Daily Alert: Tuesday 1st November 2016

Mark NugentDaily Alert, Nov 2016

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Forex Analysis for Tuesday 1st November October 2016
Economic Calendar

Monday saw Core PCE Price Index m/m, the Fed’s favoured measure of inflation meet expectation at 0.1%.

BoE Governor Carney has agreed to extend his time as Governor until the end of June 2019 (ZeroHedge).

Early Tuesday morning sees Chinese Manufacturing PMI beating expectation (51.2 vs 50.4) and Caixin Manufacturing PMI do likewise (51.2 vs 50.2).

BoJ left policy unchanged with the key rate held at -0.1% and maintained QQE with yield control policy framework as expected. Furthermore, the BoJ cut each inflation outlook through to FY18 and pushed back reaching its inflation target to H2 FY18 which would be outside of Governor Kuroda’s tenure (Zerohedge).

RBA left key rate on hold at 1.50%, as expected. The RBA reiterated that market indicators have been mixed and that inflation remains low, although it also added that inflation is expected to pick up gradually during next 2 years and that the economy is expected to grow at close to the potential rate over the next year (ZeroHedge)

Goldman Sachs said that oil could move to USD 40/bbl if OPEC fails to reach a convincing agreement (ZeroHedge).

Market Reaction

US equities very unhappy with Clinton email fiasco. UK equities mixed. Euro50 gaps uip on open but closes at Friday’s close. Aus200 failed to lift-off from support. WTI falls to the 100MA as hopes of a 30th November OPEC agreement go sour. AUD rises as some investors expecting a rate cut unwind their positions. CAD down on OPEC worries. JPY consolidating after leaving the triangle. GBP continues sideways. USD flat and Euro down.

Media

Goldman sees oil at USD40/barrel if OPEC talks fail
BoJ keeps policy unchanged

Today

UK Manufacturing PMI; Canadian GDP; US ISM Manufacturing PMI; New Zealand GDT.

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