Three things we learned last week
•President Trump announced pausing US stimulus packages until after the election, then later in the week announced announced a USD 1.8 trillion package.
• The RBA held interest rates at 0.25%, but signaled they would consider how additional monetary easing could support jobs.
• Brexit headlines drove significant volatility in sterling
For your diary: Exchange Rate
Monday 12th October
IMF and World Bank annual meetings (until 18th October)
Tuesday 13th October
IMF World Economic Outlook and Global Financial Stability reports
UK employment change (July), jobless rate, average earnings (Aug)
Citigroup, JP Morgan, Delta Air Lines, Johnson & Johnson earnings
US inflation (Sep)
Wednesday 14th October
Goldman Sachs, Wells Fargo, United Airlines earnings
US Core PPI m/m
Euro area industrial production (Aug)
Thursday 15th October
Australian employment change and unemployment rate
US unemployment claims
Friday 16th October
US retail sales, industrial output (Sep)
Eurozone inflation (Final, Sep)
GBPUSD is trading close to the top of last week’s range, sustained by hopes for fiscal stimulus in the US – despite President Trump’s tweets suggesting a full package would be delayed till after the election.
Technically, the pair is trading above its moving average, but suffered from downside momentum at the end of last week.
The recent trading range has balanced the technical picture, with support waiting at 1.2885 – a low point on Thursday – followed by 1.2850, then 1.2800.
Meanwhile, resistance is at 1.2975, Thursday’s high. This is followed by the psychologically important 1.30 level. The next line to watch is 1.3050.
With the second election debate and COVID-19 showing no sign of abating, next week the US dollar will be in play.
EURUSD rose last week, but technical indicators on the four-hour chart suggested it was about to turn bearish. A break above the 200 SMA is needed to confirm this bullish view.
Strong resistance is at 1.1810, the pair’s weekly peak and its highest point since mid-September. That would open the door to 1.1870, and then 1.1920. Support is at 1.1780.
Heads up: Exchange Rate
Election Special – ultra-low spreads until November 5th
You can’t have missed that there’s a lot of news coming out of America at the moment.
To help you take advantage of all the volatility this is causing in the markets, starting Monday we are offering super-tight spreads on the Dow Jones and NASDAQ cash indices.
For two hours a day, from market open in the US (17:30 GST) until the Euro index closes (19:30 GST), we are dropping our standard spreads down from 1.5 to 1.4 pips on the US30 roll, and from 1.0 to 0.8 pips on the UT100 roll.
This month is going to be a big one on the markets whichever way the election goes – log in to your account and trade the opportunity today!
US key data amid cancelled 2nd US election debate
The increasingly tense build-up to the US election continues, with the second presidential debate cancelled and rising virus worries in the White House – as in literally among White House staff, whose workplace is now a coronavirus cluster. What will this mean for the campaigns?
Next week also sees final release of some key economic indicators for the US, with analysts eager to see updates on industrial production and retail sales. Given the pace of news coming out of the US recently, who knows what else will come out this week?
Earnings season is here again
Earnings season is here once again – doesn’t it seem to come earlier every year?
All three major US indices performed well last week as investors gained optimism after what appeared to be a profit-taking sell-off. Ahead of the election, and with the pandemic still raging, volatility seems likely. This week we’re getting a preview of a hugely important earnings season for the US, with numbers due from these companies:
• Citigroup, Delta Air Lines, JP Morgan, Johnson & Johnson on Tuesday
• Goldman Sachs, Wells Fargo, United Airlines on Wednesday
[Please note – Delta moved their announcement from last week to Tuesday. And we don’t know why they spell ‘airline’ like that.]
UK: Brexit deadline and labour market report ahead
It’s a key week for the cable with the final, for-real, no-second-chance deadline for a Brexit deal falling on Thursday.
This makes strong moves in sterling all but inevitable this week, depending on what headlines emerge from the negotiations.
Meanwhile, the UK’s labour market report is released on Tuesday.
Unemployment has been trending upward since the start of the pandemic, with the jobless rate already at its highest since 1994. Expect more of the same this week, despite some signs that hiring activity is picking up.
The markets are going to be fascinating (and volatile) in the lead-up to the US going to the polls, so make sure you trade the opportunity with our slash on US spreads between now and November 5th. Exchange Rate for the week.
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