FOREX: USD Index Weaker Again, Despite Bessent Optimism
Oct-15 15:44
- The USD Index started the session weaker and generally maintained those losses through the London close. Powell's relative easing bias late on Tuesday provided the initial trigger, but the much firmer-than-expected CNY fix from the PBOC also worked against the greenback.
- An appearance at the IMF / World Bank forum helped trigger a brief spell of USD support. Bessent's optimism on growth, laying out the groundwork for US growth akin to the "late 1800's or 1990's" is helping the USD higher at the margins and pressing EURUSD toward flat (thereby erasing the ~40 pip gains at the European open). The better-than-expected Empire Manufacturing print will also be helping.
- US 10y yields finding a base at 4.00% has proved a key catalyst, although markets have looked through the persistent S/T uptrend in equities across Wednesday.
- Focus for the duration of the Thursday session turns to the Australian jobs print for September, expected to show employment change of +20k in the month with an unchanged participation rate. AUD had a quieter Wednesday session, despite Treasury Secretary Bessent talking up the possibility of a longer rare earths trade truce with China. This keeps the near-term picture unchanged after Tuesday's new cycle low. However, Tuesday’s recovery highlights a possible reversal pattern - a hammer candle formation. If correct, it signals the end of the bear leg that started Sep 17.
- UK data are also in focus Thursday - with GDP stats as well as industrial and manufacturing production. Ahead of the Thursday print, a late rally in GBP saw GBP/USD rally back to 1.34 on decent volumes. While there was no specific UK newsflow or headlines to drive the move, it helped EURGBP drift into the London finish, closing the gap with the French pension reform-tied rally from earlier in the week.
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US-CHINA: Chinese Negotiator Confirms TikTok 'Framework Agreement'
Sep-15 15:32
MNI London: China’s top trade negotiator, Li Chenggang, has described two days of meetings with US Treasury Secretary Scott Bessent and USTR Jamieson Greer on issues of ‘common concern’ as “in-depth, candid, and constructive.”
- Li said, per Reuters, that “both sides acknowledged stable trade ties is significant,” adding that while “frictions are normal”, it is “important to respect each other's core concerns.”
- Li confirms earlier comments from Bessent, saying a “framework agreement” has been reached regarding China’s divestment from the social media platform TikTok, a central focus of the talks.
- Li says, the sides will, “keep close communication, engage in consultation over detail of outcome documents.” Adds that the two sides will “jointly guide companies to have a good follow-up.” Li said China the TikTok agreement was "based on our assessment and judgement… the consensus is in mutual interests."
- The Wall Street Journal notes, “China, which had until now shown little appetite for a deal on the wildly popular app, likely conceded to the agreement to keep alive Beijing’s ambition for President Trump to visit China.”
- More sharply, Li claimed that the US “continued sanctions on Chinese entities” following previous rounds of talks. Alleges the US “generalise national security”, in a way that constitutes “unilateral bullying”.
- Li said China “will not sacrifice interests of firms in order to reach a deal,” adding that, “China firmly safeguards Chinese firms' legitimate rights and interests”. Li adds the US "expressed willingness to work with China in reducing investment barriers."
FED: US TSY 26W BILL AUCTION: HIGH 3.715%(ALLOT 13.53%)
Sep-15 15:32
- US TSY 26W BILL AUCTION: HIGH 3.715%(ALLOT 13.53%)
- US TSY 26W BILL AUCTION: DEALERS TAKE 26.13% OF COMPETITIVES
- US TSY 26W BILL AUCTION: DIRECTS TAKE 6.89% OF COMPETITIVES
- US TSY 26W BILL AUCTION: INDIRECTS TAKE 66.98% OF COMPETITIVES
- US TSY 26W BILL AUCTION: BID/CVR 3.09
FED: US TSY 13W BILL AUCTION: HIGH 3.905%(ALLOT 8.09%)
Sep-15 15:32
- US TSY 13W BILL AUCTION: HIGH 3.905%(ALLOT 8.09%)
- US TSY 13W BILL AUCTION: DEALERS TAKE 29.15% OF COMPETITIVES
- US TSY 13W BILL AUCTION: DIRECTS TAKE 6.56% OF COMPETITIVES
- US TSY 13W BILL AUCTION: INDIRECTS TAKE 64.30% OF COMPETITIVES
- US TSY 13W BILL AUCTION: BID/CVR 3.11
