Stocks are mixed to finish the week with major indices trading slightly to either side of flat as traders pause to reflect on a big October and prepare for next week’s flurry of economic and corporate announcements. Action in currencies today has been particularly interesting with the USD giving back some of its recent gains on signs that its more hawkish stance may not be going as far against the grain as it would have seemed a week ago. Last night, the Bank of Japan surprised some people out there by not increasing its QE program and not pushing out the target for reaching its 2% inflation target as had been speculated with Governor Kuroda blaming low inflation on the oil crash and indicating moderate growth continues. This, along with the Fed’s hawkish hold on Wednesday has been seen as two wins for the hawkish side offsetting last week’s two wins for doves through the ECB QE signal and PBOC rate cuts. The strongest currency today has been NZD rising on better than expected business sentiment. Talk in the press that China’s two child policy could boost milk demand seems possible eventually but too premature to impact the currency for long in the short term. To no surprise, JPY is climbing after the central bank declined to go more dovish. Interestingly, EUR and continental currencies are bouncing back nicely today. Mixed comments from ECB members at a conference in Estonia earlier this week, combined with better than expected Eurozone employment and inflation reports suggest discussion over more ECB stimulus may be more contentious than it seemed after ECB President Draghi’s press conference last week. CAD has been the weakest currency among majors today despite oil price gains. The loonie’s wings appear to have been clipped by a softer than expected Canada GDP report for August which indicates the door remains open even, if only a crack, to a possible Bank of Canada rate cut in December. There’s still the potential for some trading action today around US Chicago PMI and consumer sentiment reports. Next week could get off to an active start with manufacturing PMI reports kicking off a big week for data. Corporate News Exxon Mobil $1.01 vs street $0.89 Imperial Oil $0.56 vs street $0.51 Chevron $1.09 vs street $0.76 Electronic Arts $0.65 vs street $0.45, raises full year guidance to $3.00 from $2.85, looking for a big launch for Star Wars: Battlefront in the coming quarter First Solar $3.38 vs street $1.50, raises full year guidance to $4.35-$4.50 from $3.30-$3.60 Abbvie $1.13 vs street $1.08 Economic News Significant announcements released overnight include: US Senate passes budget deal 64-35 OPEC oil production down 0.12 mmbbls/d to 31.64 mmbbl/d but still above its 30.0mmbbl/d target Japan interest and QQE decision no change, an increase to QQE had been expected in some quarters Japan unemployment rate 3.4% as expected Japan household spending (0.4%) vs street 1.2% Japan consumer prices 0.0% as expected Japan CPI ex food and energy 0.9% as expected Japan vehicle production (2.6%) vs previous (4.7%) Japan construction spending 6.7% vs previous (15.6%) Japan housing starts 0.90m vs street 0.93m Canada August GDP 0.9% vs street 1.0% US employment cost index 0.6% as expected US core PCE inflation 1.3% unchanged vs street 1.4% US personal income 0.1% vs street 0.2% US personal spending 0.1% vs street 0.2% Germany retail sales 3.4% vs street 4.2% Spain GDP 3.4% as expected Italy unemployment rate 11.8% vs street 11.9% Norway unemployment rate 2.9% as expected Greece retail sales (4.0%) vs street (9.0%) Eurozone unemployment rate 10.8% vs street 11.0% Eurozone consumer prices 0.0% as expected Eurozone core CPI 1.0% vs street 0.9% NZ business confidence 10.5 vs previous (18.9) NZ activity outlook 23.7 vs previous 16.7 Australia producer prices 1.7% vs previous 1.1% Upcoming significant announcements include: 9:45 am EDT US Chicago PMI street 49.0 vs previous 48.7 10:00 am EDT US consumer sentiment street 92.5 vs previous 87.2 10:00 am EDT FOMC Williams speaking 11:25 am EDT FOMC George speaking 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.
Mixed finish to October on Bank of Japan hold, plus a flood of economic data and earnings
09:20, 30 October 2015