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Daily Outlook – 20 Oct. 2020
By: Andria Pichidi
- Stimulus uncertainties gave and token away gains on Wall Street Monday, with hopes for a deal lifting the market in early trading, but fears a deal won’t get passed knocked the indexes sharply lower.
- The back and forth on negotiations and the still wide gaps between the $2.2 tln Democrat plan,
- The $500 mln skinny deal proposed by the GOP leadership, expected to be voted on today,
- Treasuries remained shaky and posted declines, even with the drop on Wall Street and across most sectors.
- RBA’s Kent suggested that more easing is underway.
- RBNZ’s Orr said he is aware of asset price inflation and the limits of monetary policy, while suggesting that the bank will use all tools to avoid deflation taking hold.
- US election debate on Thursday
- Brexit – Reuters poll shows a 40% chance of no UK_EU trade deal – UK sees no basis to resume Brexit talks despite terming Barnier’s response as constructive.
- OPEC+ meeting produced no word on delaying further output cuts
EUR – spiked to 1.1765. currently eased above PP at 1.1773
GBP – retreated from the 1.30 after the sudden increase in volatility
JPY – up to 105.60 and is currently steady at R1 -105.50 CAD – steady with 1.31 area even though it rebounded from 1.3145 – R at 1.3200
NZD and AUD down after officials’ dovish comments
Oil – slipped to 40.57 but rebounds ahead of EU open
TODAY: US Housing Starts and Building permits
Biggest gainer – NZDUSD -0.55% – Dipped to 0.6560 breaking the ascending triangle seen since the end of September. Daily momentum indicators are mostly turning lower. Intraday the asset is traded below S2 with fasts MAs pointing further lower MACD and RSI are negatively configured while Stochastic just posted another bearish cross. 1H ATR at 0.0.00096 and Daily ATR at 0.00485
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