• Equities keep more tentative so far in the new day
• Eurozone August industrial production +1.8% vs +1.7% m/m expected
• Germany October ZEW survey current conditions -86.9 vs -84.5 expected
• USD/JPY wrestles with near-term support after nearing 150.00 yesterday
• IEA cuts 2024 oil demand growth forecast amid China drag
• China economy set to miss growth target in 2024 – poll
• Chinese stocks continue down the bumpy stretch of road in the new week
• European equities mostly a touch higher to start the day
• Spain September final CPI +1.5% vs +1.5% y/y prelim
• France September final CPI +1.1% vs +1.2% y/y prelim
• What are the main events for today?
• Eurostoxx futures +0.1% in early European trading
• UK August ILO unemployment rate 4.0% vs 4.1% expected
• Germany September wholesale price index -0.3% vs -0.8% m/m prior
• FX option expiries for 15 October 10am New York cut
• UK labour market report on the agenda in the session ahead
• BOJ seen keeping interest rates unchanged through year-end – poll
• China banks reportedly set to trim rates on ¥300 trillion of deposits as soon as this week
• Dollar keeps steadier as the week looks to pick up
• Japan PM says aims to for a supplementary budget higher than last years amount

The main event in the European session today was the release of the UK labour market report. The data beat expectations and after some tentative price action, led to a rally in the pound.

We also got the German ZEW which came out on the softer side but the expectations index improved. That didn’t help the euro though as it continues to trade tentatively into the ECB decision on Thursday.

In the markets, the most notable mover has been crude oil as it extended the fall triggered by late yesterday’s news of Israel limiting the counterstrike to military targets.

In FX, we continue to see tight ranges although the bullish momentum in the US Dollar looks to be exhausted as the market might need more to price in a more „hawkish“ path for interest rates than the current Fed’s projections.

In the equity space, the S&P 500 and the Nasdaq are consolidating around yesterday’s highs. We haven’t got any bearish catalyst in the meantime, so the current uptrend will likely remain intact.

In the American session, the main event will be the release of the Canadian CPI. The market
is pricing in a 48% probability of a 50 bps cut at the upcoming meeting. Soft data will likely seal the 50 bps cut,
while higher than expected figures might trigger a relief rally in the CAD.

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

The bullish momentum in the
US Dollar seems to be waning despite the recent higher-than-expected US CPI and PPI reports. One caveat is that the market has now
priced out the aggressive rate cuts expectations and it’s almost perfectly in
line with the Fed’s projections.

Therefore, we will likely
need more strong US data to see the market pricing in an earlier pause in the
Fed’s easing cycle and give the US Dollar a further boost.

In the bigger picture, it
looks like the US long term yields are bound to rise further, which should keep
the recent uptrend in the USD intact, but more bullish catalysts for the
greenback would give more conviction for the buyers.

The next big risk events
will be in November when we get the October data and the US election.

On the NZD side, the RBNZ recently
cut interest rates by 50 bps as expected. The market
is pricing an 88% probability of another back-to-back 50 bps cut in November.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD is consolidating around the key 0.6050 support zone. This is where we can expect the buyers
to step in with a defined risk below the support to position for a rally into
the 0.6217 resistance. The sellers, on the other hand, will want to see the
price breaking lower to increase the bearish bets into the 0.5850 support next.

NZDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the rangebound price action as the bearish momentum waned. We have
the 0.61 handle acting as resistance here so a break above it will likely see
the buyers increase the bullish momentum into the 0.6217 resistance.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much more we can glean from this timeframe as the market participants will
likely keep on playing the range until we get a breakout. Watch out for the New
Zealand CPI later in the day. The red lines define the average daily range for today.

Upcoming
Catalysts

This week is pretty empty on the data front with just a couple of key economic
releases. Today, we get the New Zealand Q3 CPI report. On Thursday, we have the
US Retail Sales and US Jobless Claims data.

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

The bullish momentum in the
US Dollar seems to be waning despite the recent higher-than-expected US CPI and PPI reports. One caveat is that the market has now
priced out the aggressive rate cuts expectations and it’s almost perfectly in
line with the Fed’s projections.

Therefore, we will likely
need more strong US data to see the market pricing in an earlier pause in the
Fed’s easing cycle and give the US Dollar a further boost.

In the bigger picture, it
looks like the US long term yields are bound to rise further, which should keep
the recent uptrend in the USD intact, but more bullish catalysts for the
greenback would give more conviction for the buyers.

The next big risk events
will be in November when we get the October data and the US election.

On the CAD side, the market
is pricing in a 48% probability of a 50 bps cut at the upcoming meeting. Today,
we get the Canadian CPI report where soft data will likely seal the 50 bps cut,
while higher than expected figures might trigger a relief rally in the CAD.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD is now trading above the key resistance around the 1.3785 level. The
sellers will want to see the price falling back below the level to position for
a drop into the 1.36 support. The buyers, on the other hand, will likely keep
on piling in around these levels to position for further upside into the 1.3860
level.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we had a huge rally the lows with basically no pullback. We have a
steep upward trendline defining the current bullish
momentum. The buyers will likely keep on leaning on it to position for further
upside, while the sellers will want to see the price breaking lower to pile in
for a drop into the 1.36 support.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the recent price action and the steep trendline. There’s not
much else to see here as the buyers will keep on leaning on the trendline,
while the sellers will look for a break. Watch out for today’s Canadian CPI as higher
than expected data might trigger a relief rally in the CAD. The red lines
define the average daily range for today.

Upcoming
Catalysts

This week is pretty empty on the data front with just a couple of key economic
releases. Today, we get the Canadian CPI report. On Thursday, we have the US
Retail Sales and US Jobless Claims data.

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

Here’s a snapshot of things at the moment:

• S&P 500 futures flat
• Nasdaq futures -0.1%
• Dow futures +0.2%
• Eurostoxx -0.4%
• Germany DAX +0.2%
• France CAC 40 -0.7%
• UK FTSE -0.4%

In Europe, the overall mood is more mixed with only the DAX looking to push up. The German index briefly touched record highs earlier as investors eye another ECB rate cut later in the week.

As for US futures, things should only start moving when we get to North America trading later. There won’t be any major events on the economic calendar but do watch out for Fed speak. Let’s see if there will be appetite to keep the run higher going as the outlook for the US economy hones in on a soft landing scenario.

This article was written by Justin Low at www.forexlive.com.