Daily Markets Broadcast 2019-10-08

Daily Markets Broadcast

2019-10-08

Wall Street slides on dimmed trade expectations

US indices traded in narrow ranges yesterday, eventually succumbing to pressure after China had said they may be prepared to agree to a partial trade deal, but would not alter its intellectual property laws. Onshore China markets re-open after a week-long break.

US30USD Daily Chart

Source: OANDA fxTrade

• The US30 index declined for the first day in three yesterday amid scaled back expectations for the high-level US-China trade talks later this week
• The index retreated from the 55-day moving average, which is at 26,505 today. That moving average has capped prices on a closing basis so far this month
• US producer prices are expected to rise 1.8% y/y in September, the same pace as August. We can anticipate speeches from Fed’s Evans and Powell.

DE30EUR Daily Chart

Source: OANDA fxTrade

• The Germany30 index looks set for a fourth daily gain today amid hopes for some positive news in the Brexit deal-or-no-deal front
• The index tested the 100-day moving average yesterday but failed to close above it
• German factory orders came in worse than expected yesterday and this could have a negative impact on today’s release of industrial production numbers for August. Surveys suggest IP fell 0.3% m/m, which would be the third month in a row it has been below zero.

CN50USD Daily Chart

Source: OANDA fxTrade

• Onshore China markets are due to open after a week-long break. During the week, futures markets have traded in a narrow range, posting declines for the past two sessions
• The index is currently sandwiched between the 55-day moving average at 13,516 and the 100-day moving average at 13,387. The 100-day average has supported prices on a closing basis since August 16
• Caixin’s China services PMI is seen improving to 52.9 in September from 52.1 the previous month. That would be the second monthly improvement in a row.

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