Market Roundup
• French 12-Month BTF Auction 2.051%, 2.058% previous
• French 3-Month BTF Auction 1.999%, 1.979% previous
• French 6-Month BTF Auction 2.034%, 2.042% previous
•US 3-Month Bill Auction 3.850% , 3.860% previous
•US 6-Month Bill Auction 3.695% ,3.715% previous
Looking Ahead Economic Data (GMT)
• 00:30 Australia ANZ Job Advertisements (MoM) (Sep) 0.1% previous
• 00:30 Australia Westpac Consumer Sentiment (Oct) -3.1% previous
• 05:00 Japan Coincident Indicator (MoM) (Aug) -1.8% previous
• 05:00 Japan Leading Index (MoM) (Aug) 1.1% previous
• 05:00 Japan Leading Index (Aug) 107.1forecast, 106.1 previous
Looking Ahead Events and Other Releases(GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro slipped against the U.S. dollar on Monday after France’s newly appointed Prime Minister Sébastien Lecornu unexpectedly resigned. Lecornu and his government stepped down just hours after unveiling his cabinet, deepening the country’s political crisis and triggering sharp declines in both stocks and the euro.The resignation came amid threats from both allies and opponents to bring down the new government, with Lecornu citing such opposition as an obstacle to effectively performing his duties. Opposition parties immediately urged President Emmanuel Macron to resign or call a snap election, claiming no other solution could resolve the crisis. Political instability in France has intensified since Macron’s 2022 re-election, with no party or coalition holding a parliamentary majority. Immediate resistance can be seen at 1.1734(SMA 20), an upside break can trigger rise towards 1.1769(38.2%fib).On the downside, immediate support is seen at 1.1665(50%fib), a break below could take the pair towards 1.1590(61.8%fib)
GBP/USD: The pound recovered from an early dip as investors digested British construction data. The UK construction sector contracted for the ninth consecutive month in September, though the pace of decline eased to a three-month low. The S&P Global Purchasing Managers’ Index (PMI) for construction rose to 46.2 in September from 45.5 in August.Meanwhile, the composite PMI, which combines data from the larger services and manufacturing sectors, slipped into contraction for the first time since April, falling to 49.7 from 52.8.Investor sentiment in the UK and across the EU was also shaken by the sudden resignation of France’s newly appointed Prime Minister, Sébastien Lecornu, and his government on Monday, just hours after announcing his cabinet. Immediate resistance can be seen at 1.3500(SMA 20), an upside break can trigger rise towards 1.3530(38.2%fib).On the downside, immediate support is seen at 1.3344(50%fib), a break below could take the pair towards 1.3309(Lower BB).
USD/CAD: The Canadian dollar gained modestly against its U.S. counterpart on Monday as global investors weighed how long the United States' government shutdown will last and its potential impact. The shutdown is leaving a void of U.S. economic data, with last Friday's closely watched monthly jobs report for September delayed along with other key releases until the government reopens. Adding to the uncertainty, France's new Prime Minister Sebastien Lecornu and his government resigned on Monday, hours after taking office. The Federal Reserve is widely expected to cut rates by 25 basis points at its October 28-29 meeting, following data that shows a weakening labor market.Traders are also pricing in 83% odds of an additional cut in December, according to the CME Group's FedWatch Tool, though this will likely depend on data released before then. Immediate resistance can be seen at 1.3677 (23.6%fib), an upside break can trigger rise towards 1.3741 (Aug 14th high).On the downside, immediate support is seen at 1.3640 (38.2%fib), a break below could take the pair towards 1.3604(50%fib).
USD/JPY: The U.S. dollar rose on Monday as the yen weakened following the election of fiscal dove Sanae Takaichi as leader of Japan’s ruling party, positioning her to become the country’s next prime minister. In Saturday’s run-off, Takaichi defeated farm minister Shinjiro Koizumi, who was viewed as more cautious on monetary policy. A former economic security and internal affairs minister with a pro-expansion fiscal stance, Takaichi is set to become Japan’s first female prime minister. Her victory could signal significant policy shifts for Japan.This week, market participants will monitor trade and current account data, household spending, and producer prices, while Bank of Japan Governor Kazuo Ueda is scheduled to speak at the 2025 Paris Europlace Forum in Tokyo on Wednesday. Immediate resistance can be seen at 150.93(Daily high) an upside break can trigger rise towards 151.00(Psychological level) .On the downside, immediate support is seen at 149.40(38.2%fib) a break below could take the pair towards 149.00(Psychological level).
Equities Recap
European stocks recovered on Monday, reversing losses caused by French Prime Minister Sébastien Lecornu’s unexpected resignation, as a rally in semiconductor shares—boosted by AMD’s chip supply deal with OpenAI—lifted the market.
UK's benchmark FTSE 100 closed up by 0.13 percent, Germany's Dax ended down by 0.00 percent, France’s CAC finished the day down by 1.36 percent.
The S&P 500 and Nasdaq rose on Monday, supported by optimism over AI-related dealmaking, despite the U.S. government shutdown entering its sixth day.
Dow Jones closed down by 0.14% percent, S&P 500 closed up by 0.36% percent, Nasdaq settled up by 0.71% percent.
Commodities Recap
Gold prices soared above $3,900 per ounce on Monday, hitting record highs as investors sought a safe haven amid economic and political uncertainty and anticipated further U.S. interest rate cuts.
Spot gold hit an all-time peak of $3,958.57 an ounce and has climbed 48% so far this year, adding to last year's gain of 27%.
Oil prices rose roughly 1% on Monday after OPEC+ announced a smaller-than-expected production increase for November, easing supply concerns, though weak demand prospects may limit near-term gains.
Brent crude futures settled 94 cents, or 1.46%, higher at $65.47 a barrel, while U.S. West Texas Intermediate crude was at $61.69, up 81 cents, or 1.33%.
