Wall Street suffers biggest weekly fall since March

US indices rebounded Friday but still faced hefty losses in the week. Buoyant earnings reports from some banks on Friday failed to prevent the weekly decline. Warnings from global finance chiefs on the fragile state of the global economy, specifically mentioning the trade war, at an IMF meeting at the weekend have set a gloomy tone to start the week.

US30USD Daily Chart

Source: Oanda fxTrade

• The US30 index saw its biggest weekly decline in more than six months last week despite strong earnings from banks on Friday. More banks report this week

• The index has regained a foothold above the 200-day moving average at 25,136, having failed to close below it on a daily basis since July 5. A weak start suggests this average may be tested again

• US retail sales are expected to have risen 0.5% in September, a faster pace than August’s 0.1%. A stronger number could save the index from too much weakness

DE30EUR Weekly Chart

Source: Oanda fxTrade

• The Germany30 index snapped a seven-day losing streak Friday, but weakness in Asia and US futures could imply a negative open for the index

• The index tested, and bounced off, the 200-week moving average last week. That moving average has supported prices since July 2016

• ECB’s Weidmann said on Friday that slower euro-area growth is not consequence of the trade war, but normalization of expansion

HK33HKD Weekly Chart

Source: Oanda fxTrade

• The Hong Kong33 index looks poised to re-test multi-month lows at the open today. The index hit 25,081 Friday, lowest since May 2017

• Technical support may be found at the 200-week moving average at 25,125. This moving average has supported prices since January 23, 2017

• PBOC governor Yi Gang reiterated at the IMF meeting that the government won’t use its currency as a tool to deal with the trade conflict. He believes that the currency is at a “reasonable and equilibrium” level