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Australia NAB business confidence rose to -10, conditions rose to -4

    By
    ActionForex.com
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    Australia NAB Business Confidence rose to -10 in Q3, up from Q2’s -15. Business Conditions improved markedly. Current situation rose from -26 to -4. Conditions for next 3 months rose from -22. to -3. Conditions for next 12 months turned positive from -8 to 13.

    Looking at some more details, Employment rose from -29 to -14. Employment for next three months rose from -14. to -2. Employment for next 12 months turned positive, from -12. to 5. Trading turned positive from -25 to 2. Profitability rose from -25. to -1.

    Alan Oster, NAB Group Chief Economist: “The Q3 survey conducted from mid-August to mid-September shows that conditions had improved notably from Q2 reflecting the opening up of the economy and generally better expectations about the virus. That said, despite the strong gains, both conditions and confidence remain very weak”.

    “As the economy opens up and the recovery unfolds business confidence will be an important factor in determining how quickly things can get back to normal. While uncertainty will likely remain elevated at the global level, opening up state borders and at least reaching a COVID-normal domestically will be important for further gains in confidence” said Oster.

    Full release here.

    New Zealand ANZ business confidence rose to -15.7, mix of ups and downs

      By
      ActionForex.com
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      New Zealand ANZ Business Confidence rose to -15.7 in October, up from September’s -28.5. That’s slightly below October’s preliminary reading of -14.5. Confidence was best in construction at 12.5 and worst in agriculture at -50.0. Own Activity outlook turned positive to 4.7, up from -5.4. Activity was positive in all (including retail, manufacturing, construction and services), except agriculture at -4.0.

      ANZ said: “There was a mix of ups and downs – it’s no longer true to say that business activity and sentiment indicators are bouncing strongly across the board. We do expect businesses to face some tougher times as the cushioning impact of the wage subsidy fades, but our best guess is that it’ll take at least a month or two to be felt. For now, the levels are encouragingly robust, on the whole.”

      Full release here.

      DOW targeting 26537 support after gap down

        By
        ActionForex.com
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        DOW gapped lower today and hit as low as 26579.14 so far. The decline then slowed as seen in 10-min chart. But that shouldn’t be taken as indication of bottoming yet. A break above today’s high (the lower end of the gap) at 27102.14 is needed to be the first sign of stabilization. Meanwhile, break of 27370.16 support turned resistance is needed to indicate short term bottoming. Otherwise, further fall should be seen to 26537.01 next.

        As we noted before, current fall is, for now, seen as the third leg of the consolidation pattern from 29199.35. Break of 26537.01 might be seen as completing a double top reversal pattern. But we believe the key support lies in cluster at 24971.03, which is close to 25000 psychological level, and more importantly 38.2% retracement of 18213.65 to 29199.35 at 25002.81.

        This could be the 25000 cluster could be the level to test as reaction to US election results. As long as it holds, rise from 18213.65 should be still in position to resume, probably rather quickly. But sustained break will open up the way for near term bearish reversal.

        US oil inventories rose 4.3m barrels, WTI decline in progress for 36

          By
          ActionForex.com
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          US commercial crude oil inventories rose 4.3m barrels in the week ending October 23, larger than expectation of 1.5m. At 492.4m barrels, inventories are about 9% above the five year average for this time of year. Gasoline inventories dropped -0.9m barrels. Distillate dropped -4.5m barrels. Propane/propylene rose 100k barrels. Commercial petroleum dropped -3.9m barrels.

          WTI crude oil hits as low as 36.92 so far. Fall from 41.62 is still in progress despite stronger than expected but brief recovery earlier in the week. Outlook is unchanged that such fall is seen as the third leg of the pattern from 43.50. Deeper decline should be seen to 35.98/36.50 support zone first. Break will confirm and target 100% projection of 43.50 to 35.98 from 41.62 at 34.10, which is close to 34.36 structural support. For now, we don’t expect a firm break there.

          BoC stands pat, no rate hike until into 2023

            By
            ActionForex.com
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            BOC kept overnight rate unchanged at effective lower bound of 0.25% as widely expected. Rate will be kept there “until into 2023” when economic slack is absorbed to sustain inflation above 2% target.

            The QE program is recalibrated to shift towards “longer-term bonds” while total purchases to be lowered to at least CAD 4B a week. The Governing Council judges that “with these combined adjustments, the QE program is providing at least as much monetary stimulus as before.”

            Canadian economy’s rebound in employment and GDP was “stronger than expected” and it’s now “transitioning to a more moderate recuperation phase”. Q4 growth is expected to “slow markedly” due to rising coronavirus cases. 2020 GDP is expected to contract around -5.5%, then grow by almost 4% on average in 2021 and 2022. “Considering the likely long-lasting effects of the pandemic, the Bank has revised down its estimate of Canada’s potential growth over the projection horizon.”

            CPI is expected “stay below” target “until early 2021″. Core inflation is ” consistent with an economy where demand has fallen by more than supply.”/ Inflation is expected to “remain below target throughout projection horizon.

            Full statement here.

            In the latest projections in BoC’s monetary summary report, GDP forecast for 2020 was revised up. 2021 and 2022 GDP forecasts are revised down. CPI inflation projections are largely unchanged.

            US goods trade deficit narrowed to USD -79.4B, small than expected

              By
              ActionForex.com
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              US goods exports for September rose USD 3.2B from August to USD 122.0B. Imports of goods dropped USD -0.5B to USD 201.4B. Goods trade deficit narrowed by -4.5% mom to USD -79.4B, smaller than expectation of USD -85.0B.

              Full release here.

              Gold heading back to 1872 supports as European stocks tumble

                By
                ActionForex.com
                -

                Yen and Dollar surges broadly as European stocks tumble sharp on the come back of coronavirus. At the moment, FTSE is down -1.77%> DAX is down -3.25%. CAC is down -3.07%. DOW future is also down nearly -500 pts.

                Gold drops back below 1900 handle today, following the rally in Dollar. While it’s essentially still range bound, focus is back on 1872.85 support. Firm break there will suggest that whole corrective pattern from 2075.18 high is extending with another leg through 1848.39 low.

                EU launches new measures as coronavirus situation is very serious

                  By
                  ActionForex.com
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                  European Commission launches a new set of actions to curb the spread of coronavirus as Europe becomes the epicenter of the outbreak again. The measures range from securing essential supplies, increasing testing capacities, contact tracing, informatoin flows and communications, to easier essential and safe travel.

                  President of the European Commission, Ursula von der Leyen, said: “The COVID-19 situation is very serious. We must step up our EU response. Today we are launching additional measures in our fight against the virus; from increasing access to fast testing, and preparing vaccination campaigns to facilitating safe travel when necessary. I call on Member States to work closely together. Courageous steps taken now will help save lives and protect livelihoods. No Member State will emerge safely from this pandemic until everyone does.”

                  https://twitter.com/EU_Commission/status/1321418273561415685/photo/1

                  Full release here.

                  DIW: Second wave of coronavirus threatens to stifle German economy upswing

                    By
                    ActionForex.com
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                    Germany’s DIW institute warned that second wave of coronavirus infections “has arrived” and “threatens to stifle the economy upswing”. After growing around 6% in Q3, further prospects are “gloomy considerably”. DIW economic barometer for Q4 dropped from 122 pts to 105 pts.

                    “The upswing will very likely be slowed down significantly,” says DIW economic chief Claus Michelsen. “There are again the threat of sharper restrictions on social and economic life – the pandemic is taking consumers and companies away from confidence. And that at a time when many companies are still struggling with the consequences of the lockdown in spring and have hardly any financial reserves”.

                    Full release here.

                    CAD/JPY accelerating downwards as BoC awaited

                      By
                      ActionForex.com
                      -

                      Canadian dollar is trading mixed in Asian session today, as markets await BoC rate decision. No change in monetary policy is expected as overnight rate will be kept at 0.25%. There might be some adjustments in the asset purchases program but the fine-tuning has already started earlier this month. BoC is also expected to reiterate the pledge to maintain the current accommodative monetary policy stance.

                      Suggested readings on BoC:

                      CAD/JPY’s decline from 80.60 is accelerating downward today, partly on overall risk aversion. The current development suggest that CAD/JPY is still staying in the third leg (started at 81.58) of the pattern from 81.91. Focus is immediately on trend line support (now at 78.90). Break there will affirm this view and bring deeper fall through 78.36 support, to 100% projection of 81.58 to 78.36 from 80.60 at 77.38.

                      Australia CPI rose 1.6% qoq in Q3 as childcare fees returned to pre-pandemic rate

                        By
                        ActionForex.com
                        -

                        Australia CPI rose 1.6% qoq in Q3, above expectation of 1.5% qoq. But that was insufficient to recover the record -1.9% qoq fall in Q2. Annually, CPI turned positive to 0.7% yoy, matched expectation. RBA trimmed mean CPI came in at 0.4% qoq, 1.2% yoy, above expectation of 0.3% qoq, 1.1% yoy.

                        Head of Prices Statistics at the ABS Andrew Tomadini said: “In the September quarter child care fees returned to their pre-COVID-19 rate having been free during the June quarter. This was the largest contributor to the CPI rise in the September quarter. Excluding the impact of child care, the CPI would have risen 0.7 per cent.”

                        Tomadini said: “Annual inflation returned to positive territory rising 0.7 per cent in the September quarter. This followed negative annual inflation for only the third time in the 72-year history of the CPI of 0.3 per cent in the June quarter.”

                         

                        Full release here.

                        10-yr yield falls as Trump confirms no stimulus deal before election

                          By
                          ActionForex.com
                          -

                          It’s now clear that there won’t be any stimulus deal before elections. President Donald Trump indicated, “after the election we’ll get the best stimulus package you’ve ever seen.” DOW and S&P 500 closed lower overnight while NASDAQ ended with small gain. Treasury yield also finally moved in tandem with risk sentiments this week. 10-year yield dropped -0.023 to 0.778 overnight, giving up 0.8 handle.

                          More downside is mildly in favor in TNX for the near term, as investors adjust their risk positions ahead of US elections. We’d anticipating further decline in stocks towards the end of the week, which should theoretically push bonds higher and yields lower. Still for TNX, downside should be contained by 55 day EMA (now at 0.719) unless there are very drastic developments.

                          Euro down as France prepares for tougher lockdown, EUR/CHF maintains bearishness

                            By
                            ActionForex.com
                            -

                            European majors are trading generally lower today on worries over coronavirus spread and lockdowns. France reported 523 deaths on Tuesday, highest since April. UK also reported 367 new deaths, highest since May. Italy and Greece also saw new cases surged to new record.

                            French President is scheduled to give a televised address on Wednesday evening. It’s uncertain what the speech is about for now. But reports are flowing around that the government is exploring imposition of lockdown from midnight on Thursday. That might be a slightly more flexible one than that in March, as schools could remain open. But options could still include confining people to homes at weekends, closing shops and starting curfews earlier.

                            EUR/CHF was once again rejected by 1.0749 resistance after yesterday’s rally attempt. Near term bearishness is kept intact as fall from 1.0877 is expected to extend through 1.0688 low, probably rather soon.

                            US consumer confidence dropped slightly to 100.9, softening in the short-term outlook for jobs

                              By
                              ActionForex.com
                              -

                              Conference Board US Consumer Confidence dropped slightly to 100.9 in October, down from 101.3, missed expectation of 101.9. Present Situation Index rose from 98.9 to 104.6. However, Expectations Index dropped from 102.9 to 98.4.

                              “Consumer confidence declined slightly in October, following a sharp improvement in September,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved while expectations declined, driven primarily by a softening in the short-term outlook for jobs. There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high.”

                              Full release here.

                              US durable goods orders rose 1.9%, five increase in a row

                                By
                                ActionForex.com
                                -

                                US durable goods orders rose 1.9% mom to USD 237.1B in September, well above expectation of 1.1% mom. That’s also the five consecutive month of growth. Excluding transportation, new orders rose 0.8% mom, also beat expectation of 0.4% mom. Excluding defense, new orders rose 3.4% mom. Transportation equipment rose four of the five months, led the increase, by 4.1% mom to USD 76.8B.

                                Full release here.

                                UK CBI retail sales dropped to -23, a warning sign of further loss of momentum

                                  By
                                  ActionForex.com
                                  -

                                  UK CBI retail sales balance dropped to -23 in October, down sharply from +11. Sales are expected to drop at a similar pace next month at -26.

                                  Ben Jones, CBI Principal Economist said: “The fall in retail sales in October is a warning sign of a further loss of momentum in the economy as coronavirus cases pick up and restrictions are tightened across many parts of the country.

                                  Full release here.

                                  Scholz: Additional coronavirus measures to taken as uniformly as possible across Germany

                                    By
                                    ActionForex.com
                                    -

                                    German Economy Minister Peter Altmaier said the country is dealing with “exponential growth” of coronavirus infections while “the number of new infections is rising by 70-75% compared to the week before.” He expected number of daily new cases to jump to 20k a day at the end of this week.

                                    Separately, Finance Minister Olaf Scholz also said the development was “very worrying”. Additional measures to curb the spread “should be targeted, temporary and focussed.” “They should be taken as uniformly as possible across Germany and be generally understandable.”

                                    “So far, our country has fared quite well during the coronavirus pandemic and it will be decided in the coming weeks whether it will stay that way. It’s in our hands,” he added.

                                    RBA Debelle: Economy probably recorded positive growth in Q3, rather than negative

                                      By
                                      ActionForex.com
                                      -

                                      RBA Deputy Governor Guy Debelle told Senate that the first recession in 30 years could have already ended in Q3. “At the moment our best guess is it looks like the economy probably recorded positive growth rather than negative,” he said. “The strength elsewhere in the country was more than the drag from Victoria, and possibly the drag from Victoria was a little less than what we had guessed.”

                                      Separately, Assistant Governor Michele Bullock said the Australian financial system “remains profitable, notwithstanding substantial loan loss provisions”. Their “strong capital position allows them to continue to lend to support the Australian economy.” But she also warned warned that “the economic recovery is expected to be unpredictable and uneven so there will be rising business insolvencies and problems for some households in servicing their debts.”

                                      AUD/NZD hits correction target, takes a breather before next move

                                        By
                                        ActionForex.com
                                        -

                                        AUD/NZD could be an interesting cross to note in the upcoming two weeks. Risk markets are now preparing for the next move after US election. The development in the cross would provide the guidance on which currency to move “faster” next. Additionally, how RBA is going to fulfil market expectations of easing on November 3, also next week, would be another factor.

                                        The corrective fall from 1.1043 has hit target of 38.2% retracement of 0.9994 to 1.1043 at 1.0642. Downside momentum is diminishing as seen in 4 hour MACD, and we’d not anticipate any reacceleration for now. Sustained break of 1.0565 key support would indicate completion of the whole three-wave rebound from 0.9994 to 1.1043. That will open up deeper fall back to 61.8% retracement at 1.0395 and below. Nevertheless, break of 1.0727 will be the first sign of bottoming and will retain near term bullishness, with a retest on 1.1043 resistance in the cards.

                                        New Zealand trade deficit widened to NZD -1B in Sep

                                          By
                                          ActionForex.com
                                          -

                                          New Zealand goods exports dropped NZD -350m, or -8.0% yoy to NZD 4.0B in September. Goods imports also dropped NZD -643m, or -11.0% yoy, to NZD 5.0B. Trade deficit came in at NZD -1017m, narrowed from August’s NZD -282m, largely inline with expectations. Imports from all top trading partners decline, including China, EU, Australia, US and Japan. Exports to all top trading partners also declined, except to US.

                                          For the quarter, exports rose 0.7% qoq to NZD 14.8B in Q3. Imports rose 3.3% qoq to NZD 13.6B. Trade balance for Q3 was a surplus of NZD 1.2B.

                                          Full release here.

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