CFTC Commitments of Traders - how the leveraged players moved

Harker is President of the Federal Reserve branch in Philadelphia

• Says that he is not convinced a rate hike in December is the prudent thing to do
• Citing rising uncertainty on the outlook 

• A recap of Friday's Talking Fed Heads Clarida, Kaplan, Evans comments

Federal Reserve speakers today, with much toing and froing for the USD as a result

• some evidence of global slowing
• impacts big parts of the (US) economy through trade and through capital markets and the like

• my own judgment that global growth is going to be a little bit of a headwind
• may spill over to the United States

• International is a little slower; Brexit …  housing market … all of those are in the mix for uncertainties
• at the moment, it's not enough to upset or adjust the trajectory that I have in mind
  

• More Fed comments - Harker not convinced a December rate hike is prudent

BoE thoughts from Barclays, saying the Bank of England is constrained by political risk.

• market has … moved to pricing out a rate hike by the MPC in 2019
• increased political risk is viewed as potentially constraining the MPC's ability to act if the downside risks associated with a disorderly Brexit outcome begin to crystallise
• against this … high frequency data in the UK have been mixed at best … forward-looking components looking distinctly weak, although this is as much a global story as a UK one
• The MPC seems likely to be forced to continue to talk about a tightening bias while acknowledging that Brexit-related downside potential continues to rise and is likely to intensify over the remained of the year

One of the high profile quitters David Davis on CNBC

• PM's May's deal with the EU will be rejected by the UK parliament
• May will have to come up with another alternative to the Brexit deal with the EU 

A preview of the Reserve Bank of Australia November 2018 Monetary Policy Meeting of the Reserve Bank Board

• We expect the latest set of minutes to deliver an upbeat tone consistent with the RBA's upward revisions to GDP, inflation and downward revisions to the unemployment rate in the quarterly statement released soon after the November board meeting. Key domestic data since the board met have been decent with another stellar employment report and some lift in annual wages growth. This suite of labour market indicators remains key to the RBA policy debate and will likely lift their confidence in achieving a return to within target inflation.
  

US - UK trade talks headlines, just a few items on the wires, not much detail.

• Liam Fox says he welcomes US steps to begin talks on trade post-Brexit
• David Davis adds the US officials are receptive to a trade deal with the UK

Stephen Barclay has been picked on as the new Brexit secretary

GS on the Australian and New Zealand dollars against the euro, citing China growth bottoming out 

• Despite strong domestic fundamentals, AUD has weakened in lockstep with other EM assets this year against a backdrop of China slowdown concerns
•  NZD has faced similar headwinds, as well as additional jitters around political tensions and a more dovish perception of the central bank
• Now, with China growth bottoming out and domestic inflationary forces starting to build, we think there is room for a rebound
• We recommend funding the trade out of EUR, where a confluence of political risks and growth concerns is likely to cap performance over the next few months and carry is attractive

A heads up for remarks from hedge fund big wig Paul Tudor Jones. He was speaking at  the Greenwich Economic Forum in Greenwich, Connecticut.

• "We're going to stress test our whole corporate credit market for the first time" 
• "From a markets perspective, it's going to be interesting. There probably will be some really scary moments in corporate credit."
  

• Market Watch
• FT (gated)
• Bloomberg 

A US House Republican plans to issues subpoenas on boht. This is a heads up on what it is to come for the next two years.

A big risk this weekend is a toppling of Prime Minister May from the leadership. But that is just one.

USD sold on Global Growth concerns

• Intro Paragraph Text Here.
• NY Fed GDP Nowcast steady at 2.6%
• Fed's Evans on the wires again
• USDJPY responding to Trump's tweet
• Baker Hughes oil rigs  888 versus 886 prior 
• Trump says US will hopefully make a deal with China
• May to the rescue. If you want a job done properly...
• US Treasury 10-year yields fall to 2 week low 
• Global growth forecasts are down 
• Federal Reserves Evans on the wires
• Total US Household debt now $837bln higher than crisis era-peak
• Slowing Global growth comments from Fed cause dollar to slide
• Snapshot of the weakest and strongest currencies as US equites open down
• USDJPY down to daily 50EMA as risk off tone enters 
• US October industrial production +0.1% vs +0.2% expected
• USDCAD pulls away from the 200EMA on the 1 hour chart 
• Canada manufacturing sales for September +0.2% versus 0.1% expected
• ECB's Weidmann on the wires
• A quick look at GBPUSD on the 1 hour chart.
• Heads up - Tech stocks may be in for a bad day
•  May has little chance of winning a Parliamentary vote
• UK Trade Secretary Liam Fox saying, 'No deal could happen'
• Trade ideas thread - Friday November 16

Markets

The day started off slowly with few moves in the currency markets until a flurry of dollar selling which was triggered by a bearish outlook from the Fed on Global growth. This was perceived to be a note of caution in the Fed's hiking path and the USD Index retreated from the 97.00 daily figure. The Index needed to break clear of that level to maintain it's march higher.  I did a quick look at some of the reports I could find on Global Growth and the consensus was for a slowdown. However, Fed's Evans spoke later in the session around 1800 GMT and questioned the reality of vs the fear/prediction of a global slowdown in growth.

A beat in the Canadian manufacturing sales m/m helped USD/CAD moved down through it's weekly lows and price close beneath the 4 hour 100EMA.  Initially rising oil prices assisted CAD with it's bullish charge before it gave up some it's gains as Oil sold off again and USD CAD retraced on the day up towards the 50% move of it's downward fall.

AT around 1745GMT Trump issued a number of positive statements about his willingness to do a trade deal with China. However, the relief in US stocks and the USD/JPY being bid was short. The bottom line was that nothing had changed and this was merely rhetoric from the US President. However, it does give a taste of how the market would respond to a conciliatory Trump. 

Thankfully Brexit news receded to a mere trickle of the occasional update, which I must say was a most welcome change from the barrage of updates received over the last few days. Theresa May has decided to take over the role of Brexit Secretary since no-one really wants the job. Who can blame them? Other then that we are marking time with the Brexit saga as May heads toward taking Parliament a deal they will reject. She is a remarkable lady to undertake her role in such testing circumstances.  Have a great weekend one and all and Adam will be back next week to resume your normal service. Take care one and all.

p.s The strongest currency was the JPY as a risk off mood lingered across the entire session. USD was sold across the board.

NY Fed GDP Nowcast at 2.6%

Federal Reserve's Evans

USDJPY now off from 112.93 highs and at 112.765

• Dow J +0.30% 
• Nasdaq -0.46%
• S&P 500 +0.20%

Total rig counts 1082  versus 1081 last week

• oil rigs  888 versus 886 last week
• gas rigs 194 versus 195 last week
• total rig count 1082 versus 1081 last week

Trump getting cosy with China

do it yourself.

US Stocks resume their earlier falls

Fed concerned about slowing Global Growth 

Global growth is expected to edge down over the next two years, as global slack dissipates, trade and investment moderate, and financing conditions tighten. In EMDEs, growth in commodity importers is expected to remain robust, while the rebound in commodity exporters is projected to mature. Risks to the outlook are tilted to the downside, including the possibility of disorderly financial market movements, escalating trade protectionism, heightened policy uncertainty, and rising geopolitical tensions. EMDE policymakers need to rebuild monetary and fiscal policy buffers and boost potential growth by promoting competitiveness, adaptability to technological change, and trade openness.

now predicting 3.7 percent global growth in both 2018 and 2019, down from its July forecast of 3.9 percent growth for both years. 

Via Reuters

USDJPY holding at Daily 50EMA

US household debt at record level

US Stocks bounce back from the opening losses