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USD/JPY has dripped lower from highs above 153.00 during US time.

Not a lot lower, but I’m sure Japanese authorities will welcome any relief from the pounding JPY has taken, no matter how small.

The dip for the US dollar was attributed to the Beige book:

• Forexlive Americas FX news wrap 23 Oct: Dollar moves higher but Beige Book tempers gains

Bank of Japan Governor Ueda spoke during US time:

• BOJ Governor Ueda: Underlying inflation has been rising slowly

I’ve been saying that the BoJ seem hell-bent on raising rates … but I also add that there is still quite the disparity between US and Japanese rates. Enough for building of major carry trades? Dunno. But approximately 12 big figures in around 4 weeks is sure something.

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

UBS are forthright with their view on the US dollar – “Unattractive” – say to sell bouts of dollar strength to reduce exposure.

UBS cite:

The Fed remains set to lower rates amid lower inflation.

US fiscal concerns are likely to keep the US dollar under pressure.

• in the event of a second Trump administration … tariffs are likely to hurt US consumers and GDP more than the rest of the world, and deficit concerns may also surface with potential tax cuts
• irrespective of who wins the presidency on 5 November, the growing US federal deficit is likely to come under the spotlight

Other currencies should see additional support

• we still expect a growth recovery in Europe going into 2025
• spillover effects from China’s stimulus efforts and the potential for more risk-on sentiment after the US election should support other G10 currencies, including the euro, the British pound, and the Australian dollar

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

Judo Bank / S&P Global preliminary PMIs for Australia in October 2024.

Manufacturing PMI still in contraction in Australia, while services is a touch improved on the month.

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

US stocks close lower on the day but off their lowest levels:

• Dow industrial average -409.94 points or -0.96% at 42514.95. At session lows, the index was down -631.72.
• S&P index fell -53.78 points or -0.92% at 5797.42. At session lows the index was down -88.79 points
• NASDAQ index -296.47 points or -1.60% at 18276.65. At session low as the index was down -426.52 points.. The index had its worst day since September 6

After the close, there was a number of earnings releases highlighted by Tesla. Tesla shares are trading up 8.15% after-hours trading:

• EPS: $0.72 (beat expectations of $0.58)
• Revenue: $25.18B (missed expectations of $25.37B)
• Gross margin: 19.8% (beat expectations of 16.8%)
• Expects slight growth in vehicle deliveries in 2024

Looking at some the other earnings

United Rentals Inc (URI) Q3 2024: Shares are trading down -4.22% after-hours trading

• EPS: $11.80 (missed expectations of $12.48)
• Revenue: $3.99B (missed expectations of $4.01B)
• FY Revenue Guidance: $15.1B to $15.05B (previously $15.1B to $15.35B)

Raymond James Financial Inc (RJF) Q4 2024. Shares are trading up 1.19% in after-hours trading

• EPS: $2.95 (beat expectations of $2.41)
• Revenue: $3.46B (beat expectations of $3.32B)

ServiceNow Inc (NOW) Q3 2024. Shares are trading down -0.85% after-hours trading

• EPS: $3.72 (beat expectations of $3.46)
• Revenue: $2.81B (beat expectations of $2.74B)

International Business Machines Corp (IBM) Q3 2024: Shares are trading down 4.44% in after-hours trading

• EPS: $2.30 (beat expectations of $2.23)
• Revenue: $14.97B (missed expectations of $15.07B)

Las Vegas Sands Corp (LVS) Q3 2024. Shares are trading up 1.0% in after-hours trading:

• EPS: $0.44 (missed expectations of $0.54)
• Revenue: $2.68B (missed expectations of $2.78B)
• FY EPS Guidance: $2.45 (missed expectations of $2.48)

Mattel Inc (MAT) Q3 2024. Shares are trading up 3.37% in after-hours trading

• EPS: $1.14 (beat expectations of $0.95)
• Revenue: $1.84B (beat expectations of $1.68B)

Newmont Corporation (NEM) Q3 2024: Shares are down 6.37% in after-hours trading

• EPS: $0.81 (missed expectations of $0.87)
• Revenue: $4.05B (missed expectations of $4.67B)

T-Mobile US Inc (TMUS) Q3 2024: Shares are up 2.75% in after-hours trading

• EPS: $2.61 (beat expectations of $2.42)
• Revenue: $20.16B (beat expectations of $20.01B)
• FY EBITDA Guidance: $31.6B to $31.8B (previously $31.5B to $31.6B)

This article was written by Greg Michalowski at www.forexlive.com.

• Beige Book cools the US dollar bid
• BOJ Governor Ueda: Underlying inflation has been rising slowly
• BOE’s Bailey: Disinflation has taken place faster than expected in the UK and elsewhere
• CIBC: It would take a major turn of events to stop another 50 bps Bank of Canda cut in Dec
• ECB’s Panetta: We have clearly seen an improvement in the inflation outlook
• Ranking of the districts and a look at the “number” qualifiers in Beige Book for October
• Beige Book shows economy flatening, employment moderated further
• Inflation, Interest Rates, and the US Dollar: The Trump Effect
• US treasury auctions off $13 billion of 20 year bonds at a high yield of 4.590%
• Apple falls on bearish iPhone sales commentary. Apple shares down -2.35%
• ECBs Escriva: Risk to inflation remains balanced
• Bitcoin turns lower after failing to break $70,000
• European equity close: Third consecutive day of declines this week
• ECBs Villeroy: Sees full optionality for December rate meeting
• Macklem press conference: We will take our next decision in December
• ECB’s Nagel: He is convinced ECB is more or less on track to meet 2% inflation target
• EIA weekly crude oil inventories +5474K vs +270K expected
• ECB Lagarde: She is satisfied with inflation progress
• ECBs Lane: High conviction that disinflation is on track
• US September existing home sales 3.84M vs 3.86M expected
• The full statement from the Bank of Canada interest rate decision
• Macklem statement: We anticipate cutting our policy rate further
• Bank of Canada rate decision: 50 basis point cut, as expected
• Kickstart the FX trading day for Oct 23 w/a technical look at the EURUSD, USDJPY & GBPUSD
• ForexLive European FX news wrap: USD/JPY ramps higher, BOC up next

The Bank of Canada (BOC) reduced its policy rate by 50 basis points to 3.75% and continues its policy of balance sheet normalization.

• The global economy is expected to expand at a rate of about 3% over the next two years.
  • Stronger growth in the U.S.
  • Subdued growth in China.
  • Modest recovery expected in the euro area.
• Inflation in advanced economies has decreased and is close to central bank targets.
• In Canada:
  • The economy grew around 2% in the first half of the year.
  • Projected to grow 1.75% in the second half.
  • Consumption has grown but is declining on a per-person basis.
  • The labor market remains soft with a 6.5% unemployment rate in September, especially impacting young people and newcomers.
  • Wage growth remains elevated relative to productivity, contributing to excess supply in the economy.
• GDP growth forecast:
  • 1.2% in 2024.
  • 2.1% in 2025.
  • 2.3% in 2026.
  • Growth driven by increased consumer spending, residential investment, and business investment.
• Inflation has declined to 1.6% in September, with easing shelter costs and lower gasoline prices.
• Core inflation is now below 2.5%.
• Inflation expectations have normalized, and the BOC expects inflation to remain close to the 2% target.

BOC Governor Tiff Macklem emphasized that core inflation is easing as expected and that there was a “clear consensus” on the decision to cut rates by 50 basis points. He noted that further rate cuts are likely if the economy evolves as expected, with a focus on inflation and growth data moving forward.

Macklem reassured Canadians that inflation is close to target and that they should not be concerned about rising living costs. He also mentioned that the BOC is focused on ensuring a smooth economic transition, or “sticking the landing”, as they navigate the post-inflationary environment. However, no immediate commitment to more aggressive rate cuts was made, with future decisions being data-dependent

September U.S. existing home sales fell to an annualized pace of 3.84 million, slightly below the expected 3.86 million.

• This marks the lowest level since October 2010.
• Sales were down 1.0% month-over-month, an improvement from the revised -2.0% last month.
• Sales were down 3.5% year-over-year, slightly better than last month’s -4.2%.
• Inventory levels rose to 1.39 million homes, a 4.3-month supply, up from 4.2 months last month and 3.4 months a year ago.
• Inventories increased 1.5% for the month.
• The median home price reached $404,500, a 3% increase year-over-year, marking the 15th consecutive month of price growth.
• The 30-year mortgage rate averaged 6.44% as of October 17, up from 6.32% a week earlier, but down from 7.63% a year ago.

NAR Chief Economist Lawrence Yun said about the report:

“Home sales have been essentially stuck at around a four-million-unit pace for the past 12 months, but factors usually associated with higher home sales are developing, There are more inventory choices for consumers, lower mortgage rates than a year ago, and continued job additions to the economy. Perhaps some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election.”

Later in the day, the Federal Reserve released its latest Beige Book, an anecdotal look at the US economy from the perspective of the Federal Reserve districts.

The Beige Book report helped to cool the US dollars move to the upside as it reinforced expectations of further rate cuts. Several Fed officials, including Chair Powell, referenced the Beige Book as a key reason for the 50 bps rate cut in September, citing anecdotal data as often better for capturing economic turning points than lagging indicators like employment.

The latest report painted a downbeat picture, with “little changed” economic activity across nearly all districts, contrasting with August’s report, which showed growth in three districts. Employment growth also moderated, with hiring now focused on replacement rather than growth. These comments strengthened market expectations of another 25 bps cut in November, with a high likelihood of another in December, causing a broad decline in the USDIn other central bank commentary, there was a gaggle of ECB officials speaking today. Most spoke positively about the inflation trends.

ECB’s Lane:

• High conviction that disinflation is on track.
• Some recent data raise questions about growth projections.
• A good recovery in the economy is still plausible.
• No dramatic weakening of the economy.

ECB’s Lagarde:

• She is satisfied with inflation progress.
• Emphasized the need for the ECB to be cautious.

ECB’s Nagel:

• Convinced that the ECB is on track to meet the 2% inflation target.

ECB’s Villeroy:

• Sees full optionality for the December rate meeting.
• Does not believe the ECB is behind the curve.

ECB’s Escriva:

• Believes that the risk to inflation remains balanced.

ECB’s Panetta:

• Inflation outlook has clearly improved.
• Acknowledged that the economy is weakening.
• The environment is conducive to further cuts.
• Suggests that the ECB might not stop at the neutral rate.

• ECB’s Holzmann:

  • Soft landing for Europe is guaranteed.
  • Recent data has not changed much.
  • Market pricing of cuts is likely too aggressive.
  • Some colleagues may push for a big December cut.
  • Current data doesn’t justify a 50 bps cut in December.

• ECB’s Centeno:

  • Downside risks to growth are accumulating.
  • 50 bps cut is on the table, but data will determine the size of the cut.
  • There are early signs of concern regarding the labor market.
  • Downside risks dominate growth and inflation outlooks.

• ECB’s Knot:

  • Confident that inflation will hit 2% in 2025.
  • Ready to ease policy if the base case holds.
  • A recovery in consumption is logical but will take longer.
  • No risk of a structural undershoot of the 2% inflation goal.
  • A large economic deterioration is needed for bigger cuts.
  • Expects the biggest slowdown in wages is still ahead.
  • Warned that trade fragmentation will hurt both the U.S. and Europe.

In the forex market, the US dollar moved higher against all the major currencies with the greenback’s gains versus the JPY the biggest mover:

• JPY +1.05%
• AUD, +0.76%
• NZD, +0.63%
• GBP, +0.42%
• CAD., +0.16%
• EUR, +0.12%
• CHF, +0.10%

Yields in the US continued there move to the upside:

• 2-year yield 4.082%, +4.5 basis points
• 5-year yield 4.054%, +5.0 basis points
• 10 year 4.239%, +3.4 basis points
• 30 year 4.514%, +2.0 basis points

The US treasury auctioned off $13 billion of 20 year notes at a high yield of 4.59%. The yield is currently at 4.592% up 3.3 basis points on that

US stocks had a rough day today but is trading off of heads low levels.

• Dow industrial average -409.94 points or -0.96% at 42514.95. At session lows, the index was down -631.72.
• S&P index fell -53.78 points or -0.92% at 5797.42. At session lows the index was down -88.79 points
• NASDAQ index -296.47 points or -1.60% at 18276.65. At session low as the index was down -426.52 points.. The index had its worst day since September 6

Crude oil futures are trading down -$0.72 or -1.0% at $71.02. Gold fell – $34.05 or -1.24% at $2714.75. No new record high today in gold. Bitcoin fell close to thousand dollars to $66,379.

This article was written by Greg Michalowski at www.forexlive.com.

Then-Goldman Sachs chief economist Jim O’Neill introduced the term BRIC in 2001. He was referring to the growth potential of Brazil, Russia, India and China and the need to reform global governance to include them.

O’Neill doesn’t think much of the grouping now. Speaking with Reuters:

• “The idea that the BRICS can be some genuine global economic club, it’s obviously a bit out there with the fairies”
• basically a symbolic annual gathering
• on BRICS developing some alternative to the USD …. O’Neill people had been talking about alternatives to the dollar since he started out in finance
• “I will take the BRICS group seriously when I see signs that the two countries that really matter – China and India – are actually really trying to agree on things, rather than effectively trying to confront each other all the time.”

Here is the Reuters link for more info if you are interested.

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

more to come

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

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

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

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

Several Fed officials — including Powell — cited the Beige Book as one of their reasons for cutting 50 basis points in September. There is a belief at the Fed that anecdotal data is often better at capturing turning points than hard numbers, particularly in lagging data like employment.

The September Beige Book was dour but it was starting to look like a one-off in light of stronger economic data but today’s report read even more downbeat. The report showed economic activity was “little changed in nearly all Districts” compared to August’s report which had three Districts showing growth and nine showing flat/declining activity. It also said employment growth moderated further, with hiring now “focused primarily on replacement rather than growth”

Those comments got the markets attention and helped to solidify the belief that another 25 bps cut is coming in November and a high chance of one in December. The turn in the dollar was across the board afterwards, with the cable chart shown here representative of the broader USD move.

This article was written by Adam Button at www.forexlive.com.

The Beige Book showed economic activity was “little changed in nearly all Districts” compared to August’s report which had three Districts showing growth and nine showing flat/declining activity.

• Employment growth moderated further, with hiring now “focused primarily on replacement rather than growth” compared to August’s steady levels
• Manufacturing weakness became more widespread, with “most Districts” now reporting declines
• Consumer spending shifted from “ticking down” to “mixed,” with consumers increasingly seeking less expensive alternatives
• Housing activity showed resilience despite affordability challenges, with inventory expanding and prices generally holding steady or rising slightly
• Banking sector stabilized somewhat, with “generally steady to up slightly” activity versus previous weakness

Inflation Trends:

• Price increases continued moderating, with most Districts reporting slight to modest increases
• Wage growth remained modest to moderate but showed further signs of cooling
• Multiple Districts noted profit margin compression as input costs rose faster than selling prices

If anecdotal reports are at the front end of economic forecasting –as many at the Fed believe — then the comments in the Beige Book should soon start trickling into economic data. The market is on a sugar high from the Fed cuts and the sense of a Fed put but the soft landing scenario isn’t assured.

This article was written by Adam Button at www.forexlive.com.

There is something of a flight-to-safety trade ongoing in US markets with the S&P 500 now down 1.2% and the Nasdaq off by 2%. Oil, gold and risk-sensitive currencies are also selling off.

You would expect that to lead to some bids in bonds but they aren’t materializing. US 2-year yields are at the highs of the day, up 4.5 bps to 4.08% while 10s are up 4 bps to 4.24% (though down from the high of 4.26%).

There is something of a chicken-and-egg argument here as it’s the bond market that has likely (finally) led to some selling in equities as Fed cuts are priced out.

Backing out, it seems as though there is a ‘sell everything’ mood descending. That makes sense as we’re less than two weeks away from the US election and it’s been a sparkling year in markets. There is also a fear of buying bonds in case there is a red or blue wave, something that’s largely expected to lead to larger deficits.

The market angst is also likely building around tech stocks with Tesla set to report today and most megacap tech stocks next week.

This article was written by Adam Button at www.forexlive.com.