DAX +17 points at 13012

FTSE +20 points at 7536

DAX +17 points at 13012

CAC +4 points at 5365

IBEX -4 points at 10211

Asian trading session was quiet. The US dollar was little changed against the G10 majors. The Asian equity markets traded rangebound, as Shanghai’s Composite gained timidly as twice-a-decade China’s Communist Party (CCP) congress kicked off. During his three hour speech, President Xi said that China will let the market play decisive role in resource allocation and be innovative on foreign investments.

European equities are set for a positive open, except the Spanish IBEX.

The US equity futures traded in the green, after the Dow Jones traded above the 23000 level for the first time on Tuesday.

Goldman Sachs dropped more than 2% after the 3Q earnings announcement. Although Goldman’s earnings topped analyst estimates, the warning that investment banking transactions could decline triggered a sell-off. Morgan Stanley gained as its 3Q FICC (Fixed Income, Currencies and Commodities) earnings per share beat estimates (93 cents versus 82 cents expected). American Express, Abbott, Labs, Alcoa, Steel Dynamics and Kinder Morgan will release results today.

The USDJPY consolidated above the 112.00 level, as the US dollar remained in demand on hawkish Federal Reserve (Fed) expectations despite the soft inflation. Decent call options trail from 111.40 to 114.75 at today’s expiry and should provide a support to the greenback against the yen. Political risks prevail in Japan before the October 22 snap election and could prevent many investors from exchanging yen against foreign currencies before the election weekend. Large put options stand at 110.00 as traders remain alert to a sudden yen appreciation before and after the election.

Gold continues its slide as North Korean threat of a nuclear war failed to bring investors back to safe-haven assets. Absence of anxiety could encourage a further slide toward 100-day moving average ($1’275).

In the UK, the pound unexpectedly fell as reaction to the high inflation data. As expected, the inflation in the UK hit 3% in September, but the Bank of England (BoE) hawks remained on the back foot as BoE Governor Mark Carney said that the inflation should “more likely than not” accelerate in the coming months. British households could continue seeing their purchasing power further decline before the economy benefits from the softer pound in terms of improved exports. It is now a certainty that the high inflation requires a BoE rate hike sooner rather than later. Market assesses 80% probability for a November rate hike. This means that the GBPUSD should find buyers at dips. UK unemployement and wages data are due today and is expected unchanged at 2.1% year-on-year in August. A positive surprise could encourage GBP-bulls, given that improved household earnings could facilitate raising rates despite the particularly difficult Brexit setting. On the other hand, a soft figure could underpin the sell-side, boosting expectation that slow wages growth would translate into a softer consumer price inflation sooner rather than later. Intra-day support is eyed at 1.3154 (post-CPI low) before 100-day moving average (1.3091).

The EURUSD rebounded after trading close to the 100-day moving average (1.1730) on Tuesday. Catalan uncertainties are a major bearish driver and the long euro positions are becoming trapped by lower euro yields. Trend and momentum indicators are marginally negative. From a technical perspective, the death cross formation on the hourly chart (50-hour moving average crossing below 200-hour moving average) hints at the possibility of a further slide. Short-term support could be found at 1.1730 (100-day moving average) and 1.1669 (October low). The key support to April – September positive trend stands at 1.1509 (major 38.2% retracement).

The WTI crude consolidated gains above $51.22 (minor 23.6% retrace on August – October rise) after the API data showed 7.13 million barrels contraction in US stockpiles last week. More official EIA data is due today. The consensus is a 4.7-million barrel contraction in last week’s oil inventories versus -2.7 million barrel printed a week earlier. Iraqi tensions give support on the upside and a short-term resistance is eyed at $52.90/53.00 (September high).