Market Roundup
• French Current Account (Aug) -0.60B , 0.00B previous
• French Exports (Aug) 49.7B ,49.5B previous
• French Imports (Aug) 57.0B ,55.5B previous
Looking Ahead Economic Data(GMT)
• 13:00 Canada Aug Exports 65.66B previous
• 13:00 Canada Imports (Aug) 64.97B previous
• 13:00 Canada Trade Balance (Aug) -0.40B forecast,0.68B previous
•14:10 US IBD/TIPP Economic Optimism (Oct) 47.2 forecast , 46.1 previous
•14:30 US Atlanta Fed GDPNow (Q3) 2.5% previous
Looking Ahead Events And Other Releases(GMT)
• 20:00 US Fed Collins Speaks
• 23:30 US Fed Governor Jefferson Speaks
Currency Forecast
EUR/USD: The euro strengthened on Tuesday as investors assessed the outlook for U.S. rate cuts. Traders have drastically shifted their expectations of monetary easing from the U.S. Federal Reserve this year. A strong jobs report last week gave credence to Fed Chair Jerome Powell's comments that the central bank would stick to its usual quarter-percentage-point rate reductions after it began its easing cycle with a big cut in September. Markets are no longer fully pricing in a rate cut in November and are ascribing around a 90% chance of a 25-basis-point reduction, the CME FedWatch tool showed. The euro inched 0.1% higher to $1.098575, not far from the seven-week low of $1.09515 hit last week. 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: The British steadied against the dollar on Tuesday as investors assessed geopolitical risks in the Middle East and the next steps in the Bank of England's easing cycle. The pound firmed to $1.30945 , about 2.5% below its more than two-and-a-half year peak in late-September when speculation about a slower easing cycle from the BoE boosted its appeal versus most major currency pairs. Later in the month, investors will look to the first tax-and-spending budget statement on Oct. 30 from the new Labour government of Prime Minister Keir Starmer. 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 1.3064(23.6%fib), a break below could take the pair towards 1.3000(Psychological level).
AUD/USD: The Australian dollar fell against dollar on Tuesday as the Reserve Bank of Australia adopted a slightly dovish outlook. The RBA issued the minutes from its September policy meeting, which outline variables that could lead to a future rate drop, including a slowing economy and a weaker labor market. Furthermore, optimism was depressed by a slowing rally in Chinese markets, disappointing investors looking for further information on Beijing's fresh stimulus package. The Aussie fell 0.36% to $0.6732, having lost 0.5% overnight. It is down 2.2% in the past four sessions. Immediate resistance can be seen at 0.6767(38.2%fib), an upside break can trigger rise towards 0.6837(23.6%fib).On the downside, immediate support is seen at 0.6711 (50%fib), a break below could take the pair towards 0.6663(61.8%fib).
USD/JPY: The dollar initially dipped against the yen on Tuesday but recovered ground as investors focused on the escalating conflict in the Middle East and anticipated US inflation data. Investor focus this week will be on the inflation report due on Thursday as well as the minutes of the Fed's September meeting scheduled to be released on Wednesday.On the data front, real earnings in Japan, the world's fourth-largest economy, decreased 0.6% in August from the same month previous year. At 12:14 GMT, the pair was down 0.02% to 148.15, having recovered from a day low of 147.65. Strong resistance can be seen at 148.24(Daily high), an upside break can trigger rise towards 149.18(23.6 %fib). 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
European stocks dropped to two-weeks lows on Tuesday, as lack of fresh details over China's stimulus measures sparked a selloff in sectors linked to the world's second-largest economy such as mining and luxury.
UK's benchmark FTSE 100 closed down by 0.98 percent, Germany's Dax ended down by 0.06 percent, France’s CAC finished the day down by 0.60 percent.
Commodities Recap
Gold prices edged up on Tuesday after four consecutive sessions of fall as a weaker dollar and safe-haven demand coming from the geopolitical tensions in the Middle East provided support.
Spot gold rose 0.3% to $2,650.22 per ounce by 1142 GMT.
Oil prices took a break on Tuesday as the market waits for Israel's response to last week's Iranian rocket attacks that prompted a price surge on concerns of a broader conflict in the Middle East.
Brent crude futures were down $1.60, or 2%, to $79.33 per barrel at 1218 GMT. U.S. West Texas Intermediate futures were down $1.60, or 2.07%, to $75.54 a barrel.
