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Novox 10.16 Commodity Market Overview

ASIA-PACIFIC RECAP

Equity markets moved lower during the Asia-Pacific trading session, with Australia’s ASX 200 index falling 0.54% and Japan’s Nikkei 225 index sliding 1.4%.


The haven-associated US Dollar and Japanese Yen continued to push higher against their major counterparts, as the prolonged gridlock in US fiscal stimulus negotiations appeared to sour market sentiment.


Gold slipped lower and silver slid over 0.5%, as yields on US 10-year Treasuries nudged marginally lower.


Looking ahead, US retail sales and industrial production numbers for the month of September headline the economic docket alongside inflation data out of the Euro-area.


UPCOMING INFLATION DATA COULD SWAY ECB

The growth-sensitive Euro has been under fire in recent days, as several European nations move to tighten restrictive measures amid a record surge in coronavirus infections.


This selling may intensify in the coming days should upcoming Euro-area inflation data continue to show sluggish consumer price growth, with headline inflation expected to sink to -0.3% and the core inflation rate to drop to a record low of 0.2%.


Of course, some of the recent weakness in consumer prices can be attributed to the delay in summer sales and marked depreciation in energy prices.


Nevertheless, a notable stagnation in inflation may fuel bets that the European Central Bank will ease its monetary policy settings further.


In fact, several members of the Governing Council have made the case “for keeping a “free hand” in view of the elevated uncertainty, underpinning the need to carefully assess all incoming information, including the euro exchange rate, and to maintain the flexibility in taking appropriate policy action if and when needed”.


Therefore, disappointing headline and core inflation prints may intensify the need for additional support from the ECB and in turn lead to a marked discounting of the Euro against its major counterparts.


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