Attention turns to earnings releases

The USD tended to edge a bit lower yesterday despite the US retail sales for September accelerating implying a robust demand side that may continue feeding inflationary pressures in the US economy. North of the US border, the CPI rates of Canada for September eased somewhat, having a temporary bearish effect on the CAD yesterday, yet across the pond UK’s CPI rates tended to refuse to slow down providing some support during today’s early European session to the pound.

Over in Asia, Chinese data took the markets by surprise as the GDP rate for Q3, industrial production and retail sales growth rates for September did not slow down as far as expected. Yet we note that embattled property developer Country Garden, is at risk of defaulting on its entire offshore debt, following the company missing its payment deadline on Tuesday. The failure to repay its $15 million coupon, following a 30-day grace period, appears to be reflecting China’s deteriorating property sector, following the collapse of Evergrande. The issue highlights the headwinds placed by the construction sector to the recovery of the Chinese economy and a loss of confidence in its outlook could weigh on the AUD and CNY. During tomorrow’s Asian session, Aussie traders may keep an eye out for the release of Australia’s September employment data.

On a technical level, AUD/USD continued to edge higher, with the next big test being set at the 0.6400 (R1) resistance line for the bulls. For a clearcut bullish outlook we would require the pair to break the R1 and we also note that the RSI indicator below our 4-hour chart is rising above the reading of 50, implying that a bullish sentiment in the market for the pair, seems to be building up. Should the bulls take over, we may see the pair breaking the 0.6400 (R1) resistance line and take aim for the 0.6515 (R2) resistance nest. Should the bears take over, we may see the pair breaking the 0.6285 (S1) support line and aiming for the 0.6170 (S2).

US Equities markets yesterday tended to edge a bit lower and we note that LockheedMartin (#LockheedMT) posted better than expected earnings, as the geopolitical tensions appear to be filling the company’s orders book. Goldman Sachs (#GS) on the other hand, saw its profits plunge, predominantly due to its write-down of its GreenSky fintech business and the company’s investments in real estate according to Reuters. We expect today the market’s attention to turn towards the releases of Morgan Stanley (#MS), Travelers (#TRV), Procter&Gamble (#PG), Tesla (#TSLA), Netflix (#NFLX) and Alcoa Corporation (#AA).

Technically the bulls of Dow Jones seemed to hesitate yesterday as the index edged lower yet remained within the corridor set between the 34300 (R1) resistance line and the 33600 (S1) support line. Yet given that the upward trendline guiding the index since the 4 of October, remains intact we tend to maintain our bullish outlook. Yet as a word of caution there are some signs of stabilisation for the index as the RSI indicator runs along the reading of 50 implying a rather indecisive market. Should the bulls maintain control over the index we may see it breaking the 34300 (R1) resistance line with next possible target for the bulls being the 35000 (R2) resistance level. Should the bears take over, we may see index breaking the prementioned upward trendline in a first signal that he upward motion has been interrupted, yet for a bearish outlook we would also require the index to break the 33600 (S1) support line and start aiming for the 32700 (S2) support base.

その他の注目材料

Today we get the US Housing start number and in tomorrow’s Asian session, we note Japan’s trade data, both for September. Also we note that Riksbank Governor Thedeen, NorgesBank Governor Bache, Fed Governor Waller, New York Fed President Williams, Fed Governor Bowman and Philadelphia Fed President Harker speak. Furthermore, we note the release of the Fed’s Beige Book and the speech by Chinese President Xi Jinping and later on, Fed Governor Cook is expected to make statements.