Market Brief
Three noteworthy events defined yesterday’s FX markets; first off the BoE indicated a unanimous 9-0 vote had supported the decision not to expand QE at the most recent meeting, sending GBP soaring higher amongst the majors (GBPUSD has hit a high of 1.6637 so far). The statement elaborated that the MPC saw no compelling reason to change the bond plan for now, but added the November meeting would provide an opportunity to assess more fully.
The second important driver of FX markets were earnings releases, notably Morgan Stanley and Wells Fargo who both trumped analyst forecasts, and sent equity markets surging higher. As usual, the positive gains in equity markets translated into an infectious sense of positive risk appetite which sent the USD spiralling lower to fresh lows (DXY as low as 74.94), and thus triggered the third key landmark, EURUSD finally breaking above the 1.5000 level. However far from being the explosive burst towards 1.5350 some bulls may have hoped for, EURUSD seemed to tread very tentatively in this new territory; it has thus far only pushed as high as 1.5046, and spent most of the remaining time consolidating in and around the 1.5000 level.
Overnight, equity markets are lower across Asia after China GDP showed the economy grew 8.9% YoY in Q3; slightly below the median estimates for 9.0%, but still at levels which seem compelling enough for stimulus measures to be soon withdrawn. China’s cabinet signalled they would still maintain stimulus measures for now, but noted that inflation concerns would be an increasing focus of policy-making going forward.
Today the economic calendar has a number of key focal points; the first will be the Riksbank rate announcement where it is widely anticipated rates will be kept on hold at 0.25%. Most focus will be on the likelihood of another 12-month fixed tender of SEK 100bn, but if this does not materialize it will likely be a positive for the currency. Swedish Unemployment Rate follows soon after, and later in the morning we get UK Retail Sales and Eurozone Current Account, before Canada Retail Sales and US Claims data round out the afternoon.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 10'267.17 | -0.64 |
| Hang Seng Index | 22'082.29 | -1.06 |
| Shanghai Index | 3'059.29 | -0.37 |
| FTSE 100 Index | 5'257.85 | 0.28 |
| DAX Index | 5'833.49 | 0.37 |
| SMI Index | 6'434.66 | 0.11 |
| S&P future | 1'077.40 | -0.06 |
| World Markets | Current Level | % Change |
| Gold | 1'057.40 | -0.15 |
| Silver | 17.6 | -0.51 |
| VIX | 22.22 | 6.32 |
| Crude wti | 80.94 | -0.53 |
| USD Index | 75.3 | 0.25 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Riksbank Interest Rate announcement Oct | 0.25 | 0.25 | SEK/07:30 |
| Unemployment rate, % Sep | 8.3 | 8 | SEK/07:30 |
| Current account, € bn (sa) Aug | 4.5 | 6.6 | EUR/08:00 |
| Retail sales, % m/m (y/y) Sep | 0.5 (2.8) | 0.0 (2.1) | GBP/08:30 |
| Government debt/GDP ratio, % 2008 | 69.3 | 69.3 | EUR/09:00 |
| Canada: Retail sales, % m/m Aug | 0.4 | -0.6 | CAD/12:30 |
| Initial jobless claims, thous 17-Oct | 515 | 514 | USD/12:30 |
| Continuing Claims, thous 10-Oct | 5970 | 5992 | USD/12:30 |
| Leading indicators, % m/m (y/y) Sep | 0.8 (2.7) | 0.6 (1.9) | USD/14:00 |
Currency Tech
AUDUSD
R 2: 0.9475
R 1: 0.9345
CURRENT: 0.9220
S 1: 0.9115
S 2: 0.8985
USDCAD
R 2: 1.0650
R 1: 1.0560
CURRENT: 1.0495
S 1: 1.0240
S 2: 1.0129
EURJPY
R 2: 137.87
R 1: 137.10
CURRENT: 136.95
S 1: 133.33
S 2: 132.25
USDMXN
R 2: 13.330
R 1: 13.175
CURRENT: 12.955
S 1: 12.767
S 2: 12.620
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
