Market Roundup
•Market sees 58.8% chance of 25 bps US rate cut in December
•Silver at one-week peak
Looking Ahead Economic Data(GMT)
•07:00 Italian Car Registration (YoY) (Oct) -10.7% previous
•07:00 Italian Car Registration (MoM) (Oct) 76.0% previous
•07:00 EUR German Car Registration (MoM) (Oct) 5.8% previous
•07:00 German Car Registration (YoY) (Oct) -7.0% previous
•07:00 French Car Registration (YoY) (Oct) -11.1% previous
•07:00 French Car Registration (MoM) (Oct) 61.7% previous
•09:00 EU Current Account (Sep) 27.0B, 31.5B previous
•09:00 EU Current Account n.s.a. (Sep) 35.2B previous
•10:00 EU Core CPI (MoM) (Oct) 0.2% forecast, 0.2% previous
•10:00 EU Core CPI (MoM) (Oct) 0.2% forecast, 0.2% previous
•10:00 EU Core CPI (YoY) (Oct) 2.7% forecast, 2.7% previous
•10:00 EU CPI (MoM) (Oct) 0.3% forecast, -0.1% previous
•10:00 EU CPI (YoY) (Oct) 2.0% forecast, 2.0% previous
•10:00 EU CPI ex Tobacco (YoY) (Oct) 1.6% previous
•10:00 EU CPI ex Tobacco (MoM) (Oct) -0.1% previous
•10:00 EU CPI, n.s.a (Oct) 127.03 forecast, 126.60 previous
•10:00 EU HICP ex Energy & Food (YoY) (Oct) 2.7% forecast, 2.7% previous
•10:00 EU HICP ex Energy and Food (MoM) (Oct) 0.2% forecast, 0.0% previous
Looking Ahead Events And Other Releases (GMT)
•08:45 EUR ECB's Elderson Speaks
10:00 BoE Gov Bailey Speaks
10:00 BoE MPC Member Mann
10:00 BoE MPC Treasury Committee Hearings
Currency Forecast
EUR/USD: The euro edged higher on Tuesday as dollar rally stalled as market players awaited comments from Federal Reserve officials this week for more clues on the U.S. interest rate path. The greenback has risen more than 2% for the month thus far, buoyed by reduced expectations of the extent of Federal Reserve rate cuts and on the view that President-elect Donald Trump's touted policies of tariffs, reduced immigration and debt-funded tax cuts will be inflationary to the U.S. economy. Traders currently see a 58.8% chance of a 25-basis-points cut in December versus 41.2% odds of holding the rates steady. Two top European Central Bank policymakers signalled on Monday they were more worried about the damage that expected new U.S. trade tariffs would do to economic growth in the euro zone than any impact on inflation. Immediate resistance can be seen at 1.0611(38.2%fib), an upside break can trigger rise towards 1.0671(50%fib).On the downside, immediate support is seen at 1.0538`(23.6%fib), a break below could take the pair towards 1.0521(Lower BB)
GBP/USD: Sterling edged higher on Tuesday as dollar rally paused after a stellar rally that saw it scale a one-year high. The greenback has gained more than 2% this month, supported by reduced expectations of significant Federal Reserve rate cuts. Additionally, there is growing speculation that President-elect Donald Trump's proposed policies—such as tariffs, reduced immigration, and debt-funded tax cuts could be inflationary, adding upward pressure to the U.S. economy. This has strengthened the U.S. dollar as markets price in potential economic overheating and tighter monetary conditions in the future. The UK data calendar is busier with CPI, PPI, retail sales and PMIs. Bank of England policymakers. Dave Ramsden and Catherine Mann are due to speak. Sterling steadied at $1.2676, while the dollar index tacked on 0.04% to 106.26, after falling 0.4% overnight. Immediate resistance can be seen at 1.2683(SMA 5), an upside break can trigger rise towards 1.2723(38.2%fib).On the downside, immediate support is seen at 1.2592 (23.6%fib), a break below could take the pair towards 1.2515(My 14th low
AUD/USD: The Australian edged higher on Tuesday as investors digested Reserve Bank of Australia’s November policy meeting minutes. The Reserve Bank of Australia (RBA) offered indirect support by reiterating that interest rates were unlikely to be cut soon, and might even have to be raised under some scenarios.. Markets imply around a 40% chance of a quarter-point reduction in the 4.35% cash rate in February, and 60% for April. A move is not fully priced in until May. The steady outlook helped the Aussie hold at $0.6506 , having bounced 0.7% overnight and away from last week's three-month low of $0.6441. Immediate resistance can be seen at 0.6500(SMA 5), an upside break can trigger rise towards 0.6512(38.2%fib).On the downside, immediate support is seen at 0.6441(23.6%fib), a break below could take the pair towards 0.6389(April 16th low).
USD/JPY: The dollar eased against the yen on Tuesday as Japanese authorities issued stronger verbal warnings against excessive foreign exchange fluctuations. Japanese Finance Minister Katsunobu Kato reiterated on Tuesday that the government would continue to respond appropriately to excessive foreign exchange movements, despite the yen's recent brief rebound. The feeling in Tokyo is that the Ministry of Finance is only waiting for the most opportune time, unwilling to act while the U.S. dollar remains broadly bid, diluting the effects of any action. Such action could come in tandem with a possible BOJ hike in December should JPY remain weak then. The yen last edged 0.2% higher to 154.40 per dollar, recovering from its fall in the previous session after Bank of Japan Governor Kazuo Ueda stuck to his usual script and failed to offer any hints on whether a rate hike could come in December. Immediate resistance can be seen at 155.20(Nov 18th high) an upside break can trigger rise towards 156.77(23.6%fib). On the downside, immediate support is seen at 154.02(5SMA) a break below could take the pair towards 153.97(38.2%fib).
Equities Recap
Asian stocks began the week on firmer footing ahead of a highly anticipated earnings release from Nvidia.
At GMT 06:20 ,China A50 was down by 0.64%, South Korean KOSPI was up by 0.20%, while Hang Seng was up 0.26%
Commodities Recap
Gold prices climbed to a one-week high on Tuesday, buoyed by a softer U.S. dollar, while the market awaited comments from Federal Reserve officials for cues on the U.S. interest rate outlook.
Spot gold rose 0.4% to $2,623.54 per ounce by 0246 GMT, the highest since Nov. 12. Prices rose 2% on Monday.U.S. gold futures gained 0.5% to $2,627.60.
Oil prices edged up on Tuesday, extending the previous day's rally driven by a halt in production at Norway's Johan Sverdrup oilfield, though investors remained cautious amid fears of an escalation in the Russia-Ukraine war.
Brent crude futures for January delivery rose 15 cents, or 0.2%, to $73.45 a barrel by 0430 GMT, while U.S. West Texas Intermediate crude futures for December delivery were at $69.31 a barrel, up 15 cents, or 0.2%. The more active WTI January contract rose 13 cents, or 0.2%, to $69.30.
