1. Media reports triggered increased volatility in the Asian session
2. Early elections in the UK may be held on November 26
3. The Fed notes the strengthening of bearish risks for the US economy
Ambiguous media reports provoked a strong increase in market volatility in the Asian trading session. Demand for defensive assets rose sharply after reports by the South China Morning Post that the Chinese negotiating delegation intends to leave Washington after the first day of negotiations. According to the publication, during the preliminary discussions, the parties failed to achieve progress. CNBC later denied this information. After that, Fox News confirmed the information about the early departure of the Chinese delegation, which again weakened the interest of investors in risk.
The market was able to regain its previously lost position after Bloomberg reported that the United States and China could enter into a currency pact, and information circulated by the New York Times that the White House could ease the restriction on US companies to supply certain types of products to Huawei.
According to The Sun, the opposition Labor Party of Great Britain supports the proposal to hold early parliamentary elections on November 26, in case Boris Johnson can not implement Brexit on October 31. According to Telegraph, the EU may refuse to grant a postponement for Brexit if the UK does not hold a new referendum or early parliamentary elections. Today, investors will follow the negotiations of Boris Johnson and Irish Prime Minister Leo Varadkar.
According to the published minutes of the FOMC meeting on September 17 and 18, Fed leaders expressed concern about the increasing influence of external factors (the slowdown of the global economy and the worsening situation in international trade) on the economy of the United States. By the time of the meeting, a clearer picture had emerged about the formation of a negative trend in investment, the production sector, and declining exports. Officials noted an increase in bearish risks. The protocols strengthened market expectations regarding a possible interest rate cut at the October FOMC meeting.
News worth paying attention to today:
08:30 GMT. United Kingdom: GDP, manufacturing and manufacturing data
09:20 GMT. United Kingdom: Bank of England Carney Speech
12:30 GMT. USA: inflation report