RECAP

The People Bank of China Adviser Ma Jun explained that it “isn’t that crucial” whether or not China’s yuan hits 7 to the dollar. The USD/CNY is trading above Tuesday’s parity fixing at 6.9075.

The Chinese stocks fell despite a top deputy to Chinese President Xi Jinping saying Beijing remained ready to discuss a trade solution with the U.S. Shanghai Composite down 1.1%, MSCI Asia Pacific up 0.5%, and the Topix rose 1.3%, while the S&P 500 futures were little changed.

The GBP is the modest outperformer among the Group-of-10 currencies, with the kiwi being the biggest loser among the group. The Rupiah is the strongest within Asia up 0.9%.

Treasury yields were steady, as the Australian 10-year yields were down 2bps to 2.72% after RBA holds its official rate.

The WTI crude was down 0.2% to $62.96.

The Key Headlines of the Asian Session:

  • PBOC’s Ma says yuan hitting 7 to dollar ‘isn’t that crucial’
  • RBA leaves key rate at 1.5% as seen by all 25 economists
  • EU to offer border compromise in a Brexit boost for May: Times
  • Kissinger ‘fairly optimistic’ U.S., China can avoid catastrophe
  • China still ready to talk trade with Trump, Xi’s no. 2 says
  • Japan’s September household spending falls 1.6% y/y; est. +1.5%

OUTLOOK

The Economic Calendar during the European session will have a very light focus on the European session itself as most investors are tuning in to the Congressional Elections happening in the U.S., which is overnight in Europe.

However, there are some releases today that might capture the attention of some investors. Those include the German factory orders as well as the Eurozone, German, French, Spanish, and Italian Manufacturing and Services PMI data.

TRADERS VIEW

The pound gains after The Times reported the EU is preparing to back a compromise proposal on border customs to resolve the Brexit standoff. Australia’s dollar is little changed even after the central bank raises growth forecasts. Trading is muted as investors await the outcome of Tuesday’s U.S. midterm elections.

USDJPY – The pair has bullishly bias within the October high and low of this week. Resistance is seen at the 113.39 followed by 114.10. Support, on the other hand, is seen at 111.75 followed by 111.07.

EURUSD – The pair has hit the double bottom supports although it lacks the upward momentum. Resistance is seen at 1.1432 followed by 1.1454. Support, on the other hand, is seen at 1.1313 followed by 1.1301.

EURJPY – The pair is to be bullish as long as it stays above the cloud bottom. Resistance is seen at the 129.47 followed by the 129.55. Support, on the other hand, is seen at 126.64 followed by 126.26.