Asian markets advanced toward a recent 2-year peak on Monday powered by hopes of a U.S. fiscal package and expectations of a coronavirus vaccine by the end of this year, though gains were held back by weaker-than-expected Chinese economic data.
In early European trades, the pan-region Euro Stoxx 50 futures added 0.25%, German DAX futures were slightly higher while London’s FTSE futures were down 0.07%.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.5% for its second straight day of gains, paring back slightly following third-quarter gross domestic product (GDP) data from China.
The index has risen in eight of the last 10 sessions amid a rally in risk assets buoyed by hopes of a coronavirus vaccine and expectations of a so-called “blue wave, which would see the Democrats claim victory in November’s elections.
Chinese shares started higher but slipped into negative territory in afternoon trading after China’s third-quarter GDP data rose 4.9%, missing expectations for a 5.2% growth.
In a positive sign, however, separate monthly indicators pointed to an expansion in economic activity.
Industrial output accelerated 6.9% in September from a year earlier, when analysts were looking for a 5.8% gain from a 5.6% rise in August.
Retail sales edged up 3.3% last month from a year earlier against expectations for 1.8% growth.
Later this week, key risk events include minutes of Australia’s central bank meeting, the final U.S. presidential debate and global manufacturing indicators.
Action in currencies was muted with the U.S. dollar, usually perceived as a safe-haven asset, flat at 93.696 against a basket of six major currencies.
The euro was slightly weaker at $1.1708 and sterling hovered near two-week lows after UK Prime Minister Boris Johnson told businesses to get ready for a no-deal Brexit in case negotiations with the European Union fail to produce a free trade agreement.
In commodities, Brent crude futures slipped 10 cents to $42.83 a barrel, and U.S. West Texas Intermediate (WTI) crude futures fell 12 cents to $40.76 a barrel.
Spot gold rose 0.6% to $1,909.6 an ounce.
Overview for the Week Ahead
In the US, earnings season is set to pick up this week, giving investors a better picture of the state of corporate profitability amid the ongoing coronavirus pandemic. This week, a plethora of companies across industries are set to report results, including more airline carriers like American Airlines (AAL) and Southwest (LUV), consumer giants including Procter & Gamble (PG) and Coca-Cola (KO), and health care companies Biogen (BIIB) and Quest Diagnostics (DGX). Reports from a couple of 2020’s closely watched tech names are expected to be a particular focal point. Streaming giant Netflix (NFLX) is set to report quarterly earnings results Tuesday after the bell, and Tesla (TSLA) is poised to deliver results late Wednesday.
The UK’s corporate calendar has a trading statement from currency services provider Record and annual results from infection prevention products provider Tristel. Very early Tuesday morning, miner BHP Group reports an operations review at 00.30 GMT+3.
These events have the potential to influence the markets which means there is plenty of trading opportunities.
Today’s High Impact Events
The times below are GMT+3.
Monday 19th October
All-Day – OPEC – JMMC Meetings
Potential instruments to Trade: All Currency Crosses.
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