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- Asian shares turned mixed on Wednesday as soft export data kept investors cautious ahead of the European Central Bank’s policy meeting later in the week, though Japan’s market was having a go at setting a new peak for the month. Earnings for S&P 500 companies are expected to have fallen about 4 percent in the third quarter, while revenue is expected to have declined 3.8 percent, according to Thomson Reuters data. Economic news from the United States was moderately upbeat as housing starts increased 6.5 percent in September to an annual pace of 1.21 million units, beating expectations for 1.15 million units
- The euro firmed against the dollar and yen on Wednesday after solid euro zone data tempered prospects of the European Central Bank implementing additional stimulus before year-end. Analysts believe the euro is still prone to volatility ahead of the ECB policy meeting on Thursday. While the ECB may not ease this month, markets remain wary of the central bank hinting at more stimuli later this year. ECB data on Tuesday showed euro zone banks had loosened their lending standards more than expected over the last few months despite global market volatility. That reduced the need for the ECB to ramp up its 1 trillion euro ($1.14 trillion) asset purchase program, pushing up German bond yields and putting a floor under the recently shaky euro. .. The ECB’s governing council meets on Thursday and markets expect it to highlight a willingness to act to boost inflation, but not just yet.
- The Canadian dollar, meanwhile, steadied after Canada’s election results were announced. The dollar stood little changed from late North American levels at C$1.2976, after reaching C$1.3048 on Tuesday after Liberal leader Justin Trudeau won a shock victory. Focus has now turned to the Bank of Canada’s policy decision due later on Wednesday. Most analysts polled by Reuters see rates staying unchanged. The New Zealand dollar was on the defensive after a fall in international milk prices at the second auction held this month by Fonterra Co-operative Group, the world’s largest dairy exporter.
- Oil prices fell on Wednesday after data from an industry group showed a larger-than-expected build in U.S. crude inventories last week, fanning worries over global oversupply, even as a slightly weaker dollar provided some support. Industry data showed U.S. commercial crude stocks climbed by a larger-than-expected 7.1 million barrels to 473 million barrels in the week to Oct. 16, the American Petroleum Institute said on Tuesday. Analysts had expected a 3.9 million barrels increase. The U.S. Energy Information Administration is due to release official inventory data later on Wednesday, which is expected to show a build in crude stocks for a fourth straight week. It was a surprise crude stocks had continued to climb even as the number of rigs had fallen, from about 800 six months ago to 600 now, McCarthy said. China’s crude imports will continue to grow over the next five years at an average annual rate of 3.2 percent, BMI Research said in a report on Wednesday. China’s implied oil demand fell slightly in September to 10.13 million bpd, down 0.1 percent from a year ago, according to Reuters calculations based on preliminary government data. Investors are also eyeing the outcome of a meeting of oil experts later on Wednesday involving members of the Organization of the Petroleum Exporting Countries and non-OPEC oil producers.