Market Roundup
•South Korea South Korea Export Price Index (YoY) (Sep) 1.2%, 5.7% previous
•South Korea South Korea Import Price Index (YoY) (Sep) -3.3% 1.8% previous
Looking Ahead Economic Data(GMT)
• Japan Capacity Utilization (MoM) (Aug) 2.5% previous
• Japan Industrial Production (MoM) (Aug) -3.3% -3.3% previous
• 05:00 Finnish GDP (YoY) (Aug) 0.0% previous
• 06:00 UK Average Earnings ex Bonus (Aug) 4.9% forecast, 5.1% previous
• 06:00 UK Average Earnings Index +Bonus (Aug) 3.8% forecast, 4.0% previous
• 06:00 UK Claimant Count Change (Sep) 20.2Kforecast, 23.7K previous
• 06:00 UK Employment Change 3M/3M (MoM) (Aug) 250K forecast, 265K previous
• 06:00 UK Unemployment Rate (Aug) 4.1%forecast, 4.1% previous
•06:45 French CPI (YoY) (Sep) 1.2% forecast, 1.8% previous
•07:00 EU Core CPI (YoY) (Sep) 2.4% forecast, 2.7% previous
•07:00 Spanish CPI (MoM) (Sep) -0.6% forecast, -0.6% previous
•07:00 Spanish CPI (YoY) (Sep) 1.5% forecast, 1.5% previous
•07:00 Spanish HICP (MoM) (Sep) -0.1% forecast, -0.1% previous
•07:00 Spanish HICP (YoY) (Sep) 1.7% forecast, 1.7% previous
•07:45 French CPI NSA (MoM) (Sep) -1.20% previous
•07:45 French CPI NSA (YoY) (Sep) 1.20% previous
•07:45 French CPI (MoM) (Sep) -1.2% forecast, 0.5% previous
•07:45 French HICP (MoM) (Sep) -1.2% forecast, 1.2% previous
•07:45 French HICP (YoY) (Sep) 1.5% forecast, 1.5% previous
•09:05 EUR German ZEW Current Conditions (Oct) -84.5 forecast,-84.5 previous
•09:05 EUR German ZEW Economic Sentiment (Oct) 10.2 forecast,3.6 previous
•09:05 EUR ZEW Economic Sentiment (Oct) 16.9 forecast,9.3 previous
Looking Ahead Events And Other Releases(GMT)
• No Events Ahead
Currency Forecast
EUR/USD: The euro dipped against dollar on Tuesday ahead of the European Central Bank policy meeting on Thursday, where the central bank looks set to deliver another interest rate cut. The ECB is widely expected to cut rates on Thursday, with over 90% of economists polled predicting a 25-basis-point reduction to 3.25% after September's inflation dipped below 2%; most expect another 25 bps cut in December. The tone of the monetary policy statement and press conference will be key for expectations. The euro zone's data highlights are final September HICP,August trade and industrial production, and the German ZEW survey. Immediate resistance can be seen at 1.1005(38.2%fib), an upside break can trigger rise towards 1.1053(50%fib).On the downside, immediate support is seen at 1.0944(23.6%fib), a break below could take the pair towards 1.0920 (Lower BB).
GBP/USD: Sterling dipped against dollar on Tuesday as dollar gained support from expectations of a smaller U.S. rate cut next month. The dollar has been buoyed by conviction the Federal Reserve will choose a smaller 25 basis point rate cut next month, rather than a 50 bp move, given the economy continues to grow without overheating.Fed Governor Christopher Waller on Monday called for "more caution" on interest-rate cuts ahead, while Fed Minneapolis President Neel Kashkari sees more modest rate cuts ahead.Traders are pricing in about an 88% probability the Fed will cut rates by 25 basis points next month and a 12% chance it would leave rates unchanged, according to CME's FedWatch. Immediate resistance can be seen at 1.3127(38.2%fib), an upside break can trigger rise towards 1.3188(50%fib).On the downside, immediate support is seen at 1.3060(23.6%fib), a break below could take the pair towards 1.3000(Psychological level).
NZD/USD: The New Zealand dipped on Tuesday as US dollar as the dollar rallied further on bets that the Federal Reserve will take a more moderate approach to cutting interest rates in the upcoming meetings. A series of U.S. data has indicated that the economy remains resilient, slowing only modestly, while inflation in September rose slightly more than expected. This has led traders to reduce their expectations for significant rate cuts from the Federal Reserve. The central bank initiated its easing cycle with an aggressive 50 basis point cut at its last policy meeting in September. Currently, traders are pricing in an 89% chance of a 25 basis point cut in November, with a total of 45 basis points of easing expected for the year. Immediate resistance can be seen at 0.6116(38.2%fib), an upside break can trigger rise towards 0.6161 (50%fib).On the downside, immediate support is seen at 0.6059 (23.6%fib), a break below could take the pair towards 0.6000(Psychological level).
USD/JPY: The dollar steadied against the yen on Tuesday as dollar was driven by expectations that the Federal Reserve will implement modest rate cuts soon . A string of U.S. data has shown the economy to be resilient and slowing only modestly, while inflation in September rose slightly more than expected, leading traders to trim bets on large rate cuts from the Fed.The U.S. central bank kicked off its easing cycle with an aggressive 50 basis points at its last policy meeting in September. Traders are now ascribing 89% chance of a 25 bps cut in November, with 45 bps of easing priced in for the year. The dollar last fetched 149.55 per yen in early trading, having touched a 2-1/2 month high of 149.98 on Monday. Immediate resistance can be seen at 149.83(Daily high), an upside break can trigger rise towards 150.00(Psychological level). On the downside, immediate support is seen at 147.61(38.2 %fib), a break below could take the pair towards 147.00(Psychological level).
Equities Recap
Japan's Nikkei share average touched a three-month high in early trade on Tuesday, as a strong performance on Wall Street overnight and a weaker yen buoyed investor sentiment.
The Nikkei 225 was up 1.2% at 40,090.35, as of 0013 GMT, as Japanese markets reopened after a public holiday on Monday.
Commodities Recap
Gold was flat on Tuesday as investors await fresh insights into the Federal Reserve's stance on U.S. interest rate reductions for further direction on prices.
Spot gold held its ground at $2,648.89 per ounce by 0022 GMT. U.S. gold futures steadied at $2,665.50.
Oil prices slid 3% in early Asian trade on Tuesday after a media report said Israel is willing not to strike Iranian oil targets, which eased fears of a supply disruption, and after OPEC lowered its outlook for global oil demand growth in 2024 and 2025.
Both benchmarks plunged 3% in early trade on Tuesday, following a 2% drop on Monday. Brent crude futures were down $2.27 at $75.19 per barrel, while U.S. West Texas Intermediate futures fell $2.22 to $71.60 per barrel as of 0127 GMT.
