The Asian stock market tried to increase at the opening of the week, but it failed to bring them back to the time Europe entered the game. Japanese Nikkei225 loses 0.2% and Chinese Shanghai Composite drops by 2.5%. In China, media information about tax incentives for strengthening consumption has not helped.
USD / JPY can not break away from 112, and GBP / USD bounces slightly to 1.28. AUD managed to score 0.71 level, and NZD was the strongest and jumped to 0.6530.
The S&P rating agency maintained Italy's rating on BBB, but it lowered the outlook to the negative from stable. The chances of the rating downgrade were not large, although speculation was not lacking. This may allow for a temporary rally of relief on the yields of Italian bonds, but with the heated EU budget dispute and general risk aversion in the markets, a more lasting recovery is doubtful.
Right-wing candidate Jair Bolsonaro won the presidential election in Brazil. After converting almost all votes cast, Bolsonaro has 55% of the vote against 45% for Fernando Haddad from the leftist Workers' Party. It was the second round of elections and the result is in line with expectations.
On the commodity market, crude oil reverses earlier increases under the pressure of the downward stock market. WTI falls 0.4$ to USD 67.2 / b. Gold slightly loses at 1231 USD / oz.
On Monday, the 29th of October, the event calendar is light in important data releases, but the global investors should pay attention to Net Lending To individuals data from the UK, Personal Spending and PCE Core data from the US. There is a speech from FOMC Member Charles Evans scheduled later for today.
EUR/USD analysis for 29/10/2018:
EUR so far does not care about the political situation in Germany, although the information from there is not good. In the local elections in Hesse, CDU Angela Merkel and center-left SPD lost 10% each. support for the Green Party and ultra-right AfD. The results may shake the ruling coalition and even dethrone Merkel.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has made a new local low at the level of 1.1335 before bouncing to the level of 1.1420 in oversold market conditions. The key technical resistance is seen at the level of 1.1444 and as long as the price is below this level the bias remains bearish. Please notice, the market is still moving inside of the descending channel. The momentum reamins negative as it is under its fifty level.