial Production – forexfactory – 18 OCT 2019

US bond yields were up a touch with the 10-year yield closing one basis point higher at 1.75%.
The string of weak US data continued with misses in US Industrial Production, down 0.4% in September, after an upwardly revised 0.8% rise in August, the largest monthly fall since April. US Capacity Utilisation underwhelmed with a 77.5% print versus expectations of 77.7%. Philly Fed Manufacturing Index fell to 5.6 (versus forecast of 7.3), and the lowest since February.
Australia’s economy created 14,700 jobs in September while August’s employment gain was revised up to 37,900 from 34,700. The Unemployment Rate dipped to 5.2% from 5.3%.

EUR/USD – The Euro rallied to near two-month highs at 1.11398 before easing to close in New York at 1.1125. The shared currency continued to benefit from positive Brexit news and the broad-based US Dollar weakness.
GBP/USD – The Pound kept its gains, finishing at 1.2890 (1.2825 yesterday) in volatile trade. Sterling slumped to 1.2855 after a leader from Ireland’s Democratic Union Party said they would vote against the UK/EU Brexit agreement. British PM Boris Johnson still needs to get the deal approved by British lawmakers who meet on the issue Saturday.

AUD USD CHART – IG Daily FX – 18 October 2019

AUD/USD – The Aussie came back in true Battler form, jumping to 0.68330 before settling at 0.6825, (0.6762 yesterday) for a 1% gain. A fall in Australia’s Jobless rate and comments from RBA Governor Lowe supported the currency. The Kiwi, antipodean cousin to the Aussie, rose against the Greenback to 0.6350 (0.62900), a gain of 0.9%.

On the Lookout: The string of weaker US economic reports continued with Industrial Production and Capacity Utilisation following Wednesday’s poor retail sales.
We noticed that US TIC Long Term Purchases (which is the difference in values between domestic and foreign purchases of US Securities) fell to US$41.1 billion from the previous months rise of $83.8 billion. It is the first fall since June and the biggest since February. FX traders are starting to notice the weak US reports. In contrast, those of rival nations are stabilising. FX will focus on today’s Chinese data dump.

US TICS Long-Term Purchases – FXFactory – 18 Oct 2019

Today sees China’s trifecta of GDP, Industrial Production and Retail Sales. China also releases its Unemployment rate.
Asia’s other data release is Japan’s National Core CPI. Europe sees the Eurozone Current Account. Finally, the US releases its Conference Board’s Composite Leading Index.
The IMF Conference in Washington DC continues with Bank of England Governor Mark Carney due to speak.

Trading Perspective: The technical break in the Dollar Index (USD/DXY) below 98.00 to its close at 97.60, was the result of more than just Sterling and Euro strength. The Dollar’s fall overnight was broad-based. The string of weaker US economic reports is eroding support for the Greenback which is on the way to a deeper downside correction. Market positioning has been long of US Dollar bets which will keep the Greenback pressurised.

USD DXY Investing.Com – 18 OCT 2019

USD/DXY – The Dollar Index broke though immediate support at 97.80 after hovering around the 98.00 level yesterday. Overnight low traded was 97.50 which is today’s immediate support. The next support level lies at 97.20. Immediate resistance can now be found at 97.80 and 98.00. The Dollar Index broke through September lows and now appears headed to 97.38. Look for consolidation today with a likely trading range of 97.40-97.90. Prefer to sell rallies.
EUR/USD – The Euro extended its advance breaking through the 1.1110 level to top out at 1.11398, near two months highs. The shared currency closed at 1.1125. Positive Brexit news will continue to support the Euro. Further signs of a slowing US economy ahead will also buoy the Euro. Immediate support lies at 1.1100 followed by 1.1070. Look for some consolidation today with a likely range of 1.1085-1.1145. Just trade the range for today but the Euro remains a buy on dips in the medium term.
AUD/USD – The Battler extended its gains squeezing out the shorts following the fall in Australia’s Unemployment rate and comments from RBA Governor Lowe. We highlighted a few reports ago that the Australian Dollar TWI (Trade Weighted Index) was at near decade lows. The RBA will keep itself from easing while this is the case. The Aussie has more topside to it with immediate resistance today at 0.6840 followed by 0.6880. Immediate support can be found at 0.6800 followed by 0.6770. Look to buy dips with a likely range today of 0.6790-0.6840.

Happy Friday, top weekend and trading all.
Am off overseas for a break, back in mid-November. Stay nimble, keep your views firm.

Brexit Agreement on Table, Risky Assets Higher

October 17, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Brexit, FED, Sino-U.S. trade talks

Asian Indices ended mixed today as investors turn cautious amid confusing headlines around the Brexit agreement deal. Meanwhile, doubts emerged about the US and China partial trade deal. China wants to proceed with further discussions before signing the phase one trade deal.

Last week, Fed Chair Jerome Powell signalled further interest rate cuts and the resumption of bond purchases. Traders increased their bets that the Fed will slash interest rates at its next meeting in October to protect the economy from slowing growth and the effects of the trade tensions. The Hang Seng index is trading 0.69% higher at 26,848. The Shanghai Composite is 0.05% lower at 2,977, while in Singapore, the FTSE Straits Times is 0.27% lower at 3,126. The ASX 200 in Australia trades 0.3% higher at 6,684.

European indices started higher the day, DAX trading 0.92 higher at 12,786, CAC40 is 0.58 per cent higher at 5,730 while the FTSE MIB in Milan is 0.79 per cent higher at 22,604. In London, FTSE 100 is trading 0.67% higher at 7,216. UK is scheduled to leave the EU on October 31.

In commodities markets, crude oil trades 0.39 per cent lower at $53.15 as global growth worries weigh on crude. Brent oil is trading 0.20% lower at $59,30 per barrel as oil world supply will be affected by the global slowdown. Gold trades lower at 1,485, as the momentum turns bearish after the price trades below the 50-day moving average. On the upside, strong resistance will be met at 1,555.13 yearly high while support is at 1,458 the recent low.

In cryptocurrencies, Bitcoin’s (BTCUSD) momentum is neutral now as BTC trades lower at 8,080, hitting the daily low at 7,899 and the daily high at 8,089. Bitcoin short term momentum is neutral now as it trades above the 200-day moving average. Immediate support for BTC stands now at $7,686 recent low, while the next support stands at 7,406 the low from June 2nd. On the upside, strong resistance now stands at 8,801 recent high and then at 9,000 round figure. Ethereum (ETHUSD) trades lower at 176,15 with capitalisation now to 19.26 billion, and on the upside, the immediate resistance stands at 317 high while the support stands at 136 the low from May 6th. Litecoin (LTCUSD) trades lower at 53.30. The crypto market cap capitalization now stands above $220.84 billion.

On the Lookout: The Australian unemployment rate fell from 5.3% to 5.2% with roughly 14,700 jobs added over the month. Yesterday, Japan Industrial Production (YoY) came in at -4.7% in line with forecasts for August. The Australian weekly consumer confidence came in at 110.9 previous reading was at 112.3.

The central bank of China set the Yuan rate (USDCNY) at 7.0789 versus yesterday’s settlement at 7.0746.

Trading Perspective: In forex markets, USD index trades 0.26 per cent lower at 97.72, the Aussie dollar trades 1.05 per cent higher at 0.6828, while NZDUSD trades 0.61% higher at 0.6329.

GBPUSD trades 0.48% higher at 1.2890 as we are getting closer to the Brexit deadline. Major support now stands at 1.2078 recent low which if broken, might accelerate the slide further towards 1.20. On the upside, immediate resistance now stands at 1.2988 recent high while more offers will emerge at 1.30 round figure.

In Pound futures markets open interest increased by 2,100 contracts, volume increased by around 8.300 futures contracts.

EURUSD Daily Chart

EURUSD trades 0.37% higher at 1.1112 the pair trades for the sixth day out of the descending channel. Immediate resistance for the pair stands at 1.1137 the 100-day moving average. On the downside, immediate support stands at 1.1003 yesterday’s low and then at 1.0835 the low from 2017.

In euro futures markets open interest decreased by 5.100 contracts, the volume also decreased by around 5.800 futures contracts.

USDJPY is trading 0.01% lower at 108.77 having hit the daily low at 108.63 and the daily high at 108.93. USDJPY pair will find support at 104.44 the low from August 23rd. On the upside, immediate resistance for the pair now stands at 108.93 today’s high, and then at 109.06 the 200-day moving average.

In Yen futures markets open interest increased by 88 contracts, volume increased by around 10,800 futures contracts.

USDJPY Daily Chart

USDCAD is trading 0.20% lower at 1.3171 the pair will find immediate support at 1.3017 the YTD low while extra support stands at 1.30 round figure. On the upside, immediate resistance now stands at the 1.3356 high from September 3rd before an attempt to 1.3450 high from 31st May.

Dollar Index Falls to One-Month Low on Weak Retail Sales

October 17, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, EUR-USD, FX trading, GBP-USD, monetary policy, Sino-U.S. trade talks, USD/JPY

Summary: The Dollar Index fell to one-month lows at 98.004 (98.286) as a weak Retail Sales report in September added to growing fears of a slowing US economy. Retail Sales dropped 0.3% in September, the first fall in seven months, missing forecasts of a 0.3% rise. The benchmark US 10-year bond yield closed 3 basis points lower to 1.74% in late New York. Across the Atlantic, Brexit neared its endgame, with EU and British officials on the verge of a last-minute deal. Sterling extended its gains, climbing to 1.28776 before easing to end at 1.2525 for a gain of 0.48%. British PM Boris Johnson still has work to do back in the UK to ensure Parliament approves the plan. The Euro advanced to 1.1075, up 0.36% on the combination of an overall weaker US Dollar and Brexit optimism. USD/JPY ended little-changed at 108.75. Ahead of today’s crucial Employment report, the Australian Dollar traded marginally higher to 0.6762 (0.6755).

USD RETAIL SALES – 17 OCT 2019

Wall Street stocks declined at the finish. The DOW was 0.22% lower to 26,972 (27,027). The S&P 500 lost 0.14% to 2,992 from 2,998 yesterday.
US September Core Retail Sales (excluding automobiles) fell 0.1% against forecast of a 0.2% gain.
UK September Annual Headline CPI missed forecasts at 1.7% (1.8%), while Core CPI matched expectations at 1.7%. UK September PPI Input (monthly) fell 0.8% lower than August’s fall of 0.1%.

DXY CHART – Trading View – 17 October 2019

USD/DXY – The Dollar Index retreated to fresh one-month lows, hovering at the 98.00 level at the close. Weak US retail sales, which saw a big miss against forecasts and recorded its first fall in 7 months weighed on the Greenback.
GBP/USD – Brexit related headlines once again dominated the FX landscape. Hopes continued to rise for a final deal as negotiations continued. The Pound traded in similar volatile fashion, jumping to a high at 1.28776 before dropping to 1.2825, up 0.48% from 1.2787 yesterday.
AUD/USD The Aussie Dollar managed a marginal gain of 0.11% to 0.6762 (0.6752) ahead of today’s Australian Employment report. Median market forecasts are for a gain of 15,000 jobs in September from August’s 34,700. The Aussie Battler was sold down to 0.67236 on the market’s dovish interpretation of the latest RBA meeting minutes.
EUR/USD – The Euro continued to advance buoyed by hopes of a Brexit deal and an overall weaker US Dollar. EUR/USD traded to 1.10855, fresh 4-week highs before easing to 1.1075 at the close, up 0.36%.

On the Lookout: Today’s data releases and events will set the tone for the next move in the Greenback. Before the release of today’s data RBA Deputy Governor Guy Debelle speaks at an Australian Investment Conference in Sydney. Bank of England Governor Mark Carney speaks at a Harvard University function in Boston. The European Council is expected to discuss Brexit at a meeting in Brussels today.
Australia’s September Employment Change, Unemployment Rate (forecast at 5.3%, unchanged from August), Participation Rate are released at 11.30 am Sydney time. Look for the breakdown as well between Full-time and Part-time Employment. European reports start with Swiss and Italian Trade Balances. The UK reports on its September Retail Sales. The US follows with a plethora of reports:
US Philadelphia Fed Manufacturing, Building Permits, Housing Starts, Industrial Production, Capacity Utilisation and Weekly Jobless Claims. Further slowing of the US economy could see more Dollar falls.
Markets will continue to monitor developments in trade and Brexit through various media releases.

Trading Perspective: The Dollar Index (USD/DXY) closed at a strong technical support at 98.00 after dipping briefly to 97.898. Expect some consolidation for the US Dollar against it’s Rivals although further confirmation of a slowing US economy will push the Greenback lower.

USD/DXY – The Dollar Index traded to an overnight low at 97.898, climbing to 98.004 at the close, clinging to the 98.00 support level. The next support level lies at 97.80 followed by 97.50. Immediate resistance can be found at 98.30 and 98.50. Expect the Dollar Index to consolidate today with a likely range of 97.90-98.40. Prefer to sell rallies.
EUR/USD – The Euro is still the main driver of the Dollar Index with 57.6% of the weight in the Index. Together with Sterling, the two currencies have a combined weight of 69.5% in the Index. The Euro traded to an overnight and 4-week high at 1.10855. Immediate resistance lies at 1.1085 followed by 1.1105. Immediate support can be found at 1.10520 and 1.1030. The EU Council meeting in Brussels on Brexit today is the big event for both the Euro and Pound. Look to trade a likely range today of 1.1040-1.1090. Just trade the range for this puppy today but the preference is to buy dips.
GBP/USD – Sterling jumped quickly to 1.28776 as Brexit entered its endgame with officials from the EU and the UK on the verge of a deal. However, it dropped just as fast as it rose to finish at 1.2825. The main positive for the Pound is that expectations for a no-Brexit have faded. Any new deal would have to go through the UK’s fractious Parliament. Look for more volatility on the currency. Immediate support for today lies at 1.2780 followed by 1.2730. Immediate resistance can be found at 1.2850 followed by 1.2880. Look to trade a likely range today of 1.2780-1.2880. Prefer to sell rallies from current levels. But be nimble.

IG-Daily FX AUD USD CHART – 17 OCT 2019

AUD/USD – The Aussie Dollar was marginally higher at the NY close to 0.6762. Just a few minutes ago, RBA Assistant Governor Guy Debelle, speaking at an Australian Investment Conference in Sydney said that rate cuts have taken account of the expected downturn in housing. The Aussie stayed put at around 0.6760 following his speech. It all depends on the Aussie Jobs report in a little over an hour. Immediate resistance lies at 0.6780 followed by 0.6810. Immediate support can be found at 0.6745 and 0.6725. Look to trade a likely range today of 0.6745-0.6795. Prefer to buy dips. The Aussie speculative market is short, and the Battler needs to play catch up with the overall weaker Greenback.

Happy Thursday and trading all.

Wall Street Heats Up as Earnings Season Comes Into Focus, Brexit & Trade Deal Woes Inspire Caution

October 17, 2019 by Karthik Subramanian Leave a Comment Filed Under: Market News - US Open Tagged: Brexit, Sino-U.S. trade talks, Wall Street

HK Protest

Netflix, BNY Mellon & BOA earnings reports and senate vote on Hong Kong autonomy bill to drive price momentum in the US market.

Summary: Equities and key indices in the global financial market are seeing a mixed activity as geopolitical events see fading optimism despite recent progress. Move by US House of Representatives on passing a human rights bill which effectively provides support to pro-democracy protesters in Hong Kong via annual review to ensure that Hong Kong remains sufficiently autonomous from Beijing is viewed as an act of bad faith from Trump administration.

Just when both parties were getting ready to sign “Phase 1” of the trade deal, the move by the US which seems to visible infringe on Chinese sovereignty and politics is viewed as an indirect threat causing China to reply with the threat of retaliation although exact how China plans to retaliate remains in the dark.

Following the disappointing turn of events surrounding trade deal between the US and China, Chinese shares and indices fell earlier today while other major markets in Asia saw key stocks and indices trade and close on a positive note. European shares are trading positive in the global market today, but it has declined from previous session highs and is trading in familiar price range as caution ahead of upcoming trade talks keeps investors on edge.

In the forex market, US Greenback remains firm as fading trade deal optimism continues to underpin demand for USD, but the prevalent risk on investor sentiment in the broad market keeps major global currencies trading positive in Asian and European market hours.

Precious Metals: Rare metals are seeing mixed price action in the global market today. While firm USD kept Silver trading in red, Yellow metal gained positive momentum as caution ahead of the upcoming Brexit summit, and fading trade deal optimism underpins demand for gold in the global market.

Crude Oil: Despite comments from OPEC yesterday, which hinted at possible extension in supply cut, the demand to supply ration remains skewed in favor of crude oil bulls. This, along with forecast hinting at build in US weekly crude oil inventory data, pressured major crude oil benchmarks to see a decline in price.

AUD/USD: The pair retains dovish tone from earlier this week but has climbed off recent lows. AUD still remains weighed down by fading trade deal optimism keeping price trading in red. But the decline in US bond yields helped weaken USD, which in turn helped keep decline in check.

On The Lookout: The main focus of US investors the week ahead is earnings reports from major US firms as quarterly data from top firms get ready to dictate short term Wall Street price momentum. However, geopolitical events continue to contribute some level of influence on the price action of key risk assets and indices.

Following the US move to go ahead with the law for protecting the autonomy of Hong Kong which is mostly viewed as US President Trump’s attempt yet again to meddle with Chinese politics as an indirect threat, China has vowed to retaliate, but it remains to be seen on how exactly China is set to retaliate. The UK is getting its Brexit draft ready and all things point to the possibility of a deal being signed by end of the week, but given the turn of events from recent past and owing to lack of support for UK PM Boris Johnson’s latest proposal, investors still continue to exercise caution ahead of upcoming key summit between UK & EU tomorrow.

On the economic calendar schedule, the US calendar sees the release of building permits data, housing starts and initial jobless claims data, Crude oil inventory data, Industrial production data, and Philadelphia Fed Manufacturing Index update while Canadian Calendar sees the release of Manufacturing Sales data. On the earnings calendar, Wall Street is set to see the release of quarterly financial data from Abbott Labs, Bank of NY Mellon, Bank of America, CSX, IBM, and Netflix.

Trading Perspective: Given cautious investor tone influenced by geopolitical events, the forex market is set to see ongoing momentum continue unchanged in North American market hours. In the international market, US stock and index futures saw decline ahead of Wall Street opening on Trump Administration’s new law which caused optimism surrounding trade deal to vanish completely.

However, there are lingering hopes of a trade deal as the US Senate is yet to approve the law, and a rejection of Law in the Senate will help calm down China increasing odds of China singing the “Phase 1” trade deal sooner rather than later. Given the dovish premise of US assets in the international market, the outcome from the senate vote will decide whether Wall Street is set to see range-bound or dovish price action later today.

EUR/USD: The pair continues to trade positive in the global market today. But price action remains capped below mid-1.10 handle. Caution influenced by fading optimism surrounding the Sino-U.S. trade deal keeps EURO’s gains in check but a decline in US T.Yields which keeps USD from gaining momentum, helps Euro maintain positive price momentum. Traders now await US macro data for short term profit opportunities.

GBP/USD: The pair is seeing price action move in a zig-zag manner around 1.28 handle as caution ahead of key Brexit summit keeps GBP’s gains in check. News of DUP’s objection for latest Brexit draft pressured GBP while positive comments from Barnier on Brexit deal and muted USD on account of decline in US T.Yields keep price momentum and bias in favor of GBP bulls. Traders now await US macro data for short term profit opportunities.

USD/CAD: The pair is seeing range-bound price action with bias mostly in favor of US Greenback. Fading optimism surrounding the Sino-U.S. trade deal and declining crude oil price on account of expected build in US crude oil inventory weighed down commodity-linked currency Canadian Loonie. But gains are capped on account of subdued USD owing to decline in US T.Yields. Traders now await the US and Canadian macro data for short term profit opportunities.

Jason Cohen Parts Ways with Citi Group, Top Executives to Relocate to EU

October 16, 2019 by Karthik Subramanian Leave a Comment Filed Under: Industry News Tagged: Brexit, Citi Group, Jason Cohen

Citi Group, the US-based multinational banking giant, has been seeing a flurry of changes in its high-level management and leadership team. Having just announced several changes to its leadership team earlier this week, which saw three of its executives promoted to a new role, Citi Group revealed that it is parting ways with yet another long-standing member of its family.

Jason Cohen

According to the latest update from the firm, Jason Cohen who has been serving at the firm for the last 11 years based out of the firm’s London office in the role of Head of Euro Swaps is parting ways with the firm as the US lender goes ahead with its restructuring plans. In order to brace with Brexit fallout and to ensure smooth operation while retaining its top-level executives, the US lender planned to relocate 63 jobs out of London and reassign them elsewhere in some leading European branches.

However, Mr. Jason Cohen, who has been serving as Head of Euro Swaps, has decided to resign from the firm rather than move to a different location as part of the permanent relocation program. While the report Citi Group is a pre-eminent figure in FX and OTC derivatives in the current global marketplace and hence its derivative products are used by investors from across the globe to hedge their portfolios. However, the ongoing Brexit crisis has got investors from across the globe worried and concerned that pending Brexit will cause huge disruption in the cross border derivatives market resulting in this particular business unit come under severe duress. The UK is currently a major hub for Citi group’s business across Europe. Owing to passporting rules currently in place in the country, the group is using its London office as a clearinghouse.

The group handles trades worth nearly 440 Billion EURO via its various clearinghouse offices located in the UK, primarily catering to clients from the rest of EU member nations while offering the service free of cost. However, a lack of Brexit deal would mean a passporting deal is likely out of place and hence the group is looking into several locations in the EU to relocate their staff and aims to retain as many executives as possible during the relocation program.

Alongside Citi Group, rumors in circulation and various reports in online news media and tabloids suggest that France is being considered as a favoured spot for relocation by many tier 1 banking service providers. However, the statement released by Citi group suggests that US lender is also considering relocation of its staff and business operations to offices in Frankfurt and Dublin.

Earlier this year, BOE asked banks and other financial institutions to submit their Brexit plans and prepare for all possible outcome including hard Brexit and this has caused quite a frenzy in the financial service industry in the UK with reports suggesting UK finance sector is likely to see nearly 250,000 job cuts if hard Brexit becomes a reality. This is one of the major reasons which has caused top banking service providers to initiate restructuring activity in their UK and European branches.

Source

https://www.financemagnates.com/executives/moves/citis-head-of-euro-swaps-leaves-amid-relocations-to-france/

Trade Deal Optimism Fades, GBPUSD Retreats From Five-Month Highs

October 16, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Brexit, GBPUSD, Sino-U.S. trade talks

Asian Indices ended higher today as global equities sentiment picking up a notch in progress around the Brexit deal. Doubts emerged about the US and China partial trade deal. China wants to proceed with further discussions before signing the phase one trade deal.

Last week, Fed Chair Jerome Powell signalled further interest rate cuts and the resumption of bond purchases. Traders increased their bets that the Fed will slash interest rates at its next meeting in October to protect the economy from slowing growth and the effects of the trade tensions. The Hang Seng index is trading 0.45% higher at 26,620. The Shanghai Composite is 0.21% lower at 2,984, while in Singapore, the FTSE Straits Times is 0.70% higher at 3,138. The ASX 200 in Australia trades 0.80% higher at 6,706.

European indices started lower the day, DAX trading 0.06 lower at 12,624, CAC40 is 0.26 per cent lower at 5,687, while the FTSE MIB in Milan is 0.03 per cent lower at 22,360. In London, FTSE 100 is trading 0.29% lower at 7,189. The UK is scheduled to leave the EU on October 31.

In commodities markets, crude oil trades 0.28 per cent higher at $52.96 as global growth worries weigh on crude. Brent oil is trading 0.26% higher at $58,89 per barrel as oil world supply will be affected by the global slowdown. Gold trades lower at 1,484, as the momentum turns bearish after the price trades below the 50-day moving average. On the upside, strong resistance will be met at 1,555.13 yearly high while support is at 1,458, the recent low.

In cryptocurrencies, Bitcoin (BTCUSD) momentum is neutral now as BTC trades lower at 8,153, hitting the daily low at 8,042 and the daily high at 8,167. Bitcoin short term momentum is neutral now as it trades above the 200-day moving average. Immediate support for BTC stands now at $7,686 recent low, while the next support stands at 7,406 the low from June 2nd. On the upside, strong resistance now stands at 8,801 recent high and then at 9,000 round figure. Ethereum (ETHUSD) trades lower at 178,45 with capitalisation now to 19.55 billion, and on the upside, the immediate resistance stands at 317 high while the support stands at 136 the low from May 6th. Litecoin (LTCUSD) trades lower at 54.27. The crypto market cap capitalization now stands above $222.61 billion.

On the Lookout: Japan Industrial Production (YoY) came in at -4.7% in line with forecasts for August. The Australian weekly consumer confidence came in at 110.9 previous reading was at 112.3.

The central bank of China set the Yuan rate (USDCNY) at 7.0708 versus yesterday’s settlement at 7.0725.

Trading Perspective: In forex markets, USD index trades 0.01 per cent lower at 98.31, the Aussie dollar trades 0.27 per cent lower at 0.6733, while NZDUSD trades 0.36% lower at 0.6270.

GBPUSD Daily Chart

GBPUSD trades 0.23% lower at 1.2750 retreating from five-month highs as we are getting closer to the Brexit deadline. Major support now stands at 1.2078 recent low which if broken, might accelerate the slide further towards 1.20. On the upside, immediate resistance now stands at 1.2636 recent high, while more offers will emerge at 1.2711 the 200-day moving average.

In Pound futures markets open interest increased by 3,500 contracts, volume increased by around 158.200 futures contracts.

EURUSD trades 0.01% lower at 1.1031, as the pair trades for the fifth day out of the descending channel. Immediate resistance for the pair stands at 1.1037, the 50-day moving average, and then at 1.1137, the 100-day moving average. On the downside, immediate support stands at 1.1003 yesterday’s low and then at 1.0835, the low from 2017.

In euro futures markets open interest decreased by 2.500 contracts, the volume also decreased by around 131.300 futures contracts.

EURUSD Daily Chart

USDJPY is trading 0.15% lower at 108.69, having hit the daily low at 108.59 and the daily high at 108.86. USDJPY pair will find support at 104.44 the low from August 23rd. On the upside, immediate resistance for the pair now stands at 108.86 the high from yesterday, and then at 109.06, the 200-day moving average.

In Yen futures markets, open interest increased by 3.300 contracts. Volume increased by around 40,000 futures contracts.

USDCAD is trading 0.09% higher at 1.3210. The pair will find immediate support at 1.3017 the YTD low while extra support stands at 1.30 round figure. On the upside, immediate resistance now stands at the 1.3356 high from September 3rd before an attempt to 1.3450 high from 31st May.

Brexit Deal Nears Completion, Sterling Soars, Risk Rallies

October 16, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, ECB, EUR-USD, Federal Reserve Board, foreign exchange, Forex, FX trading, GBP-USD, Sino-U.S. trade talks, trading platform, USD/JPY

Summary: Sterling soared to its highest level since May, hitting 1.2800 (1.2562 yesterday) on the back of reports that Britain and the European Union were close to a Brexit deal. Speaking in Luxembourg before a crucial meeting with European leaders, chief EU negotiator Michel Barnier said a Brexit deal is still possible this week. On the trade front, Beijing indicated that it wants a pullback in tariffs before China purchases up to US$50 billion of US agricultural products. Risk-on extended for FX with the haven Yen, Swiss Franc, and the US Dollar dipping. The Dollar Index eased 0.17% to 98.286 and rallied against the Yen to 108.90 from 108.38. The Australian Dollar stayed soggy despite the market’s better mood, slipping 0.34% to 0.6752 (0.6777). Latest RBA meeting minutes revealed policymakers are prepared to ease monetary policy to support the economy if needed, despite knowing that doing so could create a housing bubble. The Euro was moderately higher at 1.1035 from 1.1025. USD/SGD edged higher to 1.3705 (1.3695) after MAS eased policy.
Treasury yields rose on the renewed optimism on Brexit. The US 10-year bond yield was up 4 basis points to 1.77%. UK ten-year Gilts yielded 0.69% from 0.63% yesterday. Germany’s 10-year Bund rate was up 4 basis points to -0.42%.

GLOBAL BOND YIELD CHART – Bloomberg – 16 OCT 2019

In the US, the earnings season got off to a good start, lifting Wall Street stocks higher. The US S&P 500 finished 1.03% higher at 2,998 (2,967).
Data releases yesterday took second place to politics. The UK Unemployment rate climbed to 3.9% in September from 3.8% the previous month. Britain’s Average Weekly Earnings (Wages) dipped to 3.8%, missing forecasts at 4%. Germany’s ZEW Economic Sentiment Index improved to -22.8 beating expectations at -26.7. Eurozone ZEW Economic Sentiment also bettered forecasts at -23.5 vs -26.7. Both ZEW Sentiment Indicators were worse than the previous month,

GBP/USD – soared to hit May 2019 highs at 1.2800 before easing to settle at 1.2787, up 1.33%. Fierce short covering in the British currency has seen it rally a total of 4.33% since the beginning of the week. Technically the 1.28 level will take more shorts covering to break up. EU ministers repeatedly said that it is too premature to assume a Brexit deal is imminent.
USD/JPY – The haven Yen weakened 0.42% against the Dollar to 108.88 after hitting a 6-week high at 108.90.
AUD/USD – The Australian Dollar dipped to a low at 0.67426, the weakest this week before settling a touch higher at 0.6752. The latest RBA meeting minutes revealed a more dovish tilt with policymakers willing to cut rates further if the economy weakens.
EUR/USD – the shared currency saw a modest rise to 1.1035 from 1.1025. The Euro would benefit should a Brexit deal materialise.

On the Lookout: Data releases pick up today with the first-tier US Headline and Core Retail Sale reports. Euro area, UK and Canadian Headline and Core CPI reports are also scheduled for release. Meantime New Zealand’s Q3 CPI beat forecasts at 0.7% against 0.6%. NZD/USD jumped from 0.6285 to 0.6320, easing to 0.6310 on the release. Inflation numbers matter to FX markets.

NZ Q3 CPI Chart – Forex Factory – 16 OCT 2019

Several central bank heads will be speaking today. Bank of England Governor Mark Carney is due to address a panel discussion at an IMF event in Washington DC. Chicago Fed President Evans speaks on economic conditions and monetary policy at a conference in Illinois. Bundesbank President Weidman speaks at a function in New York.

Trading Perspective: FX move back to fundamentals with today’s data releases. A done deal on Brexit between Britain and the UK will see the Pound rally against the US Dollar and other weaker rivals. The Euro should also see further gains. Expect cross currency pairs like GBP/JPY, GBP/AUD, EUR/JPY, EUR/AUD to climb further.
The US Dollar is still on the defensive overall and tomorrow we look at the latest market positioning (delayed this week due to the US holiday on Monday).

Sterling Pound Chart – Daily FX – 16 OCT 2019

GBP/USD – Sterling rallied to an overnight and May high at 1.2800. The British Pound faces immediate resistance between 1.2800-30 level. A clean break above 1.2850 could see Sterling back to the 1.3000-1.3200 area. The 4.3% move higher has been the result of some fierce short covering. FX ignored the weaker UK employment report, trading on politics which affected sentiment. A Brexit setback could see Sterling fall just as quickly. Immediate support lies at 1.2750 followed by 1.2710. Look for a volatile trade today with a likely 1.2690-1.2790 range. Just trade the range shag and be nimble on this puppy today.
EUR/USD – The Euro continues to edge higher against the Greenback, finishing up 0.06% to 1.1035 (1.1025). Overnight high traded was 1.10461. Immediate resistance can be found at 1.1050 followed by 1.1080. Immediate support lies at 1.1010 and 1.0990 (overnight low 1.09913). Markets will focus on Euro area and Eurozone inflation numbers due today. Look to buy dips in a likely 1.0995-1.1065 range.

AUD/USD – The Aussie closed 0.34% lower to 0.6753 (0.6775) after the latest RBA meeting minutes revealed a dovish tilt from policymakers. The RBA Board said they were prepared to ease monetary policy support the economy if needed. Economic data will be crucial for the Aussie Battler moving forward. Tomorrow sees the September Australian Employment report. AUD/USD has immediate support at 0.6740 (overnight low 0.67426) followed by 0.6720. Immediate resistance can be found at 0.6780 and 0.6810. Look to trade a likely range today of 0.6740-0.6790.

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