Archives of “October 10, 2019” day

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Fed rate cut odds remain heightened amid risk flip flop

  
  Analysis

Odds of a 25 bps rate cut stays at ~82% currently

WIRP 10-10

This has to be put into context, in that on 30 September, odds of a 25 bps rate cut only stood at ~40% so we’re more than double that currently.
However, any news of a partial US-China trade deal will no doubt bring down the above odds rather dramatically and the Fed still has one week to walk back expectations if such an event transpires – if they see fit that is.
The US CPI data release may result in a bit of a push and pull but I wouldn’t look too much into that. It’s all about the outcome of trade talks in Washington right now.

White House says reports of one day trade talks are incorrect

  
Analysis, Politics

USD/JPY retracing some if its earlier losses

  • White House says SCMP report is inaccurate.
  •  “We are not aware of a change in the Vice Premier’s travel plans at this time.”
  • Senior admin official says Liu still scheduled to depart Friday evening, and dinner is on for the delegation Thursday evening in DC.
The cynics amongst us might think that once this White House denies something then that is confirmation ….
More:
  • US official asked if to expect a breakthrough in the trade talks, says Trump has not made up his mind

Japan – Reuters Tankan poll shows manufacturer outlook less pessimistic, service-sector sentiment three-month high

  
  Analysis
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The Reuters Tankan seeks to track the BOJ report. Reuters is monthly, BOJ Tankan is quarterly.

Japanese manufacturers’ business outlook was less pessimistic in October
service-sector sentiment rose to a three-month high
 manufacturers voiced worry about the protracted trade war and slowdown in China’s economy
some Japanese firms do not see the impact of the global slowdown immediately hurting the economy
Sentiment index for manufacturers minus 5,
  • up two points from the prior month’s 6-1/2-year low of minus 7
  • index is expected to minus 6 in January
service-sector index climbed to plus 25
  • from plus 19 in the previous month
  • led by retailers who have likely benefited from consumers rushing to beat the Oct. 1 sales tax which went up to 10% from 8%
Poll of 504 large- and mid-sized companies, in which 248 firms responded
  • conducted Sept. 26 to Oct. 7

HK press says US-China talks are expected to last for only one day! No progress made.

  
Analysis, Politics
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South China Morning Post with the piece saying:

  • US and China make no progress on key trade issues in two days of deputy-level talks, sources say
  • The Chinese delegation refuses to talk about forced technology transfers, a core US grievance in the negotiations, a person with knowledge of the meetings says
  • High-level talks are expected to last for only one day, with Liu He and his team now planning to leave Washington on Thursday
Risk off on this news.
And yen, gold positive

US Indices end higher but late China headlines take some shine off the day’s gains

  
Analysis, US Market

Some of the declines were retraced

The major indices are ending the session with gains but some late day headlines from China that the blacklist announced earlier in the week, has lowered their trade expectations for the trade meetings this week (or so they say). Those meetings will begin tomorrow and are expected to go through Friday.
Although of the highs, the indices have retraced some of the declines from yesterday that saw the NASDAQ index fall -1.67%. The S&P index fall -1.56%, and the Dow fall -1.19%.
Today the closing levels are showing:
  • The NASDAQ index up 79.9 points or 1.02% at 7903.74. The high reached 7930.91. The low extended to 7873.516
  • The S&P index up 26.43 points or 0.91% at 2919.49. The high extended to 2929.32. The low reached 2907.41
  • The Dow industrial average up 181.97 points or 0.70% at 26346.02. The high reached 26424.31. The low extended to 26249.75.
Below is a graphical representation of the high, low and close percentage changes.
Some of the declines were retraced
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