Market Roundup
• US Redbook (YoY): 4.8%, 6.0% previous
• French 12-Month BTF Auction: 2.515%, 2.647% previous
• French 3-Month BTF Auction: 2.989% , 3.085% previous
• French 6-Month BTF Auction: 2.806% , 2.892% previous
•US IBD/TIPP Economic Optimism (Nov): 53.2 47.3 forecast, 46.9 previous
•US Consumer Inflation Expectations (Oct): 2.9%, 3.0% previous
•US 3-Month Bill Auction: 4.420% , 4.440% previous
•US 6-Month Bill Auction: 4.310% , 4.260% previous
Looking Ahead Economic Data(GMT)
•00:30 Australia Employment Change (Oct): 25.2K forecast 64.1K previous
•00:30 Australia Full Employment Change (Oct): 51.6K previous
•00:30 Australia Participation Rate (Oct): 67.2% forecast, 67.2% previous
•00:30 Australia Unemployment Rate (Oct): 4.1% forecast, 4.1% previous
Looking Ahead Events And Other Releases (GMT)
•00:30 Australia RBA Assistant Governor Jones Speaks
Currency Forecast
EUR/USD: EUR/USD slid to its lowest point since November 2023 as concerns over U.S. tariffs and political uncertainty in Germany weighed on single currency. Trump has warned that the euro bloc will pay a big price for not buying enough American exports, with cars a particular target. He has threatened China with blanket 60% tariffs. On Monday, Chancellor Olaf Scholz's coalition partner, the Greens, joined opposition calls for an earlier parliamentary vote, potentially paving the way for a snap election. The policies that Trump will implement once in office will likely put upward pressure on inflation on both sides of the Atlantic, European Central Bank policymaker Robert Holzmann said on Tuesday. Euro was down 0.28% at $1.0624.Immediate resistance can be seen at 1.0732(Daily high), an upside break can trigger rise towards 1.0761(38.2%fib).On the downside, immediate support is seen at 1.0611`(23.6%fib), a break below could take the pair towards 1.0583(Lower BB)
GBP/USD: Sterling fell to a three-month low on Tuesday after data revealed that regular wage growth had slowed and unemployment had ticked up. British wage growth, excluding bonuses, dropped to its lowest level in over two years in the third quarter, according to official data. This could bolster the Bank of England's view that inflationary pressures are likely to ease.Average weekly earnings, excluding bonuses, increased by 4.8% in the three months to September compared to the same period a year earlier, down from 4.9% in August and nearly 8% a year ago, as reported by the Office for National Statistics. The third-quarter figure marks the weakest reading since the June 2022 quarter.As a result, sterling dropped as much as 0.6% to $1.2717, its lowest level since August 15.Immediate resistance can be seen at 1.2806(38.2%fib), an upside break can trigger rise towards 1.2881(50%fib).On the downside, immediate support is seen at 1.277 (23.6%fib), a break below could take the pair towards 1.2700 (Psychological level).
USD/CAD: The Canadian dollar weakened against the U.S. dollar on Tuesday, as expectations of inflationary U.S. economic policies boosted the greenback and expanded the yield differential between U.S. and Canadian bonds. The Canadian 10-year yield increased by 8.9 basis points to 3.271%. However, the gap between the Canadian and U.S. 10-year yields widened by 3.3 basis points, with the U.S. note yielding roughly 116 basis points more. The loonie was trading 0.2% lower at 1.3948 to the U.S. dollar, after touching its weakest intraday level since October 2022 at 1.3967.Immediate resistance can be seen at 1.3959 (23.6% fib), an upside break can trigger rise towards 1.3988 (Higher BB).On the downside, immediate support is seen at 1.3922(Nov 12th low), a break below could take the pair towards 1.3872(38.2%fib).
USD/JPY: The dollar strengthened against the yen on Tuesday buoyed by expectations of inflationary import tariffs from Republican President-elect Donald Trump. The greenback is expected to continue to strengthen against yen and those sensitive to its economy as a result of Trump's trade policies and because of expectations of higher U.S. Treasury yields. Investors are closely watching Wednesday's consumer price inflation data, followed by producer price inflation and retail sales figures later in the week. These reports could offer important insights into the U.S. Federal Reserve's future policy direction. The dollar against the Japanese yen rose 0.66% to 154.73 yen. The Japanese currency dropped to a three-month low of 154.715 per dollar last week. Immediate resistance can be seen at 154.86(23.6 %fib) an upside break can trigger rise towards 155.08(Higher BB). On the downside, immediate support is seen at 153.37(Daily low) a break below could take the pair towards 153.16(38.2%fib).
Equities Recap
Europe's main index dropped 2% to a near three-month low on Tuesday, as worries over the future of U.S.-China relations dampened sentiment, particularly for stocks with significant exposure to the world's second-largest economy. Disappointing earnings reports further added to the negative momentum.
UK's benchmark FTSE 100 closed down by 1.22 percent, Germany's Dax closed down by 2.13 percent, France’s CAC closed down by 2.69 percent.
Wall Street's three major indexes closed lower on Tuesday as investors took profits from the post-election rally and awaited key U.S. inflation data scheduled for release later this week.
Dow Jones was down by 0.86% percent, S&P 500 was down by 0.29% percent, Nasdaq was down by 0.08% percent.
Commodities Recap
Oil prices remained near a two-week low on Tuesday, after falling nearly 5% over the past two sessions. Investors digested OPEC's latest downward revision of demand growth, a stronger U.S. dollar, and disappointment over China's new stimulus plan.
Brent futures were up 6 cents, or 0.1%, to settle at $71.89 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 8 cents, or 0.1%, to settle at $68.12.
