• Monday: PBoC LPR.
• Tuesday: Canada PPI.
• Wednesday: BoC Policy Decision.
• Thursday: Australia/Japan/Eurozone/UK/US Flash PMIs, US
  Jobless Claims.
• Friday: PBoC MLF, Tokyo CPI, German IFO, Canada Retail
  Sales, US Durable Goods Orders.

Monday

The PBoC is expected
to cut the LPR rates by 20 bps bringing the 1-year rate to 3.15% and the 5-year
rate to 3.65%. This follows the recent announcement by governor Pan Gongsheng on Friday which aims to
achieve a balance between investment and consumption.

He also added that
monetary policy framework will be further improved, with a focus on achieving a
reasonable rise in prices as a key consideration. China is in a dangerous deflationary spiral and they must do whatever it takes to avoid
Japanification.

Wednesday

The Bank of Canada
is expected to cut interest rates by 50 bps and bring the policy rate to 3.75%.
Such expectations were shaped by governor Macklem mentioning that they could
deliver larger cuts in case growth and inflation were to weaken more than
expected.

Growth data wasn’t
that bad, but inflation continued to miss expectations and the last report sealed the 50 bps cut. Looking ahead, the market
expects another 25 bps cut in December (although there are also chances of a
larger cut) and then four more 25 bps cuts by the end of 2025.

Thursday

Thursday will be
the Flash PMIs Day for many major economies with the Eurozone, UK and US PMIs
being the main highlights:

• Eurozone Manufacturing PMI: 45.3 expected vs. 45.0
  prior.
• Eurozone Services PMI: 51.6 expected vs. 51.4 prior.
• UK Manufacturing PMI: 51.4 expected vs. 51.5
  prior.
• UK Services PMI: 52.4 expected vs. 52.4 prior.
• US Manufacturing PMI: 47.5 expected vs. 47.3
  prior.
• US Services PMI: 55.0 expected vs. 55.2 prior.

The US Jobless
Claims continues to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market.

Initial Claims
remain inside the 200K-260K range created since 2022, while Continuing Claims
after an improvement in the last two months, spiked to the cycle highs in the
last couple of weeks due to distortions coming from hurricanes and strikes.

This week Initial
Claims are expected at 247K vs. 241K prior, while there’s no consensus for Continuing
Claims at the time of writing although the last week we saw an increase to 1867K vs. 1858K prior.

Friday

The Tokyo Core CPI
Y/Y is expected at 1.7% vs. 2.0% prior. The Tokyo CPI is seen as a leading
indicator for National CPI, so it’s generally more important for the market
than the National figure.

The latest news we
got from the BoJ is that the central bank is likely to mull changing their view
on upside price risks and see prices in line with their view, thus enabling a
later hike.

Therefore, a rate
hike can come only in 2025 if the data will support such a move.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

aCrude Oil Futures Weekly Forecast: Bears in Control, Watching Key Support Levels

📉 Crude Oil Futures (CL1!) are showing clear signs of bearish momentum, with prices falling sharply in recent weeks. This is reflected in the weekly chart, where the market has consistently respected a long-term descending resistance line (marked in red as the bottom of the triangle) stretching back to the highs seen in 2022.

Key Technical Levels to Watch for Oil:

• Current Price: $68.69 (as of the latest close, down -2.80%)
• Resistance at $78.50: The August 2023 open, just below $78.59, represents a critical resistance area. This level is near prior high liquidity zones and has proven to be a key barrier for crude oil prices, pushing back bullish attempts to rally.

Support Levels in Focus:

1. $67.75 Support Zone: Currently, bears are pusheing prices toward this next key support level – pobably to be tested next. Breaking below $67.75 could open the door for another leg down, with additional targets below.

2. Further Downside Targets:

   • $66.80: A key level being eyed by traders as a potential stopping point after breaking through $67.75.
   • $65.27: If selling pressure continues, this lower support could come into play. Any sustained breach of this zone would likely signify a more significant bearish trend. However, a sustained break down is less likely and even if oil price pierces down the big triangle, expect a bullish reversal.

Bearish Momentum and Indicators:

• The descending red trendline has acted as firm resistance, indicating that sellers remain in control. Multiple attempts to break above this line have failed, leading to the recent retest of lower levels.

• The sharp 9.09% weekly decline highlights increased selling pressure. Unless bulls can defend these key support levels, the bearish outlook remains intact.

Possible Scenarios Moving Forward:

• Bullish Reversal: For a bullish case to emerge, crude oil would need to break decisively above the $78.50 area. However, given the recent failure to sustain upward momentum, this scenario looks less likely in the short term.

• Continuation of Bearish Trend: If the $67.75 support gives way, crude oil could quickly test lower levels at $66.80 and beyond. Any break below $65.27 would solidify a deeper bearish trend, potentially targeting even lower price points as sellers continue to dominate.

So, what should oil traders expect:

Bears remain firmly in control of crude oil futures, and the market is teetering on the edge of a critical support level. Traders should keep a close eye on $67.75, as a breakdown here could lead to further declines. On the flip side, any reversal that pushes prices back above $78.50 would shift the momentum back toward the bulls. For now, the path of least resistance appears to be lower, so caution is advised.

Trade carefully, and stay tuned for more updates from ForexLive.com for additional perspectives and insights! Always trade oil at your own risk only.

This article was written by Itai Levitan at www.forexlive.com.

Last month the PBoC cut the 7-day reverse repo rate, and the Medium-term Lending Facility (MLF) rate:

• PBOC 1-year Medium-term Lending Facility (MLF), rate cut to 2% (2.3% previously)

and a matching cut to LPRs is expected tomorrow. Indeed, on Friday PBoC Governor Pan foreshadowed Monday’s rate cut, by 20 to 25 basis points he says.

Current LPRS are:

• 1-year (which most new loans are based on) 3.35%
• 5-year (reference for mortgages) 3.85%

Coming up later in the week from China, on Friday, is the latest Medium-term Lending Facility (MLF). No rate change is expected for this given the cut last month (see link above).

China’s National People’s Congress is yet to come, towards the end of October. Further stimulus measures seem likely from this.

This article was written by Eamonn Sheridan at www.forexlive.com.