Market Roundup
•UK Halifax House Price Index (YoY) (Sep) 4.7%,4.3%previous
•UK Halifax House Price Index (MoM) (Sep) 0.3%,0.2%forecast 0.3%previous
•German Factory Orders (MoM) (Aug) -5.8%, -1.9% forecast,3.9% previous
•French Reserve Assets Total (Sep 260,783.0M, 254,092.0M previous
•Eurozone Sentix Investor Confidence (Oct) -13.8,-14.6 forecast, -15.4 previous
•Eurozone Retail Sales (MoM) (Aug) 0.2% ,0.2% forecast, 0.0% previous
•Eurozone Retail Sales (YoY) (Aug) 0.8%, -0.1% previous
Looking Ahead Economic Data(GMT)
• 13:00 French 12-Month BTF Auction 2.714% previous
• 13:00 French 3-Month BTF Auction 3.250% previous
• 13:00 French 6-Month BTF Auction 3.028% previous
•14:00 US CB Employment Trends Index (Sep) 109.04 previous
•15:30 US-Month Bill Auction 4.500% previous
•15:30 US 6-Month Bill Auction 4.215% previous
Looking Ahead Events And Other Releases(GMT)
• 17:00 FOMC Member Bowman Speaks
•17:50 FOMC Member Kashkari Speaks
•22:00 FOMC Member Bostic Speaks
Currency Forecast
EUR/USD: The euro dipped against the dollar on Monday as last week’s strong U.S. jobs data and an escalation in the Middle East conflict supported greenback. U.S. labour market data dispelled fears of a recession and spurred a sharp paring of rate-cut expectations. Traders now see a bigger chance of a 25 basis-point Federal Reserve cut rate cut in November, a stark shift from last week when most were betting on a large 50 bps move. Meanwhile, they have nearly fully priced in another 25 bps cut by the European Central Bank (ECB) later this month as inflationary pressures are easing faster than policymakers had expected. The ECB will probably cut rates on Oct. 17 as economic growth is weak and this raises the risk that inflation will undershoot its 2% target, French Central Bank Chief Francois Villeroy de Galhau told an Italian newspaper. On the data front, investor morale in the euro zone unexpectedly rose in October after three consecutive months of decline, boosted by rising expectations even as dissatisfaction with the current situation hit a new low this year, a survey showed. Immediate resistance can be seen at 1.0933(38.2%fib), an upside break can trigger rise towards 1.1044(23.6%fib).On the downside, immediate support is seen at 1.0955(50%fib), a break below could take the pair towards 1.0916 (61.8%fib).
GBP/USD: Sterling dropped against the dollar on Monday as investors focus turned to geopolitical risks and central banks' monetary policy path.The pound recorded its biggest daily fall last week since April after Bank of England Governor Andrew Bailey was quoted as saying the central bank might move more aggressively to lower borrowing costs.Analysts said Bailey's remarks triggered a substantial unwinding of stretched pound net longs, and that speculative positioning makes the British currency more vulnerable to shifts in sentiment. The data calendar is not particularly busy in the UK this week, but market-moving releases, including jobs data and the consumer price index report, are due next week. Immediate resistance can be seen at 1.3170(38.2%fib), an upside break can trigger rise towards 1.3257(50%fib).On the downside, immediate support is seen at 1.3020(50%fib), a break below could take the pair towards 1.3004(61.8%fib).
AUD/USD: The Australian dollar was little changed against dollar on Monday as investors turn their attention towards U.S. inflation data and comments by Federal Reserve officials this week.A slew of Fed officials are due to speak at events this week, which could give further clues on the direction of the central bank's future interest rate trajectory. Focus will also be on U.S. September inflation figures on Thursday.The release of minutes from the Fed's September meeting on Wednesday is expected to explain its big rate cut last month. Markets currently see a one-in-ten chance of the Fed keeping rates on hold next month, and zero chance of a 50 basis point rate cut, after a hawkish shift in expectations spurred by Friday's strong U.S. jobs data. Immediate resistance can be seen at 0.6888(Daily high), an upside break can trigger rise towards 0.6909(38.2%fib).On the downside, immediate support is seen at 0.6859(50%fib), a break below could take the pair towards 0.6857(61.8%fib).
USD/JPY: The dollar eased slightly against the yen on Monday as investors digested last Friday’s U.S. jobs report that reinforced bets that the world's largest economy is headed for a soft landing. The U.S. jobs report on Friday pointed to a resilient economy and spurred markets to reduce bets ofoutsized Federal Reserve rate cuts. The market now awaits minutes of the Fed's last policy meeting and data for the U.S. Consumer Price Index and Producer Price Index this week. Traders now see a 95% probability that the Fed will cut rates by only a quarter of a percentage point next month, after a U.S. employment report pointed to a resilient economy that likely does not need the central bank to deliver large interest rate cuts for the rest of this year. Strong resistance can be seen at 149.76 (23.6%fib), an upside break can trigger rise towards 148.26 (23.6%fib). On the downside, immediate support is seen at 146.20(38.2%fib), a break below could take the pair towards 145.32 (50%fib).
Equities Recap
European stocks slipped on Monday as the initial euphoria over strong U.S. jobs data last week faded and rate-sensitive sectors such as real estate and utilities came under pressure from higher bond yields.
UK's benchmark FTSE 100 was last trading down at 0.44 percent, Germany's Dax was down by 0.21 percent, France’s CAC was last up by 0.12 percent.
Commodities Recap
Gold prices held steady on Monday, off recent record highs as the market anticipated a smaller interest rate cut by the U.S. Federal Reserve next month, while traders awaited inflation data this week for further clues on policy easing.
Spot gold was around $2,651.48 per ounce by 0940 GMT, off a record peak of $2,685.42 hit on Sept. 26. U.S. gold futures edged up about 0.2% at $2,671.70.
Oil prices extended gains on Monday, with Brent nearing $80 to build on last week's steepest weekly jump since early 2023, driven by fears of a wider Middle East conflict and potential disruption to exports from the major oil-producing region.
Brent crude futures rose $1.11, or 1.4%, to $79.16 a barrel by 0839 GMT. U.S. West Texas Intermediate crude futures jumped $1.28, or 1.7%, to $75.66.
