Market Roundup
• New Zealand NZIER Business Confidence (Q3) 18% , 22% previous
• New Zealand NZIER QSBO Capacity Utilization (Q3) 89.1%, 89.4% previous
• Australia Westpac Consumer Sentiment (Oct) -3.5%, -3.1% previous
• Japan Household Spending (MoM) (Aug) 0.6%, 0.1% forecast,1.7% previous
• Japan Household Spending (YoY) (Aug) 2.3%, 1.4%forecast,1.4% previous
• Japan Foreign Reserves (USD) (Sep )1,341.3B, 1,324.2B previous
•Japan Coincident Indicator (MoM) (Aug) -0.7%, 0.3% previous
•Japan Leading Index (MoM) (Aug) 1.3%, 0.5% previous
•Japan Leading Index (Aug) 107.4, 107.1forecast,106.1 previous
•UK Halifax House Price Index (YoY) (Sep) 1.3%, 2.2%forecast, 2.0% previous
Looking Ahead Economic Data (GMT)
•09:00 UK Mortgage Rate (GBP) (Sep) 6.86% previous
•09:30 German 5-Year Bobl Auction 2.290% previous
Looking Ahead Events and Other Releases(GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro slipped against the U.S. dollar on Tuesday as ongoing political uncertainty in France weighed on the currency. French Prime Minister Sebastien Lecornu and his government resigned just hours after announcing his cabinet, intensifying the political crisis and sending the euro sharply lower.Lecornu is set to hold two days of last-ditch talks with various parties starting Tuesday, a day after his shock resignation, in an effort to resolve the deadlock. President Macron tasked him with the negotiations, setting a Wednesday evening deadline.Politicians from across the spectrum expressed confusion over Macron’s move, with some suggesting that Lecornu’s new mandate was primarily a bid to buy time, nearly a month after his initial nomination as prime minister. Immediate resistance can be seen at 1.1734(SMA 20), an upside break can trigger rise towards 1.1769(38.2%fib).On the downside, immediate support is seen at 1.1665(50%fib), a break below could take the pair towards 1.1590(61.8%fib)
GBP/USD: The pound dipped on Tuesday as political upheaval in Japan and France gripped currency and bond markets for a second day running. Market attention is now focused on the Fed itself for signs of the timing and extent of more easing. Fed Vice Chair for Supervision Michelle Bowman and newly installed fellow Governor Stephen Miran are due to speak later on Tuesday, while Wednesday brings minutes from the Federal Open Market Committee's meeting for September.Markets are pricing in additional 25 basis-point rate cuts in both October and December, with probabilities of 92.5% and 81.5%, respectively, according to the CME FedWatch tool. On the data front, British house prices rose by 1.3%in the 12 months to September, the weakest annual increase since April 2024, and unexpectedly fell in month-on-month terms, dropping by 0.3% from August, mortgage lender Halifax said on Tuesday. Sterling was down 0.11% to $1.3470 Immediate resistance can be seen at 1.3500(SMA 20), an upside break can trigger rise towards 1.3530(38.2%fib).On the downside, immediate support is seen at 1.3344(50%fib), a break below could take the pair towards 1.3309(Lower BB).
AUD/USD: The Australian dollar eased against the U.S. dollar on Tuesday as falling rate cut expectations from RBA hit consumer sentiment. Australian consumer sentiment fell for a second consecutive month in October, as concerns over household finances resurfaced amid speculation that interest rates may not decline further, a survey showed on Tuesday.A Westpac-Melbourne Institute survey showed the main consumer sentiment index fell 3.5% to 92.1 in October, after a 3.1% decline in September. Readings below 100 indicate pessimists now outnumber optimists. Investors have scaled back pricing for a near-term easing from the Reserve Bank of Australia following a hawkish outlook last week. Futures now imply only around a 40% chance of a quarter point reduction in the 3.65% cash rate in November, when it was almost fully priced just a month ago. Immediate resistance can be seen at 0.6610(SMA 20)., an upside break can trigger rise towards 0.6685(Higher BB).On the downside, immediate support is seen at 0.6339(50%fib), a break below could take the pair towards 0.6537(Lower BB).
USD/JPY: The U.S. dollar climbed to two month high on Tuesday as attention in Japan turned to who may join the administration of fiscal dove Sanae Takaichi after her party leadership victory.Takaichi, who is expected to become Japan’s next prime minister, has appointed former premier Taro Aso as vice president of the ruling party.Investors wait for details on how Takaichi will shape her government, Japanese authorities may step in with verbal intervention to temper the yen’s recent slide.The results of the weekend LDP leadership vote could lead to significant policy changes in Japan. Finance Minister Katsunobu Kato said Tuesday that currency moves should stay stable and reflect economic fundamentals, as the yen continued to weaken. Immediate resistance can be seen at 150.93(Daily high) an upside break can trigger rise towards 151.00(Psychological level) .On the downside, immediate support is seen at 149.40(38.2%fib) a break below could take the pair towards 149.00(Psychological level).
Equities Recap
Japan’s Nikkei closed at a record high on Tuesday for the third straight session, lifted by chip-related stocks following strong U.S. peers, though gains eased as traders took profits from the recent rally
Hang Seng was down 0.67% ,China’sA50 traded up 1.38% ,Japan’s Nikkei 225 was up 0.18 %
Commodities Recap
Gold surged to a record high on Tuesday amid a prolonged U.S. government shutdown, with investors also supported by near-certain expectations of a rate cut later this month.
Spot gold was up 0.1% at $3,962.63 per ounce by 0626 GMT, after hitting an all-time high of $3,977.19 earlier in the session. U.S. gold futures for December delivery gained 0.2% to $3,985.30.
Oil prices rose further on Tuesday as a smaller-than-expected November output increase by OPEC+ eased concerns over a potential supply glut.
Brent crude futures advanced 19 cents, or 0.29%, to $65.66 a barrel by 0623 GMT. U.S. West Texas Intermediate crude climbed 19 cents, or 0.31%, to $61.88.
