Archives of “October 2019” month

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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

Heads up: Fed chair Powell to speak again later today

  
  Analysis
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In case you missed out on his remarks from yesterday:

Powell

 

For today, he is scheduled to speak at around 1430 GMT (agenda says it is at 1500 GMT though) as he participates in a roundtable session in a Fed Listens event in Missouri.
The event is hosted by the Kansas City Fed so Powell will be joined by Esther George in the discussion, where we will be hearing a range of economic issues, such as labor market conditions, local banking, community development challenges and other topics.
In any case, I wouldn’t expect Powell to deviate from his stance yesterday as he continues to keep all options on the table ahead of the next Fed meeting.
The FOMC meeting minutes release later today as well as US CPI data and US-China trade talks later this week will be more impactful for the dollar and risk in my view.

EU official dismisses earlier report, says “no bold new offer is coming”

  
  Analysis
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Reuters reports, citing an EU official on the matter

Adds that EU diplomats have said that the report is “not true” and have dismissed it as “spin” amid ongoing Brexit negotiations. The Guardian’s Brussels correspondent, Jennifer Rankin, adds to the above claim with a tweet earlier:

“The EU is *not* about to make a big bold offer to allow Stormont to exit part of the Brexit withdrawal agreement, in order to break the Brexit deadlock I hear from EU sources.”

Not like it matters all too much now after we have heard from the DUP on the matter

China reportedly said to propose increased agricultural purchases to ease trade war

  
  Analysis

China is said to propose to purchase an extra $10 mln tonnes of US soybeans

This, in an effort to seek a partial/interim agreement in exchange for the US to put off a new round of tariffs which are due on 15 October, according to the Financial Times.

The report cites people briefed on ongoing negotiations, adds that the Chinese “are ready to de-escalate” and that “Liu He is coming with real offers, it’s not an empty visit”.
The above just adds to the Bloomberg report here but it is continuing to keep risk assets in a good mood for the time being.
Treasury yields are markedly higher with 10-year yields now up by nearly 3 bps to 1.558% while US futures are up by 1% as we move towards European midday.

China reportedly may restrict visas for US visitors with anti-China links

  
Analysis, Politics

Reuters reports

The report cites people with knowledge of the proposed curbs, saying that China is planning tighter visa restrictions for US nationals with ties to anti-China groups.
The proposed move is said to be in the works “for months” already but you can’t help but think that the timing of this leak is a bit ‘convenient’ after US actions this week.
The dollar has inched lower over the past few minutes with cable recovering from 1.2200 to 1.2235 while EUR/USD is up to session highs of 1.0983 currently.
I don’t see this report as being a significant game changer ahead of trade talks but perhaps it is leading to some jitters among weak hands in what has been a quiet session so far.
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