Morgan Stanley Research previews the US CPI report due on Tuesday. 

We expect October core CPI to slow sharply to 0.19% m/m from 0.33% in September, below consensus. The moderation is concentrated in services, where we expect shelter, hotels, airfares, and education to normalize after unusually strong September readings. The health insurance reset should provide an additional drag. Core goods inflation also eases on softer car prices but remains positive amid AI-related price pressures," MS notes.

Headline CPI is also 0.19% m/m, with the NSA index at 337.020. The BLS will not publish y/y rates for this release because year-ago indexes for most categories are unavailable due to the lapse in data collection during the 2025 federal shutdown. A key question is whether September’s jump in shelter inflation was signal or noise. We think it was largely noise, amplified by unusual volatility in the Midwest, and expect housing inflation to return toward its underlying trend," MS adds.

EUR/USD has recovered from Friday's 1.1132 low and is retesting 1.1200. That puts a thick band of option strikes between 1.1200 and 1.1250 in focus.

Why the zone matters As an option expiry approaches (10 a.m. New York (1500 GMT) for G10 pairs), hedging flows typically increase. The relationship between spot and strike becomes more important to option profit and loss. If an option is likely to be exercised, the opposing party may need to buy or sell more of the underlying currency to meet its obligation. When strikes are near spot, these flows can often pull spot towards them and help contain price action until expiry. The more strikes in one area, the stronger this effect can be.

Today About €1.7 billion expires at 1.1190, just below the retest level. It is one of Monday's largest strikes and with spot nearby, hedging flows might keep the price anchored in the immediate area until the 10 a.m. New York cut.

The bigger concentration starts tomorrow Excluding Monday, about €19.8 billion of strikes fall in the 1.1200-50 zone from Tuesday to Friday. That compares with about €14.0 billion across 1.1100-1.1190 and about €9.9 billion across 1.1260-1.1340. The 1.1200-50 zone has the largest expiries on three of the four days, and the densest strikes per level over the week.

The weight within that 1.1200-50 zone builds through the week:

• Tuesday: about €4.2 billion.

• Wednesday: the heaviest day, at about €7.0 billion.

• Thursday: about €5.7 billion.

• Friday: about €2.9 billion.

Over the week, 1.1250 is the largest single strike in the zone at about €5.4 billion, followed by 1.1210 at about €3.5 billion.

What it means for the recovery Rallies into the 1.1200-50 zone may stall and dips can find support, which makes it harder for EUR/USD to build momentum through the area before the expiries roll off.

Related comments - FX options shrug off US CPI risk

Banks split on dollar: peak or pause?
EUR/USD FX option strikes expiring Nov 9-13

(Richard Pace is a Reuters market analyst. The views expressed are his own)

(Adds second chart)

• Gold is maintaining a firm tone, a sign that bearish risks are easing

• Price action reflects this, with only a fleeting break below support at $3944 (prior YTD low) last week

• Friday's hot US payrolls report also had a limited impact on gold

• Last week's high at $4146 is the immediate topside objective

• A clean break through $4146 can open the door for a move towards $4400

• Support comes in at $4030 (US payrolls spike low), then $3950-70
Gold performance


Gold chart 10 min

Justin McQueen is a Reuters market analyst. (The views expressed are his own) ((Email: ))

• EUR/GBP is in consolidation mode after hitting deeply oversold levels

• Spot continues to hover around 0.8333, or 1.2000 in GBP/EUR

• The cross failed to extend lower after the hawkish BoE hike, given weakness in global equities

• That said, EUR/GBP's sensitivity to equities has diminished in recent months

• The 60-day rolling beta between EUR/GBP and SPX is effectively flat

• This suggests domestic factors (French risks) are a bigger driver for the cross than external ones

• If that continues, given the risks to EUR, rebounds in the cross could be somewhat limited

• Overall, more sideways action looks the path of least resistance for EUR/GBP
EURGBP vs SPX beta

Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

• Revealed, Japan's July yen-buying intervention set a fresh daily record

• Market still wary of intervention in USD/JPY above 159.00

• USD/JPY has slipped from 158.52 to hit 157.89, on Monday, according to EBS data

• Daily cloud, that now spans the 157.17-158.42 region, continues to limit USD/JPY's downside

• Relationship between USD/JPY and EUR/JPY breaking down, 30--day correlation drops below +0.5

Daily Chart

(Martin Miller is a Reuters market analyst. The views expressed are his own)

• Cable hits 1.3392 after extending north from 1.3350 (Asian session low)

• Ascent influenced by lower oil prices (UK is a net energy importer)

• 1.3343 was Friday's one-week low, after dollar rose on robust US jobs data

• 1.34 (former support point) is now a resistance level (1.3397 was Nov 3 low)

• There is a large 1.3400 option expiry for the New York cut

• CFTC data: net GBP short shrank 25% to 59,821 contracts in week to Nov 3

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• Euro shorts grew to $22 billion equivalent in week to Nov 6

• Largest short since Dec 2015 when shorts were $23.5bln

• EUR/USD rallied from 1.0523 Dec 2015 to 1.1616 in May 2016

• EUR/USD fell 1.1710 in Aug 2026 to 1.1105 in Oct 2026

• Pair trading 1.1132-1.1273 in November

•
EURUSD and betting

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• FX option strikes expire at 10am New York/15:00 GMT on Monday November 9

• EUR/USD: 1.1100 (1.4BLN), 1.1120-25 (1.4BLN), 1.1140-50 (1.9BLN), 1.1170-80 (2BLN), 1.1190 (1.7BLN)

• USD/CHF: 0.8100 (300M), 0.8300 (300M). EUR/CHF: 0.9150 (220M)

• GBP/USD: 1.3400 (751M). NZD/USD: 0.5600-10 (577M).

AUD/NZD: 1.2450-55 (876M)

• USD/CAD: 1.3960 (495M), 1.3990 (405M), 1.4025-30 (368M), 1.4240 (362M)

• USD/JPY: 157.00 (1.1BLN), 157.50-65 (640M), 158.00 (280M), 158.45-50 (483M), 158.75 (430M)

• EUR/JPY: 176.75 (400M)

• Friday's FX options wrap - AI rout spills into FX - AUD leads (Richard Pace is a Reuters market analyst. The views expressed are his own)

• Shares of Rox Resources gain as much as 7.7% to A$0.593, their highest level since October 16

• Gold developer says infill drilling returned high-grade results at its Youanmi Gold Mine in Western Australia, indicating potential for additional ounces of gold intersections

• YTD, stock up 17.2%

(Reporting by Swetha Lakshmi in Bengaluru)

• Australian gold stocks rise as much as 4.2% to their highest level since October 12

• S&P/ASX 200 up 0.2%

• Bullion prices climb over 1% as softer oil prices ease inflation concerns [GOL/]

• Shares of gold miners Northern Star Resources , St Barbara both up 1.4%

• YTD, including session moves, sub-index has risen 0.2% vs .AXJO up 3.6%

(Reporting by Roshan Thomas in Bengaluru)

• AUD/USD firms 0.6% Mon in quiet holiday impacted trading

• CN extends suspension of some tariffs on U.S. imports by 2-months

• Fed officials Williams, Musalem, and Daly all flag incoming FFR hikes

• Futures pricing now implies 81% probability of Fed rate hike on Dec 9

• AUD pushing upper hourly Bollinger band, upside momentum likely to slow

• Range Asia 0.68561-0.69029 support 0.6835 0.6662, resistance 0.7140 0.7282
AUD Hourly Bollinger Study & DXY Daily 55/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD +0.4% in Asia, activity subdued with SG closed for holiday

• RBA's Hunter says AI yet to deliver productivity boost or cause job losses

• AUD targeting 0.6835 level after nullifying 0.6865 support zone

• Downside separation from 0.6970 52-WMA suggests downtrend now establishing

• Fed officials Williams, Musalem, and Daly all flag incoming FFR hikes

• Futures pricing now implies 78.2% probability of Fed rate hike on Dec 9

• Range Asia 0.68561-80 support 0.6835 0.6662, resistance 0.7140 0.7282
AUD Daily 21/55/100-DMA


AUD Weekly 52-WMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Shares of Australia's Citigold Corporation rise as much as 14.2% to A$0.016, marking their biggest intraday pct gain since August 28

• Gold explorer enters joint venture (JV) agreement with Native Mineral Resources over 40 key tenements at the Charters Towers gold project in Queensland

• Company says JV tenements host the majority of its reported mineral resources

• Adds NMR will have the exclusive right to undertake exploration and drilling across the JV area

• Company will receive a one-off A$5 million ($3.43 million) production payment from NMR once 8,000 ounces of gold have been produced from the tenements, in addition to share of surplus

• Stock largely flat YTD, including session's moves

($1 = 1.4571 Australian dollars)

(Reporting by Subhalakshmi Dey in Bengaluru)

• NZD/USD +0.5% Mon, NZ election too close to call as vote count continues

• Government reduced majority likely, minor parties to gain more leverage

• NZD pushing upper hourly Bollinger band, further topside extension difficult

• Break below Oct 14 0.5566 low opens door for move toward 0.5485 support

• U.S. Oct non-farm payrolls +165k (poll +65k), DXY closed +0.8% Fri

• Fed officials Williams, Musalem, and Daly all flag incoming FFR hikes

• Futures pricing now implies 78.2% probability of Fed rate hike on Dec 9

• Range NZ 0.55605-80, support 0.5485, resistance 0.5710 0.5995 0.6012
DXY Daily 55/100/200-DMA


NZD Daily 21/55/100-DMA


NZD Hourly Bollinger Study

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD +0.3% early Mon, but down 2.3% from last week's 0.70345 high

• Downside separation from 0.6970 52-WMA suggests downtrend now establishing

• U.S. Oct non-farm payrolls +165k (poll +65k), DXY closed +0.8% Fri

• Fed officials Williams, Musalem, and Daly all flag incoming FFR hikes

• Futures pricing now implies 78.2% probability of Fed rate hike on Dec 9

• AUD now targeting 0.6835 level after nullifying 0.6865 support zone

• RBA Assistant Governor Sarah Hunter speaking in Sydney Mon

• Range Asia 0.68705-78 support 0.6835 0.6662, resistance 0.7140 0.7282
DXY Daily 55/100/200-DMA


AUD Weekly 52-WMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• IMM net spec G10 long -$1.7bn to +$36.9bn in Oct 28-Nov 3 period; USD index -0.5% in period

• Today's data likely mooted given USD bid post-election and ongoing AI/tech volatility

• $IDX had moved lower after Dem takeover of congress, risk unwind lifting USD on haven bid

• Today's above-forecast US payrolls tempered recent more-dovish Fed outlook also USD positive

• EUR$ +0.56% in period, specs -13.9k contracts now -157.8k;

hawkish Fed post-NFP weighs

• $JPY +0.47%, specs +730 contracts now +102.3k; USD bid amid parallel Fed-BoJ rate view

• GBP$ +0.84%, specs +19.6k contracts now -59.8k; BoE hike bid faded after elex, risk-off tone

• $CAD -0.28%, specs +24.6k contracts now -41.8k; CAD bid fading amid diverging US-CA rates, job data

IMM Position Table:


Majors w/IMM Performance Chart:

(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

The dollar rallied broadly on Friday after October nonfarm payrolls beat forecasts and the unemployment rate fell unexpectedly.

Nonfarm payrolls rose 165k last month, cruising past the Reuters consensus forecast of 65k and easily surpassing the previous month's rise of 29k. The unemployment rate fell to 4.1%. Economists had expected it to hold at the previous month's rate of 4.2%

Treasury yields rose, led by the front end, and US-German two-year spreads widened. Lingering concerns over AI and tech stocks also supported the dollar. Gold traded lower, and USD/CNH rallied toward 6.6735, which helped sink EUR/USD.

EUR/USD opened in New York near 1.1175 after trading as high as 1.1234 overnight. It extended its drop to a six-session low of 1.1132 and was near 1.1140 late. Technicals lean bearish, with falling RSIs signaling downward momentum. The pair has also formed a monthly gravestone doji and also fell below its 10- and 21-day moving averages.

GBP/USD held at 1.3350 in the New York afternoon, near session lows. Thursday's hawkish Bank of England hike faded as the US-UK rate differential headed back toward something like convergence. LSEG's IRPR still shows a slight UK yield advantage through 2027.

Support in cable lies at Friday's 1.3343 low, then the rising 30-day moving average at 1.3310 and 1.3274, the October 28 low. Resistance is at 1.3370, the 100-DMA, then 1.3428 and 1.3501.

AUD/USD slid to an eight-month low of 0.6855, bounced to 0.6893, then neared 0.6860 again as dollar buying persisted. It opened near 0.6875 after trading at 0.6942 overnight. The pair broke the base of a pennant on the monthly chart, and falling RSIs are bearish. It also trades below its 10- and 21-DMAs and the 0.6990 area.

USD/JPY held a narrow range as the payrolls lift faded. US equities remain the short-term driver. Tech has rebounded, but lingering concerns cap the topside. Treasury yields and oil are well off recent highs, which favors the yen. Resistance sits at 158.90-159.00, with support at 157.27, then 156.50 and 156.00.

The S&P 500 was trading 0.5% higher in New York afternoon as technology stocks bounced back from their worst drubbing in more than a year.

WTI crude gained 0.50%.

Copper was down 0.14%.

Gold fell 0.60%.

Heading toward the close: EUR/USD -0.7%, USD/JPY +0.53%, GBP/USD -0.73%, AUD/USD -0.9%, DXY +0.75%, EUR/JPY -0.15%, GBP/JPY -0.22%, AUD/JPY -0.42%.(Burton Frierson)

• NY opened near 0.6875 after 0.6942 traded overnight, drop extended early

• USD, US yields rallied sharply after the upbeat Oct. jobs report

• USD/CNH steadily rallied while gold traded lower on the session

• AUD/USD fell to an 8-month low of 0.6855 then bounced, 0.6893 traded

• Sellers emerged again as USD buying persisted, AUD/USD neared 0.6860

• The pair traded down -0.98% in NY's afternoon which had techs lean bearish

• Break of pennant base on monthly chart, falling RSIs are bearish signals

• AUD/USD's hold below 10- & 21-DMAs & 0.6990 area add to bear sentiment
audusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

ANZ Research discusses its tactical GBP bias for teh coming week.

'"Tightening therefore remains in play. Following the decision, OIS priced around 14bp for December and 32bp cumulatively by February, with just over 50bp priced by April. Focus now shifts to Q3 GDP next week. With the BoE forecasting growth of 0.7% q/q, a resilient print would reinforce expectations for further tightening and support GBP, while a meaningful downside surprise would challenge the rate path and leave GBP more exposed after its recent rally. Historical performance around UK GDP releases suggests GBP/USD responds more strongly to upside than to downside surprises," ANZ notes.

"We retain a mild upside bias in GBP/USD, although the risk-reward is becoming less attractive. EUR/GBP is the clearer expression of stretched GBP strength. The cross has fallen to around 0.834, well below its key daily moving averages. The broader trend is lower, but with the BoE and ECB expected to tighten and substantial UK tightening priced in, we would not chase EUR/GBP downside from current levels," ANZ adds.

• USD/JPY held a narrow range as the lift from a hot US payrolls print proved short-lived

• The direction of US equities is the short-term key driver for the pair

• US tech names have rebounded, but concerns continue to linger, so the topside in USD/JPY remains capped

• UST Yields and oil are both significantly off recent highs, which leans in favour of JPY

• Technically, resistance at 158.90-159.00 continues to keep a cap

• Initial support is at 157.27 (Thursday low), then 156.50 and 156.00
USDJPY hourly chart


USDJPY vs oil stocks and yields

Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

MUFG Research sees a scope for the Fed to delays its next hike.

"Recent developments in financial markets could affect the performance of the USD by changing the outlook for Fed policy. The Fed decided to leave rates on hold last month after hiking for the first time in September in response to the energy price shock. The updated communication was surprisingly cautious about the need for further rate hikes, particularly given the recent strength of US growth and inflation. Fed Chair Kevin Warsh emphasised that higher rates are beginning to have a greater impact on the AI sector, making it more challenging for highly leveraged companies to secure financing. AI-related investments have sold off further since then, contributing to a tightening of US financial conditions," MUFG notes.

"Alongside the recent sharp drop in energy prices, this has encouraged the US rates market to pare back expectations for a December rate hike. A second hike in December is still judged to be more likely than not, but if financial conditions tighten further, expectations for another hike could be scaled back further. The Fed could then decide to delay its next hike, putting downward pressure on US yields and the USD heading into year-end," MUFG adds.

LONDON, Nov 6 - USD/JPY remains stuck in a well-defined 156-159 range. This is despite weakness in US equities and oil, and lower US yields, all of which should point to JPY upside. Though the yen has strengthened on the crosses, price action in USD/JPY itself has been tepid.

That said, USD/JPY downside has been an effective hedge for this AI-led sell-off. As the chart below shows, the 1-month correlation between USD/JPY and the tech-heavy Nasdaq has moved sharply into positive territory, supporting the view that the JPY is a better equity hedge than the USD, and it is a key reason the topside in USD/JPY has been truncated.

The same logic explains why US data has had little effect. Friday's robust US payrolls print proving as much with USD/JPY marginally impacted. Thus, the focus instead is on the path of US equities, particularly tech. Another lurch lower would likely see USD/JPY revisit 156, while a sizeable rebound would test the range highs at 159. A clean break there would open up 160.

However, given the softer US tech sentiment and considerably lower yields and oil from where we have been recently, these factors still lean in favour of the yen.
USDJPY vs Nasdaq correlation


USDJPY vs oil stocks and yields

Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

Credit Agricole CIB Research on USD/JPY outlook on GPIF allocations scenarios.

"Japan’s GPIF recorded its first QoQ loss in 18M in Q2 largely due to losses on its domestic and foreign bond holdings. The pension fund has not announced any changes to its asset allocations for Q4, which is not a surprise to the market. Newswire reports suggested GPIF’s management committee did not discuss portfolio allocation at its 28 September board meeting, despite holding a meeting in August for the first time in seven years. So, the GPIF has equal allocations across all four assets classes of 25% with variations around these shares of up to +/-5-6ppt. The current allocation to domestic bonds is 26.49% vs 25.59% in June," CACIB notes.

"We examined several scenarios of the GPIF’s allocations and what they would mean for USD/JPY. We concluded that even if the pension fund did not formally change its allocations, allowing the share of JGBs in its portfolio to reach the upper limit of 31% would be enough to drive USD/JPY down to 150," CACIB adds.

CIBC Research reacts to the  US and Canada October job reports

"The US labour market bounced back to life in October. October nonfarm payrolls jumped to 165K, higher than the consensus expectation of 70K. September was also revised higher to 60K from 29K previously. The unemployment rate declined to 4.1% in October from 4.2% in September.

This report suggests that the labour market remains near full employment in the US, which should free up the Fed to continue to focus on the inflation fight. We continue to believe the Fed will deliver a 25 bps hike in their December meeting," CIBC notes.

"While the Canadian Labour Force Survey is notoriously volatile, three monthly declines in a row is a trend that is hard to ignore. The -5K change in employment was below the consensus forecast for a +15K gain, with sector breakdown showing a large decline (-29K) in wholesale and retail trade. T

 While there's one more LFS report due for release before the Bank's December meeting, the recent trend in the labour market suggests that slack is opening up again in the economy and supports a hold at that time," CIBC adds.