Macro events & news for November 04, 2015

4 November, 2015

FX News Today

The euro has been heavy, with EUR-USD ebbing to the lower 1.09s in the wake of dovish remarks from ECB boss Draghi after the European close yesterday, who said that the central bank will use all instruments, if warranted. While nothing new, his comments bring into relief the contrast with the Fed’s bias. Upcoming Fed speakers are likely to leave the door open for a possible tightening in December. The AUD remained buoyant, lifted today by healthy Australian retail sales data, which were up 0.4% m/m in September, and news that Australia’s trade deficit had shrunk more than expected in September on the back of a 3% gain in exports. The trade numbers prompted economists to upwardly revision Q3 GDP forecasts. AUD-USD posted a one-week high at 0.7224.

ECB’s Draghi struck a relatively balanced tone in his afterhours speech, expressing confidence that the bank will meet its price stability mandate; neither too high nor too low. He continued to back the success of the asset purchase program in supporting credit for firms and households. He also reiterated that the governing council “is willing and able to act by using all the instruments available within its mandate if warranted,” which was interpreted on the dovish side (with euro dipping to session lows). Draghi also remained concerned over EM growth prospects and other external factors that could impact growth and inflation. He promised to reevaluate the level of accommodation in December.

China’s services PMI (Caixin) improved to 52.0 in October from 50.5 in September. The Caixin composite PMI improved to 49.9 in October from 48.0. The Caixin manufacturing PMI, released earlier this week, showed an improvement to a still contractionary 48.3 in October from 47.2 in September. The official manufacturing PMI was 49.8 in October, matching the 49.8 in September. Overall, the October PMIs show a still shrinking manufacturing sector alongside a more upbeat service sector.

Main Macro Events Today

EMU Oct Services PMI. The final services reading is expected to be confirmed at 54.2 (med same), which after the upward revision to the manufacturing PMI at the start of the week leaves the composite with a risk to the upside. Economic activity continues to expand and national readings show more broadly balanced growth than last year, which means so far the ECB’s central scenario of a continuing modest recovery remains intact, although the risk from the external side are rising, especially as consumers, which have been propping up domestic demand, are also starting to get concerned about the general economic outlook.
ADP Employment Change. We expect a 180k October ADP rise that tracks our 180k private and 190k total payroll forecasts, following a likely trimming of the 186k September rise toward the lean 118k private payroll increase in that month. We expect a mining-restrained 15k rise in October goods employment with a 20k rise for construction and a flat factory figure, alongside a 165k climb for service sector jobs.
US Non-Manufacturing ISM. The October service sector ISM is out today to close out the October measures of producer sentiment. We expect the headline to tick up to 57.0 (median 56.5) from 56.9 in September. Other measures of producer sentiment for the month have been weaker and the ISM ticked down to 50.1 from 50.2 in September. Overall, the ISM-adjusted average for the month looks poised to decline to 49 from 50 in September.
The Fed Chair Yellen speech.

Source link  
US reports revealed modest upside surprises for December trade

Asian stock markets mostly moved higher overnight, with Nikkei and Topix was trading close to levels last seen in December 2015 as the Yen weakened...

The global stock rally continued in Asia overnight

Reuters reported, the fast-growing financial technology (Fintech) sector could hold big “systemic risks” for the banking sector and the broader economy which need to be addressed by bank regulators around the world, Bank of England Governor Mark Carney said on Wednesday...

Too-strong a dollar may hurt the economy

Japanese stock markets moved higher, led by Japanese bourses as the country managed to snap a 14-month long run of falling exports, which helped the Nikkei to close with a 1.4% gain...

Dollar found its feet after declining over the last day

Asian stock markets were mixed overnight, with Japanese bourses still under pressure (Nikkei closed down 0.55%). despite a dip in the Yen, as USD stabilised. Uncertainty over Trump’s regulatory and trade policies continues to weigh on investor sentiment...

The dollar has settled moderately lower

Asian stock markets were mixed overnight, after U.S. and European shares closed in the red Thursday. Japan and mainland China bourses managed to move higher (Chinese GDP beat expectations at 6.8%)...

Stock markets continued to stabilise

German HICP confirmed at 1.7% y/y, as expected, with prices up 1.0% m/m. The sharp acceleration from just 0.7% y/y in November was mainly due to base effects from lower energy prices and the breakdown showed that prices for heating oil jumped 21.9% y/y in December...

ECB policy was focused on avoiding deflation trap

Asian stock markets were mixed, with Japan and ASX heading south amid reports that U.K. Prime Minister May will announce plans for a hard Brexit at today’s keynote speech. Yen strength is also continuing to put pressure on the Japanese markets...

U.S. markets are closed Monday

U.S. markets are closed Monday for Martin Luther King Day. This will be a busy week for traders, with the inauguration of president-elect Trump on Friday headlining...

The dollar is trading softer into the London open

Aftershocks from President-elect Trump’s campaign-like press conference, which had weighed on global stock markets and yields started to recede late in the U.S. session and U.S. equities managed to recover part of their losses...