DXY firmed last night:
The Australian dollar fell:
Gold looks precarious:
Oil is trying amid a vast glut:
Metals did OK:
Miners are back from the dead:
EM stocks firmed:
Junk was strong:
Treasuries were bid though it does not show on the chart:
Stocks too:
Westpac has the wrap:
Event Wrap
Ahead of the December meeting, ECB President Lagarde said policy makers will focus on emergency bond purchases and long-term bank funding: “While all options are on the table, the pandemic emergency purchase program and targeted longer-term refinancing operations have proven their effectiveness,” she said. “They are therefore likely to remain the main tools for adjusting our monetary policy.”
Event Outlook
Australia: The Melbourne Institute will publish their November inflation expectations. Expectations fell 1ppt during the nadir of the pandemic, but have since stabilised around 3.0-3.5%.
New Zealand: September net migration will remain muted with border restrictions in place.
Euro Area: The market expects September industrial production will rise 0.6%, but the recovery will stall in coming months as Europe again returns to lockdown. The ECB will hold its annual Forum on Central Banking (Nov 11-12). This year’s theme is “Central Banking in a Shifting World”. Notable speakers include ECB President Lagarde, BoE Governor Bailey, and FOMC Chair Powell.
UK: The trade balance is expected to narrow again in September (market f/c: GBP850m). Whilst the market is looking for GDP to rebound in Q3 (market f/c: 15.8%), a contraction is imminent as the new lockdown begins to bite.
US: The October CPI is set to remain anaemic at 0.1% (1.3%yr), well below the Fed’s 2%yr inflation target. Meanwhile, elevated initial jobless claims continue to emphasise the churn being seen in the labour market (market f/c: 732k). The FOMC’s Evans will speak at a Detroit community forum (05:00 AEDT).
The return of a Treasury bid helped end the tech stock rout. There is no inflation coming with a Republican senate sitting on stimulus:
And another deflation shock is bearing down fast upon the US. COVID cases march on:
Deaths are accelerating with the usual one month lag:
And are about to go parabolic as hospitalisations surge to records:
Within three weeks deaths will be back at record highs. With a looming vaccine promoting confidence prematurely and a vengeful El Trumpo doing nothing, it will probably get even worse. America will in the throes of resurgent lockdowns, public or private, by Christmas.
I do still see the US dollar falling away next year as global recovery takes hold with vaccines but not until the wave of death sweeping America has passed.
Think the reverse for the Australian dollar.
