Daily Markets Broadcast 2018-10-22

Daily Markets Broadcast

2018-10-22

Wall Street gets temporary reprieve after China voices

US indices finished last week’s volatile period barely changed, though sentiment is slightly negative at the open this morning. All eyes will be on the opening of China markets to determine near-term direction.

US30 USD Weekly Chart

Source: Oanda fxTrade

• The US30 index was little changed on the week, helped on Friday by the concerted comments from China on Friday about supporting the market
• The index managed to hold above the 55-week moving average again, but weakness this morning has brought the 200-day moving average at 25,137 back in to play
• It’s a slow start to the week on the data front, with Sep Chicago Fed activity index the only item on tap. The main event will be Q3 GDP data on Friday

DE30EUR Weekly Chart

Source: Oanda fxTrade

• The Germany30 index saw its first up-day in three, following China sentiment and a narrowing of Italy bond spread yields versus Germany
• The index tested and held the 200-week moving average support at 11,473 last week. The Oct 11 low of 11,394 continues to offer additional support
• EU Commission says Italy’s budget plans point to “particularly serious” non-compliance with EU rules. Will decide on their budget submission on Tuesday

AU200AUD Daily Chart

Source: Oanda fxTrade

• The Australia200 index saw the first weekly gain in three weeks last week, buoyed by a strong jobs report. The start this week has been mildly negative, echoing sentiment in US futures markets
• The index has struggled to overcome Fibonacci resistance at 5,924 (38.2% retracement of the Sep28 to Oct11 drop) on a closing basis
• Australian govt at risk of losing one seat at the Wentworth by-election, which would take away its majority. Knee-jerk reaction in equities likely to be negative

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