PM May is confident on UK getting a good deal with EU

The UK's PM May is hitting the wires, speaking at Parliament, saying that she wants a transition period with ‘as little change as possible, but she doesn’t answer questions on whether transition deal will come 1st.

• Last week's talks made important progress on new relationship with EU.
• Confident on UK getting a good deal, says its in the interests of both sides.
• Wants transition period with ‘as little change as possible’.
•  Expects vote on Brexit deal in Parliament, before EU countries vote on any agreement.
•  Ambitious and positive about Britain's future after the negotiations.
•  No physical infrastructure in n Ireland after Brexit.
•  United on key principles of any deal about rights of EU citizens, in touching distance of any deal.

Eu’s Juncker said earlier:

• UK must agree on divorce bill before trade talks.
• Dinner with UK PM May was positive.

WTI Crude oil significant levels

             At the moment the barrel of WTI is up 0.69% at $52.20 and a break above $52.37 (high Oct.16) would open the door to $52.86 (high Sep.28) and finally $53.76 (high Apr.12). On the flip side, the immediate support lines up at $51.15 (10-day sma) seconded by $50.70 (low Oct.20) and then $50.08 (38.2% Fibo of $45.58-$52.86).

West Texas Intermediate above the $52.00 mark

WTI up on geopolitical jitters

             Prices for the black gold remain underpinned by ongoing disruptions in crude oil supply in the Middle East, all amidst unabated concerns around Iraq and Kurdistan.
Adding to the upbeat mood around WTI, driller Baker Hughes reported on Friday the third consecutive drop in US oil rig count, this time by 6 to 736 US active oil rigs, while US oil production dropped to 8.4 million barrels during the week ended on October 13 according to the latest report by the EIA (Wednesday).

            Further out, traders remain optimistic following last week’s comments by OPEC officials, noting the effectiveness of the current output cut deal in rebalancing the oil market.
News from the positioning space noted oil speculative net longs dropped to 3-week lows during the week ended on October 17, as shown by the latest CFTC report.

EM’s central banks this week

              “COPOM meets Wednesday and is expected to cut rates 75 bp to 7.5%.  IPCA inflation was 2.5% y/y in September, right at the bottom of the 2.5-6.5% target range.  Price pressures are picking up, and so we see one last 50 bp cut at the December 6 meeting for a terminal SELIC rate of 7%.  Brazil then reports September current account, FDI, and central government budget data Thursday”.

            “Central Bank of Turkey meets Thursday and is expected to keep rates steady.  Inflation was 11.2% y/y in September, well above the 3-7% target range.  Yet the bank will be under great pressure not to tighten any further.  We expect further erosion of confidence in the nation’s institutions as a result”.

            “Central Bank of Russia meets Friday and is expected to cut rates 25 bp to 8.25%.  A small handful of analysts look for a 50 bp cut.  Inflation was 3% y/y in September well below the 4% target.  While a bigger move is possible, we think the bank will play it safe with a 25 bp cut and follow up with another cut at its next meeting December 15”.

            “Colombia central bank meets Friday and is expected to keep rates steady at 5.25%.  The bank remained on hold in September as inflation ticked higher to 4% y/y.  However, official comments suggest this is just a pause in the cycle.  The next meeting after this one is November 24.  Timing of the next cut will be very data dependent”. 

US stocks hit fresh all-time highs and retreat

                Major US equity indices kicked off a new trading week on a slightly positive note and touched fresh record highs as traders continued to cheer the prospects for a major tax overhaul.
Monday's modest gains came after all the three major indices scored all-time record closing highs on Friday and were being supported by growing optimism over the US President Donald Trump's proposed tax reforms. The Senate last week passed a budget blueprint for the next fiscal year and lifted hopes that congressional Republicans will be able to push on with tax cuts.

                The already buoyant investors’ sentiment got an additional boost from the Japanese PM Shinzo Abe's ruling party's big win in Sunday's snap election and a stronger-than-expected earnings season. Corporate earnings have got off to a strong start, with nearly 75% of the S&P 500 companies, which reported third-quarter earnings, beating profit expectations.

                With the third-quarter earnings season continuing at full steam this week, investors would also be keen to know who will take over as the next Fed Chair after Janet Yellen's term expires in February.

                 During the opening hour of trade, the Dow Jones Industrial Average was up nearly 30-points to 23,356, while the broader S&P 500 Index added around 2-points to 2,577. Meanwhile, tech-heavy Nasdaq Composite Index underperformed the broader indices and treaded water near Friday's closing level of 6,628.