- China’s central bank cuts rates for 6th time since Nov, say monetary policy remains prudent.
- PBoC cuts 1-yr lending rate 25bp, 1-yr repo rate by 25bp, RRR by 50bp.
- Markit Oct Mfg PMI 54 v 52.8 forecast, highest since May, new orders highest since March.
- Canada annual inflation in Sept falls to 1.0 pct , lower fuel prices the culprit CAD to 3-week low.
- Oil down as dollar offsets China move; heavy U.S. crude stockpile build weighs on WTI U.S. oil rig count down one, smallest drop in eight weeks.
- Global stocks soar on surprise China rate cut.
- IMF reps told China that yuan likely to join fund’s basket of reserve currencies soon.
Looking Ahead – Economic Data (GMT)
- 21:45 New Zealand Trade – Imports* Sep 4.77b-previous
- 21:45 New Zealand Trade Balance*Sep forecast -800.0m, -1035.0m-previous
- 21:45 New Zealand Trade Balance YY* Sep -3331.00b-previous
- 21:45 New Zealand Trade – Exports* Sep -3.73b-previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is likely to find support at 1.0960 levels and currently trading at 1.1011 levels. The pair has made session high at 1.1036 and hit lows at 1.0996 levels. The euro stumbled to a two-month low against the dollar on Friday, still struggling after the European Central Bank a day earlier signalled further monetary easing to fire up an economy grappling with sluggish growth and low inflation. Europe’s common currency was down 2.8 percent versus the dollar for the week, on track for its worst weekly showing in three months. It fell to a one-month low against the yen and for the week was down 1.4 percent, its largest weekly percentage fall in six weeks. ECB President Mario Draghi on Thursday said the bank could accelerate its bond purchases, extend its asset-buying program, and further cut its deposit rate, currently at -0.2 percent. On Friday, the euro fell as low as $1.1017 EUR, the lowest since around mid-August, and was last at $1.1033, down 0.7 percent. Against the yen, the euro slid 0.4 percent to 133.60 yen. To the upside, immediate resistance can be seen at 1.1015. To the downside, immediate support level is located at 1. 989 levels.GBP/USD is supported in the range of 1.5280 levels and currently trading at 1.5306 levels. It reached session high at 1.5380 and hit session low at 1.5306 levels. Sterling hit a 10-day low against the dollar on Friday, as the single currency continued to struggle a day after the European Central Bank signalled it could ease monetary policy further to prop up the euro zone economy. The pound after showing strong performance against dollar earlier in the week declined sharply on Thursday, after ECB chief Mario Draghi told a news conference that the central bank was “open to the full menu of monetary policy. Against the dollar though, sterling fell half a percent to $1.5426, its weakest since October 14, as the dollar powered higher across the board, benefiting from euro weakness. The pound had hit a one-month high of $1.5510 after the retail sales numbers. Next week investors will turn to British growth data for the latest signs on how the UK economy is performing. The Federal Reserve’s latest policy meeting will also be closely watched for signals on when the Fed might start to raise rates. Most expect the Bank of England to wait for the Fed to move before it tightens policy. To the downside, immediate support level is located at 1.5321 levels. To the upside, immediate resistance can be seen at 1.5298.USD/JPY is supported around 121.06 levels and currently trading at 121.37 levels. It hit session high at 121.46 and made session lows at 121.19 levels. Japanese yen slipped lower against dollar on Friday as the dollar soared to its highest level in more than 7 weeks and U.S. stocks jumped higher after China revised its monetary policy for the sixth time in a year, concerned by U.S. rate hike expectation. Investors initially bet the Federal Reserve would be compelled to delay raising rates given the fragility of the global economy, but buying soon evaporated on the view that the Chinese stimulus and upbeat U.S. data made a U.S. rate hike more likely this year. Gains in U.S. equities also reduced the appeal of safe-haven bullion and bonds, while the U.S. dollar rose to its highest mark since Aug. 19 against a basket of currencies, further pressuring bullion. The dollar was up 0.3 percent versus the yen at 121.02 yen. It was up 0.6 percent against a currency basket at 96.943, boosted by gains versus the euro. To the upside, immediate resistance can be seen at 120.60. To the downside, immediate support level is located at 120.04 levels. USD/CAD is supported at 1.3130 levels and is trading at 1.3177 levels. It has made session high at 1.3196 and lows at 1.3037 levels. The Canadian dollar weakened to a fresh three-week low against its U.S. counterpart on Friday after domestic inflation data slipped more than expected and China cut interest rates to spur growth in its slowing economy. Canada’s annual inflation rate dipped to 1.0 percent in September on lower prices for gasoline, marking the 10th straight month it has been below the Bank of Canada’s 2.0 percent target, Statistics Canada said on Friday. Core inflation, which strips out volatile items and is closely watched by the Bank of Canada, advanced by 2.1 percent, the same as in August. Plummeting energy prices have also dragged the Canadian dollar down to near-decade lows in recent months, which in theory means prices for imported goods should increase and boost inflation.The Canadian dollar was trading at C$1.3184 to the greenback, or 75.85 U.S. cents, weaker than Thursday’s close of C$1.3107, or 76.30 U.S. cents. At one point it touched C$1.3190, its weakest since Oct. 2. It is on track for a 2 percent loss on the week. Canadian dollar was also weaker against most of its key currency counterparts, most sharply against its commodity-linked Australian counterpart. To the upside, immediate resistance can be seen at 1.3200. To the downside, immediate support level is located at 1.3152 levels.Equities RecapEuropean shares rose to two-month highs on Friday, with export-driven stocks such as autos leading the way as China announced a surprise rate cut just a day after the ECB signalled the possibility of stronger stimulus measures.UK’s benchmark FTSE 100 ended up 1.04 percent, the pan-European FTSEurofirst 300 ended the day up by 1.92 percent, Germany’s Dax ended up 2.78percent, France’s CAC finished the day up by 2.44 percent.U.S. stocks were driven high by techshare rally up sharply for a second day on Friday as earnings from companies including Microsoft Corp beat analysts’ expectations, while healthcare shares rebounded from recent losses.Dow Jones closed up by 0.92 percent, S&P 500 ended up by 1.12 percent, Nasdaq finished the day up 2.28 percent.Treasuries RecapU.S. Treasury debt yields jumped on Friday, taking benchmark 10-year yields to a two-week high, after China cut interest rates for the sixth time in less than a year and helped fuel a global rally in equities.The benchmark 10-year Treasury yield last stood at 2.08 percent after touching a high of 2.099 percent, a level last seen on Oct. 9. Its price was last off 18/32.Yields on the 30-year Treasury bond were as high as 2.93 percent before easing to 2.90 percent, reflecting a price decline of 26/32.Shorter-term Treasuries, including the five-year note, were also off in price. The five-year was last yielding 1.41 percent on a price drop of 10/32.Commodities RecapGold was flat to slightly lower on Friday as the dollar soared to its highest level in more than two months and U.S. equities raced higher after China eased monetary policy for the sixth time in a year, reviving expectations of a U.S. rate hike.Spot gold eased 0.03 percent to $1,166.3 an ounce at 3:05 p.m. EDT (1905 GMT). U.S. gold futures settled down 0.3 percent at $1,162.8. Bullion was on course for a weekly loss, snapping two weeks of gains.Oil fell on Friday, erasing early gains as traders dismissed a rate cut by China to focus on a surging dollar and weaker spot prices for U.S. crude as a glut weighed on prompt supplies.Brent crude oil settled down 9 cents, or 0.2 percent, at $47.99 a barrel, after falling as much as 63 cents earlier.U.S. West Texas Intermediate (WTI) crude finished down 78 cents, or 1.7 percent, at $44.60, after hitting a three-week low at $44.20.Both Brent and WTI lost about 5 percent on the week, sliding for a second straight week.
The material has been provided by InstaForex Company – www.instaforex.com