Asian Shares Buoyed By FOMC Minutes
Swissquote Bank Ltd | Oct 09, 2015 06:49AM ET
Market participants were expecting that the hawkish speeches delivered by FOMC members in the aftermath of the September meeting would be reflected in the minutes. There is nothing of the sort! The minutes showed that the Committee wasn’t even close to tightening its monetary policy in September and was still trying to find some common ground concerning the most appropriate timing to start raising rates. In our opinion, the Fed will have to wait at least until March 2016 before starting to talk about raising rates again. Asian bourses cheered the prospect of low interest rate and, more importantly, the fact that the Fed will remain on the side-line in the next few months. The Nikkei 225 climbed 1.49% to 18,411, while the broader TOPIX index rose 2.28%. In mainland China, stock continue to trade higher with the Shanghai Composite and the Shenzhen Composite up 1.26% and 1.43%, respectively. Elsewhere, in Hong Kong the Hang Seng rose 1.39%, in Singapore stocks are up 1.63%, while in India the BSE Sensex 30 added 0.77%.
In the FX market, commodity currencies get a boost from commodity rally and global risk-on sentiment. WTI is approaching its 200dma at around $50.97 per barrel, up almost 35% from its September 24th low of $38.16. Iron ore futures for delivery in January rose more than 4% in the Asian session. Copper is up 2.58%, Gold 0.66%, Silver 0.58%, Palladium 0.97% and Platinum 1.96%.
AUD/USD sent a strong bullish signal when it broke the strong resistance at 0.7280 (high from September 18th). We believe there is still some upside potential. The next resistance can be found at 0.7440, while on the downside a support lies at 0.6939. In New Zealand, the Kiwi jumped more than 7% since September 23rd, reaching $0.6699 in New York yesterday. However, NZD/USD is still trading below the 0.67 psychological threshold.
In Europe, futures are all blinking green on the screen with the DAX up 0.54%, the CAC 40 0.24%, the SMI 0.28%, the FTSE 250 0.94% and the Euro STOXX 600 0.53%. EUR/USD is moving higher this morning on encouraging data from France. Industrial production rose 1.6%y/y in August versus 0.2% expected, while manufacturing production expanded 2.2%y/y versus 1% median forecast. Given the general risk-on environment, we continue to see some upside potential in EUR/USD with 1.15 as the next target.
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Today traders will be watching inflation report from Norway; industrial production from Italy; trade balance from the United Kingdom; unemployment rate and net change in employment from Canada; import price index and wholesale inventories from the US.
Today's CalendarEstimatesPreviousCountry / GMT DE Aug Trade Balance ex Ships 5.4b 5.2b DKK / 07:00 DE Aug Current Account Balance 12.5b 12.2b DKK / 07:00 DE Aug Current Account (Seasonally Adjusted) - 9.3b DKK / 07:00 NO Sep CPI MoM 0.70% -0.10% NOK / 08:00 NO Sep CPI YoY 2.20% 2.00% NOK / 08:00 NO Sep CPI Underlying MoM 0.70% -0.20% NOK / 08:00 NO Sep CPI Underlying YoY 3.00% 2.90% NOK / 08:00 NO Sep PPI including Oil MoM - -4.30% NOK / 08:00 NO Sep PPI including Oil YoY - -10.00% NOK / 08:00 IT Aug Industrial Production MoM -0.30% 1.10% EUR / 08:00 IT Aug Industrial Production WDA YoY 1.40% 2.70% EUR / 08:00 IT Aug Industrial Production NSA YoY - 2.70% EUR / 08:00 BZ oct..07 FIPE CPI - Weekly 0.70% 0.57% BRL / 08:00 AS CANCELLED: ECB's Nowotny Briefs Journalists in Vienna - - EUR / 08:00 UK Aug Construction Output SA MoM 1.00% -1.00% GBP / 08:30 UK Aug Construction Output SA YoY 1.40% -0.70% GBP / 08:30 UK Aug Visible Trade Balance GBP/Mn -£9925 -£11082 GBP / 08:30 UK Aug Trade Balance Non EU GBP/Mn -£3000 -£3461 GBP / 08:30 UK Aug Trade Balance -£2150 -£3371 GBP / 08:30 BZ Oct IGP-M Inflation 1st Preview 1.00% 0.56% BRL / 11:00 CA Sep Unemployment Rate 7.00% 7.00% CAD / 12:30 CA Sep Net Change in Employment 10.0k 12.0k CAD / 12:30 CA Sep Full Time Employment Change - 54.4 CAD / 12:30 CA Sep Part Time Employment Change - -42.4 CAD / 12:30 US Sep Import Price Index MoM -0.50% -1.80% USD / 12:30 CA Sep Participation Rate 65.8 65.9 CAD / 12:30 US Sep Import Price Index YoY -11.20% -11.40% USD / 12:30 CA Bloomberg Oct. Canada Economic Survey - - CAD / 13:00 US Fed's Lockhart Speaks on Economy in New York - - USD / 13:10 US Aug Wholesale Inventories MoM 0.00% -0.10% USD / 14:00 US Aug Wholesale Trade Sales MoM -0.40% -0.30% USD / 14:00 CA 3Q Business Outlook Future Sales 4 8 CAD / 14:30 CA 3Q BoC Senior Loan Officer Survey - 1.4 CAD / 14:30 US Fed's Evans Speaks on Monetary Policy in Milwaukee, WI - - USD / 17:30 CH Sep Foreign Direct Investment YoY CNY - 22.00% CNY / 22:00 EC ECB Officials Attend IMF Annual Meetings in Lima - - EUR / 22:00
Currency Tech
EUR/USD
R 2: 1.1561
R 1: 1.1330
CURRENT: 1.1305
S 1: 1.1017
S 2: 1.0809
GBP/USD
R 2: 1.5659
R 1: 1.5383
CURRENT: 1.5366
S 1: 1.5089
S 2: 1.4960
USD/JPY
R 2: 125.86
R 1: 121.75
CURRENT: 120.15
S 1: 118.61
S 2: 116.18
USD/CHF
R 2: 1.0240
R 1: 0.9903
CURRENT: 0.9644
S 1: 0.9513
S 2: 0.9259
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