The RBA’s meeting minutes show contradicting opinions

According to the RBA September meeting minutes “the case to keep the cash rate target unchanged at this meeting was the stronger one”, implying that the bank’s pause may have not been unanimous and that the case for a 25-basis point hike was made “based on the expectation that inflation will remain above the Bank’s target” when referring to inflation. Surprisingly, the market showed little to no reaction, implying that they may believe that the banks rate hiking cycle is over. Over in Europe ECB Kazimir, stated yesterday that “It is, therefore, premature to place market bets on when the first interest rate cuts will occur”, hinting that even if the bank may have reached its terminal rate, in his opinion the current interest rates will remain at current levels for a prolonged period of time. However, given that ECB Kazimir was a vocal advocate for further rate hikes, his apparent softening tone may be a further indication to the bears that the ECB may have reached its terminal rate. According to Bloomberg, Banco Santander (#Bsantander) has revamped its corporate structure in an attempt simplify operations. The article states that the Spanish bank is combining individual countries’ retail and commercial banking businesses under a new global unit, in addition to creating a new digital consumer bank area. Overall, should the changes increase efficiency and reduce costs for the company, we may see the stock gaining support. In the US Equities market, we note that the United Auto Workers union threatened yesterday to widen strikes again should a deal not be reached by Friday, as negotiations appear to have a reached a stalemate. Therefore, in the event that an agreement has not been reached by Friday, we may see the workers union expanding their strikes to other plants and as such could weigh on the stock price of Ford (#F) and General Motors (#GM) who are currently affected by the union’s ongoing strike. Lastly in the commodities market, Brent Crude Oil according reached $95 per barrel.

On a technical level, we note that US100 appears to be moving in a sideways motion and supporting our case is the sideways moving channel formed on the 18 of August and the RSI indicator below our daily chart, which is currently near the figure of 50, implying a neutral market sentiment. For our neutral outlook to continue, we would like to see the index remaining confined between the 14710 (S1) support and the 15550 (R1) resistance levels respectively. On the other hand, for a bullish outlook, we would like to see a clear break above the 15500 (R1) resistance level, with the next possible target for the bulls being the 16610 (R2) resistance ceiling. Lastly for a bearish outlook, we would like to see a clear break below the 14710 (S1) support level, with the next possible target for the bears being the 13865 (S2) support base.

WTICash appears to be moving in an upwards fashion and supporting our case is the RSI indicator below our 4-Hour chart which currently registers a figure near 70, implying a bullish market sentiment in addition to the upwards moving trendline which was incepted on the 8 of September. For our bullish outlook to continue, we would like to see a clear break above the 93.10 (R1) resistance level, with the next possible target for the bulls being the 96.30 (R2) resistance ceiling. On the other hand, for a bearish outlook, we would like to see a clear break below the 90.40 (S1) level and the 87.50 (S2) support level, which would coincide with breaking below our upwards moving trendline, with the next possible target for the bears being the 84.50 (S3) support base.

今日其他亮点:

Today we make a start with the Eurozone’s Final HICP rate for August followed by New Zealand’s Bi-weekly rate. During the American session, we note the US Building Permits and Housing Start figures both for the month of August, followed by Canada’s BOC Core CPI rate for August and finishing off the day is the US API weekly crude oil inventories figure. In tomorrow’s Asian session, we note New Zealand’s current account figure for Q2, followed by Japan’s trade balance figure for August.