- Prior was -17.2
267201 October 31, 2022 23:40 FXStreet Market News
Gold price slides for the second consecutive day as the US Dollar advances, ahead of the Federal Reserve Open Market Committee (FOMC) meeting, which is widely expected to deliver the last jumbo-size rate hike of the US central bank, amidst growing speculation for a Fed pivot, while recession fears increased. At the time of writing, the XAU/USD is trading at $1637 a troy ounce, down by 0.39%.
Global equities remain under pressure. Inflation in the Eurozone reached a record high of 10.7% amidst an ongoing economic slowdown in the block, which weakened the EUR, and underpinned the USD. The greenback got bolstered by US Treasury yields rising, while the 3-month/10-year yield curve spread briefly inverted during the last week. According to BBH analysts, “the signal is impossible to ignore, and that is the US economy is moving closer to a recession within the next 12 months, give or take.”
Data-wise, the US economic docket featured the Chicago PMI, which decreased to 45.20, below estimates of 47, adding to the list of Federal Reserve regional indices, painting a recessionary scenario. Of late, the Dallas Fed Manufacturing Business Index dropped below 0 to -19.4, lower than estimates of -17.4.
Aside from this, the Institute for Supply Management (ISM) will be reported the Manufacturing PMI for October on November 1, with estimates at 50, below the previous month’s 50.9. Of note, particular attention would be to prices paid by companies and employees, which would signal if the US economy continues to expand or begins to feel the shock of higher interest rates. Last month’s readings were 68.7 and 53.0, respectively.
The US Dollar Index, a gauge of the buck’s value vs. a basket of peers, climbs 0.84% at 111.592, while the US 10-year benchmark note rate sits at 4.042%.
The US calendar will release the ISM Manufacturing PMI for October, JOLT’s opening, and the Federal Reserve’s monetary policy decision ahead of the week.
The yellow metal tumbled below last week’s low of $1638.40, exacerbating its fall to fresh two-week lows at around $1633.53. The Relative Strength Index (RSI) in the daily chart is headed downward, meaning that sellers remain in charge, though they will face solid support at around $1617, ahead of the YTD low at $1614.92. If buyers would like to shift gold bias to neutral, they need to reclaim the 50-day Exponential Moving Average (EMA) at $1682.69.
Full Article267199 October 31, 2022 23:40 FXStreet Market News
The USD/MXN is rising on Monday but it moved off highs and pulled back. The pair traded momentarily above 19.90 and then dropped below 19.85, and is it looking again at the key support around 19.80.
The critical support area around 19.80 has held fine so far and triggered a rebound, but it is still exposed and being challenged. A daily close below would reinforce the bearish bias, exposing the 19.50 key level (intermediate support at 19.70).
The 19.95 has become the immediate resistance, followed by 20.00, an area that also contains the 20 and 55-day Simple Moving Average. A break higher would expose the 20.15/20.20 key resistance. A break higher would suggest more gains ahead, targeting 20.45.
267198 October 31, 2022 23:26 FXStreet Market News
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267197 October 31, 2022 23:26 FXStreet Market News
After its late October swoon, the US Dollar Index is up for the third straight day as critical central bank week gets underway. Unless the Federal Reserve cements a pivot, the greenback is set to remain on a solid foot, economists at MUFG Bank report.
“If the Fed does slow the pace of hikes in December it does not necessarily mean as well that the total amount of tightening delivered in the current tightening cycle will be less although that will be the initial assumption. It could be that the Fed slows the pace of hikes but eventually keeps hiking for longer. The US rate market though is expecting that as the Fed slows the pace of hikes at the end of this year, it will then quickly bring an end to the hiking cycle in the 1H of next year leaving the terminal rate at around 4.75%.”
“After correcting lower over the past week/month, the Fed will have to send a clear signal that it plans to slow rate hikes and sound more cautious over the need for further tightening to trigger a further leg lower for the US dollar in the week ahead.”
Full Article267196 October 31, 2022 23:02 FXStreet Market News
Central bank pivots create interesting dynamics for FX, explaining the recent decline in USD/CAD. But risk appetite remains the dominant driver of the Canadian dollar, economists at HSBC report.
“For FX, central bank pivots are at the height of financial market fashion and raise interesting questions. On the one hand, individual shifts towards a less hawkish stance continue to be associated with local currency weakness. But on the other hand, the collective shift towards slower tightening appears to be boosting risk appetite, which conversely favours many of the currencies where central banks have pivoted.”
“In the end, risk appetite remains the dominant driver of the CAD. With the US Federal Reserve and the BoC still in the mood to tighten, the outlook for economic growth and risk appetite is set to be challenging for a while longer, probably weighing on the CAD.”
Full Article267195 October 31, 2022 22:56 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
267192 October 31, 2022 22:56 FXStreet Market News
Binance Coin price is on the move on Monday, oblivious to the upcoming Fed’s FOMC (Federal Open Market Committee) meeting on November 2. Market participants anticipate stricter measures as the Fed fights inflation. A 0.75% interest rate hike could mean pressure mounting on the crypto market as investors keep their hands-off riskier assets.
Binance exchange has announced the launch of its 31st project on the Binance Launchpool. Hashflow (HFT) is a DEX (decentralized exchange) that links traders with professional market watchers.
According to a blog post released by the world’s largest exchange by trading volume, users now have an opportunity to stake both BNB and BUSD in separate pools to farm HFT tokens for the next 30 days – starting from November 11, 2022, at 00:00 UTC.
Following Hashflow’s time on the Binance Launchpool, HFT will move to the innovation zone, where trading will open with three pairs, HFT/BTC, HFT/BUSD and HFT/USDT.
Binance Coin price exploded in the wake of the Hashflow news to trade 7.8% higher on the day. This sudden movement in BNB price reflects a spike in investor risk appetite as they prepare to farm HFT. Demand for BNB will go up as long as Hashflow appeals to investors over the next 30 days.
Looking at the Supply Distribution metric from Santiment, large volume investors, also known as whales in crypto jargon, are throwing their support behind BNB. It is this increase in demand that could be fueling BNB’s rally. Holders with between 10,000 and 100,000 BNB now number 188 after gradually growing from 181 on September 21.
Binance Coin Supply Distribution
Binance Coin price suddenly flipped bullish even though last week’s forecasts seemed highly bearish. The buyer congestion at $250 allowed bulls to regain control. With buying pressure behind BNB growing aggressively, its price had no option but to obliterate resistance at $300.
Binance Coin is trading at $332 after brushing shoulders with $335. Its technical outlook remains positive, looking at the DMI (Directional Movement Index). Buyers will be at the helm of the uptrend if the divergence between its -DI and the +DI keeps expanding.
BNB/USD daily chart
Traders scanning for more long positions must wait for a confirmed break above the seller congestion at $340. BNB’s uptrend will be secured if the 100-day SMA (simple Moving Average) (in blue) crosses above the 200-day SMA (in purple). BNB will probably hold above support at $330 while waiting for the second breakout phase to $380.
Full Article267191 October 31, 2022 22:51 FXStreet Market News
The euro has remained at weaker levels following last week’s European Central Bank (ECB) policy meeting. The release of stronger activity and inflation data from the eurozone are set to prevent a sharp euro sell-off as ECB tightening expectations have been challenged, economists at MUFG Bank report.
“The latest economic data from the eurozone did highlight that the ECB is still facing a difficult balance when setting policy with inflation continuing to surprise significantly to the upside. It will keep pressure on the ECB to keep delivering larger rate hikes as policy rates remain relatively low and well below inflation.”
“Activity in the eurozone economy appears to have held up better than expected in Q3. While a sharper slowdown is still likely over the winter period, the activity data for Q3 has provided some comfort.”
“The combination of stronger inflation and activity data should help to dampen speculation over an even bigger dovish pivot from the ECB anytime soon, and thereby dampen the risk of a sharper euro sell-off.”
Full Article267188 October 31, 2022 22:51 FXStreet Market News
The single currency remains mired in the negative territory and drags EUR/USD to fresh multi-session lows in the sub-0.9900 region at the beginning of the week.
EUR/USD accelerates its losses on Monday and breaches the key support at 0.9900 the figure, that is more than 2 cents down from last week’s monthly highs just below the 1.0100 barrier (October 27).
Indeed, the continuation of the strong recovery in the greenback keeps undermining the sentiment around the euro and favours extra decline in the pair, as investors get ready for the FOMC gathering on Wednesday, which will be the salient event of the week.
The daily drop in the pair comes in tandem with the small rebound in the German 10-year bund yields, which add to Friday’s bounce beyond 2.10% at the same time.
In the euro docket, advanced inflation figures in the euro area now see the CPI rising more than expected 10.7% in the year to October, while the Core CPI is seen gaining 5.0% from a year earlier.
Still in the Euroland, the economy is predicted to expand 0.2% QoQ in Q3 and 2.1% on a yearly basis, according to preliminary results. In the first turn, German Retail Sales contracted 0.9% in September vs. the same month of 2021.
EUR/USD extends a leg lower and breaks below the 0.9900 mark against the backdrop of persistent dollar strength on Monday.
In the meantime, price action around the European currency is expected to closely follow dollar dynamics, geopolitical concerns and the Fed-ECB divergence. The resurgence of speculation around a potential Fed’s pivot seems to have removed some strength from the latter, however.
Furthermore, the increasing speculation of a potential recession in the region – which looks propped up by dwindling sentiment gauges as well as an incipient slowdown in some fundamentals – adds to the fragile sentiment around the euro in the longer run.
Key events in the euro area this week: Germany Retail Sales, EMU Flash Q3 GDP Growth Rate, Inflation Rate (Monday) – Germany Balance of Trade, Unemployment Change, Unemployment Rate, Final Manufacturing PMI, EMU Final Manufacturing PMI (Wednesday) – EMU Unemployment Rate (Thursday) – EMU/Germany Final Services PMI, ECB Lagarde (Friday).
Eminent issues on the back boiler: Continuation of the ECB hiking cycle vs. increasing recession risks. Impact of the war in Ukraine and the persistent energy crunch on the region’s growth prospects and inflation outlook.
So far, the pair is retreating 0.66% at 0.9899 and the breakdown of 0.9888 (weekly low October 31) would target 0.9704 (weekly low October 21) en route to 0.9631 (monthly low October 13). On the upside, there is an initial hurdle at 1.0093 (monthly high October 27) followed by 1.0197 (monthly high September 12) and finally 1.0368 (monthly high August 10).
Full Article267187 October 31, 2022 22:49 FXStreet Market News
Senior Economist at UOB Group Alvin Liew reviews the recent flash US GDP figures for the third quarter.
“The advance estimate of US 3Q GDP surprised on the upside with a 2.6% q/q SAAR expansion (versus Bloomberg est +2.4%) the first positive q/q print for this year, from an unchanged 0.6% decline in 2Q. The rebound in 3Q GDP was attributed to resilient private consumption expenditure, a continued gain in net exports, a rebound in non-residential fixed investment (business spending) as well as federal government, state and local government spending, offsetting the continued decrease in private inventories and a deeper plunge in residential fixed investment.”
“But with the 2.6% bounce in 3Q growth, even as we factor in a sizeable 3.6% contraction in 4Q, our full year GDP growth forecast will now be higher at 1.6% (from previous forecast of 1.0%). And for 2023, we continue to expect the US economy to fall into a shallow recession due to the combination of elevated inflation, global growth slowdown with a European recession and importantly, the impact from the aggressive Fed rate hikes. We keep our projection for US GDP to contract by 0.5% in 2023. That said, the risk of a deeper recession will rise in tandem with a more protracted and sharper Fed tightening cycle.”
“US GDP Outlook – The latest GDP report does not change our Nov FOMC outlook for a 75bps rate hike. If anything, the resilient PCE component and rebound in business spending in 3Q vindicates the Fed to continue with “larger than usual” hikes in order to tame elevated inflation. The question is whether the more pessimistic outlook in 2023 will be enough to convince the Fed to slow its tightening pace after Nov.”
Full Article267186 October 31, 2022 22:49 FXStreet Market News
The headline General Business Activity Index of the Federal Reserve Bank of Dallas’ Texas Manufacturing Survey declined to -19.4 in October from -17.2 in September. This reading came in weaker than the market expectation of -15.
Further details of the survey revealed that the Manufacturing Output Index fell to 6 from 9.3, the Employment Index improved to 17.1 from 15 and the Company Outlook Index edged higher to -9.1 from -10.7.
The greenback preserves its strength following this report and the US Dollar Index was last seen rising 0.75% on the day at 111.50.
Full Article267184 October 31, 2022 22:33 Forexlive Latest News Market News
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