Headlines:

• Dollar keeps steadier so far on the session
• Gold remains undaunted as the run higher continues
• Weekly update on interest rate expectations
• ECB’s Šimkus says lower rates possible if disinflation gets entrenched
• ECB’s Šimkus: Policy will clearly become less restrictive from here
• ECB’s Kažimír says all options are on the table for December meeting
• Germany September PPI -0.5% vs -0.2% m/m expected
• SNB total sight deposits w.e. 18 October CHF 462.3 bn vs CHF 467.1 bn prior

Markets:

• CHF leads, AUD lags on the day
• European equities lower; S&P 500 futures down 0.4%
• US 10-year yields up 4.3 bps to 4.128%
• Gold up 0.6% to $2,736.00
• WTI crude up 2.3% to $70.81
• Bitcoin down 0.1% to $68,325

It was a quiet session but there were some decent moves in broader markets.

Of note, equities trended lower after a more pensive start and alongside higher yields, it pushed the dollar a little higher during the session.

EUR/USD moved down from 1.0860 to 1.0845 while USD/JPY notably gained from a low of 149.10 in Asia to clip the 150.00 mark briefly. As equities are slightly softer, the antipodeans are lagging with AUD/USD falling back below its 100-day moving average – down 0.3% to 0.6685.

US futures gradually nudged lower during the session, with little catalysts in general. The same goes for European indices and this is pretty much weighing on broader sentiment. Tech shares are leading declines with S&P 500 futures down 0.4% and Nasdaq futures down 0.6%.

The overall market mood is more mixed though with bonds being offered. Higher Treasury yields is helping to underpin USD/JPY as such.

In the commodities space, gold continues to shine ever so brightly in a push to fresh record highs again near $2,736. Up, up, and away we go.

Looking to US trading, there won’t be much catalysts on the agenda so traders will continue to be left to their own devices to start the week.

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

• December meeting is wide open
• Will be in a strong position to ease further if accelerated pace of disinflation continues
• Increasingly confident that disinflation path is on solid footing
• But still need more evidence, especially on services inflation

Well, unless the economy miraculously bounces back in the final quarter of the year, it will be tough for the ECB to fight the narrative of another rate cut. As things stand, traders have fully priced in a 25 bps move for December.

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

Fundamental
Overview

Last Friday, the PBoC
announced new easing measures which included further rate cuts and stock buyback
funding. Moreover, we got
some positive economic
data with Retail Sales
and Industrial Production beating expectations by a big margin. These catalysts
provided support for copper which erased most of last week’s losses.

Copper
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that copper bounced around the 4.32 support zone where we had also the 61.8% Fibonacci retracement level for confluence. This is where the buyers stepped
in and then increased the bullish bets following the new easing measures
announcement from the PBoC.

The sellers will want to
see the price turning around and breaking below the 4.32 support to start
targeting the trendline around the 4.20 level.

Copper Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price broke above the downward trendline increasing the bullish
momentum as more buyers piled in. The first target should be the swing level at
4.51 which the buyers will need to break to extend the rally into the 4.70
resistance next. The sellers, on the other hand, will likely step in around the
4.51 level to position for a drop back into the 4.32 support.

Copper Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we now have a minor 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 look for a break lower to position for a drop
back into the 4.32 support. The red lines define the average daily range for today.

Upcoming
Catalysts

This week is pretty empty on the data front with market moving releases scheduled
for the latter part of the week. On Thursday, we get the Flash Japanese and US
PMIs, and the US Jobless Claims figures.

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

The ranges for the day aren’t overly interesting but the dollar is seen holding a slight edge in European morning trade. It comes as Treasury yields are pushing higher as well, allowing for some light action on the session. USD/JPY is now marked up by 0.3% to 149.95 from a low of 149.10 in Asia earlier in the day.

In the bigger picture, USD/JPY remains pinned closer to the 150.00 mark and that remains a key level to watch. There is also key resistance closer to the 50.0 Fib retracement level and the 100-day moving average (red line) near 150.76 currently. So, that is the bigger technical region in play for now.

Besides that, GBP/USD is down 0.2% to 1.3020 and AUD/USD down 0.2% to 0.6690 currently. The latter is in an interesting spot as it slips back below its own 100-day moving average of 0.6695.

The moves are coming as bond yields are seen nudging higher again today. 10-year Treasury yields are up another 3 bps to 4.116% with 2-year yields at 3.982% on the day. The former is seeing a bounce after testing the 4% mark last week, with bond sellers drawing a line at the key level.

There’s not much else to work with besides flow movement in European trading thus far. The economic calendar to start the week isn’t anything enticing. So, traders will be left to deal with the technical plays and getting a feel of trading sentiment with each passing session.

That until we get the next key catalyst to really move markets. And that might not come until later in the week.

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

HFM, unified brand name of HF Markets Group, a
leading global online trading provider, is committed to empowering traders
through access to the renowned MetaTrader 4 (MT4) and MetaTrader 5 (MT5)
platforms, as well as the innovative HFM App.
Together, these tools enhance the trading experience for both novice and
seasoned traders, enabling users to maximize their potential across various
asset classes, including forex, stocks, indices, and commodities.

HFM provides MT4 and
MT5 to accommodate different trading styles and preferences, while the HFM App
offers traders seamless access to their accounts on the go. Whether traders
prefer the user-friendly MT4, the advanced capabilities of MT5, or the convenience
of mobile trading through the HFM App, HFM ensures a tailored experience for
every type of trader.

MT4: Designed for Forex
Traders

MetaTrader 4 (MT4) is
widely recognized for its reliability and efficiency, making it a favorite
among forex traders. Its user-friendly interface allows traders to focus on
executing strategies without unnecessary distractions. Key features of MT4
include advanced charting tools, built-in technical indicators, and support for
automated trading through Expert Advisors (EAs).

“MT4 is ideal for those
looking for simplicity and effectiveness. When combined with HFM’s competitive
trading conditions, it becomes an invaluable resource for traders,” said an HFM
spokesperson.

MT5: Advanced Features
for Comprehensive Trading

MetaTrader 5 (MT5) builds
upon the foundations of MT4, offering advanced tools and capabilities for
traders seeking comprehensive trading options. MT5 supports a wider range of
order types and provides in-depth market analysis with features like the Depth
of Market (DOM) and an integrated economic calendar.

“MT5 is perfect for
traders who want to explore multiple asset classes and utilize advanced
analytical tools. It allows traders to seize opportunities across diverse
markets effortlessly,” the spokesperson added.

HFM App: Trading
Anytime, Anywhere

The HFM App
enhances the trading experience by providing users with the ability to trade
directly from their mobile devices. With the HFM App, traders can access
real-time market data, execute trades, and manage their accounts conveniently,
ensuring they never miss an opportunity, regardless of their location.

About HFM

Since its founding in
2010, HFM has been a leader in the online trading industry, known for its
cutting-edge technology, comprehensive educational resources, and exceptional
trading conditions. The company holds licenses from 7 regulatory bodies and has
earned more than 60 prestigious industry awards, demonstrating its commitment
to excellence and trader security.

HFM offers traders access to a diverse range of
financial instruments, including forex, indices, commodities, bonds, and ETFs.
With four tailored account types and three advanced trading platforms—including
the proprietary HFM platform—HFM provides a comprehensive suite of tools and
resources to meet the needs of traders worldwide.

Additionally, HFM
supports traders with features like copy trading and various promotions,
enabling them to pursue their financial goals with confidence. Whether through
in-person seminars, online webinars, or state-of-the-art trading platforms, HFM
continues to provide the resources traders need to engage in today’s fast-paced
financial markets.

This article was written by FL Contributors at www.forexlive.com.

UPCOMING
EVENTS:

• 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.

China sets loan prime rate (LPRs) on Monday, October 21, 2024.

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.

• Mon: PBoC LPR
• Tue: NBH Announcement, IMF World Economic Outlook
• Wed: BoC Announcement
• Thu: EZ/UK/US Flash PMIs (Oct)
• Fri: PBoC MLF (TBC), CBR Announcement, Japanese Tokyo CPI (Oct), German Ifo (Oct), US Durable Goods (Sep), US University of Michigan Final (Oct)

PBoC LPR (Mon):

PBoC will announce the latest Loan Prime Rates next week in which Chinese banks are likely to reduce the benchmark lending rates from the current levels after the slew of recent policy support measures by China’s central bank and government departments. As a reminder, China’s Loan Prime Rates were maintained last month with the 1-Year LPR (which most new loans are based on) kept at 3.35% and the 5-Year LPR (reference for mortgages) held at 3.85%, as expected. However, since then, the PBoC have announced a 50bps cut RRR cut and reduced the 7-day reverse repo rate by 20bps to 1.50%, while it also lowered the 1-year MLF rate by 30bps to 2.00% and said it will guide LPRs lower. Furthermore, the PBoC instructed banks to lower interest rates on existing mortgages by October 31st and it was also reported that Chinese banks will reduce rates on as much as CNY 300tln of deposits. This had already set the backdrop for a reduction in the LPRs, while the latest developments further signalled an upcoming cut to the benchmark rates as the major Chinese banks recently lowered interest rates on CNY fixed-rate deposits by 25bps and PBoC Governor Pan noted the LPR is expected to drop by 20bps-25bps on Monday, as well as reiterated that they may further lower RRR this year by 25bps-50bps based on market liquidity.

BoC Announcement (Wed):

The Bank of Canada is expected to cut rates by 50bps to 3.75% on Wednesday, according to 19/29 analysts surveyed by Reuters, while 10 analysts look for a smaller 25bps rate cut. Alongside the rate decision, the latest monetary policy report will be released as well as a speech from Governor Macklem. Remarks from BoC Governor Macklem on 10th September, a week after the BoC cut by 25bps, stated that bigger cuts are possible if the economy and CPI is weaker. The August data was soft, which started to see 50bps being priced in with more certainty, although a strong September jobs report saw money markets price in a 25 or 50bps as a coin flip. Nonetheless, the September inflation data was notably softer than forecast and 50bps bets ramped up. As things stand, money markets are pricing in 48bps of easing at the upcoming meeting, implying a 92% probability of a 50bps cut. The focus of the meeting will largely be on the rate decision, however the statement will be eyed for guidance and how the BoC are explaining the recent soft inflation data. We will also look to the MPR for the BoC’s economic forecasts. Looking ahead, the BoC Business Outlook Survey noted business sentiment remains subdued, while excess capacity is leading to restrained investment and hiring. Firms also expect both wage and price growth to soften. Analysts at RBC note that the recent soft inflation data, coupled with the BOS, sees the desk expect a 50bps rate cut. Looking ahead, the Reuters poll found that there was no clear consensus on what the BoC will do at the December meeting, 10/29 expect rates to finish the year at 3.50%, nine expect rates to at 3.75%, while one analyst sees rates at 4.00% from the current 4.25%.

EZ PMI (Thu):

Expectations are for October’s manufacturing PMI to rise to 45.1 from 45.0, services to pick up to 51.5 from 51.4, leaving the composite at 49.7 vs. prev. 49.6. As a reminder, the prior release saw a decline in the manufacturing print from 45.8 to 45.0, services slip to 51.4 from 52.9, leaving the composite in contractionary territory at 49.6 vs. prev. 51. The accompanying report noted „our GDP nowcast model, which takes into account the PMI indicators, points to only minimal growth.“ This time around, analysts at Investec expect an extension of some of the weakness seen in the September composite metric to follow through into the upcoming report. That being said, the desk acknowledges that there is some scope for stabilisation on the manufacturing front on account of Chinese stimulus efforts. Note, this is unlikely to have any follow-through to the services sector, which instead may be hampered by news of French tax-raising measures. From a policy perspective, given the impact of the prior report on pricing for the ECB’s October meeting, this is very much a tier 1 release for ECB watchers, particularly given the increased importance of the growth outlook at the bank. As such, a soft release could see an acceleration of dovish pricing for the December meeting with a deeper 50bps cut currently priced at around 20%.

UK PMI (Thu):

Expectations are for October’s services PMI to slip to 52.2 from 52.4, manufacturing to fall to 51.3 from 51.5, leaving the composite at 52.4 vs. prev. 52.6. As a reminder, the prior report showed a decline in the services print to 52.4 from 53.7, manufacturing decline to 51.5 from 52.5, leaving the composite at 52.6 vs. prev. 53.8. The accompanying report noted „The September PMI surveys suggest that the UK economy is still on a positive trajectory“. This time around analysts at Investec expect similar themes in the October release to those of September which was characterised by an optimistic picture of the UK economy, albeit with some concerns over the upcoming UK budget. On the latter, the desk notes “if the fear of fiscal tightening turns out to be greater than the net impact of what will be announced, then we could be in store for a rebound in November”. From a policy perspective, a 25bps rate is very much baked in for the BoE’s November meeting. However, a strong report could temper expectations for how fast the MPC will move thereafter with a December cut priced at around 64%.

This article originally appeared on Newsquawk.

This article was written by Newsquawk Analysis at www.forexlive.com.

The major indices are closing higher for the day with the Nasdaq leading the way. The Dow and the S&P are also higher. The small cap Russell 2000 is closing lower but is higher on the week.

The final numbers are showing:

• Dow Industrial Average rose 36.86 points or 0.09% at 43275.91
• S&P rose 23.20 points or 0.40% at 5864.67
• Nasdaq rose 115.94 points or 0.63% at 18489.55
• Russell 2000. – 4.76 points or -0.21% at 2276.09

For the trading week, the major indice rose for the six consecutive week:

• Dow industrial average rose 0.96%
• S&P index rose 0.85%
• NASDAQ index rose 0.80%
• Russell 2000 rose 1.85%

The six week winning streak is the largest since late 2023

This article was written by Greg Michalowski at www.forexlive.com.