Market Roundup
• French Current Account (Aug) 1.50B, -1.90B previous
• French Exports (Aug) 51.8B, 51.8B previous
• French Imports (Aug) 57.3B, 57.6B previous
• French Reserve Assets Total (Sep) 330,268.0M, 304,802.0M previous
• French Trade Balance (Aug) -5.5B, -5.2Bforecast,-5.7B previous
• German 5-Year Bobl Auction 2.310% 2.290% previous
Looking Ahead Economic Data (GMT)
• 12:30 US Exports (Aug) 280.50B previous
• 12:30 US Imports (Aug) 358.80B previous
• 12:30 US Trade Balance (Aug) -61.40B forecast,-78.30B previous
•12:30 Canada Exports (Aug) 61.86B previous
•12:30 Canada Imports (Aug) 66.80B previous
•12:30 Canada Trade Balance (Aug) -5.70B forecast,-4.94B previous
•12:50 US Redbook (YoY) 5.9% previous
•14:00 Canada Ivey PMI n.s.a (Sep) 50.0 previous
•14:00 Canada Ivey PMI (Sep) 51.2 forecast,50.1 previous
•14:10 US IBD/TIPP Economic Optimism (Oct) 49.3 forecast,48.7
•15:00 US CB Employment Trends Index (Sep) 106.41 previous
•15:00 US Consumer Inflation Expectations (Sep) 3,2 % previous
Looking Ahead Events and Other Releases(GMT)
• 15:30 US FOMC Member Kashkari Speaks
•14:05 US FOMC Member Bowman Speaks
•14:00 US FOMC Member Bostic Speaks
Currency Forecast
EUR/USD : The euro slipped against the U.S. dollar on Tuesday as France’s deepening political turmoil weighed on the currency. Prime Minister Sebastien Lecornu and his government resigned just hours after announcing a new cabinet, intensifying the crisis and sending the euro sharply lower.Lecornu is now set to begin two days of last-ditch talks with various parties starting Tuesday, a day after his surprise resignation, in a bid to break the deadlock. President Emmanuel Macron tasked him with leading the discussions and set a Wednesday evening deadline for progress.However, politicians across the spectrum voiced confusion over Macron’s strategy, with some arguing that Lecornu’s new mandate was little more than an attempt to buy time nearly a month after his contested nomination as prime minister. 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 edged lower on Tuesday as political uncertainty and fiscal concerns in France and Japan weighed on sentiment. Market focus now turns to the Federal Reserve for clues on the timing and scale of further easing.Fed Vice Chair for Supervision Michelle Bowman and newly appointed Governor Stephen Miran are scheduled to speak later Tuesday, followed by the release of September FOMC meeting minutes on Wednesday. In the U.K, Bank of England Chief Economist Huw Pill will speak Wednesday, with fellow policymaker Catherine Mann due Thursday. Both voted with the majority to keep rates steady at the September meeting. Money market pricing currently implies fewer than three basis points of easing for the BoE’s November meeting equivalent to roughly a 10% probability of a quarter-point rate cut. Sterling was down 0.11% to $1.3398 .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).
AUD/USD: The Australian dollar eased against the U.S. dollar on Tuesday as fading expectations of near-term rate cuts from the Reserve Bank of Australia (RBA) weighed on consumer sentiment.A Westpac-Melbourne Institute survey showed consumer confidence fell for a second straight month in October, with the main index down 3.5% to 92.1 after a 3.1% decline in September. Readings below 100 indicate pessimists outnumber optimists, reflecting renewed concerns over household finances amid speculation that interest rates may not decline further.Investors have scaled back bets on RBA easing after last week’s hawkish outlook. Futures now price in only about a 40% chance of a quarter-point cut in November, compared with near-full expectations just a month ago, leaving the cash rate at 3.65%.. Immediate resistance can be seen at 0.6610(SMA 20)., an upside break can trigger rise towards 0.6685(Higher BB).On the downside, immediate support is seen at 0.6339(50%fib), a break below could take the pair towards 0.6537(Lower BB).
USD/JPY: The U.S. dollar climbed to two month high on Tuesday as attention in Japan turned to who may join the administration of fiscal dove Sanae Takaichi after her party leadership victory.Takaichi, who is expected to become Japan’s next prime minister, has appointed former premier Taro Aso as vice president of the ruling party.Investors wait for details on how Takaichi will shape her government, Japanese authorities may step in with verbal intervention to temper the yen’s recent slide.The results of the weekend LDP leadership vote could lead to significant policy changes in Japan. Finance Minister Katsunobu Kato said Tuesday that currency moves should stay stable and reflect economic fundamentals, as the yen continued to weaken. 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 shares edged higher on Tuesday as investors continued to monitor political uncertainty and fiscal concerns in France and Japan.
UK's benchmark FTSE 100 was up by 0.28 percent, Germany's Dax was up by 0.16 percent, France’s CAC was up by 0.27 percent.
Commodities Recap
Gold prices hit another record high on Tuesday, fueled by safe-haven demand amid geopolitical and economic uncertainty, with further support from expectations of additional U.S. rate cuts.
Spot gold held its ground at $3,959.82 per ounce by 1111 GMT, after hitting an all-time high of $3,977.19 earlier in the session.U.S. gold futures for December delivery were up 0.2% at $3,983.10.
Oil prices were steady on Tuesday as investors assessed a smaller than expected increase to OPEC+ output in November against a backdrop of possible oversupply.
Brent crude futures rose 9 cents, or 0.14%, to $65.56 a barrel by 1154 GMT. U.S. West Texas Intermediate crude gained 8 cents, or 0.13%, to $61.77.
