Oct 21


  • BY: Donal Kelly
  • October, 21st, 2015 20:05 +00:00

Good evening,

As expected the Bank of Canada kept interest rates at 50 basis points considering that the trend of commodities is not increasing inflationary pressure. Canada is an exporter of commodities and the confidence on US growth is offset by the Chinese slowdown.  US indices fluctuated around the parity almost all the session but now are in negative territory with the S&P500 at 2,203.17 (-0.37%) and the Nasdaq Composite at 4,851 (-0.60%).  GbpUsd is trading in a 100 pips range since last week and this compression of volatility may end soon. AudUsd is trading just above both the daily 21SMA and the 55EMA, thus seems likely a technical rebound on dynamic supports. EurUsd  is off its intraday high and is trading at 1.1341 (-0.04%).

Massive selloff for Crude Oil, down 1.07$. The commodity is trading at 45.22 $/barrel and may test soon 43.81. Gold is losing ground as well at 1,167.1 $/oz (-0.88%) and Silver is doing even worse at 15.69 $oz (-1.31%).

The ECB will meet in Malta tomorrow and likely will not increase its QE, but will explain the structure of the purchase program in case it will needed. Another factor that has a weight for the ECB is the Chinese situation, because if financial markets will have a sudden decrease of risk appetite just after an increase of QE it would be difficult for eurozone members like Germany to  accept another round of balance sheet expansion of the monetary authority.