The US$ is mixed on Wednesday, with the main action being seen in Sterling which marched strongly higher ahead of tomorrow’s BOE Meeting at which the first rate hike in 10 years is widely expected. In other markets, US stocks are firm while the metals are heavy, but within a tight range. WTI is chopping around at new 7 month highs, made during the session after the release of the API Weekly Crude Oil Stock Inventory showed a decline in inventories of 5.087 mio barrels.
In terms of data, the Euro lacked direction after some mixed economic figures that showed some solid growth but sluggish inflation. The EU Q3 GDP growth slowed to 0.6% qq, down from upwardly revised 0.7% qq but beating expectation of 0.5% qq. The annualised growth expanded by 2.5%, the highest since 2011. EU unemployment rate dropped to 8.9% in September, beating expectation of 9.0%, the lowest level in nearly 9 years, since January 2009.Headline CPI slowed to 1.4% yy in October, down from 1.5% yy and missed expectation of 1.5% yy. The Core CPI slowed to 0.9% yy, down from 1.1% yy and below expectation of 1.1% yy. .From the US, the employment cost index rose 0.7% in Q3, in line with expectation, and in annualized terms, by 2.5%, a nine-year high. The S&P Case-Shiller 20 cities house price rose 5.9% yy in August, while the Chicago Purchasing Managers Index came in at 66.2, well above expectations of 61.0.
Wednesday will begin with the NZ employment figure forQ3 (exp 4.7%, Change +0.8%, PR 70.2%) and then we have the Nikkei Mfg PMI and the Caixin China Mfg PMI. After that, with much of Europe on holiday (all saints day), there is nothing, except the UK Mfg PMI, until the US session, when the ADP (exp 225K), the ISM Mfg PMI/Prices Paid and the FOMC Meeting/IR Decision will be released. No change is expected this month ahead of the increasing chance of a Fed rate hike next month. Also note that the BOEs Cunliffe will be speaking and traders will be look for a hint as to a possible rate hike on Thursday.
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|ASX SPI: 5908|