Daily Alert: Wednesday 5th October 2016

Mark NugentDaily Alert, Oct 2016

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Forex Analysis for Wednesday 5th October 2016
Economic Calendar

UK Construction PMI beat expectations (52.3 vs 49.1). In New Zealand, Global Dairy came in substantial negative for the first time since May, at -3.0%. There are rumours of a taper to the ECB QE programme, reducing it from EUR80B/month to EUR70B/month. This has strengthened the Euro. The ECB have stated clearly this has not been discussed at any ECB meeting.

Market Reaction

US Equities continue to move sideways at all-time highs. Both the UK FTSE100 and FTSE250 gap up and keep going as further easing seems likely and the weak GBP helps exporters. The Euro50 spikes up to the 200MA line but closes close to the open as sellers reveal themselves. Oil grinds up by another dollar to $49.5/barrel. The USD strengthens as does the Euro. The JPY and GBP weaken. All 3 commodity currencies move sideways.

Media

An interesting story on Deutsche Bank and the practicalities of allowing a “bail-in” where retail investors take a hit. The view is, despite this being required by recent legislation, is that it won’t happen because of the risk of contagion, with a bail-out from public funds being the right thing to do despite the political fallout.

Today

Australian Retail Sales; the third and final UK PMI – Services PMI; US ISM Non-Manufacturing PMI and Crude Oil Inventories.

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