Market Roundup
• New Zealand Employment Change (QoQ) (Q3): 0.0%, 0.1% forecast, -0.2% previous
• New Zealand Labor Cost Index (YoY) (Q3): 2.1%, 2.1% forecast, 2.2% previous
• New Zealand Labor Cost Index (QoQ) (Q3): 0.5%, 0.5% forecast, 0.6% previous
• New Zealand Participation Rate (Q3): 70.30%, , 70.50% previous
• New Zealand Unemployment Rate (Q3): 5.3%, 5.3% forecast, 5.2% previous
•Australia AIG Construction Index (Oct): -7.1, , 12.3 previous
•Australia AIG Manufacturing Index (Oct): -22.0, , -13.2 previous
•Australia Manufacturing & Services PMI (Oct): 52.10, 52.60 forecast, 52.40 previous
•Australia Judo Bank Services PMI (Oct): 52.5, 53.1 forecast, 52.4 previous
Looking Ahead Economic Data (GMT)
• 07:00 German Factory Orders (MoM) (Sep): , 0.9% forecast, -0.8% previous
• 07:00 Finnish Trade Balance (Sep): , , -0.69B previous
•07:45 French Industrial Production (MoM) (Sep): , 0.1% forecast, -0.7% previous
•08:50 HCOB France Composite PMI (Oct): , 46.8 forecast, 48.1 previous
•08:50 HCOB France Services PMI (Oct): , 47.1 forecast, 48.5 previous
•08:55 HCOB Germany Composite PMI (Oct): , 53.8 forecast, 52.0 previous
•08:55 HCOB Germany Services PMI (Oct): , 54.5 forecast, 51.5 previous
Looking Ahead Events and Other Releases(GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro edged lower against the dollar on Tuesday as dollar firmed as divergence in views from Fed officials clouding the outlook for a rate reduction in December.The U.S. Fed last week cut interest rates for the second time this year, but Chair Jerome Powell said another reduction this year was "not a foregone conclusion".Market participants now see a 65% chance of another rate cut in December, down from over 90% prior to Powell's remarks, as per CME's FedWatch Tool.Fed officials on Monday continued pressing competing views on the economy, a debate set to intensify ahead of the December policy meeting and in the absence of key data, including from the Bureau of Labor Statistics, due to the federal government shutdown. Investors now eagerly await the release of ADP U.S. employment data, due on Wednesday and ISM PMIs this week for cues on rate cuts. Immediate resistance can be seen at 1.1539(38.2%fib), an upside break can trigger rise towards 1.1590(50%fib).On the downside, immediate support is seen at 1.1475(23.6%fib), a break below could take the pair towards 1.1462(Lower BB).
GBP/USD: Sterling hovered near a seven-month low after British Finance Minister Rachel Reeves signaled on Tuesday that broad tax increases could be on the table in her upcoming budget. Reeves framed her second annual budget as one of “hard choices,” aimed at protecting public spending while reducing the nation’s debt, in an effort to avoid a return to austerity.With just three weeks to go before delivering the budget, Reeves highlighted the challenging economic backdrop, citing rising debt from the COVID-19 pandemic, years of low productivity, and persistent inflation. Her comments suggested she might take the politically difficult step of breaking the Labour Party’s election pledge to avoid raising major taxes, aiming to reassure investors of a firm approach to borrowing. Immediate resistance can be seen at 1.3129(38.2%fib), an upside break can trigger rise towards 1.3163(Nov 3rd high).On the downside, immediate support is seen at 1.3000(Psychological level), a break below could take the pair towards 1.2977(Lower BB).
AUD/USD: The Australian dollar held steady against the U.S. dollar on Wednesday, following Tuesday’s sharp decline, as it consolidated within a narrow range. The Reserve Bank of Australia kept interest rates unchanged at 3.6% during its November meeting, in line with market expectations.The central bank cited ongoing inflationary pressures as a key reason for maintaining its current policy stance. After a hotter-than-expected third-quarter inflation print, markets had largely ruled out the possibility of a rate cut this week.Investor expectations now point to a very limited chance of monetary easing before May next year, as central banks continue to take a cautious approach amid persistent inflation pressures.Immediate resistance can be seen at 0.6603(38.2%fib), an upside break can trigger rise towards 0.6655(Higher BB).On the downside, immediate support is seen at 0.6538(50%fib), a break below could take the pair towards 0.6466(61.8%fib)
USD/JPY: The U.S. dollar initially fell but regained some ground on Wednesday as investors digested the Bank of Japan’s September meeting minutes. The release revealed increasing support among policymakers for a potential rate hike, with two members advocating for an immediate increase.At the two-day policy meeting that ended on September 19, the BOJ’s nine-member board decided to keep rates at 0.5%, rejecting calls from the two hawkish members to raise them to 0.75%. The minutes highlighted discussions on the timing of any hike, weighing downside risks to growth against persistent inflation pressures, particularly from elevated food prices.Market participants are now turning their attention to this week’s key economic data, including wage and household spending figures, for further clues on the BOJ’s policy trajectory.Immediate resistance can be seen at 154.58(23.6%fib) an upside break can trigger rise towards 155.00 (Psychological level) .On the downside, immediate support is seen at 152.90 (38.2%fib) a break below could take the pair towards 152.98 (SMA20).
Equities Recap
Asian stocks tumbled on Wednesday, with market volatility spiking to levels not seen since April, as an overnight tech-led selloff on Wall Street stoked concerns over stretched valuations.
Hang Seng was down 0.22% ,South Korea’s KOSPI traded down 2.85% ,Japan’s Nikkei 225 was down 2.33%
Commodities Recap
Oil prices slipped on Wednesday, pressured by a broader decline in financial markets and a firm U.S. dollar, as investors weighed the supply outlook.
Brent crude futures edged lower by 6 cents, or 0.1%, to $64.38 a barrel by 0408 GMT, having touched a near two-week low in the prior session. U.S. West Texas Intermediate crude was down 10 cents, or 0.17%, at $60.46.
Gold prices climbed on Wednesday, supported by bargain buying after bullion fell to a near one-week low in the previous session, with investors also eyeing U.S. private payroll data for signals on potential future interest rate cuts.
Spot gold rose 0.9% to $3,965.49 per ounce by 0547 GMT. Bullion fell more than 1.5% on Tuesday, hitting its lowest since October 30.
