Daily Outlook...coronavirus relief package after urging his team on Twitter to “go big” in...

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Research Department 13 October 2020

Daily Outlook GLOBAL MARKETS & ECONOMIES | WEEKLY ECONOMIC INDICATORS | CURRENCIES | PRECIOUS METAL | O I L |

GLOBAL ECONOMIES

Japanese wholesale prices fell 0.8% in September from the same month a year earlier, data showed on Monday, marking the seventh straight month of year-on-year declines and heightening the risk the country will slide back into deflation. Squeezed mostly by soft global demand for commodities and Japanese machinery goods, the weakness in wholesale prices highlights the challenge Tokyo faces in cushioning the impact of the coronavirus pandemic on the world's third-largest economy.

Japan’s core machinery orders unexpectedly rose in August, extending gains and highlighting resilience in capital spending even as the economy remains under pressure from the coronavirus pandemic. Core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, grew 0.2% in August after a 6.3% rise in July.

Bank of Japan Governor Haruhiko Kuroda stressed on Monday his readiness to take additional monetary easing steps, saying the central bank had not run out of tools to cushion the economic blow from the COVID-19 pandemic.

China vowed on Monday to boost the competitiveness of state companies through reforms including more cooperation with private firms and capital - while keeping a firm grip on strategic industries such as network infrastructure.

French President Emmanuel Macron and other EU leaders will insist on tough enforcement rules for any trade deal with Britain, warning that Prime Minister Boris Johnson's bid to override the Brexit treaty has shown Britain's word cannot be trusted, the Financial Times reported.

The European Union is taking a step towards a fiscal union with its plans to recover from the coronavirus pandemic, which involve the European Commission borrowing in financial markets, German Finance Minister Olaf Scholz said on Monday.

There is reluctance among European Central Bank policymakers to follow the U.S. Federal Reserve’s move to target an average inflation rate, fearing this could tie their hands, sources involved in a revamp of ECB policy told Reuters.

The Swiss government raised its 2020 economic forecast on Monday but remained cautious about a possible second wave of COVID-19 that could curtail growth if it triggered a nationwide lockdown. Swiss output will shrink by 3.8% this year, a less severe coronavirus-triggered slump than the 6.2% drop previously expected, the State Secretariat for Economic Affairs (SECO) said.

The Bank of England asked banks on Monday how ready they are for zero or negative interest rates, following up its announcement last month that it was considering how to take rates below zero if necessary.

Bank of England Governor Andrew Bailey said on Monday the central bank thought that Britain’s economy could struggle more than it has forecast to recover from the coronavirus crisis.

Republicans in the U.S. Senate will go along with what President Donald Trump wants in coronavirus relief legislation, a White House spokeswoman said on Monday, as the White House pursues a deal with Democratic lawmakers.

GLOBAL MARKETS

U.S. stocks climbed on Monday as investors looked to Washington to unveil more fiscal stimulus to aid the economy and hoped that Wall Street’s largest banks would post decent quarterly earnings later this week.

Optimism that more U.S. stimulus was in the offing came in spite of indications that talks in Washington had stalled again, leading the Trump administration to call on Congress to pass a less ambitious coronavirus relief bill. U.S. President Donald Trump on Friday had offered a $1.8 trillion coronavirus relief package after urging his team on Twitter to “go big” in negotiations with the Democrats to reach a deal.

Global stocks had hit five-week highs on Monday led by China’s post-holiday surge as investors bet on a steady recovery for the world’s No. 2 economy, while hopes for stimulus offset worries about rising COVID-19 cases in Europe.

JPMorgan and Citigroup will kick off the third-quarter earnings season on Tuesday, followed by Goldman Sachs, Bank of America and Wells Fargo on Wednesday and Morgan Stanley on Thursday. Analyst data from Refinitiv showed Citigroup and Wells Fargo could report that net income has slid 60%, while JPMorgan and Bank of America are expected to post drops of 30%. Investment banks Goldman Sachs Group Inc and Morgan Stanley are expected to do better by announcing more modest declines of between 5% and 10%. The U.S. bond market is closed on Monday for Columbus

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Day.

FOREX

The dollar index was little changed near three-week lows on Monday as optimism over the possibility of a COVID-19 relief bill was curbed by concern over the pandemic, while China’s yuan fell after the People’s Bank of China (PBOC) changed its reserve requirements policy. On Sunday, the Trump administration called on Congress to pass a stripped-down coronavirus relief bill using leftover funds from an expired small-business loan program, as negotiations on a broader package continue to run into roadblocks. A White House spokeswoman said on Monday that Senate Republicans will go along with what Trump wants in legislation. The greenback has held within a range of about 2% over the past three weeks as talks have gone back and forth. The dollar had its biggest loss in six weeks on Friday amid rising hopes a fiscal stimulus package would be agreed to stem the economic fallout from COVID-19. More stimulus is seen as negative for the dollar. Opinion polls show Biden with a substantial lead nationally, but the advantage is smaller in some of the states that may decide the election outcome. The offshore yuan fell 0.76% against the dollar after China’s central bank said on Saturday it would lower the reserve requirement ratio for financial institutions when conducting some foreign exchange forwards trading, a move seen as a bid to curb recent yuan appreciation. The yuan had reached a more than 17-month high on Friday in offshore trade and has gained nearly 8% against the dollar since late May. But on Monday the offshore yuan was on track for its biggest daily decline against the dollar since March. The move was also cited by analysts as a reason for weakness in the China-sensitive Australian dollar, which was down about 0.4%. The dollar index fell 0.059%. The euro was down 0.18% to $1.18105. In Europe, the World Health Organization has urged governments to restrict activity to combat a rapid rise in COVID-19 infections. The Japanese yen weakened 0.24% versus the greenback at 105.36 per dollar after Bank of Japan Governor Haruhiko Kuroda stressed his readiness to take additional monetary easing steps. The pound held above $1.30, strengthening after Prime Minister Boris Johnson set out on Monday a three-tier system of local lockdown measures in England. Sterling was last trading at $1.3065, up 0.15% on the day.

GOLD

Gold prices fell from a three-week peak on Monday as expectations of an inadequate U.S. coronavirus relief bill dented the appeal of bullion, which is used as a hedge against likely inflation. Spot gold fell 0.3% to $1,923.56 per ounce by 1:41 p.m. EDT (1741 GMT), after hitting its highest since Sept. 21 at $1,932.96. U.S. gold futures settled up 0.1% at $1,928.90. The Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill using leftover funds, as negotiations on a broader package ran into resistance. Gold has gained over 26% so far this year helped by stimulus from governments and global central banks as it considered a hedge against inflation risks and currency weakening. Investors were also keeping a close eye on the upcoming U.S. election due in a couple of weeks, where Democrat Joe Biden is seen as more likely to win. Bullion also eased as Wall Street's main indexes weremsupported by rising tech stocks. The U.S. government and bond market are closed on Monday for Columbus Day. Among other precious metals, silver fell 0.2% to $25.07 per ounce, platinum fell 1.3% to $874.22, while palladium lost 1.6% to $2,399.86.

OIL

Oil prices settled about 3% lower on Monday as force majeure at Libya’s largest oilfield was lifted, a Norwegian strike affecting production ended and U.S. producers began restoring output after Hurricane Delta. Brent crude settled down $1.13, or 2.6%, to $41.72 a barrel. U.S. West Texas Intermediate ended 2.9%, or $1.17, lower at $39.43. Production in Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), is expected to rise to 355,000 barrels per day (bpd) after force majeure at the Sharara oilfield was lifted on Sunday. Rising Libyan output will pose a challenge to OPEC+ - a group comprising OPEC and allies including Russia - and its efforts to curb supply to support prices. Hurricane Delta, which inflicted the biggest blow in 15 years to energy production in the U.S. Gulf of Mexico last week, was downgraded to a post-tropical cyclone at the weekend. Workers headed back to production platforms on Sunday and French oil major Total restarted its 225,500 barrel per day Port Arthur refinery in Texas. The Louisiana Offshore Oil Port (LOOP) on Monday said it has resumed operations at its offshore Marine Terminal and there are no interruptions in deliveries at the Clovelly Hub. Front-month prices for both contracts gained more than 9% last week in the biggest weekly rise for Brent since June. But both fell on Friday after Norwegian oil companies struck a deal with labour union officials to end a strike that had threatened to cut the country’s oil and gas output by close to 25%. Prices were also pressured by a jump in new COVID-19 cases, which has raised the spectre of more lockdowns which could dampen demand for oil. Infections are at record levels in the U.S. Midwest. In

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Europe, British Prime Minister Boris Johnson announced new coronavirus lockdown measures and Italy is preparing fresh nationwide restrictions.

ECONOMIC INDICATORS

DATE WIB CTY INDICATORS PER ACTUAL FORECAS

T PREV. REV.

10-Oct - 18-Oct N/A CN Foreign Direct Investment YoY CNY Sep -- 18.7%

Mon/12-Oct-20 06:50 JP Bank Lending Ex-Trusts YoY Sep 6.4% -- 6.7%

06:50 JP Bank Lending Incl Trusts YoY Sep -- 6.7%

06:50 JP Core Machine Orders MoM Aug 0.2% -1% 6.3% 06:50 JP Core Machine Orders YoY Aug -15.2% -15.6% -16.2% 06:50 JP PPI MoM Sep -0.2% 0.0% 0.2% 0.1%

06:50 JP PPI YoY Sep -0.8% -0.5% -0.5% -0.6% 12:45 CH SECO October 2020 Economic Forecasts

13:00 JP Machine Tool Orders YoY Sep P -15% -- -23.2% -23.3% ALL CA Bank Holiday (Thanksgiving Day) 21:00 GB BOE's Haskel speaks.

23:00 GB BOE's Bailey speaks.

Tue/13-Oct-20 N/A CN Exports YoY Sep 10.2% 9.5% N/A CN Exports YoY CNY Sep 9% 11.6%

N/A CN Imports YoY Sep 0.0% -2.1% N/A CN Imports YoY CNY Sep 0.2% -0.5% N/A CN Trade Balance Sep $59.20b $58.93b

N/A CN Trade Balance CNY Sep 419.50b 416.59b 13:00 GB Average Weekly Earnings 3M/YoY Aug -0.6% -1% 13:00 GB Claimant Count Rate Sep -- 7.6%

13:00 DE CPI EU Harmonized MoM Sep F -0.4% -0.4% 13:00 DE CPI EU Harmonized YoY Sep F -0.4% -0.4%

13:00 DE CPI MoM Sep F -0.2% -0.2% 13:00 DE CPI YoY Sep F -0.2% -0.2% 13:00 GB Employment Change 3M/3M Aug -48k -12k

13:00 GB ILO Unemployment Rate 3Mths Aug 4.3% 4.1% 13:00 GB Jobless Claims Change Sep -- 73.7k 13:00 GB Weekly Earnings ex Bonus 3M/YoY Aug 0.6% 0.2%

16:00 DE ZEW Survey Current Situation Oct -63 -66.2 16:00 EZ ZEW Survey Expectations Oct -- 73.9

16:00 DE ZEW Survey Expectations Oct 74.8 77.4 17:00 US NFIB Small Business Optimism Sep 101.2 100.2 19:30 US CPI Core Index SA Sep 269.392 268.747

19:30 US CPI Ex Food and Energy MoM Sep 0.2% 0.4% 19:30 US CPI Ex Food and Energy YoY Sep 1.8% 1.7% 19:30 US CPI Index NSA Sep 260.225 259.918

19:30 US CPI MoM Sep 0.2% 0.4% 19:30 US CPI YoY Sep 1.4% 1.3%

19:30 US Real Avg Hourly Earning YoY Sep -- 3.3% 19:30 US Real Avg Weekly Earnings YoY Sep -- 3.9%

Wed/14-Oct-20 06:30 AU Westpac Consumer Conf Index Oct -- 93.8 06:30 AU Westpac Consumer Conf SA MoM Oct -- 18%

N/A KR BoK 7-Day Repo Rate Oct-14 0.5% 0.5% 11:30 JP Capacity Utilization MoM Aug -- 9.6%

11:30 JP Industrial Production MoM Aug F -- 1.7% 11:30 JP Industrial Production YoY Aug F -- -13.3% 16:00 EZ Industrial Production SA MoM Aug 0.2% 4.1%

16:00 EZ Industrial Production WDA YoY Aug -7.4% -7.7% 19:00 EZ ECB Chief Economist Lane Speaks 19:30 US PPI Ex Food and Energy MoM Sep 0.2% 0.4%

19:30 US PPI Ex Food and Energy YoY Sep 0.9% 0.6% 19:30 US PPI Ex Food, Energy, Trade MoM Sep 0.2% 0.3%

19:30 US PPI Ex Food, Energy, Trade YoY Sep -- 0.3% 19:30 US PPI Final Demand MoM Sep 0.1% 0.3% 19:30 US PPI Final Demand YoY Sep 0.2% -0.2%

20:00 GB BOE's Haldane speaks 20:00 US Fed’s Clarida Discusses U.S. Economic Outlook 21:00 EZ ECB's Villeroy speaks at online conference

21:30 US Fed’s Quarles Takes Part in Panel on Financial Stability

Thu/15-Oct-20 02:00 US Fed’s Kaplan Discusses The Road Ahead for Central Banks

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02:00 US Fed’s Quarles Discusses Financial Regulation

02:00 US Fed's Kaplan, Quarles Speak on Financial Supervision 04:45 AU RBA's Lowe Gives Speech Online

05:00 US Fed's Kaplan to Hold Virtual Town Hall 07:00 AU Consumer Inflation Expectation Oct -- 3.1%

07:30 AU Employment Change Sep -35.0k 111.0k 07:30 AU Full Time Employment Change Sep -- 36.2k 07:30 AU Part Time Employment Change Sep -- 74.8k

07:30 AU Participation Rate Sep 64.8% 64.8% 07:30 AU Unemployment Rate Sep 7.1% 6.8% 08:30 CN CPI YoY Sep 1.9% 2.4%

08:30 CN PPI YoY Sep -1.9% -2% 11:30 JP Tertiary Industry Index MoM Aug 1.6% -0.5%

19:30 US Continuing Claims Oct-03 -- 10976k 19:30 US Empire Manufacturing Oct 12 17 19:30 US Initial Jobless Claims Oct-10 -- 840k

19:30 US Philadelphia Fed Business Outlook Oct 14.5 15 20:00 GB BOE's Cunliffe speaks. 20:00 US Fed's Bostic to Speak on Benefits Cliffs

20:45 CA Bank of Canada's Tim Lane Speaks on Panel 22:00 US DOE Cushing OK Crude Inventory Oct-09 -- 470k

22:00 US DOE U.S. Crude Oil Inventories Oct-09 -- 501k 22:00 US DOE U.S. Distillate Inventory Oct-09 -- -962k 22:00 US DOE U.S. Gasoline Inventories Oct-09 -- -1435k

22:00 US Fed’s Kaplan Speaks to U.S. India Chamber of Commerce 22:00 US Fed’s Quarles Discusses Response to Covid-19

Fri/16-Oct-20 04:00 US Fed's Kashkari Speaks on U.S. Economic Outlook

04:30 NZ BusinessNZ Manufacturing PMI Sep -- 50.7 06:00 KR Unemployment rate SA Sep 3.8% 3.2% 16:00 EZ CPI Core YoY Sep F 0.2% 0.2%

16:00 EZ CPI MoM Sep F 0.1% 0.1% 16:00 EZ CPI YoY Sep F -0.3% -0.3% 16:00 EZ Trade Balance NSA Aug -- 27.9b

16:00 EZ Trade Balance SA Aug -- 20.3b 19:30 CA Manufacturing Sales MoM Aug -- 7%

19:30 US Retail Sales Advance MoM Sep 0.7% 0.6% 19:30 US Retail Sales Control Group Sep 0.2% -0.1% 19:30 US Retail Sales Ex Auto and Gas Sep 0.4% 0.7%

19:30 US Retail Sales Ex Auto MoM Sep 0.4% 0.7% 20:15 US Capacity Utilization Sep 72% 71.4% 20:15 US Industrial Production MoM Sep 0.6% 0.4%

20:15 US Manufacturing (SIC) Production Sep 0.8% 1% 21:00 US Business Inventories Aug 0.3% 0.1%

21:00 US U. of Mich. 1 Yr Inflation Oct P -- 2.6% 21:00 US U. of Mich. 5-10 Yr Inflation Oct P -- 2.7% 21:00 US U. of Mich. Current Conditions Oct P -- 87.8

21:00 US U. of Mich. Expectations Oct P -- 75.6 21:00 US U. of Mich. Sentiment Oct P 80 80.4

Sat/17-Oct-20 00:00 US Baker Hughes U.S. Rig Count Oct-16 -- --

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@researchvaf @rekhmen


EUR/USD

Interest Rate: 0.00% (EU)/ 0.00%-0.25% (US)

1.18705

RESISTANCE 1.18480

1.18305

SUPPORT

1.17905

1.17680

1.17505

SUGGESTION

BUY ---

SELL 1.1815

S/L 1.1845

T/P:

1.1765 1.1750

DATE OPEN HIGH LOW RANGE CLOSE CHANGE PREVIOUS

Oct 12 1.18154 1.18255 1.17855 40,0 1.18130 10,7 1.18237

WEEKLY OCTOBER 2020

HIGH LOW HIGH LOW HIGH LOW

1.18255 (12/Oct) 1.17855 (12/Oct) 1.18269 (09/Oct) 1.16945 (02/Oct) 1.20100 (01/Sep) 1.06362 (20/Mar) All price & chart based on Valbury MT4 Platform

USDJPY Interest Rate: 0.00%-0.25% (US)/-0.1% (JP)

105.979

RESISTANCE 105.813

105.561

SUPPORT

105.143

104.977

104.725

SUGGESTION

BUY ---

SELL 105.35

S/L 105.60

T/P:

104.90 104.75


Oct 12 105.634 105.648 105.230 41,8 105.308 28,7 105.595

WEEKLY OCTOBER 2020


105.648 (12/Oct) 105.230 (12/Oct) 106.095 (07/Oct) 104.931 (02/Oct) 112.213 (20/Feb) 101.170 (09/Mar)

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GBP/USD Interest Rate: 0.10% (GB)/ 0.00%-0.25% (US) 1.31711

RESISTANCE 1.31263

1.30937

SUPPORT

1.30163

1.29715

1.29389

SUGGESTION

BUY 1.3055

SELL ---

S/L 1.3010

T/P:

1.3125 1.3155


Oct 12 1.30328 1.30816 1.30042 77,4 1.30610 22,4 1.30386

WEEKLY OCTOBER 2020


1.30816 (12/Oct) 1.30042 (12/Oct) 1.30816 (12/Oct) 1.28185 (01/Oct) 1.34813 (01/Sep) 1.14094 (20/Mar)

All price & chart based on Valbury MT4 Platform

USD/CHF Interest Rate: 0.00%-0.25% (US)/ -1.25 to -0.25% (CH)

0.91494

RESISTANCE 0.91359

0.91118

SUPPORT

0.90742

0.90607

0.90366

SUGGESTION

BUY ---

SELL 0.9095

S/L 0.9125

T/P:

0.9050 0.9035


Oct 12 0.91031 0.91224 0.90848 37,6 0.90877 12,0 0.90997

WEEKLY OCTOBER 2020


0.91224 (12/Oct) 0.90848 (12/Oct) 0.92174 (02/Oct) 0.90848 (12/Oct) 0.98998 (20/Mar) 0.89975 (31/Aug)

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AUD/USD Interest Rate: 0.25% (AU)/ 0.00%-0.25% (US)

0.72580

RESISTANCE 0.72458

0.72263

SUPPORT

0.71946

0.71824

0.71629

SUGGESTION

BUY ---

SELL 0.7210

S/L 0.7220

T/P:

0.7195 0.7185


Oct 12 0.72286 0.72336 0.72019 31,7 0.72069 28,2 0.72351

WEEKLY OCTOBER 2020




NZD/USD Interest Rate: 0.25% (NZ)/ 0.00%-0.25% (US) 0.66927

RESISTANCE 0.66809

0.66640

SUPPORT

0.66353

0.66235

0.66066

SUGGESTION

BUY ---

SELL 0.6650

S/L 0.6660

T/P:

0.6635 0.6625


Oct 12 0.66629 0.66691 0.66404 28,7 0.66472 18,2 0.66654

WEEKLY OCTOBER 2020



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USD/CAD Interest Rate: 0.00%-0.25% (US)/ 0.25% (CA) 1.31766

RESISTANCE 1.31593

1.31346

SUPPORT

1.30926

1.30753

1.30506

SUGGESTION

BUY ---

SELL 1.3115

S/L 1.3130

T/P:

1.3095 1.3080


Oct 12 1.31289 1.31421 1.31001 42,0 1.31099 17,3 1.31272

WEEKLY OCTOBER 2020


1.31421 (12/Oct) 1.31001 (12/Oct) 1.33396 (07/Oct) 1.31001 (12/Oct) 1.46674 (19/Mar) 1.29559 (07/Jan)


EURJPY Interest Rate: 0.00% (EU)/-0.1% (JP)

125.351

RESISTANCE 125.109

124.753

SUPPORT

124.155

123.913

123.557

SUGGESTION

BUY ---

SELL 124.45

S/L 124.80

T/P:

123.85 123.65


Oct 12 124.817 124.868 124.270 59,8 124.396 46,3 124.859

WEEKLY OCTOBER 2020


124.868 (12/Oct) 124.270 (12/Oct) 125.066 (09/Oct) 123.006 (02/Oct) 127.047 (01/Sep) 114.399 (06/May)

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GOLD (XAU/USD)

1945.67

RESISTANCE 1939.37

1930.88

SUPPORT

1916.09

1909.79

1901.30

SUGGESTION

BUY ---

SELL 1924.00

S/L 1930.00

T/P:

1916.00 1910.00


Oct 12 1929.16 1933.07 1918.28 14.79 1922.40 6.06 1928.46

WEEKLY OCTOBER 2020


1933.07 (12/Oct) 1918.28 (12/Oct) 1933.07 (12/Oct) 1872.84 (07/Oct) 2075.18 (07/Aug) 1450.81 (16/Mar)


SILVER (XAG/USD)

26.268

RESISTANCE 25.903

25.491

SUPPORT

24.714

24.349

23.937

SUGGESTION

BUY ---

SELL 25.10

S/L 25.40

T/P:

24.70 24.40


Oct 12 25.133 25.538 24.761 0.78 25.079 0.02 25.099

WEEKLY OCTOBER 2020


25.538 (12/Oct) 24.761 (12/Oct) 25.538 (12/Oct) 22.858 (06/Oct) 29.834 (07/Aug) 11.616 (18/Mar)

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OIL WTI – CL-NOV/USD (Exp. 16 Oct 2020)

41.67

RESISTANCE 41.05

40.27

SUPPORT

38.87

38.25

37.47

SUGGESTION

BUY ---

SELL 39.65

S/L 40.20

T/P:

38.90 38.35


Oct 12 40.35 40.44 39.04 1.40 39.49 1.04 40.53

WEEKLY OCTOBER 2020


40.44 (12/Oct) 39.04 (12/Oct) 41.46 (09/Oct) 36.63 (02/Oct) 65.63 (08/Jan) 6.54 (21/Apr)


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DISCLAIMER: The information contained above is intended to provide general information and does not constitute or purports to be a financial advice, investment advice, trading advice, or any other advice. Any strategies, views or opinions expressed above are not intended to be presented as an offer or solicitation for the purchase or sale of any financial instrument. Client should seek personal professional advice before making any decisions. The client should ensure that financial instruments are suitable for his/her own individual objectives, financial situation and investment needs. This report is prepared for the use of Valbury e-Capital clients. The reproduction and redistribution of this material is strictly prohibited

Daily Outlook...coronavirus relief package after urging his team on Twitter to “go big” in...

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Transcript of Daily Outlook...coronavirus relief package after urging his team on Twitter to “go big” in...