S&P 500 futures are flat as we look towards the start of European morning trade later. It’s a quiet one for now, following the slight advance from yesterday.

Higher yields continue to be a key consideration for stocks at the moment. But for trading this week, it’s going to be a rather tricky one.

We have a slew of US data during the week, which will be capped off by the non-farm payrolls report on Friday. The PCE price index on Thursday is also a standout in that regard. Then, there’s key earnings releases from big tech as seen here. And then, there’s also month-end flows to add into the equation as well.

It’s pretty much squeaky bum time for markets this week as such. And when things get this muddy and complicated, sometimes the best trade you can do is to stay on the sidelines to let it all settle.

Coming back to the equities mood currently, we might be in for a slower one in Europe until we get to Wall Street. Upon which, there will be some anticipation ahead of the Alphabet earnings later in the day; not to mention the other factors above.

This article was written by Justin Low at www.forexlive.com.

S&P 500 futures are flat as we look towards the start of European morning trade later. It’s a quiet one for now, following the slight advance from yesterday.

Higher yields continue to be a key consideration for stocks at the moment. But for trading this week, it’s going to be a rather tricky one.

We have a slew of US data during the week, which will be capped off by the non-farm payrolls report on Friday. The PCE price index on Thursday is also a standout in that regard. Then, there’s key earnings releases from big tech as seen here. And then, there’s also month-end flows to add into the equation as well.

It’s pretty much squeaky bum time for markets this week as such. And when things get this muddy and complicated, sometimes the best trade you can do is to stay on the sidelines to let it all settle.

Coming back to the equities mood currently, we might be in for a slower one in Europe until we get to Wall Street. Upon which, there will be some anticipation ahead of the Alphabet earnings later in the day; not to mention the other factors above.

This article was written by Justin Low at www.forexlive.com.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.57%, Shanghai Composite down 0.96%, Hang Seng up 0.41% ASX up 0.34%
• Commodities : Gold at $2763.35 (0.24%), Silver at $33.60 (-0.14%), Brent Oil at $70.64 (-0.26%), WTI Oil at $67.39 (-0.29%)
• Rates : US 10-year yield at 4.270, UK 10-year yield at 4.257, Germany 10-year yield at 2.2850

News & Data:

• (JPY) Unemployment Rate  2.4% vs 2.5% expected

Markets Update:

Asia-Pacific markets showed mixed results despite gains on Wall Street, as investors focused on key earnings reports from major technology companies expected to boost the Nasdaq Composite.

Japan’s Nikkei 225 rose 0.5%, adding to the previous day’s gains. This follows a shift in Japan’s political landscape, with the ruling Liberal Democratic Party losing its parliamentary majority for the first time since 2009 in Sunday’s election. Additionally, Japan’s unemployment rate for September dropped slightly to 2.4%, compared to 2.5% in August and slightly below expectations.

South Korea’s Kospi and Kosdaq saw losses, down 0.51% and 0.41%, respectively, while Australia’s S&P/ASX 200 index gained 0.36%. In China, Hong Kong’s Hang Seng Index rose by 1.21%, and the CSI 300 increased by 0.17% in early trading. Singapore’s unemployment data will also be closely watched by regional traders.

In the U.S., markets rallied overnight, with the S&P 500 rising by 0.27% to 5,823.52, the Dow Jones advancing 273.17 points (0.65%) to 42,387.57, and the Nasdaq climbing by 0.26% to end at 18,567.19.This week is pivotal for third-quarter earnings, particularly with tech giants Alphabet, Microsoft, Meta, Amazon, and Apple set to report. Additionally, the U.S. is preparing for the presidential election on Nov. 5 and a Federal Reserve policy update on Nov. 7, while investors await Friday’s October jobs report.

Upcoming Events: 

• 02:00 PM GMT – USD CB Consumer Confidence
• 02:00 PM GMT – USD JOLTS Job Openings

The post Tuesday 29th October 2024: Asian Markets Waver Amid Political Shifts and Anticipation of Major Tech Earnings first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 29 October 2024

What happened in the Asia session?

With no major news during this session, the dollar index (DXY) was hovering around 104.30 while spot prices for gold hit a high of $2,756.83/oz before pulling back slightly. Meanwhile, crude oil prices continue to face significant overhead pressures as WTI oil fell below $67.50 per barrel by midday Asia.

What does it mean for the Europe & US sessions?

Looking at U.S. inventories, the API stockpiles experienced a surprise build of 1.6M barrels of crude last week, significantly higher than the forecast of 0.7M. Should inventories increase for the second consecutive week, it would signal demand weakness in the U.S. and this result could weigh on crude oil prices later today.

Bank of Canada (BoC) Governor Tiff Macklem will be testifying along with Senior Deputy Governor Carolyn Rogers before the House of Commons Standing Committee on Finance in Ottawa following last week’s monetary policy announcement. The Loonie has depreciated tremendously in October and could face higher volatility later today.

The Dollar Index (DXY)

Key news events today

CB Consumer Confidence (2:00 pm GMT)

JOLTS Job Openings (2:00 pm GMT)

What can we expect from DXY today?

The Conference Board (CB) Consumer Confidence survey fell from 105.6 in August to 98.7 in September as consumers worried about the state of the labour market and the current business conditions. The forecast of 99.5 points to a relatively unchanged reading for the month of October, highlighting the ongoing concerns amongst consumers.

Meanwhile, job openings have dwindled over the past 10 months with 8.04M vacancies available in August. September’s estimate of 7.98M openings signal another month of ‘softer’ hiring practices by U.S. corporations and should the final figures disappoint market expectations, the dollar could face some near-term headwinds.

Central Bank Notes:

• The Federal Funds Rate target range was reduced by 50 basis points to 4.75% to 5.00% on 18th September in an 11 to 1 vote with Governor Michelle Bowman dissenting, preferring to cut rates by a smaller amount.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and has gained greater confidence that inflation is moving sustainably toward 2%, and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have slowed, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 6 to 7 November 2024.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

CB Consumer Confidence (2:00 pm GMT)

JOLTS Job Openings (2:00 pm GMT)

What can we expect from Gold today?

The Conference Board (CB) Consumer Confidence survey fell from 105.6 in August to 98.7 in September as consumers worried about the state of the labour market and the current business conditions. The forecast of 99.5 points to a relatively unchanged reading for the month of October, highlighting the ongoing concerns amongst consumers.

Meanwhile, job openings have dwindled over the past 10 months with 8.04M vacancies available in August. September’s estimate of 7.98M openings signal another month of ‘softer’ hiring practices by U.S. corporations and should the final figures disappoint market expectations, the dollar could face some near-term headwinds and potentially lift gold prices higher.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Overhead pressures remain intact for the Aussie as it fell to a low of 0.6579 on Monday. This currency pair retraced slightly higher before resuming the downtrend as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6515

Resistance: 0.6620

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 24th September, marking the seventh consecutive pause.
• Inflation has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but it is still some way above the midpoint of the 2 to 3% target range.
• The trimmed-mean CPI was 3.9% YoY in the June quarter, broadly as forecast in the May Statement on Monetary Policy (SMP) while headline inflation declined in July as measured by the monthly CPI indicator.
• Headline inflation is expected to fall further temporarily but current forecasts do not see inflation returning sustainably to target until 2026.
• GDP data for the June quarter have confirmed that growth has been weak but growth in aggregate consumer demand, which includes spending by temporary residents such as students and tourists, remained more resilient.
• Broader indicators suggest that labour market conditions remain tight, despite some signs of gradual easing while wage pressures have eased somewhat.
• Data since then have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out while agreeing that policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions and will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• Next meeting is on 5 November 2024.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Just like its Pacific neighbour, the Kiwi faces significant headwinds as it fell to a low of 0.5957 before retracing higher to close at 0.5984. This currency pair remained capped under the threshold of 0.6000 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.5920

Resistance: 0.6025

Central Bank Notes:

• The Monetary Policy Committee agreed to reduce the OCR by 50 basis points, bringing it down to 4.75% in October as inflation converges to target.
• The Committee assesses that annual consumer price inflation is within its 1 to 3% inflation target range and converging on the 2% midpoint.
• Economic activity in New Zealand is subdued, in part due to restrictive monetary policy while business investment and consumer spending have been weak, and employment conditions continue to soften.
• The economy is now in a position of excess capacity, encouraging price- and wage-setting to adjust to a low-inflation economy; lower import prices have assisted the disinflation.
• High-frequency indicators point to continued subdued growth in the near term, mostly due to weak consumer spending and business investment while labour market conditions are expected to ease further, with filled jobs and advertised vacancy rates continuing to decline.
• The Committee confirmed that future changes to the OCR would depend on its evolving assessment of the economy.
• Next meeting is on 27 November 2024.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

With the ruling Liberal Democratic Party losing its majority in Sunday’s general election, the yen has depreciated even further as USD/JPY hit a three-month high of 153.87 on Monday. This currency pair pulled back slightly to close at 153.27 before extending the downward move as Asian markets came online – these are the support and resistance levels for today.

Support: 151.70

Resistance: 154.90

Central Bank Notes:

• The Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 2.5 to 3.0% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a passthrough to consumer prices of cost increases led by the past rise in import prices have waned.
• Meanwhile, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period of the July 2024 Outlook for Economic Activity and Prices, it is likely to be at a level that is generally consistent with the price stability target.
• Japan’s economy has recovered moderately, although some weakness has been seen in part, but it is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 31 October 2024.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

After falling to a low of 1.0782, the Euro reversed to rebound quite strongly as it closed at 1.0811 on Monday. This currency pair was hovering around 1.0810 as Asian markets came online and could edge higher as the day progresses – these are the support and resistance levels for today.

Support: 1.0770

Resistance: 1.0840

Central Bank Notes:

• The Governing Council today decided to reduce the three key ECB interest rates by 25 basis points on 17th October to mark the second successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.40%, 3.65% and 3.25% respectively.
• The incoming information on inflation shows that the disinflationary process is well on track while the inflation outlook is also affected by recent downside surprises in indicators of economic activity.
• Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

After coming within a whisker of 0.8700, USD/CHF reversed sharply to close at 0.8652 on Monday as demand for the greenback waned. This currency pair stabilized around 0.8640 at the beginning of the Asia session before moving higher – these are the support and resistance levels for today.

Support: 0.8635

Resistance: 0.8700

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• Next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable swung between 1.2939 and 1.3000 before closing at 1.2969 on Monday in what was a pretty volatile period despite no major news on the calendar. This currency pair was hovering around 1.2960 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.2915

Resistance: 1.3000

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to maintain Bank Rate at 5.0% while one member preferred to reduce Bank Rate by 25 basis points to 4.75%, on 19th September 2024.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B.
• Twelve-month CPI inflation had been 2.2% in August and July, slightly lower than August Report expectations. Consumer core goods and food price inflation had remained subdued as the cost pressures from previous global shocks had unwound further, and producer price levels had been broadly flat while energy prices had continued to drag on CPI inflation.
• Services price inflation had increased to 5.6% in August compared to 5.2% in July and 5.7% in June. This was slightly lower in August than had been expected at the time of the August Report. There had been volatility in a number of services sub-components in the July and August outturns, including accommodation and catering prices and airfares.
• GDP had increased by 0.6% in 2024 Q2, 0.1 percentage points lower than had been expected in the August Monetary Policy Report. That had followed 0.7% growth in Q1, but Bank staff judged that the underlying pace of growth had been somewhat weaker during the first half of the year. 
• Headline GDP growth was expected to return to its underlying pace of around 0.3% per quarter in the second half of the year. Based on a broad set of indicators, the MPC judged that the labour market continued to loosen but that it remained tight by historical standards.
• Monetary policy decisions have been guided by the need to squeeze persistent inflationary pressures out of the system so as to return CPI inflation to the 2% target both in a timely manner and on a lasting basis; policy has been acting to ensure that inflation expectations remain well anchored.
• In the absence of material developments, a gradual approach to removing policy restraint remains appropriate while monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• Next meeting is on 7 November 2024.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

BoC Gov Macklem Speaks (7:30 pm GMT)

What can we expect from CAD today?

Bank of Canada (BoC) Governor Tiff Macklem will be testifying along with Senior Deputy Governor Carolyn Rogers before the House of Commons Standing Committee on Finance in Ottawa following last week’s monetary policy announcement. The Loonie has depreciated tremendously in October and could face higher volatility later today.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.75% while continuing its policy of balance sheet normalization on 23rd October; this marked the fourth consecutive meeting where rates were reduced.
• Canada’s economy grew at around 2% in the first half of the year and growth of 1.75% is expected in the second half; consumption has continued to grow but is declining on a per person basis while exports have been boosted by the opening of the Trans Mountain Expansion pipeline.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026 – as the economy strengthens, excess supply is gradually absorbed.
• The labour market remains soft with unemployment at 6.5% in September while wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services while the drop in global oil prices has led to lower gasoline prices – these factors have all combined to bring inflation down.
• The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out; the upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.
• With inflation now back around the 2% target, the Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range.
• If the economy evolves broadly in line with the latest forecast, further reduction of the policy rate can be expected but the timing and pace of additional reductions in the policy rate will be guided by incoming information and assessment of its implications for the inflation outlook.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• Next meeting is on 11 December 2024.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

API Crude Oil Stock (8:30 pm GMT)

What can we expect from Oil today?

Intense overhead pressures have caused crude oil prices to plunge 6% on Monday with WTI oil gaping lower from $71.78 to close at $67.38 per barrel. Despite heightened geopolitical tensions in the Middle East, this benchmark remains under pressure and was sliding towards the $67.50-mark at the onset of the Asian trading hours. Moving over to U.S. inventories, the API stockpiles experienced a surprise build of 1.6M barrels of crude last week, significantly higher than the forecast of 0.7M. Should inventories increase for the second consecutive week, it would signal demand weakness in the U.S. and this result could weigh on prices later today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 29 October 2024 first appeared on IC Markets | Official Blog.

It is being reported by Reuters that China president Xi Jinping had asked US president Joe Biden to change the language that the latter uses when discussing its position on Taiwan independence. The request came about last year, in which China wanted the US to explicitly say that they “oppose Taiwan independence” rather than mention that they “do not support independence for Taiwan”. Xi’s aides are also reported to have followed up on the matter in further requesting the change but the US has declined to do so.

For some context, even though the US does mention that they “do not support independence for Taiwan”, they do maintain unofficial relations with the island and is their most important backer as well as arms supplier. So, it is a case of actions speaking louder than words here.

As much as a change in wording would send a strong message to the rest of the region, it is unlikely the US would do so to appease China and give up their position surrounding the Taiwan matter presently. A change would definitely signal a softer and a retreat in stance by the US in a time when Beijing is ramping up pressure on the island, so it will definitely reverberate. But again, not likely to be the case for now.

This article was written by Justin Low at www.forexlive.com.

There are plenty of events on the economic calendar this week but still just not today, at least for Europe. Major currencies are keeping little changed for the most part, with USD/JPY down slightly on the day as traders continue to digest the political developments in Japan. Meanwhile, the antipodeans are a touch lower owing to a softer Chinese yuan with AUD/USD poised for a third straight down day to its lowest levels since mid-August.

There’s still plenty to play for in the week ahead. But for now, it’s pretty just a continuation of flows since last week. The bond market continues to intrigue with higher yields in play. 10-year Treasury yields are coming close to hitting 4.30% and that’s one to watch out for, with Goldman Sachs highlighting that level as a pain threshold for stocks.

Looking to the session ahead, there’s not much in terms of economic releases to really impact trading sentiment. There will be bigger fish to fry as we will get to CPI and GDP numbers across the euro area and the UK budget in the days ahead. But for today, it’s a case of counting down to those more important events later in the week.

0700 GMT – Germany November GfK consumer sentiment0930 GMT – UK September mortgage approvals, credit data

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

This article was written by Justin Low at www.forexlive.com.

DXY (US Dollar Index):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price could potentially make a bullish bounce off the pivot and rise towards the 1st resistance.

Pivot: 104.01
Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 103.45
Supporting reasons: Identified as a pullback support that aligns close to a 23.6% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 104.52
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price could potentially make a bearish reversal off the pivot and drop towards the 1st support.

Pivot: 1.0868
Supporting reasons: Identified as a swing-high resistance that aligns with a 23.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 1.0774
Supporting reasons: Identified as a swing-low support, suggesting a potential area where price could find support once more.

1st resistance: 1.0951
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise towards the 1st resistance.

Pivot: 164.92
Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 163.98
Supporting reasons: Identified as a pullback support that aligns with a confluence of Fibonacci levels i.e. the 23.6% and 50% retracements, indicating a potential level where price could find support once again.

1st resistance: 165.86
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price could potentially make a bearish reversal off the pivot and drop towards the 1st support.

Pivot: 0.8352
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

1st support: 0.8308
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where price could find support once more.

1st resistance: 0.8369
Supporting reasons: Identified as a swing-high resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price could potentially make a bearish reversal off the pivot and drop towards the 1st support.

Pivot: 1.3000
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 1.2916

Supporting reasons: Identified as a swing-low support that aligns close to a 127.2% Fibonacci extension,  indicating a potential level where price could find support once more.

1st resistance: 1.3049
Supporting reasons: Identified as a swing-high resistance that aligns close to a 23.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise towards the 1st resistance.

Pivot: 196.58
Supporting reasons: Identified as a pullback support that aligns close to a 23.6% Fibonacci retracement, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 195.53

Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 199.03

Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price could potentially make a bullish bounce off the pivot and rise towards the 1st resistance.

Pivot: 0.8636
Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to stage a rebound.

1st support: 0.8608
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 0.8697
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise towards the 1st resistance.

Pivot: 151.62
Supporting reasons: Identified as pullback support, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 150.29
Supporting reasons: Identified as a pullback support that aligns close to a 23.6% Fibonacci retracement, indicating a potential level where price could find support.

1st resistance: 153.64
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 1.3883
Supporting reasons: Identified as an overlap support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 1.3843
Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement, indicating a key level where price could find support once again.

1st resistance: 1.3946
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is falling towards the pivot and could potentially make a bearish break below this level to fall towards the 1st support.

Pivot: 0.6563
Supporting reasons: Identified as an overlap support where the strong downward momentum could trigger a potential bearish breakout.

1st support: 0.6513
Supporting reasons: Identified as a swing-low support, indicating a potential level where price could find support once again.

1st resistance: 0.6609
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 0.5913

Supporting reasons: Identified as a swing-low support, indicating a potential level where buying interests could pick up to stage a minor rebound.

1st support: 0.5866
Supporting reasons: Identified as a swing-low support, indicating a potential level where price could find support once more.

1st resistance: 0.5989
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to fall rise towards the 1st resistance.

Pivot: 42,084.33

Supporting reasons: Identified as a pullback support that aligns with a 38.2% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 41,737.31

Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, indicating a potential level where price could find support.

1st resistance: 42,526.18

Supporting reasons: Identified as a pullback resistance that aligns with a 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 19,681.50
Supporting reasons: Identified as a swing-high resistance that aligns with the all-time high, indicating a potential level where selling pressures could intensify.

1st support: 19,309.60
Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement level, indicating a key level where price could find support once again.

1st resistance: 19,785.10
Supporting reasons: Identified as a resistance that aligns with a 127.2% Fibonacci extension, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to fall rise towards the 1st resistance.

Pivot: 5,802.90

Supporting reasons: Identified as a pullback support that aligns with a 61.8% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 5,771.00
Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement level, indicating a potential level where price could find support once again.

1st resistance: 5,851.50
Supporting reasons: Identified as a pullback resistance that aligns with a 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 71,607.46
Supporting reasons: Identified as a swing-high resistance that aligns with a 61.8% Fibonacci projection, indicating a potential level where selling pressures could intensify.

1st support: 69,643.65
Supporting reasons: Identified as a pullback support that aligns with a close to a 38.2% Fibonacci retracement level, indicating a potential level where price could find support.

1st resistance: 73,468.61
Supporting reasons: Identified as a swing-high resistance that aligns with a 78.6% Fibonacci projection, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 2,644.49
Supporting reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 2,540.64
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support.

1st resistance: 2,745.12
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is falling towards the pivot and could potentially make a bearish break below this level to fall towards the 1st support.

Pivot: 67.68
Supporting reasons: Identified as a swing-low support where the strong downward momentum could trigger a potential bearish breakout.

1st support: 66.02
Supporting reasons: Identified as a swing-low support, indicating a key level where price could find support once more.

1st resistance: 69.16
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price is trading close to the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 2,753.21
Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential level where selling pressures could intensify.

1st support: 2,714.81
Supporting reasons: Identified as a pullback support that aligns close to a 23.6% Fibonacci retracement, indicating a key level where price could find support once more.

1st resistance: 2,771.96
Supporting reasons: Identified as a resistance that aligns with a 127.2% Fibonacci extension, indicating a potential area that could halt any further upward movement.

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The post Tuesday 29th October 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

The post Ex-Dividend 29/10/2024 first appeared on IC Markets | Official Blog.

One of the key trade dialogues between the UK and China was the Joint Economic and Trade Commission (JETCO). That was meant to facilitate bilateral trade and investment between the two countries but was put on ice by the last UK government following China’s actions on Hong Kong back in 2022.

It is being reported now that the incumbent UK government is “open” to explore the trade dialogue again “where cooperation is possible with China”. That according to business and trade secretary, Jonathan Reynolds, at least. But he does say that they will have to engage the conversation on their own terms. Adding that:

“Obviously, what I want to know is, if JETCO were to be reinstated, would it be a substantive way to resolve some of these (ongoing trade) issues?”

The full piece can be found here. All of this is just word on the street for now but it’s a start perhaps. So, we’ll have to see how substantial any of this will be in the months ahead.

This article was written by Justin Low at www.forexlive.com.

IC Markets Asia Fundamental Forecast | 29 October 2024

What happened in the U.S. session?

Intense overhead pressures have caused crude oil prices to plunge 6% on Monday with WTI oil gaping lower from $71.78 to close at $67.38 per barrel. Despite heightened geopolitical tensions in the Middle East, this benchmark remains under pressure and was sliding towards the $67.50-mark at the onset of the Asian trading hours. Meanwhile, demand for the greenback eased slightly on Monday with the dollar index (DXY) falling as low as 104.11, keeping gold prices buoyed. Spot prices for this precious metal edged higher towards $2,745/oz overnight.

What does it mean for the Asia Session?

With demand for the dollar waning, the DXY was falling towards the threshold of 104 while gold continued its ascent towards $2,750/oz. After making its most recent all-time high of $2,758.45/oz last Wednesday, this commodity looks set to break higher at some point this week.

The Dollar Index (DXY)

Key news events today

CB Consumer Confidence (2:00 pm GMT)

JOLTS Job Openings (2:00 pm GMT)

What can we expect from DXY today?

The Conference Board (CB) Consumer Confidence survey fell from 105.6 in August to 98.7 in September as consumers worried about the state of the labour market and the current business conditions. The forecast of 99.5 points to a relatively unchanged reading for the month of October, highlighting the ongoing concerns amongst consumers.

Meanwhile, job openings have dwindled over the past 10 months with 8.04M vacancies available in August. September’s estimate of 7.98M openings signal another month of ‘softer’ hiring practices by U.S. corporations and should the final figures disappoint market expectations, the dollar could face some near-term headwinds.

Central Bank Notes:

• The Federal Funds Rate target range was reduced by 50 basis points to 4.75% to 5.00% on 18th September in an 11 to 1 vote with Governor Michelle Bowman dissenting, preferring to cut rates by a smaller amount.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and has gained greater confidence that inflation is moving sustainably toward 2%, and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have slowed, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 6 to 7 November 2024.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

CB Consumer Confidence (2:00 pm GMT)

JOLTS Job Openings (2:00 pm GMT)

What can we expect from Gold today?

The Conference Board (CB) Consumer Confidence survey fell from 105.6 in August to 98.7 in September as consumers worried about the state of the labour market and the current business conditions. The forecast of 99.5 points to a relatively unchanged reading for the month of October, highlighting the ongoing concerns amongst consumers.

Meanwhile, job openings have dwindled over the past 10 months with 8.04M vacancies available in August. September’s estimate of 7.98M openings signal another month of ‘softer’ hiring practices by U.S. corporations and should the final figures disappoint market expectations, the dollar could face some near-term headwinds and potentially lift gold prices higher.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Overhead pressures remain intact for the Aussie as it fell to a low of 0.6579 on Monday. This currency pair retraced slightly higher before resuming the downtrend as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6515

Resistance: 0.6620

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 24th September, marking the seventh consecutive pause.
• Inflation has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but it is still some way above the midpoint of the 2 to 3% target range.
• The trimmed-mean CPI was 3.9% YoY in the June quarter, broadly as forecast in the May Statement on Monetary Policy (SMP) while headline inflation declined in July as measured by the monthly CPI indicator.
• Headline inflation is expected to fall further temporarily but current forecasts do not see inflation returning sustainably to target until 2026.
• GDP data for the June quarter have confirmed that growth has been weak but growth in aggregate consumer demand, which includes spending by temporary residents such as students and tourists, remained more resilient.
• Broader indicators suggest that labour market conditions remain tight, despite some signs of gradual easing while wage pressures have eased somewhat.
• Data since then have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out while agreeing that policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions and will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• Next meeting is on 5 November 2024.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Just like its Pacific neighbour, the Kiwi faces significant headwinds as it fell to a low of 0.5957 before retracing higher to close at 0.5984. This currency pair remained capped under the threshold of 0.6000 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.5920

Resistance: 0.6025

Central Bank Notes:

• The Monetary Policy Committee agreed to reduce the OCR by 50 basis points, bringing it down to 4.75% in October as inflation converges to target.
• The Committee assesses that annual consumer price inflation is within its 1 to 3% inflation target range and converging on the 2% midpoint.
• Economic activity in New Zealand is subdued, in part due to restrictive monetary policy while business investment and consumer spending have been weak, and employment conditions continue to soften.
• The economy is now in a position of excess capacity, encouraging price- and wage-setting to adjust to a low-inflation economy; lower import prices have assisted the disinflation.
• High-frequency indicators point to continued subdued growth in the near term, mostly due to weak consumer spending and business investment while labour market conditions are expected to ease further, with filled jobs and advertised vacancy rates continuing to decline.
• The Committee confirmed that future changes to the OCR would depend on its evolving assessment of the economy.
• Next meeting is on 27 November 2024.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

With the ruling Liberal Democratic Party losing its majority in Sunday’s general election, the yen has depreciated even further as USD/JPY hit a three-month high of 153.87 on Monday. This currency pair pulled back slightly to close at 153.27 before extending the downward move as Asian markets came online – these are the support and resistance levels for today.

Support: 151.70

Resistance: 154.90

Central Bank Notes:

• The Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 2.5 to 3.0% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a passthrough to consumer prices of cost increases led by the past rise in import prices have waned.
• Meanwhile, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period of the July 2024 Outlook for Economic Activity and Prices, it is likely to be at a level that is generally consistent with the price stability target.
• Japan’s economy has recovered moderately, although some weakness has been seen in part, but it is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 31 October 2024.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

After falling to a low of 1.0782, the Euro reversed to rebound quite strongly as it closed at 1.0811 on Monday. This currency pair was hovering around 1.0810 as Asian markets came online and could edge higher as the day progresses – these are the support and resistance levels for today.

Support: 1.0770

Resistance: 1.0840

Central Bank Notes:

• The Governing Council today decided to reduce the three key ECB interest rates by 25 basis points on 17th October to mark the second successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.40%, 3.65% and 3.25% respectively.
• The incoming information on inflation shows that the disinflationary process is well on track while the inflation outlook is also affected by recent downside surprises in indicators of economic activity.
• Inflation is expected to rise in the coming months, before declining to target in the course of next year. Domestic inflation remains high, as wages are still rising at an elevated pace. At the same time, labour cost pressures are set to continue easing gradually, with profits partially buffering their impact on inflation.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

After coming within a whisker of 0.8700, USD/CHF reversed sharply to close at 0.8652 on Monday as demand for the greenback waned. This currency pair stabilized around 0.8640 at the beginning of the Asia session before moving higher – these are the support and resistance levels for today.

Support: 0.8635

Resistance: 0.8700

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• Next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable swung between 1.2939 and 1.3000 before closing at 1.2969 on Monday in what was a pretty volatile period despite no major news on the calendar. This currency pair was hovering around 1.2960 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.2915

Resistance: 1.3000

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to maintain Bank Rate at 5.0% while one member preferred to reduce Bank Rate by 25 basis points to 4.75%, on 19th September 2024.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B.
• Twelve-month CPI inflation had been 2.2% in August and July, slightly lower than August Report expectations. Consumer core goods and food price inflation had remained subdued as the cost pressures from previous global shocks had unwound further, and producer price levels had been broadly flat while energy prices had continued to drag on CPI inflation.
• Services price inflation had increased to 5.6% in August compared to 5.2% in July and 5.7% in June. This was slightly lower in August than had been expected at the time of the August Report. There had been volatility in a number of services sub-components in the July and August outturns, including accommodation and catering prices and airfares.
• GDP had increased by 0.6% in 2024 Q2, 0.1 percentage points lower than had been expected in the August Monetary Policy Report. That had followed 0.7% growth in Q1, but Bank staff judged that the underlying pace of growth had been somewhat weaker during the first half of the year. 
• Headline GDP growth was expected to return to its underlying pace of around 0.3% per quarter in the second half of the year. Based on a broad set of indicators, the MPC judged that the labour market continued to loosen but that it remained tight by historical standards.
• Monetary policy decisions have been guided by the need to squeeze persistent inflationary pressures out of the system so as to return CPI inflation to the 2% target both in a timely manner and on a lasting basis; policy has been acting to ensure that inflation expectations remain well anchored.
• In the absence of material developments, a gradual approach to removing policy restraint remains appropriate while monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• Next meeting is on 7 November 2024.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

BoC Gov Macklem Speaks (7:30 pm GMT)

What can we expect from CAD today?

Bank of Canada (BoC) Governor Tiff Macklem will be testifying along with Senior Deputy Governor Carolyn Rogers before the House of Commons Standing Committee on Finance in Ottawa following last week’s monetary policy announcement. The Loonie has depreciated tremendously in October and could face higher volatility later today.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.75% while continuing its policy of balance sheet normalization on 23rd October; this marked the fourth consecutive meeting where rates were reduced.
• Canada’s economy grew at around 2% in the first half of the year and growth of 1.75% is expected in the second half; consumption has continued to grow but is declining on a per person basis while exports have been boosted by the opening of the Trans Mountain Expansion pipeline.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026 – as the economy strengthens, excess supply is gradually absorbed.
• The labour market remains soft with unemployment at 6.5% in September while wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• Excess supply elsewhere in the economy has reduced inflation in the prices of many goods and services while the drop in global oil prices has led to lower gasoline prices – these factors have all combined to bring inflation down.
• The Bank expects inflation to remain close to the target over the projection horizon, with the upward and downward pressures on inflation roughly balancing out; the upward pressure from shelter and other services gradually diminishes, and the downward pressure on inflation recedes as excess supply in the economy is absorbed.
• With inflation now back around the 2% target, the Governing Council decided to reduce the policy rate by 50 basis points to support economic growth and keep inflation close to the middle of the 1% to 3% range.
• If the economy evolves broadly in line with the latest forecast, further reduction of the policy rate can be expected but the timing and pace of additional reductions in the policy rate will be guided by incoming information and assessment of its implications for the inflation outlook.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• Next meeting is on 11 December 2024.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

API Crude Oil Stock (8:30 pm GMT)

What can we expect from Oil today?

Intense overhead pressures have caused crude oil prices to plunge 6% on Monday with WTI oil gaping lower from $71.78 to close at $67.38 per barrel. Despite heightened geopolitical tensions in the Middle East, this benchmark remains under pressure and was sliding towards the $67.50-mark at the onset of the Asian trading hours. Moving over to U.S. inventories, the API stockpiles experienced a surprise build of 1.6M barrels of crude last week, significantly higher than the forecast of 0.7M. Should inventories increase for the second consecutive week, it would signal demand weakness in the U.S. and this result could weigh on prices later today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 29 October 2024 first appeared on IC Markets | Official Blog.

Of note, we’ll have five of the ‘Magnificent 7’ reporting earnings this week. Alphabet will be the one kicking things off in the day ahead, being accompanied by smaller releases from Visa, AMD, and McDonald’s. Then tomorrow, we’ll get to Microsoft and Meta. And on Thursday, it will be Apple and Amazon. The latter releases will be after the close, so do take note of that.

As much as we do have other big drivers of market sentiment in play, the earnings reporting above is going to be a decisive factor as well in impacting the equities mood on the week.

This article was written by Justin Low at www.forexlive.com.

• Wharton finance professor says Fed could pause next week if NFP comes in hot
• Japan finance minister Kato closely watching FX moves including those drive by speculators
• Japan DPP head says BOJ should avoid big policy change now b/c real wages standing still
• No Fed speakers this week, or next. Its FOMC blackout time ahead of November 6 – 7 meeting
• Bank of Korea Governor says not short on ammunition to stabilise FX
• Reports that China’s Luckin Coffee to enter US market – plans to undercut Starbuck prices
• PBOC sets USD/ CNY reference rate for today at 7.1283 (vs. estimate at 7.1271)
• Bank of Canada Governor Macklem and Deputy Rogers are speaking again on Tuesday
• Faster UK disinflation in October (shop price index) – keeps BoE rat cuts on front burner
• Japan’s tight labour market (2.4% u/e rate!) should be positive for wages, BOJ rate hikes
• UK inflation indicator: BRC Shop Price Index fell faster in October
• Japan September jobs report: Unemployment rate 2.4% (expected 2.5%)
• Preview – Bank of Japan meeting this week – no change to policy expected
• Japanese PM Ishiba is reportedly seeking a coalition with DPP
• Australian weekly Consumer Confidence 86.4 (prior 87.5)
• 4 Big reasons that UBS target US$2850 for gold
• Japan’s Komeito leader will resign (Japan media report)
• Nate Silver tips Trump to cruise to the win in the US election
• Forexlive Americas FX news wrap 28 Oct. US yields move higher.USDJPY rises after elections
• Goldman Sachs like US equities higher through year-end
• Japan’s Toyota & NTT to invest $3.26 bn R&D to create AI software to improve self-driving
• Bank of America technical analysts like S&P 500 through to the end of the year
• Broader US indices close near lows for the day
• Trade ideas thread – Tuesday, 29 October, insightful charts, technical analysis, ideas

It
was a reasonably quiet session here in Asia today.

Data
confirmed a tight labour market in Japan, with some arguments that
this augers well for wage rises. The counter to this is that Japanese
unemployment had been low for years before wages began rising. It
took political pressure to get wage rises.

In
Japan political news it appears that PM Ishiba is negotiating with
the Democratic Party for the People (DPP) to join the LDP/Komeito
coalition. Head of the DPP, Yuichiro Tamaki says he wants the Bank of
Japan to stop hiking rates, saying real wages are not rising:

• “Once
  there is certainty that real wages will exceed 4% at next year’s
  spring wage negotiations, that’s when the BOJ can review monetary
  policy”.

Wow,
that’s a long way off.

USD/JPY
has dribbled a little lower on the session, and is around 153.00 as I
post.

Elsewhere
across major FX ranges have been very small indeed.

This article was written by Eamonn Sheridan at www.forexlive.com.