The G-10 rundown
USD – the Friday US jobs data failed to confirm the weakness in other data, extending the suspense on when the Fed will slash rates more aggressively. Meanwhile, the market awaits the direction of US-China trade talks and the October 30 FOMC meeting, where the Fed will need to lay out its intentions for balance sheet operations.
EUR – the euro gaining some support, perhaps, by the general sense that the ECB is at the end of its road policy wise, but would make more of a point on a solid close above 1.1000 in EURUSD and really needs to bull up through 1.1075-1.1100 to get something started technically.
JPY – Japan’s leading indicators looking very ugly as the market frets the economic damage from the sales tax hike and suspects that the BoJ is warming up for more policy action at its meeting at the end of the month, though we fail to see where the BoJ thinks it can gain leverage over the situation..
GBP – will Johnson cave on his “no extension” vow or will he provoke a constitutional crisis with Parliament by trying to allow a No Deal to unfold? His negotiating position with the EU seems so far from what the latter finds acceptable to believe that a Deal rabbit can be pulled from the hat before the end of the month.
CHF – the Swiss franc tried to get interesting recently as the EURCHF rally didn’t fit with the general backdrop – but this never developed and the pair is stuck in limbo, with the franc perhaps finding a bid at the margin on Brexit concerns ratcheting higher again.
AUD – the AUDUSD is dead in the water ahead of US-China trade talks. Watching the Australia Oct. Consumer Confidence reading tonight with interest, as confidence readings are most closely correlated with the labour market, the RBA’s chief area of concern.
CAD – so far we have seen zero follow through higher in USDCAD after the recent snapback rally as the pair has failed to break the top of the range. Heavier Canadian data calendar through the end of this week, including Friday’s jobs report.
NZD – scoping out levels for re-entry in long AUDNZD positions – real value doesn’t show up until 1.0600 or even a bit lower (200-day moving average currently just below 1.0550) unless we see isolated negative NZ developments.
SEK and NOK – the Scandies looking doubly weak because the backdrop has been otherwise nominally supportive over the last couple of sessions. Both countries report September CPI levels on Thursday.
Upcoming Economic Calendar Highlights (all times GMT)
- 0900 – Norway Norges Bank’s Governor Olsen to Speak
- 0930 – ECB’s Lane and others to Speak
- 1215 – Canada Sep. Housing Starts
- 1230 – US Sep. PPI
- 1735 – US Fed’s Evans (Voter) to Speak
- 2330 – Australia Oct. Westpac Consumer Confidence