Author: admin

President Trump has said he might give Ukraine long-range cruise missiles called Tomahawks. Russia said that would be seen as a “serious escalation” in the war.

The US Dollar found support at the 98.80 area after retreating from the mid-range of the 99.00s on Friday, following Trump’s threat to impose 100% tariffs on China.

• Inflation and wage growth is also stronger
• I have concerns that the disinflationary process might be slowing
• BoE thinks underlying growth is weak, and the labour market is weakening
• There’s uncertainty around forecasts
• Core inflation has gone sideways for the past year
• I think there is a concern particularly in the UK about inflation expectations
• Rates are probably still on a downward path but monetary policy is less restrictive
• There is a case for higher for longer rates and skipping a cut

There’s been a refocus on inflation recently from the BoE members. That’s what they should focus on given that they’ve been much above target for five years now and they also have consumer inflation expectations rising steadily.

This article was written by Giuseppe Dellamotta at investinglive.com.

• This was a provocative move
• There was substantial communication over the weekend
• There will be lots of staff level meetings
• China is neither going to command or control us
• We have already been in touch with allies, meeting them this week
• Expect support from India and other countries
• Believes that China is open to discussions on this matter
• If not, we have substantial levers we can pull
• We could move more aggressively than how China has
• We don’t want to decouple but China is sending a decoupling message
• Everything’s on the table, but confident that this can be de-escalated
• Trump still on track to meet with Xi in South Korea

The first few remarks sounded like he was trying to cool the rhetoric a little. However, the part on going “more aggressively” might be something to temper some of the optimism to start the week. It still sounds like both sides are still quite some ways of from pressing the pause button again though. But hey, at least there’s still time. We’re roughly three weeks away from the 1 November deadline.

This article was written by Justin Low at investinglive.com.

Silver (XAG/USD) found resistance at fresh four-year highs right above $51.70 and retreated sharply during Mondfday’s European morning session.

Australian Dollar (AUD) is likely to consolidate within a range of 0.6465/0.6530. In the longer run, further declines in AUD still appear likely; the next level to watch is 0.6440, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Fundamental
Overview

The USD came under some
pressure on Friday as the risk-off sentiment caused by Trump’s threat of
substantially increasing tariffs on China weighed on Treasury yields. Over the
weekend, we had more soothing comments from Trump and other US officials which
triggered a recovery in risk sentiment.

The positive mood is
weighing a bit on the greenback amid lack of bullish catalysts. Domestically,
nothing has changed for the US dollar as the US government shutdown continues
to delay many key US economic reports. The dollar “repricing trade” needs strong
US data to keep going, especially on the labour market side, so any hiccup on
that front is likely to keep weighing on the greenback.

The market pricing shifted
more dovish with 47 bps of easing by year-end and 115 bps cumulatively by the
end of 2026. The BLS announced last week that it will release the US CPI report
despite the shutdown on October 24, so that’s going to be a key risk event. In
case we get hot data, we will likely see a hawkish repricing in interest rates
expectations with the December cut being priced out. Conversely, a soft report
shouldn’t change much in terms of pricing, but it will likely weigh on the
greenback anyway.

On the CAD side, we got a
strong employment report on Friday beating expectations by a big margin although
the unemployment rate remained unchanged. The BoC cut interest rates by 25 bps
as expected at the last meeting and stressed the need to remain attentive to
risks and setting policy on a meeting-by-meeting basis. The probabilities of a
cut in October fell to 56% following the employment report but we still have
the CPI report before the next meeting.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD reached the key 1.4018 level last week and pulled back. This is
where we can expect the sellers to step in with a defined risk above the level
to position for a drop into new cycle lows. The buyers, on the other hand, will
want to see the price breaking higher to increase the bullish bets into the
1.43 handle next.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have an upward trendline defining the bullish momentum. The buyers
will likely lean on the trendline with a defined risk below it to keep pushing
into new highs, while the sellers will look for a break lower to increase the
bearish bets into new lows.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we a support zone around the 1.3975 level. If the price gets there, we
can expect the buyers to step in with a defined risk below the support to
position for a rally into new highs. The sellers, on the other hand, will look
for a break lower to extend the pullback into the trendline. The red lines
define the average daily range for today.

Upcoming Catalysts

This week is going to be very light again in terms of data
releases given the US government shutdown. Data like Retail Sales and Jobless
Claims won’t be released. We will have lots of Fed speakers though with Fed
Chair Powell scheduled for tomorrow. Given the lack of key US data though, it’s
very unlikely to see a change in stance. For now, we know that only the US CPI
will be published despite the shutdown, which is scheduled for Friday October
24.

This article was written by Giuseppe Dellamotta at investinglive.com.

President Trump’s threats of higher US tariffs on China last Friday led to some decisive price action in FX and bond markets. USD/CNH traded sharply higher, but the DXY dollar index dropped even more as investors felt the fallout would be greater on the US than on China.

Pound Sterling (GBP) could rebound further; any advance is likely part of a 1.3290/1.3390 range. In the longer run, downward momentum has slowed somewhat, but there is still a chance for GBP to decline to 1.3200, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.