• Risk-on mood emerged at the end of the session amid optimism over a Brexit deal and strong U.S. earnings, despite renewed concerns over global growth.Concerns over global growth were supported by the IMF decision to cut again its 2019 global growth forecast from 3.2% to 3% to its slowest pace in a decade underpinned by trade tensions. Meanwhile, its 2020 estimate fell by 0.1% to 3.4%.
  • On the data front, the ZEW figures suggested a persistent weakness in the German economy. Investors confidence in Germany’s economic outlook continued to worsen in October to its lowest level since April 2010, although less than estimated (-22.8, consensus -26.4, previous -22.5), while the assessment of the current situation was more pessimistic than expected (-25.3, consensus -23.6, previous -19.9). Moreover, the Chinese producer price index continued to fall in September as estimated (-1.2% YoY, consensus -1.2% YoY, previous -0.8% YoY), whereas its CPI remained strong led by a surge in pork prices (3% YoY, consensus 2.9% YoY, previous 2.8% YoY).
  • The kick off of the US 3Q19 company earnings started on the right foot, with a bunch of companies beating earnings estimates, offsetting some growth concerns. The outlook for the S&P500 3Q19 earnings was low, with the consensus estimating 3% YoY decline
  • The sovereign bonds market was steady until the end of the session, although European yields surged on optimism over a Brexit deal (10Y GER yield +4bps, 10Y UK yield +6bps). The 10Y UST bond yields also benefited from hopes of a Brexit deal, trimming early losses (10Y US +2bps). Separately, tensions in money market rates slightly re-emerged, with U.S. general collateral repo rising to 2.05% from 1.896% in response to a large Treasury coupon settlement. Nonetheless, the US money markets strains should be limited by the Fed’s liquidity provision. On the other hand, James Bullard backed another Fed interest rate cut, supporting current market expectations that price in 68% probability of a rate cut in October.
  • The sterling was volatile during the session amid Brexit developments. The GBPUSD resumed its rally to a 3- month high (+0.9%), outperforming its G10 peers, on the back of Barnier’s comments that a Brexit deal is still possible this week, with both sides targeting a deal by midnight. However, the GBPUSD 1M implied volatility rose near to a year-high. The euro slipped 0.1% against the USD led by the weak ZEW figures in Germany, while safe-haven currencies slipped (USDJPY -0.4%, DXY index -0.1%). Regarding EM currencies, the Turkish lira led the gains (USDTRY +0.7%) as both U.S. and EU sanctions over Turkey were softer than investors had feared. Meanwhile, LatAm currencies depreciated (LACI index -0.4%) given the uncertainty of recent trade talks, alongside the yuan (USDCNY -0.2%) driven by the risk of deflation in China.
  • Equity markets soared with both the U.S. and European banking sector outperforming driven by investors risk appetite. Turkish stock trimmed partially yesterday’s sharp decline (BIST 100 +1.4%).

Download The Full Market Comment

En ningún caso BBVA será responsable de las pérdidas, daños o perjuicios de cualquier tipo que surjan por acceder y usar el website, incluyéndose, pero no limitándose, a los producidos en los sistemas informáticos o los provocados por la introducción de virus y/o ataques informáticos. BBVA tampoco será responsable de los daños que pudieran sufrir los usuarios por un uso inadecuado de este website y, en modo alguno, de las caídas, interrupciones, ausencia o defecto en las telecomunicaciones.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex Analysis

Editors’ Picks

EUR/USD hits highest since March amid US protests, European reopening

EUR/USD has jumped above 1.1150, trading at the highest since March. Protests in the US are grabbing the headlines and marginally supporting the dollar. European countries continue reopening their economies amid falling coronavirus statistics. 

EUR/USD News

GBP/USD resumes rally amid Brexit optimism, dollar weakness

GBP/USD is trading above 1.2550, extending its gains. Reports about British readiness to compromise in Brexit talks, conditioned on EU concessions, is helping boost the pound. US protests are eyed.

GBP/USD News

Bitcoin is three steps away from $14000

Bitcoin joins the list of bullish breakouts and leaves the relative highs at $14000 as a clear target in the short term. Ethereum continues to gain market share and sets the price level of $300 as a goal in the short term.

Read more

Gold trades with modest losses around $1735 level, downside seems limited

Gold traded with a mild negative bias through the early European session and was last seen hovering near the lower end of its daily range, around the $1735 region.

Gold News

WTI sits at three-month highs near $36.50 ahead of Russia’s decision, API

WTI (July futures on Nymex) broke its bullish consolidative phase to the upside in the European session and clinched fresh three-month highs at 36.48.

Oil News

Forex Majors

Cryptocurrencies

Signatures