Market Roundup
•French 12-Month BTF Auction 2.593% ,2.730%
•French 3-Month BTF Auction 3.071%,3.138%
•French 6-Month BTF Auction 2.824%,2.897%
•US Leading Index (MoM) (Sep) -0.5%,-0.3% forecast, -0.2% previous
•US 3-Month Bill Auction 4.510%,4.515% previous
•US 6-Month Bill Auction 4.310%,4.270% previous
Looking Ahead Economic Data(GMT)
•05:00 japan BoJ Core CPI (YoY) 1.8% previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro eased slightly on Monday as dollar gained traction ahead of U.S. presidential election in two weeks. Election polls that show rising odds of former President Donald Trump winning the Nov. 5 election are boosting the dollar, since his proposed tariff and tax policies are seen as likely to keep U.S. interest rates high and undermine currencies of trading partners.The Republican candidate's tariff, tax and immigration policies are seen as inflationary, and thus negative for bonds and positive for the dollar. On the data front, Euro zone flash consumer confidence and PMIs and the German Ifo business climate survey are the only significant data this week. Immediate resistance can be seen at 1.0847(Daily high), an upside break can trigger rise towards 1.0866(38.2%fib).On the downside, immediate support is seen at 1.0820(23.6%fib), a break below could take the pair towards 1.0800(Psychological level).
GBP/USD: The pound fell on Monday as investors focused on the relative strength of the U.S. economy, pushing up the dollar. Last week, data showed retail sales grew more than anticipated in September and jobless claims fell the previous week, helping moderate investors' bets on Federal Reserve rate cuts and pushing up Treasury yields.By contrast, figures released last Wednesday showed British inflation fell more than expected in September to 1.7%, below the Bank of England's 2% target, causing traders to increase their bets on deeper rate cuts in the UK. This week, investors will be focused on comments from Bank of England Governor Andrew Bailey, starting with a speech tomorrow, and purchasing managers' index data on the private sector's performance in October. Immediate resistance can be seen at 1.3054(38.2%fib), an upside break can trigger rise towards 1.3123(50%fib).On the downside, immediate support is seen at 1.2981(23.6%fib), a break below could take the pair towards 1.2928 (Lower BB).
USD/CAD: The Canadian dollar weakened to a near 11-week low against its U.S. counterpart on Monday, as the gap between U.S. and Canadian bond yields weighed on the currency ahead of an expected outsized interest rate cut by the Bank of Canada this week. A half-percentage-point move by the BoC on Wednesday would be the first reduction greater than 25 basis points in 15 years outside of the pandemic era.The central bank has cut rates three times since June, in 25-basis-point steps, lowering the benchmark rate to 4.25%. The loonie was trading 0.3% lower at 1.3835 to the U.S. dollar , after touching its weakest intraday level since Aug. 6 at 1.3849. Immediate resistance can be seen at 1.3852 (23.6%fib), an upside break can trigger rise towards 1.3900 (Psychological level).On the downside, immediate support is seen at 1.3801 (5 SMA), a break below could take the pair towards 1.3791(38.2%fib).
USD/JPY: The dollar strengthened against the yen on Monday as rising expectations of Republican candidate Donald Trump winning the U.S. election next month strengthened the dollar. The greenback has risen for three straight weeks as a run of positive economic data led investors to scale back expectations about the size and speed of rate cuts from the Fed.Markets are pricing in a 91.7% chance for a cut of 25 basis points (bps) at the Fed's November meeting, with an 8.3% chance of the central bank holding rates steady, according to CME's FedWatch Tool. The market was completely pricing in a cut of at least 25 bps a month ago, with a 50.4% chance of a 50 bps cut. Immediate resistance can be seen at 150.86 (23.6 %fib), an upside break can trigger rise towards 151.00(Psychological level). On the downside, immediate support is seen at 149.45(Oct 17th low), a break below could take the pair towards 148.67(38.2%fib)
Equities Recap
European shares ended Monday's choppy session in the red ahead of a series of marquee corporate earnings, although stabilising oil prices buoyed the energy sector.
UK's benchmark FTSE 100 closed down by 0.48 percent, Germany's Dax ended down by 1.00 percent, France’s CAC finished the day down by 1.01 percent.
The Dow Jones Industrial Average and S&P 500 closed lower on Monday, retreating from Friday's record high closes and six straight weekly gains as Treasury yields rose and investors wary of high valuations awaited earnings from major companies.
Dow Jones closed down by 0.80% percent, S&P 500 closed down by 0.18% percent, Nasdaq settled up by 0.27% percent.
Commodities Recap
Gold took a breather after surging to a record high on Monday, as higher U.S. Treasury yields and dollar offset support from growing uncertainties surrounding the U.S. presidential election and the Middle East war.
Spot gold was little changed at $2,723.25 per ounce, as of 1:35 p.m. ET (1735 GMT), after hitting a record $2,740.37 earlier in the session. U.S. gold futures settled 0.3% higher at $2,738.9.
Oil prices settled nearly 2% higher on Monday, recouping some of last week's more than 7% decline, with no letup of fighting in the Middle East and expected Israeli retaliation on Iran worrying markets about supply from the region.
Brent crude futures were up $1.23, or 1.68%, at $74.29 a barrel, while U.S. West Texas Intermediate crude futures were $1.34, or 1.94% higher, at $70.56 a barrel.
