Market movers today

  • In Norway, inflation data for October is due out. We estimate core inflation slowed to 1.8% y/y, from 1.9% y/y in September. For more see Scandi markets overleaf.

  • In the UK, focus remains on Brexit, where we have seen mixed signals on whether the UK Cabinet is about to reach an agreement on the UK's backstop proposal (backstop is the solution to avoid a harder border if negotiations on the future relationship breaks down). Besides this, we are due to get the monthly GDP figure for September (and hence the first full estimate for growth in Q3), which we estimate rose 0.1% m/m. We believe it is likely GDP grew 0.6% q/q in Q3.

  • In the US, preliminary consumer confidence from the University of Michigan is due out in the afternoon.

 

Selected market news

The positive risk sentiment in financial markets seen earlier this week did not last long. Asian stock markets fell 1-2% overnight, while the USD stayed strong and the 10Y US yield continues to trade around this year's peak of 3.23%. The oil market sold off further yesterday, with the price of Brent crude falling below USD71/bbl.

Chinese inflation data for October was published overnight. It came in roughly as expected 6 PPI was 3.3% y/y, down from 3.6% y/y in September, and CPI was 2.5% y/y, unchanged from the previous month. Hence, inflationary pressures remain muted in the Chinese economy and do not constrain the People's Bank of China from keeping an easy stance on monetary policy.

Money-supply growth in Japan is also worth keeping an eye on. Both growth in M2 and M3 money supply slowed in October to 2.7% y/y and 2.3% y/y, respectively.

Finally, the Reserve Bank of Australia kept monetary policy unchanged but signalled that higher rates are to come amid a sound economy but downplayed the likelihood of a near-term move.

As expected, the Fed stayed on hold today and made no major change to the policy signals in the statement, which means the Fed is still on track to hike rates again in December. A few in the market had speculated that the Fed would cut interest on excess reserves (IOER) by 5bp at this meeting, as the effective Federal funds rate had crept higher leading up to the meeting. However, the Fed could instead make an adjustment hike of 15-20bp of IOER in December following a widely expected 25bp hike of its target rate (see FOMC Review 6 No change to the Fed's hiking plans , 8 November).

Download The Full Daily FX Market Commentary

This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: positive mood could prevent the collapse

The shared currency has remained under selling pressure on Friday, amid mounting speculation the ECB will announce a larger-than-anticipated stimulus package next September. EUR/USD capped by a Fibonacci resistance at 1.1110, yearly low at risk.

EUR/USD News

GBP/USD: economic disruption on a no-deal Brexit to weigh on Sterling

The GBP/USD pair has closed the week with gains, a handful of pips below the 1.2150 level. The Pound advanced for a third consecutive day, helped by some headlines indicating that Jeremy Corbyn, has been in talks with the Scottish National Party.

GBP/USD News

USD/JPY: short-term advance to be capped by long-term jitters

The USD/JPY has recovered some ground these last few days, to close the week at 106.35. Still, it posted a lower low and a lower high when compared to the previous week, as the Yen benefited from its safe-haven condition on mounting concerns about a US recession. 

USD/JPY News

Four Signs of A Bear Market

I am a believer that the Universe gives you signs. That may sound a bit crazy, but these three charts are three more signs of a bear market. The top chart is the GLD exchange traded fund.

Read more

Gold gives back territory towards a 23.6% retracement

Gold prices were a touch lower by the end of the week, falling -0.68% having travelled between a high of $1,528.00 to a low of $1,503.87, ending the NY session around $1,513. 

Gold News

Majors

Cryptocurrencies

Signatures