• Prior 105.5; revised to 104.5

Alongside a softer revision to the month before, it’s a negative take on Swiss economic conditions as we look towards year-end. That’s reflective of the mood in Europe as a whole though. But it doesn’t change much of the SNB outlook at the moment.

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

• Prior +1.5%
• HICP +1.8% vs +1.8% y/y expected
• Prior +1.7%

The higher readings here reaffirms some bumps in the road in the disinflation process. Core annual inflation also ticked a little higher to 2.5%, up from 2.4% in September. We’ll see how this continues to play out in the months ahead and how much this will affect the ECB outlook as such. For now, one month’s worth of reading isn’t cause for panic.

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

Here’s a look at the changes for dollar pairs currently:

It is very much a dud with less than 10 pips change across all pairs at the moment. And the ranges for the day are also leaving a lot to be desired, so we might get some extension of that in the session ahead hopefully.

Despite the light changes though, there are some levels to be mindful of ahead of the key risk events on the day.

EUR/USD is holding just above 1.0800 but sits more within a range of 1.0780 to 1.0825 this week. The pair is keeping just above its 100 and 200-hour moving averages of 1.0810-15, so buyers may look to make a play on stronger euro area data.

Then, we have USD/JPY which opened with a gap higher on Monday and is holding that for the most part. The pair is still running into some resistance from the 61.8 Fib retracement level of the swing lower in July to August, seen at 153.40 currently.

As for cable, it is creeping up just above 1.3000 ahead of the UK budget later. But any downside strikes will have to contend with the 100-day moving average at 1.2974 currently.

Then, we have USD/CAD which is continuing its stunning October run to above 1.3900 now. The August high of 1.3945 will be one to watch as buyers continue their win streak, now seen at five days coming into today.

And then we have AUD/USD which is still drifting lower since the turn of the month, now falling to its lowest levels since early August. There’s not much support for the pair on the daily chart, with a run towards 0.6500 potentially on the cards if the dollar manages to maintain its momentum following the US jobs report on Friday.

So, it might be quiet now. But with plenty of key risk events on the cards in the next few days, we could see the technical levels highlighted get called into action. And that will add some intrigue to what has been a slow start to the week thus far.

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

The 1-week implied volatility for the pound is at its highest since March last year, indicating that traders are a little nervous ahead of the budget announcement later. Labour will be setting their first budget in 14 years, hoping to meet their election promises and avoiding the chaos that ensued from the Truss-Kwarteng mini-budget back in 2022.

For one, tax hikes are very much anticipated with what many are dubbing to be likely the biggest tax hikes in the UK in three decades. But it is the borrowing part that will be closely watched, with chancellor Rachel Reeves expected to announce some £40 billion worth of fiscal measures. For some context, that’s roughly 1.25% of the UK’s economic output.

Total government borrowing this year might end up being closer to £100 billion and that will beat the estimate set by the OBR of £87 billion. So, is there going to be worries about Reeves blowing apart the UK’s public finances?

The difference this time compared to the Truss-Kwarteng mini-budget fiasco back in 2022 is arguably that we’re in a different cycle in the economy and monetary policy.

Interest rates are coming down, so that offers some added room for comfort to Labour despite the increased borrowing. It’s now a question of how Reeves can sooth the public and markets – the gilts market in particular – and convince that this is a net positive for the UK economy.

The other thing to watch out for is Reeves looking to change up the UK’s self-imposed fiscal rules as she mentioned last week here. That will free up more room to borrow/spend but for now, those surveyed in the gilts market are believing she won’t shake things up too much and only dig into that “reserve” by a fraction to start with.

So, that’s one spot to watch in case for any drama in the budget announcement today.

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

• Prior +0.2%

French Q3 GDP comes in at a beat, with household consumption especially showing a marked improvement compared to the previosu quarter. Again, that owes much to the Olympics though so there’s that to keep in mind. Here is the breakdown of the components:

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

The Bank of Japan (BOJ) is expected to keep rates steady at the conclusion of its latest meeting on Thursday, amidst uncertainties arising from recent political changes within Japan and external developments, particularly in the United States and the trajectory of the world’s largest economy.

Since its previous meeting in September, the BOJ has signaled a more cautious stance on its outlook for rates. Significant updates due shortly after this meeting may substantially influence the bank’s next decision. Notably, the upcoming economic events in the US are anticipated to have a greater impact on the timing of the BOJ’s next rate hike than domestic data. Both US employment figures and the outcome of the presidential election are set to be released within a week of the BOJ’s rate call, and both could have considerable effects on global markets. Market pricing currently suggests a strong chance of a Trump victory, a key factor behind the recent appreciation of the Dollar. Another robust Non-Farm Payroll (NFP) report could bolster the Dollar further.

Domestically, recent election results and the appointment of a new Prime Minister may place additional political pressure on the BOJ. However, what remains clear is that inflation in Japan is gaining momentum, as is wage growth. As with most central banks, the BOJ is likely to rely on data updates when making its next rate call, with many market participants anticipating a hike sooner rather than later.

The Yen has depreciated considerably over the last few months, with USDJPY rising over 10% from its mid-September low of around 139.50. Traders are expecting increased volatility in the coming days and weeks as the BOJ announcement competes with US economic updates for market direction. A surprise rate hike could significantly strengthen the Yen, causing rapid corrections to the upside; however, a more likely scenario may be a hawkish tilt from the BOJ, which would still lend support to the currency. A dovish outlook, on the other hand, could open the door for further Yen depreciation—a scenario both the BOJ and the Ministry of Finance would likely aim to avoid.

On the longer-term daily chart, USDJPY has recently peaked just below the 154.00 level, which now serves as the initial resistance level for any potential upside movement in the coming sessions. The 200-day moving average at 151.49 should provide initial support on the downside, with the next significant level further down near 147.00 along the trendline. Traders will likely follow the prevailing trend, with a dovish BOJ supporting this trajectory. A break above the 154.00 resistance could pave the way for a move towards the historic highs last seen in July this year.

Resistance 2: 161.99 – 2024 High

Resistance 1: 153.96 – October High

Support 1: 151.49 – 200 Day Moving Average

Support 2: 146.60 – Trendline Support

The post Bank of Japan Trade Opportunity first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 1.17%, Shanghai Composite down 1.16%, Hang Seng down 2.01% ASX down 0.84%
• Commodities : Gold at $2791.35 (0.24%), Silver at $34.60 (0.34%), Brent Oil at $71.64 (0.26%), WTI Oil at $67.63 (0.29%)
• Rates : US 10-year yield at 4.251, UK 10-year yield at 4.317, Germany 10-year yield at 2.3340

News & Data:

• (USD) CB Consumer Confidence  108.7 vs 99.5 expected
• (USD) JOLTS Job Openings  7.44M vs 7.98M expected

Markets Update:

Asia-Pacific markets mostly declined on Wednesday, following a strong overnight session on Wall Street, where the Nasdaq Composite hit a record high due to gains in tech stocks.

In Australia, investors digested consumer price data showing a 2.8% year-on-year increase in headline inflation for the September quarter, the lowest level since early 2021. This was slightly below the 2.9% forecast by economists. Consequently, Australia’s S&P/ASX 200 index fell by 0.92%.

Meanwhile, China may authorize over 10 trillion yuan (about $1.4 trillion) in additional debt next week to stimulate its economy, as reported by Reuters. If Donald Trump wins the upcoming U.S. presidential election, the fiscal package could be further increased. Hong Kong’s Hang Seng Index dropped 1.86%, and China’s CSI 300 was down 1.11%.

Elsewhere in Asia, Japan’s Nikkei 225 rose by 1.10%, while the Topix advanced 0.88%, as the Bank of Japan commenced a two-day policy meeting, with analysts expecting the bank to maintain interest rates at 0.25%. South Korea’s Kospi declined 1.05%, and the small-cap Kosdaq was down 0.47%. In the U.S., the Nasdaq rose 0.78% to a new record high of 18,712.75, while the S&P 500 gained 0.16% to close at 5,832.92. However, the Dow Jones Industrial Average fell 154.52 points, or 0.36%, to finish at 42,233.05.

Upcoming Events: 

• 12:15 PM GMT – USD ADP Non-Farm Employment Change
• 12:30 PM GMT – USD Advance GDP q/q

The post Wednesday 30th October 2024: Asia-Pacific Markets Dip Amid Mixed Global Economic Signals first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 30 October 2024

What happened in the Asia session?

Inflationary pressures in Australia continued to dissipate further in September as the monthly CPI indicator eased from 2.7% in the previous month to 2.1% YoY. Not only was this figure the lowest reading since July 2021, but it also printed lower than the forecast of 2.3% which was primarily due to the ongoing impact of the Energy Bill Relief Fund rebate. September’s result brought inflation within the RBA’s target range of 2 to 3% for the second consecutive month causing the Aussie to reverse from this morning’s high of 0.6570 to tumble under 0.6540 by midday Asia – overhead pressures are likely to build further as the day progresses.

What does it mean for the Europe & US sessions?

GDP output in the Euro Area has been muted over the past four quarters and the ECB will be hoping that the recent rate cuts will spur the economy. Following a rise of 0.2% QoQ in the second quarter of 2024. The flash estimate points to a gain of 0.2% QoQ for the third quarter. Should the flash result miss market expectations, it could weigh on the Euro during the European trading hours.

SNB Governing Board Chairman Martin Schlegel will be speaking at a news conference in Bern. After being appointed as the new Chairman of the Governing Board by the Federal Council on the 26th of June, markets will be keeping a close ear on what he has to say at this conference. Traders should brace themselves for higher volatility for the franc during this event.

The Dollar Index (DXY)

Key news events today

ADP Employment Report (12:15 pm GMT)

GDP (12:30 pm GMT)

What can we expect from DXY today?

After highlighting a widespread employment rebound in September with 143K jobs being added to private payrolls, the estimate of just 110K for August points to a return to slower job creation as observed in July and August. This forecast sits well below the 12-month average of 144K and should job creation slow more than originally anticipated, it could spark a huge sell-off in the dollar.

After which, the advance GDP estimate for the third quarter of 2024 shows the U.S. economy expanding at an annual rate of 3.0% – matching the final result for the second quarter. Economic activity has been chugging along steadily since the second half of 2022 and a stronger reading could boost the dollar. Whatever the outcomes from the above data announcements, the dollar is certain to face much higher volatility during the U.S. session.

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

ADP Employment Report (12:15 pm GMT)

GDP (12300 pm GMT)

What can we expect from Gold today?

After highlighting a widespread employment rebound in September with 143K jobs being added to private payrolls, the estimate of just 110K for August points to a return to slower job creation as observed in July and August. This forecast sits well below the 12-month average of 144K and should job creation slow more than originally anticipated, it could spark a huge sell-off in the dollar.

After which, the advance GDP estimate for the third quarter of 2024 shows the U.S. economy expanding at an annual rate of 3.0% – matching the final result for the second quarter. Economic activity has been chugging along steadily since the second half of 2022 and a stronger reading could boost the dollar. Whatever the outcomes from the above data announcements, gold is certain to face much higher volatility during the U.S. session.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

CPI (12:30 am GMT)

What can we expect from AUD today?

Inflationary pressures in Australia continued to dissipate further in September as the monthly CPI indicator eased from 2.7% in the previous month to 2.1% YoY. Not only was this figure the lowest reading since July 2021, but it also printed lower than the forecast of 2.3% which was primarily due to the ongoing impact of the Energy Bill Relief Fund rebate. September’s result brought inflation within the RBA’s target range of 2 to 3% for the second consecutive month causing the Aussie to reverse from this morning’s high of 0.6570 to tumble under 0.6540 by midday Asia – overhead pressures are likely to build further as the day progresses.

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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi remains in a strong downtrend as it hit a low of 0.5953 on Tuesday. This currency pair retraced higher towards 0.5980 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.5960

Resistance: 0.5990

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 Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The yen continues to remain under pressure as USD/JPY hit a high of 153.86 on Tuesday. With the Bank of Japan’s (BoJ) monetary policy meeting taking place on Thursday, 31st of October, the yen could depreciate even further should the BoJ keep rates on hold for the third consecutive meeting. This currency pair was hovering above 153 as Asian markets came online – these are the support and resistance levels for today.

Support: 151.70

Resistance: 154.00

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

GDP (10:00 am GMT)

What can we expect from EUR today?

GDP output in the Euro Area has been muted over the past four quarters and the ECB will be hoping that the recent rate cuts will spur the economy. Following a rise of 0.2% QoQ in the second quarter of 2024. The flash estimate points to a gain of 0.2% QoQ for the third quarter. Should the flash result miss market expectations, it could weigh on the Euro during the European trading hours.

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

SNB Chairman Schlegel Speaks (9:00 am GMT)

What can we expect from CHF today?

SNB Governing Board Chairman Martin Schlegel will be speaking at a news conference in Bern. After being appointed as the new Chairman of the Governing Board by the Federal Council on the 26th of June, markets will be keeping a close ear on what he has to say at this conference. Traders should brace themselves for higher volatility for the franc during this event.

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

Autumn Forecast Statement (Tentative)

What can we expect from GBP today?

The Autumn Forecast Statement is a document that is released annually which provides an updated economic outlook and previews the government’s budget for the coming year, including expected spending and income levels, borrowing levels, and financial objectives. It also contains comments on the latest independent economic forecasts prepared by the Office for Budget Responsibility (OBR). Any unexpected changes to the budget proposal could have a significant impact on the Pound.

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 (8:15 pm GMT)

What can we expect from CAD today?

Bank of Canada (BoC) Governor Tiff Macklem will once again 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

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

After last week’s higher-than-anticipated inventory build, the API stockpiles beat market expectations with a drawdown of 0.6M barrels of crude versus a 2.3M-increase on Tuesday. Prices for crude oil have lost over 6% this week but they have now steadied on Wednesday due to shrinking inventories. WTI oil stabilized around $67.50 per this morning and could receive another boost should the EIA inventories also register a large drawdown later today.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Europe Fundamental Forecast | 30 October 2024 first appeared on IC Markets | Official Blog.

It has been the case for a while now, especially with the manufacturing sector in such a dire state. Here’s the estimates for the Q3 GDP releases in key euro area countries this week:

• Germany -0.3% q/q (previously -0.1%)
• France +0.3% q/q (previously +0.3%)
• Spain +0.6% q/q (previously +0.8%)
• Italy +0.7% q/q (previously +0.9%; revised to +0.6%)

The periphery nations continue to outperform but recent data has showed that they are also starting to see some slowdown. But the standout is of course the fact that a contraction reading will confirm a recession in Germany (again). This will mark the fourth time in the last five quarters that the economy has shrunk.

The latest PMI data for Germany here might be an improvement to September but it still doesn’t take away from the poor performance overall. And that plight there is what is pressuring the ECB to have to move quicker, so as to manage the fall that the economy is facing. Liability much?

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

In the euro area, October CPI and Q3 GDP figures are going to dominate the agenda. And in the UK, there’s the budget announcement to go through. All that before we get into the stretch of jobs-related data in the US ahead of the non-farm payrolls report on Friday. And then, there’s the BOJ policy decision tomorrow and month-end rebalancing flows to consider as well. Oh, what fun.

It’s one of those times in markets when things might be a little tricky to decipher or make sense of. That with so many things happening as outlined above. Taking a step back and keeping a calm head is always a good tip, but easier said than done most of the time. However, it’s still something worth reminding.

Looking at how markets are playing out ahead of the hustle and bustle later, major currencies are keeping more muted. The antipodeans are down slightly, in part dragged by a softer yuan as well. Chinese investors don’t look too optimistic after the stimulus news yesterday. And Adam outlined why that seems to be the case here. The CSI 300 index is down 1% today at the lunch break now. PPT to the rescue?

Meanwhile, the bond market continues to stay in focus with 10-year Treasury yields briefly crossing over 4.30% overnight. It is back down to around 4.25% today but the threat of higher yields is still something to be wary of. If there is ever a spot, month-end flows will make reading the moves here fairly tougher.

Then, there is gold and Bitcoin which are rampaging higher as well. 🚀🌙

With plenty of moving parts in play, this will certainly keep market players busy in the days ahead. If not, at least we’ll get quite a number of headlines to move things along.

0730 GMT – France Q3 preliminary GDP figures0800 GMT – Spain Q3 preliminary GDP figures0800 GMT – Spain October preliminary CPI figures0800 GMT – Switzerland October KOF leading indicator index0855 GMT – Germany October unemployment change, rate0900 GMT – Germany Q3 preliminary GDP figures0900 GMT – Italy Q3 preliminary GDP figures0900 GMT – Switzerland October UBS investor sentiment1000 GMT – Eurozone Q3 preliminary GDP figures1000 GMT – Eurozone October final consumer confidence1000 GMT – Eurozone October economic, industrial, services confidence1100 GMT – US MBA mortgage applications w.e. 25 October1300 GMT – Germany October preliminary CPI figures

The UK budget announcement is expected at around 1230 GMT but there might be leaks to the details in the run up. So, keep an eye out for that.

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.

Looking at the details:

• Overall livelihood: 34.2 (previously 34.4)
• Income growth: 39.4 (previously 40.1)
• Employment: 41.6 (previously 42.2)
• Willingness to buy durable goods: 29.7 (previously 31.0)

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

DXY (US Dollar Index):

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: 104.12
Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 103.83
Supporting reasons: Identified as an overlap support that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 104.56
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Neutral
Overall momentum of the chart: Bearish

Price could potentially fluctuate between the 1st resistance and 1st support level.

1st support: 1.0770
Supporting reasons: Identified as multi-swing low support, suggesting a strong support level if the price moves downward.

1st resistance: 1.0840
Supporting reasons: Identified as an overlap resistance, indicating a level where the price may encounter selling pressure if it rises.

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 indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 163.78
Supporting reasons: Identified as an overlap support, indicating a potential level where price could again find support.

1st resistance: 165.36
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Neutral
Overall momentum of the chart: Bearish

Price could potentially fluctuate between the 1st resistance and 1st support level.

1st support: 0.8295
Supporting reasons: Identified as a swing low support, suggesting a strong support level if the price moves downward.

1st resistance: 0.8347
Supporting reasons: Identified as multi-swing high resistance, indicating a level where the price may encounter selling pressure if it rises.

GBP/USD:

Potential Direction: Bullish 

Overall momentum of the chart: Bearish

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

Pivot: 1.2999
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 1.2959

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

1st resistance: 1.3034
Supporting reasons: Identified as a pullback resistance, 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: 198.93
Supporting reasons: Identified as overlap support, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 198.28

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 200.33

Supporting reasons: Identified as an overlap resistance that aligns with the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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: Bearish
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 that aligns with the 50% Fibonacci retracement, 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 61.8% Fibonacci retracement, indicating a potential level where price could find support.

1st resistance: 153.79
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 has made a bullish bounce off the pivot and could potentially rise towards the 1st resistance.

Pivot: 1.3883
Supporting reasons: Identified as an overlap support that aligns with a 23.6% Fibonacci retracement, 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 close to a 50% 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 has made a bearish reversal off the pivot and could potentially fall towards the 1st support.

Pivot: 0.6563
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

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 that aligns close to a 38.2% Fibonacci retracement, 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: 0.5957

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

1st support: 0.5913
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 that aligns close to a 23.6% Fibonacci retracement, 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: Bullish
Overall momentum of the chart: Neutral

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

Pivot: 19,401.50
Supporting reasons: Identified as a pullback support that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

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: 19,681.50
Supporting reasons: Identified as a swing-high resistance that aligns with the all-time high, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price has made a bearish reversal off the pivot and could potentially fall towards the 1st support.

Pivot: 5,858.50

Supporting reasons: Identified as a pullback resistance that aligns with a 78.6% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 5,802.90
Supporting reasons: Identified as a pullback support that aligns with a 61.8% Fibonacci retracement level, indicating a potential level where price could find support once again.

1st resistance: 5,882.00
Supporting reasons: Identified as a swing-high resistance at the all-time high, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

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: 71,607.46
Supporting reasons: Identified as a pullback support that aligns with a 23.6% Fibonacci retracement, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 69,643.65
Supporting reasons: Identified as a pullback support that aligns with a with a 50% 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 has made a bearish reversal off the pivot and could potentially fall towards the 1st support.

Pivot: 2,644.49
Supporting reasons: Identified as a pullback resistance, indicating a potential level where selling pressures could intensify.

1st support: 2,540.64
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: 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: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 67.68
Supporting reasons: Identified as a swing-low support, indicating a potential area where buying interests could pick up to stage a minor rebound.

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: Bullish 

Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and drop toward the 1st resistance.

Pivot: 2752.16
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 2737.78

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

1st resistance: 2791.20
Supporting reasons: Aligns with the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

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