The major event in markets is the release of US CPI figures. We expect flat reading of the numbers - which should be good for risk and market sentiment.
Calendar
Economic Data Releases
|
|
Country
| Time (GMT)
| Name
| Expectation
| Prior
| Comment
|
UK
| 09:30
| BoE Minutes
| -
| -
| -
|
US
| 13:30
| CPI YoY (OCT)
| -0.3%
| -1.3%
|
|
US
| 13:30
| Housing Starts (OCT)
| 600K
| 590K
|
|
What's going on?
· Bank of England Minutes today should be interesting – not least their discussion of inflation and quantitative easing. BoE surprised the market a couple of weeks ago by only raising the QE target amount by £25B, not £50B as was expected.
· CPI out of the US today could disappoint the market. We expect flat numbers in both CPI and Core CPI, slightly below the consensus of market expectations.
· Industrial Production and Capacity Utilization yesterday were slightly disappointing not least when you take into account the fact that utilities was the only improving industry group. Was the good September report just leftovers from Cash for Clunkers?
· US Housing starts today is an important number. Starts have so far stabilized just below 600K, but we need continued improvement to really get a recovery going.
FX
FX
| Daily stance
| Comment
|
EURUSD
| 0/-
| Expect to find res in the 1.4900-10 area for a re-test of 1.4825. stop abv 1.4950
|
USDJPY
| 0/+
| While holding 88.80 suppt expect rebound to extend to 89.70-80 lvl before lower.
|
EURJPY
| 0
| 132.50 target met. Look for further consolidation in a 132.50 – 133.50 range
|
GBPUSD
| 0
| Ranging 1.6775 – 1.6835 ahead of BOE minutes. Go with breakout either way
|
AUDUSD
| 0/-
| Risk of deeper correction. Seen capped at 0.9310-15 for test of 0.9210. Stop abv 0.9355
|
FX Options
FX-Options
| Comment
|
EURUSD
| Brokers were mainly looking to buy short term EUR calls but have been pretty quiet in
|
| general. With spot unable to break current ranges, expect gamma to trade softer as well.
|
USDJPY
| Front end continued to get sold off with spot managing a mere 20 point move in Asia.
|
| Overnight risk reversals were paid at 1.5 Yen calls over so possible that spot follows lower.
|
AUDUSD
| Front end remains soft but mid curve holds up well. Back end likely to remain steady
|
| and with gamma being shunned, we should expect further curve steepening.
|
Equities
Equities
| Daily stance
| Comment
|
DAX
| 0/+
| Buy at the break of 5791 targeting 5812. S/L below 5780.
|
FTSE
| 0/+
| Buy at the break of 5354 targeting 5375. S/L below 5345.
|
S&P500
| 0/+
| Buy at the break of 1111 targeting 1117. S/L below 1109.
|
Nasdaq
| 0/+
|
|
DJIA
| 0/+
|
|
Futures
Gold
| 0/-
| May struggle to overcome 1,145 lvl. Risk n/term deeper correction to 1,132, poss 1,127 again
|
Silver
| 0/-
| Prefer to sell rallies to 18.40, or break below 18.30 for 18.20 target
|
Oil (CLZ9)
| 0/-
| May peak n/term below 80.0. Look for retracement back to 78.50
|
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