EUR futures: rallies remain tepid In light of CME Group’s preliminary data for EUR futures markets, open interest rose by more than 1.2K contracts on Tuesday vs. Monday’s 439,425 contracts. On the opposite direction, volume decreased by nearly 32.2K contracts.
EUR/USD still capped by 1.1660
Tuesday’s doji-like candle hinted at some indecision in EUR/USD, while the move has been in tandem with a small up tick in open interest coupled with an important decrease in volume.
Ahead of the FOMC meeting later today, the ‘neckline’ around 1.1660/70 emerges as tough barrier for occasional bullish attempts, coincident at the same time with August’s low and early October low.Read More →

Argentina: Macri gets the green light to continue reforms – BBH Argentine President Macri’s Cambiemos alliance won the mid-term elections which bodes well for the reform effort and the economic outlook, as confirmed by recent S&P’s upgrade to B+, according to analysts at BBH.
Key Quotes
“The central bank is adding to the orthodox policy mix, surprising the markets with a rate hike last week.”
“Political Outlook
Argentina President Mcri’s Cambiemos alliance was the winner of the congressional mid-term elections. Cambiemos won the five largest electoral districts, including important Buenos Aires province. There, Macri’s ally Esteban Bullrich defeated ex-President Cristina Fernandez de Kirchner in a victory that should help Macri’s reform agenda advance. At the national level, Cambiemos won 13 out of 24 provinces with close to 42% of the total vote. President Macri has done a commendable job of addressing the economic woes since being elected in October 2015. He quickly floated the..Read More →

Fed widely expected to maintain the parameters of monetary policy unchanged – Rabobank Analysts at Rabobank suggest that the US Fed is widely expected to maintain the parameters of its monetary policy unchanged when the decision is announced at 19:00CET.
Key Quotes
“There will be no press conference on this occasion and Fed officials will not publish their economic projections. The markets will have to look for clues in the official statement, which should indicate that the Fed is on track to raise rates at its last meeting this year in December.”
“For now our Fed watcher Philip Marey maintains his call for the next hike to be delayed to 2018. However, he reserves the right to change his view if incoming data are not weak enough to deter the Fed from its intention to deliver a Christmas hike.”Read More →

NZD: Looking for a bottom – BBH Analysts at BBH have been looking for a bottom in the New Zealand dollar, suspecting the market was overreacting to the new Labour-New Zealand First government.
Key Quotes
“We expect the pro-growth orientation will be rewarded over time. In recent days, the downside momentum faded as the Kiwi approached the lows for the year, set in May near $0.6800. However, the bias was still to sell into rallies. Until today, when the stronger than expected Q3 employment figures spurred a powerful short squeeze.”
“The Kiwi is up more than 1% to trade at its best levels in a week near $0.6930. The bears may try to make a stand, but we anticipate an upside correction will continue and look for a move toward $0.7000-$0.7050, even if a modest pullback is seen first. At the same time, New Zealand shares were hit by profit-taking after a strong run, as the Kiwi fell. The 1.15% loss was the largest since March.”Read More →

BoC: Governor Poloz and Senior Deputy Governor Wilkins testimony in focus – TDS BoC’s Governor Poloz and Senior Deputy Governor Wilkins will testify to the Senate Committee on Banking, Trade and Commerce and will be in focus, according to analysts at TDS.
Key Quotes
“Poloz will read an opening statement at 16:15 ET which will be followed by a Q&A with Senators which will run until 18:00 ET. His opening statement and comments are likely to mirror yesterday’s testimony to the House of Commons. On the data front, Markit Manufacturing for October is the lone economic release.”Read More →

FOMC meeting is a low-key event – BBH According to analysts at BBH, the FOMC meeting is a low-key event as there are already four hikes into the cycle and the Fed has not managed to hike rates outside of a meeting in which there is a press conference and updated economic projections.
Key Quotes
“It is a shame because that cuts in half the number of “live” meetings, and denies it greater flexibility. There is not going to be a change of rates today, and there cannot be much of a commitment to hike in December. If it were a done deal, as the vernacular would have it, then the Fed would hike rates now.”
“We suspect Fed officials have been pleasantly surprised by the continued strength of the economy, and could, in its economic assessment, recognize it. We would not push this point too hard though on the grounds that final domestic sales were rose by an uninspiring 1.8%.”
“The Fed has finished its first month of allowing its balance sheet to shrink. It may adjust the technical secti..Read More →

US: ADP jobs estimate and auto sales in the limelight – BBH The ADP jobs estimate and US auto sales may provide some insight into the US economy, but there seems to be an asymmetrical risk, according to analysts at BBH.
Key Quotes
“Strong data may spur less of a reaction than weak data because of the response to the storms. ADP showed a 135k increase in jobs in September while the national figure showed a 33k loss. The median Bloomberg survey forecast is for the 200k increase. To put it in some context, this year's average through August was 221k and last year's average was around 180k.”
“The key focus for investors is not the number of jobs being created. It is on earnings and wage growth. We will write more about it in the weeks ahead, but we suspect that the Phillip's Curve has been prematurely buried and will, over the next few quarters, make itself more visible. Suffice for the time being to note the importance of wage pressures as a new Fed takes shape early n..Read More →

Greece's manufacturing activity expanded for the fifth successive month in October, though the rate of growth was the weakest in three months, survey data from IHS Markit showed Wednesday.
The seasonally adjusted Purchasing Managers' Index, or PMI, dropped to 52.1 in October from 52.8 in September. However, any reading above 50 indicates expansion in the sector.
The overall growth in October was underpinned by strong demand in both domestic and export markets, which led to rises in purchasing activity, employment and output.
On the price front, input price inflation accelerated in October, driven by higher raw material costs.
Meanwhile, business confidence improved to a three-and-a-half year high.Read More →

Dutch manufacturing activity expanded at the quickest pace in more than six-and-a-half years in October, survey data from IHS Markit showed Wednesday.
The Purchasing Managers' Index rose to 60.4 in October from 60.0 in September. Any reading above 50 indicates expansion in the sector.
Moreover, the latest figure was the strongest recorded since February 2011 and the second-highest in the survey's 17-year history.
Both output and new orders continued to expand sharply in October. Firms raised their employment level at the fastest pace in the survey history.
To support workloads, purchasing activity by manufacturers rose strongly in October, and input stocks increased at a joint-survey record pace.
On the price front, inflation of both manufacturing input and output prices accelerated to the strongest since March.
Finally, firms' output expectations for the next twelve months hit a new series high, driven by pipeline projects and an improving European growth outlook..Read More →

The pound strengthened against its major counterparts in early European deals on Wednesday, as the UK manufacturing sector activity expanded notably in October before the Bank of England decision tomorrow.
Survey data from IHS Markit showed that the IHS Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index rose to 56.3 in October from revised 56.0 in September.
The expected score was 55.9. The headline PMI has now signaled expansion for 15 consecutive months.
The currency was also buoyed by rising European shares, as Catalonia worries eased and encouraging data from the U.S. and China stoked optimism about the global economy.
Investors looked ahead to the FOMC decision later in the day. While no policy changes are expected, investors may get some clues in the policy statement as to whether the U.S. central bank is on track to raise rates in December.
The Bank of England will reveal its interest-rate decision on Thursday, with traders bracing for wha..Read More →