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Futures Fall In Early Trading, Brexit Deal Is In Focus, Trade Talks To Take Place This Week

Thomas Hughes

The U.S. Market Moves Lower

The U.S. market is moving lower in early Monday trading as caution takes center stage. Traders will be watching a number of key economic releases as well as trade talks slated for Washington D.C. The Dow Jones Industrial Average, the S&P 500, and NASDAQ Composite are all down about -0.25% in the premarket session. The industrial stocks are in the lead, the XLI Industrial SPDR is down about -0.50%.

In economic news, this week’s calendar will bring us CPI and PPI as well as the JOLTs report and FOMC minutes. On the inflation front, traders will be looking for signs of clarity regarding the Fed. The Fed is expected to cut rates later this month but the outlook is cloudy. While activity is slowing and inflation is running cool, the labor markets are still strong. The NFP data reveals underlying strength in the U.S. The FOMC may cut rates one more time before the end of the year but the odds for two are well below 50%.

In trade news, deputy-level talks will be held in Washington this week. China is sending Vice Premier Liu He who has already said China will not agree to the broad reforms President Trump is asking for.

Brexit Deal In Focus, Expect Big News By The End Of The Week

EU markets are slightly higher in early Monday trading as hopes for a smooth Brexit intensify. The UK FTES is in the lead at midday but the gain is small, only about 0.25%, while the DAX and CAC are close behind. In Brexit news, UK PM Boris Johnson’s solution to the Irish-Backstop was met with some optimism. While there is no indication it will be accepted leaders in the EU have embraced it with an open mind. France’s Macron says the EU Council will make its decision by the end of the week.

In economic news, German Industrial Orders fell again and more than expected. The news is the latest indication the German manufacturing recession will continue for another month. On the consumer front, Sentix Consumer Sentiment fell to -16.8 from -11.1 as trade woes and economic slowdown drag on outlook. In stock news, shares of HSBC moved higher after the company said it would cut up to 10,000 jobs in an effort to control costs.

Asia Mixed, Trade Is In Focus

Asia markets are mixed after Monday’s session. The Chinese and Hong Kong markets are still closed for holidays. The session was led by Korea and Australia which gained close to 1.0% and 0.70%. Japan trailed with a loss of -0.16%. Investors are hopeful an interim deal will be reached between the U.S. and China. One trader put the odds at 40% for an interim deal and 60% for the October 31st tariffs to be delayed.

This article was originally posted on FX Empire