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EUR / USD
GBP / USD
USD / JPY
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EUR / GBP
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By Andrew M Spencer  —  Nov 04 - 07:10 PM
  • -0.05% after closing up 0.25% with the USD softer into the election

  • BOE expected to cut 25bp to 4.75% on Thursday by all 72 economists polled

  • Expecting the BOE to remain cautious on inflation outlook post-budget

  • LSEG BOEWATCH prices a Nov 25bp cut at 90.83%, next cut priced in Feb

  • Charts - neutral daily momentum studies, 21-day Bollinger bands slip

  • 5, 10 & 21-day moving averages ease - signals show a modest bearish bias

  • 1.2844 October low, then the 1.2665 August base are initial supports

  • Thursday's 1.2999 top and last week's 1.3043 high are first resistance

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 04 - 06:10 PM
  • Steady after closing up 0.38% amid broad-based US dollar weakness

  • Monday's early USD selloff was sustained by the tight US election flows

  • Today's RBA rate decision will be interesting, but markets expect few changes

  • The RBA to remain data-driven, and cautious on rate cuts, amid resilient inflation

  • Charts; 10 & 21-day moving averages fall, 21-day Bollinger bands ease

  • Mixed daily momentum studies - the October downtrend remains in place

  • Last week's 0.6537 low then 0.6477 0.786% of the Aug-Sep rise first support

  • 0.6590 10 DMA held on the close, then the 0.6652 21-DMA is first resistance

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 04 - 03:00 PM

Synopsis:

Morgan Stanley maintains a bullish stance on AUD/CAD, targeting 0.97 and beyond. The firm sees AUD benefiting from both global and local factors, supported by solid Australian growth and a likely divergence in central bank policies as the RBA holds rates steady, while the BoC moves toward earlier cuts.

Key Points:

  • Australian Growth Strength: Recent Australian labor data reflects solid economic momentum, contrasting with the increased slack in Canada’s labor market.
  • Diverging Central Bank Policies: Morgan Stanley expects the RBA to keep rates unchanged longer than markets currently expect, potentially until May 2025, while the BoC is likely to pursue more front-loaded rate cuts with a lower terminal rate.
  • Global and Local AUD Support: Both global risk appetite and resilient domestic economic indicators are expected to bolster AUD relative to CAD.

Conclusion:

Morgan Stanley maintains a long AUD/CAD position, citing supportive economic fundamentals and a divergence in central bank policies favoring AUD. With the RBA likely holding steady while the BoC moves to cut, AUD/CAD is set to rise, with a target of 0.97 or higher.

Source:
Morgan Stanley Research/Market Commentary
By Content Admin  —  Nov 04 - 01:55 PM

The U.S. dollar index was on pace for its biggest drop in two months on Monday as Treasury yields fell and investors trimmed positions in the Trump trade ahead of Tuesday’s U.S. presidential election.

The position pruning was triggered after a weekend polls showed U.S. Democratic presidential candidate Kamala Harris had surpassed Republican Donald Trump in a new poll in Iowa.

U.S.
data showed auto sales improved in October.
Focus later this week is on the FOMC policy decision.

The euro touched a two-week high after HCOB's final euro zone manufacturing PMI index for October increased to 46.0, another sign growth in the region may be stabilizing.

The strength of Germany's three-way ruling coalition will be tested Wednesday when the cabinet discusses an array of economic measures.

The pound lagged most of its major peers as traders awaited an expected Bank of England rate cut Thursday.

Oil prices climbed more than 2% on OPEC+'s decision to delay plans to increase output by a month.

Treasury yields were down 2 to 6 basis points as the curve flattened.
The 2s-10s curve was down about 4 basis points to +13.4bp.

The S&P 500 slipped 0.06% amid weakness in financial shares.

Gold prices were marginally higher ahead of Tuesday's U.S. election.

Copper rose 1.3% amid a broadly weaker dollar.

Heading toward the close: EUR/USD +0.49%, USD/JPY -0.58%, GBP/USD +0.24%, AUD/USD +0.43%, DXY -0.42%, EUR/JPY -0.08%, GBP/JPY -0.34%, AUD/JPY -0.09%.




For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Robert Fullem  —  Nov 04 - 01:50 PM
  • USD/JPY trims drop after testing key support at its 200-DMA of 151.57 amid lower Treasury yields

  • Session range remains 151.54 to 152.95 on EBS with volumes muted ahead of US elections on Tuesday

  • One-week implieds move above 18.0% to a three-month high ahead of this week's US election outcome and an FOMC policy decision

  • Key resistance is at the double-top of 153.87-88 from last week and the 154 psychological level

  • Supports below the 200-DMA include the Oct. 23 low of 151.04, Oct. 21 high of 150.88 and its 100-DMA at 150.37

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 04 - 01:30 PM

Synopsis:

Barclays expects the RBA to adopt a hawkish tone at its November meeting, reinforcing the message that rate cuts are unlikely in 2024. With the Australian economy operating above potential and core inflation still above target, the RBA is expected to signal a steady path for now, while providing updated economic forecasts.

Key Points:

  • Hawkish Stance Maintained: Barclays anticipates the RBA will convey that rate cuts are not expected until at least 2025.
  • Above-Potential Economy: The Australian economy remains above potential, justifying a cautious approach to easing.
  • Core Inflation Concerns: Core inflation remains outside the RBA’s target range, reinforcing the need for a hawkish tone.
  • Statement on Monetary Policy: The meeting will be accompanied by an updated Statement on Monetary Policy, offering revised economic forecasts.

Conclusion:

Barclays projects a steady policy stance from the RBA, with a focus on maintaining a hawkish message amid above-potential economic conditions and persistent inflation. The updated economic forecasts will likely reinforce expectations that rate cuts are off the table for the remainder of 2024.

Source:
Barclays Research/Market Commentary
By Paul Spirgel  —  Nov 04 - 11:40 AM
  • GBP$ relatively soft into Europe close, +0.24% at 1.2952; NY range 1.2993-51

  • Early rise as UST yield curve bull flattened; 10-year off early NY low yield

  • 1st hurdle for traders is Tuesday U.S. election; Iowa poll shifts to Harris

  • Despite Harris Iowa poll bump election remains on knife edge

  • Wednesday Fed, BoE rate announcement, both banks seen cutting rates by 25bp

  • GBP$ res 1.2999 Monday high, 1.3050 daily cloud base, 1.3094 falling 30-DMA

  • Supt 1.2930 Monday low, 1.2888 daily low Nov. 1, 1.2811 rising 200-DMA

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 04 - 10:45 AM

Synopsis:

Credit Agricole anticipates the RBA will hold rates at this week’s meeting, with Australian inflation and activity data aligning with forecasts, supporting a continued hawkish stance relative to other G10 central banks. Despite stable inflation and moderate retail activity, the RBA is expected to maintain a neutral outlook, with rate cuts not likely until early 2025.

Key Points:

  • Inflation in Line with Forecasts: Trimmed mean inflation is at 3.5% YoY, aligning with RBA projections and showing a decrease from 4.0% YoY, reducing pressure for policy shifts.
  • Moderate Consumption Growth: Retail sales adjusted for inflation rose 0.5% QoQ in Q3 but remain below the RBA’s 1.5% YoY forecast for H2 2024, reflecting restrained consumer spending.
  • Neutral Outlook Expected: The RBA is likely to maintain its neutral stance, indicating it is open to either hikes or cuts, though rate cuts are not expected until February 2025.
  • AUD Support: With the RBA lagging other G10 banks in easing cycles, AUD finds underlying support from this relatively hawkish positioning.

Conclusion:

Credit Agricole expects the RBA to stay on hold this week, maintaining a neutral yet hawkish stance as inflation trends align with forecasts. The bank’s cautious approach to rate adjustments contrasts with other G10 central banks, potentially offering continued support for the AUD in the near term.

Source:
Crédit Agricole Research/Market Commentary
By Content Admin  —  Nov 04 - 10:00 AM

EUR/USD hit a 14-session high and rallied above the 5-, 21- and 200-Day moving averages Monday and further gains may follow due to positioning, rate differentials and technical influences.

The latest CFTC report indicated net-short euro 1099741NNET positions are at their largest since March 2020.
The positions were built over the last two reporting periods but EUR/USD rallied over the second-half of the period which suggests many investors that are short are under water and may have to cover should EUR/USD's ascent continue.

The dollar's yield advantage over the euro has been eroding since Oct.
28.
Further erosion occurred on Monday, which put German-U.S.
2-year yield spreads US2DE2=RR at their tightest since Oct.
17.

Fed SRAM26 and ECB FEIZ5 terminal rate spreads also extended their narrowing trend to -153bps to trade the tightest since Oct.
21.

EUR/USD technicals highlight upside risks.

In addition to rallying above the slew of daily moving averages EUR/USD rallied back above the 23.6% Fibonacci retracement of the 1.1214-1.076125 drop.

Rising daily and monthly RSIs reinforce bullish signs as they indicate upward momentum is in place.

Meanwhile, investors also face U.S. election risk.
The latest polls indicate very tight races, which could indicate results may be contested and winners might not be known for some time.

Fed risk also looms.
A 25bps cuts is expected by investors so Fed Chair Jerome Powell's presser will be key.
A dovish tone could send the dollar much lower and EUR/USD higher.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 04 - 09:30 AM

Synopsis:

Bank of America expects a 25bps rate cut at the November FOMC meeting, with minimal changes in policy language and Chair Powell’s message. The Fed is likely to look past the October jobs data, and BofA anticipates limited market impact from this meeting as attention shifts to the upcoming US elections and December FOMC.

Key Points:

  • Rate Cut Expected: BofA forecasts a 25bps cut, with the FOMC statement seeing minimal adjustments outside of the updated policy rate.
  • Powell’s Message: Chair Powell is expected to downplay the October jobs report’s weakness, though he may acknowledge recent downward revisions to payrolls.
  • Election Overshadowing: The November meeting is likely to have a limited market impact, with the US election taking precedence for markets and potentially influencing the Fed’s future path.
  • FX and Market Strategy: BofA sees the Fed meeting as less influential for FX than the election, with December FOMC likely being more significant. They advise investors to add duration on UST dips and anticipate currency markets will focus more on the election’s outcomes.

Conclusion:

BofA anticipates a muted market response to the November FOMC, with broader focus on election outcomes and their implications for the Fed’s path. A December rate decision is expected to have greater significance for FX and funding markets, while the November cut may be seen as part of a gradual normalization strategy.

Source:
BofA Global Research
By eFXdata  —  Nov 04 - 08:39 AM

Synopsis:

Goldman Sachs outlines three main market elements in the event of a Democratic win, highlighting an initial, modest USD retracement as macro fundamentals continue to support the dollar. Market reactions are expected to stabilize quickly, shifting back to economic data and Fed outlooks over political drivers.

Key Points:

  1. Status Quo on Trade: With a Democratic win, market adjustments are expected to be swift, with trade policies largely maintaining the current stance, enabling a quick market reaction.
  2. Macro and Dollar Strength Alignment: The recent USD strength aligns with US macroeconomic resilience and tariff risks; a Democratic outcome might lead to partial retracement, likely taking EUR/USD to around 1.0950. This would also affect currencies sensitive to China’s trade outlook, like MXN and CNH, though modestly.
  3. Return to Macro Focus: After initial adjustments, markets are likely to shift back to macroeconomic fundamentals. Goldman expects the Fed’s upcoming decision to reinforce gradual normalization, keeping the USD relatively supported.

Conclusion:

Goldman Sachs anticipates a limited market impact from a Democratic win, with USD strength sustained by solid US macro data. Any retracement, especially in EUR/USD, MXN, and CNH, is expected to be moderate and short-lived, as markets pivot back to broader economic and Fed-driven factors.

Source:
Goldman Sachs Research/Market Commentary
By Justin Mcqueen  —  Nov 04 - 06:50 AM
  • Friday's Swiss CPI print (0.6%) should act as a constraint on CHF upside

  • Inflation is undershooting the SNB's Q4 CPI forecast of 1%

  • Meanwhile, officials have continued to flag concerns over CHF strength

  • With EZ data stabilising - Citi EZ Surprise Index at a 5-month high

  • EUR/CHF risks are leaning to the topside. Rate spreads also support

  • U.S. election is a risk, but downside is likely truncated by SNB

  • Resistance: 0.9508 (Sep high), 0.9565-80 (200DMA)

  • Support: 0.9300, 0.9200

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Nov 04 - 06:35 AM
  • Dollar softens as the U.S. election and Fed decision looms nL1N3MA06G

  • USD/JPY has dropped from 152.95 to 151.60, on Monday, EBS data shows

  • USD/JPY's setbacks have been limited by the key 200-DMA (151.57)nL1N3MB07H

  • If there is a sustained break under the 200-DMA, that would be negative

  • EUR/JPY and USD/JPY continue to move in tandem with each other

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Nov 04 - 04:50 AM
  • AUD/USD remains bearish as it trades under the daily cloud

  • The Ichimoku cloud currently spans the 0.6646-0.6812 region

  • Daily momentum remains negative, reinforcing the offered market structure

  • There is scope for bigger losses towards the 0.6489 Fibo

  • 0.6489 Fibo is a 76.4% retrace of the 0.6349-0.6943 rise

  • Intra-day recovery moves have broken the tenkan line, now at 0.6616

  • Those that are bullish need a daily close above the tenkan line

  • AUD/USD Trader TGM2347. Previous update nL1N3M80H2

Source:
Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Nov 04 - 04:10 AM
  • AUD/USD rose to 0.6618 in Asia as Iowa poll surprise weighed on USD

  • Poll has Harris leading Trump 47-44% in Iowa. 0.6618 = one-week high

  • 0.6554 was pre-weekend low vs 0.6591 high after USD fell on Oct NFP miss

  • There is a huge 0.6600 option expiry for the NY cut; A$2.2 bln strike

  • U.S. presidential election Tuesday; outcome uncertain nL1N3MA04V

  • Another RBA interest rate hold expected at 0330 GMT nL1N3MB00T

Source:
Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Nov 04 - 02:55 AM
  • Cable up to 1.2999 in Asia as USD fell on Iowa poll from Des Moines Register

  • Poll has Harris leading Trump 47-44%; Trump easily won Iowa in 2016 and 2020

  • 1.2918 was pre-weekend low vs 1.2980 high after USD fell on big Oct NFP miss

  • Halloween high was also 1.2999 - before drop to 1.2845 on higher gilt yields

  • 1.2845 = 11-week low. CFTC data showed net GBP long fell ahead of UK budget

  • 25 bps BoE, Fed rate cuts expected on Thursday. Badenoch is new Tory leader

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Nov 04 - 02:55 AM
  • EUR/USD slumped on Friday to find support near tenkan line, now at 1.0833

  • Spot has rebounded on Monday, which is quite a bullish sign

  • There is scope is for bigger gains to the 1.0935 Fibo

  • 1.0935 Fibo is 38.2% retrace of the 1.1214-1.0762 (1.1214-1.0762) EBS fall

  • We are looking to get long at 1.0850. Only under Oct's 1.0762 low will defer

  • EUR/USD Trader TGM2334. Previous nL1N3M80BC

Source:
Refinitiv IFR Research/Market Commentary
By Ewen Chew  —  Nov 04 - 01:55 AM
  • USD/JPY bounces just before 200 DMA 151.57, last 152.08

  • Hit an intraday low of 151.60 in Asian trading session

  • Volatility persists as Japan financial markets closed

  • Thin liquidity, pre-US election jitters shake the USD

  • Outlook for USD broadly hinges on US election outcome

  • Bollinger uptrend channel at 152.68, Ichimoku cloud at 148.72

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 03 - 10:20 PM
  • Trades +0.6%, as the USD fell 0.55% with the move occurring at the open

  • EUR consolidated after the early bounce, then gained into the European open

  • PMIs across Europe and investor confidence lead the Eurozone data risk

  • Charts - positive daily momentum studies, 21-day Bollinger bands contract

  • 5, 10 & 21-day moving averages coil, signals display a neutral setup

  • A close above 1.0869 21 DMA targets a test of 1.0934 0.382% Sep/Oct fall

  • 1.0783, 78.6% of the Jun/Sep rise and 1.0777 August low are a strong base

  • 1.0850 477 mln, and 1.0900 1.170 BLN are the large close Nov 4th strikes

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 03 - 10:15 PM
  • Trades 0.5% higher with the USD down 0.55% - hectic early on FX Matching

  • The USD was sold at the open and then extended into the European open

  • USD selling may be trimming Trump election bets - polls too close to call

  • There is no UK data today or BoE events, so risk and the USD lead GBP

  • Charts - neutral daily momentum studies, 21-day Bollinger bands slip

  • 5, 10 & 21-day moving averages fall - signals show a bearish trending bias

  • Thursday's 1.2844 low, then the 1.2665 Aug base are initial supports

  • The 1.2999 top on Thursday and last week's 1.3043 high are first resistance

  • 1.2945/50 519mln and 1.2970/80 793 mln close strikes for Nov 4th

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Ewen Chew  —  Nov 03 - 10:15 PM
  • USD/JPY drops as low as 151.62 from intraday high 152.95

  • Break of 200 DMA at 151.57 floor may cue momentum selling

  • That could send it toward 100 DMA, currently at 150.37

  • Monday closing below 152.65 confirms bullish bias eroded

  • That would take USD/JPY out of Bollinger uptrend channel

  • Liquidity thin with Japan financial markets closed Mon

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Ewen Chew  —  Nov 03 - 08:00 PM
  • USD/JPY extends drop to 151.93 from open 152.95

  • Japan financial markets closed Mon; liquidity thinned

  • Further downside available till 200 DMA support 151.57

  • Bids may pile up near 200 DMA, and 100 DMA at 150.37

  • US NFP on Fri badly missed, due to hurricanes nL1N3M71FR

  • Fed still likely to cut 25bps on Thursday nL1N3M80JN

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 03 - 06:45 PM
  • +0.3% after the USD slid at the Monday open - sterling closed up 0.15%

  • There is no significant UK data today, so risk appetite and the USD lead GBP

  • Rating agencies will be closely watching upcoming UK data after the budget

  • Charts - neutral daily momentum studies, 21-day Bollinger bands slip

  • 5, 10 & 21-day moving averages fall - signals show a bearish trending bias

  • Thursday's 1.2844 low, then the 1.2665 Aug base are initial supports

  • The 1.2999 top on Thursday and last week's 1.3043 high are first resistance

  • 1.2945/50 519mln and 1.2970/80 793 mln close strikes for Nov 4th

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 03 - 05:40 PM
  • Up 0.7% in early Asia after closing -0.35% - the USD was sold at the open

  • USD selloff possibly on a Harris victory in the Des Moines Register poll

  • ANZ job ads lead Australian data - interesting but unlikely market-moving

  • Expecting choppy nervous US dollar trading into Tuesday's US election

  • Charts; 10 & 21-day moving averages fall, 21-day Bollinger bands ease

  • Mixed daily momentum studies - the negative trending setup remains in place

  • Last week's 0.6537 low then 0.6477 0.786% of the Aug-Sep rise first support

  • 0.6601 10 DMA, tested but holds, then the 0.6661 21-DMA are first resistance

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
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