OVERNIGHT DATA AND HEADLINES
• The USD slid and global equity markets fell overnight after U.S. President Donald Trump's remarks over the weekend suggested an end to the trade war with China was still not in sight, dashing recent investor optimism. Moody's warning on Britain's sovereign debt weighed on shares in London, while escalating violence in HK led Asian equities to post their worst day since August.
• U.S. markets were closed following Veterans Day celebrations.
• Wall Street's main indexes fell - prospects of a quick resolution to the U.S.-China trade war dimmed. Dow Jones +27 points (0.1%) to 27,708, S&P 500 -5 points (0.17%) to 3,087, Nasdaq -9 points (0.11%) to 8,465.
• U.K. Preliminary Q3 GDP came in at 0.3%, better than the previous -0.2% but below the market’s expectations of 0.4%.
• The GBP rally was triggered by comments from Nigel Farage, as the Brexit Party leader said he wouldn’t contest Conservative seats won at the last election, instead go after the seats held by Lib Dem and Labour.
• Hong Kong police shot and critically wounded a protester and a man was set on fire on Monday in violence that prompted leader Carrie Lam to denounce "enemies of the people" and drew a chilling warning from a senior Chinese newspaper editor. There have been almost daily protests in Hong Kong, but it was rare for tear gas to be fired during working hours in Central, lined with bank headquarters and top-brand shops.
• The U.S. dollar was lower, DXY fell 0.18% to 98.19
• EUR was up 0.14% from 1.1020 towards 1.1037.
• GBP flirted with the 1.2900 level (1.2897 high), bouncing up from 1.2790 despite tepid local data.
• JPY strengthened 0.12% at 109.11
• CNY eased, opening at 6.9960 but weakening past the key 7 mark to close at 7.0100.
• AUD remained muted overnight, trading within a 15 point range 0.6845 / 0.6860.
• NZD saw some improvement, jumping up from 0.6340 towards 0.6370.
• AUDNZD fell back towards 1.0760 from 1.0800 highs.
• AUDEUR saw mild selling interest back towards 0.6200 level from 0.6225.
• U.S. Treasury markets were closed for the Veterans Day holiday.
• A selloff in southern European bond markets gathered pace, pushing yields higher, with an inconclusive election in Spain adding to uncertainty in its bond market. While 10-year yields on higher-rated bonds such as German and Dutch ones were up about 2 basis points, 10-year yields across southern Europe rose much more.
• Gold fell to its lowest price in more than three months. Spot gold fell 0.2% to $1,455.47 per ounce
• Iron ore futures in China closed at a two-and-a-half-month low, dropping for a fourth session, as demand declined amid a slowing manufacturing sector and as mills reduced their stockpiles. Benchmark spot 62% iron ore for delivery to China fell to $82 a tonne.
• Copper prices slipped as weak data from China reinforced poor demand and growth prospects. Benchmark LME copper ended 0.8% lower at $5,878 a tonne.
• Oil prices fell after data showed a drop in stocks at Cushing, Oklahoma, but trade concerns weighed. Brent crude fell 18 cents to $62.33 a barrel (low $61.57). U.S. WTI crude down 26 cents to $56.98 a barrel.
ECONOMIC OUTLOOK TODAY
• Australian Economic data today – October NAB business survey (conditions are weak – hoping for stimulus boost).
• New Zealand – Sep net migration & Q4 RBNZ inflation expectations (a key focus ahead of its OCR decision).
• Europe – November ZEW survey of expectations (sentiment remains negative)
• U.K.- Sep ILO unemployment rate
• U.S. – Oct NFIB small business optimism and Fed speak by Harker.
The U.S. Veterans day holiday and minimal markets impacting news saw AUD remain in a very tight 15 point range overnight, hugging the 0.6850 support and waiting for fresh direction.
Today we have Australian October NAB business survey (not market moving) and little in the way of offshore news tonight. Markets will be watching Fed speak from Harker in NY and any further unrest in HK and U.S / China trade discussions. Investors are still on edge as they await any further developments from the ongoing US/China trade negotiations. Concerns regarding the social unrest in Hong Kong reappeared yesterday after it was reported there had been another protestor shot by police. The US has previously stated that any deals would be at risk if there were any human rights violations in Hong Kong so traders will be keeping a close eye on the headlines as they hit the wires.
AUD down slightly on day as risk sentiment sours (US-Sino trade, Hong Kong tensions & AU yield slip)
AUD shorts tread water, consolidating near the 21 day moving average (0.6850) – markets await Australian October jobs data to see if economy's gentle turn is advancing.
Falling RSIs & daily cloud top drop give technical outlook a bearish tint as well as CFTC stats show persistent reduction for AUD shorts.
Decent support near 0.6810 though (55 DMA), could see dip buyers emerge if tested.