Market Roundup
•US Nonfarm Productivity (QoQ) (Q3) 2.2%,2.2% forecast, 2.5% previous
•US Unit Labor Costs (QoQ) (Q3) 0.8%, 1.9% forecast, 0.4% previous
•US Redbook (YoY) 4.2%, 7.4% previous
Looking Ahead Economic Data (GMT)
•No data ahead
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro fell against the dollar on Tuesday as investors remained cautious ahead of significant economic events later this week, including US inflation data on Wednesday and a European Central Bank (ECB) policy meeting on Thursday. As inflation continues to fall, the ECB is generally expected to lower interest rates once more, with markets keeping an eye out for indicators that a weakening economy may lead to more aggressive steps in the future. Traders are pricing in a 25 basis point rate decrease, which would be the fourth reduction this year, strengthening expectations for consecutive cuts. The euro dropped 0.26% to $1.0526. Immediate resistance can be seen at 1.0605(38.2%fib), an upside break can trigger rise towards 1.0637(30SMA).On the downside, immediate support is seen at 1.0458(23.6%fib), a break below could take the pair towards 1.0417(Lower BB).
GBP/USD: The British pound moved higher on Tuesday as traders awaited a reading of US inflation due the next day for more hints on the future of Federal Reserve policy. This week's most significant piece of global economic data is the price data from the United States. It is the final scheduled event that could disturb market expectations that the Federal Reserve will lower interest rates at its meeting next week.Core inflation is forecast to remain at 3.3% in November, and an in-line reading should not impede an easing. Immediate resistance can be seen at 1.2866(Higher BB), an upside break can trigger rise towards 1.2789 (SMA 30).On the downside, immediate support is seen at 1.2629(38.2%fib), a break below could take the pair towards 1.2507(23.6%fib).
USD/CAD: The Canadian dollar rose against the US dollar on Tuesday as oil prices rose, but the currency remained near a four-and-a-half-year low as investors bet on another huge interest rate cut from the Bank of Canada this week. Investors expect the Bank of Canada to drop interest rates by half a percentage point to 3.25% on Wednesday, after doing so in October for the first time in 15 years outside of the pandemic era. The price of oil, one of Canada's primary exports, has received support from Chinese stimulus, which may increase demand from the world's largest crude consumer. U.S. crude oil futures rose 0.7% to $68.82 a barrel. Immediate resistance can be seen at 1.4159(23.6% fib), an upside break can trigger rise towards 1.4184 (Higher BB).On the downside, immediate support is seen at 1.4022(38.2%fib), a break below could take the pair towards 1.3913(38.2%fib).
USD/JPY: The dollar rose against the yen on Tuesday, as investors awaited critical US inflation data later this week for more indications on the Federal Reserve's policy stance. The Consumer Price Index (CPI) coming on Wednesday could shed light on how much flexibility policymakers have for potential easing next year. Money markets are pricing in an 86% possibility of a 25 basis point rate cut by the US Fed.The US dollar gained 0.2% to 151.55 yen, having previously risen to 151.71 yen for the first time since November 28.Federal Reserve next week, but several analysts warned that Fed hawks may have more weight in the future decisions.Immediate resistance can be seen at 151.97 (38.2%fib) an upside break can trigger rise towards 153.62 (23.6%fib). On the downside, immediate support is seen at 150.94(50%fib) a break below could take the pair towards 149.82(61.8%fib).
Equities Recap
European stocks closed settled lower on Tuesday as investors awaited fresh inflation data and further economic news later in the week.
UK's benchmark FTSE 100 closed down by 0.86 percent, Germany's Dax ended up by 0.08 percent, France’s CAC finished the day down by 1.14 percent.
Wall Street's main indexes closed lower on Tuesday, as losses in the technology sector outweighed gains in communications services.
Dow Jones closed down by 0.35% percent, S&P 500 closed down by 0.30% percent, Nasdaq settled down by 0.24% percent.
Commodities recap
Oil prices climbed on Tuesday, driven by expectations of increased demand in China, the world's largest importer, and potential supply shortages in Europe this winter, overshadowing concerns over the overthrow of Syria's president.
Brent crude futures settled at $72.19 a barrel, up 5 cents or 0.07%. U.S. West Texas Intermediate finished at $68.59 a barrel, up 22 cents or 0.32%. Both benchmarks had risen more than 1% on Monday.
Gold prices reached a two-week high on Tuesday, supported by escalating geopolitical tensions and expectations of a third U.S. rate cut by the Federal Reserve next week, with market focus shifting to Wednesday's U.S. inflation data.
Spot gold was up 1.3% at $2,692.32 per ounce at 01:41 p.m. ET (1841 GMT). U.S. gold futures settled 1.2% higher at $2,718.40.
