DXY was up last night as EUR fell:
The Australian dollar fell against all DMs:
But couldn’t match plunges in EMs:
Gold lifted:
Oil fell:
Metals too:
And miners:
Plus EM stocks:
Junk was mixed:
Bonds were bid:
Stocks held on:
Westpac has the wrap:
Event Wrap
Reuters reported that the meeting between Presidents Trump and Xi to sign the Phase One trade agreement might be delayed until December. The two parties have been searching for a new venue (from Chile). Ongoing demands by China to reduce tariffs may also have been a factor.
EU’s trade negotiator Malmstrom said that EU still faces threats of US car tariffs, though intensive talks to avoid tariffs continue. She also said that the US is not ready to negotiate over WTO rulings on aircraft aid.
Eurozone final services PMI at 52.2 beat the flash reading of 51.8 and pushed the composite to 50.6 (flash 50.2), mostly driven by gains in the German PMI although Italy was also firmer than expected. Sep retail sales was also above estimates, +0.1%m/m (est. flat m/m), 3.1%y/y (est. 2.4%y/y). German Sep factory orders beat estimates, +1.3%m/m and -5.4%y/y (vs est. +0.1%m/m and -6.3%y/y).
Event Outlook
Australia: Sep trade balance is expected to decline to a $5.1bn surplus from $5.7bn in Aug. Westpac is forecasting a $4.7bn surplus as exports decline 2.9% on lower prices and volumes for iron ore and coal.
Europe: the European Commission economic forecasts are released. This follows the submission of national governments’ draft budgets on October 15. Sep German industrial production is expected to decline 0.5%.
UK: the BOE policy meeting is widely expected to be on hold ahead of the UK general election on December 12. Updated economic forecasts will be released in the monetary policy report which replaces the quarterly inflation report.
Trade non-deal dealys are causing jitterd. Reuters had the scoop:
A meeting between U.S. President Donald Trump and Chinese President Xi Jinping to sign a long-awaited interim trade deal could be delayed until December as discussions continue over terms and venue, a senior official of the Trump administration told Reuters on Wednesday.
The official, who spoke on condition of anonymity, said it was still possible the “phase one” agreement aimed at ending a damaging trade war would not be reached, but a deal was more likely than not.
Dozens of venues have been suggested for the meeting, which had originally been scheduled to take place on the sidelines of a now-canceled mid-November summit of Asia-Pacific leaders in Chile, the official said.
They included sites in Europe and Asia, but the former was more likely, with Sweden and Switzerland among the possibilities. Iowa, which Trump has suggested, appeared to have been ruled out, the official said.
China’s latest push for more tariff rollbacks would be discussed, but was not expected to derail progress toward an interim deal.
The official said China was believed to see a quick deal as its best chance for favorable terms, given pressure Trump is facing from a congressional impeachment inquiry as he seeks re-election in 2020.
China’s embassy in Washington did not immediately respond to a request for comment on the U.S. official’s remarks.
This is the easy deal, remember.
Meanwhile, in Britain, Brexit appears to powering ahead as Tory polling is strong:
Though relying on polling at this juncture is pretty ironic!
My best guess is the US-China phase one deal gets done and that’s as far as it gets. And that BoJo wins for Brexit.
That suggests a little more juice in the risk rally, and perhaps for the AUD, but it still appears tradable at best.
