Market Roundup
• Japan Corporate Services Price Index (CSPI) (YoY) 3.0%,2.8%forecast, 2.7% previous
Looking Ahead Economic Data (GMT)
•09:00 German Business Expectations (Oct) 89.7 previous
•09:00 German Current Assessment (Oct) 85.5 forecast,85.7 previous
•09:00 German Ifo Business Climate Index (Oct) .1 forecast,87.7 previous
•09:00 EU M3 Money Supply (YoY) (Sep) 2.7% forecast,2.9% previous
•09:00 EU M3 Money Supply (Sep) 16,912.3B previous
•09:00 EU Loans to Non Financial Corporations (Sep) 3.0% previous
• 09:00 EU Private Sector Loans (YoY) (Sep) 2.6%forecast,2.5% previous
Looking Ahead Events and Other Releases(GMT)
• 09:40 ECB Supervisory Board Member Tuominen Speaks
Currency Forecast
EUR/USD : The euro slipped against the dollar on Monday as easing trade tensions between China and the U.S. boosted risk appetite, weighing on demand for safe-haven currencies. The focus this week shifts to a series of major central bank meetings in Japan, Canada, Europe, and the U.S.The Federal Reserve is widely expected to cut interest rates by 25 basis points after data showed U.S. consumer prices rose slightly less than expected in September. However, concerns persist over the potential impact of the ongoing government shutdown on economic data and policymaking.Meanwhile, both the European Central Bank and the Bank of Japan are expected to keep interest rates unchanged later this week. While the BOJ may discuss whether conditions are favorable for resuming rate hikes amid easing recession fears, political factors are likely to keep the central bank on hold for now. Immediate resistance can be seen at 1.1662(50%fib), an upside break can trigger rise towards 1.1728(Oct 17th high).On the downside, immediate support is seen at 1.1561(61.8%fib), a break below could take the pair towards 1.1523(Lower BB).
GBP/USD: The pound dipped against the dollar on Monday as dollar firmed on signs of easing U.S.-China trade tensions , while investors awaited major central bank meetings due later this week for monetary policy cues. On Sunday, top Chinese and U.S. economic officials hashed out the framework of a trade deal for U.S. President Donald Trump and Chinese President Xi Jinping to decide on later this week.The Federal Reserve is widely expected to cut interest rates by a quarter percentage point at its meeting on Wednesday, a view supported by a softer-than-expected inflation report on Friday.With the rate cut already factored in, markets are looking ahead to any forward-looking comment from Fed Chair Jerome Powell. Immediate resistance can be seen at 1.3386(SMA 20), an upside break can trigger rise towards 1.3399(SMA 20).On the downside, immediate support is seen at 1.3294(23.6%fib), a break below could take the pair towards 1.3265(Lower BB).
AUD/USD: The Australian dollar climbed two week high on Monday as Australian dollar was lifted by improving global risk sentiment following signs of progress in U.S.-China trade negotiations. Chinese and U.S. economic leaders agreed on the outline of a trade pact on Sunday, ahead of a highly awaited meeting between Presidents Donald Trump and Xi Jinping in South Korea later this week.A successful trade pact would freeze additional American tariffs and Chinese export limits on rare earths, helping to calm investors unsettled by the ongoing trade conflict between the world’s top economies.Given Australia’s strong export ties to China, investors often treat the Australian dollar as a liquid proxy for global trade sentiment and risk appetite. Immediate resistance can be seen at 0.6576(50%fib), an upside break can trigger rise towards 0.671(Oct 10th high).On the downside, immediate support is seen at 0.6476(61.8%fib), a break below could take the pair towards 0.6445(Lower BB)
USD/JPY: The U.S. dollar rose to a more-than-two-week high against the yen on Monday at the start of a packed week of global trade negotiations and central bank meetings. U.S. President Donald Trump is expected to meet Chinese President Xi Jinping in South Korea on Thursday, where the pair will decide on the framework of a trade deal hashed out over the weekend. The Fed is widely expected to lower its current benchmark interest rate of 4% to 4.25% by another quarter percentage point when it decides on policy on Wednesday, a view supported by tamer-than-estimated inflation data on Friday.With that rate move already factored into asset prices, markets are likely to be more sensitive to any forward-looking language from Fed Chair Jerome Powell, with the central bank expected to cut rates further at its next meeting in December. Immediate resistance can be seen at 153.27(23.6%fib) an upside break can trigger rise towards 154.00 (Psychological level) .On the downside, immediate support is seen at 151.58 (38.2%fib) a break below could take the pair towards 151.00 (Psychological level).
Equities Recap
Asian stocks jumped while gold and bonds slipped Monday as easing U.S.-China trade tensions boosted risk appetite ahead of key central bank meetings and major earnings reports.
Hang Seng was up 1.03% ,China’sA50 traded up 1.10% ,Japan’s Nikkei was up 2.54%
Commodities Recap
Gold prices slipped on Monday as a firmer dollar and easing U.S.-China trade tensions dented safe-haven demand ahead of key central bank meetings this week.
Spot gold was down 0.8% at $4,077.11 per ounce, as of 0655 GMT. U.S. gold futures for December delivery lost 1.1% to $4,090.90.
Oil prices climbed on Monday after U.S. and Chinese officials outlined a trade deal framework, easing concerns that their tariff dispute could hurt global growth.
Brent crude futures rose 47 cents, or 0.71%, to $66.41 a barrel by 0629 GMT, while U.S. West Texas Intermediate (WTI) crude gained 44 cents, or 0.72%, to $61.94.
