China’s consumer price index (CPI) and producer price index (PPI) came in at 1.9% and 6.9% respectively, while the consensus was for 1.8% and 6.6%.

In September the CPI rate was 1.6% and the PPI level was 6.9%. The Chinese government claimed they will comfortably achieve their 6.5% growth target this year. Investors are adopting to the mid-single digit growth rate from second-largest economy in the world, and a strong level of demand is required to keep the country ticking along.  

 

It was relatively quiet finish to the US session last night as the Dow Jones and S&P 500 managed to eke out tiny gains on the day. Traders are a bit worried that President Tump’s tax reforms could be delayed as the Republican Party lost out in elections in New Jersey and Virginia. This suggests the Republicans are not as popular was Mr Trump would have you believe, and in turn they may find it difficult to change the tax system.

 

The indices were a bit subdued over the possible hold-up in the relation to the tax proposals. The banks on the other hand lost ground. Citi Group and Bank of American lost 0.5% and 1.5% respectively. Banks have the potential to earn more money in a higher interest rate environment, and concerns in relation to the tax overhaul dragging on has is putting pressure on the banks.   

 

Gold traded higher last night as the lack of clarity surrounding Mr Trump’s tax plans prompted buying of the metal. Gold has been trading sideways lately as the market can’t seem to make its mind up which way it is heading, but last night it hit a level not seen for nearly three weeks. Gold suffered when traders were optimistic that a raft of pro-business tax policies would be introduced, and now the metal is reversing those losses.

 

It continues to be a light week in terms of economic data, and the most important economic indicator from Europe today will be the German trade figures at 7am, imports are expected to rise by 0.3% and exports are anticipated to fall by 1.1%

 

EUR/USD – has been in decline for the past two months, and the next level of support might be found at 1.1479. Rallies may encounter resistance at the 100-day moving average at 1.1710. Beyond 1.1720, the next resistance could be found at the 50-day moving average at 1.1800. 

 

GBP/USD – is still in its upward trend and while it is above the 1.3000 mark, the outlook may remain positive. Rallies may incur resistance at 1.3335. A break below 1.3000 could send it to 1.2900.

 

EUR/GBP – is edging towards the 200-day moving average at 0.8765, and a break below that metric could see it retest 0.8733 or 0.8600. Rallies could run into resistance at the 50-day moving average at 0.8911. 

 

USD/JPY – has been pushing higher since early September, and 114.73 could be the next level to watch. A break above 114.73, might see the market target 115.62 and support may come into play at 113.00. The next support level below that could be the 200-day moving average at 111.75.

 

 

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.