Back in the Red, Awaiting Backstops

Reporters barely had the time to write about Tuesday's 2% stocks surge, before indices in and out of the US slip back in the red on Wednesday. Tuesday saw the best gain for stocks since March 26. UK CPI slipped back to 2.4% from 2.7%, while US housing starts and building permits contracted in September. The Fed minutes of last month's rate hike are due at 2 pm ET, 5 pm BST may shed more light on whether the "accomodative" description to monetary policy was dropped to pave the way for rates pushing above the neutral level, or whether to signal the beginning of the end of the tightening. Powell took the opportunity to signal the former in a subsequent speech. The DAX premium short was stopped out by 40 pts. A new trade has been issued today following Tuesday's 2nd metals trade.

تفسير صفقات الدولار و المعادن

Click To Enlarge

On Tuesday, US August JOLTS job openings jumped to a record 7136K compared to 6900K expected. The NAHB home builder sentiment report rose to 68 vs 66 expected. Industrial production also beat the consensus at +0.3% vs +0.2% forecast.

All eyes on Theresa May's Backstop

British PM Theresa May will aim at closing the gap over the issue of the Irish Border when she meets European Council president Donald Tusk today. The idea is to pave the way for a final agreement on Brexit in mid-November between the EU and the UK before the UK leaves in March of next year. The question of the "Backstop" on the Irish border remains the most difficult issue in the Brexit negotiations.

Sterling posted a solid day as Brexit negotiations go into a holding pattern. Barnier shifted the deadline to a deal to December and there were reports of an EU offer to stay in the customs union beyond 2020 or to stretch the Article 50 deadline another year. Cable remains supported at 1.3100, with preliminary upside objective at 1.3400.