EURUSD
- EUR/USD Price: The EUR/USD pair edged up to 1.0795 in early Monday trading, though it remains close to the descending channel’s upper boundary, a technical level that could reintroduce a bearish trend.
- ECB Policy Expectations: The Euro faces pressure as expectations grow for a more aggressive ECB policy easing. Lower inflationary pressures and signs of economic weakness in the Eurozone have contributed to a softer outlook for the currency.
- ECB’s Knot Remarks: Over the weekend, ECB Governing Council member Klaas Knot remarked on the importance of “keeping all options open” to address potential risks to Eurozone growth and inflation, leaving room for future rate adjustments.
- US Consumer Sentiment: The US Michigan Consumer Sentiment Index rose to 70.5 in October, surpassing expectations and supporting the US Dollar.
- More US Data: Durable Goods Orders fell by 0.8% in September, a smaller decline than anticipated, hinting at ongoing resilience in US economic activity.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: EUR/USD struggles to gain traction amid expectations of ECB policy easing and stronger US sentiment data, reinforcing bearish signals for the pair.
GBPUSD
- GBP/USD Extends Losses: The GBP/USD pair continues its downward trend, hovering around 1.2960 in the European session as the market weighs recent data and BoE policy signals.
- BoE’s Mann on Rate Cuts: Bank of England MPC member Catherine Mann, known for her hawkish stance, warned on Thursday against premature rate cuts, highlighting the potential long-term inflationary pressures stemming from a persistent wage-price dynamic.
- US Consumer Sentiment Index: The University of Michigan’s Consumer Sentiment Index reached a six-month high of 70.5 in October, exceeding expectations and boosting the US Dollar.
- Durable Goods Orders: Durable Goods Orders fell by 0.8% in September, a smaller decline than expected, suggesting economic resilience that aligns with the Fed’s gradual rate-cut outlook.
GOLD
- Gold Price: After a two-day recovery, XAU/USD stalls below $2,750 on Monday as market attention shifts to upcoming key events and data releases.
- Geopolitical Concerns: The USD strengthens amid rising safe-haven demand driven by escalating Middle East tensions and uncertainty around the November 5 US presidential election. Israel’s airstrikes on Iran, a response to earlier missile attacks, have intensified market caution, further supporting the Dollar.
- Fed Easing Expectations: Continued resilience in US economic data fuels expectations of a less aggressive Fed easing cycle, bolstering the USD, which pressures gold prices.
- China Stimulus Hopes: Expectations for increased Chinese stimulus measures, as highlighted by Vice Minister Liao Min’s statements on boosting economic policy adjustments, provide underlying support for gold.
Closing statement: XAU/USD faces downside pressure from a strong USD on geopolitical concerns and Fed policy outlook. However, Chinese stimulus expectations could offer some support, creating a mixed outlook for the precious metal.
CRUDE OIL
- WTI Prices: WTI Crude declines to approximately $68.55 per barrel during Monday’s European session, marking a significant drop amid moderating geopolitical risks.
- Eased Geopolitical Tensions: The decrease in prices is partly due to calming Middle East tensions following Israel’s targeted airstrikes on Iran over the weekend. The strikes, focused on missile and air defense sites, were less aggressive than anticipated, reducing concerns of a prolonged conflict that could disrupt supply.
- OPEC+ Plans Output Increase: The OPEC+ alliance remains committed to rolling back some production cuts, with an increase of 180,000 bpd set to begin in December. This move aims to stabilize the market amid changing demand dynamics.
- Weaker Demand from Asia: Asian demand, crucial as it accounts for nearly two-thirds of global seaborne crude imports, has remained subdued throughout 2024, further pressuring oil prices.
- Q3 Earnings Reports: Investors are also closely watching Q3 earnings reports from major oil firms, including BP, Shell, Chevron, ExxonMobil, and others, which may provide insights into the sector’s financial resilience and supply outlook.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: WTI Oil faces pressure from easing geopolitical concerns and subdued Asian demand, while OPEC+ production adjustments and upcoming earnings reports could influence near-term pricing stability.
DAX
- Auto Sector News: The German auto sector was a major focus, with Mercedes-Benz Group falling 0.98% on Friday following disappointing earnings. The company reported a 64% drop in operating profit, attributing this to increased competition in Asia and declining demand. Volkswagen and BMW also faced losses, dropping 0.67% and 0.63%, respectively.
- Positive German Ifo Data: The Ifo Business Climate Index rose to 87.3 in October, up from 86.4 in September, surprising to the upside. The encouraging data and improved business expectations boosted buyer demand for DAX-listed stocks, offering a positive outlook on Germany's economic sentiment.
- Strong US Data: US durable goods orders (excluding transport) rose by 0.4% in September, adding to the 0.6% increase in August. The solid data, combined with positive consumer sentiment, raised hopes for a soft US economic landing, which contributed to global market optimism.
- US Election News: Investor sentiment for DAX-listed export stocks was affected by concerns of a potential Donald Trump victory in the US elections, seen as unfavorable for US-EU relations. Trump’s trade policies could introduce punitive tariffs on EU goods, negatively impacting the Eurozone economy.
- Upcoming Key US Data: This week, Thursday’s US Personal Income and Outlays Report and Friday’s Jobs Report are highly anticipated, likely to shape global market sentiment and offer direction to DAX investors.
