Boeing Suspends Talks, Withdraws Pay Offer to Striking Union

Economic

Summary:

Boeing has withdrawn its pay offer to around 33,000 US factory workers and halted talks as a financially damaging strike nears its fourth week.

Boeing said on Oct 8 that it had withdrawn its pay offer to around 33,000 US factory workers and no further negotiations were planned with their union representatives as a financially damaging strike nears its fourth week.

Boeing and the union held their latest round of negotiations with federal mediators on Oct 7 and 8. But talks collapsed and the sides were left locked in an acrimonious stalemate showing no signs of being resolved anytime soon, a person briefed on the talks said.

“Unfortunately, the union did not seriously consider our proposals,” Boeing Commercial Airplanes head Stephanie Pope said in a note to the employees, calling the union’s demands “non-negotiable”.

“Further negotiations do not make sense at this point and our offer has been withdrawn.”

She noted Boeing had been taking steps to preserve cash.

Reuters reported on Oct 8 that the company is examining options to raise billions of dollars through a sale of stock and equity-like securities while the factories producing its best-selling 737 Max as well as 767 and 777 planes are shut.

Boeing, which is on the brink of losing its prized investment grade credit rating, has also introduced temporary furloughs for thousands of salaried employees.

The striking union of its West Coast factory workers is seeking a 40 per cent pay rise over four years and restoration of a defined-benefit pension that was taken away in the contract a decade ago.

More than 90 per cent of workers voted down an offer of a 25 per cent pay rise over four years before going on strike.

Boeing made an improved offer last month that it described as its “best and final”, which would give workers a 30 per cent raise and restore a performance bonus.

But the union said a survey of its members found that was not enough.

Source: Straitstimes

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Justin

Forex

Silver (XAG/USD) struggles to capitalize on the overnight bounce from the vicinity of the $30.00 psychological mark, or a three-week low and trades with a negative bias for the third successive day on Wednesday. The white metal is currently placed just above the mid-$30.00s and seems vulnerable to prolonging its retracement slide from the highest level since December 2012 touched last week.

From a technical perspective, the recent repeated failures to find acceptance above the $32.00 mark constitute the formation of a bearish multiple-tops pattern on the daily chart. Moreover, oscillators on the daily chart have started gaining negative traction and validate the near-term bearish outlook for the XAG/USD. Hence, a subsequent slide below the $30.00 mark, towards testing the next relevant support near the $29.75-$29.60 confluence, looks like a distinct possibility.

The latter comprises the 100-day Simple Moving Average (SMA) and the 50-day SMA, which if broken decisively should pave the way for a further near-term depreciating move. The XAG/USD might then accelerate the fall towards the $29.00 mark and eventually drop to the $28.60-$28.50 support zone.

On the flip side, any attempted recovery might now confront immediate resistance and remain capped near the $31.00 mark. That said, a sustained move beyond could trigger a short-covering move and lift the XAG/USD to the $31.55 hurdle en route to the $31.75-$31.80 region and the $32.00 mark. This is followed by the $32.25 supply zone, above which the white metal could aim to challenge the multi-year peak and make a fresh attempt to conquer the $33.00 round figure.

Source: FXSTREET

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Alex

Economic

GBP/USD hangs near multi-week low, below 1.3100 as traders await FOMC minutes

The GBP/USD pair struggles to capitalize on the previous day's modest recovery gains and meets with a fresh supply during the Asian session on Wednesday. Spot prices currently trade around the 1.3085-1.3080 area and remain within the striking distance of a nearly four-week low touched on Monday.

The British Pound (GBP) continues with its relative underperformance in the wake of market conviction that the Bank of England (BoE) might be heading towards speeding up its rate-cutting cycle. The bets were lifted by BoE Governor Andrew Bailey's dovish remarks last week, saying that there was a chance that the central bank could become a bit more aggressive in cutting rates if there's further good news on inflation. This, in turn, is seen as a key factor exerting downward pressure on the GBP/USD pair.

GBP/USD snaps five-day losing streak but gains remain tepid

GBP/USD pulled the plug on a five-day losing streak, closing a scant one-sixth of a percent in the green on Tuesday. Despite Cable bidders successfully snapping the near-term losing streak, the pair remains stubbornly on the low side of the 50-day Exponential Moving Average (EMA).

UK data remains thin in the front half of the trading week, leaving GBP traders to twiddle their thumbs until the Bank of England’s (BoE) Monetary Policy Report Hearings, slated for Thursday. UK Gross Domestic Product (GDP) figures will follow on Friday.

Source: FXSTREET

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Economic

Stocks

Asia Open

The Asian session looks set for a positive open, with Nikkei +1.15%, ASX +0.50% and NZX +0.74% at the time of writing. Korean markets are closed for holiday today. The return of risk appetite in Wall Street overnight may set a positive backdrop for Asia, as optimism continue to bask in Federal Reserve (Fed)’s policy pivot while US labour market risks are not as worrying as before, given the latest blowout US job report. The VIX dipped 5.4% overnight, while the S&P 500 continues to consolidate around previous record high in anticipation for a catalyst to induce a fresh break.

A slight tick lower in Treasury yields overnight and a pause in the US dollar rally will see market participants taking the chance to load up on risks. Overnight, US growth stocks were back at the hot-favourite seats, potentially with some anticipation for them to deliver in the upcoming earnings.

We are also seeing markets starting to fade geopolitical risks in the absence of any disruptions to supply chains, trade routes and energy supplies thus far. Market patience seems to be wearing thin in waiting for Israel’s response, while a broader ground incursion in Lebanon may have laid pressures on Hezbollah to seek a ceasefire. Safe-haven gold prices were down 0.78%, while Brent Crude prices being a barometer to geopolitical risks were down 4.5%.

Hang Seng Index down. What’s next?

Chinese stocks were the talk of the town yesterday, with the Hang Seng Index (HSI) plunging 9.4%, its largest dip since 2008. However, one may note that the index is still up 24.7% year-to-date. A lack of new stimulus has been the cause of disappointment, with many market participants hoping that its fiscal policies will follow in the footstep of the financial “bazooka” delivered in late-September, but there was clearly a step-down in yesterday’s announcement. Most measures announced are tapping on existing funding or frontloading, coupled with the usual verbal cues of meeting its gross domestic product (GDP) growth target of around 5% for this year.

We believe a pullback following a 36% rally in less than a month may be healthy in allowing market participants to reassess recent policy developments, while providing entry points for new investors and creating more balanced market participation.

Having unleashed a wave of monetary stimulus back in late-September, another commitment to a major spending package may seem overly aggressive as well, with authorities potentially hoping to gauge the success of recent measures first before assessing whether to do more. Several data suggests a jump in home sales during the holiday period, but consumer spending continues to lag, which may call for more direct support to consumers if the trend continues.

Hang Seng Index Technicals: Broader upward trend may persist

The weekly chart suggests that the HSI has reversed to an upward trend since September 2024, which leaves buying-on-dips as the preferred strategy. Its weekly relative strength index (RSI) has been managed to defend and trade above its mid-line thus far, along with a break of its weekly Ichimoku Cloud resistance for the first time since November 2020. Longer-term moving average (MA), such as the 100-day MA, is also showing signs of turning up.

With the US elections less than a month out, we may expect volatility to persist in Chinese stocks, given the uncertainties around US-China trade policies and geopolitical relations. For now, the index is retesting a 38.2% Fibonacci retracement level on the daily chart at the 21,200 level. A more attractive buy level may be at the 19,965 level or 19,632 level, where its technical conditions may hit neutral to offer a technical reset. Overall, the broader upward trend may continue, with one to watch for the formation of any higher low ahead. Asia Day Ahead: What’s Next for the Hang Seng Index after its 9% Dip?_1

Asia Day Ahead: What’s Next for the Hang Seng Index after its 9% Dip?_1

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FxPro

Economic

Germany’s industrial production index jumped 2.9% in August, almost recovering from a similar drop in the previous month. This data, above the expected 0.8% rise, nominally supports the euro-dollar exchange rate on Tuesday, as does the positive surprise in the Sentix index on Monday.

In both cases, the better-than-expected and stronger-than-expected data does not change the overall rather worrying picture. German industrial production is down 2.7% year-on-year and has been in a declining phase since February 2023, and we saw the global peak at the very end of 2017.

Sentix—the eurozone investor sentiment index—has been negative for 31 of the last 32 months despite its uptrend, compared with 25 months below zero after the global financial crisis.

Industrial orders, like manufacturing, have been very volatile in recent months, falling 5.8% in August. But here, too, there is a long downtrend, with a peak just after production.

Germany’s economic slowdown began with the first salvos of the trade war with China and continued with the cut-off of cheap gas from Russia and the abandonment of that market. In recent months, the issue of tariffs on Chinese goods and China’s potential response has returned to the fore.

It is hardly a coincidence that the peak in the EURUSD almost coincided with peaks in all the above indicators. Weakness in manufacturing and low investor confidence are translating into looser monetary policy from central banks. In particular, the ECB has not raised interest rates as much as the Fed and has started to cut rates earlier. At the same time, the strong US labour market report contrasts with the global sluggishness in Europe (albeit locally better than expected).

The macroeconomic backdrop thus supports a strategy of selling EURUSD on the expectation that the ECB will accelerate its monetary easing. Meanwhile, the Fed will reduce the pace of its rate cuts.

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RBNZ

Remarks of Officials

Central Bank

On October 9, the Reserve Bank of New Zealand (RBNZ) cut rates by 50 bps to 4.75% from 5.25%, with its monetary policy statement as follows:

Economic growth in New Zealand is weak, in part because of low productivity growth, but mostly due to weak consumer spending and business investment. High-frequency indicators point to continued subdued growth in the near term. Members agreed that increasing excess capacity is leading to lower inflationary pressure in the New Zealand economy.

Labour market conditions are expected to ease further, with filled jobs and advertised vacancy rates continuing to decline. More generally, weak house price growth, lower levels of net immigration, and ongoing fiscal consolidation from spending restraint, are expected to constrain aggregate demand growth.

Members are confident that inflation is converging to target. Monthly price indices signal a continued decline in consumer price inflation in New Zealand. New Zealand's annual consumer price inflation is assessed to currently be within the Committee's 1% to 3% target band and is expected to converge to the target midpoint of 2%.

The Committee agreed that the economic environment provided scope to further ease the level of monetary policy restrictiveness. It is appropriate to cut the OCR by 50 basis points to achieve and maintain low and stable inflation, while seeking to avoid unnecessary instability in output, employment, interest rates, and the exchange rate. The Committee confirmed that future changes to the OCR would depend on its evolving assessment of the economy.

RBNZ Rate Decision

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FastBull Featured

Daily News

Economic

[Quick Facts]

1. Japanese government decides to dissolve the House of Representatives.

2. France's government survives a no-confidence vote.

3. Fed's Collins says rate cuts should be cautious and data-dependent.

4. Fed's Bostic is optimistic about the economic situation.

5. RBNZ cuts the cash rate by 50bp due to subdued economic activity.

6. Israeli Defense Minister: New Hezbollah leader Safieddine likely killed.

[New Details]

Japanese government decides to dissolve the House of Representatives

On Tuesday morning, the Japanese government held an emergency cabinet meeting and decided to dissolve the House of Representatives. The dissolution announcement will be read at the full meeting scheduled for 3:30 PM local time today, effectively initiating the election campaign. On September 30, Shigeru Ishiba, the president of the Liberal Democratic Party, stated that he would immediately form a new cabinet after taking office as prime minister on October 1, dissolve the House of Representatives on October 9, and call an election on October 27.

According to Japanese law, the prime minister can dissolve the House of Representatives. However, Ishiba's announcement to dissolve the House before officially taking office is rare in Japanese politics. The House of Representatives elections in Japan are held every four years, and the terms of the current House members will expire in October 2025. Japanese media speculate that Ishiba chose to dissolve the House early to leverage the momentum from the party leadership election and capitalize on the high approval ratings.

France's government survives a no-confidence vote

On October 8, the French National Assembly voted on a no-confidence motion against Prime Minister Borne's government, which did not pass. The National Assembly has a total of 577 seats. In the vote, only 197 members supported the no-confidence motion, failing to reach the required minimum of 289 votes for passage. On October 4, 192 left-wing members of the National Assembly submitted the no-confidence motion, opposing Borne government's tax policies and arguing that her appointment as prime minister was a "negation" of the election results.

Fed's Collins says rate cuts should be cautious and data-dependent

Recent data, including last week's September jobs report, indicates that the overall condition of the U.S. labor market is "good," said Boston Fed President Susan Collins on Tuesday. She is increasingly confident that inflation will "timely" return to the Fed's target, while the labor market remains healthy.

Looking ahead, maintaining the current favorable economic conditions will require adjustments to monetary policy so as not to impose unnecessary constraints on demand. It is appropriate to normalize policy in a cautious, data-dependent manner as we balance dual risks and continue to focus on achieving price stability and full employment.

Fed's Bostic is optimistic about the economic situation

Atlanta Fed President Raphael Bostic said on Tuesday that the overall risks between the two sides of the Fed's dual mandate are more in balance now. Although the labor market has slowed, it does not appear weak or vulnerable. But the inflation rate is still above the 2% target. Bostic remains optimistic about the current U.S. economic conditions and is closely monitoring the potential fallout from hurricanes battering the southeastern U.S.

RBNZ cuts the cash rate by 50bp due to subdued economic activity

The Reserve Bank of New Zealand (RBNZ) lowered the official cash rate by 50 basis points to 4.75% on Wednesday as expected, marking the second consecutive rate cut. The monetary policy statement indicates that the New Zealand economy is now in a state of excess capacity, and economic activity in New Zealand is subdued, in part due to restrictive monetary policy. The Committee agreed that excess capacity has dampened inflation expectations, and price and wage changes are now more consistent with a low-inflation environment. New Zealand's annual consumer price inflation is assessed to be within the Committee's 1%-3% target range and is expected to converge to 2%.

Israeli Defense Minister: New Hezbollah leader Safieddine likely killed

Israeli Defense Minister Yoav Gallant stated that senior Hezbollah official Hashem Safieddine was likely killed in last week's airstrikes targeting Beirut. Safieddine was a candidate to succeed the assassinated Hezbollah leader Hassan Nasrallah.

"Hezbollah is an organization without a leader. Nasrallah was eliminated and his replacement was probably also eliminated. This thing has a dramatic effect on everything that happens. There is no one to make decisions, no one to act," Gallant said. He added that Hezbollah's firepower capabilities have also been significantly impacted. "The actions we are taking are observed all over the Middle East. When the smoke in Lebanon clears, in Iran they will realize that they have lost their most valuable asset, which is Hezbollah," Gallant added.

[Today's Focus]

UTC+8 16:30 ECB Executive Board Member Elderson Speaks

UTC+8 21:15 Dallas Fed President Logan Speaks on the Economic Situation

UTC+8 00:00 Next Day: ECB Governing Council Member Villeroy Speaks

UTC+8 00:15 Next Day: Richmond Fed President Barkin Speaks

UTC+8 00:30 Next Day: Fed Vice Chair Jefferson Speaks

UTC+8 02:00 Next Day: Fed Releases Its Monetary Policy Meeting Minutes

UTC+8 05:00 Next Day: Boston Fed President Collins Speaks

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