Daily Observations:

Most Asian stocks rose, led by energy companies, as the prospect of a deal to limit crude output continues to keep oil above $51/bbl. The dollar climbed versus major peers, extending a six-year high against the yuan, as Treasury yields rose earlier today. Gold and government debt fell.

US:

  • A CNN poll awarded yesterday’s second debate between US presidential nominees Hillary Clinton and Donald Trump to the former, with the latter’s campaign hit by a 2005 video in which he made vulgar and degrading comments about women, prompting some top Republicans to withdraw their support for him.
  • The Mexican peso, recently used as a barometer of investor anxiety over the US election – weakening when Trump advances in the polls, jumped as much as 2.6% last night to a one-month high against the greenback.
  • The US dollar strengthened, with the Bloomberg Dollar Spot Index reversing overnight losses to a gain of 0.1% and extending its climb by 0.2% this morning as increasing speculation of a December hike continues to buoy the dollar.
  • In a speech earlier today, Chicago Fed President Charles Evans says FOMC’s refrain from rate increases “may well be changing soon”, and renewed his call for the central bank to signal a willingness to tolerate higher inflation.
  • Vladimir Putin’s comments that Russia would back an OPEC accord fueled energy stocks, and helped the S&P 500 Index to a 0.5% gain.
  • Alcoa Inc. is set to kick off 3Q earnings season tonight. According to Bloomberg, analysts are expecting a 1.6% contraction in 3Q profits for S&P 500 companies, however historically, US firms have exceeded projections by an average margin of 3.6% in the past 5 years.
  • Trading in US Treasuries was halted last night for the Columbus Day holiday.
  • PIMCO, which manages the world’s biggest actively run bond fund, said the Fed may raise interest rates 2 or 3 times by the end of 2017, as higher economic growth and inflation may drive the central bank to tighten.

China:

  • Goldman Sachs warned that China’s currency outflows may be bigger than they look. Official data show that $27.7 billion in yuan payments left China in August, compared with a monthly average of $4.4 billion in the 5 years through 2014; such large cross-border moves can’t be explained by market driven factors and need to be taken into account when measuring currency outflows, according to an economist at the bank.

Precious Metals:

  • Spot gold pared prior day’s gains, and was 0.5% lower at $1,255.70/Oz earlier today. The precious metal continues to be supported at the key level of $1,250/Oz, although it has been trading below its 200-day moving average of $1,261.92 for most of its past three sessions.
  • On the other hand, silver has managed to remain above its 200-day moving average of $17.1828/Oz, despite falling 0.8% to $17.6005/Oz this morning.

Oil:

  • Crude oil for November delivery jumped 3.1% to $51.35/bbl, settling at its highest point since July after Russia’s Putin said he is willing to join OPEC on limiting output.
  • Saudi Arabia’s Energy Minister said oil prices could recover to $60/bbl by the end of 2016, and is optimistic that OPEC can reach a deal by November.

 

USDSGD:

  • Spot 1.3785
  • USDSGD extended recent gains, rising 0.3% to 1.3786 earlier today, as steadying oil prices suggests a pickup in inflation and hence no change in MAS policy later week, according to the consensus by analysts.
  • The May 2016 high of 1.3842 is the next resistance to be tested.

 

AUDUSD:

  • Spot 0.7571
  • AUDUSD pared previous day’s gains, falling 0.3% to 0.7566 on the back of overnight USD strength.
  • The currency pair has struggled to get back above the 0.7600 handle, and has a higher chance of falling lower to 0.7500.

 

USDCAD:

  • Spot 1.3191
  • The Canadian dollar strengthened on the back of oil’s overnight surge, gaining as much as 0.9% against the greenback to 1.3140.

 

USDCNH:

  • Spot 6.7209
  • The PBOC weakened its fixing again this morning, which was 0.13% weaker at 6.7098.
  • Onshore yuan extended its decline beyond the 6.7000 handle while offshore yuan is poised to post its longest losing streak since Mar 2014.
  • USDCNH was 0.2% higher at 6.7256.
  • Onshore yuan tumbled the most in 4 months as China’s markets reopened after a week-long break; offshore weakened 0.1% to 6.7135 against the USD following its 0.5% weekly decline last week.
  • The PBOC weakened its reference rate by 0.3% to 6.7008 earlier today.

 

USDJPY:

  • Spot 103.94
  • USDJPY rose 0.6% towards the 104 handle, gaining above its 100-day moving average in the process and the currency pair continues its recent upward trend.
  • The 104 handle will be key, and a break above it could see USDJPY rise to the 108 level.

 

GBPUSD:

  • Spot 1.2301
  • GBPUSD continues to remain well-offered, and was as much as 1.0% lower at 1.2301 earlier today after a report in The Times said the UK could lose up to 66 billion pounds a year under a “hard Brexit”.

 

 

© Jachin Capital Pte Ltd

UEN: 201419754M


The contents of this document are for information only and is taken or compiled from sources that we, Jachin Capital Pte Ltd, believe to be reliable. To the maximum extent permitted by law, we do not make any representation or warranty (express or implied) that this information is accurate, timely or complete and it should not be relied upon as such. Opinions expressed are our current opinions as at the date of this document only and are subject to change without notice. We endeavour to update on a reasonable basis the information discussed but regulatory, compliance or other reasons may prevent us from doing so. The publication and distribution of this document is not and does not imply any form of endorsement of any person, entity, service or product described or appearing here. This is not and does not constitute or form an offer to buy or sell nor the solicitation of an offer to buy or sell any security or financial instrument nor to participate in any particular trading or investment strategy. We are not soliciting any action based on this document. The information, services and products described or appearing here are intended only for Accredited Investors (as currently defined in the Securities and Futures Act) and are not intended for nor targeted at the public in any specific jurisdiction. This information does not take into account the particular investment objectives, financial situations or needs of individual investors. Investors should seek independent financial, tax or legal advice or make independent investigations as considered necessary or appropriate before making an investment decision. Investments involve risk. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment instrument.

Essential SSL