Euro area GDP is confirmed to see a marginal contraction in Q3. Looking at the breakdown, household consumption contributed +0.2% with government final expenditure contributing +0.1% on the quarter. This was offset by changes in inventories, which was -0.3%, while there were negligible contributions from gross fixed capital formation and external balance.
This article was written by Justin Low at www.forexlive.com.
USD/JPY is down 1.4% to 145.30 currently with the low earlier briefly touching 145.05 in European trading. The drive lower owes to BOJ governor Ueda’s remarks from Asia trading before he went on to align with Tokyo to pin down the spring wage negotiations as the potential turning point on policy here. Other dollar pairs are little changed as all the action has been in the Japanese yen instead:
As you can see, other major currencies are also seeing losses around 1.3% to 1.5% against the yen as well currently.
I reckon this might be a bit of a precursor as to what traders might be looking for in Q1 next year. But the real question is, will be the BOJ actually follow through on that? Yen longs might be starting to build up as early as now, hoping for that. However, the negative carry is still something that I’d be mindful about if you want to stay structurally long in the Japanese currency. It can be a rather painful one.
And not to mention, there is still the risk of the BOJ not following through and not using the stronger wages outcome to conduct a policy pivot. I mean, that was already supposed to be the narrative this year when Ueda took over. And look where we are now.
This article was written by Justin Low at www.forexlive.com.
He is commenting alongside the release of the financial stability report earlier here. So far, the above isn’t anything new as they continue to preach the higher for longer narrative considering where inflation is at.
This article was written by Justin Low at www.forexlive.com.
JPY
GBPJPY Technical Analysis –
Daily Timeframe
On the daily chart, we can see that GBPJPY is now
near the key trendline where we have also the confluence with the 50% Fibonacci
retracement level. This is where the buyers should step in with a defined risk
below the trendline to position for a rally into new highs. The sellers, on the
other hand, will want to see the price breaking lower to increase the bearish
bets into the 178.00 handle.
GBPJPY Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see more closely the
bearish setup around the trendline and the Fibonacci level. If we do get a
bounce on the trendline, the buyers will then need to break above the
counter-trendline and the 186.30 resistance to confirm a rally into new highs.
The sellers, on the other hand, will lean on the counter-trendline to try again
a break below the major trendline.
GBPJPY Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
price is starting to diverge with the MACD right near the key trendline. This
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the sellers will need a break below the trendline to
confirm the reversal and invalidate the bullish setup, while the buyers will
need a break above the counter-trendline to confirm the reversal and increase
the bullish bets into new highs.
Upcoming Events
Today we have another US
labour market report with the release of the US ADP data. Tomorrow, it will be
the time for the US Jobless Claims figures, while on Friday we conclude the
week with the NFP report. Weak US data is likely to weigh on global yields and
favour the JPY, while strong figures might keep the pair supported.
This article was written by FL Contributors at www.forexlive.com.
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This article was written by Itai Levitan at www.forexlive.com.
The key thing to note is that they say that businesses and households are still able to cope so far with higher interest rates. While there are risks to that in the short-to-medium term, the central bank is not quite in a mode to urgently scale back on tighter policy just yet.
This article was written by Justin Low at www.forexlive.com.
The major currencies bloc is showing little change for the most part, with just some minor extensions to the narrow ranges from earlier. EUR/USD continues to sit flattish near 1.0800, with large option expiries also in play while USD/JPY is up by just 0.1% to 147.30 levels.
The commodity currencies are holding a slender lead against the dollar, amid a slightly better risk mood. That being said, the gains in stocks are not really overwhelming as of yet so that is keeping traders on their toes for now. AUD/USD is up just 0.3% to 0.6570, a slight drop from around 0.6590 earlier in the session.
In the bond market, yields are a touch higher but we still have the US ADP employment data to work through so that will be one to watch in case it leads to any broader market moves later in the day.
This article was written by Justin Low at www.forexlive.com.
●The current interest rate is unsustainable for
Canadians, and it seems evident that the Bank of Canada will keep the overnight
key rate.
●The BoC decision on the interest rate is likely to
weaken the national currency—the nearest target for USDCAD is 1.3650–1.3700.
The
Bank of Canada (BoC) is set to release its final interest rate report on 6
December, marking the eighth interest rate announcement this year. The rate is
expected to remain at the current level.
In
the previous October
meeting, Canada’s central bank kept
its key interest rate at 5%. It was the third consecutive rate hold of the
year. In Canada, there is growing evidence that past interest rate hikes have
dampened economic activity and eased price pressures. Consumption has declined,
with lower demand for housing, durable goods, and many services. Lower demand
and higher borrowing costs are putting pressure on business investment.
‘The current interest rate is unsustainable for Canadians, and it seems
obvious that the Bank of Canada will keep the overnight key rate,’ said Kar
Yong Ang, Octa’s financial market analyst. ‘The expectation of a pause and a
possible potential rate cut is causing the currency to weaken,’ he added.
The
bank’s preferred measures of core inflation show downward momentum, with CPI
inflation falling to 4.0% in August, 3.8% in September and 3.1% in October.
Higher interest rates are moderating inflation in many goods that people buy on
credit, and this is spreading to services. Considering the more apparent signs
of easing price pressure, it is likely that the Governing Council will hold the
policy rate at 5%. Such a decision will weaken the national currency: the
near-term target for USDCAD is 1.3650–1.3700.
About Octa
Octa is an international broker that has been providing
online trading services worldwide since 2011. It offers commission-free access
to financial markets and various services already utilised by clients from 180
countries with more than 42 million trading accounts. Free educational
webinars, articles, and analytical tools they provide help clients reach their
investment goals.
The company is involved in a comprehensive network of
charitable and humanitarian initiatives, including the improvement of
educational infrastructure and short-notice relief projects supporting local
communities.
Octa has also won over 60 awards since its foundation,
including the ‚Best Educational Broker 2023‘ award from Global Forex Awards and
the ‚Best Global Broker Asia 2022‘ award from International Business Magazine.
This article was written by FL Contributors at www.forexlive.com.
UF AWARDS MEA 2024 represent the financial
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contributions in the online trading and fintech space.
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come as no surprise that these awards also help provide traders and businesses
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within the Middle East and Africa (MEA). Does your brand have what it takes to
take home this year’s biggest honours?
Time is
Running Out to Nominate Your Brand for the UF AWARDS MEA 2024
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Are you unsure of how to cast your nomination? Thankfully, nominating your
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Of note, only registered users can
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Nominations will remain open until December 15,
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With less than two weeks remaining before the
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As a quick reminder, only subscribed users will
be able to cast their nomination or vote. The official UF AWARDS MEA 2024
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iFX EXPO is the world’s leading online trading
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This article was written by FL Contributors at www.forexlive.com.
It’s not only central banks and bond yields in focus this week but US data is once again another key point of contention for markets. And even if inflation data has been the main draw in recent months, it would be careless to disregard the US labour market report at any point in time. And we’ll have a couple of key releases in the run up to that on Friday, starting with the JOLTS data today.
This particular release may not be too impactful at times but in October, it certainly was as seen here. Now, we’re in a rather sensitive period in markets – especially after the extremely aggressive amount of rate cuts priced in for next year. So, any data that challenges said narrative might go some ways in disrupting the balance of things. And even more so if it is backed up by less optimistic inflation developments.
We’ll only get to the inflation stuff next week but for this week, the jobs data will have to do. The JOLTS data today will be the first touch point before we get to the ADP employment roulette change tomorrow and lastly, the non-farm payrolls on Friday. So, buckle up. It’s going to be a bumpy few days potentially; not least as markets also have to consider key central bank decisions going into next week.
This article was written by Justin Low at www.forexlive.com.