News

Volkswagen on Wednesday warned of temporary production outages citing China’s export restrictions on semiconductors made by Nexperia.

EUR/USD has retraced previous gains on Wednesday, to extend its decline to one-week lows below 1.1600, trading at 1.1586 at the time of writing.

Across banking, the auto sector and retail, executives are warning employees and investors that AI is taking over jobs.

Gold (XAU/USD) extends its decline on Wednesday, losing further ground after Tuesday’s sharp correction from record highs, as improving risk sentiment kept buyers on the sidelines.

Crude prices are trading higher for the second consecutive day on Wednesday.

In recent weeks, Nigel Farage has sharpened criticism of the Bank of England. His challenge to central bank independence isn’t just opposition rhetoric but signals potential future policy, Rabobank’s Senior Macro Strategist Stefan Koopman reports.

Headlines:

• UK September CPI +3.8% vs +4.0% y/y expected
• Sterling drops to one-week low after UK inflation data
• Traders increase BoE rate cut bets with the December meeting now seen as live
• Gold stumbles back lower in European morning trade
• ECB’s de Guindos: Current ECB interest rate level is adequate
• SNB Chairman Schlegel: US tariffs could increase downside risks for the economy
• Cannot say that Japan has exited deflation fully – finance minister Katayama
• US MBA mortgage applications w.e. 17 October -0.3% vs -1.8% prior

Markets:

• JPY leads, GBP lags on the day
• European equities mostly lower; S&P 500 futures flat
• US 10-year yields down 1.6 bps to 3.947%
• Gold down 2.4% to $4,023.19
• WTI crude oil up 2.0% to $58.42
• Bitcoin down 2.7% to $107,930

The main headline on the session came early on with UK inflation seen coming in softer than estimated in September. A rise in services inflation did not materialise and food price inflation was much softer, paving the way for the BOE to push for rate cuts sooner rather than later. And that’s precisely how markets responded as well.

The inflation numbers aren’t likely to be enough to change the outlook for November but a December rate cut is definitely plausible now. Traders moved to price those odds in, with the next full 25 bps rate cut seen for February 2026 and that is brought forward from March 2026 before the data.

In reaction, the pound fell with GBP/USD sliding from 1.3360 to a low of 1.3305 as sellers hold the near-term momentum for now. Besides that, other major currencies are more muted with 0.1% changes across the board among dollar pairs. Talk about a snoozefest, eh?

In other markets, stocks were also not up to much with European indices giving back some of the gains from yesterday with US futures also lacking any real conviction and appetite. Investors will be waiting on Tesla earnings after the close today for something to work with at least.

Once again though, precious metals continue to make the headlines with gold seen rebounding early on after the heavy slump in Asia. The precious metal moved up to a high of $4,161 after a low of $4,004 earlier in the day before falling back by over 2% now to $4,023. The volatility bouts are continuing to play out as sellers hold near-term control and hoping to try and break below the $4,000 mark.

The waiting game continues as we remain in the countdown zone ahead of US-China meetings as well as the Fed next week.

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

The Pound Sterling (GBP) faces intense selling pressure against its major peers on Wednesday after the release of the United Kingdom (UK) Consumer Price Index (CPI) data for September.

Fundamental
Overview

The Nasdaq recovered all
the losses as the de-escalation that ensued soon after Trump’s threat of
massively increasing tariffs on China gave the bulls a good reason to keep
piling into the market.

The baseline expectation is
for US and China to reach some kind of a deal before the November 1st
deadline. If that doesn’t happen, then we can expect the deadline to be
postponed keeping the negotiations going.

Everybody knows that 155%
tariffs on China would be a suicide for both, so it’s kind of an empty threat.
Nevertheless, we could still see the markets selling off in case things go
south and Trump decides to impose those tariffs. It’s a very low risk, but
still a risk.

On Friday, the BLS will
release the US CPI report despite the shutdown since it’s crucial for social security
benefits adjustment required by November. The data won’t stop the Fed from
cutting rates in October, but it could trigger a hawkish repricing in case we
get an upside surprise.

Nasdaq
Technical Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq erased all the losses and it’s
now trading near the all-time high. This is where we can expect the sellers
to step in with a defined risk above the all-time high to position for a drop
into the major trendline. The buyers, on the other hand, will want to see the
price breaking higher to increase the bullish bets into new highs.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a key support zone around the
25,200 level. That’s where we can expect the buyers to step in with a defined
risk below the support to position for a rally into new all-time highs. The
sellers, on the other hand, will look for a break lower to increase the bearish
bets into the trendline around the 24,700 level.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the consolidation between the all-time high and the 25,200
support. There’s not much else we can add here as the buyers will look for
bounces around the support, while the sellers will target a breakout. The red
lines define the average daily range for today.

Upcoming Catalysts

On Friday, we will get the US CPI report and the US flash PMIs.

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