There are no material stats to provide direction through the early part of the day.
The lack of stats leaves geopolitics to provide direction through the session.
News from the U.S of constructive talks with China over the weekend was not enough to ease demand for the safe havens.
Updates from talks have been mixed from Washington and Beijing of late, with Trump’s unwillingness to rollback tariffs and demand for China to spend $50bn on U.S agri key issues for Beijing.
While there are no stats, the ECB is scheduled to release its Financial Stability Review that will garner plenty of attention.
The markets will be looking for guidance on monetary policy, with the review the first under Lagarde’s watch.
Geopolitical risk will continue to provide direction on the day, with UK politics and trade in focus.
It’s also a quiet day ahead on the data front. There are no material stats due out of the UK to provide the Pound with direction.
The lack of stats leaves the Pound firmly in the hands of UK politics and the general election opinion polls.
From the weekend, opinion polls reflected a widening in support for the Tories, which is considered Pound positive.
At the time of writing, the Pound was up by 0.16% to $1.2918.
It’s a quiet day on the economic calendar. There are no material stats due out of the U.S to provide the Dollar with direction.
The lack of stats leaves the Greenback in the hands of the U.S administration for the day.
Expect updates from the ongoing U.S – China trade talks to provide direction.
Last week, we saw the equity markets respond positively to Thursday’s updates, while the FX world decided otherwise.
With Beijing continuing to raise concerns over the issue of tariffs and demand to spend $50bn on U.S agri, a phase 1 agreement is yet to be assured.
The Dollar Spot Index fell by 0.36% last week, with pressure coming off the back of negative chatter on trade…
It’s also a quiet day on the economic calendar. The lack of stats leaves the Loonie in the hands of risk sentiment throughout the day.
Updates from Beijing and Washington on trade talks and influence on crude oil prices will likely have the greatest impact.
Following OPEC’s favorable monthly report last week, progress on trade talks is a must for the optimism over demand for next year to continue.
The Loonie was up by 0.02% to C$1.3221, against the U.S Dollar, at the time of writing.
The U.S. futures are trading flat in the early Tuesday session. Trade hopes are fueling optimism but weaker than expected earnings from McDonald’s are capping gains. The Dow Jones Industrial Average is down slightly while the S&P 500 and NASDAQ Composite are just above break-even. McDonald’s reported revenue and eps below consensus on weaker than expected comps in the U.S. Comps in the U.S. rose nearly 5% but missed estimates by nearly 100 bps. Shares of MCD are down more than 3.0% in early trading.
Lockheed Martin and the Travelers Companies also reported before the bell. Lockheed Martin beat consensus top and bottom line and updated guidance to the high end of the previous range. Shares of that stock are down -2.33%. The Travelers Companies reported a top and bottom-line miss citing “challenging conditions” and sent its shares down more than -4.0%.
European indices are flat to slightly higher in early Tuesday trading as trade hopes and Brexit dominate the headlines. In trade news, Presidents Trump and Xi are expected to sign a limited trade deal in mid-November. Comments from Economic Advisor Larry Kudlow suggest the talks are advancing. According to him, there is a possibility the December tariffs will be canceled.
In Brexit news, MPs are expected to vote on a number of items over the next two days. On the list is approval for Boris Johnson’s deal to progress, changes to customs legislation, and a possible 2nd referendum. The FTSE is in the lead with a gain of 0.45% while the DAX and CAC trail with advances closer to 0.10%.
In stock news, shares of Just Eat are up nearly 25% after the company received a competing bid for acquisition. Shares of UBS are moving higher after it reported a 16% decline in YOY earnings. The bank cites “challenging conditions” but was able to beat consensus. Pharma giant Novartis is trading flat after beating consensus and raising guidance. Shares of Husqvarna are moving lower after it reported weak earnings.
Asian markets closed higher at the end of Tuesday’s session. The Korean Kospi led with a gain of 1.16% on strength in tech and chips. The mainland China Shanghai Composite is runner up with a gain of 0.50% while the Hang Seng and Australian ASX trail with gains near 0.25%. The Japanese Nikkei is closed for a holiday.
The U.S. futures are indicated higher on Monday morning as traders turn their attention to earnings. The 3Q earnings season got off to a decent start last week with 80% of those reporting beating their EPS consensus estimate. The problem is that most companies beat their estimates by a much smaller margin than in the past even as revenues rise. This week the market is looking for reports from over 100 S&P 500 companies and a handful of Dow components. The NASDAQ Composite is in the lead with a gain of 0.40% while the S&P 500 is up 0.30% and the Dow 0.20%.
In earnings news, shares of Lennox are moving lower in early pre-market action after the company lowered its full-year guidance. Shares of Haliburton are flat after the company reported revenue and EPS missed consensus. Across the pond, shares of software giant SAP are up sharply after it reported better than expected revenue. Later this week traders will be looking for reports from McDonald’s, United Technologies, Harley Davidson, AT&T, and Ford.
The EU markets are broadly higher in early Monday trading even as Brexit uncertainty intensifies. A newly-negotiated deal with the EU has been put on hold by Parliament. Parliament voted to force PM Boris Johnson to request another extension despite his pledge to never do said action. Johnson is expected to push for a second vote early this week. The EU is expected to respond to the extension request as early as today. The DAX is in the lead at midday with a gain of 0.90% while the FTSE and CAC are trailing with advances closer to 0.25%.
In stock news, shares of Germany’s Wirecard are up more than 8.0%. The company says it will begin an independent 3rd party audit of its financial practices following a report in the Financial Times. The FT alleged WireCard is engaging in fraudulent activities. Shares of Tomra Systems are also up 8%, it reported strong 3rd quarter results.
Asian markets are flat and mixed at the end of the Monday session. Trading was supported by increasing hope a trade deal is at hand although there is still no indication of when it will emerge. On Friday, Chinese Vice Premier Liu He revealed the two sides had made substantial progress and would continue to work together to solve differences. In other news, the IMF downgraded China’s GDP outlook saying activity could fall below 6.0% growth in 2020. The Nikkei led in Monday action with a gain of 0.25% while most others closed within 0.05% of flat.