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International financial news

International financial news

[API report: US crude oil inventories increased by 4.3 million barrels to 440.5 million barrels last week]
API Cushing area crude oil inventories increased by 1.3 million barrels, gasoline inventories fell by 4.2 million barrels, refined oil inventories fell by 1.6 million barrels; US crude oil imports last week decreased by 930,000 barrels per day to 6.7 million barrels per day.

[Key data brings surprises The market's expectation of the Fed to cut interest rates is further pushed back to 2021]  

The US ISM non-manufacturing PMI was better than expected in October. After the data was released, the futures market further pushed back on the Fed’s interest rate cut on Tuesday. Now federal funds futures show that until the beginning of 2021, the Fed is entirely likely to cut interest rates by 25 basis points. The expected time on Monday is October 2020. US service activity rebounded from a three-year low in October, and expansion exceeded expectations, thanks to improvements in employment, orders and business activities, indicating that the largest sector of the US economy is achieving steady and moderate growth. As interest rate cuts are further pushed back, US Treasury prices have fallen, and 10-year US Treasury yields have risen by 9 basis points to 1.87%.


[Federal Kaplan: Not interested in negative interest rates] 

About 23% of the world's debt is negative, which indicates that economic growth is slowing and the central bank is active – this is not a healthy situation. Warning that this situation will cause excesses and distortions, should be an alarm for policymakers, there is a danger that the central bank tries to do too much, and mentions the European Central Bank. Regarding the risk of the 2020 recession, Kaplan still believes that this is unlikely. (Kaplan has no voting rights at FOMC this year)


[Federate Daley: After cutting interest rates three times this year, I don’t think there is a need to further relax monetary policy]

[OPEC Secretary General: The prospects for the oil market in 2020 become brighter] The highest official of the Organization of Petroleum Exporting Countries (OPEC) said that as the economic growth is firm, the prospects for the oil market in 2020 will become brighter, indicating that the pressure on the organization to deepen the rate of production cuts may be reduced.


GMT(time)

Currency

News and Data

02:00

USD

ISM Non-Manufacturing PMI (Oct)

02:00

USD

JOLTs Job Openings (Sep)

08:45

NZD

Employment Change (QoQ) (Q3)

Tentative

GBP

Autumn Budget



Summary of investment bank views

CIBC: US service industry performance remains solid, or dilute future interest rate cuts




The Canadian Imperial Bank of Commerce (CIBC) wrote on Tuesday that the performance of the US service industry is still solid, helping to reduce future interest rate cuts. With a modest improvement in the manufacturing PMI, the ISM service PMI also recorded a sharp rise to 54.7 in October (previous value of 52.6). However, this is still below the value range of 56-60 in 2018, but at least it has already shown a momentum of recovery, consistent with recent GDP data. A careful analysis of the data reveals that most sub-category data has also improved, including employment, orders, and business activities. Overall, the data confirms the clues to the non-farm report on Friday, indicating that the US service industry is still solid, which will dilute the demand for future interest rate cuts to some extent. This is good for the dollar, but it is bad for fixed income assets.


Mitsubishi UFJ: The downside risk of the euro has eased, but the profit is limited




As the morale of investors in the euro zone improved, the downside risk of the euro eased, but it is still between the year-to-date lows of 1.1000-1.1200. The role of the euro group as an attractive financing currency may be tempered, while current low volatility conditions are spurring demand for carry trades. Recently, investors have responded positively to the easing of the trade situation and the European Central Bank's easing measures.

UOB: The euro against the US dollar, unless the clear breakthrough of 1.1090, otherwise the rise is unsustainable




The research department of UOB Bank discussed the technical prospects of the euro against the US dollar on Tuesday, emphasizing the key to a clear breakthrough of 1.1090 soon. The October high of 1.1179 continued to thwart the euro's rise, causing it to fall to this strong resistance for the third consecutive day (Monday's high of 1.1175). The price trend is not unexpected. We stressed on Thursday (October 31, point 1.1155) that the euro will either hit 1.1179 or the gains will be blocked. Although our "important support" 1.1090 is still intact, the trend in the past few days suggests that the euro may not be ready to break through 1.1179. The possibility of a further strength in the euro is waning. In order to maintain the current momentum, the euro must remain above 1.1155 in the past two days. If it falls below 1.1090, it will mean that the euro began to disappear one month ago.

Bank of America Merrill Lynch: For sterling traders, the election is still the focus of attention




Thursday may make sterling traders turn their attention from the general election to the Bank of England interest rate decision, but this is only temporary; on the eve of the December 12 election, opinion polls are more important than monetary policy or data; if the Conservatives can lock A majority of votes, British lawmakers support the British Prime Minister Johnson's Brexit agreement, then the pound is expected to appreciate; and it is expected that when the Brexit is in a quagmire, the Bank of England will announce interest rate resolutions, the latest economic forecasts and meeting minutes, will trigger short-term fluctuations in the pound


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