Market Roundup
• Japan au Jibun Bank Manufacturing PMI (Oct) 48.2, 48.3 forecast,48.3 previous
• Australia RBA Interest Rate Decision (Nov) 3.60%, 3.60% forecast,3.60% previous
Looking Ahead Economic Data(GMT)
•07:45 French Government Budget Balance (Sep) -157.5B
•08:00 French Car Registration (YoY) (Oct) 1.0% previous
•08:00 Spanish Unemployment Change (Oct) 5.2Kforecast,-4.8K previous
•09:40 Spanish 12-Month Letras Auction 2.006% previous
•09:40 Spanish 6-Month Letras Auction 1.937% previous
Looking Ahead Events And Other Releases(GMT)
•13:00 UK BoE Breeden Speaks
•11:35 US FOMC Member Bowman Speaks
•12:00 German Buba Balz Speaks
Currency Forecast
EUR/USD : The euro edged lower against the dollar on Tuesday as dollar firmed as divergence in views from Fed officials clouding the outlook for a rate reduction in December.The U.S. Fed last week cut interest rates for the second time this year, but Chair Jerome Powell said another reduction this year was "not a foregone conclusion".Market participants now see a 65% chance of another rate cut in December, down from over 90% prior to Powell's remarks, as per CME's FedWatch Tool.Fed officials on Monday continued pressing competing views on the economy, a debate set to intensify ahead of the December policy meeting and in the absence of key data, including from the Bureau of Labor Statistics, due to the federal government shutdown. Investors now eagerly await the release of ADP U.S. employment data, due on Wednesday and ISM PMIs this week for cues on rate cuts. Immediate resistance can be seen at 1.1662(50%fib), an upside break can trigger rise towards 1.1728(Oct 17th high).On the downside, immediate support is seen at 1.1551(61.8%fib), a break below could take the pair towards 1.1523(Lower BB).
GBP/USD: The pound edged lower on Tuesday greenback strengthened as the greenback strengthened amid heightened uncertainty over the U.S. interest rate outlook. Fed officials overnight offered contrasting views on the economy and its risks, even as the absence of official data due to a U.S. government shutdown clouded the outlook. That left the dollar index supported just below the 100 mark.The Fed cut rates last week, but Chair Jerome Powell signalled it may be the last reduction this year.Traders are now pricing in a 65.7% chance of a rate cut in December, down from 94% a week earlier. Immediate resistance can be seen at 1.3200(38.2%fib), an upside break can trigger rise towards 1.3288(50%fib).On the downside, immediate support is seen at 1.3119(23.6%fib), a break below could take the pair towards 1.3054(Lower BB).
AUD/USD: The Australian dollar edged lower on Tuesday after the Reserve Bank of Australia kept interest rates unchanged, as widely anticipated. Australia’s central bank held the cash rate steady at 3.60% , in line with forecasts, and signaled restraint on further policy easing amid elevated underlying inflation, solid household spending, and renewed momentum in housing.The Reserve Bank of Australia, wrapping up its two-day policy discussions, cautioned that inflationary pressures appear entrenched and said it would refine its outlook as economic data unfold.Markets saw little likelihood of a rate cut this week after a hotter-than-expected Q3 inflation print and now assign only slim odds to any easing in December.The RBA has lowered interest rates three times this year following quarterly inflation reviews, but in Q3, core inflation jumped to 3% the upper end of its 2–3% target range — driven by persistent strength in housing and market service costs. Immediate resistance can be seen at 0.6603(38.2%fib), an upside break can trigger rise towards 0.6655(Higher BB).On the downside, immediate support is seen at 0.6538(50%fib), a break below could take the pair towards 0.6466(61.8%fib)
USD/JPY: The U.S. dollar dipped on Tuesday as growing speculation of possible FX intervention by Japan kept investors cautious.Japan’s Finance Minister Satsuki Katayama said on Tuesday the government would keep a close watch on foreign exchange movements with a strong sense of urgency as the yen slipped to fresh eight-month lows.Katayama’s comments were little changed from Friday, when she warned that authorities were keeping a vigilant watch on sharp and speculative swings in the currency market with heightened urgency.Japan’s currency hit 154.47 per dollar in early Asian hours on Tuesday, its lowest point since mid-February, reviving fears that authorities might step in to support the yen.Immediate resistance can be seen at 154.58(23.6%fib) an upside break can trigger rise towards 155.00 (Psychological level) .On the downside, immediate support is seen at 152.90 (38.2%fib) a break below could take the pair towards 152.98 (SMA20).
Equities Recap
Asian stock markets from Tokyo to Taipei and Seoul retreated from all-time highs on Tuesday, with investors booking profits following strong tech-led rallies over recent weeks.
Hang Seng was down 0.79% ,China’sA50 traded down 0.31% ,Japan’s Nikkei 225 was down 1.38 %
Commodities Recap
Gold slipped below the $4,000-per-ounce mark again on Tuesday as the dollar held firm near three-month highs, while diminishing prospects of a December U.S. rate cut and easing U.S.-China trade tensions curbed demand for the precious metal.
Spot gold was down 0.4% at $3,984.49 per ounce, as of 0501 GMT. U.S. gold futures for December delivery lost 0.5% to $3,994.40 per ounce.
Oil prices fell on Tuesday after investors interpreted OPEC+’s decision to pause output hikes in the first quarter as a sign of potential oversupply in the market.
Brent crude futures fell 15 cents, or 0.2%, to $64.74 a barrel by 0405 GMT. U.S. West Texas Intermediate crude was down 14 cents, or 0.2%, at $60.91 a barrel.
