Justin is away for today. This is my sad imitation of his awesome option expiry post ;-)

Justin will be back on Monday.

EUR/USD

• 1.0900 (EUR1.1bn), 1.0840 (EUR863m)

USD/CAD

• 1.3940 (US$693m), 1.3885 (US$650m), 1.3900 (US$457m)

GBP/USD

• 1.2900 (GBP638m), 1.2850 (GBP600.4m), 1.2800 (GBP490m)

AUD/USD

• 0.6700 (AUD451m)

NZD/USD

• 0.6100 (NZD720m)

USD/CNY

• 7.1500 ($854m)

EUR/GBP

• 0.8340 (EUR719m), 0.8400 (EUR328m), 0.8200 (EUR305m)

For more information on how to use this data, you may refer to this post here.

The election is going to dominate early November trading so making moves based on seasonals is unwise. That said, it's useful to keep them in mind as the dust settles.

• November is the best month for USD/JPY
• Best month for the Nasdaq
• Third-best month for the US dollar
• The November through February is strong for gold
• Second-best month for the S&P 500
• Second-best month for the MSCI world index
• Second-best month for the German DAX
• Best month for the Nikkei 225
• The final month of the seasonal slump for oil. Seasonals neutral in Dec-Jan then strongly positve from Feb-June

Going into last November, the S&P 500 had declined for three straight months but that month marked a turning point as it recouped nearly all the gains in what was the beginning of a five-month rally. This time, we're coming into the month with better momentum, though October was negative for stocks.

There are a couple to take note of on the day, as highlighted in bold.

The first one is for EUR/USD at the 1.0900 level. The figure level isn't one that holds any technical significance but the expiries could well help to box in price action in the session ahead. That without much fresh headlines involving the US election in the meantime. However, with the dollar under pressure, there is still a chance of European traders following through on the earlier price action. So, that's something to be wary about.

Then, there is one for AUD/USD at the 0.6600 level. The expiries are pretty huge and sits near the 200-hour moving average of 0.6599 currently. But the pair is largely driven by dollar dynamics to start the week, with the greenback opening with a gap down on US election sentiment. That is still the key driver to watch in the session(s) ahead but just note of the 200-day moving average at 0.6627 for the pair. That will be the bigger key level to watch on the charts for now.

For more information on how to use this data, you may refer to this post here.

There are just a couple to take note of, as highlighted in bold.

And they are for EUR/USD at the 1.0850 and 1.0900 levels. Considering the focus on the US election, this will keep price action more boxed in going into European trading and before we get to the election rush later in the day.

Besides that, market sentiment will be largely driven by election headlines over the next few sessions more so than anything else.

For more information on how to use this data, you may refer to this post here.

There is just one to take note of on the day, as highlighted in bold. But on a day like this, the influence of the expiries is far from the first thing in driving or impacting trading sentiment. It's all about the US election and the momentum flows riding from the results and emotions. As such, I wouldn't place much emphasis on the large one at 1.0725 currently for EUR/USD.

For more information on how to use this data, you may refer to this post here.

There are a couple to take note of, as highlighted in bold.

They are both for EUR/USD at the 1.0725 and 1.0775 levels. To some degree, the expiries might just lock price action in between these levels but it's all about post-election sentiment now. And momentum flows will be the key driver of the moves, in particular the dollar. For now though, the greenback is seeing a slight pullback to yesterday's gains. So, the ones at 1.0775 could help to just keep a lid on things until we get to US trading at least.

For more information on how to use this data, you may refer to this post here.

There are just a couple to take note of on the day, as highlighted in bold.

And again, they are all for EUR/USD layered in between 1.0750 through to 1.0800. Post-election sentiment is still the name of the game in driving FX flows now, so the expiries are just secondary drivers alongside everything else at the moment. That being said, they could play a role in keeping price action more boxed in until we get to US trading again later.

There aren't any key risk events on the calendar to really impact EUR/USD sentiment. So, it's all about how the post-election flows will settle as we look towards the end of the week.

For more information on how to use this data, you may refer to this post here.

There is just one to take note of, as highlighted in bold.

That being for EUR/USD at the 1.0700 level. The daily lows last week were held by the figure level, so the expiries will add another layer to that as we get the new week underway at least. With the bond market absent to start the week, there might not be too much appetite for traders to chase any outsized moves.

For more information on how to use this data, you may refer to this post here.

There are just a couple to take note of on the day, as highlighted in bold.

And they are both for EUR/USD at the 1.0600 and 1.0625 levels. The pair is being pressured to the downside, touching its lowest levels since April now as the dollar continues to rampage forward. As such, that will put added emphasis on key support from the April low of 1.0601. The expiries above will just add a bit of a defensive layer as well, at least for the session ahead.

There will also be another notable one at 1.0600 for tomorrow, so just keep that in your back pocket in case. But for now, the post-election dollar sentiment continues to be the number one driver.

For more information on how to use this data, you may refer to this post here.

BofA suggests staying short on CHF, particularly against USD and GBP, as post-election volatility subsides and G10 rate repricing supports a weaker CHF. While political risks may pose a minor obstacle, BofA sees CHF depreciation as likely due to policy divergence, with recent fiscal stimulus in the UK reinforcing the case for long GBP/CHF.

Key Points:

• CHF Weakness Expected: Following the US election, BofA expects normalization in volatility and G10 rate adjustments, which support a weaker CHF heading into year-end.

• Policy Divergence and SNB Cuts: CHF depreciation has been driven by Swiss policy moves, including an SNB rate cut, and ongoing yield compression. Increased Swiss inflation has also pressured CHF.

• Positioning in USD/CHF and GBP/CHF: BofA favors short CHF positions in USD/CHF and recently opened a long GBP/CHF position via a three-month ratio call spread, driven by UK fiscal stimulus enhancing policy divergence.

• Risk Management Considerations: While CHF shorts are promising, BofA advises a cautious approach due to potential political uncertainties that could affect CHF.

Conclusion:

BofA recommends holding short CHF positions in USD/CHF and GBP/CHF, as volatility recedes and policy divergence favors a weaker CHF. Though political noise may cause short-term volatility, BofA sees CHF depreciation persisting into year-end, with UK fiscal moves strengthening the case for GBP/CHF.

For bank trade ideas, check out eFX Plus. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. Get it here.

The Chinese market and related global-growth proxies got excited about potential fiscal stimulus in October. After a flurry of buying, there has been some consolidation as we waited for the details.

Those details came on Friday and just before that, the market tried to break higher in a front-run of potentially larger stimulus. Beijing didn't deliver and the market was slow to digest that at first.

Today though, it looks like disappointment is setting in as the MCHI ETF falls into the October gap. The threat of tariffs combined with lackluster domestic growth make for a bad combination. Given how late the market was to pile into this theme, there are going to be many people underwater very quickly.

The US CPI will be released tomorrow at 8:30 AM ET. What is expected?

• October Headline CPI expected to rise by 0.2% MoM, which is the same as last month. The forecasted range is 0.1 to 0.3%.
• YoY Headline CPI expected to increase to 2.6%, up from 2.4%, with a forecast range of 2.3 to 2.6%. A change of 0.0% will fall out of the YoY calculation this month.
• Core CPI projected to rise 0.3% MoM and 3.3% YoY, matching the previous month. The forecast range is 0.2 to 0.3% MoM and 3.2 to 3.4% Y/Y. A year ago, a gain of 0.2% falls out of the calculation.

The US PPI will be released on Thursday with the expectations of 0.2% for the MoM headline and 0.3% for the core measure.

Fed's Barkin this morning on inflation kept it simple saying::

• Inflation might be coming under control or might risk getting stuck above Fed 2% target.

Kashkari had more to say about inflation today with different influences. He said.

• Uncertainty exists around the impact of new government policies on inflation.
• A one-time tariff increase is transitory but could become a sustained issue if it escalates, introducing inflation risks.
• Immigration policy changes could have a significant effect on inflation, but the outcome is uncertain.
• Inflation from new leases will take a couple of years to work through the system.
• Housing inflation is expected to return to normal levels, but it may take a year or two.
• If inflation surprises to the upside before December, it may affect policy decisions.
• Current long-term yield increases don’t seem to reflect heightened inflation expectations.
• Higher productivity could suggest a higher neutral rate, potentially influencing future rate cuts.

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

There were numerous Fed speakers on Tuesday, US time:

• Fed's Kashkari: The fundamentals seems strong and I'm optimistic that will continue
• Fed's Barkin: Fed in position to respond appropriately regardless of how economy evolves
• Fed's Waller: Makes no comments on economy or monetary policy outlook

and we get one more today in Asia:

• 2200 GMT / 1700 US Eastern time - Federal Reserve Bank of Philadelphia President Patrick Harker speaks on "Fintech, AI and the Changing Financial Landscape".

Which doesn't sound too promising for remarks from him on the economy or monetary policy. But, perhaps we'll get a mortsel thrown to us in any Q&A.

***

As for the data agenda, it's a bit of a yawn, none of it likely to move around major FX upon release.

From Japan we'll get an update of wholesale inflation - the PPI for October. The Producer Price Index (PPI) in Japan is also known as the Corporate Goods Price Index (CGPI)

• its a measure of the average change over time in the selling prices received by domestic producers for their output
• is calculated by the Bank of Japan

Unlike the Consumer Price Index (CPI), which measures the price change that consumers see for a basket of goods and services, the CGPI focuses on the change in the prices of goods sold by companies.

The PPI reflects some of cost pressures faced by producers

• its based on a basket of goods that represents the range of products produced within the Japanese economy, including items such as:
  • raw materials like metals and chemicals
  • semi-finished goods
  • and finished products
  • different weights are assigned to each category within the index based on its contribution to the overall economy.
• it does not account for the quality improvements in goods and services over time, which might lead to overestimation of inflation
  • additionally, it reflects only the prices of domestically produced goods, leaving out the impact of imported goods

The PPI can be used as a guide to inflationary pressures in the economy:

• If producers are facing higher costs, they may pass these on to consumers, leading to higher consumer prices.

***

From Australia we'll get wages data for Q3. Wage growth is expected to keep slowing (y/y) in Q3 2024. With the labor market softening, upward pressure on wages has been easing over recent quarters.

In Commonwealth Bank of Australia's preview they cite their internal data as indicating a quarterly wage growth of around 0.9%, a notable decrease from the 1.3% growth seen in the same quarter last year, which had been boosted by a significant 5.75% increase in award and minimum wages. As a result, the annual wage growth rate is projected to fall to 3.6%, bringing it closer to a level compatible with sustainable, in-target inflation.

While the labour market softening, but from strong levels, the RBA is eyeing wage growth as a factor helping keep inflation sticky. A moderation in growth for wages will be welcomed by the bank if it translates into softening price pressure also.

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the 'prior' (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.
• I’ve noted data for New Zealand and Australia with text as the similarity of the little flags can sometimes be confusing.

The major US stock indices are all closing lower. No new records today.

The final numbers are showing:

• Dow Industrial average -382.15 points or -0.86% at 43910.98
• S&P -17.36 points or -0.29% and 5983.99.
• NASDAQ index -17.36 points or -0.09% at 19281.40.

The small-cap was 2000 with a decline of -43.13 points or -1.77% at 2391.84.

• US indices close lower on the day. No new records today.
• Bitcoin trades above $90,000 for the first time. It broke the $80,000 level on Monday
• US CPI to be released tomorrow at 8:30 AM. Expectations are for 0.2% MoM
• It's not a pretty picture in China
• Fed's Kashkari: The fundamentals seems strong and I'm optimistic that will continue
• BofA: Life don't come easy for CHF: What's the trade?
• US 10 year yield looks to close at the highest level since July 1
• Major European indices are closing sharply lower
• John Paulson drops out of the running for Treasury Secretary
• New York Fed: 1-year inflation expectations 2.9% versus 3.0% last month
• Fed's Barkin: Fed in position to respond appropriately regardless of how economy evolves
• Fed's Waller: Makes no comments on economy or monetary policy outlook
• And they are off. US stocks are marginally higher in the early trading
• LiteFinance Becomes the Official Trading Partner of Leicester City Football Club
• Kickstart the FX day. A look at the EURUSD, USDJPY and GBPUSD from a technical perspective
• Canada Sept building permits +11.5% vs +1.7% expected
• Forexlive European FX news wrap: Not much action as we await the US CPI release tomorrow

Markets:

• Bitcoin trades to $90,000 for the first time, two days after passing $80,000. The high reached $90,243
• WTI crude trades down $0.07 at $67.97
• 2 year yield 4.338%, up 8.4 basis points. 10 year yield 4.421%, +11.4 basis points.
• Gold down -$20.78 or -0.79% at $2598.58. Lowest level since September 20
• S&P 500 -17.36 points or -0.29% at 5983.99.
• Nasdaq index down -17.36 points or -0.09% at 19,281.40. Both the Nasdaq and the S&P closed by the exact same point amount....
• Russell 2000 tumbled -43.13 points or -1.77% at 2391.84

In the US the NY Fed Survey showed inflation expectations moving lower with the one year inflation at 2.9% vs 3.0% estimate. That is the lowest in 4 years. The 3 and five years measures also declined with the 3 year down to 2.5% from 2.7%, and the 5 year down to 2.8% from 2.9%.

In Canada building permits soared by 11.5% after -6.3% decline last month. Overall permits were the second-highest level since the start of the new series in January 2017 but it's more of a one-off around government spending than anything related to the economy. Ontario's institutional component received big contributions from construction for long-term care facilities across the province and a hospital permit in Prince Edward County. Residential building is holding up on the multi-family side as the pipeline of condos continues to work its way through but single-family has flatlined.

The US bond market was open after Monday's Veteran's Day holiday and selling was the order of the day as traders price in the inflationary and growth implications of a GOP sweep (and perhaps increased deficits too). The 10-year yield rose close to 12 basis points. The 2 year is up close to 9 basis points.

The USD moved higher with the greenback moving the most vs the GBP (0.95%).. The GBPUSD moved to the lowest level since August 8 and traded below the 61.8% retracement of the move up from the April low. That level comes in at 1.27322. The current price is trading just above that level into the close for the day.

The EURUSD is rallying modestly into the close but still saw the dollar higher by 0.26% versus the EUR. The pair moved below the 1.0601 level which took to price to a new low for 2024. The low could only get to 1.0594 before bouncing higher into the close. The sellers in the EURUSD had their shot. They missed.

The USDJPY is closing higher by 0.61% and into a swing area between 154.54 and 155.21. The high price reached 154.92 extending above the high price from last week at 154.70. The price is trading at 154.62 into the close. Buyers are in control. Can they extend to the high target at 155.21.

The USDCAD traded to the highest level going back to October 2022 when the price extended to 1.3977. The high price today reached 1.3966 just 11 pips short of that high. The price is trading at 1.3949 going into the end of the trading day.

Gold continues its move to the downside after reaching record levels at the end of October at $2790.07. The price has since fallen -6.89% to $2597.88.

Bitcoin's sprint to the topside continued today with the price reaching above $90,000 for the first time ever and just 2-days after breaking above the $80,000 level. The high price reached $90,243. The price has come off that lofty level and trades at $88,092.

China-based Construction Machinery and Equipment (CME) with the data from earlier this week. In October China's excavator sales are estimated to have reached 16,791 units:

• that's +15.1% y/y

More notably, excavator sales in the Chinese domestic market are estimated at 8,266 units

• +21.6% y/y
• Excavator sales to the export market +9.46% y/y

For the January-October 2024 period this year, China's excavator sales are estimated to have increased by 0.47 percent year on year

• domestic market +9.8% y/y
• export market -7.41% y/y

Is this a sign of green shoots for the economy in China?

There has been plenty of stimulus announcements, that the market has been disappointed with. But, are thye having an impact?

CPI data from the US due today, Wednesday, November 13, 2024.

Greg popped up a preview earlier:

• US CPI to be released tomorrow at 8:30 AM. Expectations are for 0.2% MoM

In a recent note, BMO previewed the data also. Analysts at the bank suggest that any significant influence from recent storms on inflation data is likely limited, meaning market reactions to any deviation in core inflation—either upward or downward—may be pronounced.

The consensus forecast calls for a steady +0.3% rise in core CPI for the month, with expectations leaning toward a possible upside surprise.

A +0.4% reading or higher would make waves, particularly against the backdrop of the recent election results. The logic suggests that if inflation was already ticking up before the GOP’s victory, the added impact of tariffs and potential trade conflicts could fuel further inflationary momentum. However, BMO analysts also point out that while targeted tariffs may not universally drive up prices, this assumption currently shapes US rates market sentiment. With this market outlook in mind, BMO expects that an upside surprise in October’s inflation numbers could have a meaningful impact on yields, increasing their upward trajectory.

At present, actual inflation data is seen as the most direct factor that could push 10-year yields beyond the 4.50% threshold. A softer-than-expected core CPI reading could trigger a rally in the Treasury market, though there appears to be a limit to how much the market will temper expectations for inflation following Trump’s victory. Instead, BMO anticipates the market will continue to define a trading range in this post-election landscape, characterized by a mix of cautious optimism and prevailing skepticism.

Barclays has issued a note suggesting that the re-election of Trump is unlikely to significantly impact oil market fundamentals in the near term.

The bank believes that current market dynamics are relatively stable and does not foresee major shifts tied to potential changes in U.S. leadership.

Barclays is recommending a long position on December 2025 Brent call spreads. The bank notes that volatility has recently decreased, and it perceives market sentiment as overly focused on downside risks, or the "left tail." In contrast, Barclays believes the risks are more balanced, especially in light of recent improvements in oil market fundamentals and the possibility of a more confrontational geopolitical landscape.

Japanese wholesale prices, the PPI or CGPI:

+0.2% m/m

• expected 0.0%, prior 0.0%

+3.4% y/y

• expected +3.0%, prior +2.8%

The higher results will be a bit of a tailwind for the yen, at the margin. Not too much though, there is the huge monetary policy divergence that is weighing on the hapless yen to contend with.

Of note is that renewed yen falls pushed up import costs for some goods

The Bank of Japan is wary of yen weakness pushing up prices, the Bank wants inflation but not like that. The Bank wants inflation coming from wage growth pushing up demand. The Bank has said it'll consider raising rates to help slow or stop the yen decline. But political pressure is on the Bank not to hike until wages are seen rising at the next round of wage negotiations in (Japan's) spring.

---

The Producer Price Index (PPI) in Japan is also known as the Corporate Goods Price Index (CGPI)

• its a measure of the average change over time in the selling prices received by domestic producers for their output
• is calculated by the Bank of Japan

Unlike the Consumer Price Index (CPI), which measures the price change that consumers see for a basket of goods and services, the CGPI focuses on the change in the prices of goods sold by companies.

The PPI reflects some of cost pressures faced by producers

• its based on a basket of goods that represents the range of products produced within the Japanese economy, including items such as:
  • raw materials like metals and chemicals
  • semi-finished goods
  • and finished products
  • different weights are assigned to each category within the index based on its contribution to the overall economy.
• it does not account for the quality improvements in goods and services over time, which might lead to overestimation of inflation
  • additionally, it reflects only the prices of domestically produced goods, leaving out the impact of imported goods

The PPI can be used as a guide to inflationary pressures in the economy:

• If producers are facing higher costs, they may pass these on to consumers, leading to higher consumer prices.

Australia data - Wage Price Index for Q3 2024:

+0.8% q/q for the third consecutive quarter

• expected +0.9%, prior +0.8%
• Both the private sector and the public sector rose 0.8%, seasonally adjusted, for the quarter.

+3.5% y/y, lowest annual rise for the series since December quarter 2022 and followed four consecutive quarters of annual wage growth equal to or above 4%.

• expected +3.6%, prior +4.1%

---

The Australian Bureau of Statistics (ABS) publishes the Wage Price Index (WPI) quarterly, measuring changes in the price of labor, unaffected by shifts in workforce composition, hours worked, or employee characteristics.

The ABS provides detailed WPI data, including breakdowns by industry and sector, offering insights into wage trends across Australia's economy.

In brief from WPAC's note:

• September quarter Wage Price Index below the RBA’s expectation which pointed to a 0.9%qtr rise in both the September and December quarters of 2024
• Wage inflation peaked at 4.3%yr in December 2023 and has been drifting lower through 2024
• Wage Price Index (WPI) rose 0.8% (3.5%yr) ... The RBA is currently forecasting annual wages growth to print 3.4%yr for end 2024 and hold at that rate through to June 2025.

***

The WPI should easily come in under that RBA forecast by end 2024. While some will point to slowing wages as a reason to cut rates the RBA is in no hurry, still war of elevated demand and inflation likely to pop back above the top of the 2 - 3% target band once government cost of living subsidies roll off.

0945 GMT / 0445 US Eastern time - Bank of England policymaker Catherine Mann is a panellist on the Female Central Bankers panel organised by BNP Paribas’ Global Markets

*

The Bank of England cut last week

• Forexlive Americas FX news wrap 7 Nov: FOMC/BOE cuts by 25 basis points

Expectations are for slower cuts ahead:

• More gradual Bank of England rate cuts = support for GBP

Japan's Seven & i Holdings is considering a management buyout to take itself private with funding from banks, Itochu Corp. and the founding Ito family in a transaction that could be worth US$58 billion

"People with knowledge of the matter" cited in the reports via Nikkei and Bloomberg.

The Japanese owner of 7-Eleven is considering going private by buying back its own shares in a bid to avoid a takeover attempt by Canadian rival Alimentation Couche-Tard, the news report says.

ING remarks after the wages data from Australia earlier:

• Australia data - Wage Price Index for Q3 2024: +0.8% q/q (expected +0.9%, prior +0.8%)
• Australia - "Wage inflation is moderating as expected"

ING says that year-on-year wage growth slowing to 3.5% is a step in the right direction for the Reserve Bank of Australia (RBA) to consider rate cuts.

However, ING notes this deceleration alone isn’t enough for the RBA to rule out any upside risks to interest rates.

Despite the softer data, ING believes a case for a near-term rate cut remains weak, predicting the earliest possible easing from the RBA could come in the first quarter of 2025.

**

I suspect even Q1 is too early. The RBA next meet on December 9 - 10, where on hold is expected.

At 10 am Sydney time on Thursday, November 14, 2024,

• Panel Participation by RBA Governor Michele Bullock, at the ASIC Annual Forum, Sydney
• that's 2300 GMT, 1800 US Eastern time on Wednesday, November 13, 2024

Perhaps we'll hear something on wages data from earlier today:

• Australia data - Wage Price Index for Q3 2024: +0.8% q/q (expected +0.9%, prior +0.8%)

But, probably not:

• Australia - "Wage inflation is moderating as expected"

The RBA next meet on December 9 and 10 and no change to the cash rate is widely expected.

Later today, Wednesday, 13 November, we get the US consumer inflation data for October 2024

• due at 1330 GMT, which is 0830 US Eastern time

Previews posted already:

• US CPI to be released tomorrow at 8:30 AM. Expectations are for 0.2% MoM

• US CPI data due Wednesday - possible upside surprise.
• US inflation data this week expected to show core CPI moving sideways - risk ahead higher

OK, what to expect. This snapshot from the ForexLive economic data calendar, access it here.

Taking a look at the range of expectations compared to the median consensus (the 'expected' in the screenshot above) for the key data points:

CPI Headline y/y, expected 2.6% with the range showing:

• 2.3% - 2.7%

CPI Headline m/m expected 0.2% with the range showing:

• 0.1 to 0.3%

CPI excluding food and energy (the core rate of inflation) y/y expected 3.3% with the range showing:

• 3.2 - 3.4%

CPI excluding food and energy (the core rate of inflation) m/m expected 0.3% with the range showing:

• 0.2 to 0.4%

***

Why is knowledge of such ranges important?

Data results that fall outside of market low and high expectations tend to move markets more significantly for several reasons:

• Surprise Factor: Markets often price in expectations based on forecasts and previous trends. When data significantly deviates from these expectations, it creates a surprise effect. This can lead to rapid revaluation of assets as investors and traders reassess their positions based on the new information.

• Psychological Impact: Investors and traders are influenced by psychological factors. Extreme data points can evoke strong emotional reactions, leading to overreactions in the market. This can amplify market movements, especially in the short term.

• Risk Reassessment: Unexpected data can lead to a reassessment of risk. If data significantly underperforms or outperforms expectations, it can change the perceived risk of certain investments. For instance, better-than-expected economic data may reduce the perceived risk of investing in equities, leading to a market rally.

• Triggering of Automated Trading: In today’s markets, a significant portion of trading is done by algorithms. These automated systems often have pre-set conditions or thresholds that, when triggered by unexpected data, can lead to large-scale buying or selling.

• Impact on Monetary and Fiscal Policies: Data that is significantly off from expectations can influence the policies of central banks and governments. For example, in the case of the inflation data due today, weaker than expected will fuel speculation of nearer and larger Federal Open Market Committee (FOMC) rate cuts. A stronger (i.e. higher) CPI report will diminish such expectations. the December meeting is in focus right now.

• Liquidity and Market Depth: In some cases, extreme data points can affect market liquidity. If the data is unexpected enough, it might lead to a temporary imbalance in buyers and sellers, causing larger market moves until a new equilibrium is found.

• Chain Reactions and Correlations: Financial markets are interconnected. A significant move in one market or asset class due to unexpected data can lead to correlated moves in other markets, amplifying the overall market impact.

We had Fed speakers on Tuesday US time, Kashkari watered down the prospect of a December rate cut ... didn;t rule it out but he sounds shaky:

• Fed's Kashkari: The fundamentals seems strong and I'm optimistic that will continue
• Fed's Barkin: Fed in position to respond appropriately regardless of how economy evolves
• Fed's Waller: Makes no comments on economy or monetary policy outlook

The agenda ahead includes another three. The times below are GMT/US Eastern time format:

• 1435/0935 Federal Reserve Bank of Dallas President Lorie Logan gives opening remarks before hybrid "Energy and the Economy: Meeting Rising Energy Demand" Conference hosted by the Federal Reserve Banks of Dallas and Kansas City
• 1800/1300 Federal Reserve Bank of St. Louis President Alberto Musalem speaks before an Economic Club of Memphis luncheon
• 1830/1330 Federal Reserve Bank of Kansas City President Jeffrey Schmid gives luncheon keynote before hybrid "Energy and the Economy: Meeting Rising Energy Demand" Conference hosted by the Federal Reserve Banks of Dallas and Kansas City

• Fed speakers on energy, the economy, and maybe policy due on Wednesday
• US CPI data due Wednesday, the ranges of estimates (& why they're crucial to know)
• AUD traders heads up - Reserve Bank of Australia Governor Bullock speaks Thursday
• The argument for a near-term Reserve Bank of Australia interest rate cut remains very thin
• Japan's Seven & i Holdings is considering a management buyout
• Bank of England Monetary Policy Committee member Catherine Mann speaking Wednesday
• Australia - "Wage inflation is moderating as expected"
• PBoC promised stronger damping to support CNY, and that's what are seeing
• PBOC sets USD/ CNY mid-point today at 7.1991 (vs. estimate at 7.2305)
• Dogecoin catches a bid on Trump's new DOGE department headed by Musk
• Trump names Elon Musk, Vivek Ramaswamy to lead Department of Government Efficiency (DOGE)
• Australia data - Wage Price Index for Q3 2024: +0.8% q/q (expected +0.9%, prior +0.8%)
• Japan PPI (October) +0.2% m/m (expected 0%) and +3.4% y/y (expected +3.0%)
• Barclays on oil - current market dynamics relatively stable, doesn't foresee major shifts
• ECB Interest Rate Forecast: Deutsche Bank's 7 reasons for projecting a lower terminal rate
• BoA expect a 4% EPS benefit for S&P 500 equites from Trump corporate tax cuts
• US CPI data due Wednesday - possible upside surprise.
• Green shoots in China? Excavator sales grew 15% in October
• Forexlive Americas FX news wrap 12 Nov: Bitcoin hits $90K. Stocks fall. USD moves higher.
• NY Fed Perli says there's been more friction in money mkts lately, repo rate rise orderly
• Amazon’s Bezos sells US$1.25bn of shares
• US indices close lower on the day. No new records today.
• Bitcoin trades above $90,000 for the first time. It broke the $80,000 level on Monday
• Trade ideas thread - Wednesday, 13 November, insightful charts, technical analysis, ideas

Small ranges prevailed during Asia time with many traders content to wait until the US inflation data later.

• US CPI data due Wednesday, the ranges of estimates (& why they're crucial to know)

Data events during the session here were lower-tier. We had PPI data from Japan coming in higher than expected. Renewed yen weakness pushed up import costs for some goods. At the margin, an argument can be made that the data was supportive of a nearer-term Bank of Japan rate hike. Against this is, of course, is the new political pressure on the Bank to not hike until wages are seen rising at the next round of wage negotiations in (Japan's) spring. Many months away. The Bank of Japan next meet on December 18 - 19.

USD/JPY moved a little higher, but didn’t get to 155.00. As I post its around the middle of its session range circa 154.80.

Data from Australia showed wage growth moderating a little. This is not sufficient for the Reserve Bank of Australia to cut its cash rate any time soon. The next meeting is December 9 – 10, and then in February (17 – 18).

Earlier this week People’s Bank of China Governor Pan Gongsheng emphasized that the Bank will not let the yuan plummet without a fight:

• Will step up countercyclical adjustment
• Should resolutely guard against the risk of exchange rate overshoot

Today the Bank set the USD/CNY reference rate more than 300 points lower than model estimates (ie a stronger yuan). The Bank delivered on its word to support the yuan. Offshore yuan has jumped (lower USD/CNH).

Bitcoin sat near US$88K.

Broader markets are still largely clinging on to the post-election sentiment this week. However, today will add something different to the mix as we will have the US CPI report in focus. While inflation numbers haven't been too important in recent months, it is one that could still impact trading sentiment. That especially if the disinflation process meets a couple of bumps along the way.

And looking at the expectations for today's report, that might shape up to be the case at least for the October estimates.

Core monthly inflation is expected to nudge up by ~0.30% while headline monthly inflation is expected to nudge up by ~0.21%. Meanwhile, core annual inflation is expected to hold at 3.3% - similar to September. As for headline annual inflation, it is expected to come in a little higher this time at 2.6%.

According to Goldman Sachs, we should be seeing less disinflationary pressures from previously softer components such as airfares and used cars prices. Their estimates show the former increasing by 1.0% this month with the latter up 2.5%. So, that's one part of the argument.

At the balance, the report today should not provide a major reaction if within estimates. I reckon the balance of risks at this point is favouring an outsized reaction on an upside surprise, as compared to a downside miss.

Fed funds futures are showing ~63% odds of a 25 bps rate cut for December and that has been toned down since last week. If there is any upside surprise, the scope for a materially bigger shift in odds there is much wider as compared to a downside miss. So, that's the key consideration now.

Here's Goldman Sachs' playbook in terms of the S&P 500 reaction:

There are just a couple to take note of, as highlighted in bold.

They are both for EUR/USD at the 1.0600 and 1.0650 levels. The former in particular will continue to be a notable one, adding another layer to key support at the figure level for the time being. As such, the expiries are likely to once again keep price action locked in until we get to US trading later at least.

As an aside, just be wary of the larger option expiries at the same level of 1.0600 through the week. And on Friday, EUR/USD also has a very large one pinned at 1.0700. So, just be wary of that in case.

For more information on how to use this data, you may refer to this post here.

The dollar continues to sit in a good spot this week, holding gains ahead of the main event later today. It's all about the US CPI report and markets are likely to remain more tentative up until then. As for the bigger picture, the post-election sentiment continues to play out for the most part and that remains the larger focus.

For now, USD/JPY is one to watch as it closes in on the 155.00 mark currently. That will mark the first time since the end of July that the pair is taking a run at the figure level. Is Tokyo going to step up with their verbal interventions? There's going to be little technical resistance in between this pocket here and 160.00 next.

Besides that, EUR/USD is also in focus as the pair closes in on the April low of 1.0601. Large option expiries are in play for now but it's hard to ignore the stronger dollar post-election. If that breaks, sellers will be eyeing the 1.0500 level next before the October lows from last year seen at 1.0448-51.

European trading will be a bit of a snoozer as such with a lack of headlines. But perhaps we might get some interesting market moves to talk about in the run up to the US CPI report. USD/JPY is now inching just above 155.00 for the first time since end July while EUR/USD is looking heavy near the April low of 1.0601. Those will be two of the more interesting charts in play currently.

Elsewhere, US futures are pointing lower with gold back up slightly just above $2,600 and Bitcoin is down to below $87,000 after briefly brushing up against the $90,000 mark overnight. So, there are some mixed moves in there for the time being.

In terms of data releases, there's just the US MBA mortgage applications at 1200 GMT. With rates having shot higher post-election, that is likely to keep sentiment in a more dour spot after last week's report here.

As for euro area releases, there's nothing on the agenda for today.

• German DAX futures -0.2%
• French CAC 40 futures -0.4%
• UK FTSE futures -0.1%

The CAC 40 index is now down to its lowest since mid-August while the DAX is eyeing its October lows of 18,911. This comes with US futures also marked down so far on the day. S&P 500 futures are lower by 0.3% as we look to the session ahead.

• Expects inflation to moderate in France
• Expects French unemployment rate to go up to around 8% before falling back

He is speaking somewhat in his capacity as Bank of France governor here. And the remarks aren't anything that stand out. As things stand, traders have fully priced in a rate cut for December. The odds of a 25 bps move are at ~68% with the remainder tied to a 50 bps rate cut.

Welcome to the US CPI Day! Inflation is back at the top of market's focus after the Fed's 50 bps cut in September, the acceleration in the US data and Trump's victory.

If we look at the markets, there's been already some pre-positioning/hedging into a potentially higher than expected CPI print, so there's some risk of a "sell the fact" reaction. Of course, a bigger than expected upside surprise would be much more straightforward.

The market is currently pricing a 63% chance of a 25 bps cut in December and basically two more 25 bps rate cuts in 2025 which is already much less than the four projected by the Fed in September.

13:30 GMT/08:30 ET - US October CPI

The US CPI Y/Y is expected at 2.6% vs. 2.4% prior, while the M/M measure is seen at 0.2% vs. 0.2% prior. The Core CPI Y/Y is expected at 3.3% vs. 3.3% prior, while the M/M figure is seen at 0.3% vs. 0.3% prior.

At the latest Fed’s decision, Fed Chair Powell said that they expect bumps on inflation and that one or two bad data months on inflation won’t change the process. This keeps the 25 bps cut in December in place even if we get higher inflation readings.

The market though is forward-looking, and the rise in Treasury yields showed that the market sees risks to the inflation outlook. Moreover, the red sweep could increase those fears if the progress on inflation stalls, or worse, reverses.

Therefore, higher inflation readings might not change the near-term monetary policy outlook, but I personally see it changing the market’s outlook and eventually the Fed’s one.

Central bank speakers:

• 09:45 GMT - BoE's Mann (hawk - voter)
• 14:35 GMT/09:35 ET - Fed's Logan (neutral - non voter)
• 18:00 GMT/13:00 ET - Fed's Musalem (neutral - non voter)
• 18:30 GMT/13:30 ET - Fed's Schmid (hawk - non voter)

• Eurostoxx -0.3%
• Germany DAX -0.2%
• France CAC 40 -0.1%
• UK FTSE +0.1%
• Spain IBEX flat
• Italy FTSE MIB -0.2%

There's some push and pull in the opening stages but the changes here don't take away from the heavy selling yesterday. As mentioned since last week, the outlook for European indices remain challenging considering the more dour economic outlook in the region. So far today, US futures are also a little more subdued with S&P 500 futures down 0.3%.

Fundamental Overview

Gold is now down almost 6% from the US election day. That shouldn’t be surprising as the last time we got a red sweep gold dropped by more than 16%.

The reason is that a red sweep brings a more expansionary fiscal policy and should be not only positive for growth but also for inflation.

In fact, the market now sees just two 25 bps rate cuts in 2025 which is already much less than the four projected by the Fed in September.

In the bigger picture, gold remains in a bullish trend as real yields will likely continue to fall amid the Fed’s easing cycle, but for now the short-term trend is to the downside due to the repricing in rate cuts expectations.

Gold Technical Analysis – Daily Timeframe

On the daily chart, we can see that gold is now trading near the key trendline around the 2600 level. This is where the buyers are stepping in with a defined risk below the trendline to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the next trendline around the 2400 level.

Gold Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more clearly the strong support zone we have around the 2600 level where there’s the confluence of the previous swing low level and the trendline. We can see that we also have a downward trendline defining the current bearish momentum.

If we get a pullback, the sellers will likely lean on it to position for the break below the major trendline, while the buyers will look for a break higher to increase the bullish bets into a new all-time high.

Gold Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have another minor downward trendline defining the bearish momentum on this timeframe. More aggressive sellers might lean on this one to position for the break of the major trendline, while the buyers will look for a break higher to target the pullback into the next downward trendline. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we have the US CPI report. Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US Retail Sales data.

See the video below

Why it's important?

The ranges of estimates are important in terms of market reaction because when the actual data deviates from the expectations, it creates a surprise effect. Another important input in market's reaction is the distribution of forecasts.

In fact, although we can have a range of estimates, most forecasts might be clustered on the upper bound of the range, so even if the data comes out inside the range of estimates but on the lower bound of the range, it can still create a surprise effect.

Distribution of forecasts for CPI

CPI Y/Y

• 2.7% (2%)
• 2.6% (56%) - consensus
• 2.5% (28%)
• 2.4% (12%)
• 2.3% (2%)

CPI M/M

• 0.3% (17%)
• 0.2% (73%) - consensus
• 0.1% (10%)

Core CPI Y/Y

• 3.4% (8%)
• 3.3% (81%) - consensus
• 3.2% (11%)

Core CPI M/M

• 0.4% (4%)
• 0.3% (82%) - consensus
• 0.2% (14%)

Analysis

We can ignore the headline CPI as the market will focus on the Core figures. We can notice that we have a pretty strong consensus and not much skew on either side.

Nonetheless, there's been a consistent bid in the US Dollar going into this report with Treasury yields higher and stocks kinda rangebound. The market might have already assigned some premium to a higher than expected print, so there's some risk of a short-term "sell the fact" reaction on a higher than expected number.

It goes without saying that a bigger than expected upside surprise should see the momentum increasing immediately with the US Dollar likely rallying across the board and Treasury yields shooting higher.

On the other hand, a soft print will likely see the US Dollar and Treasury yields falling, although one can argue that it's just going to provide a pullback to go long the US Dollar and short bonds again at even better levels as future conditions will likely see inflation getting stuck above the target or even moving back higher.

The economy ministry notes that in light of the US election result, renewed uncertainty among German households and firms cannot be ruled out. It goes without saying that Trump tariffs on German exports is of course the big risk to watch out for. But indirectly, Trump's tariffs on China will also have some impact on the EU market. If China finds it tough to export goods to the US, they might look to flood the market in Europe instead. That's some other form of risk to be mindful about.

Fundamental Overview

The puzzling weakness in the US Dollar following Trump’s victory looks more and more like it was just a “sell the fact” reaction. The greenback is now back in the driving seat, and we might have also seen some pre-positioning in the past couple of days into a potentially hot US CPI report today.

At the latest Fed’s decision, Fed Chair Powell said that they expect bumps on inflation and that one or two bad data months on inflation won’t change the process. This keeps the 25 bps cut in December in place even if we get higher inflation readings.

The market though is forward-looking, and the rise in Treasury yields showed that the market sees risks to the inflation outlook. Moreover, the red sweep could increase those fears if the progress on inflation stalls, or worse, reverses.

The market might have already assigned some premium to a higher than expected print, so there's some risk of a short-term "sell the fact" reaction on a higher than expected number.

It goes without saying that a bigger than expected upside surprise should see the momentum increasing immediately with the US Dollar likely rallying across the board and Treasury yields shooting higher.

On the other hand, a soft print will likely see the US Dollar and Treasury yields falling, although one can argue that it's just going to provide a pullback to go long the US Dollar and short bonds again at even better levels as future conditions will likely see inflation getting stuck above the target or even moving back higher.

EURUSD Technical Analysis – Daily Timeframe

On the daily chart, we can see that EURUSD broke through the key support zone around the 1.0777 following the Trump’s victor, retested it and eventually continued lower. We are now testing another key level at 1.06 handle, and this is where the buyers are stepping in with a defined risk below the level to position for a rally back into the 1.0777 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 1.05 handle next.

EURUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a downward trendline defining the current bearish momentum. We can expect the sellers to lean on it to position for the break below the 1.06 handle, while the buyers will look for a break higher to increase the bullish bets into the 1.0777 level.

EURUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor resistance zone around the 1.0630 level where we have the trendline for confluence. This is where the sellers are likely to step in with a defined risk above the trendline to position for the break below the 1.06 handle. The buyers, on the other hand, will look for a break higher to increase the bullish bets into the 1.0777 level. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we have the US CPI report. Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US Retail Sales data.

• There are still noticeable price pressures, especially in services sector
• Trump's tariffs may cause German economy to contract
• If tariffs come into effect, it could cost Germany 1% in economic output

And therein lies the dilemma for the ECB heading into next year I guess. The good news is that the disinflation process is still progressing, albeit with a few bumps along the way. All else being equal, the argument for further rate cuts should hold heading into 2025.

• Headline CPI reading not telling us that underlying inflation dynamics have been vanquished
• Services inflation is pretty sticky
• Energy prices are more likely to go up than down
• Sees more volatility and upward bias to some inflation drivers

Do keep in mind that Mann is arguably the most hawkish member among the BOE policy committee. So, her comments here are not as striking as they might seem to be.

Fundamental Overview

The puzzling weakness in the US Dollar following Trump’s victory looks more and more like it was just a “sell the fact” reaction. The greenback is now back in the driving seat, and we might have also seen some pre-positioning in the past couple of days into a potentially hot US CPI report today.

At the latest Fed’s decision, Fed Chair Powell said that they expect bumps on inflation and that one or two bad data months on inflation won’t change the process. This keeps the 25 bps cut in December in place even if we get higher inflation readings.

The market though is forward-looking, and the rise in Treasury yields showed that the market sees risks to the inflation outlook. Moreover, the red sweep could increase those fears if the progress on inflation stalls, or worse, reverses.

The market might have already assigned some premium to a higher than expected print, so there's some risk of a short-term "sell the fact" reaction on a higher than expected number.

It goes without saying that a bigger than expected upside surprise should see the momentum increasing immediately with the US Dollar likely rallying across the board and Treasury yields shooting higher.

On the other hand, a soft print will likely see the US Dollar and Treasury yields falling, although one can argue that it's just going to provide a pullback to go long the US Dollar and short bonds again at even better levels as future conditions will likely see inflation getting stuck above the target or even moving back higher.

USDCHF Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDCHF broke through the key downward trendline following Trump’s victory and, after a brief pullback, continued higher as the trend in the US Dollar remains skewed to the upside.

We now have an upward trendline defining the current bullish momentum. If we get a pullback, we can expect the buyers to lean on it to position for a rally into new highs, while the sellers will look for a break lower to pile in for a drop into the 0.85 handle.

USDCHF Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have another minor upward trendline defining the bullish momentum on this timeframe. The buyers will likely keep on leaning on it to push into new highs, while the sellers will look for a break lower to start targeting new lows.

USDCHF Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much to add here as the buyers will look for a bounce around the trendline, while the sellers will look for a break. The US CPI report today is going to be a major catalyst, so it would be better to wait for the release before taking any position. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we have the US CPI report. Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US Retail Sales data.

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For some context, these subsidies did come to an end in May but were reinstated in August through to October to cope with the warmer weather. Subsequently, they were continued until this year-end but the funds had to be drawn from reserves in the budget for the fiscal year that started in April.

NHK is now reporting that the government is considering keeping these subsidies from January through to March next year. Amid a higher cost of living in key populated areas such as Tokyo, the measure above is mainly to try and combat rising consumer prices.

[Mr Peter Martin]: To ask the Minister for the Economy whether smart electricity meters will be rolled out in Northern Ireland.

[Mr Phillip Brett]: To ask the Minister for the Economy to detail each bid he submitted to the Department of Finance as part of the October Monitoring Round.

[Ms Kate Nicholl]: To ask the Minister for the Economy, pursuant to his Good Jobs Employment Rights Bill, to detail the support that can be provided to parents with multiples.

[Mr Stephen Dunne]: To ask the Minister for the Economy to detail any action his Department is taking to encourage overseas tourism by promoting Ulster-Scots links with the United States of America.