<p class=“MsoNormal“>It’s going to be a
light week ahead in terms of economic events as is usual after the NFP. There
are no notable economic events on Monday, but Tuesday SNB Chairman Jordan will
deliver a speech at the High-Level Conference on Global Risk, Uncertainty, and
Volatility, in Zurich. </p><p class=“MsoNormal“>This type of event is
not generally supposed to create volatility in the market, but the SNB is known
for its ability to surprise, so it’s worth keeping an eye out for any remarks
about monetary policy in Jordan’s address.</p><p class=“MsoNormal“>SNB continued its
tightening cycle and hiked the rate to 0.50%, out of negative territory. The
inflation rate in Switzerland is above target but didn’t rise alarmingly high
compared to other developed countries. Additional rate hikes are expected in
the future. </p><p class=“MsoNormal“>Also, on Tuesday we
have the U.S. midterm elections. According to FiveThirtyEight estimations
there’s an 80% probability the Republicans will take control of the House. The
Democrats could maintain control of the Senate.</p><p class=“MsoNormal“>If this happens,
passing legislation could be difficult for the next two years. Bank of America
suggests that a Republican win suggests that the electorate wants low
inflation, while a Democrat win will signal a desire for low unemployment.</p><p class=“MsoNormal“>The most important
event of the week will be the inflation data for the U.S. on Thursday, and it
will also be important to watch the unemployment claims. On Friday, we’ll have
the GDP data for the U.K. and the Prelim UoM consumer sentiment in the U.S.
Some Fed members are expected to deliver their remarks over the week. </p><p class=“MsoNormal“>Last week the nonfarm
payrolls surprised again and rose 261K indicating that the labour market is
still tight. The rise was especially in healthcare, professional and business
services, and manufacturing. </p><p class=“MsoNormal“>In the construction
sector the employment was flat despite the fact that real estate was negatively
influenced lately. In the near future, job growth is expected to cool down, but
the FOMC will keep tightening policy even if at some point the pace of
tightening will slow down.</p><p class=“MsoNormal“>Some analysts expect
the Fed to hike the rate by 50bps at the next meeting in December, but hot
inflation data could force another 75bps hike, so this week’s CPI data is very
important. The FOMC said for the first time that it will take into account the
cumulative amount of tightening when deciding future moves which could point to
a slower pace of tightening.</p><p class=“MsoNormal“>The CPI y/y for
October is expected to print lower to 8% from 8.2%, but the monthly gain is
expected to print above expectations. It’s likely that core inflation data will
see some relief but will remain above target.</p><p class=“MsoNormal“>On Friday the
consumer sentiment data in the U.S. could reflect pessimism, with consumers
concerned about high inflation and recession risks. The University of Michigan
Consumer Sentiment index is at a historical low level and Citi analysts expect
a further modest decline in November to 59.6 from 59.9.</p><p class=“MsoNormal“>The GDP data in the
U.K. is not yet expected to show improvement. The consensus is that the economy
likely contracted 0.4% q/q in Q3 making the U.K. one of the most affected
economies among developed countries with recession possibly being under way
already. The BoE will continue to fight against inflation and keep rising
rates, but analysts from Wells Fargo believe the
BoE will likely not tighten to the extent that’s currently priced by markets,
meaning the pound will remain under depreciation pressures for the foreseeable
future.</p><p>USD/CAD
expectations</p><p class=“MsoNormal“>On the H1 chart the
pair looks good for selling opportunities. Last week, the pair closed below the
1.3500 level of support, at 1.3480, which can open the path for further
depreciation. A correction is expected until the 1.3650 resistance level. If
that holds, the next level of support is at 1.3420. On the upside, the next
level of resistance is at 1.3805. </p><p class=“MsoNormal“>The unemployment rate
for the Canadian economy remained at 5.2% and the participation rate rose to
64.9%. There was also an increase in the average hourly wages from 5.2% YoY to
5.5% YoY which reflects excess demand for workers. </p><p class=“MsoNormal“>A risk for this trade
is the U.S. inflation data. The outlook for the USD remains bullish until the
end of the year, but in the short term, its correction might not be over. </p><p class=“MsoNormal“>This article
was written by Gina Constantin.</p>

This article was written by ForexLive at forexlive.com.

<p class=“MsoNormal“>UPCOMING
EVENTS:</p><p class=“MsoNormal“>Thursday: US
CPI</p><p class=“MsoNormal“>The last
week we finally got the FOMC Policy Decision. The statement leant on the less
hawkish side mentioning that “the Committee will take into account the cumulative
tightening of monetary policy, the lags with which monetary policy affects
economic activity and inflation, and economic and financial developments”. The
market interpreted that as a hint to a slower pace of hikes as the Fedwatcher
Nick Timiraos has mentioned in his WSJ article the week prior the FOMC meeting.
</p><p class=“MsoNormal“>The market
reacted positively to such development, and we saw risk rally across the board
and the USD getting offered. What ended the party was the Press Conference
where Powell sounded very hawkish. There are three takeaways that Nick Timiraos
highlighted:</p><p class=“MsoNormal“>1) The Fed
could step down to a slower pace in December even if inflation data don’t
improve much.</p><p class=“MsoNormal“>2) If there
had been new estimates of the terminal funds rate released, they would have
moved up.</p><p class=“MsoNormal“>3) Not ready
to talk about a pause.</p><p class=“MsoNormal“>And then
adding some key lines from Powell:</p><p class=“MsoNormal“>“The
question of when to moderate the pace of increases is now much less important
than the question of how high to raise rates and how long to keep monetary
policy restrictive.“</p><p class=“MsoNormal“>“The
risks are asymmetric. If the Fed does too much, it can cut. If it doesn’t
tighten enough, then you’re in real trouble.”</p><p class=“MsoNormal“>“It is
very premature to be thinking about pausing…Very premature.“</p><p class=“MsoNormal“>Maybe the
Fed wants to slow the pace of hikes but to counteract the likely easing in
financial conditions it can keep on raising the terminal rate. I’d say that
considering how the market is forward looking, the Fed here is taking a gamble
by slowing the pace of hikes when inflation data has not yet shown meaningful
improvement, even though forward-looking indicators are signalling moderation
in price pressures. The risk is that the market looks more at the slower pace
of hikes than the higher terminal rate and financial conditions ease anyway.</p><p class=“MsoNormal“>Maybe we already
got a taste of that on Friday when, after the NFP report, the market rallied,
and we saw a big USD dump. Some say it was because of a higher unemployment
rate and some other citing China reopening rumours. The former is said to be a
noisier data compared to payrolls figure (which beat expectations), and the
latter should be seen as more inflationary rather than being good news. </p><p class=“MsoNormal“>This week will
be all about the US CPI on Thursday. The report is expected to show an increase
of 0.7% M/M from the prior 0.4% and a little dip to 8.1% for the Y/Y figure
from the prior 8.2%. For the Core figures the expectations are for a 0.5% M/M,
down from the prior 0.6% and 6.6% Y/Y which would match the prior reading. The
market is currently split on the likely rate increase in December between 50
bps and 75 bps. This report may not be as important as the one coming days
before the December FOMC meeting, but another hot report should be negative for
risk sentiment and see the USD being bid. On the other hand, a soft report may
see risk rally and USD getting offered. </p><p class=“MsoNormal“>Stanley
Druckenmiller, who began his career in financial markets back in the 70s and
traded successfully through many cycles, had this to say back in June:</p><p class=“MsoNormal“>“We’ve never
had a soft landing after inflation has got above 4.5%.” </p><p class=“MsoNormal“>“Once
inflation gets above 5%, it’s never come down unless the Fed Funds rate is
higher than the CPI.“</p><p class=“MsoNormal“>“Once
inflation gets above 5%, it’s never been tamed without a recession.“</p><p class=“MsoNormal“>The market
prices a terminal rate of 5.00-5.25% in Q2 2023 and just for context the market
priced just 75 bps worth of hikes in 2022 back in 2021, and we are already at
400 bps. The market is not always right. </p><p class=“MsoNormal“>This article
was written by Giuseppe Dellamotta.</p>

This article was written by ForexLive at forexlive.com.

<p>In this video, Greg Michalowski of Forexlive.com reviews the Fed and the US jobs report and previews the CPI data ahead. He also looks at the technicals that define the bias and the risk levels for the major currencies vs the USD.

EURUSD (9:45)
USDJPY (14:10)
GBPUSD (15:38)
USDCHF (17:00)
USDCAD (18:48)
AUDUSD (20:30)
NZDUSD (21:46)</p>

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

<ul><li>MON: Eurogroup; Chinese Trade Balance (Oct), Swiss Unemployment (Oct), EZ
Sentix (Nov), US Employment Trends (Oct), Australian Consumer Sentiment (Nov).</li><li>TUE: US Midterms, CBR Policy Announcement, BoJ SOO (Oct), EIA STEO; EZ
Retail Sales (Sep), US NFIB (Oct).</li><li>WED: NBP Policy Announcement; Chinese CPI (Oct).</li><li>THU: Banxico Policy Announcements; Norwegian CPI (Oct), US CPI (Oct), IJC
(w/e 31st Oct), New Zealand Manufacturing PMI (Oct), Chinese M2 (Oct).</li><li>FRI: German CPI Final (Oct), UK GDP Estimate (Sep), GDP Prelim. (Q3), US
University of Michigan Prelim. (Nov).</li></ul><p class=“MsoNormal“>NOTE: Previews are listed in day-order</p><p class=“MsoNormal“>Chinese Trade Balance (Mon): </p><p class=“MsoNormal“>China’s trade surplus is expected to have widened further in Dollar
terms, with analysts expecting USD 95.80bln from a prior 84.74bln. Exports are
expected to have grown 4.1% Y/Y (prev. 5.7%) and imports are forecast to rise
by +0.1% Y/Y (prev. +0.3%). It’s worth noting that the data will likely be too
backwards looking given the recent chatter surrounding a more targeted COVID
policy from China; recent reports suggest that China’s CDC is working on a
reopening path, and China’s health authorities will be holding a press
conference on targeted COVID prevention on November 5th. On Friday, a former
Chinese government expert told a conference that many new COVID policies will
be introduced over the next 5-6 months, and added a “substantive change” to
COVID policy is coming soon.</p><p class=“MsoNormal“>US Midterm Elections (Tue): </p><p class=“MsoNormal“>All seats in the House up for election, and 35 Senate seats will be up
for the vote. The Senate race is currently seen as a toss-up, but in recent
days, the polling has been leaning in favour of Republicans, according to
FiveThirtyEight; Republicans are expected to take control of the House.
FiveThirtyEight sees an 80% chance of the GOP holding between 215-248 seats, adding
the fate of the House lies on Iowa’s 3rd District, North Carolina’s 13th
District and Colorado’s 8th District, while the three districts along the
Texas-Mexico border will also be key. Within the Senate, there is particular
attention on the Georgia, Nevada and Pennsylvania races, with Republicans
trying to take Georgia and Nevada, while Democrats are looking to take
Pennsylvania from the opposition. If the Democrats retain control of the
Senate, and the House becomes Republican, it will be difficult to pass
legislation over the coming two years, where any House-passed measures would
likely be dead on arrival in the Senate, and vice-versa. However, the
Republicans will likely use the debt limit and government funding limits to
leverage the Democrats to force them to the negotiating table on spending cuts,
some analysts argue. The Governorship race is for 36 positions, made up of 20
republicans and 16 Democrats. The Governor races could have implications for
the 2024 US Presidential Election, with eyes on whether Florida Governor Ron De
Santis is to run for President for the Republicans, as well as former President
Trump who has been hinting he expects to run again. Inflation and the economy
have been the one of, if not the main concern among the electorate; Bank of
America suggests that if the Republicans win, it would signal that the
electorate wants low inflation, while if the Democrats win, it would imply the
electorate wants low unemployment. BofA suggests a Republican win would also
lead to tighter monetary policy, and for the yield curve to invert further,
while a Democratic win would likely result in looser fiscal policy, and a
steeper yield curve. </p><p class=“MsoNormal“>EZ Retail Sales (Tue): </p><p class=“MsoNormal“>Analysts expect Eurozone retail sales to rebound by 0.3% M/M in
September, following a decline of 0.3% in August; the annual measure is
expected to improve a little but is still seen -1.3% Y/Y (prev. -2.0%).
Analysts at Moody’s note that regional retail sales data out of Germany and
France surprised to the upside in the month, which bodes well for the
aggregated Eurozone data. However, Moody’s says it is “not holding [its] breath
for a turnaround in consumer spending,” and instead, it expects retail sales
“to contract through the rest of the year as inflation continues eroding purchasing
power and dismal confidence cuts into demand.”</p><p class=“MsoNormal“>Chinese CPI (Wed): </p><p class=“MsoNormal“>Annual consumer prices are expected to have cooled slightly in October
to 2.5% Y/Y (prev. 2.8%), while the monthly metric seen accelerating a little
to +0.4% M/M (prev. 0.3%). PPI is forecast to fall -1.4% Y/Y (prev. +0.9%).
Using the Caixin PMI as a proxy, in October “the rate of inflation was the
quickest since February, and above the series long-run average; output prices
increased, which often reflected the pass-through of higher costs to customers,
anecdotal evidence showed. Alongside a rise in oil-related prices, firms
reported higher wage bills leading to an increase in operating expenses. That
said, the overall rate of cost inflation was the second slowest in the past 14
months.” As a reminder, last month’s CPI metrics were impacted by lockdowns
(ahead of the CCP National Congress) which hit spending habits. Furthermore,
headline CPI was driven by higher food prices, with pork prices rising some 36%
in September following a 22.4% gain in April – note the Chinese government has
been releasing frozen pork from state reserves in a bid to tame prices.</p><p class=“MsoNormal“>US CPI (Thu): </p><p class=“MsoNormal“>Analysts expect headline consumer prices to pick up by 0.7% M/M in
October, accelerating from the 0.4% M/M rate in September; the core measure is
seen cooling a touch to 0.5% M/M, lower than the 0.6% M/M in September, but a
still elevated level vs historical levels. The data will be framed in the
context of how much progress the Fed is making towards lowering inflation.
After the November FOMC meeting, Fed Chair Powell said it was “very premature”
to consider pausing or ending the rate hiking cycle, noting that inflation
remains well above the Fed’s longer-run goals, with price pressures evident
across goods and services. Although longer-term inflation expectations still
appear well-anchored, the Fed wants to see inflation coming down decisively,
and is prepared to stay the course until the job is done. The message from
Powell was that the Fed is strongly committed to its inflation target of 2%.
Powell did, however, allude to a potentially slower pace of rate hikes in
December; the statement said the Fed will consider the “cumulative tightening
of monetary policy, the lags with which monetary policy affects economic
activity and inflation, and economic and financial developments” when
determining the pace of future rate increases. Analysts rationalised that with
rates in restrictive territory, the Fed can downshift to a slower pace of
normalisation to assess the impact of the 375bps worth of rate tightening
unleashed since March. Currently, the market is split in its views about
whether the Fed will implement a 50bps or 75bps rate hike in December.
Accordingly, the market seems to be of the view that if inflation metrics move
lower (and traders are keeping an eye on aggregate inflation data, including
CPI, PCE, wages metrics within jobs data, consumer inflation expectations via
surveys, etc), this gives the Fed cover to downshift to the lower increment;
however, if inflation data does not cooperate, then the Fed will prefer the
larger sized hike, and potentially an even a higher terminal rate (Powell
suggested that the eventual peak Fed Funds Rate Target is above the 4.6%
pencilled in within the September projections; money markets see the peak at
5.00-5.25% in Q2 2023).</p><p class=“MsoNormal“>Banxico Announcement (Thu): </p><p class=“MsoNormal“>At its last policy meeting, Banxico hiked interest rates by 75bps to
9.25%, in line with the consensus view, and minutes from that meeting suggested
that further rate hikes were on the table. The central bank’s recent monthly
poll revealed analysts think rates will end 2022 at 10.50%, raising their
expectations from 10.25% in the prior month’s poll – and it appears that the
current level of rates has begun prompting conversations on the Board about
when it will end the hiking cycle. Board member Esquivel, whose term concludes
at the end of this year, recently cautioned against lifting rates to an
aggressively restrictive level given a weakening economy, and said policymakers
should begin thinking about ending the rate-hiking cycle, arguing that a
benchmark rate between 10.25-10.50% should be a sufficiently high and
restrictive level of rates. He also said that expectations for rates next year
are ‘atypically’ high, and “we cannot think they can stay there for very long”.
Indeed, this thinking is in line with the central bank’s poll, where analysts
think that rates will fall to 9.75% next year (in the previous poll, they were
expecting 10.25% in 2023).</p><p class=“MsoNormal“>UK GDP Estimate (Fri): </p><p class=“MsoNormal“>August’s monthly GDP data printed -0.3% M/M, painting a picture of an
economy losing momentum, and analysts at Investec think a similar picture could
be seen in the September data, with the potential for an even steeper drop; it
forecasts a monthly decline of 1.0%. The September downside will be exacerbated
by a one-off factor relating to Queen Elizabeth II’s funeral in the month,
which was a national holiday – Investec notes that the character of this type
of holiday is different to that of other Bank Holidays, with many businesses
shutting as a sign of respect. The September data also rounds out Q3, where the
street expects UK GDP to have fallen by 0.2% Q/Q, offsetting the 0.2% Q/Q
growth seen in Q2; the annual measure is expected to reveal growth of 2.8% Y/Y.
Investec says that if back data is not revised, the UK will have managed to
avoid technical recession for now (as defined by the traditional ‘two
consecutive quarters of negative growth’ measure); “Nor is recession likely by
Q4, because a rebound in GDP is highly likely to have followed in October as
activity resumed after the end of the national mourning period,” the bank
writes, but “still, we do expect a recession during 2023 as higher interest
rates bite against a backdrop of fiscal tightening.”</p><p class=“MsoNormal“>For more research like this, check out Newsquawk’s
<a target=“_blank“ href=“https://newsquawk.com/daily/article/?id=2720-week-ahead-preview-november-711th-highlights-include-us-cpi-midterms&utm_source=forexlive&utm_medium=research&utm_campaign=partner-post&utm_content=weekly“ target=“_blank“>live squawk box</a> for 7 days free.</p>

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

<p>The US midterms take place on November 8 and it all likelihood we will have a very good idea of who holds that balance of power that night. However that wasn’t the case in the most-recent US election and it might not be the case again on Tuesday.</p><p>Ballot counting is fraught by different systems, recounts and slow processes. If it’s too close to call, it will take some time to sort out but that’s not all.</p><p>In Georgia, one of the tightest races, we could see a repeat of 2020. In that race last time neither candidate received 50% of the vote so it went to a runoff that ultimately hoisted the Democrats to 50 seats and control of the Senate. That ultimately proved to be pivotal as it allowed them to pass numerous stimulus bills.</p><p>Polls for that race show libertarian candidate Chase Oliver sitting at 3-4% of the vote. If that’s enough to prevent Warnock or Walker from getting a majority, the runoff wouldn’t take place until December 6, leaving the balance of power in question.</p><p>An equally-close race is in Pennsylvania between Dr. Oz and John Fetterman. In that state, mail-in ballots aren’t counted until the day after election day and that could take days.</p><p>Arizona is also hotly-contested and voting there is mostly done by mail and in 2020 it was one of the last battlegrounds to be decided. The state also has an automatic threshold of 0.5% for a recount.</p><p>Add in the potential for candidates refusing to accept results and it could be a bumpy time.</p>

This article was written by Adam Button at forexlive.com.

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Can the momentum keep up?</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/vitol-threatens-to-cut-off-german-natural-gas-in-1-billion-standoff-20221104/“>Vitol threatens to cut off German natural gas in $1 billion standoff</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-barkin-we-could-potentially-have-a-higher-end-point-on-rates-20221104/“>Fed’s Barkin: We could potentially have a higher end-point on rates</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-collins-time-for-fed-to-shift-focus-from-size-of-rate-hikes-to-the-ultimate-level-20221104/“>Fed’s Collins: Time for Fed to shift focus from size of rate hikes to the ultimate level</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/oil-gets-a-double-dose-of-good-news-climbs-more-than-4-20221104/“>Oil gets a double dose of good news, climbs more than 4%</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/canadian-dollar-suddenly-has-everything-going-for-it-20221104/“>Canadian dollar suddenly has everything going for it</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/canada-october-employment-change-1083k-vs-100k-20221104/“>Canada October employment change 108.3K vs. 10.0K</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-october-non-farm-payrolls-261k-vs-200k-expected-20221104/“>US October non-farm payrolls +261K vs +200K expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/chinas-xi-we-will-continue-to-open-up-and-pursue-win-win-cooperation-20221104/“>China’s Xi: We will continue to open up and pursue win-win cooperation</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/boes-bailey-says-wont-sell-gilts-when-sales-might-increase-market-dysfuction-20221104/“>BOE’s Bailey says won’t sell gilts when sales might increase market dysfuction</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/technical-analysis/the-is-the-strongest-and-the-is-the-weakest-as-the-na-session-begins-20221104/“>The AUD is the strongest and the USD is the weakest as the NA session begins</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/forexlive-european-fx-news-wrap-dollar-drops-as-risk-gains-on-china-hope-nfp-up-next-20221104/“>ForexLive European FX news wrap: Dollar drops as risk gains on China hope, NFP up next</a></li></ul><p>The US nonfarm payroll came in better than expected at 261K vs 205K estimate. The prior month was revised higher to 315K from 263K. So stronger 300K growth month on month with the revision included. The average hourly earnings came in at 0.4% vs 0.3%. So that was higher. The unemployment rate moved higher to 3.7% but coming off record low levels is 3.7% much different than 3.5%? It still is a strong employment market. </p><p>The dollar went higher right?</p><p>Not so fast. </p><p>Initially, the move was to the upside, but stocks in pre-market trading hung in there. Then the dollar, perhaps seeing stocks not going down, started to sell. The stocks starting to see the dollar fall, and it moved higher. Yields moved around, but the shorter end started to come down helped by some Fed talk from Fed’s Collins who said it is time for the Fed to shift focus from size of rate hikes to ultimate level, and later said that all options should be on the table for the Fed’s next meeting including a 25 basis point hike and a 75 basis point hike. </p><p>Hmmmm. OK. </p><p>Fed’s Barkin said </p><ul><li>Now real rates are positive so you could credibly say we have our foot on the brake</li></ul><p>Hmmmm. OK. Although are rates at 4.65% for the 2 year and the Fed funds at 4% positive real rates? I thought PCE and CPI and other measures of inflation were still higher. </p><p>Anyway, it wasn’t until September 20, that the Fed policy was „restrictive“ (i.e., above 2.5%) and this last hike did move further into restrictive policy, but employment remains strong. Before September 20, you can argue that policy was still expansionary. </p><p>Fed Chair Powell was less positive about the prospects for a peak rate soon this week.</p><p>Time will tell. </p><p>The markets today wanted all to end, with stops moving higher, the yield curve steeper, and the dollar lower. So that’s what it did.</p><p>Looking at the strongest to the weakest of the major currencies, the AUD is ending the day where it began, as the stronges of the major currencies. In fact the AUDUSD pair had its biggest one day advance from a percentage basis going back to 2010 (up 3.07%). </p><p>The USD was the weakest of the major currencies with declines of 1.12% (versus the JPY) to 3.07% (vs the AUD). . </p><p>In the US equity market, the major indices moved higher initially at the open, and then gave back all the gains and traded lower, before rebounding and closing higher for the day. </p><ul><li>Dow industrial average closed up 403.53 points or 1.26% at 32404.79</li><li>S&P closed up 50.72 points or 1.36% at 3770.60</li><li>Nasdaq closed up 132.32 points or 1.28% at 10475.26</li><li>Russell 2000 closed up 20.13 points or 1.13% at 1799.86</li></ul><p>For the week, the major indices still closed lower.</p><ul><li>Dow industrial average fell -1.39%</li><li>S&P index fell -3.34%</li><li>NASDAQ index tumbled 5.65%</li><li>Russell 2000 fell -2.54%</li></ul><p>In the US debt market today, the yield curve steepened with the shorter end lower and the longer end higher.:</p><ul><li>2 year is trading at 4.66%, -4.1 basis points</li><li>5 year is trading at 4.332% -1.9 basis points</li><li>10 year is trading at 4.164% +4.1 basis points</li><li>30 year is trading at 4.257% +10.5 basis points</li></ul><p>In other markets as the week comes to a close:</p><ul><li>Spot gold is trading up $51 on the back of the week dollar that’s up 3.16% at $1680.50. Gold was up at 2.17% this week</li><li>Spot silver is trading up $1.43 or 7.42% the $20.88. Silver rose 8.64%</li><li>WTI crude oil is trading up $4.44 or 5.04% at $92.61. WTI crude oil rose 5.37%</li><li>Bitcoin love the risk on and is trading at $21,053. That’s up $844 on the day. For the week bitcoin rose 2.23%</li></ul><p>Thank you for all your support. Wishing you all a great and healthy weekend. </p>

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

<p>Comments in the Fed’s stability report</p><ul><li>Treasury market has functioned smoothly since last report in May</li><li>Market liquidity remained low in several key areas and that could amplify volatiltiy and may ultimately impair market functioning</li><li>Economic outlook has weakened, uncertainty remains elevated</li></ul><p>US regulators haven’t done enough to prevent air pockets in the bond market. The explosion in short-dated options trading is also something that’s obviously going to end in disaster at some point as well.</p>

This article was written by Adam Button at forexlive.com.

<p>Here’s the picture in gold the way I see it.</p><p>1) It has declined for seven straight months</p><p>That’s certainly not a sign of a bull market but nothing falls in a straight line and the decline of 13% is better than many major currencies over that period. The decline is mostly a story of US dollar strength and a tightening Fed.</p><p>2) Central banks are buying heavily</p><p>The World Gold Council reported that central banks bought 399 tons of bullion in the third quarter, which was nearly double the previous record for Q3. It’s unclear which central banks were buying but eyes are on Russia and China due to the US’s weaponization of the US dollar.</p><p>3) Beyond maximum central bank hawkishness</p><p>There were 6 major central bank decisions in the past week and 5 of them were dovish. The Fed ratcheted up the terminal rate but only „slightly“ as Chicago Fed President Charles Evans <a target=“_blank“ href=“https://www.forexlive.com/centralbank/evans-fed-is-looking-for-the-right-level-of-restrictiveness-20221104/“ target=“_blank“>said </a>today. To be sure, central banks are still hiking but the pace is slowing and markets generally move on the second derivative.</p><p>What worries me is the technicals</p><p>The chart isn’t great. There’s still a daunting double top at $2070 and the latest bounce looks like a retest of the base of it before a further fall. The measured target of the double top is $1350.</p><p>What makes me skeptical that it’s going to happen is that it hasn’t happened yet. It’s been a perfect storm of USD strength, central bank hawkishness and a rout in risk assets yet it’s held up ok.</p>

This article was written by Adam Button at forexlive.com.

<p>The EURUSD is moving to a new session high and in the process is up testing one of my old favorite levels. The 0.99515 level. That level was the swing low back in July after the price broke below the parity level for the first time. In September the price moved down to test it, before breaking to the cycle low for the year. Last month, the pair used the level as a risk defining target as well.</p><p>We are back testing it. A move above would have traders looking toward the parity level and then the falling 100 day MA at 1.00515. Hold below and traders will look toward 0.9898.</p>

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

<p>The AUD is the strongest and the USD is the weakest as the North American session begins. In the US, the Bureau of Labor Statistics will release their monthly jobs report (Canada will also release their monthly employment data). The expectations are for</p><ul><li>Nonfarm payroll: 205K vs. 263K last month</li><li>Unemployment rate 3.5%</li><li>Avg hourly wages 0.3% vs. 0.3% last month. Year on year 4.7% vs. 5.0%</li><li>Average workweek 34.5 hours unchanged from the previous week</li><li>participation rate last month came in at 62.3 percent</li></ul><p>The leisure and hospitality sector is still 1.1M behind the pre-pandemic level which may be an influence in a rise. Meanwhile the tech sector has announced that about 1/3 of the job announced cuts. Do we see a shift in this months numbers within the details that shows shifting winds. </p><p>US stocks are higher ahead of the report. The major indices are down 4 consecutive days. US yields are trading higher. European stock indices and yields are also higher.</p><p>In Europe this morning, German factory orders plunged -4% vs. -0.5% expected. Ouch. However services PMI although below the 50 level were higher than expectations and higher than last month at 48.6 vs. 48.2.</p><p>The Canada jobs report is expected to show an employment change of a 11.0 K vs. 21.1 K last month. The unemployment rate is expected to rise to 5.3% from 5.2%. Last month full-time employment gain 5.7K while part time employment rose by 15.4K. Average hourly wages came in last month that 5.2% last month</p><p>Looking at other markets ahead of the key jobs reports:</p><ul><li>Spot <a target=“_blank“ href=“https://www.forexlive.com/terms/g/gold/“ target=“_blank“ id=“c0483026-a32e-4e25-8e74-f808d52790c3_1″ class=“terms__main-term“>gold</a> is trading up $22 or 1.35% at $1651.20.</li><li>Spot <a target=“_blank“ href=“https://www.forexlive.com/terms/s/silver/“ target=“_blank“ id=“f3f46493-8e6f-475a-a7ba-a6c320e4d51c_1″ class=“terms__secondary-term“>silver</a> is up $0.44 or 2.3% at $19.89</li><li>crude oil is trading up sharply by $3.10 and $91.27</li><li>bitcoin is trading higher $20,576</li></ul><p>In the market for US stocks, the major indices are trading higher after 4 straight days of declines:</p><ul><li>Dow industrial average is up 157 points after yesterdays -146.51 point decline</li><li>S&P index is up 25.5 points after yesterdays -39.80 point decline</li><li>NASDAQ index is up 76 points after yesterdays -181.86 point decline</li></ul><p>In the European equity markets, the major indices are higher:</p><ul><li>German DAX +1.86%</li><li>France’s CAC up 2.4%</li><li>UK’s FTSE 100 up 1.44%</li><li>Spain’s Ibex up 0.46%</li><li>Italy’s FTSE MIB up 0.92%</li></ul><p>In the US debt market, prices remain pressured/yields are higher after the FOMC rate decision this week and the comments from Fed’s Powell:</p><p>In the European debt market, the benchmark 10 year yields are higher across the board:</p>

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