- USD (USDIndex 93.84) – topped at 94 before retracing to 93.84 in Asia session.Wall Street rallied to more new highs on the USA500 and USA30, with the USA100 closing in on its peak, before gains faded. Solid earnings continued to underpin optimism, and stronger than expected confidence and housing data helped too. – rekindled Fed tightening fears.
- The long end of the market saw yields dip, overlooking the inflation jump as the longer term outlook is still benign. The 10-year Treasury yield has moved up 1.4 bp to 1.622%. Australia’s 10-year rate moved up and the 3-year jumped nearly 16 bp after core inflation came in higher than anticipated and reached a 6 year high in data for the third quarter.
- FT: Alphabet and Microsoft smash estimates with $110bn revenue haul (+33% from Q3 2020) – surge in cloud computing, and a strong rebound in digital advertising – all eyes on US open. Big misses from Robinhood, tanking its shares – closed at 40.09.
- Evergrande in focus again as authorities called on billionaire Hui Ka Yan to use his personal wealth to support China Evergrande Group. Chinese authorities called on companies to make “active preparations” to meet payments on offshore bonds. – sell-off in seven weeks for Chinese tech shares.
- German import price inflation hit 17.7% in September – The breakdown showed that energy prices remain the main driving factor, & that the shortage of natural gas and the spike in oil prices are not the only problems hitting supply chains, with supply shortages likely to keep prices elevated into next year.
- USOil steadied around $82 – $83.
- Gold dipped on robust USD, higher yields and ahead of central banks, at $1785.
- FX markets – EURUSD 1.1600, Cable bounced 1.3774, USDJPY – 114 from 114.30.
Today – US Durables and BoC rate decision and conference. Earnings: Thermo Fisher, Coca-Cola, McDonald’s, Sony, ServiceNow, Bristol-Myers Squibb, Boeing, GlaxoSmithKline, ADP, GM, Old Dominion, CME, Edwards Lifesciences, Norfolk Southern, Twilio, Ford, General Dynamics, KLA Corp., eBay.
Biggest FX Mover @ (06:30 GMT) AUDUSD (+40%) – spiked at 0.7535, faster MAs rising and RSI at 60. Fast MACD signal line & histogram keep rising, implying further rise in the short term.
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Andria Pichidi
Market Analyst
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