European stocks taking the lead from US and Asia with significant losses; Stoxx 600 at lowest in 20 months

Mixed reports on an all-UK agreed backstop, with sources suggesting PM May is to ask her cabinet for approval today

Looking ahead, highlights include, US CPI, US weekly jobs and DoEs

ASIA

Asian stocks drowned in a sea of red following the battered lead from Wall St. amid a sell-off in tech stocks where the sector posted its worst day since 2011. Dow and S&P notched their biggest...

Asian stocks drowned in a sea of red following the battered lead from Wall St. after the Dow and S&P notched their biggest one-day drop since early February

Traders cited concerns over prospective earnings (luxury stocks hit yesterday), ongoing trade worries, higher yield environment, whilst some (including Trump and Mnuchin) suggested a mild correction was overdue

UK and EU have reportedly reached an agreement in principle on an all-UK backstop plan, according to sources

Looking ahead,...

Latest reports suggesting progress towards a Brexit deal support a GDP-flippant GBP

European indices largely in the red as focus remains on Italy amidst more budget parliamentary testimonies

Looking ahead, highlights include, US PPI, Wholesale Inventories, APIs, Fed’s Evans and Bostic

ASIA

Asia-Pacific equities traded mixed as the region mimicked the lead from Wall St. where the S&P notched its fourth day of losses while the Nasdaq snapped its three-day losing streak. The Dow...

Asia-Pacific equities traded mixed as the region mimicked the lead from Wall St. where the S&P notched its fourth day of losses while the Nasdaq snapped its three-day losing streak

EU and the UK have made progress in Brexit talks, divorce terms could be settled by Monday, according to reports

Looking ahead, highlights include Norwegian CPI, UK GDP and production, US PPI, Wholesale Inventories, APIs, ECB’s Mersch, BoE’s Haldane, Fed’s Evans and...

• Tria’s Parliamentary budget testimony fails to support BTP’s after suggestion of Italian budget watchdog rejection
• US-China Trade talks on hold unless Xi does not produce a list of concessions as according to US officials
• Looking ahead, highlights include, Fed’s Kaplan, ECB’s Villeroy, Fed’s Evans, BoE’s Broadbent, Fed’s Harker, BoE’s Carney

ASIA

Asia-Pacific stocks traded mixed as the region followed a similar picture...

Asia-Pacific stocks traded mixed as the region followed a similar picture painted on Wall St

FX markets were choppy as the greenback eased to print fresh intraday lows with EUR/USD and GBP/USD testing 1.1500 and 1.3100 to the upside

FT reports, US Officials warned China that Trump will not engage in trade talks with Chinese President Xi at the G20 summit if China does not produce a detailed list of concessions

Looking ahead, highlights include German trade, ECB’s Mersch, Fed’s Kaplan,...

• EUR, EU equities and BTPs hit as Italian budget targets seen as a “serious concern” for the European Commission
• China returns with a RRR cut, but can’t stop the rot for Chinese equities and the CNH
• Looking ahead the highlight is ECB’s Nowotny; NOTE: US Columbus Day is today, US equity markets are open

ASIA

Asian stocks traded on the backfoot as the region mimicked the lead from Wall St. where the S&P 500 posted its worst week in nearly a month...

Asian stocks traded on the backfoot as the region mimicked the lead from Wall St. where the S&P 500 posted its worst week in nearly a month

The Telegraph reports The EU is preparing to offer Theresa May a “supercharged” free trade deal this week but will reject Mrs May’s demands for frictionless tradee

The Telegraph also reports that Brexiteers offered UK PM May a lifeline that will see EU officials based at UK borders

Brazilian far-right candidate Bolsonaro won the first...

Week In Focus; week commencing 8 October 2018

Sunday: Brazilian Election

Monday: Chinese Caixin Services PMI, Eurozone Sentiment Index

Tuesday: Japanese Current Account

Wednesday: Australian GDP, US PPI, UK Monthly GDP, Production & Trade Balance

Thursday: US CPI, Japanese PPI, ECB Minutes

Friday: Eurozone Industrial Production, Chinese Trade Balance, Pastor Brunson court decision, US Banks kick off US earnings season

ITALIAN BUDGET

Last week...

GBP gets a lift from EU sources stating a divorce deal is “very close” temporarily breaking 1.3050 to the upside

BTP’s down by over a point as Italy cut GDP growth targets and Salvini maintains his anti-EU tone

EU equities on the back foot as Italy, yields and US-China tensions weigh ahead of NFP

Looking ahead, highlights include, US and Canadian jobs reports, US trade, Baker Hughes, ECB’s de Guindos, Fed’s Kaplan, Williams and Bostic

ASIA

Asia-Pac...

Asian equities trade mixed following a negative lead from the US with sentiment on Wall St. dampened by ongoing trade concerns and US yields

FX markets were little changed overnight with the greenback remaining in a tight range ahead of NFP

Italy's Finance Minister Tria is targeting GDP growth of 1.5% in 2019, 1.6% in 2020, 1.4% in 2021 and confirmed deficit/GDP target of 2.4% in 2019, 2.1% in 2020 and 1.8% in 2021

Looking ahead, highlights include RBI rate decision, US and Canadian jobs...

• US 10-year yields hit 4 year highs as markets react to a hawkish Powell
• Positive vibes from EU sources on the new Irish backstop proposal lifts Brexit spirits and the GBP
• Looking ahead, highlights include, weekly US jobs data, US factory orders, Banxico rate decision, Fed’s Quarles and ECB’s Coeure

ASIA

Asia-Pac stocks traded mostly lower despite the positive lead from Wall St as the effects of rising rates...

• Asia-Pac stocks traded mostly lower despite the positive lead from Wall St as the effects of rising rates spooked investors
• In FX markets, the greenback hit a one-month high following upbeat comments from Fed Chair Powell on the economy
• Italy's government agreed on a 2.4% deficit/GDP target in 2019, 2.1% in 2020 and 1.8% in 2021, PM Conte confirmed
• Looking ahead, highlight include, weekly US jobs data, US factory orders,...

• Italian Economy Minister tries to tame budget excesses ahead of key meeting
• BTPs firm but off peaks as Di Maio maintains citizens income demands
• Looking ahead, highlight include, US services PMI, US ADP, ISM non-mfg, Fed’s Barkin, Harker, Bullard, Brainard and Mester

• Italy are said to seek cuts in their 2021 and 2020 deficit/GDP ratio to 2.0% and 2.2% respectively from 2.4%
• EUR immediately caught a bid as the reports signal a potential compromise from Italy. Asian stocks traded choppy following a mixed lead from Wall St.
• Looking ahead, highlights include EZ, UK and US services PMI, US ADP, ISM non-mfg, ECB’s Mersch, Fed’s Evans, Barkin, Harker, Bullard, Brainard and...

• BTP yields hit 4 year highs and FTSE MIB underperforms after Borghi suggests Italy would be better off without the EUR
• GBP the G10 laggard after poor PMI’s and negative Brexit commentary via the Tory conference
• Looking ahead highlights include, US APIs and potential comments from BoE’s Haskel, Fed’s Quarles, ECB’s Villeroy, Fed’s Barkin, Powell, and BoE’s Haldane

• Asian stocks traded mostly lower as the upbeat sentiment from the USMCA deal seen on Wall St. faded away
• UK PM May is preparing to limit Britain's ability to strike free-trade deals after Brexit in a significant concession to the EU aimed at breaking the deadlock in negotiations
• The RBA stood pat on rates as expected and stated that low interest rates are supporting the economy, while business conditions and the outlook for the labour market remain...

• US-Canada-Mexico agreed to new NAFTA named the USMCA; CAD and MXN the major outperformers in FX
• FTSE MIB the outperforming bourse as Italy sees some reprieve
• Looking ahead, highlights include, US mfg PMIs, US construction spending, ISM mfg PMI, Fed’s Bostic, Kashkari, Rosengren, BoE’s Tenreyro

• US and Canada said in an official statement that they have reached a trade deal with Mexico in an agreement dubbed the USMCA (US-Mexico-Canada Agreement)
• Asian stocks traded mixed following a rather uneventful lead from Wall St. on Friday. Hong Kong and Mainland China closed due to public holidays
• In FX, focus has been on JPY weakness and CAD strength with the latter hitting 4-month highs vs. USD
• Looking ahead, highlights include...

• Italian budget fallout continues, with BTP yields above 3.15%, FTSE MIB Bank Index down over 5%, and EUR underperforming
• GBP undermined by benign UK GDP and more Brexit-related weakness in business investment
• Looking ahead, highlights include US personal income, core PCE price index, Canadian GDP, Chicago PMI, Uni. of Michigan and a slew of central bank speakers

• Asian stocks traded mostly higher following a spur in risk-appetite and an upbeat lead on Wall St
• The Italian government has reached agreement on 2.4% deficit to GDP target for 2019
• Looking ahead, highlights include German jobs, UK GDP, EZ CPI, US personal income, core PCE price index, Canadian GDP, Chicago PMI, Uni. of Michigan and a slew of central bank speakers

• Italian budget dispute takes centre stage as Finance Minister and League/5SM 2% conflict comes to the fray
• BTP roam toward 3% to the upside in early European trade and FTSE MIB leading the losses in equities
• Looking ahead, highlights include, German CPI, US GDP, Durables, Italian budget presentation and a slew of central bank speakers

• FOMC hiked rates as expected, Fed Chair Powell provided an upbeat tone on the US economy, dot plots suggested no more hikes after 2020
• UK PM May is reportedly losing support for a no-deal Brexit if EU discussions fail, according to sources
• Recent reports suggest the Italian Government may postpone their 2019 budget plan meeting while the league are set to join 5SM in seeking a 2.4% deficit target
• Looking ahead, highlights include...

• FX markets rangy and equities directionless in a quiet European morning ahead of the FOMC
• BTP’s back over 127.00 as Italian budget updates surface ahead of the official release on Thursday
• Looking ahead, highlights include, Czech, US and NZ interest rate decisions, US new home sales, ECB’s Draghi and Fed’s Powell

• Asian equities traded mostly higher despite a mixed lead from Wall St. where the Dow and S&P closed with losses
• In FX markets, antipodeans stole the limelight as an improvement in New Zealand’s business outlook and activity lifted NZD/USD to near weekly highs
• UK PM May again states that it is not in the national interest to hold another general election or second referendum
• Looking ahead, highlights include, Czech, US...