UK: Focus on industrial production and trade data – Nomura Analysts at Nomura suggest that the UK industrial production numbers and trade data will be the key economic releases for today’s session.
Key Quotes
“We already know (via the Q3 preliminary GDP report) how the industrial and manufacturing sectors performed during the quarter as a whole. As a result, forecasting production growth in September typically involves working out what monthly rate of growth is consistent with that quarterly outturn. Of course, there may well be revisions to the back-data, but assuming not the quarterly numbers imply a further modest increase in output in September. That would be consistent with the continued strength of the PMI surveys.”
“UK trade: A sharp rise in the oil and erratic deficits during recent months added over £2bn to the monthly trade deficit between May and August – around half of the total increase in the headline deficit. Together with a partial unwind of the 5% monthly rise in un..Read More →

FX option expiries for Nov 10 NY cut FX option expiries for Nov 10 NY cut at 10:00 Easter Time, via DTCC, can be found below.
= EUR/USD: $1.1500-05(E470mn), $1.1515(E299mn), $1.1545-50(E1.25bn), $1.1600(E400mn), $1.1650(E465mn)
– GBP/USD: $1.2850(Gbp1.03bn)
– USD/JPY: Y112.50-55($869mn), Y113.00($1.63bn), Y113.50($378mn), Y114.00($435mn), Y115.00-05($611mn), Y115.25($710mn)
– USD/CHF: Chf0.9900($805mn), Chf1.0000($430mn), Chf1.0040-50($450mn)
– AUD/USD: $0.7650(A$319mn),
– USD/CAD: C$1.2695-1.2700($334mn)
– EUR/GBP: Gbp0.8800(E486mn)
– EUR/JPY: Y132.00(E540mn)
– AUD/JPY: Y86.25(A$375mn)
– AUD/NZD: N$1.1070(A$314mn)
– AUD/CAD: C$0.9820(A$231mn)
– USD/CNY: Cny6.5400($1.15bn), Cny6.6000($1.33bn), Cny6.6300($775mn), Cny6.6600($869mn)Read More →

Gold was steady near a three-week peak notched in the session earlier, supported by uncertainty regarding U.S. tax reform and is also poised for its first weekly gain in four weeks.
Spot gold was relatively flat at $1,285.28 an ounce, and is on track for an increase of over one percent for the week. The precious metal hit its highest since Oct. 20 at $1,288.34 per ounce on Thursday.
U.S. gold futures for December delivery slid 0.1 percent at $1,285.80.
U.S. Senate Republicans revealed a tax plan that differed from the House of Representatives' version on several key fronts, including how they treat the corporate tax rate, the tax deduction for state and local taxes, and the estate tax.
Spot gold might increase to a resistance at $1,292 an ounce, a break above could lead to a gain to $1,299, according to Reuters technical analyst Wang Tao.
In other precious metals, palladium fell 0.4 percent at $1,006.50 per ounce after hitting its highest since 2001 at $1,026.10 on Thursday…Read More →

Industrial production and foreign trade figures from the UK are due on Friday, headlining a light day for the European economic news.
At 2.00 am ET, Statistics Norway releases consumer and producer prices for October. Inflation is forecast to ease to 1.4 percent in October from 1.6 percent in September.
In the meantime, industrial production data from Finland is due.
At 2.45 am ET, the statistical office Insee releases France's industrial production data for September. Economists forecast industrial output to grow 0.5 percent on month, reversing a 0.3 percent fall in August.
At 4.00 am ET, Italy's Istat is slated to issue industrial production figures for September. Production is expected to fall 0.3 percent month-on-month in September, reversing a 1.2 percent rise in August.
At 4.30 am ET, the Office for National Statistics releases UK industrial production and foreign trade reports. Economists forecast industrial output to climb 0.3 percent on month in September, sl..Read More →

RBA: Inflation to remain below target for longer – TDS According to analysts at TDS, the RBA did not surprise them with its upbeat outlook for the global economy and on domestic employment, with above average employment growth expected to continue in today’s SoMP.
Key Quotes
“The RBA told us in its Statement on Tuesday that the growth outlook was little changed and this was reflected in today’s forecasts. Growth was revised lower by 0.25% in Jun’18 and Dec’19 and was left unchanged elsewhere. Annual GDP growth is expected to remain above 3% from mid Jun’18.”
“The RBA was tight lipped on the inflation trajectory in its Statement on Tuesday. Today the RBA revealed it has sliced 0.5% off its inflation profile from mid-next year, meaning the RBA expects underlying inflation to reach the bottom end of the 2-3% target band only in Jun’19.”
“The cuts in the underlying inflation profile take into account the reweighting of the CPI basket and substitution bias effect. The RBA had estimated ..Read More →

RBNZ will exercise patience on the policy front – Nomura Analysts at Nomura point out that the RBNZ this week announced an unchanged cash rate, at 1.75%, as was uniformly expected and also repeated its open-ended conclusion that policy will remain unchanged for a “considerable period”, with “numerous uncertainties” meaning that “policy may need to adjust accordingly”.
Key Quotes
“Its updated forecasts – which now incorporate a preliminary assessment of the impact of new government policies in several areas – show a slightly weaker GDP profile but a higher inflation path over the next 18 months, with lower trade-weighted index forecasts, and the official cash rate estimated to rise a fraction in Q2 of 2019, from Q3 previously. We continue to think the RBNZ (like the RBA) will exercise patience on the policy front, and we continue to forecast an RBNZ rate hike in early 2019.”Read More →

US: Trump’s “state visit plus” to Beijing didn’t go without a gasp – Rabobank According to analysts at Rabobank, US President Trump’s “state visit plus” to Beijing appears to have gone without a hitch, but it didn’t go without a gasp.
Key Quotes
“There was an audible reaction –and then scattered applause– from assembled journalists when Trump announced “I don't blame China,” when talking to business leaders about the huge and persistent US trade deficit with the county. “After all, who can blame a country for being able to take advantage of another country for benefit of their citizens? I give China great credit.”
“Understandably, that remark immediately generated much ‘carping’ (a subtle reference back to the Japanese fishpond incident for those who have been reading all week). Wasn’t this outrageous? Wasn’t it a betrayal of his base? Arguably not. Trump was factually correct that the US-China trade deficit is a logical consequence of the economic framework put in place betw..Read More →

Bank of France to point to solid growth in 4Q – SocGen The Banque of France will release its first estimate of 4Q GDP growth, probably at 0.5% qoq, according to analysts at Societe Generale.
Key Quotes
“We expect the October Bank’s index of business sentiment in the manufacturing sector to rise from 104 to 105.6 (0.6 standard deviations above the long-term average). That would partially stop its diverging trend with the PMI and INSEE indicators (respectively at 1.1 and 1.0 standard deviations above the mean).”
“Based on our own econometric models, this reading would be consistent with firm growth in 4Q17 of 0.6% qoq, or 2.4% p.a. The BoF survey has a sample of more than 10,000 companies, so it is generally reliable. It is completed at the end of the month, i.e. later than the INSEE and the PMI surveys which are conducted in the middle of the month. Looking ahead, we expect the manufacturing index to soften over the next 12 months, in line with our view that global demand will slow ..Read More →

Disney earnings posted quarterly results that failed to impress Wall Street as the media company's television business continues to struggle.
Total revenue from Disney's cable business, the company's biggest unit which covers ESPN and the Disney Channel, declined to $3.95 billion in the fourth quarter, falling short of the estimated $4.06 billion by analysts. Both advertising revenue and subscribers declined at ESPN.
Overall revenue declined to $12.78 billion in the period ended September 30, down from $13.14 billion a year prior. Net income fell to $1.75 billion from $1.77 billion, while adjusted profit came in at $1.07. The figures are lower than the expected EPS of $1.13 and revenue of $13.23 billion.
In order to offset the problems the firm faces in its TV networks unit, Disney is creating a family-friendly streaming services that it will cater directly to consumers to compete with Netflix Inc and other market competitors. Starting 2019, the company's new rele..Read More →