Articles
Euro falls for third day in a break below 0.9900
267183 October 31, 2022 22:29 Forexlive Latest News Market News
The euro touched a six-week high on Thursday but it’s now fallen in three straight days.
That’s generally followed the broad trend in the US dollar. It sank last week on falling Treasury yields and bets that the Fed wouldn’t hike as much. It’s rebounded today after a Timiraos article saying the Fed could hike more and hold rates higher for longer.
Last week’s ECB sent mixed message but the general impression was that Lagarde wasn’t eager to hike. That could change though after today’s eurozone inflation data ran at 10.7% compared to 10.2% expected.
The main event is this week’s Fed decision. A 75 bps hike is 98.9% priced in but the market is split on whether December will be 50 bps or 75. Messages along those lines will dictate the next steps for the dollar and EUR/USD.
The main feature on the chart continues to be the break of the year-long downtrend line but we’re now going back and retesting it. If it breaks, it could signal the start of a longer-term period of consolidation around the lows.
Germany’s Scholz: We will implement the main framework on gas prices this week
267182 October 31, 2022 22:17 Forexlive Latest News Market News
European TTF gas prices are down to 88 today in a 21 euro decline as weather forecasts stay mild. It’s a different story in the US with gas prices up 11% on forecast for cool weather in the second weak of November.
In any case, winter is coming the fight over LNG supplies will restart.
Germany’s Scholz said the EU will adopt the main framework for implementing gas prices proposals this week. There has been some compromise around this as Germany was initially against it.
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NZ Labour Market Preview: Forecasts from four major banks, back to work
267181 October 31, 2022 22:12 FXStreet Market News
New Zealand is set to report its employment figures for the third quarter on Tuesday, November 1 at 21:45 GMT and as we get closer to the release time, here are forecasts from economists and researchers at four major banks regarding the upcoming labour market data.
The unemployment rate is expected to fall a tick to 3.2%, driven by an expected 0.5% quarter-on-quarter gain in employment. Private wages including overtime are expected at 1.2% QoQ vs. 1.3% in Q2.
Westpac
“We expect a solid 0.6% rise in employment for the quarter and a small dip in the unemployment rate back to its record low of 3.2%. We also expect a 1% rise in the Labour Cost Index, lifting the annual growth rate to a 14-year high of 3.6%.”
ANZ
“We’ve pencilled in a 0.5% QoQ (0.3% YoY) increase in employment. That translates into unemployment easing 0.2ppts to 3.1%, assuming the participation rate lifts 0.1ppts to 70.9%. Data may not shift the dial for the November MPS (where a 75 bps hike is widely expected). But a stronger-than-expected set of data could firm up expectations for another 75 bps hike in February.”
NAB
“We think Wednesday’s Q3 labour market reports will show the unemployment rate pressing down to a record low 3.1%, lower than the 3.3% the RBNZ predicted in its August MPS. But then the RBNZ also expected a quarterly 1.2% lift in the private-sector LCI, which is north of the 1.0% we expect.”
Citibank
“NZ Q3 Labor Force and Wages: Citi employment change forecast; 0.8%, Previous; 0.0%; Citi unemployment rate forecast; 3.3%, Previous; 3.3%; Citi private sector wages forecast; 1.6%, Previous; 1.3%. Despite the return of jobs, we do not expect the unemployment rate to fall from 3.3%. Even so, with a tight labor market, we expect another strong increase in private-sector wage costs.”
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AUD/USD keeps the red below 0.6400 amid stronger USD, focus shifts to RBA on Tuesday
267180 October 31, 2022 21:56 FXStreet Market News
- AUD/USD turns lower for the third successive day amid strong follow-through USD buying.
- Elevated US bond yields and the risk-off mood offer support to the safe-haven greenback.
- The downside seems cushioned as traders now look to the RBA policy meeting on Tuesday.
The AUD/USD pair attracts fresh sellers following an early uptick to the 0.6425-0.6430 region and turns lower for the third successive day on Monday. The pair remains on the defensive through the early North American session and is currently placed near a four-day low, around the 0.6375-0.6370 region.
A combination of supporting factors assists the US dollar to capitalize on last week’s late rebound from over a one-month low, which, in turn, is seen exerting downward pressure on the AUD/USD pair. The markets have fully priced in another supersized 75 bps rate hike at the end of a two-day FOMC monetary policy meeting on Wednesday. The expectations remain supportive of elevated US Treasury bond yields, which, along with a softer risk tone, underpins the safe-haven greenback.
The disappointing release of the Chinese Manufacturing PMI further fuels worries about a deeper global economic downturn and takes its toll on the risk sentiment. Furthermore, investors remain concerned about the potential economic headwinds stemming from the resurgence of COVID-19 cases in China. This turns out to be another factor weighing on the growth-sensitive Australian dollar, though the downside remains cushioned ahead of this week’s key central bank event risks.
The Reserve Bank of Australia is scheduled to announce its policy decision during the Asian session on Tuesday. Last week’s stronger domestic consumer inflation figures all but confirmed another 50 bps rate hike by the RBA and hence, the focus will be on the accompanying policy statement. The focus, however, will remain on the outcome of the highly-anticipated FOMC meeting on Wednesday. This will play a key role in determining the next leg of a directional move for the AUD/USD pair.
Technical levels to watch
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United States Chicago Purchasing Managers’ Index below expectations (47) in October: Actual (45.2)
267179 October 31, 2022 21:49 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.
US equities stumble lower at the open as US dollar stays strong
267178 October 31, 2022 21:40 Forexlive Latest News Market News
US stocks are set for one of the best month’s in history but today’s trading so far is lower. The S&P 500 is down 0.7% and the Nasdaq down 1.0%.
Here’s how things were looking as of late on Friday for the Dow, in a historical context (via Bespoke).
The economic calendar is very light today but it picks up later with the RBA followed by the Fed Wednesday and the Bank of England Thursday.
In FX, the dollar is near the highs of the day with the euro testing 0.9900 to the downside and the pound pushing below 1.1500.
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GBP/USD drops to fresh daily low, around 1.1500 mark amid broad-based USD strength
267177 October 31, 2022 21:33 FXStreet Market News
- GBP/USD comes under some selling pressure on Monday amid sustained USD buying.
- Elevated US bond yields and the risk-off impulse lifts demand for the safe-haven buck.
- The downside seems limited ahead of the key central bank event risks later this week.
The GBP/USD pair struggles to find acceptance above the 1.1600 mark on Monday and retreats over 100 pips from the daily peak. Spot prices extend the steady intraday descent through the early North American session and drop to a fresh daily low, around the 1.1500 psychological mark in the last hour.
The US dollar builds on last week’s bounce from over a one-month low and gains traction for the third successive day, which, in turn, exerts downward pressure on the GBP/USD pair. In fact, the USD Index, which measures the greenback’s performance against a basket of currencies, climbs to a multi-day high and is drawing support from a combination of factors.
The Fed is universally expected to deliver another supersized 75 bps rate hike at the end of a two-day monetary policy meeting on Wednesday, which remains supportive of elevated US Treasury bond yields. This, along with the risk-off impulse – as depicted by a generally weaker tone around the equity markets, provides an additional boost to the safe-haven buck.
That said, growing speculations that the US central bank might soften its hawkish stance – amid signs of a slowdown in the US economy – could act as a headwind for the greenback. Investors might also refrain from placing aggressive bets ahead of this week’s key central bank event risks and important US macro data scheduled at the beginning of a new month.
The Fed will announce its policy decision on Wednesday, which should play a key role in influencing the near-term USD price dynamics. This will be followed by the Bank of England meeting on Thursday. Apart from this, the closely-watched US jobs report – popularly known as NFP on Friday, will help determine the next leg of a directional move for the GBP/USD pair.
Technical levels to watch
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USD/IDR now looks consolidative within 15,450-15,640 – UOB
267176 October 31, 2022 21:29 FXStreet Market News
Markets Strategist Quek Ser Leang at UOB Group’s Global Economics & Markets Research expects USD/IDR to keep the 15,450-15,640 range unchanged for the time being.
Key Quotes
“Our expectation for USD/IDR to break 15,750 last week did not materialize as it traded within a relatively narrow range between 15,510 and 15,621. We view the quiet price movement as part of a consolidation phase and we expect USD/IDR to trade between 15,450 and 15,640 this week”.
“Looking ahead, USD/IDR has to break clearly above 15,640 before a sustained rise is likely”.
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Gold Price Forecast: XAU/USD to gain traction on a dovish Fed surprise
267175 October 31, 2022 21:29 FXStreet Market News
Gold ended up closing the week in negative territory below $1,650. XAU/USD needs a dovish Fed to ditch bears, FXStreet’s Eren Sengezer reports.
Strong NFP print to help the dollar
“The Fed is widely expected to raise its policy rate by 75 bps to the range of 3.75%-4%. Markets are pricing in a 51.5% probability of the Fed hiking its policy rate by a total of 125 bps by end-2022. The market positioning demonstrates that the dollar has more room on the downside in case investors are convinced that the Fed will opt for a 50 bps hike in December. In that scenario, XAU/USD is likely to gather bullish momentum alongside falling US yields. On the other hand, risk traders are likely to be disappointed in case the US central bank shows no intentions of a policy pivot and seek refuge in the dollar. That would likely be a significant bearish development for gold and open the door for an extended decline.”
“The US Bureau of Labor Statistics will publish the October jobs report on Friday. Investors forecast Nonfarm Payrolls (NFP) to rise by 200K. The market reaction to the past few NFP releases had been straightforward with strong prints helping the dollar outperform its rivals and vice versa. A similar response could be witnessed ahead of the weekend.”
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Silver Price Analysis: XAG/USD sees vulnerable, sustained weakness below $19.00 awaited
267173 October 31, 2022 21:05 FXStreet Market News
- Silver shows some resilience below the $19.00 mark and reverses the early dip to a multi-day low.
- The technical set-up still favours bearish traders and supports prospects for further near-term fall.
- A sustained strength beyond the $20.00 psychological mark is needed to negate the negative bias.
Silver reverses an intraday dip to sub-$19.00 levels, or a multi-day low and climbs to the top end of its daily trading range heading into the North American session. The XAG/USD pair is currently hovering around the $19.15-$19.20 region, still down over 0.20% for the day.
From a technical perspective, any subsequent move-up is likely to face resistance near the $19.30-$19.40 confluence support breakpoint. The said area comprises the 38.2% Fibonacci retracement level of the sharp downfall from the monthly peak and the 100-hour SMA, which should now act as a pivotal point for intraday traders.
A sustained strength beyond might trigger a short-covering move and allow the XAG/USD to reclaim the $20.00 psychological mark. The positive momentum could get extended towards an intermediate hurdle near the $20.50 area, above which bulls could target the $21.00 mark en route to the monthly peak, around the $21.25 region.
On the flip side, the $18.95-$18.90 zone coincides with the 23.6% Fibo. level. A convincing break below will be seen as a fresh trigger for bearish traders and expose the $18.00 mark, with some intermediate support near the $18.30-$18.25 region. The XAG/USD could eventually drop further to challenge the YTD low, around the $17.55 area.
Silver 1-hour chart
Key levels to watch
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Brazil Nominal Budget Balance came in at -60.618B, above expectations (-71.481B) in August
267172 October 31, 2022 21:02 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.
Brazil Primary Budget Surplus below expectations (11.1B) in August: Actual (10.746B)
267171 October 31, 2022 21:02 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.