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Futures, Global Markets Unsure What To Do As “Angst” Rises

Futures, Global Markets Unsure What To Do As "Angst" Rises



Futures, Global Markets Unsure What To Do As "Angst" Rises Tyler Durden Wed, 10/14/2020 - 08:38

US equity futures and world stocks were flat below recent record highs after several days of ramping higher driven by strength in tech, while Europe's STOXX 600 slipped, reversing an earlier gain with markets in Frankfurt, London and Paris were down around 0.3% following moves to address rising coronavirus infection rates in Europe.

The market was unsure what to do after a downbeat day on Tuesday, when stocks dropped after two COVID-19 trials were delayed, and U.S. stimulus hit an impasse. The losses began when Johnson & Johnson said it was pausing a COVID-19 vaccine trial after a study participant suffered an unexplained illness. Eli Lilly and Co later said it too had paused the clinical trial of its COVID-19 antibody treatment because of a safety concern, leading the U.S. equity market to deeper losses. J&J shares lost 2.3% and Eli Lilly closed down nearly 3%. Oil driller Concho Resources Inc. jumped after a report that the company is in talks to be acquired by ConocoPhillips.

Hopes for the passage of a new coronavirus relief package also faded as U.S. House Speaker Nancy Pelosi rejected a $1.8 trillion relief proposal from the White House. As a result, markets are grappling with "angst about vaccine/antibody delays, angst about rising covid cases in Europe, stalled U.S. fiscal talks, stalled Brexit trade talks" according to Kit Juckes, macro strategist at Societe Generale.

"We continue to see the ping-pong back and forth between the White House, Senate Republicans and Democrat-controlled House, and what’s at stake is both the size of the stimulus but also what the money goes toward,” David Chao, a strategist at Invesco Ltd., said on Bloomberg TV. “I still think there will be a stimulus package between now and the end of the year, which is what the market is partially discounting.”

In Europe, an index of travel shares dropped for a third day as authorities tighten curbs to regain a grip on the pandemic. Across the continent, infections are rising, France reported a surge in patients needing intensive care and Prime Minister Boris Johnson is facing pressure to order a national lockdown. Euro zone industrial production data showed the rate of recovery slowed sharply in August, in line with expectations.

Europe continues to be hit hard with a second wave of covid, and moving beyond bar and pub closures, the Czech Republic, which now has Europe’s worst rate per capita, shifted schools to distance learning and hospitals started cutting non-urgent medical procedures to free beds. Moscow authorities said on Wednesday they would introduce online learning for many students starting on Monday, while Northern Ireland announced schools would close for two weeks.

"The standstill in negotiations over a new U.S. fiscal package as COVID-19 infections continue to rise globally highlights the importance of political consensus, and here the outcome of the election is likely to prove pivotal,” Unicredit analysts said in a note.

Earlier in the session, Asian stocks fell, led by energy and materials, with MSCI's index of Asia-Pacific shares outside of Japan tracking Wall Street's losses overnight to end a seven-day rally. Most markets in the region were down, with Thailand's SET dropping 1% and South Korea's Kospi Index falling 0.9%, while Jakarta Composite gained 0.8%. Trading volume for MSCI Asia Pacific Index members was 11% above the monthly average for this time of the day. The Topix declined 0.3%, with DesignOne and Treasure Factory falling the most. The Shanghai Composite Index retreated 0.6%, with Shanghai Baosight and HNA Technology posting the biggest slides.

In emerging markets, Zambia told creditors including Eurobond holders that the government won’t be able to meet its obligations if they don’t agree to its proposed interest payment holiday. The bonds fell to four-month lows.

Meanwhile, in the US banks are in focus on Wall Street, with revenues at Bank of America plunging as lower loan loss provisions offset the hit to the bottom line, while Goldman stock was higher after a solid beat in FICC. In addition to following the start of earnings season, investors will be watching tensions between the European Union and Britain after the EU demanded “substantive” movement on Tuesday on fisheries, dispute settlement and guarantees of fair competition in their talks on a post-Brexit trade deal. An EU-UK trade deal is difficult but still possible to achieve if the two sides negotiate intensely in the coming weeks, said a person close to the talks on Wednesday. Sterling reversed earlier losses against the euro and the dollar on the news. EU leaders will hold a summit in Brussels on Thursday and Friday to assess progress.

Elsewhere in FX, the U.S. dollar was steady after its best day in three weeks on Tuesday, when its index against a basket of six major currencies rose 0.5%. The index was last 0.06% lower at 93.48. The euro was barely changed at $1.1741.

In rates, Treasuries extended their advance, with 10-year yields approaching last week’s low at 0.714%. The curve was flatter as the long end outperformed. The focus remains on stalemated U.S. fiscal stimulus negotiations, while U.S. session includes several Fed speakers. Yields were lower by ~2bp at long end with 2s10s, 5s30s spreads flatter by more than 1bp; 10-year, lower by 1.3bp at 0.714%, trails bund and gilt yield declines by ~1bp. In Europe, government bonds edged up with German bund yields hitting their lowest since May. Irish 10-year yields fell to a record low.

Zambia, one of the world’s largest copper producers, saw its international bonds slump more than three cents on the dollar on fears of an ugly default caused by an escalating row between the government and the country’s private-sector creditors.

In commodities, Oil slipped on concerns that fuel demand will continue to falter as rising coronavirus cases across Europe and in the United States, the world's biggest oil consumer, impede economic growth. Brent and WTI were at $42.40 and $40.10 a barrel, respectively after grinding modestly higher earlier after the IEA monthly oil market report which wrapped up this month’s 3-main releases and notably provided an alternative demand view. Specifically, the IEA report maintained 2020 & 2021 crude demand forecasts at largely unchanged levels from the previous report; however, they did highlight that demand growth is now beginning to slow given the resurgence in COVID-19. Spot gold is up 0.6% this morning but remains capped around $1900/oz mark which coincides with the session high thus far. Separately and following reports that China ordered their domestic steel mills to stop purchasing Australian coal, on this, while Australia state they have not heard of any formal order from China, BHP announced they have received deferment requests from Chinese coal customers.

In addition to earnings from Bank of America, Goldman, Wells Fargo and United Health, we get the latest PPI data.

Market Snapshot

  • S&P 500 futures up 0.4% to 3,520.25
  • Stoxx Europe 600 up 0.3% to 371.89
  • MXAP down 0.1% to 176.90
  • MXAPJ down 0.1% to 587.43
  • Nikkei up 0.1% to 23,626.73
  • Topix down 0.3% to 1,643.90
  • Hang Seng Index up 0.07% to 24,667.09
  • Shanghai Composite down 0.6% to 3,340.78
  • Sensex down 0.6% to 40,383.44
  • Australia S&P/ASX 200 down 0.3% to 6,179.17
  • Kospi down 0.9% to 2,380.48
  • Brent futures up 0.3% to $42.57/bbl
  • Gold spot up 0.4% to $1,899.36
  • U.S. Dollar Index little changed at 93.56
  • German 10Y yield fell 1.2 bps to -0.568%
  • Euro up 0.03% to $1.1750
  • Italian 10Y yield fell 1.9 bps to 0.456%
  • Spanish 10Y yield fell 1.1 bps to 0.133%

Top Overnight News from Bloomberg

  • President Donald Trump’s once-tight grip on Republican lawmakers is showing signs of slipping as he falls further behind Democrat Joe Biden, making the GOP path to keeping control of the Senate increasingly fraught
  • Boris Johnson is under growing pressure to order a U.K. “circuit breaker” lockdown, as other countries across Europe widened curbs. The sprint to find medical breakthroughs to contain Covid-19 stumbled this week, as a pair of pharmaceutical giants working to develop treatments and vaccines suffered setbacks
  • Johnson’s government is drawing up plans for a radical new law that would give ministers power to unravel foreign investments in U.K. companies -- potentially casting major doubt on deals that have already been concluded -- to stop hostile states gaining control over key assets
  • The European Central Bank must question whether mirroring the composition of the bond market in its asset purchases is appropriate in light of climate risks, according to President Christine Lagarde

A look at global markets courtesy of NewsSquawk

Asia-Pac equities traded with no clear conviction following a downbeat handover from Wall Street whereby the major indices snapped a four-day winning streak as hopes for a near-term stimulus bill fade with Democrats and Republicans still at loggerheads, whilst Eli Lilly announced that it will pause its COVID-19 antibody treatment over safety concerns, less than a day after Johnson & Johnson announced the halt of its vaccine study. ASX 200 (-0.4%) was contained within a tight parameter amid the heightening tensions with China and ahead of Aussie jobs data and a speech by RBA Governor Lowe tomorrow. Nikkei 225 (+0.1%) and KOSPI (-0.9%) both opened narrowly lower but thereafter diverged, with the latter extending losses after the BoK stood pat on rates, whilst Apple suppliers saw mixed trade following the unveiling of the iPhone 12, with Taiyo Yuden and Murata Manufacturing posting losses, whilst South Korea’s LG Display jumped over 2.5% as Apple extended the range of iPhones to include a new “mini” model – Taiwanese chip makers were also mixed. Elsewhere, Shanghai Comp (-0.6%) held onto losses amid another net daily drain by the PBoC as Chinese markets awaited President Xi’s speech which provided little by way of fresh news or surprises, whilst Hang Seng (U/C) opened with modest gains as it played catchup from yesterday’s storm-cancelled trade but immediately erased upside as China’s Evergrande shares slumped over 15% after announcing a share placement as a discount to its last closing price, and HSBC fell around 3% after the Co. was left off the list of banks arranging China’s sovereign debt sale. 10yr JGBs saw modest gains amid the cautious risk tone in the APAC region.

Top Asian News

  • China Is Buying Up Record Chunks of Japan’s Debt Mountain
  • Evergrande Tumbles After Share Placement Misses Target

European equities (Eurostoxx 50 -0.1%) trade somewhat mixed in what has been a relatively uninspiring/choppy session thus far. From a macro standpoint, there’s been not much for participants to digest since yesterday’s close asides from US stimulus headlines that continue to highlight the differences between the Republican and Democratic camps with the former (led by Senate Majority Leader McConnell) set to table a USD 500bln stimulus proposal next week; a move that had already been rebuffed by House Speaker Pelosi. On the medical front, Eli Lilly have been the latest company to halt a trial for one of its products, this time amid safety concerns over its COVID antibody treatment. However, the market remains upbeat in its view that such occurrences are a regular feature of the process and have therefore taken the news in its stride. The FTSE 100 (U/C) has outperformed its peers throughout the session, however, this has been more a by-product of earlier GBP weakness, as opposed to any inherent strength within the index. Most recently, European bourses have come under pressure as sentiment deteriorates ahead of the US market entrance seemingly taking the lead from US futures which have reverted to the U/C mark. From a sectoral standpoint, banking names are seeing some reprieve from yesterday’s noteworthy declines with strength seen particularly in Spanish banks. To the downside, the COVID-sensitive travel & leisure sector is softer on the session with losses also observed in real estate names. In terms of stock specifics, Atlantia (+9.3%) sit at the top of the Stoxx 600 amid reports that CDP, the Italian State Lender, is collaborating with Blackstone & Macquarie on a bid for the Co’s stake in Autostrade. Elsewhere, financial updates from Ashmore (+7.1%), TomTom (+3.2%) and Just East (+4.9%) have boosted their respective share prices. Maersk (+3.1%) are enjoying a session of gains thus far amid source reports noting that it could lower its headcount by around 2k.

Top European News

  • Atlantia Shares Soar as Talks on Autostrade Pick Up Steam
  • ASML Stays Positive Despite Being Caught by U.S., China Rift
  • Lagarde Says ECB Should Ask If Market Neutrality Is Right Policy
  • Brexit Negotiators Turn Up Heat as U.K. Deadline Approaches

In FX, although the writing was on the wall well before the latest headlines emphasising that the impasse between the UK and EU on key trade issues remains too big to formulate a deal in time for Thursday-Friday’s meeting and talks will have to intensify further, ‘confirmation’ of the fact via a draft document pushed the Pound down across the board. Cable met some opposition at 1.2900, but breached defences to probe below the 21 DMA (1.2892) before finding a base ahead of week ago lows circa 1.2945, while Eur/Gbp rebounded further from recent sub-0.9050 troughs to around 0.9120 and fading as the Euro suffered knock-on losses against the Dollar and Yen etc. Ahead, the 3-way conference call between PM Johnson, European Commission and Council Presidents von der Leyen and Michel, but in truth the bar is now even higher for any real positives in terms of progress towards an agreement. Nevertheless, Sterling has clambered off its knees as wires report that the UK will not abandon negotiations immediately and a person said to be familiar with the situation suggests that a deal remains possible even if remote at this stage.

  • USD - The Greenback is off best levels after yesterday’s relatively strong recovery rally extended overnight and amidst the early Pound sell-off noted above, with the DXY easing back from 63.670 and just above the 21 DMA (93.655), as several major counterparts pare losses. However, risk sentiment remains fragile following a turnaround Tuesday for many global stocks, no breakthrough on US fiscal stimulus, another pause in COVID-19 vaccine trials and ongoing geopolitical/diplomatic tensions, leaving the Buck with an underlying bid and the index holding close to 93.500.
  • NZD/AUD - Not quite all change, but some respite for the Kiwi and Aussie that appears to have regained poise on psychological if not technical grounds given its resilience into 0.7150 and 1.0750 vs Antipodean and US rivals. Similarly, Nzd/Usd has managed to stay afloat close to 0.6650 irrespective of dovish RBNZ rhetoric overnight as Assistant Governor Hawkesby stated that guidance alluding to the prospect of NIRP is no bluff and a reiterated that a weaker Kiwi would help boost the economic recovery alongside other stimulative policy. Ahead, RBA Governor Lowe is due to speak just a few hours before September labour data.
  • CAD/JPY/CHF/EUR - All narrowly mixed vs the Buck, as the Loonie meanders within a 1.3157-16 range and Yen hugs an even tighter 105.51-31 line inside decent option expiries from 105.20-15 to 106.00 (1.2 bn and 1.4 bn respectively). Elsewhere, the Franc has retreated further into 0.9133-56 parameters and Euro from 1.1800+ peaks sub-1.1750 where 1.2 bn expiry interest lies ahead of more ECB speakers.
  • SCANDI/EM - The Crowns are benefiting from the aforementioned single currency weakness rather than specifics of broad upturn in risk appetite, but EMs are largely softer vs the Dollar bar the Yuan that could be deriving traction from stronger than expected Chinese lending and money supply metrics in conjunction with a PBoC official seeing a further GDP revival in Q3.
  • RBNZ Assistant Governor Hawkesby said some economic data points are surprising to the upside, but the economy will require continued policy support. Lower exchange rate could provide further stimulus, lower bound on interest rate likely to change over time and will also depend on other policy tools being used. (Newswires)

In commodities, WTI and Brent are subdued at present in a somewhat choppy session which did earlier feature the benchmarks experiencing a grinding bid post the IEA monthly oil market report which wrapped up this month’s 3-main releases and notably provided an alternative demand view. Specifically, the IEA report maintained 2020 & 2021 crude demand forecasts at largely unchanged levels from the previous report; however, they did highlight that demand growth is now beginning to slow given the resurgence in COVID-19. The roughly unchanged forecast contrasts yesterday’s OPEC release and the EIA one prior to that which both saw modest revisions lower to their 2020 and 2021 demand forecasts. At present, WTI and Brent are off session highs and have reverted back into negative territory lower by circa USD 0.20/bbl as things stand a move which is coinciding with a modest pullback in US equity futures (currently ~U/C) ahead of US participants’ entrance. Elsewhere, attention remain on various geopolitical tensions which have thus far seen the Azeri President comment that if Armenia attempt to take control of Azerbaijan gas pipelines than the outcome will be severe. Moving to metals, spot gold is modestly firmer this morning but remains capped by the USD 1900/oz mark which broadly coincides with the session high thus far. Separately and following reports that China ordered their domestic steel mills to stop purchasing Australian coal, on this, while Australia state they have not heard of any formal order from China, BHP announced they have received deferment requests from Chinese coal customers.

US Event Calendar

  • 8:35am: Fed’s Barkin Speaks to Economic Outlook Conference
  • 9am: Fed’s Clarida Discusses U.S. Economic Outlook
  • 10:30am: Fed’s Quarles Takes Part in Panel on Financial Stability
  • 2pm: Fed’s Barkin Speaks to the Economic Club of New York
  • 2:20pm: New York Fed’s Logan Speaks in SEC Webinar
  • 3pm: Fed’s Quarles, Kaplan Speak on Financial Supervision
  • 6pm: Fed’s Kaplan to Hold Virtual Town Hall

DB's Jim Reid concludes the overnight wrap

We’re into day 4 now of our fourth period of soul destroying isolation over the last 7 months. On Sunday night one of my twins (Jamie) had a 38.7C fever and we immediately managed to book a test. We were hoping to get the results within a day or two but in spite of staring at my phone waiting for the text it hasn’t arrived. Maybe if I got the new iPhone it would speed up its delivery! Meanwhile Jamie is now bouncing around the house, and mostly destroying it, with no fever. He and Eddie are going stir crazy and keep on saying “go mummy’s car” and pointing out the window. They are all desperate to be at school and poor Bronte isn’t getting walked. My wife is at the end of her tether and my home office is where I hide for most of the day. There are those with far worse problems but hopefully the results will come though today and be negative. If there’s anyone that’s had a very recent test in the U.K. and can tell me how long they waiting for the results I’d be interested to know.

Rather like our energy levels, the rally in global equity markets finally ran out of steam yesterday amidst doubts over whether a US stimulus deal would be reached anytime soon (not sure anyone should have been expecting it to be honest) and as investors reacted to the news we reported this time yesterday that J&J had paused its vaccine trial. By the close, the S&P 500 was down -0.63% as banks (-2.72%) struggled as reporting companies provided bleak outlooks on economy and on rising costs. The broad index fell in spite of an outperformance from tech stocks that saw the NASDAQ outperform but still fall -0.10%. Over in Europe there were similar falls as the STOXX 600 fell -0.55%. The dollar index had a strong performance as investors moved into safe havens, and by the close was up +0.50% in its strongest day for over 3 weeks.

Earnings season started with the large financial institutions as usual. JPMorgan Chase (-1.62%) and Citigroup (-4.80%) both reported better than expected trading revenue and beat on EPS, however credit reserves were larger than expected as worries over the economy persist. JPM’s reserve for credit losses was still nearly $34 billion, as the bank expects loan defaults to surge in the first half of next year once the effects of stimulus abate. Citigroup in particular forecast higher unemployment and a smaller recovery in GDP than last quarter which lowered their retail profits estimates. They also saw operating expenses hit a three year high following a regulatory penalty. BlackRock (+3.91%) rose after profits and revenues were well above estimates, with CEO Larry Fink noting that the pandemic has likely caused a rise in the savings rate and caused people to think longer term about investing. Elsewhere, Johnson & Johnson shares fell (-2.33%) as the pause in their vaccine trial, due to a participant falling ill, overshadowed the company’s otherwise positive earnings announcement. In similar news, Eli Lilly & Co. (-4.33%) had to pause enrollment in a clinical trial of its Covid-19 treatment after an unspecified potential safety concern.

In yesterday’s CoTD we highlighted that the bottom-up analyst consensus saw S&P 500 EPS growth rising from -32.6% yoy in Q2, which was the worst since 2008-09, to -18.6% in Q3. The majority of that improvement is almost exclusively being driven by much lower loan loss provisions from banks and a recovering energy sector. DB thinks the season will see another big beat as data surprises have been on the upside in the quarter yet earnings outside these two factors above are broadly flat (YoY) to last quarter. However there is perhaps less market upside this quarter, as the major difference is that now positioning is more neutral than it was 3 months ago when investors were very underweight. For more see the CotD here.

On stimulus, President Trump once again pushed Congressional leaders to deliver a significant amount of fiscal measures ahead of the election as he tweeted “STIMULUS! Go big or go home!!!” This came shortly after Senate Majority Leader McConnell proposed a vote next week on one provision – allocating funds to the Paycheck Protection Program for small businesses. However near term prospects for stimulus took a hit as House Speaker Pelosi told Democratic lawmakers that McConnell’s proposal was a non-starter and not nearly enough. This comes after reports over the weekend that the White House, particularly Secretary Mnuchin, and Speaker Pelosi were discussing a $1.8 trillion dollar deal, with talks ongoing. So Senate Republicans and the Trump Administration remain at odds on the path forward here with just under 3 weeks to Election Day.

Asian markets have largely taken Wall Street’s lead this morning with the Hang Seng (-0.27%), Shanghai Comp (-0.54%) and Kospi (-0.56%) all down while the Nikkei is up +0.11%. Meanwhile, futures on the S&P 500 are back up +0.44%. Elsewhere, AMC Entertainment, the world biggest cinema chain, was down -5.65% in after-hours trading on reports that the company is considering a range of options that include a potential bankruptcy to ease its debt load as the pandemic keeps moviegoers from attending and studios from supplying films. The news highlights the disproportionate impact of the pandemic on leisure, hospitality and entertainment industry.

In other overnight news, Saudi Crown Prince Mohammed Bin Salman and Russian President Vladimir Putin urged OPEC+ oil producers to stick to agreed production cuts. This comes six days before a small group of OPEC+ ministers are scheduled to review compliance with the current production cuts on a conference call scheduled for October 19. Oil prices are down c. -0.20% this morning.

On the coronavirus, the situation continued to deteriorate in Europe, with the Netherlands announcing a partial lockdown yesterday. Prime Minister Rutte announced that the sale of alcohol will be banned after 8pm, with bars, coffee shops and restaurants being closed all together. The government is also encouraging residents to avoid public transport if possible. Here in England, the number of hospitalised patients continued to rise, reaching a 4-month high yesterday of 3,905, and the opposition Labour leader Keir Starmer ratcheted up the pressure on the government by calling for a 2-to-3 week circuit-break lockdown that would overlap with the upcoming school half-term holiday. Overnight Sky News has reported that Northern Ireland is set to impose a “circuit breaker” lockdown for four weeks, with schools closing for two weeks. Meanwhile in France, as more patients are requiring intensive care, the country is mulling additional restrictions. As of Monday more than 1,500 COVID-19 patients were in intensive care and President Macron will speak on national television this evening on the situation. In Italy, a further 5,901 cases were reported yesterday with cases edging up but still relative muted compared to the current second wave hotspots in Europe. On the other side of world, following a small outbreak in China’s port city Quingdao, the city has mass tested about 5.6mn of its 9.5mn population in the last two days and aims to complete the tests for all population within 5 days. Maybe I should get tests for my family there! Anyway you’ll see the latest case numbers in the table below. Fatalities are in the pdf as usual.

There wasn’t a great deal of news on the election yesterday, though the odds of a Biden presidency rose further in FiveThirtyEight’s model to a new campaign high of 87%. That said, the impact of a potential blue wave on markets seems to have run its course for now as the 5s30s yield curve flattened yesterday by a further -2.9bps, having steepened to a 3-year high earlier in the month in anticipation of further fiscal stimulus. Meanwhile the VIX November future, which to an extent has acted as a proxy for concerns over a contested election, snapped a run of 4 successive declines but remained flat yesterday. Assuming Biden’s polling remains where it is (currently +10.0pts in the RCP average), attention will increasingly remain on the Senate outcome and what that might mean for possible stimulus legislation next year. The Democrats remain the favourites to win control (at 69% in the FiveThirtyEight model) but there are still a number of very tight races.

Sovereign bonds continued their relentless advance yesterday as yet more records were set in Europe. By the close, 10yr Italian BTPs had fallen -1.9bps to another all-time low of 0.658%, as had Greek 10yr yields which were down -3.0bps to 0.785%. Yields fell in core countries too, with those on 10yr bunds down -1.1bps at a 5-month low, while Treasuries reopened following yesterday’s holiday as 10yr yields fell -4.7bps.

Elsewhere, sterling weakened by -0.97% against the dollar yesterday as the Brexit newsflow suggested little progress had been made in the ongoing trade negotiations. The currency took a tumble in particular after a headline came through from Prime Minister Johnson’s spokesman that Johnson had told the cabinet that the UK was “ready and willing to move forward with an Australian style outcome”, i.e. without a formal trade agreement. Today, Johnson will be holding a call with European Commission President Von der Leyen and Council President Michel to discuss Brexit, which comes ahead of the EU leaders’ summit tomorrow, where the issue is on the agenda for discussion. Previously, Johnson has spoken of October 15 as the point by which an agreement needs to have been reached, so all eyes will be on proceedings over the remainder of the week for further headlines.

In the US, September’s CPI data showed a month-on-month increase of +0.2%, in line with expectations, as the year-on-year figure also rose to an expected +1.4%. In the UK meanwhile, unemployment in the 3 months through August rose to 4.5% (vs. 4.3% expected) and the total number of hours worked in that time frame (which gives a better indicator of actual labour supply) was only up to 891k, which still leaves it around 15% below pre-pandemic levels. Finally in the IMF’s latest World Economic Outlook, they upgraded their global growth projection for this year to a smaller -4.4% contraction from -4.9% last time around back in June.

To the day ahead now, and there’s an array of central bank speakers, including ECB President Lagarde, the ECB’s Mersch, Lane, Villeroy, Hernandez de Cos, the Fed’s Clarida, Quarles, Barkin, Kaplan, and the BoE’s Haldane. Earnings releases include UnitedHealth Group, Bank of America, ASML, Wells Fargo, Goldman Sachs and United Airlines. And today’s data releases include Euro Area industrial production for August and the US PPI reading for September.

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EUR/AUD bearish breakdown supported by additional China fiscal stimulus and AU inflation

Weak PMI readings from the Eurozone, an increase in China’s budget deficit ratio, and renewed inflationary pressures in Australia may trigger a persistent…



  • Weak PMI readings from the Eurozone, an increase in China’s budget deficit ratio, and renewed inflationary pressures in Australia may trigger a persistent bearish sentiment loop in EUR/AUD.
  • Watch the key short-term resistance at 1.6700 for EUR/AUD.
  • A break below 1.6250 key medium-term support on the EUR/AUD may trigger a multi-week bearish impulsive down move.

The Euro (EUR) tumbled overnight throughout the US session as it erased its prior gains against the US dollar recorded on Monday, 23 October; the EUR/USD shed -104 pips from yesterday’s intraday high of 1.0695 to close the US session at 1.0591, its weakest performance in the past seven sessions.

Yesterday’s resurgence of the USD dollar strength has been attributed to a robust set of October flash manufacturing and services PMI data from the US in contrast with weak readings seen in the UK and Eurozone that represented stagflation risks.

Interestingly, the Aussie dollar (AUD) has outperformed the US dollar where the AUD/USD managed to squeeze out a minor daily gain of 21 pips by the close of yesterday’s US session. The resilient movement of the AUD/USD has been impacted by positive news flow out from China, Australia’s key trading partner.

China’s national legislature has just approved a budgetary plan to raise the fiscal deficit ratio for 2023 to around 3.8% of its GDP which was above the initial 3% set in March and set to issue additional sovereign debt worth 1 trillion yuan in Q4. This latest round of additional fiscal stimulus suggests that China’s top policymakers are expanding their initial targeted measures to address the ongoing severe liquidity crunch in the domestic property market as well as to reverse the persistent weak sentiment inherent in the stock market.

In addition, the latest set of Australia’s inflation data surpassed expectations has also reinforced another layer of positive feedback loop in the Aussie dollar which in turn may put Australia’s central bank, RBA on a “hawkish guard” against cutting its policy cash rate too soon.

The less lagging monthly CPI Indicator has risen to an annualized rate of 5.6% in September, above consensus estimates of 5.4%, and surpassed August’s reading of 5.2% which has translated into a second consecutive month of uptick in inflationary growth.

In the lens of technical analysis, a potential bearish configuration setup has emerged in the EUR/AUD cross pair from a short to medium-term perspective.

Major uptrend phase of EUR/AUD is weakening


Fig 1: EUR/AUD medium-term trend as of 25 Oct 2023 (Source: TradingView, click to enlarge chart)

Even though the price actions of the EUR/AUD have been oscillating within a major ascending channel since its 25 August 2023 low of 1.4285 and traded above the key 200-day moving average so far, the momentum of this up movement is showing signs of bullish exhaustion.

Yesterday (24 October) price action ended with a daily bearish reversal “Marubozu” candlestick coupled with the daily RSI momentum indicator that retreated right at a significant parallel resistance in place since March 2023 at the 65 level which suggests a revival of medium-term bearish momentum.

EUR/AUD bears are now attacking the minor ascending support

Fig 2: EUR/AUD minor short-term trend as of 25 Oct 2023 (Source: TradingView, click to enlarge chart)

The EUR/AUD has now staged a bearish price action follow-through via the breakdown of its minor ascending support from its 29 September 2023 low after a momentum bearish breakdown that was flashed earlier yesterday (24 October) during the European session as seen from the 4-hour RSI momentum indicator.

Watch the 1.6700 key short-term pivotal resistance (also the 50-day moving average) for a further potential slide toward the intermediate supports of 1.6460 and 1.6320 in the first step.

On the other hand, a clearance above 1.6700 invalidates the bearish tone to see the next intermediate resistance coming in at 1.6890.

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GigXR partners with NUS Medicine to deliver holographic clinical scenarios for gastroenterology training

GigXR, Inc., a global provider of holographic healthcare training, announced today its partnership with the Yong Loo Lin School of Medicine, National University…



GigXR, Inc., a global provider of holographic healthcare training, announced today its partnership with the Yong Loo Lin School of Medicine, National University of Singapore (NUS Medicine), one of the world’s leading medical schools, to introduce a new gastrointestinal module for the award-winning HoloScenarios application. Created to better prepare medical and nursing students in diagnosing and treating acute gastrointestinal diseases, HoloScenarios: Gastrointestinal delivers evidence-based, robust clinical simulations that present hyperrealistic holographic simulated patients and medical equipment to be used in any physical learning environment, accessed anywhere in the world.

Credit: Yong Loo Lin School of Medicine, National University of Singapore (NUS Medicine), and GigXR

GigXR, Inc., a global provider of holographic healthcare training, announced today its partnership with the Yong Loo Lin School of Medicine, National University of Singapore (NUS Medicine), one of the world’s leading medical schools, to introduce a new gastrointestinal module for the award-winning HoloScenarios application. Created to better prepare medical and nursing students in diagnosing and treating acute gastrointestinal diseases, HoloScenarios: Gastrointestinal delivers evidence-based, robust clinical simulations that present hyperrealistic holographic simulated patients and medical equipment to be used in any physical learning environment, accessed anywhere in the world.

Going beyond linear step-based training traditionally seen with virtual reality (VR), HoloScenarios: Gastrointestinal uses mixed reality (MR) to simulate the entire patient journey, while including branching logic to catalyze variance in learning experiences. From taking basic medical history to performing invasive testing and emergency procedures, the new module empowers learners to master vital medical decision-making and manual skills as they would see them in real-life clinical scenarios and patient care.

HoloScenarios: Gastrointestinal is created in collaboration with renowned medical professionals and educators from NUS Medicine who specialize in the fields of Gastrointestinal (GI) Surgery and holographic medical training. The module is delivered by the Gig Immersive Learning Platform, the enterprise-scale platform enabling the creation, curation, and sharing of immersive training applications and modules made by the world’s preeminent healthcare institutions and MR developers.

“Gastrointestinal pathologies can be complex and challenging to diagnose. This module will allow learners to form a deeper understanding and appreciation of the gastrointestinal tract, especially the three-dimensional understanding of anatomy and body functions,” said Associate Professor Alfred Kow Wei Chieh from the school’s Department of Surgery and Assistant Dean (Education) at NUS Medicine. “We believe mixed reality is the next evolution in healthcare training, and collaborating with immersive platform innovators like GigXR helps us to bring this vital content to more learners globally and, ultimately, improve patient care.”

With international medical and surgical credentials that include MBBS (S’pore), M Med (Surg), FRCSEd (Gen Surg), FAMS, and FACS, Associate Professor Kow has trained thousands of healthcare professionals and advanced surgical fellows. He received the 2023 REAL Advancing in Liver Transplantation Award for his contributions to global liver transplantation education and is a founding member of The Holomedicine® Association.

“GigXR has one of the most advanced and comprehensive platforms in mixed reality, especially in medical training, and enables the exchange of developments, innovation, and expertise with a wider community across Asia and beyond,” added Associate Professor Kow. He is also the Head and Senior Consultant of the Division of Hepatobiliary & Pancreatic Surgery, Department of Surgery, at Singapore’s National University Hospital (NUH), the teaching hospital of NUS Medicine.

The new module also delivers enhanced realism in training learners to more accurately diagnose and treat acute gastrointestinal diseases. Whereas VR has been widely used in gastroenterology training for linear step-based skills, such as in endoscopic procedures, it is limited in its ability to simulate fully realized clinical scenarios. Holographic patient simulation in MR merges hyper-realistic holograms in physical learning spaces that accurately reflect the clinical environment and tools with which learners will care for real patients.

With HoloScenarios: Gastrointestinal, learners can interact with the holographic simulated patients, holographic medical equipment, instructors, and each other. This allows them to master both technical and soft skills, such as patient empathy and team communication, in hyper-realistic, safe-to-fail environments that reduce cognitive load. If the holographic patient displays the need for further care, such as a definitive surgery, learners can discuss a definitive treatment plan.

To gain a deeper evaluation of outward symptoms, co-located learners can safely walk around the patient hologram that is displayed on top of their real-world surroundings. Whereas VR locks learners into a virtual “box,” MR enables clear visibility and awareness of physical surroundings. This allows learners to move freely without fear of physical collisions and safety so they can fully focus on learning key gastrointestinal treatment, diagnostic, and communication skills with peers and instructors.

“In healthcare, educators are not only trying to help learners master and retain vital knowledge, but recall and apply it when a patient’s life may be at risk,” said Dr. Gao Yujia, MBBS (S’Pore), MRCS, FRCSEd, Consultant and Assistant Group Chief Technology Officer at Singapore’s National University Health System, and Vice Chairman of The Holomedicine® Association. “With HoloScenarios: Gastrointestinal, learners will have the ability to not only visualize the presentation of a given disease in 3D but better understand how to apply key learnings in the clinical context and within team environments.” Dr Gao is also the Director of Undergraduate Medical Education for Surgery at NUS Medicine.

With scenarios across gastrointestinal pathologies that include gastrointestinal bleeding, intestinal obstruction, and chronic liver failure, learners can master complex and potentially critical situations. They can learn, for example, how to stabilize patients who are dehydrated, bleeding, or septic, as well as the types of diagnostic procedures that may then be required to get a definitive diagnosis. Using mixed reality headsets or any Android, iOS smartphone or tablet, learners can access HoloScenearios: Gastrointestinal from anywhere for remotely distributed, yet highly immersive simulation.

“Immersive technology has accelerated the sharing of expertise for teaching, training, and simulation. Mixed reality, with its natural propensity to facilitate hyperrealistic, safe, and collaborative learning, continues to accelerate both the quality and scale of training outcomes,” said Jared Mermey, CEO of GigXR. “We are immensely proud to partner with NUS Medicine which has been at the forefront of adopting mixed reality in both clinical and educational use cases. By bringing their esteemed expertise onto our platform with the co-creation of HoloScenarios’ newest module, we believe clinical breakthroughs in diagnosing and treating gastrointestinal diseases will take a giant leap forward.”

Designed specifically for pedagogy, the Gig Immersive Learning Platform is trusted by over 70 enterprise-scale healthcare institutions across four continents to build full immersive curricula utilizing a robust content catalog – all of which is managed from a single dashboard. Third-party content developed by leading 3D medical partners, including DICOM Director, 3D4Medical by Elsevier, and ANIMA RES, seamlessly integrates with the platform to provide complementary, in-depth anatomy applications that empower learners with a broader physical context for the pathologies that they study.

“The Gig Immersive Learning Platform has quickly become the premier educational, social network for sharing healthcare training expertise in the immersive format, spanning global healthcare institutions and the Department of Defense to content developers and enterprises large and small,” said David King Lassman, Founder of GigXR. “HoloScenarios: Gastrointestinal marks the latest milestone in our rapidly expanding catalog, which now boasts a dozen different licensable training modules that span holographic simulated patients, clinical scenarios, anatomy, pathophysiology, and 3D medical imaging.”

NUS joins the University of Cambridge and Cambridge University Hospitals (CUH) NHS Foundation Trust, University of Michigan, and Morlen Health, a subsidiary of Northwest Permanente, P.C., as the world-class institutions partnering with GigXR to co-create holographic healthcare training. These simulations include modules centered around Respiratory diseases, Basic Life Support, Advanced Cardiac Life Support, Neurology scenarios, and now, with NUS, Gastrointestinal diseases.

GigXR and NUS Medicine plan to launch HoloScenarios: Gastro in Spring 2024. For more information on GigXR, visit or email For more information on NUS, visit

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Public support for extending the 14-day rule on human embryo research indicated by foundational dialogue project

The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded…



The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded Human Developmental Biology Initiative (HDBI). The HDBI is an ambitious scientific endeavour to advance our understanding of human development. The dialogue project, which was co-funded by UKRI Sciencewise programme, engaged a diverse group of the public to consider how early human embryo research can be used to its fullest, the 14-day rule and the fast-paced field of stem cell-based embryo models.

Credit: Dr Matteo Molè (Babraham Institute)

The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded Human Developmental Biology Initiative (HDBI). The HDBI is an ambitious scientific endeavour to advance our understanding of human development. The dialogue project, which was co-funded by UKRI Sciencewise programme, engaged a diverse group of the public to consider how early human embryo research can be used to its fullest, the 14-day rule and the fast-paced field of stem cell-based embryo models.

Headline findings include:

  • Appetite for review of the 14-day rule: Participants recognised that extending the 14-day rule could open up ways to achieve benefits in fertility and health, with participant support for reviewing this, including national discussion.
  • Confidence in regulation: There was a high level of confidence in how human embryo research is regulated, despite a low level of awareness of the regulators and statutes themselves. This included strong desire to see robust regulation governing any changes to the 14-day rule and further regulation for the use of stem cell-based embryo models.
  • Support for improved fertility and health outcomes: The strongest hopes for future human embryo research were where new knowledge would deliver improvements in understanding miscarriage, preventing health conditions such as spina bifida and raising the success rates of IVF procedures.
  • Concerns about genetically engineering humans: The public expressed concerns on the application of developments in this field to genetically alter or engineer humans.

The dialogue engaged a group of 70 people broadly reflective of the UK population in over 15 hours of activities including a series of online and face-to-face workshops with scientists, ethicists, philosophers, policy makers and people with relevant lived experience (such as embryo donors from IVF procedures).

Dr Peter Rugg-Gunn, scientific lead for the HDBI and senior group leader at the Babraham Institute, said: “Recent scientific advances bring incredible new opportunities to study and understand the earliest stages of human development. To ensure this research remains aligned with society’s values and expectations, we must listen and respond to public desires and concerns. This public dialogue is an important first step and as a scientist I am reassured by the findings but there is still a long way to go to fully understand this complex issue.” 

The report is exceedingly timely, following notable scientific advances in human developmental biology presented at conferences and in leading scientific journals in recent months. As well as generating excitement in scientific fields and with the public, announcement of these breakthroughs also prompted some concerns and criticisms, with the view that these findings raised significant ethical issues. The dialogue provides insight into public considerations following deliberation on early human embryo research. The hope is that it will act as a foundational reference point that others in the sectors can build upon, such as in any future review of the law on embryo research.

Professor Robin Lovell-Badge, co-chair of the HDBI Oversight group, senior group leader and head of the Laboratory of Stem Cell Biology and Developmental Genetics at the Francis Crick Institute, said: “We have learnt a lot about human development before 14 days, but there are areas of investigation that could change how we understand development, and associated diseases, that lie beyond our current window of knowledge. Despite low awareness of current laws, members of the public quickly recognised many of the critical issues researchers are keenly aware of when it comes to growing embryos beyond the current limit. This dialogue also reinforced the fact that the public are in support of research that will yield better health outcomes, and in this case, increase the success of IVF procedures.

Other countries will be looking to the UK to see how we deal with the 14-day rule; we are not there yet with any mandate to make a change, but this does give a strong pointer. The next step will be to delve deeper into some of the topics raised through this dialogue as they apply to specific areas of research, as well as feeding into policy changes.”

The 14-day rule and the regulation of stem cell-based models

When considering the regulation of research involving human embryos, the dialogue explored participant’s views on the 14-day rule. Introduced in 1990, the 14-day rule is a limit enforced by statute in the UK. It applies to early human embryos that are donated by consent to research and embryos that are created for research from donated sperm and eggs. It limits the amount of time early human embryos can be developed in a laboratory for scientific study to 14 days after fertilisation. Due to technical advances, it is now possible to grow embryos in the lab past 14 days, but researchers are not allowed to by the law. If the law changed, it would open up this ‘black box’ of development with researchers able to investigate this crucial time in development from 14-28 days after fertilisation.

Professor Bobbie Farsides, co-chair of the HDBI Oversight group and Professor of Clinical and Biomedical Ethics at the Brighton and Sussex Medical School, said: “It has been a fascinating experience to support HDBI in the undertaking of this exercise.  I commend the participants for the care and mutual respect they have shown throughout. Their engagement and commitment to a subject few of them had previously considered allowed for a wide range of views to be expressed and considered. I hope the scientists involved will be encouraged by the high level of interest in their work, and will want to keep the public conversation going around these important subjects.”

The dialogue included participant discussion on what a change to the 14-day rule might look like, and identified points that should be considered, such as defining what the benefits of extending the rule would be and potential mis-alignment with human embryo research regulations in other countries.

Participants acknowledged the astonishing possibilities of stem cell-based embryo models. The majority of participants would like to see these models further regulated. Work in establishing potential governance mechanisms is already underway. In recognition of the need for additional guidance and regulation in this area, the Cambridge Reproduction initiative launched a project in March 2023 to develop a governance framework for research using stem cell-based embryo models and to promote responsible, transparent and accountable research.

Future steps

A key outcome from the public dialogue is the identification of areas for further exploration, with participants proposing how future national conversations might be shaped. It is hoped that the project acts as a reference base for both widening engagement with the subject and also prompting deeper exploration of areas of concern.

Dr Michael Norman, HDBI Public Dialogue coordinator and Public Engagement Manager at the Babraham Institute, said: “This dialogue shows that people want the public to work closely with scientists and the government to shape both future embryo research legislation and scientific research direction. It is crucial that others in the sector build on these high quality, two-way engagement methodologies that allow for a genuine exchange of views and information to ensure that the public’s desires and concerns are listened to and respected. Transparency and openness around science is vital for public trust and through this we, as a society, can shape UK research in way that enriches the outcomes for all.”

Public Participant (Broad public group, south) said: “I do think that an extension of this public dialogue, and educating a wider society has a benefit in itself. This is really complex and sensitive and the wider you talk about it before decisions are made, the better.”

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