Chinese Congress of the Communist Party ends today, initial reports indicate President Xi-Jinping is following a moderate path in the set up of the new Standing Committee. Will this good for stability in China? Read some of 24 October key market movers.
24 October, Danske Bank – Euro zone is focussed on PMI releases. Manufacturing PMI on a rising trend since August 2016, within reach of post-financial crisis peak in February 2011. The stronger euro may have started to affect new export orders adversely and October PMI expected to remain the same.
Danske Bank Research: 24 October Key Market Movers
- Asia, Asian equity markets moved modestly higher this morning, despite a modest decline in the USA equity markets on Monday. The USA equity markets await for further earnings results. More news also anticipated on the process of the US tax reform.
- Spain, Spanish Bond market fairly resilient following recent escalations on the Catalan crisis
- China, Chinese 19th Congress of the Communist Party ends today
- USA, Preliminary Markit PMI’s are due. Service Index indicates service sector main growth driver. Danske Bank Research concerned about the large gap between ISM Manufacturing and Markit PMI Manufacturing.
- EU, modest movements seen in the major crosses this morning. Markets await the ECB meeting on Thursday.
Key 24 October Market News
No major events or key economic data releases.
Fixed income markets outlook
Trump said last night that he is `very, very close’ regarding the Fed chair decision. The candidates in the run-up are Powell, Taylor and Yellen. This announcement expected to be a potential market mover and expected any day now.
The main release today will be the euro area Flash PMIs. Mario Draghi was a ‘PMI man’. Draghi’s preferred growth indicator has been on a strong upward trend over the past year with manufacturing PMI hitting a new post-debt crisis in September at 58.1. ECB releases its Bank Lending Survey today. The core FI markets recovered slightly yesterday after the Friday sell off. The rally was broad based, Germany rallied 2bp in 10Y, Spain/Italy rallied 4bp.
Sweden, Kommuninvest set to introduce new 7Y benchmark bond today, (SE0010469205), which will become the longest benchmark bond issued in SEK by Kommuninvest.
24 October Forex markets Overview
Danske Bank Research stress clients should position for break higher going into year end. Favouring the bullish ratioed seagull to play the upside.
Danske Bank Research continues to see EURSEK as a near-term 9.50-9.65 range play and highlights risk to the top side.
Danske Bank Research indicated clients look to sell on bounces above 0.8970 for a test of the the 0.8750 going into the BoE meeting on 2 November.
EURUSD to trade in tight ranges with a slight bearish bias going into the ECB meeting.
The post-election rally in USDJPY is likely to prove sshort-livedand Danske Bank Research looks for the cross to settle in the 111.50-114.10 range again
This research report “24 October Key Market Movers” has been prepared by Danske Bank A/S (‘Danske Bank’). The author of the research report is detailed on the front page.
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