Archives of “October 2019” month

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Order flow levels across major pairs.

  
Analysis, Forex
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Orders in the market seen across major pairs

  • Sell orders on NZDUSD on 0.6480/90 and 0.6360/70
  • Sell orders on AUDUSD at 0.6800/10 and 0.6910/20
  • Sell orders on EURJPY at 120.40/50, 118.70/80

and buy orders at 116.20/10

  • Sell orders on USDJPY at 108.70/80, 108.30/40

and buy orders at  106.00/90 and 105.00/90

Sell orders on GBPUSD at 1.2680/90 and 1.2530/40

and buy orders at 1.2000/90

  • Sell orders  on EURUSD at 1.1010/20

Currencies in focus: AUD and NZD strongest against the USD

  
Analysis, Forex

Positive risk tones

In yesterday’s US session the news that China are ready to deal on parts of the agreement both sides agree on gave a risk on tone to the markets.
The mood has continued and AUD and NZD are the strongest currencies on the day against the dollar and the safe havens CHF and JPY are the weakest. So, joining that risk tone direction makes sense this am, keeping an eye out for any negative headlines of course. Optimism is the mood of the moment.
Positive risk tones

Hong Kong leader Lam says cannot say under what circumstances she’d call on China central government

  
Analysis, Politics
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Hong Kong leader Carrie Lam comments from press conference.

  • says there is no bottom line for protesters’ violent acts
  • says amount of visitors during ‘golden week’ fell by 50%
  • appeals to developers and landlords to offer relief to retailers
  • says aims for fair district elections, although current atmosphere is complex
  • says an objective of the anti-mask law is to let youth know not to participate in these political actions
  • she has no plans to use the emergency regulation ordnance for introduction of other laws
  • it is still too early to say if the anti-mask law is ineffective
  • using the emergency powers was a very difficult decision
  • anti-mask law still valid and effective at this time
  • upcoming policy address will not be the “usual comprehensive” address
  • says there is widespread support for the anti-mask law
  • says no foreign government should think these are peaceful protests
  • says believes Q3 economic figures will surely be very bad
  • she did not meet any central govt officials to talk about business while in Beijing for national day holiday
  • says she still feels HK should find solutions on its own, and central govt holds same view
  •  says cannot say under what circumstances Hong Kong would call on central govt

The HKD is on the weak side, but not threatening the band as yet:

Hong Kong leader Carrie Lam comments from press conference. 

Japan Balance of Payment Current Account for August

  
Analysis, Economy

Despite trade woes Japan has inflows from offshore investments.

BoP Current Account Balance Y 2157.7bn

  •  expected Y 2069.5bn, prior Y 1999.9bn

BoP Current Account Adjusted 1720.3bn yen

  • expected Y 1682.1bn, prior Y 1647.1bn

Trade Balance BoP basis 50.9bn yen

  • expected Y 34.6bn, prior Y -74.5bn
As I said in the preview of today’s economic calendar none of the Japanese data was likely to move the yen too much. Which is not an out on a limb forecast by any stretch, I’ll admit. Anyway, yeah. yen barely moving so far. 10 point range or so.

Ahead of the FOMC minutes this week, a forecast of an October rate cut

  
Analysis, US Market
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UBS are citing the US slowdown to potentially arrive sooner than expected

  • Which, they say, opens the door to a Fed funds rate cut in October.
(Federal Open Market Committee meeting is October 29 and 30)
Citing trade tension with China –  a substantial shock to the economy – tariffs causing a slump in private demand
  • tarfifs weakening employment in manufacturing, retail
Following that the bank expects further cuts in:
  • January, March and June 2020
  • And also say that due to the run of recent data there is risk is to the downside for the Fed to cut more.

US stocks end near the lows but give up gains

  
Analysis, US Market
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Early declines still holding the lows

The US stocks are ending the day near, but above) the day’s lows (from earlier in the day) but they gave up gains in the processs in what was an up and down day.
The final numbers are showing:
  • The S&P index fell -13.22 points or -0.45% at 2938.79. The high reached 2959.75. The low extended to 2935.68
  • The NASDAQ index fell -26.181 points or -0.33% at 7956.29. The high reached 8013.316. The low extended to 7942.08
  • The down industrial average fell -95.70 points or -0.36% at 26478. The high reached 26655.84. The low extended to 26424.54

The NASDAQ index closed below its 100 day moving average at 7967.39. The index close back above that MA on Friday. Failure to keep the momentum to the upside going is a disappointment for the bulls.

The S&P index remains above its 100 day moving average at 2928.07, but is closing below its 50 day moving average at 2940.64

China ready to do deal on parts of deal both sides agree on. But tougher issues to be discussed next year

  
  Analysis
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That’s not as good as it sounds

Fox Business reports that China’s commerce ministry told the US it’s prepared to do a deal on the parts of negotiations both sides agree upon. The ministry told Fox they’re prepared to set out a timetable for the harder issues to be worked out next year.
This report has boosted risk trades but it’s not all it seems. US officials — including Trump — have said many times that they want a big deal or no deal.
He said it on TV about 30 minutes ago but it’s moving the market now as it does the rounds. A reader who caught the clip on TV also tells us it wasn’t as positive as the spin that’s coming out.
Of course that can change and the US might be bluffing but I don’t see this being received as unambiguously good news. If anything, the initial market reaction might have it wrong as USD/JPY rises and gold falls.
USD/JPY:
USDJPY
Isn’t this just another way of saying ‘If you like what we’re offering, take it; as for the parts you don’t like, we can talk about those some other time, because we’re not going to discuss those now.’.

Trump warns he will obliterate Turkey if they go offside

  
  Analysis
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Trump talks about his “great and unmatched wisdom”

Another tweet on Turkey:
As I have stated strongly before, and just to reiterate, if Turkey does anything that I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy and obliterate the Economy of Turkey (I’ve done before!). They must, with Europe and others, watch over…the captured ISIS fighters and families. The U.S. has done far more than anyone could have ever expected, including the capture of 100% of the ISIS Caliphate. It is time now for others in the region, some of great wealth, to protect their own territory. THE USA IS GREAT!
The Turkish lira is under pressure today on speculation they will launch offensives into Turkey.
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