FTSE -3 points at 7530

FTSE -3 points at 7530

DAX +8 points at 12978

CAC +3 points at 5365

IBEX +8 points at 10286

The US dollar is softer against the G10 majors as the Federal Reserve (Fed) minutes showed concerns about the low inflation on Wednesday. Some FOMC members are willing to wait for a stronger evidence of rising inflation to carry on with the rate hikes. The probability of a December rate hike is slightly down to 76.7%. The US 10-year yields give toppish signs near 2.35%.

The Dow Jones traded at a new record of $22’872.89 on Wednesday, while Asian traders lacked appetite for the US equity futures in the overnight session. In the absence of anxiety, traders remain buyers despite intra-Republican controversies on Donald Trump’s fiscal plans.

The US earnings season start today. Citigroup and JP Morgan Chase are among stocks in focus today.

Nikkei (+0.45%) and Topix (+0.26%) consolidated gains in Tokyo, as Korean Kospi index closed on a record high for the second consecutive day.

Risk appetite and toppish US yields give a hand to the gold market. Gold is gathering momentum to test the $1’297/1’300 offers (50-day moving average / major 38.2% retrace on July – September rise), though the precious metal lacks the support of safe-haven investors at the moment.

The USDJPY stagnates above the 112.00 mark. The lack of a positive boost in USD, combined to the Japanese uncertainty on the run up to the October 22 snap election hold traders back from a directional move. PM Shinzo Abe’s main rival Yuriko Koike is no longer running for the election, increasing Abe’s chances to come out stronger posterior to October 22. Abe’s rule involves ultra-loose monetary policy, massive government spending and a planned increase in sales tax. As a results, the so-called Abenomics is negative for the yen in medium-to-long term. In the short-run, the 112.25/112.00 could be a pivot. Light put options stand at this area at today’s expiry.

The Aussie gained in Sydney as home loans and investment lending beat estimates in August. AU 10-year yields came under pressure following the nation’s largest ever bond sale, yet the softer US yields appear to compensate for the downside pressure on the rate differential. The AUDUSD broke above the 0.78 handle and is paving its way toward the 100-day moving average (0.7853) and October high (0.7875).

The WTI futures rebounded lower from $51.60 on Wednesday after the weekly API data showed a surprise rise in the US stockpiles. The more official EIA data is due today. Analysts expect 1.9-million-barrel contraction in last week’s inventories, but the recent API data suggests there could be an unexpected build on last week's US inventories. Higher oil inventories would dent the buy-side appetite. Support is eyed at $50/barrel, resistance is presumed at $52.90 (September high).

The GBPUSD extends gains. The golden cross formation (50-hour moving average crossing above 200-hour moving average) on hourly chart is encouraging for a further rise. The pair is testing the critical Fibonacci resistance at 1.3268 (major 38.2% retrace on September – October decline), if surpassed should indicate a short-term bullish reversal. The next target could be found at 1.3340 (50% level / 100-week moving average). Large call options stand at 1.3350/1.3400 at today’s expiry. The UK politics remain the major downside risk to the actual pound appreciation, yet outstanding options suggest that traders are mainly hedged for a slide below 1.31/1.30 area.

The FTSE 100 bumped into the 7550p resistance on Wednesday. The DAX (+0.17%) and the CAC (-0.02%) remained rangebound despite the relief rally on Spanish stocks. European markets look for a flat start on Thursday.

The EURUSD took over the 50-day moving average (1.1860) on relief that Catalonia suspended the declaration of independence. Spanish PM Mariano Rajoy asked for more clarity, while keeping his position clear: Spain will not negotiate the Catalan independence and is ready to take measures to suspend Catalonia’s autonomy if Catalonian President Carles Puigdemont insists on independence. Catalonia is given time until Monday to pronounce its verdict on independence. Uncertainty looms, but the Catalan independence deal seems harder to be sealed as time goes by. EUR-traders have been showing little-to-no sign of anxiety to the Catalan crisis. IBEX closed 1.34% higher on Wednesday.