The week highlights U.S. consumer confidence and job openings data, with gold and silver prices impacted by geopolitical tensions and a stronger dollar. Market expectations for Eurozone rate cuts influence the EUR/USD pair, while the British Pound faces downward pressure amid fiscal concerns.
Time | Currency | Event | Forecast | Previous |
Tuesday, October 29, 2024 | ||||
14:00 | USD | CB Consumer Confidence (Oct) | 98.8 | 98.7 |
14:00 | USD | JOLTS Job Openings (Sep) | 8.040M | |
Wednesday, October 30, 2024 | ||||
09:00 | EUR | German GDP (QoQ) (Q3) | -0.10% | -0.10% |
10:00 | GBP | Autumn Forecast Statement | ||
12:15 | USD | ADP Nonfarm Employment Change (Oct) | 120K | 143K |
12:30 | USD | GDP (QoQ) (Q3) | 3.00% | 3.00% |
13:00 | EUR | German CPI (MoM) (Oct) | 0.00% | |
14:30 | USD | Crude Oil Inventories | 5.474M | |
Thursday, October 31, 2024 | ||||
01:30 | CNY | Manufacturing PMI (Oct) | 49.8 | |
03:00 | JPY | BoJ Interest Rate Decision | 0.25% | 0.25% |
10:00 | EUR | CPI (YoY) (Oct) | 1.70% | |
12:30 | USD | Core PCE Price Index (YoY) (Sep) | 2.70% | |
12:30 | USD | Core PCE Price Index (MoM) (Sep) | 0.10% | |
12:30 | USD | Initial Jobless Claims | 227K | |
13:45 | USD | Chicago PMI (Oct) | 46.6 | |
Friday, November 1, 2024 | ||||
12:30 | USD | Average Hourly Earnings (MoM) (Oct) | 0.30% | 0.40% |
12:30 | USD | Nonfarm Payrolls (Oct) | 140K | 254K |
12:30 | USD | Unemployment Rate (Oct) | 4.10% | 4.10% |
14:00 | USD | ISM Manufacturing PMI (Oct) | 47.6 | 47.2 |
14:00 | USD | ISM Manufacturing Prices (Oct) | 48.3 | |
14:45 | USD | S&P Global US Manufacturing PMI (Oct) | 47.8 | 47.3 |
Last week saw pullbacks in gold and silver prices after reaching new highs. The strengthening of the dollar index and Treasury yields ahead of the upcoming U.S. elections contributed to this decline. However, rising tensions in the Middle East between Israel and Iran, as well as increased tensions between China and Taiwan, have heightened geopolitical risks, which may continue to support these safe-haven assets in the near future. Additionally, positive news and stimulus packages from China could positively impact silver, given that China is the largest silver importer. In terms of performance, gold outperformed silver this week, managing to close flat while silver ended the week in negative territory. As a result, the gold-to-silver ratio rose by approximately 2% over the week.
Instrument | PRICE | WEEKLY CHANGE |
XAUUSD | 2722.23 | 0.04% |
XAGUSD | 33.216 | -1.45% |
XAU/XAG | 82.01 | 2.07% |
The dollar index experienced profit-taking following a strong start, influenced by a combination of economic data, the upcoming U.S. elections, and statements from Federal Reserve officials throughout the week.
Recent data revealed that initial claims for unemployment benefits in the U.S. fell by 15,000 to 227,000 for the week ending October 19, marking the lowest level since the beginning of the month and significantly below market expectations of 242,000. This decline supports the view that the U.S. labor market remains resilient despite the Fed's restrictive interest rate policies, reinforcing speculation that the central bank may adopt a more cautious approach to future rate cuts.
The S&P Global U.S. Composite PMI rose to 54.3 in October, up from 54.0 in September, indicating strong growth in business activity as the fourth quarter begins. This uptick was primarily driven by the service sector, which recorded a PMI of 55.3. However, the S&P Global Flash U.S. Manufacturing PMI increased to 47.8 in October from a 15-month low of 47.3 in September. Despite this rise, it still reflected deteriorating conditions in the manufacturing sector for the third consecutive month. The ongoing decline in new orders, which fell for the fourth straight month, remained the main source of negative impact, although the pace of this decline moderated compared to September's significant drop. Employment in manufacturing experienced a slight decline for the third month, reflecting uncertainties ahead of the presidential election.
Nonetheless, businesses reported heightened confidence for the upcoming year, anticipating greater stability post-election. The survey also highlighted a slowdown in inflation for input costs and prices charged, especially within the service sector.
The positive surprise in PMI data further supported the dollar index. Coupled with hawkish remarks from Fed officials, which echoed Chair Powell's stance on maintaining higher interest rates over the long term and adopting a careful approach to rate cuts, this helped support the dollar.
Finally, expectations surrounding the upcoming U.S. elections, particularly the prospect of Trump's reelection, given his inflationary policies, contributed to the belief that the Fed would proceed with slower rate cuts, thereby reinforcing the strength of the dollar index. As a result, the dollar index concluded the week approximately 0.6% higher.
Instrument | PRICE | WEEKLY CHANGE |
DXY | 104.05 | 0.56% |
The past week saw increased expectations for interest rate cuts in the Eurozone. Following lower-than-expected inflation data, Germany—Europe's largest economy—reported a Producer Price Index (PPI) that also fell below expectations, highlighting a strengthening deflationary trend on a yearly basis. Additionally, Eurozone PMI data failed to meet forecasts, further fueling expectations for rate cuts. Statements from ECB officials supported these views; Lagarde expressed satisfaction with the ECB's observations, while Mario Centeno indicated that a 50 basis point cut in December is possible. As a result of these developments, the EUR/USD pair closed the week in negative territory.
The British Pound finished the week on a downward trend as Finance Minister Rachel Reeves indicated that she may allow increased borrowing in the upcoming budget, which could postpone rate cuts by the Bank of England. Reeves plans to revise fiscal rules to prioritize public sector net financial liabilities (PSNFL), potentially freeing up tens of billions for capital investment. The Institute for Fiscal Studies noted that this adjustment could have facilitated an additional £53 billion in borrowing last March, although the Treasury has signaled it will not immediately take advantage of this capacity. Additionally, Bank of England Governor Andrew Bailey expressed concerns about persistent inflation, highlighting that, despite being lower than expected, ongoing structural economic changes and elevated service sector inflation remain significant issues. As a result, market expectations for a BoE rate cut in November have decreased from 100% to 86%. Furthermore, flash PMI data revealed slower growth in both the UK manufacturing and services sectors for October. Despite these developments, the GBP/USD pair was unable to close the week on a positive note.
The Japanese yen experienced a decline of nearly 1.5%. Ahead of the upcoming general elections, concerns over the ruling party potentially losing its majority in parliament have created political uncertainty, complicating the Bank of Japan's normalization plans. Additionally, Tokyo's inflation figures came in below the BOJ's target, allowing the central bank to proceed cautiously regarding interest rate hikes. Economy Minister Akazawa acknowledged that a weak yen has various impacts on the economy, and while he did not specify a particular level, the market began to anticipate possible intervention. Coupled with the strong dollar theme, these developments led to a further depreciation of the yen by the end of the week.
Following recent inflation data that fell below the Bank of Canada's (BoC) target and weak labor market indicators, market expectations for a 50 basis point rate cut emerged for the Canadian dollar. In line with these expectations, the BoC implemented a 50 basis point cut this week, following three prior reductions of 25 basis points each. Given the current economic data, it appears that further cuts may be on the horizon. Additionally, the resulting decline in oil prices, which limits exports, contributed to the Canadian dollar's depreciation by the end of the week.
Last week, the People's Bank of China injected CNY 700 billion into financial institutions through a one-year medium-term lending facility (MLF), maintaining the interest rate at 2%. This action followed a significant rate cut the previous month when the central bank lowered the MLF rate by 30 basis points from 2.3% to 2% in an effort to stimulate growth amid ongoing economic challenges. Traders are now keenly awaiting details of a proposed CNY 8 trillion stimulus package, with the National People's Congress (NPC) Standing Committee yet to announce a meeting date. There are also strong expectations for CNY 1 trillion in special government bonds aimed at supporting bank recapitalization, along with a CNY 5 trillion increase in the local government debt swap quota. With these developments, the yuan ended the week with a depreciation.
The Australian dollar closed the week lower, impacted by the strengthening dollar theme and domestic developments. Key data revealed that while private sector activity in services increased, production activity contracted at its fastest pace since May 2020, suggesting a potential stabilization. Additionally, comments from Hauser, indicating that the central bank is ready to respond in both directions based on incoming data, drew attention. The market expects the Reserve Bank of Australia (RBA) to maintain interest rates this year, with the first rate cut anticipated in May.
INSTRUMENT | PRICE | WEEKLY CHANGE |
EURUSD | 1.08237 | -0.40% |
GBPUSD | 1.29871 | -0.46% |
AUDUSD | 0.66293 | -1.15% |
NZDUSD | 0.60027 | -1.13% |
USDJPY | 151.894 | 1.59% |
USDCAD | 1.38481 | 0.36% |
Last week, equity indices experienced a downward trend. With the upcoming week being the last before the elections, the market sentiment appears cautious. The possibility of Trump, who has historically pursued inflationary policies, returning to power raises expectations that the Fed may delay interest rate cuts, contributing to gains in the dollar index and Treasury yields. While the Nasdaq closed the week flat, the S&P 500 recorded a decline of approximately 1%, and the Dow Jones fell by about 2%. However, due to the earnings season, there have been notable performances on both the positive and negative sides among individual stocks.
Tesla closed the week with an impressive gain of approximately 17%, driven by strong earnings that exceeded expectations.
Starbucks opened lower with a gap down following earnings that fell short of expectations but managed to close the week flat.
European indices generally experienced a decline over the past week, with the CAC40 falling by 1.18%, the IBEX 35 down by 0.8%, and the DAX closing with a 1.5% drop. The upcoming inflation data from Germany and the broader Eurozone is expected to significantly influence the direction of these indices.
Instruments | PRICE | WEEKLY CHANGE |
S&P 500 | 5823.39 | -0.70% |
DOW JONES | 42424 | -1.97% |
NASDAQ | 20272 | -0.26% |
DAX | 19432 | -1.15% |
Today, markets respond to the Federal Reserve’s recent 25-basis-point rate cut decision. It reflects a flexible approach, with Chair Jerome Powell highlighting a meeting-by-meeting policy stance, unaffected by the recent U.S. election outcome.
Detail BoE Lowers Rates as Fed Prepares for Another CutThe Bank of England has lowered its benchmark rate by 25 basis points to 4.75%, in line with market expectations. This reduction follows a steady rate in September and a similar 25 basis point cut in August.
Detail Markets Await Fed, BoE Decisions as Dollar Surges Post-Election (11.07.2024)Today, the market landscape cautious as the dollar rallies on Donald Trump’s U.S. presidential election victory, with investors focused on upcoming rate decisions from both the Federal Reserve and the Bank of England.
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