Action Insight Mid-Day Report 11-14-18

Sterling Firm, But Uncommitted, as Markets Await UK Cabinet Meeting on Brexit Agreement

Action Insight Mid-Day Report 11-14-18 Sterling Turned Cautious as Markets Await May's Brexit Cabinet Meeting Sterling turned cautious as markets are now awaiting the result of UK Prime Minister Theresa May's Cabinet meeting on Brexit. The withdrawal agreement text should have been agreed with the EU. Approval by the Cabinet will give the green-light to EU chief negotiator Michel Barnier to declare that "decisive progress" is made for a November EU summit. May would tell the House of Commons the results after the meeting. Meanwhile, Barnier will also make a statement. It could be rather volatile for the Sterling in the upcoming hours. Though for now, the Pound is trading as the second weakest one, next to Swiss Franc. Yen is the third weakest, partly due to weak GDP data, and partly due to persistent fall in JGB yield. New Zealand Dollar is the strongest one for now, followed by Canadian Dollar. Some support is seen as WTI crude oil dipped to as low as 54.85 but recovers to 56.70 for now. But that support for the Loonie could be brief. Euro is indeed the third strongest at this point, despite weak Germany data and Italy budget jitters. Dollar reacts little to CPI release but will turn focus to Fed Chair Jerome Powell's comments in the upcoming Asian session. Technically, the forex markets are clearly in consolidation mode. For the Pound, break of 1.3741 resistance in GBP/USD and 149.70 in GBP/JPY are at least needed to prove its strength. Otherwise, we won't believe the move. While Dollar trades lower since yesterday, there is limited selling. We'd look for Dollar buyers to come back, probably after UK May settles her Cabinet. In other markets, major European indices are trading higher at this point. FTSE is up 0.56%, DAX is up 0.61% and CAC is up 0.45%. German 10 year yield drops -0.0053 to 0.408. Italy 10 year yield rises 0.398 to 3.487. That is, German-Italian spread remains above 300. Earlier in Asia, Nikkei closed up 0.16%. But Hong Kong HSI, China Shanghai SSE and Singapore Strait Times all closed down, by -0.54%, -0.85% and -0.34% respectively. Japan 10 year JGB yield drops -0.0077 to 0.108, below 0.11 now. Full Report Here US CPI rose to 2.5%, but core CPI slowed to 2.1% European Update: Sterling pares gain as Brexit optimism turns into cautiousness ECB Knot: It's pertinent that Italy complies with EU budget rules UK CPI unchanged at 2.4%, core at 1.9%, Pound unmoved German GDP contracted -0.2% qoq mainly due to foreign trade development Italy to cut debt to 129.2% of GDP in 2019 to... Japan GDP contracted -0.3% qoq, exports contracted at fastest pace in... Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol China's October Data Encourage More Easing From Government   Upbeat Chinese Trade Data Masked Impact of Trade War   Dollar and Yen Building Up Bullish Turnaround, Canadian Down on Oil... Central Bank Views | China Watch | Oil N' Gold | Special Topics GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.2857; (P) 1.2952; (R1) 1.3063; More... Intraday bias in GBP/USD remains neutral at this point. Overall outlook is unchanged that price actions from 1.2661 are viewed as a consolidation pattern. In case of stronger rise, strong resistance should be seen at 1.3316 fibonacci level to limit upside to bring down trend resumption eventually. On the downside, below 1.2825 will resume the fall from 1.3174 to 1.2661/92 key support zone. Decisive break there will resume larger down trend from 1.4376. Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings US: Inflation Edges Higher in October, Mostly on Higher Energy Prices US Inflation as Expected in October Unsure if the Sell-off in Oil is Over AUDUSD Remains above SMAs in Narrow Range Brexit Cabinet Meeting in Focus, German Economy Shrinks, and US CPI Eyed Pound Awaits Cabinet Brexit Meeting; Powell's Speech in Focus USDCHF Bullish, Trades Near 20-Month High Sterling Braces For Wild Moves After Cabinet Meeting Focus On Brexit, Italy And Oil Italian Politics Monitor: Budget Truce Postponed Aussie Turns Focus On Employment Report To Pick Up Momentum Fundamental Analysis | Technical Analysis In-depth Reports Brexit Monitor: The Real Test Is The Vote In The House Of Commons More Euro Underperformance in Store by Year-End? China's October Data Encourage More Easing From Government US-China Trade: 60% Chance of Ceasefire at Xi-Trump Meeting Upbeat Chinese Trade Data Masked Impact of Trade War Italy's Costly Budget Ordeal: Fiscal Imprudence Non Grata Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 23:30 AUD Westpac Consumer Confidence Nov 2.80% 1.00% 23:50 JPY GDP Q/Q Q3 P -0.30% -0.30% 0.70% 23:50 JPY GDP Deflator Y/Y Q3 P -0.30% -0.20% 0.10% 0.00% 00:30 AUD Wage Price Index Q/Q Q3 0.60% 0.60% 0.60% 0.50% 02:00 CNY Retail Sales Y/Y Oct 8.60% 9.20% 9.20% 02:00 CNY Industrial Production Y/Y Oct 5.90% 5.80% 5.80% 02:00 CNY Fixed Assets Ex Rural YTD Y/Y Oct 5.70% 5.50% 5.40% 04:30 JPY Tertiary Industry Index M/M Sep -1.10% -0.40% 0.50% 0.40% 04:30 JPY Industrial Production M/M Sep F -0.40% -1.10% -1.10% 07:00 EUR German GDP Q/Q Q3 P -0.20% -0.30% 0.50% 09:30 GBP CPI M/M Oct 0.10% 0.20% 0.10% 09:30 GBP CPI Y/Y Oct 2.40% 2.50% 2.40% 09:30 GBP Core CPI Y/Y Oct 1.90% 2.00% 1.90% 09:30 GBP RPI M/M Oct 0.10% 0.20% 0.00% 09:30 GBP RPI Y/Y Oct 3.30% 3.40% 3.30% 09:30 GBP PPI Input M/M Oct 0.60% 0.60% 1.30% 1.40% 09:30 GBP PPI Input Y/Y Oct 10.00% 9.60% 10.30% 10.50% 09:30 GBP PPI Output M/M Oct 0.30% 0.20% 0.40% 09:30 GBP PPI Output Y/Y Oct 3.30% 3.10% 3.10% 09:30 GBP PPI Output Core M/M Oct 0.30% 0.20% 0.10% 09:30 GBP PPI Output Core Y/Y Oct 2.40% 2.40% 2.40% 09:30 GBP House Price Index Y/Y Sep 3.50% 3.30% 3.20% 3.10% 10:00 EUR Eurozone Industrial Production M/M Sep -0.30% -0.40% 1.00% 1.10% 10:00 EUR Eurozone GDP Q/Q Q3 P 0.20% 0.20% 0.20% 13:30 USD CPI M/M Oct 0.30% 0.20% 0.10% 13:30 USD CPI Y/Y Oct 2.50% 2.50% 2.30% 13:30 USD CPI Core M/M Oct 0.20% 0.20% 0.10% 13:30 USD CPI Core Y/Y Oct 2.10% 2.20% 2.20%

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