EU HEALTHCARE: Sandoz Group: Q3 Results Headlines (SDZSW; Baa2/BBB/NR)

• RES 4: $78.63 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
• RES 3: $76.82 - 2.382 proj of the Apr 9 - 23 - May 5 price swing
• RES 2: $75.43 - High Jun 23 and a bull trigger 
• RES 1: $69.87/71.20 - High Sep 26 / High Jul 30 and key resistance 
• PRICE: $66.82 @ 07:10 BST Sep 30
• SUP 1: $64.20 - Low Jun 30 and a key short-term support
• SUP 2: $58.50 - Low May 5
• SUP 4: $57.88 - Low Apr 9 and a key support   

Brent futures traded higher last week, however, the contract has pulled back from its recent peak. A resumption of gains would suggest scope for a continuation of a bullish corrective cycle and expose key resistance at $71.93, the Jul 30 high. The medium-term outlook appears bearish and sights are on key support and the bear trigger at $64.50, the Jun 30 low. Clearance of this level would strengthen a bearish theme.

RBA Governor Bullock said that monetary policy is “a bit restrictive” but the bank doesn’t know how restrictive it is but it’s neither “very restrictive” nor expansionary. Therefore, decisions will be made on a meeting-by-meeting basis and will be highly data and outlook dependent. She stated that it is “good news” that activity is picking up but the Board will watch what this means for inflation and employment going forward. 

• The aim remains for inflation to be around 2.5%, if it looks like that will be missed then the Board will have to re-evaluate its stance. While it is good news that increased wealth is supporting a consumption recovery, the RBA is concerned about a number of CPI components and therefore remains cautious and is monitoring developments.
• RBA is concerned about market services inflation as it reflects labour market trends and has also been sticky overseas. It will now reassess how far it has it moderating in its projections.
• It included a scenario where businesses increase their cost pass through if demand strengthens but the bank is not yet seeing evidence of this including from its business liaison programme.
• Bullock said that while the monthly CPI is volatile, it still contains information but needs analysis and shouldn’t be taken at face value. While the ABS will begin a full monthly CPI from November, the RBA will continue to focus on quarterly trimmed mean for another 18 months thereafter as seasonal adjustment factors develop.
• The labour market has eased and the RBA expects it to ease further but the monthly data are volatile and so it is best to look at the 3-month average. While employment growth has slowed, there is still evidence the labour market remains a “little bit tight” while vacancies and surveys are not suggesting “mass layoffs”.

• Bund trades at Yesterday's top range, a continuation since Yesterday as the US heads toward a Government shutdown, core Germany and Gold have acted as Safer Haven assets.
• VP Vance said that the Government is on track to shut Down, with Dems and Reps still far apart.
• This will also run the risk of delaying Data releases.
• Next upside resistance in the German Bund is at 128.82 followed the 129.13 Gap, this level hit to the Tick at the last FOMC Meeting.
• The initial support will now move up to Yesterday's Opening gap of 128.26.
• Further push lower will open back to 127.88 and 127.61.
• The Data Calendar kicks in as of Today, it includes, France, Germany, Italy, Portugal prelim CPIs, MNI Chicago PMI, JOLTS, and US Consumer Confidence.
• SPEAKERS: ECB Rehn, Cipollone, Lagarde, Nagel, Fed Jefferson, Collins, Goolsbee (x2), BoE Lombardelli, Mann, Breeden.