30 Oct: Steady as she goes ahead of the FOMC, due late Wednesday. Australian CPI ahead. UK election; Dec 12th!

By | October 30, 2019

Tuesday has been pretty quiet as traders wait on the FOMC, due later today. Stocks and commodities are flat while in the FX markets the EU currencies have been choppy but without doing a great deal. Even Sterling has been well behaved and seems pretty much exhausted by the never-ending Brexit saga. As I write, it has just been announced that there will be a general election called for December 12th. If Boris Johnson and the Tories win a majority at the pre-Christmas ballot, then he will deliver his Brexit deal. If the Labour Party wins a majority, they will facilitate a second referendum on the UK’s departure from the EU, while, should the Liberal Democrats defy the odds to win a majority, they will revoke Article 50 and cancel Brexit on day 1 of taking office. Chaos! Elsewhere in the FX world, the Aud$ is mildly firmer after being underpinned by growing optimism over a US-China trade deal, but otherwise there has been little activity and most pairs are going to start the day at the same levels as yesterday.

Of other interest, the S&P eased back from a record high to trade unchanged on the day, as traders waded through the heart of earnings season and the latest headlines on a potential trade deal between the US and China. WTI has not done too much and waits on the FOMC as well as the latest EIA Crude Oil Stocks Weekly figures, where stockpiles are expected to have risen by around 500K barrels.

In terms of data, the US consumer confidence fell for a third straight month in October, to 125.9 from an upwardly revised 126.3 in September, and against expectations of rising to 128.0. Pending Home Sales came in better than expected for September at +1.5% for the month as opposed to the expected +0.9%.

Wednesday will be a busy session but it will really be all about the FOMC Meeting, where a 25 bp cut is more or less locked in, but with all the focus to be on whether the Fed will continue to ease or whether they have reached the end of the cycle. In the end, I suspect they will rather sit on the fence and will suggest that further moves will be data driven.

There is plenty of other market moving events before then though, beginning with the Japan Retail Trade for September, the Australian Q3 CPI (exp 0.5%qq, 1.7%yy; Trimmed Mean, 0.4%qq) and September New Home Sales.  Europe will look to the German Unemployment and CPI (CPI, exp 0.00%mm, 1.0%yy; HICP, exp 0.8%yy) and the Economic Sentiment Indicator, Industrial Confidence, Services Sentiment and Business Climate figures for October, while ahead of the FOMC result, the US will also have the ADP Jobs data (exp 120K) and the Preliminary Q3 GDP (exp 1.7% annualised). Have a good day.

Economic data highlights will include:

Wed: Japan Retail Trade, Australian New Home Sales, CPI, German Unemployment, CPI/HICP, EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, US Preliminary GDP, FOMC Meeting/Interest Rate Decision/Press Conference, ADP Jobs data, EIA Crude Oil Stocks Weekly Change, Personal Consumption/Expenditure

Market moves, in brief:

FX: DXY 97.69 (-0.05%)

Bonds: US10Y; 1.837% (-0.50%), German 10Y; -0.353% (-6.27%), UK 10Y; +0.620% (-2.16%), Australian 10Y; 1.191% (+4.73%), NZ 10Y; 1.322% (+9.20 %), China 10Y; 3.282% (-0.26%)

Stock Indices: DJI; -0.06%, S+P; -0.05%, NASDAQ; -0.59%, EUStoxx50; -0.10%, FTSE100; -0.34%, Shanghai Composite; -0.87%,

Metals: Gold $1488 oz (-0.25%), Silver $17.82 oz (-0.17%), Copper $2.6895 lb (+0.24%), Iron Ore $83.26 per tonne (NYMEX) (-7.73%),

Oil: WTI $55.39 pb (-0.59%)

EURUSD: 1.1110
Res  1.1125  1.1140  1.1155
Sup  1.1100  1.1085  1.1070
USDJPY: 108.83
Res  109.05  109.30  109.60
Sup  108.65  108.45  108.20
GBPUSD: 1.2858
Res  1.2880  1.2910  1.2945
Sup  1.2835  1.2800  1.2760
USDCHF: 0.9940
Res  0.9960  0.9975  0.9995
Sup  0.9930  0.9910  0.9890
AUDUSD: 0.6863
Res  0.6870  0.6885  0.6900
Sup  0.6850  0.6835  0.6820
NZDUSD: 0.6355
Res  0.6365  0.6380  0.6395
Sup  0.6335  0.6320  0.6305
S&P.fs: 3034.78
Res  3045.00  3060.00  3075.00
Sup  3030.00  3015.00  3000.00
DJ30.fs: 27031.00
Res  27115.00  27215.00  27320.00
Sup  26960.00  26860.00  26765.00
SPI200.fs: 6695
Res  6720  6740  6760
Sup  6685  6665  6645
XAUUSD: 1488.95
Res  1495.00  1500.00  1505.00
Sup  1485.00  1480.00  1475.00
XAGUSD: 17.82
Res  18.00  18.15  18.30
Sup  17.75  17.60  17.45
WTI.fs: 55.41
Res  56.25  56.90  57.50
Sup  55.00  54.35  53.70