The Chinese GDP (Q3) of 4.9% came in lower than expected of 5.2% however, this read was far better than the prior read of 3.2%. The Chinese industrial production of September climbed to 6.9% above the expected 5.8% and the prior print of 5.6%. Additionally, the Chinese Retail Sales of 3.3% came in better than expected of 1.8% and better than the prior of 0.5%. This data sends mixed signals about the Chinese economic recovery.
Equities
Hopes of a possible agreement on US fiscal stimulation and news about a possible registration of Pfizer Coronavirus vaccine have calmed down risk-off sentiment. Asian stock markets traded higher on Monday amid the better than expected industrial Chinese data.
The house speaker Nancy Pelosi stated that there are too many issues that should be agreed on with the White House however, they are not far from an agreement. Although, President Trump advisors said that it would be difficult to execute the relief package before the US elections.
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Stock Market |
Change % |
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-0.5% | |
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-0.01% | |
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-0.9% | |
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+0.1% | |
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+1.1% | |
|
+0.8% | |
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+0.8% |
EUR/USD and Main Currency Pairs
The greenback rose last week and closed on Friday in the green due to the risk-off sentiment in the market mainly from the delay in passing the US stimulus package and the increasing numbers of the Coronavirus in the US and Europe. Technically, the US Dollar index is still trading below 94.04 and this means that the index could fall towards 91.78.
The EUR/USD closed below the 50-day moving average reflecting bull’s weakness and tested 1.1713 twice. A daily close below that level could send the pair towards 1.1621.
The GBP/USD consolidated in the trading zone 1.2773- 1.3048. The price of the pair does not reflect at the moment any hard-Brexit risk as markets believe that the EU/UK will eventually end up with a deal. A daily close below 1.2773 may cause a further fall towards 1.2505.
Gold and Oil
Oil prices benefited from positive Chinese data showing a significant increase in industrial production. Technically, the Brent Crude rallied and remained above $42.50 last week however, the coronavirus increasing numbers in the US and Europe would keep any rally in check. The US Crude closed last week above the 50-day moving average and opened on Monday with an upward gap. A failure in closing above $42.23 could reverse the price’s direction towards $38.37.
The Gold traded in a sideways move creating higher lows with lower highs. A failure in closing above $1,921 could send the price for a test of $1,861/oz.
Looking Ahead
EUR/USD and Gold traders will follow the Fed Chairman Powell’s speech at 1:00 PM (GMT) and the ECB Lagarde’s speech at 1:45 PM. Investors will fallow also the Fed member William’s, Clarida, Bostic, and Harker's speeches at 3:00 PM, 4:45 PM, 7:20 PM, and 8:00 PM, respectively.