What mattered last week:
- The S&P500 fell -2.75%, as the correction in tech stocks deepened and spread to other sectors.
- The FANG index, a $US120 trillion equal dollar weighted index comprised of high growth tech stocks including Facebook, Apple, Amazon and Google has fallen 15% in September, it largest pullback since March.
- New coronavirus cases continued to trend lower in the U.S, and Australia. However cases in India and Europe are rising, particularly in Spain and France.
- Brexit risks remerged and in the U.S, the Democrats blocked the latest stimulus package.
- The ECB kept policy unchanged at its monthly meeting and did not push back against EURUSD strength.
- The Band of Canada kept policy unchanged, as well as its GoC bond purchase commitment of a minimum C$5bn per week.
- Volatility, as measured by the VIX index, closed lower at 26.9.
- U.S. 10-year yields closed lower, near 0.66%.
- Gold rose slightly to U.S $1940.00.
- Crude oil fell another 6.14%, closing at U.S $37.33/bbl.
- The ASX200 closed down -1.12% at 5859.4.
- In FX, the AUDUSD closed unchanged near .7280.
For the week ahead, the key events are:
Australia: RBA meeting minutes, house price index (Tuesday), HIA new home sales (Wednesday), labour force (Thursday).
- Labour Force (Thursday): Despite the Victorian lockdowns, weekly payroll data suggest strength in other states will see a rise in jobs of 40,000. Nevertheless, a rise in the participation rate should result in an increase in the unemployment rate, from 7.5% to 7.7%.
New Zealand: Westpac consumer confidence Q3 (Monday), global dairy trade auction (Tuesday), current account (Wednesday), Q2 GDP (Thursday).
China: Unemployment, fixed asset investment, industrial production, retail sales (Tuesday).
Japan: Reuters Tankan index, Liberal Democratic Party leadership vote (Monday), balance of trade (Wednesday), BoJ interest rate decision (Thursday), CPI (Friday).
U.S: Retail sales (Wednesday), FOMC meeting, housing starts, building permits, jobless claims (Thursday), current account (Friday).
- FOMC Meeting (Thursday): Following Fed Chair Powell’s speech at the Jackson Hole Symposium, the message is expected to remain one of caution and likely to contain more details on the Feds forward-guidance as well as its willingness to let inflation run above 2%.
Canada: CPI (Wednesday), retail sales (Friday).
Euro Area: EA and German ZEW economic sentiment index (Tuesday), EA balance of trade (Wednesday), EA current account (Friday).
UK: Employment (Tuesday), CPI (Wednesday), BoE interest rate meeting (Thursday), retail sales (Friday).
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.