Mixed bank earnings see little change in US futures
US futures are little changed as investors focus on earnings and Covid-19 vaccine news. In its report today, Bank of America said that its total revenue rose to $20.45 billion in the third quarter. That was lower than the $20.8 billion that analysts were expecting. At the same time, its profit fell by 16% to $4.9 billion. In a statement, the bank attributed the disappointing performance to low interest rates as its net interest income fell to $10.2 billion. Meanwhile, Goldman Sachs made $10.78 billion in revenue, higher than the expected $9.46 billion. Later today, companies like PNC Financial and Wells Fargo will release their third quarter results.
The US dollar was little changed today as the market reflected on the mortgage data. The number of mortgage applications declined by 0.7% last week after rising by 4.6% in the previous week. The average rate of a 30-year mortgage rate fell from 3.1% to 3.0% while the mortgage market index declined from 804.7 to 798. The greenback also reacted to the producer price index (PPI) data. According to the Bureau of Labour Statistics (BLS), the factory-gate prices rose by 0.4% in September leading to a 0.4% year-on-year increase. Similarly, the core PPI, which excludes the volatile food and energy products rose by 0.4% in September.
The euro declined slightly as investors reacted to a speech by Christine Lagarde and weak EU industrial production data. In her speech, the ECB president reiterated that the bank was committed to offer more support to the EU economy. She also said that the bank will review the makeup of the bonds it is buying. Earlier on, data released by Eurostat showed that industrial production in the Eurozone rose by 0.7% in August, leading to an annual decline of 7.2%. Separately, in China, data from the Central bank showed that outstanding loan growth rose by 13.0% in September while M2 money stock rose by 10.9%.
The EUR/USD price dropped to an intraday low of 1.1718. On the four-hour chart, this price is 42 pips below the psychologically-important level of 1.1750. The price has also moved below the 25-day and 15-day moving averages while the moving average of oscillator is still below the neutral level. Also, the on-balance volume has been falling. Therefore, the price is likely to continue falling as bears attempt to move below 1.1700.
The GBP/USD pair rose slightly as the market reacted to a parliamentary speech by Boris Johnson. On the four-hour chart, the price has moved above the ascending pink trendline. It has also moved above the 25-day exponential moving averages while the average directional index has moved to 42. The price is also above the important support at 1.2850.
The AUD/USD pair dropped to an intraday low of 0.7150. The price is above the ascending pink trendline. It is also along the 25-day and 15-day exponential moving average. It is also slightly above the 38.2% Fibonacci retracement level. The RSI has fallen from the overbought level of 72 to a low of 47. The price could continue rising so long as it remains above the ascending trendline.