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International financial news

International financial news

[EU and British Prime Minister Johnson hinted that there is hope for an agreement] The Brexit negotiations have taken a step forward. Since the British Prime Minister Johnson took office, the EU and the United Kingdom will conduct consultations on details for the first time.

[Federal Rosengren: further easing may lead to future pain] Boston Fed President Rosengren (this year has voting rights, he opposed the decision to cut interest rates in July and September) said that now further interest rate cuts may only make investors With the family suffering more, I would rather wait until we actually experience the economic downturn and act again.

[Federal Kaplan: The yield curve is moving toward a healthier direction] Dallas Fed President Kaplan said that the Fed’s interest rate is near a neutral level, and its interest rate position may be appropriate given the economic slowdown. The Federal Reserve announced earlier on Friday that it began to purchase Treasury bills at a rate of $60 billion a month. At least until the second quarter, the decision was not related to monetary policy, but was intended to inject liquidity into the system.

[US energy companies increased the number of crude oil rigs this week, this is the first time in eight weeks. General Electric's energy services company Baker Hughes said on Friday that as of the week of October 11, the energy company added two drilling platforms, bringing the total to 712.]



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Summary of investment bank views

Sterling rose sharply on Friday, hitting a new high in three and a half months, EU and the UK restarted negotiations to boost market confidence

Sterling rose sharply on Friday as investors re-priced the prospect of a Brexit agreement between the UK and the EU at the last minute. Many investors have previously believed that the UK's delay in Brexit is the most likely scenario, and the possibility of reaching a Brexit agreement by the end of October is almost zero. Traders said that the unexpected news of the EU and the UK reopening negotiations suppressed the pound short and pushed the pound higher

Forex derivatives market data showed that derivatives traders regained confidence in the pound, and the pound long position on Friday exceeded the short position of the pound for the first time since January 2018, and the pound is expected to continue to strengthen. Ducrozet, a strategist at Patek Wealth Management, believes that Irish officials have raised expectations for an agreement, and if they can reach an agreement, there will be a sharp rise in the pound and a steeper rate of return curve.

Morgan Stanley: European Central Bank is expected to temporarily maintain QE policy

From a macro perspective, the ECB is unlikely to further revise its quantitative easing program at the current critical moment. The minutes of the last monetary policy meeting showed that more than one-third of policymakers voted against the stimulus in September, including the French and German central bank governors. It is estimated that by March 2020, the European Central Bank will cut the deposit mechanism interest rate by 10 basis points to -0.60%, but there will be great uncertainty about how this will be presented and whether this will happen.

German commercial bank: USD/JPY adjusted rebound

According to the technical analysis of the German commercial bank, the USD/JPY rebounded slightly from the 50% Fibonacci retracement of the previous downtrend 106.47, but the rebound was slightly larger than expected. It is difficult to maintain the gains at present, but there is no selling signal yet. The short-term prospect is neutral, if it falls below 106.47, then the target will see 106.00, the 78.6% Fibonacci retracement of the previous downtrend is 105.32, and the August low of 104.46; the short-term uptrend failed to break the decline since April. The 50% Fibonacci retracement of the potential is 108.43, and the September high of 108.48 is constructed as the short-term top. The exchange rate is under the 200-day moving average below 109.07. The upper resistance is the 55-week moving average of 109.91 and the 200-week moving average. 110.24.

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