It was another volatile day in the financial markets, as currencies and asset classes dealt with a handful of top-tier catalysts.
Not only did Uncle Sam print the Q3 advance GDP, but Australia also released its quarterly inflation report while big tech companies like Meta and Microsoft released earnings figures.
Check out the latest headlines driving price action!
Headlines:
- Australia CPI q/q: 0.2% (0.3% expected, 1.0% previous) annual reading down from 2.7% to 2.1% vs. 2.3% forecast
- Japanese consumer confidence index dipped from 36.9 to 36.2 in October (36.7 forecast)
- German preliminary CPI accelerated from 0.0% to 0.2% m/m in Sept (0.2% forecast)
- French flash GDP for Q3 showed 0.3% q/q expansion vs. estimated 0.3% figure, previous reading downgraded from 0.3% to 0.2% growth
- Swiss KOF economic barometer in Oct: 99.5 (105.1 forecast, previous reading downgraded from 105.5 to 104.5)
- Spanish flash CPI up from 1.5% y/y to 1.8% (1.7% forecast)
- German unemployment change in Sept: 27K (15K forecast, previous reading revised from 17K to 19K in joblessness)
- Eurozone preliminary flash GDP in Q3: 0.4% m/m (0.2% forecast, previous reading downgraded from 0.3% to 0.2%)
- OPEC+ considering delaying its production hike by a month or more past December, according to a Reuters report citing three sources
- ECB official Schnabel says that disinflation remains on track but that battle against inflation is not yet won, so gradual approach to removing restriction is appropriate
- ADP non-farm employment change in Oct: 233K (110K forecast, previous reading upgraded from 143K to 159K)
- U.S. advance GDP for Q3: 2.8% q/q (3.0% forecast, previous reading upgraded from 2.8% to 3.0%)
- U.S. advance GDP price index for Q3: 1.8% q/q (1.9% forecast, previous reading revised higher from 2.3% to 2.5%)
- U.K. Autumn Forecast Statement reveals pay boost for over 3 million workers next year, as National Living Wage rises by 6.7% and 18-20 National Minimum Wage will rise by £1.40 per hour – the largest increase on record
- U.S. pending home sales jumped 7.4% m/m in Sept (1.9% expected, 0.6% previous)
- U.S. election poll indicated that Trump was leading Harris in Pennsylvania and gaining a lead compared to previous surveys
- EIA crude oil inventories fell 0.5M barrels (expected 1.5M gain, previous 5.5M increase)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Major asset classes started the day on a relatively chill note, moving mostly sideways throughout the Asian session, with WTI crude oil on a slow but steady climb.
Word through the grapevine is that the OPEC is considering delaying its planned production hike by a month or so past their December target date.
The energy commodity continued to advance leading up to top-tier U.S. data releases, but dipped upon seeing slightly weaker than expected advance GDP data, which sparked some demand concerns. Crude oil resumed its climb upon seeing a surprise draw in EIA inventories, which appeared to reassure investors that consumption is supported.
Meanwhile, gold traders appeared to take it easy for today, as the precious metal hovered just slightly within positive territory throughout. Crypto traders also took a chill pill, with BTC/USD hanging out just below its all-time highs.
U.S. equity indices, on the other hand, found themselves in the red despite strong earnings from big tech companies like Meta and Microsoft, as a massive tumble in AMD shares dragged stocks of other chipmakers south.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Major Currencies Chart by TradingView
The trading day started with another bout of volatility for the Aussie and Kiwi, as weaker than expected Australian quarterly CPI initially led to a small dip for AUD/USD, followed by a quick pullback then an even larger selloff.
The rest of the dollar pairs cruised carefully in ranges, although USD/JPY was still slightly in the red. The Greenback found itself on weak footing around the start of the London session, as risk appetite appeared to improve while the euro drew some support from mostly better than expected preliminary GDP and CPI readings from the region’s top economies.
GBP/USD veered away from the pack, though, as traders seemed uneasy ahead of the U.K. Chancellor’s budget announcement. The actual Autumn Forecast Statement initially spurred gains for sterling when markets focused on the significant increase in wages for next year and the lack of outsized tax hikes, but these gains were short-lived.
As for U.S. data points, the dollar raked in some gains upon seeing stronger than expected ADP figures for October and positive revisions in the previous month’s figure, as these pointed to a potential upside NFP surprise. However, the currency returned these wins and more when the U.S. advance GDP reading fell short of estimates while the price index for the quarter tumbled.
Upcoming Potential Catalysts on the Economic Calendar:
- New Zealand ANZ business confidence index at 12:00 am GMT
- Australia retail sales at 12:30 am GMT
- Chinese official manufacturing & non-manufacturing PMI at 1:00 am GMT
- BOJ monetary policy statement & presser coming up
- German import prices & retail sales at 7:00 am GMT
- Eurozone flash CPI at 10:00 am GMT
- Canada’s monthly GDP at 12:30 pm GMT
- U.S. core PCE price index at 12:30 pm GMT
- U.S. quarterly employment cost index at 12:30 pm GMT
- U.S. initial jobless claims at 12:30 pm GMT
- U.S. Chicago PMI at 12:45 pm GMT
It’s bound to be another topsy-turvy trading day since we’ve got a bunch of major economic events on deck!
Watch out for the release of the official Chinese PMI readings during the Asian trading session, as this could strongly impact overall market sentiment, followed by the Bank of Japan’s monetary policy decision that could spark big moves among yen pairs.
After that, the eurozone flash CPI readings for October could influence ECB policy forecasts and push the shared currency around. Volatility is likely to stay elevated throughout the U.S. session with the release of the core PCE price index, which could shape Fed statement expectations for next week, and the weekly initial jobless claims figure.
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