Currency Zone

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EUR/USD Intraday: the downside prevails.

Pivot: 1.1485

Our preference: short positions below 1.1485 with targets at 1.1430 & 1.1395 in extension.

Alternative scenario: above 1.1485 look for further upside with 1.1520 & 1.1550 as targets.

Comment: the RSI shows downside momentum.

 

 

USD/JPY Intraday: consolidation.

Pivot: 112.65

Our preference: short positions below 112.65 with targets at 112.10 & 111.95 in extension.

Alternative scenario: above 112.65 look for further upside with 112.85 & 113.10 as targets.

Comment: the RSI shows downside momentum.

 

 

GBP/USD Intraday: key resistance at 1.3015.

Pivot: 1.3015

Our preference: short positions below 1.3015 with targets at 1.2935 & 1.2895 in extension.

Alternative scenario: above 1.3015 look for further upside with 1.3050 & 1.3090 as targets.

Comment: the RSI is mixed to bearish.

 

 

EUR/GBP Intraday: under pressure.

Pivot: 0.8855

Our preference: short positions below 0.8855 with targets at 0.8805 & 0.8790 in extension.

Alternative scenario: above 0.8855 look for further upside with 0.8875 & 0.8900 as targets.

Comment: the RSI shows downside momentum.

 

 

USD/ZAR intraday: as long as 14.2770 is support look for 14.5700

Our pivot point stands at 14.2770.

Our preference: as long as 14.2770 is support look for 14.5700.

Alternative scenario: the downside breakout of 14.2770 would call for 14.1700 and 14.1060.

Comment: the RSI is above its neutrality area at 50. The MACD is below its signal line and positive. The pair could retrace. Moreover, the pair is above its 20 and 50 MAs (respectively at 14.3691 and 14.3369).

Currency Zone

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EUR/USD Intraday: the downside prevails.


Pivot: 1.1485

Our preference: short positions below 1.1485 with targets at 1.1430 & 1.1395 in extension.

Alternative scenario: above 1.1485 look for further upside with 1.1520 & 1.1550 as targets.

Comment: the RSI shows downside momentum.



USD/JPY Intraday: under pressure.


Pivot: 112.85

Our preference: short positions below 112.85 with targets at 112.35 & 112.20 in extension.

Alternative scenario: above 112.85 look for further upside with 113.10 & 113.30 as targets.

Comment: the RSI shows downside momentum.



GBP/USD Intraday: the downside prevails.


Pivot: 1.3015

Our preference: short @ 1.2961 with targets @ 1.2940 & 1.2895 in extension.

Alternative scenario: above 1.3015 look for further upside with 1.3050 & 1.3090 as targets.

Comment: the RSI is mixed to bearish.




EUR/GBP Intraday: supported by a rising trend line.


Pivot: 0.8825

Our preference: long positions above 0.8825 with targets at 0.8855 & 0.8875 in extension.

Alternative scenario: below 0.8825 look for further downside with 0.8805 & 0.8790 as targets.

Comment: the RSI shows upside momentum.


USD/ZAR intraday: the upside prevails as long as 14.2730 is support


Our pivot point is at 14.2730.

Our preference: the upside prevails as long as 14.2730 is support.

Alternative scenario: below 14.2730, expect 14.1660 and 14.1030.

Comment: the RSI is above its neutrality area at 50. The MACD is above its signal line and positive. The configuration is positive. Moreover, the pair is above its 20 and 50 MAs (respectively at 14.3392 and 14.3278).

EU Economics Preview: Germany's Producer Price Data Due

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Producer prices from Germany and flash consumer sentiment from euro area are due on Tuesday, headlining a light day for the European economic news.

At 2.00 am ET, Destatis is set to publish Germany's producer prices for September. Economists forecast prices to rise at a steady pace of 0.3 percent.

In the meantime, Finland's unemployment data is due for September. The jobless rate stood at 6.8 percent in August.

At 3.00 am ET, Turkey's consumer confidence survey data is due.

At 6.00 am ET, the Confederation of British Industry is scheduled to issue Industrial Trends survey data. The order book balance is seen at 2 in October versus -1 in September.

At 10.00 am ET, European Commission releases euro area consumer sentiment survey results. The confidence index is seen at -3.2 in October versus -2.9 in September.

o2's London stock market flotation of £10bn on hold

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The £10bn stock market flotation of mobile operator o2 has been put on hold until after Brexit as parent firm Telefonica holds fire in the wake of market uncertainty and a recent spate of IPO flops.

An initial public offering had been expected in 2018 following 4G and 5G spectrum auctions in April, but people with knowledge of the matter told the Press Association that those plans are firmly on ice.

Worries over Brexit and the recent IPO failures of Funding Circle and Aston Martin, which sank on their stock market debuts earlier this month, are thought to have convinced bosses at Telefonica to sit tight.

Telefonica chief executive Jose Maria Alvarez-Pallete said earlier this year that financial markets were not yet ready for an o2 float, an opinion reinforced by subsequent events.

Its delay will cause further consternation as volatility, uncertainty and a perceived lack of investor appetite weigh on the listings pipeline.

Accountancy giant EY has previously said that Brexit uncertainty is casting a "shadow" over the London IPO market.

O2's float is one of the most hotly anticipated, with analysts valuing the UK's second largest mobile firm at up to £10bn.

The firm booked operating profit of €879m in the first half of the year.

Telefonica first revealed that it would explore a London-listing of O2 in 2016 after seeing a tie-up with rival operator Three collapse over competition concerns.

It had been awaiting the outcome of a radio spectrum sale, which eventually took place in April and saw the biggest chunk go to o2 in auction that raised over £1bn for the Government.

While the operator made no firm commitment to float this year, Telefonica has been eyeing a cash-raising on o2 as a means of driving down its circa €40bn debt pile.

However, the need to float the British mobile network to generate funds is now less pressing, with the Spanish group seeing its cash flow strengthen.

Telefonica declined to comment.

Two thirds of businesses fail in measuring the right data

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A commissioned study conducted by Forrester Consulting on behalf of Collinson, a global leader in loyalty and benefits, reveals that the majority of organisations do not understand what is driving customer loyalty, and are therefore putting customer relationships and profitability at risk.

Surveying decision-makers in organisations with revenue exceeding US$300 million, respondents graded their programmes based on a series of measures and also shared their key goals and challenges. The study surveyed and compared the results for a multitude of countries and regions in Asia Pacific (APAC), including Hong Kong, mainland China, Singapore, Indonesia, Japan, Korea and Australia.

The research found that two thirds (65 per cent) of those surveyed markets in APAC do not understand why their customers are loyal to their organisations. Almost 7 out of 10 (67 per cent) reported that they do not have a proper framework in place to measure loyalty in the context of overall business performance. Remarkably, the research also found a misalignment between the loyalty objectives and the measurement criteria used to determine the effectiveness of their loyalty success.  

Three reasons why organisations may be struggling with customer loyalty

1. Loyalty strategy without clearly defined business objectives and appropriate metrics

Loyalty success is led by a holistic loyalty strategy with clear defined goals and measurement framework which needs to be embedded consistently across an organisation.

Less than half (49%) of the APAC respondents have clearly defined business goals and objectives to define their loyalty proposition, where Hong Kong and Japan have the highest percentage (55%) compared with 39% of respondents in Singapore. Only 40% have cohesive customer loyalty strategy that spans multiple functions and is a top strategic initiative with C-level support.

From the research, we found there is a clear discrepancy between what people are trying to achieve through their loyalty programmes and the KPIs in places to measure the performance in relation to their objectives.

The key loyalty objectives and performance metrics shared by our respondents for their customer loyalty programme in APAC are misaligned as shown below:


Key loyalty objectives

The metrics for measurement

1

Acquiring new customers (53%)

Customer satisfaction (62%)

2

Retaining existing customer (47%)

Customer engagement (59%)

3

Enriching customer relationships (46%)

Customer retention rate (57%)

4

Improving the customer experience (37%)

Loyalty programme enrolments (57%)

5

Increase customer advocacy (35%)

Sales & revenue (57%)

Without appropriate metrics, it could be difficult to know which areas need improvement and understand the impact of customer loyalty on overall business performance.

2. Without a single customer view to harness data potential

To appeal to the modern, choice-rich consumers, it is important to engage them at an individual level which means collecting all appropriate data across the customer journey.

The research found that three-fifths (60%) of respondents in APAC do not have centralised business rules to incorporate all sources of customer data into a single customer view. Less than a half (48%) collect a wide enough range of customer data to run deep analyses, where only 26% of them automate advanced data analytics to optimise their customer strategy, and 35% would use predictive modelling to identify the right existing dynamic content based on customer behaviour.

Predictive modelling enables brands to make better decisions and run more effective programmes where China has the highest percentage (47%) compared with the rest of respondents in Asia Pacific to harness the value of data for providing personalized offers for each member. It is vital to recognise each customer preference and behaviour to provide a personalised experience that stands out from the competition. This can only be done when brands continuously collect the right information about their customers and using it effectively, to understand what makes them tick.

3. Competitive differentiation

Loyalty programmes with reward, point and VIP schemes have been pervasive for years. These tactics are still frequently employed, but the effectiveness is uncertain when they are deployed without a sound loyalty strategy. From the research, we found that brands continue to see competitive differentiation as being vital, with two thirds (66%) of loyalty practitioners in APAC reporting that is a critical or high priority.

72% in Asia Pacific, 78% in Hong Kong, Indonesia and Korea respondents planned to increase funding for developing new loyalty programme benefits and rewards.  Embracing partnerships with like-minded brands, who can offer unique experiences and access to their customer base, will enhance and strengthen the member's engagement. It enables partner brands to expand their knowledge of the customer through an integrated cross analysis of buyer behaviour and preferences for personalized, curated communications to increases sales leveraged through the partnership.

Mary English, Executive Vice President, APAC of Collinson, says, "A clearly defined loyalty strategy provides the foundation to design a proposition for continuous engagement with your customers in a relevant and meaningful way. Data is the fuel for ongoing loyalty to a brand with heavy weighting on a well-structured single customer view to capture, measure, gain insights, and personalise the dialogue with their customers.  Organisations need to put loyalty back on track by becoming better aligned in terms of their objectives, what they measure, and how to differentiate their programmes. There is really no 'one size fits all'approach and each organisation must identify their brand's unique, valuable assets in formulating a strategy that is regularly reviewed and updated to the changing behaviours of their customers."

"Creating formalised processes and employing dedicated resources can be a valuable investment and demonstrate your company's commitment to loyalty. It is logical for companies to consider 'connected loyalty' as a goal of their strategy. Customers who feel connected to the organisation become fans, not just purchasers of their products and services. The latter may simply be shopping out of habit or convenience, whereas fans will go out of their way for the brands they love."

About the research:
A commissioned study conducted by Forrester Consulting on behalf of Collinson was carried out in April 2018.  635 respondents in UK, North America, Hong Kong, mainland China, India, UAE, Singapore, Brazil, Australia, France, Japan, Korea, Indonesia, Saudi Arabia, Mexico, South Africa were asked 20 questions. Participants' job function included decision makers ('manager' or above) for organisations with revenues over $300 million in the retail, travel and financial services sectors.

About Collinson
Collinson is a global leader in loyalty and benefits. We craft customer experiences which enable some of the world's best known brands to acquire, engage and retain the most demanding and choice-rich customers.

Our unique expertise and insight into high earning, frequent travellers allows our clients to deliver the smarter experiences it takes to drive deeper customer devotion.

We have 30 years' experience working with the world's leading payment networks, over 600 banks, 90 airlines and 20 hotel groups in over 170 countries to create loyalty, deliver smarter travel experiences, and protect and assist their customers in times of need. Our clients include Air France KLM, American Express, Cathay Pacific, Hackett, Hilton, Mastercard, Radisson Hotel Group, RSA, Sephora, UnionPay, Vhi and Visa.

Netflix set to issue $2bn of junk bonds

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NETFLIX is once again turning to the junk-bond market to fund new programming as the streaming-video giant seeks to maintain its subscriber growth.

The $2bn (€1.74bn) bond offering, which will be issued in dollars and euros, comes just a week after tit reported a bigger jump in subscribers than expected.

The bonds would push the cash-burning company's debt load above $10bn for the first time. Netflix's market value has soared almost 70pc this year to about $140bn.

The US portion of the 10.5-year bond may yield around 6.375pc, while the euro notes could pay 4.625pc, according to people with knowledge of the matter. Netflix paid less than 6pc when it last tapped the market in April, in part because underlying Treasury yields were lower.

Italy vows to defy EU

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Italian government bonds and stocks rallied after a credit ratings decision by Moody's Investors Service removed the immediate threat of a downgrade to junk.

Yields on 10-year securities fell to their lowest level in over two weeks following Friday's cut to Baa3 - its lowest investment-grade rating - with a "stable" outlook instead of a two-notch cut as had been expected and that was enough to tempt back investors. Italy is due to be reviewed by S&P, who have the nation two notches above junk, on Friday.

The country yesterday told the European Commission it would stick to its 2019 budget plans in defiance of EU fiscal rules, but promised not to inflate its deficit any further in the years ahead. In a letter to the commission, Economy Minister Giovanni Tria said he recognised that the budget, which is set to hike next year's deficit to 2.4pc of gross domestic product (GDP), was not in line with the EU Stability and Growth Pact.

However, looking to silence growing alarm from EU allies, he said the government had to respond to years of anaemic growth in the eurozone's third-largest economy. "(The budget) was a hard, but necessary decision in light of Italy's delay in catching up to pre-crisis levels of GDP and the desperate economic conditions in which the most disadvantaged citizens find themselves," Mr Tria wrote.

The commission sent Rome a warning letter about the budget last week - the first formal step of a procedure that could lead to Brussels rejecting the package and imposing fines. An EU spokesman said the commission would decide today its next step.

Underscoring the tensions, German Finance Minister Olaf Scholz said Italy had to be "careful" over its debt, while Austrian Chancellor Sebastian Kurz called on the commission to reject the budget unless changes were made.

Italian Prime Minister Giuseppe Conte dismissed Mr Kurz's criticism as "incautious" and reiterated that Rome wanted to have "constructive dialogue" over the budget, which includes tax cuts, welfare hikes and a rolling back of tough pension reform. Conte also stressed that his government had no intention of abandoning either the euro currency or the EU.

"Read my lips. There is no way Italy will leave the euro," he said. However, he added that the EU was damaging itself by not meeting the needs of ordinary people.

Italy's economy is still some 6pc smaller than it was at the start of 2008, hobbled by a slew of long-standing problems, including a national debt mountain at around 131pc of GDP - the second-highest in Europe after Greece. Mr Conte predicted that growth would "take off" once government reforms were enacted. To help fund its expansionary programme, the Treasury sharply hiked the deficit goal from a targeted 1.8pc this year. "For us, 2.4pc is the ceiling," Mr Conte said.

Asian Markets Lower

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Asian stock markets are in negative territory on Tuesday following the lackluster cues overnight from Wall Street amid rising geopolitical tensions around the world and on worries about Italy's budgetary woes as well as Brexit. Investors are also cautious as they focus on several major upcoming corporate earnings results due this week.

The Australian market is extending losses from the previous session, with stocks lower across the board.

In late-morning trades, the benchmark S&P/ASX 200 Index is losing 47.90 points or 0.81 percent to 5,857.00, off a low of 5,853.90 earlier. The broader All Ordinaries Index is down 44.00 points or 0.73 percent to 5,962.20. Australian markets fell notably on Monday.

The big four banks are notably lower. ANZ Banking, Commonwealth Bank, Westpac and National Australia Bank are down in a range of 1.1 percent to 1.4 percent.

Commonwealth Bank, which is selling its 80 percent stake in an Indonesian life insurance business for A$426 million, said it will make a post-tax profit of about A$140 million on the sale. The bank's shares are declining 0.3 percent.

The major miners are also weak despite higher iron ore and copper prices. Fortescue Metals is losing almost 2 percent, BHP is declining almost 1 percent and Rio Tinto is down 0.3 percent.

Among oil stocks, Woodside Petroleum is declining more than 2 percent and Santos is lower by more than 1 percent, even as crude oil prices edged higher overnight.

Shares of Oil Search are down more than 3 percent despite the company reporting that its revenue for the September quarter nearly doubled from the preceding quarter on higher oil prices and an uptick in production that helped offset the impact of an earthquake in Papua New Guinea earlier this year.

Gold miners are mixed after gold prices declined overnight. Evolution Mining is lower by more than 1 percent, while Newcrest Mining is adding 0.2 percent.

Private equity firm BGH Capital and AustralianSuper have renewed their takeover attempt for Healthscope with a A$4.1 billion bid, five months after the private hospitals operator rejected their offer. Shares of Healthscope, which said it will assess the proposal, are gaining more than 20 percent.

In the currency market, the Australian dollar is lower against the U.S. dollar on Tuesday. The local currency was quoted at $0.7078, down from $0.7109 on Monday.

The Japanese market is notably lower, tracking the mixed cues from Wall Street and a stronger safe-haven yen amid rising geopolitical tensions. Investors are also cautious as they focus on several upcoming corporate earnings results due this week.

The benchmark Nikkei 225 Index is losing 396.09 points or 1.75 percent to 22,218.73, after falling to a low of 22,202.89 earlier. Japanese shares eked out modest gains on Monday.

Among the major exporters, Canon is declining more than 2 percent, Mitsubishi Electric is losing more than 1 percent, Panasonic is lower by almost 1 percent and Sony is down 0.5 percent.

Among auto makers, Honda is lower by more than 1 percent, while Toyota is rising almost 1 percent. In the banking sector, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial are declining more than 1 percent each.

In the oil space, Japan Petroleum is down almost 2 percent and Inpex is losing almost 3 percent after crude oil prices edged higher overnight.

In the tech sector, Advantest is lower by almost 2 percent and Tokyo Electron is declining more than 2 percent.

Among the worst performers, Toto is falling more than 6 percent, while Kawasaki Kisen Kaisha, Daiwa House Industry and Toyo Seikan Group are losing more than 5 percent each. Screen Holdings is lower by almost 5 percent.

In economic news, Japan will release September figures for supermarket sales as well as department store sales, and final September numbers for machine tool orders today.

In the currency market, the U.S. dollar is trading in the upper 112 yen-range on Tuesday.

Elsewhere in Asia, South Korea is losing almost 2 percent, while New Zealand, Hong Kong and Taiwan are all down more than 1 percent each. Shanghai and Singapore are both lower by almost 1 percent each. Indonesia and Malaysia are modestly lower. The markets in Thailand are closed on Tuesday for Chulalongkorn.

On Wall Street, stocks closed mixed on Monday for a second straight session as traders expressed some uncertainty about the near-term outlook for the markets following recent volatility. A lack of major U.S. economic data also kept some traders on the sidelines ahead of the release of reports on new home sales, durable goods orders, and consumer sentiment in the coming days.

While the Nasdaq rose 19.60 points or 0.3 percent to 7,468.63, the Dow slid 126.93 points or 0.5 percent to 25,317.41 and the S&P 500 fell 11.90 points or 0.4 percent to 2,755.88.

The major European markets moved to the downside on Monday. The U.K.'s FTSE 100 Index edged down by 0.1 percent, the German DAX Index fell by 0.3 percent and the French CAC 40 Index slid by 0.6 percent.

Crude oil prices edged higher on Monday as investor focus returned to impending U.S sanctions against Iran. WTI crude for November added $0.05 or 0.07 percent to close at $69.17 a barrel on expiration day.

10 things you need to know in markets today

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Here's what you need to know in markets on Monday.

1. Chinese stocks are trading sharply higher on Monday, adding to mammoth gains achieved on Friday that were fueled by a wave of supportive measures rolled out by Chinese policymakers. After jumping 2.76% on Friday, the benchmark Shanghai Composite Index has risen by a further 4.17%, putting the index on track to record its largest two-day percentage gain since early August 2015.

2. Foreigners sold a net 4.01 billion riyals ($1.07 billion) in Saudi stocks in the week ending October 18, exchange data showed on Sunday — one of the biggest selloffs since the market opened to direct foreign buying in mid-2015. The selloff came during a week when investors were rattled by Saudi Arabia's deteriorating relations with foreign governments following the disappearance of journalist Jamal Khashoggi.

3. Over the weekend, Saudi Arabia admitted that Khashoggi died inside their consulate. The Saudi foreign minister denied Crown Prince Mohammed bin Salman had prior knowledge, but many are skeptical of the Kingdom's account.

4. Turkey vowed to expose the "naked truth" about the events surrounding Jamal Khashoggi's death. Turkish President Recep Tayyip Erdogan also cast doubt onto Saudi Arabia's narrative on the incident.

5. US National Security Adviser John Bolton is in Moscow for high-tension talks over plans to withdraw from a nuclear weapons treaty. President Donald Trump said Russia violated terms of the treaty, though Russia has repeatedly denied the allegations.

6. Trump has no intention of de-escalating trade tensions with China, according to Axios, with the president believing instead that more time is required to make "Chinese leaders to feel more pain from his tariffs." According to Axios, one source told them that Trump "wants them to suffer more" from tariffs.

7. U.S. Treasury Secretary Steven Mnuchin dismissed concerns that China's weakest economic growth since the global financial crisis could spill into other emerging markets and destabilize U.S. financial markets. "I am not concerned about that destabilizing our markets," Mnuchin said in an interview with Reuters in Jerusalem at the start of a Middle East visit.

8. BlackRock is betting on the explosive growth of exchange-traded funds, an asset class that has already propelled the firm to become the world's largest asset manager. The ETF market, which includes $4.7 trillion worldwide in assets, could jump to $12 trillion in the next five years, CEO Larry Fink said on the firm's earnings call last week.

9. Goldman Sachs has named veteran banker Todd Leland as its investment banking head for Asia Pacific excluding Japan, according to an internal memo seen by Reuters. The move adds to leadership changes at the bank with CEO David Solomon taking over this month. Leland, an American who joined Goldman in 1992, will replace Andrea Vella and Kate Richdale who were appointed co-heads of the unit in 2015.

10. The outlook for global growth in 2019 has dimmed for the first time, according to Reuters polls of economists who said the U.S.-China trade war and tightening financial conditions would trigger the next downturn. At the start of 2018, optimism about a robust global economic outlook was almost unanimous among respondents. But Reuters polls of more than 500 economists taken this month showed a downgrade to the outlook for 18 of 44 economies polled.

10 things in tech you need to know today

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This is the tech news you need to know this Monday.

Twitter fired an employee in 2015 who was a suspected mole for a Saudi Arabian spying operation. The employee had reportedly been persuaded to spy on dissident accounts.
Facebook reportedly wants to buy a cybersecurity company in the wake of its security breach. A deal could be announced before the end of the year.
British lawmakers discovered a dark advertising campaign on Facebook, in which Brits were encouraged to lobby against Prime Minister Theresa May's Brexit plan. MPs want Facebook to reveal who was behind the campaign.
Facebook has hired Britain's former deputy prime minister as its global comms chief. Nick Clegg, once leader of the Liberal Democrats, has deep political ties in Europe that may help Facebook handle its scrutiny in Brussels.
Phone makers will have to pay as much as $40 per device to install Google's suite of apps, according to documents obtained by The Verge. That's after Google took measures to comply with an EU antitrust ruling.
Defectors from SpaceX and Blue Origin are developing a remarkable technology called 'Stargate' to help colonize other planets. Relativity Space has backing from Mark Cuban and is working on a 3D-printed rocket.
Tesla and SpaceX CEO Elon Musk said on Twitter on Sunday that his Boring Company, which aims to lower the cost of building high-speed transit tunnels, has almost completed its first tunnel. The tunnel will open on December 10, and reportedly run under Hawthorne in the Los Angeles area.
Studies are beginning to show the impact of e-cigs such as Juul on people's health. Researchers have found evidence of toxic metals like lead in e-cig vapor and evidence that vaping may be linked with an increased risk of heart attacks.
Uber has hired former politico Lottie Dominiczak as its new UK communications chief. Dominiczak previously worked as a special adviser to the Department of Digital, Culture, Media and Sport.
Wall Street thinks online dating may be the next hot sector, and the latest estimate sees the market growing to $12 billion by 2020. According to a note from a Nomura analyst, it all comes down to peoples' increasing willingness to try out online dating.

European Shares Set To Follow Asian Peers Higher

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European stocks may follow Asian peers higher on Monday after Chinese markets jumped the most in more than two years following soothing comments from top officials about the health of the economy.

After last week's coordinated pronouncements from three top Chinese financial regulators, Chinese President Xi Jinping vowed "unwavering" support for the country's private sector.

In an open letter published in state media, he said that Beijing would continue to value and protect the country's private business owners to ensure a "better tomorrow".

China's Shanghai Composite index is up as much as 4.5 percent, extending a 2.6 percent rebound on Friday. Hong Kong's Hang Seng index is climbing 2.4 percent.

Markets elsewhere across Asia are turning in a mixed performance amid concerns surrounding Saudi Arabia, Italy and Brexit. U.S. President Donald Trump accused Saudi Arabia of lying about the killing of Jamal Khashoggi, as pressure built on the administration to identify and punish those responsible for his murder.

In Europe, today marks the deadline for Rome to reply to the European Commission's criticism of its budget proposal.

British Prime Minister Theresa May is set to tell lawmakers later today that 95 percent of the Withdrawal Agreement and its protocols are now settled despite a disagreement on the so-called Northern Irish backstop.

The European Central Bank (ECB) will announce its interest rate decision on Thursday, with economists expecting no change in monetary policy.

The dollar eased and gold hovered near a 2-1/2-month high hit last week while oil held steady on expectations of a tightening market amid looming U.S. sanctions against Iran.

Earnings news is likely to be in the spotlight in the U.S. this week, as the economic calendar is relatively quiet. 3M, Caterpillar, McDonald's, Verizon, AT&T, Boeing, UPS, Ford, Microsoft, Merck, Twitter, Amazon and Intel are among the prominent companies reporting their quarterly results.

U.S. stocks ended mixed on Friday, with upbeat earnings updates from the likes of Procter & Gamble, American Express and Honeywell as well as a rebound in Chinese equities helping limit the downside.

The Dow inched up 0.3 percent, while the tech-heavy Nasdaq Composite dropped half a percent and the S&P 500 finished marginally lower.

European markets fluctuated on Friday before ending mixed as third-quarter earnings proved to be a mixed bag and concerns over Italy's controversial budget plans drove Italian government bond yields to four-year highs.

The pan-European Stoxx Europe 600 index slid 0.1 percent. The German DAX dropped 0.3 percent and France's CAC 40 index declined 0.6 percent while the U.K.'s FTSE 100 rose 0.3 percent.

Currency Zone

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EUR/USD Intraday: the bias remains bullish.


Pivot: 1.1485

Our preference: long positions above 1.1485 with targets at 1.1530 & 1.1545 in extension.

Alternative scenario: below 1.1485 look for further downside with 1.1455 & 1.1435 as targets.

Comment: technically the RSI is above its neutrality area at 50.



USD/JPY Intraday: further upside.


Pivot: 112.35

Our preference: long @ 112.58 with targets @ 112.75 & 113.00 in extension.

Alternative scenario: below 112.35 look for further downside with 112.20 & 112.05 as targets.

Comment: the RSI shows upside momentum.



GBP/USD Intraday: the bias remains bullish.


Pivot: 1.3045

Our preference: long positions above 1.3045 with targets at 1.3100 & 1.3130 in extension.

Alternative scenario: below 1.3045 look for further downside with 1.3015 & 1.2985 as targets.

Comment: the RSI advocates for further upside.



EUR/GBP Intraday: the bias remains bullish.


Pivot: 0.8795

Our preference: long positions above 0.8795 with targets at 0.8820 & 0.8835 in extension.

Alternative scenario: below 0.8795 look for further downside with 0.8785 & 0.8775 as targets.

Comment: the RSI is mixed to bullish.



USD/ZAR intraday: the downside prevails as long as 14.4620 is resistance


14.4620 is our pivot point.

Our preference: the downside prevails as long as 14.4620 is resistance.

Alternative scenario: above 14.4620, look for 14.5700 and 14.6350.

Comment: the RSI is below its neutrality area at 50. The MACD is negative and below its signal line. The configuration is negative. Moreover, the pair stands below its 20 and 50 MAs (respectively at 14.4066 and 14.3977).

Sensex Up 100 Points In Early Trade; Nifty Holds Above 10,300

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 Indian shares opened modestly higher on Monday and the rupee opened on a flat note at 73.30 per dollar following coordinated pronouncements from three top Chinese financial regulators.

The benchmark 30-share BSE Sensex was up 100 points or 0.29 percent at 34,415 in early trade after falling 1.2 percent last week. The broader Nifty index was up 16 points or 0.16 percent at 10,320.

HDFC Bank, HCL Technologies, Eicher Motors, Bajaj Finance and Indiabulls Housing Finance rallied 2-4 percent while Tech Mahindra, UltraTech, IOC, BPCL and Yes Bank dropped 2-3 percent.

JSW Steel lost around 2 percent on fund raising reports.

Private sector lender HDFC Bank advanced 1.6 percent after reporting a 20.6 percent increase in quarterly net profit.

Jet Airways tumbled 5 percent on reports that the airline is pruning its workforce and operations.

Tata Motors shed 0.6 percent on the buzz that Tata sons has increased its stake in the company.

Brexit already having 'negative impact on majority of UK firms'

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Eight out of 10 UK firms surveyed by the Confederation of British Industry (CBI) have said that Brexit has had a "negative impact" on their investment decisions.

Almost one in five also stated that the point of no return for triggering their plans has already passed.

The powerful UK business lobby, which surveyed 236 firms - representing 101 large companies and 135 SMEs - revealed the majority of firms will implement damaging contingency plans in the absence of greater certainty on Brexit by December.

Contingency plans include cutting jobs, adjusting supply chains outside the UK, stockpiling goods and relocating production and services overseas.

"The situation is now urgent," said Carolyn Fairbairn, director general of the CBI, who warned that as long as a 'no-deal' scenario remains a possibility, the effect is corrosive for the UK economy, jobs and communities.

The UK-wide survey comes as the Irish Government concludes a nationwide 'Getting Ireland Brexit Ready' roadshow, with more than 1,000 businesses due to attend a conference in the Convention Centre in Dublin on Thursday.

A seminar in Monaghan last Thursday, where three Government ministers heard that many Border firms had changed suppliers and have diversified to offset Brexit, was attended by 400 businesses.

Yesterday, Ms Fairbairn said the "speed of negotiations is being outpaced by the reality firms are facing on the ground", adding a no-deal outcome will have severe implications for people's livelihoods.

"Unless a withdrawal agreement is locked down by December, firms will press the button on their contingency plans. Jobs will be lost and supply chains moved," she said. "The knock-on effect for the UK economy would be significant. Living standards would be affected and less money would be available for public services."

Almost six out of 10 firms said they had formulated contingency plans, with one in five stating that the latest date to halt further implementation of contingency plans has already passed. Some 80pc of firms said that Brexit has had a negative impact, with almost seven out of 10 firms stating that Brexit has had an impact on the attractiveness of the UK as a place to invest.

"Uncertainty is draining investment from the UK, with Brexit having a negative impact on eight in 10 businesses," said Ms Fairbairn.

The CBI said many firms won't publicise their investment decisions, yet their impact will show in lower GDP years down the line.

The latest CBI Brexit preparedness survey was carried out between September 19 and October 8.

How EU's budget rules sparked showdown with Italy

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For nations of the eurozone, the annual budget process isn't over when a budget is drawn up.

The European Commission also gets a say. In Italy's case, the response from Brussels took less than three days. In a letter to the Italian government, the EU leadership said the draft included an unprecedented "deviation" and it demanded an explanation.

With no evidence that Italy is willing to reconsider its plans to spend big, signs point to an escalating standoff.

1 Why does the EU have a say on Italy's budget?

EU countries have to follow a set of fiscal rules spelled out in what's called the Stability and Growth Pact. Focusing on deficit and debt, the rules are designed to force members to maintain sound public finances and co-ordinate their spending policies. Monetary policy is the responsibility of the European Central Bank, and matters such as taxation are up to each country. But the EU expects its 28 members to heed the economic stability of the region as a whole.

2 What are the EU rules?

No country should have a budget deficit larger than 3pc of GDP or debt above 60pc of output, and governments must set annual targets to show they're moving in the right direction. The EU made the rules for eurozone countries stricter in 2013 following the sovereign debt crisis. The updated rules require nations to pursue a balanced budget by law, aimed at keeping mounting public debt in check.

3 How are the rules enforced?

The European Commission (EC), the EU's executive arm, monitors the finances of member states, reviews annual spending plans, identifies imbalances and issues recommendations every spring. These have to be endorsed by finance ministers and incorporated into the budget plans for the next year.

4 Who has a problem with the EU rules?

France, Belgium and Spain are among those that have received warnings or reprimands from the EU in recent years, though never a formal rejection of their draft budget plans or any sanctions.

Italy is now the nation in the EU's crosshairs. In a showdown that was building for weeks, the EC declared Italy's spending plans to be excessive. If Italy's explanation is deemed insufficient, the commission could take the unprecedented step of essentially rejecting the budget and asking for revised plans. Italian leaders have spoken of wanting the commission to tweak how it calculates deficits.

5 What exactly is Italy seeking to do?

Its budget calls for a deficit equal to 2.4pc of GDP, compared with a 0.8pc shortfall planned by the government that was swept out of power in March.

This first budget plan by a government of two populist parties makes assumptions about growth that Italy's own budget watchdog considers overly optimistic. It proposes accepting a wider deficit as the cost of delivering on promises such as a "citizen's income" for the poor, tax cuts and a lower retirement age. Under Italy's plan, the structural deficit is projected to deteriorate by 0.8pc, far from the 0.6pc improvement Brussels wants.

6 What happens to a nation that breaks the EU rules?

While Brussels ultimately has no real power over national budgets, governments are expected to take the commission's opinion into account and avoid a reprimand that could affect financial markets.

If the commission finds a country persistently breaks deficit rules, it could eventually open a so-called excessive deficit procedure - a process where the country has to reduce its deficit by a set deadline or risk sanctions of up to 0.2pc of output. The EU's enforcement credibility has come into question, such as when it opted not to penalise repeat offenders Spain and Portugal in 2016. France, too, has received leniency while Germany went unpunished when it broke the rules.

Asian Markets Mixed, Chinese Stocks Rally

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Asian stock markets are mixed on Monday following the lackluster cues from Wall Street Friday amid worries about U.S.-Saudi Arabia tensions and on caution as the corporate earnings season gains momentum. Some of the markets pared initial losses after Chinese stocks rallied more than 2 percent at the start of trade.

The Australian market is losing ground following the mixed cues from Wall Street and on political uncertainty after news that Australia's ruling Liberal Party was poised to lose a crucial by-election in Sydney that could rob the government of its one-seat parliamentary majority.

In late-morning trades, the benchmark S&P/ASX 200 Index is losing 38.70 points or 0.65 percent to 5,900.80, off a low of 5,887.70 earlier. The broader All Ordinaries Index is down 39.70 points or 0.66 percent to 6,003.10. Australian shares closed marginally lower on Friday.

The big four banks are weak. ANZ Banking, Commonwealth Bank, Westpac and National Australia Bank are down in a range of 0.5 percent to 0.9 percent.

The major miners are also mostly lower. BHP is declining almost 1 percent and Rio Tinto is down 0.5 percent, while Fortescue Metals is adding 0.5 percent.

Among oil stocks, Santos is advancing almost 1 percent, while Woodside Petroleum is lower by 0.6 percent and Oil Search is declining 0.2 percent even as crude oil prices rose on Friday.

Gold miners are mixed after gold prices edged lower Friday. Evolution Mining is rising almost 1 percent, while Newcrest Mining is lower by 0.6 percent.

Virgin Australia reported a nearly 10 percent increase in revenue for the three months to September 30, and said it expects first-half underlying pre-tax profit to increase at least 22 percent to A$100 million. The airline's shares are rising almost 1 percent.

In the currency market, the Australian dollar is higher against the U.S. dollar on Monday. The local currency was quoted at $0.7115, up from $0.7109 on Friday.

The Japanese market has pared initial losses and is modestly lower following the mixed cues from Wall Street amid worries about U.S.-Saudi Arabia tensions. Investors are also cautious ahead of upcoming earnings results from major companies this week.

The benchmark Nikkei 225 Index is losing 67.02 points or 0.30 percent to 22,465.06, after falling to a low of 22,271.59 earlier. Japanese shares fell on Friday to extend losses from the previous session.

Among the major exporters, Sony is declining more than 1 percent, while Mitsubishi Electric and Panasonic are down almost 1 percent each. Canon is down 0.6 percent. SoftBank is lower by more than 1 percent.

Among auto makers, Honda is declining 0.3 percent and Toyota is down 1 percent. In the banking sector, Mitsubishi UFJ Financial is rising 0.3 percent, while Sumitomo Mitsui Financial is down 0.2 percent.

In the oil space, Japan Petroleum is losing almost 1 percent, while Inpex is adding more than 1 percent after crude oil prices rose on Friday.

In the tech sector, Advantest is edging up less than 0.1 percent and Tokyo Electron is adding 0.2 percent.

Among the best performers, Shiseido Co. is rising almost 3 percent, while NEC Corp. and Credit Saison are adding almost 2 percent each.

On the flip side, Kawasaki Heavy Industries is losing more than 9 percent and JXTG Holdings is lower by almost 4 percent. Rakuten, Ebara Corp., Nippon Electric and Showa Shell are all declining more than 3 percent each.

In economic news, Japan will see August numbers for its all industry activity index today.

In the currency market, the U.S. dollar is trading in the lower 112 yen-range on Friday.

Elsewhere in Asia, South Korea and Malaysia are also modestly lower, while Singapore, Indonesia, Hong Kong and Taiwan are higher. Shanghai is gaining more than 3 percent.

On Wall Street, stocks closed mixed on Friday after failing to sustain an early move to the upside following a rally by Chinese stocks and upbeat earnings from major companies. Traders seemed reluctant to make more significant moves, however, as concerns about rising interest rates and tension between the U.S. and Saudi Arabia continued to weigh on the markets.

While the Dow rose 64.89 points or 0.3 percent to 25,444.34, the Nasdaq fell 36.11 points or 0.5 percent to 7,449.03 and the S&P 500 edged down 1.00 points or less than a tenth of a percent to 2.767.78.

The major European markets also ended mixed on Friday. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the German DAX Index dipped by 0.3 percent and the French CAC 40 Index fell by 0.6 percent.

Crude oil prices recovered some lost ground on Friday as investors shifted their focus back to the impending U.S. sanctions on Iran's oil exports, which will come into force on November 4. WTI crude for November added $0.47 or 0.7 percent to $69.12 a barrel on the New York Mercantile Exchange.

Italian debt premium drops

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Italian bonds and stocks snapped two days of losses after the European Commission struck a more conciliatory tone toward the country's spending plans, easing heightened tensions between the two.

The premium that lenders charge to hold Italian 10-year bonds rather than German bonds, known as the yield spread, had hit the highest level in more than five years.

But the gap closed after European Commissioner for economic affairs, Pierre Moscovici, said that the bloc wouldn't interfere in the new government's economic policies.

It followed a letter on Thursday from the institution that said the proposed spending plans were excessive, though it is still to give a final verdict.

"It's the other way round to the recent pattern," said Christoph Kutt, head of rates strategy and sovereign credit at DZ Bank in Frankfurt.

"First the EU and Italy want to appear very strict and spreads widen, then the EU and Italy play down the issue to prevent spreads from widening any further. Especially when they're north of 300 basis points."

Italy's 10-year yield fell 13 basis points to 3.56pc, having earlier touched 3.81pc, the highest level since May 2014.

The yield spread was at 313 basis points, having earlier widened to 341 basis points, the highest level since April 2013.

Milan's main stock market rose slightly yesterday. The euro rallied 0.4pc to $1.1495 on Commissioner Moscovici's comments.

Even with that recovery, Italy's bonds headed for their fourth weekly loss and were set for a challenging period.

Both S&P Global Ratings and Moody's Investors Service are due to review their credit ratings on the nation before the end of the month.

Both agencies grade the debt just two notches above junk.

Italy is the Euro-area's third biggest economy, and by some way the single currency's biggest debtor.

The rally in Italy also helped ease pressure on other European debt markets, with Spain and Portugal erasing losses.

The two countries had slid in unison with Italy over the past few days, suggesting that investors were growing increasingly concerned about the prospects of a wider crisis in the region.

Unlike the period of the euro crisis, Irish bonds did not move with the weaker periphery.

On the markets, the yield on 10-year Irish government debt was 1.039pc, around half what Portugal would pay to borrow.

Currency Zone Update

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EUR/USD Intraday: rebound.

Pivot: 1.1430

Our preference: long positions above 1.1430 with targets at 1.1505 & 1.1530 in extension.

Alternative scenario: below 1.1430 look for further downside with 1.1390 & 1.1365 as targets.

Comment: the RSI shows upside momentum.

 

 

USD/JPY Intraday: the bias remains bullish.

Pivot: 112.25

Our preference: long positions above 112.25 with targets at 112.75 & 113.00 in extension.

Alternative scenario: below 112.25 look for further downside with 112.10 & 111.95 as targets.

Comment: the RSI shows upside momentum.

 

 

GBP/USD Intraday: the downside prevails.

Pivot: 1.3065

Our preference: short positions below 1.3065 with targets at 1.3000 & 1.2960 in extension.

Alternative scenario: above 1.3065 look for further upside with 1.3100 & 1.3130 as targets.

Comment: the RSI is mixed to bearish.

 

 

EUR/GBP Intraday: rebound.

Pivot: 0.8785

Our preference: long positions above 0.8785 with targets at 0.8810 & 0.8825 in extension.

Alternative scenario: below 0.8785 look for further downside with 0.8770 & 0.8755 as targets.

Comment: the RSI shows upside momentum.

 

 

USD/ZAR intraday: the downside prevails as long as 14.4560 is resistance

14.4560 is our pivot point.

Our preference: the downside prevails as long as 14.4560 is resistance.

Alternative scenario: above 14.4560, look for 14.5740 and 14.6440.

Comment: the RSI is below 50. The MACD is below its signal line and negative. The configuration is negative. Moreover, the pair is trading under both its 20 and 50 MAs (respectively at 14.4059 and 14.3896).

Need To Know On Markets Friday

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Here's what you need to know in markets on Friday.

1. Asian rebounded from declines on Friday as China's efforts to bolster investor confidence helped its share markets rally. Data showing China's economy growing at the slowest pace since 2009 capped broader gains. Chinese policy makers have stepped up their efforts to ease concerns about the ongoing sell-off in domestic stocks.

2. US President Donald Trump said missing journalist Jamal Khashoggi is likely dead based on "intelligence coming from every side." Trump said there would be "very severe" consequences if the Saudis killed him. Meanwhile, Saudi Arabia is reportedly planning to admit Jamal Khashoggi was murdered. Officials reportedly plan to scapegoat a two-star general and say he botched a plan to interrogate Khashoggi and accidentally killed him. More officials, including Treasury Secretary Steven Mnuchin, are pulling away from Saudi Arabia. Here’s the full list.

3. Insurer AIG said on Thursday it expects third-quarter pre-tax catastrophe losses, net of reinsurance, of between $1.5 billion and $1.7 billion. "These losses are largely associated with multiple events in Japan, including Typhoons Jebi and Trami, as well as Hurricane Florence and revisions to our loss estimates on the California mudslides," AIG said. The shares fell about 4% in extended trading.

4. Banks on Thursday pushed back on how regulators are attempting to simplify rules prohibiting banks from trading on their own account, a development that is likely to delay efforts to wrap up the overhaul in the coming months. On May 30, U.S. regulators unveiled a plan to modify the so-called Volcker Rule introduced following the 2007-2009 financial crisis, aiming to make compliance easier for many firms and relieving small banks altogether.

5. The US is pulling out of an obscure 144-year-old treaty to take a shot at China in the trade war. The Universal Postal Union helps set international postage rates, and Chinese goods coming into the US are currently subject to lower postage rates.

6. A top US commander in Afghanistan survived a deadly insider attack that killed senior Afghan officials and wounded two Americans. The incident follows two other fatal insider attacks this year.

7. Government debt levels are about to become a 'major focus' for global markets. Global markets are becoming increasingly vulnerable to rising levels of government debt, warns ANZ. The analysts said a troubling shift is underway in the fiscal policies of the US and Europe which may prove difficult to unwind. In short, government debt levels are back on the rise again.

8. Russian President Vladimir Putin warned that any country that threatens Russia with nuclear weapons will "drop dead." Putin said that aggressors who strike Russia will perish as sinners, while Russian "martyrs" will go to heaven.

9. President Trump threatened to summon the military and wreck a Mexico trade deal amid a burgeoning migrant crisis.Trump is concerned about a caravan of migrants that has grown to 4,000 people, and is currently trekking through Guatemala en route to the US.

10. China’s biggest retailer is coming to America with the help of Google. It will be the first time the Chinese e-commerce giant JD.com can sell directly to US customers.

Currency Zone

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EUR/USD Intraday: the downside prevails.


Pivot: 1.1485

Our preference: short positions below 1.1485 with targets at 1.1445 & 1.1425 in extension.

Alternative scenario: above 1.1485 look for further upside with 1.1505 & 1.1530 as targets.

Comment: the RSI is mixed to bearish.


USD/JPY Intraday: continuation of the rebound.


Pivot: 112.10

Our preference: long positions above 112.10 with targets at 112.60 & 112.75 in extension.

Alternative scenario: below 112.10 look for further downside with 111.95 & 111.70 as targets.

Comment: the RSI shows upside momentum.


GBP/USD Intraday: under pressure.


Pivot: 1.3065

Our preference: short positions below 1.3065 with targets at 1.3000 & 1.2960 in extension.

Alternative scenario: above 1.3065 look for further upside with 1.3100 & 1.3130 as targets.

Comment: the RSI shows downside momentum.



EUR/GBP Intraday: the bias remains bullish.


Pivot: 0.8785

Our preference: long @ 0.8798 with targets @ 0.8810 & 0.8825 in extension.

Alternative scenario: below 0.8785 look for further downside with 0.8770 & 0.8755 as targets.

Comment: the RSI shows upside momentum.



USD/ZAR intraday: as long as 14.3360 is support look for 14.6460


Our pivot point is at 14.3360.

Our preference: as long as 14.3360 is support look for 14.6460.

Alternative scenario: below 14.3360, expect 14.2170 and 14.1470.

Comment: the RSI is above 50. The MACD is positive and below its signal line. The pair could retrace. Moreover, the pair is trading under its 20 MA (14.4482) but above its 50 MA (14.3500).