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UK Consumer Confidence Improves In September





UK consumer confidence improved in September, survey results from the market research group GfK showed Friday.


The consumer confidence index rose to -12 in September from -14 in August. "Since the Brexit referendum we have witnessed a long succession of negative Overall Index scores with the overall trend downwards," Joe Staton, client strategy director at GfK, said. "This month, British consumers appear to be treading water during this wait-and-see run-up to October 31st."


The index measuring changes in personal finances during the last 12 months climbed three points to +2. Likewise, the forecast for personal finances over the coming year gained two points to +4.


The measure for the general economic situation over the last year also increased two points, to -32. At the same time, expectations for the general economic situation rose three points to -35.


Further, the major purchase index improved two points to +3. The savings index also rose two points to +23.


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China Manufacturing Sector Expands Most Since Early 2018


EUR/USD





China's manufacturing sector expanded at the fastest pace since early 2018 in September despite ongoing trade disputes with the United States, survey data from IHS Markit showed on Monday.


The Caixin factory Purchasing Managers' Index rose to 51.4 in September from 50.4 in August. Any score above 50 indicates expansion in the sector. This was the highest score since February 2018.


The official data from the National Bureau of Statistics revealed that the factory sector continued to contract in September. However, the manufacturing PMI climbed to 49.8 from 49.5 a month ago.


New orders increased at the fastest rate since March 2018, while new export orders decreased slightly in September, IHS Markit reported. Companies said that the ongoing China-US trade dispute had continued to dampen foreign sales.


Employment level remained unchanged for the second month in September. Outstanding business increased amid stagnant payrolls and rise in orders.


Higher volumes of total new work led firms to expand production again in September. The rate of growth was the fastest seen since August 2018.


Input buying rose for the third month in a row and stocks of purchased items expanded slightly.


Input costs increased at the end of the third quarter and the output cost remained broadly unchanged compared to the previous month.


Nonetheless, goods producers continued to express a relatively subdued level of confidence towards future output, as worries persisted over the outcome of the ongoing China-US trade negotiations.


"Growth in manufacturing demand was mainly driven by the domestic market as China-U.S. trade conflicts still restrained overseas demand," Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, said.

Australia Cuts Key Rate By 25 bps





Australia's central bank reduced as much as possible, on Tuesday.


Bank of Australia, governed by Philip Lowe, decided to reduce the cash rate by 25 basis points to 0.75 percent.


The bank had a lower rate in June and July. The back-to-back rate cut in July was the first since mid-2012.


In Australia to reach full employment and achieve the inflation target, "the bank said in a statement.


"The Board will continue to monitor developments, including in the labor market, and seek to achieve sustainable growth in the economy," the bank said.

Japan Corporate Inflation Expectations Remain Stable





Japanese firms' inflation expectations held steady in the third quarter, the Tankan summary of "Inflation Outlook of Enterprises" from Bank of Japan showed Wednesday.


Companies expect annual inflation of 0.9 percent in the year ahead, unchanged from the previous outlook.


Similarly, the three-year ahead inflation is seen at 1 percent, the same rate as estimated in June. The projection for next five years was retained at 1.1 percent.


The central bank aims at achieving price stability of 2 percent since 2013. Although the bank unveiled various quantitative and qualitative easing, inflation still remains well below the target.


The Tankan survey results published on Tuesday showed that the business conditions for large manufacturers declined moderately to 5 in the third quarter from 7 in the second quarter.


Likewise, the business conditions index for non-manufactures dropped to 21 from 23.


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Japan Services PMI Falls To 52.8 In September - Jibun





Japanese firms' inflation expectations held steady in the third quarter, the Tankan The services sector in Japan continued to expand in September, albeit at a slower rate, the latest survey from Jibun Bank revealed on Friday with a PMI score of 52.8.


That's down from the 22-month high of 53.3 in August, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction.


Individually, output was up solidly in September, although new orders grew at a pace below trend for 2019. Selling charges increased only fractionally.


The survey also showed that the composite index came in at 51.5, down from 51.9 in August.


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UK Economic Conditions Deteriorate On Weak Manufacturing Activity: BCC





The UK economic conditions weakened in the third quarter reflecting a marked deterioration in manufacturing sector activity, survey results from the British Chambers of Commerce showed Friday.


According to Quarterly?Economic?Survey, manufacturing firms reporting increased domestic sales fell to zero. The domestic order balance entered negative territory for the first time in seven years, to -7 in the third quarter. Both are at their weakest since the fourth quarter of 2011.


The balance of manufacturing firms reporting increased export sales dropped to +3, the lowest level since the fourth quarter of 2015 and the balance for export orders went negative and came in at its weakest level since the third quarter of 2009.


The dominant services sector reported a decrease in the balance of firms reporting increased domestic sales and orders, and export orders, the survey showed. The domestic sales balance of service providers slid to 15 and the balance for domestic orders dropped marginally to 9 in the third quarter.


Manufacturers' cashflow position - a key indicator of the financial health of a business, deteriorated. In the services sector, cashflow held steady at a low level.


"A stuttering services sector coupled with a worrying downturn in manufacturing activity indicates that any bounce back in UK GDP growth from the contraction in the second quarter is likely to be underwhelming at best," Suren?Thiru, Head of Economics at the BCC, said.


"This is a reality check, not scaremongering or politicking. These are some of the worst figures we've seen in a decade - and jobs, businesses, and the future success of our communities are on the line," Adam Marshall, Director General of the BCC, said.


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China's Forex Reserves Decline In September





China's foreign exchange reserves declined in September, figures from the People's Bank of China showed over the weekend.


Forex reserves totaled $3.092 trillion at the end of September compared to $3.107 trillion in August. The expected level was $3.105 trillion.


The currency exchange rate and changes in asset prices affected the level of foreign exchange reserves.


Martin Lynge Rasmussen, an economist at Capital Economics, said the central bank relied on state banks during August to contain forex volatility, but the latest forex reserves figures suggests that last month this may have been either replaced with, or supplemented by, direct forex sales by the PBoC.


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At a breakneck height: recession as a "lift" for gold





Statements by a number of economists about the risk of a recession in the US economy are gaining momentum. Experts analyzed how the implementation of such a scenario will affect the price of gold, and concluded that the precious metal will appreciably rise in price.


Strategists at Goldman Sachs, the largest US bank, are confident that in the fourth quarter of this year, the cost of the yellow metal will rise to $1,600 per ounce. The reason for this, analysts believe a high probability of a recession in the US economy. Analysts of the leading analytical company Independent Strategy agree with them. They claim that in 2020, the price of gold may increase by 30% from the current key value of $1,500. Accordingly, it can reach $2000 per ounce, according to the Independent Strategy.


The appreciation of precious metals will be facilitated by the desire of market participants to maintain their capital. It is known that gold is best suited for this purpose, and the increased demand for yellow metal pushes its value up. Analysts are very optimistic about the future prospects of the gold market. They are confident that the precious metal will receive support for growth amid fear of a recession in the US economy. Note that the main threats to financial markets are weak data on the US labor market and a slowdown in economic growth.


Currently, the XAU/USD pair is trading near the levels of 1502-1503. According to analysts, the price of gold has generated two signals over the past month, one of which shows a direction to increase, the other - to decline. After the breakdown of the support level of 1487.70, the price of the precious metal may fall to the target level of 1418.25. In the case of a positive scenario and an update of the level of 1557.20, gold can reach the target level of 1595.00, analysts said. In the long run, due to increasing instability in the global economy, analysts recommend opening long positions in precious metals.


At the moment, the yellow metal is trading in the range of $1,505– $1,507 per ounce, completing the correction phase. Gold prices recovered the lion's share of the previous loss in relation to major currencies, as global stock markets fell after the US due to the weakest data on production in the US. At the moment, the score is 1:0 in favor of the precious metal, which plays into the hands of the high probability of monetary policy easing by regulators of Australia and Japan.


In the short term, the yellow metal could quickly return to local resistance at $1,530 per ounce, analysts warn. For further take-off to multi-year highs, powerful geopolitical or economic triggers will be required, the main of which may be the risk of a recession in the United States. Goldman Sachs analysts emphasize that the long-term forecast for the cost of precious metals is highly dependent on economic growth in the United States. Analysts recall the growing risk of a recession in the US economy, which is increasing annually. Goldman Sachs believes that the recession in the United States will become a kind of "lift" for gold, capable of pushing the precious metal to the next price peaks.


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#USDX vs USD / JPY vs EUR / JPY vs GBP / JPY - H4. Comprehensive analysis of movement options from October 09, 2019 APLs & ZUP analysis


We would like to bring to your attention a comprehensive analysis of the development options for the movement of the cross-instruments EUR / JPY and GBP / JPY , as well as the dollar index #USDX and the currency of the "land of the rising sun" USD / JPY currency from October 09, 2019.
Minuette (H4 timeframe)
____________________
US dollar Index
The development of the USDX dollar index movement will be determined by the development and direction of the breakdown of the boundaries of 1/2 Median Line channel (99.15 - 98.95 - 98.75) Minuette operational scale fork. The details are shown in the animated chart.


The breakdown of the upper boundary of the 1/2 Median Line channel (resistance level 99.15) of the Minuette operational scale fork - the development of the #USDX movement will continue to the boundaries of the 1/2 Median Line Minuette channel (99.25 - 99.40 - 99.55) with the prospect of reaching the equilibrium zone (99.60 - 99.75 - 99.95) of the Minuette operational scale fork.


On the contrary, if the lower boundary of the 1/2 Median Line Minuette channel (support level 98.75), equilibrium zone of the Minuette operational scale fork is broken, the downward movement of the dollar index can continue to the local minimum 98.64 - the upper boundary of ISL38.2 (98.45) equilibrium zone of the Minuette operational scale fork.


The details of the #USDX movement are presented in the animated chart.





____________________ US dollar vs Japanese yen


The currency of the "country of the rising sun" in the equilibrium zone of the Minuette operational scale fork, respectively, further development of the USD / JPY movement from October 9, 2019 will be due to the development and direction of the breakdown of boundaries (107.00 - 106.80 - 106.55) of this equilibrium zones. The movement markup is shown in the animated chart.


In case of breakdown of the upper boundary of ISL38.2 (resistance level of 107.00), of the Minuette operational scale fork, then the upward movement USD / JPY will be directed to the boundaries of the 1/2 Median Line Minuette channel (107.55 - 107.72 - 107.90) and the UTL control line (108.15) of the Minuette operational scale fork.


The breakdown of support level 106.55 on the lower boundary of ISL61.8 of the Minuette operational scale fork together with support level of 106.45 will determine the development of the currency of the country of the rising sun inside the 1/2 Median Line channel (106.45 - 105.90 - 105.40) of the Minuette operational scale fork.


The details of the USD / JPY movement, depending on the breakdown direction of the above equilibrium zone, are shown in the animated chart.





____________________
Euro vs Japanese yen


The development of the cross-instrument movement EUR / JPY from October 9, 2019 will continue in the equilibrium zone (117.95 - 117.30 - 116.70) of the Minuette operational scale fork. The markup of this movement is shown in the animated chart..


The breakdown of the lower boundary of ISL61.8 (support level of 116.70) of the Minuette operational scale fork will direct the EUR / JPY movement to the local minimum 115.84 and the boundaries of 1/2 Median Line Minuette channel (115.10 - 114.70 - 114.30).


In case of breakdown of the upper boundary of ISL38.2 (resistance level of 117.95) of the Minuette operational scale fork, the upward movement of this cross-instrument will continue to the boundaries of the 1/2 Median Line channel (118.65 - 119.10 - 119.55) of the Minuette operational scale fork.


The details of the EUR / JPY movement depending on the development of the Minuette equilibrium zone are presented in the animated chart.





___________________


Great Britain pound vs Japanese yen


Meanwhile, the development of the GBP / JPY cross-instrument movement from October 9, 2019 will be determined by the direction of the breakdown of the range :


resistance level of 130.90 (lower boundary of the ISL61.8 equilibrium zone of the Minuette operational scale fork); support level of 129.97 (upper boundary of the 1/2 Median Line channel of the Minuette operational scale fork).


The breakdown of support level of 129.97 will confirm that further movement of the cross-instrument will be developed inside the 1/2 Median Line channel (129.97 - 128.50 - 127.00) and the equilibrium zones (128.75 - 127.00 - 125.40) of the Minuette operational scale fork.


If you return above ISL61.8 Minuette (resistance level of 130.90), the development of the GBP / JPY movement will begin to occur again in the equilibrium zone (130.90 - 131.95 - 133.00) of the Minuette operational scale fork with the prospect of reaching the initial SSL (133.85) and control UTL (134.50) lines of the Minuette operational scale fork.


The movement options, depending on the breakdown direction of the above range, are shown in the animated chart.





____________________


The review is made without taking into account the news background. Thus, the opening of trading sessions of the main financial centers does not serve as a guide to action (placing orders "sell" or "buy").


The formula for calculating the dollar index:


USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.


where the power coefficients correspond to the weights of the currencies in the basket:


Euro - 57.6%;
Yen - 13.6% ;
Pound Sterling - 11.9%;
Canadian dollar - 9.1%;
Swedish Krona - 4.2%;
Swiss franc - 3.6%.


The first coefficient in the formula leads the index to 100 at the start date of the countdown - March 1973, when the main currencies began to be freely quoted relative to each other.


Analysis are provided byInstaForex.

Australia Consumer Sentiment Weakest Since Mid-2015





Australia's consumer confidence weakened to the lowest level in more than four years in October despite interest rate reductions, survey results from Westpac showed Wednesday.


The Westpac-Melbourne Institute Index of Consumer Sentiment dropped to 92.8 in October from 98.2 in September. This was the lowest score since July 2015.


Typically, an interest rate cut boosts confidence particularly around consumers' expectations for and assessments of their own finances.


However, in this survey the indicator measuring assessment of current family finances dropped 4.9 percent to 80.2 and that for future family finances slid 3.7 percent to a five-year low of 93.3.


Despite the rate cut, assessment for the economy for the next year plunged by 6 percent to 87.1 and the five-year outlook declined 9.1 percent to 88.9.


Consumer attitudes towards spending also deteriorated in October. The 'time to buy a major household item' sub-index declined 4.2 percent to 114.5.


Global events also contributed to the weak result in October with the deterioration in US-China trade relations weighing on the global economy amid speculation of a recession in the US, Bill Evans, chief economist at Westpac, said.


Evans noted that the board of the Reserve Bank of Australia is likely to take some time to assess the impact of the three rate cuts before deciding to move again.


Westpac expects that next move will be a further cut in the cash rate to 0.5 percent in February next year.


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