|

Today's Market Themes: Lower Chinese forecasts weigh on mood, services data awaits

What you need to know today:

  • Chinese Premier Li Keipand announced a growth target of 6-6.5%, another downgrade after the 6.6% level in 2018, the lowest in 28 years. The news weighs on the market mood.
  • Optimism prevails on reaching a trade deal between the US and China, but this is mostly priced in.
  • Brexit negotiations continue in Brussels with UK Brexit Secretary Barclay and Attorney General Cox meeting Chief EU Negotiator Barnier. 
  • Bank of England Governor Mark Carney will testify about Brexit, inflation, and the economy. 
  • Services PMI data is due all over the world with the US ISM Manufacturing PMI standing out. A minor bounce is projected in the forward-looking gauge for the largest sector, which also serves as a hint toward the Non-Farm Payrolls. Services PMI preview
  • The Reserve Bank of Australia left rates unchanged but made a dovish shift, weighing on the Aussie.

Euro-zone:

  • French President Emmanuel Macro called for a "renaissance" for the 19-country bloc as it limps from crisis to crisis.
  • Euro-zone services PMI data are projected to show that Italy and France suffer from a contraction in these sectors, while Germany and Spain are doing well.
  • The Sentix Investor Confidence beat expectations but remained in negative territory at -2.2 points.

UK:

  • The Services PMI is forecast to show stagnation in the UK's largest sector amid Brexit uncertainty.
  • The Construction PMI slipped to 9.5 points, indicating contraction.
  • The eurosceptic European Research Group faction in the Conservative Party has hired a group of top lawyers to examine any changes to the Brexit deal.

 US:

  • Boston Fed President Eric Rosengren will speak later in the day.
  • House Democrats have launched a broad investigation in President Trump's dealings, asking for documents from 81 people, including the President's sons.
  • Construction Spending disappointed with a drop of 0.6% in December. This is expected to push GDP estimates lower.

China:

  • The Caixin Services PMI disappointed with 51.5 points.

Australia: 

  • RBA Governor Lowe will speak about the housing market at the wake of the Asian session.
  • Australian GDP is set to bounce but remain below the Q1 and Q2 levels.

Author

Yohay Elam

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

More from Yohay Elam
Share:

Editor's Picks

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold holds above $4,000/three-month low as Fed hike bets and firm USD cap upside

Gold struggles to capitalize on its modest recovery from levels below the $4,000 psychological mark, or a three-month low set earlier this Friday, and retains a bearish tone through the first half of the European session. Federal Reserve officials recently signaled there is no urgency to raise interest rates. Traders, however, are still pricing in around an 80% chance that the US central bank will raise borrowing costs again at its December policy meeting.

Bitcoin, Ethereum, and Ripple rebound as major support levels cap recent sell-off

Bitcoin, Ethereum and Ripple rebound modestly on Friday after correcting and testing their key support zone the previous day. BTC holds the 50-day EMA, ETH finds support around the 100-day EMA, while XRP holds the horizontal floor near $1.300. The price action of these top three cryptocurrencies suggests a recovery if this critical support zone holds; a decisive close below these levels suggests a deeper correction.

US S&P Global PMI expected to show moderating business activity in October

The United States S&P Global preliminary Purchasing Managers Indices for October will be released on Friday, providing fresh insights into the health of the world's largest economy ahead of next week's Federal Reserve monetary policy meeting. The report includes the Manufacturing PMI, Services PMI and Composite PMI, which measure business activity across the private sector.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.