Morning Market Review for 11.10.2024

EUR/USD

The EUR/USD pair shows ambiguous trading dynamics, consolidating near 1.0935. The focus of European investors today is on inflation statistics in Germany. The Consumer Price Index in Germany in September amounted to 1.6% year-on-year and 0.0% month-on-month, while the Harmonized CPI accelerated by another 1.8% year-on-year but fell by 0.1% month-on-month. In turn, today at 14:30 (GMT+2), the US will present September data on producer inflation: forecasts suggest that the PPI will slow from 1.7% to 1.6% on an annual basis and from 0.2% to 0.1% on a monthly basis, with the PPI excluding Food and Energy likely to adjust from 2.4% to 2.7% on an annual basis. The statistics will supplement the data on the dynamics of consumer prices in the US, which was published the day before: the September data reflected a slowdown in the annual indicator from 2.5% to 2.4% with a forecast of 2.3%, and in monthly terms it again added 0.2%, contrary to expectations of a slowdown to 0.1%, while Core CPI fell from 3.2% to 3.3% year-on-year and increased by another 0.3% in monthly terms, although the markets expected 0.2%. In addition, at 16:00 (GMT+2) the market will receive October data on the Consumer Confidence index from the University of Michigan: analysts expect a moderate increase in the indicator from 70.1 points to 70.8 points.

GBP/USD

The GBP/USD pair is trading with a slight decrease, testing 1.3050 for a breakdown. The day before, the instrument also showed moderate negative dynamics, having managed to update the local minimums of September 11, which was the market’s reaction to the publication of September statistics on inflation in the US. The Consumer Price Index slowed down from 2.5% to 2.4% year-on-year, while analysts had expected 2.3%, and in monthly terms it rose by the previous 0.2%, contrary to preliminary estimates of 0.1%. At the same time, the Core CPI excluding Food and Energy accelerated from 3.2% to 3.3% with neutral forecasts. Against this backdrop, investors have significantly reduced expectations regarding a possible easing of the US Federal Reserve's monetary policy during the November meeting: according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the probability of a 25-basis-point interest rate cut is estimated at approximately 80.0%, while previously it exceeded 90.0%. At the same time, some pressure on the position of the American currency on Thursday was exerted by statistics on jobless claims: Initial Jobless Claims for the week ending October 4 increased from 225.0 thousand to 258.0 thousand, significantly exceeding expectations of 230.0 thousand, and Continuing Jobless Claims for the week ending September 27 — from 1.819 million to 1.861 million, while experts expected 1.830 million. In turn, British investors paid attention to the dynamics of the Gross Domestic Product (GDP): it added 0.2% after zero dynamics in the previous month, while Industrial Production in annual terms again significantly decreased by 1.6% after –1.2%, while analysts expected –0.5%, and in monthly terms they were adjusted by 0.5% after –0.7% with a forecast of 0.2%. Manufacturing Output fell 0.3% year-on-year in August after falling 2.0% in July, while experts had expected 0.4%, while the monthly figure was 1.1%, compared to 1.2% the previous month. Meanwhile, the Index of Services slowed to 0.1% in August from 0.6%, compared to preliminary estimates of 0.3%.

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Publication date:

11 October 2024 - 13:43 (GMT)

The NZD/USD pair is showing moderate growth, developing the "bullish" momentum that formed the day before. The instrument is trying to consolidate above the psychological resistance at 0.6100, receiving support from macroeconomic statistics from New Zealand. The Manufacturing PMI rose in September from 46.1 points to 46.9 points with neutral forecasts, and the Food Price Index rose from 0.2% to 0.5%. Meanwhile, Tourist Arrivals in August slowed slightly from 3.8% to 3.6%. The instrument is developing corrective dynamics, despite the publication of statistics on inflation in the US, which led to a slight revision of forecasts regarding the November easing of monetary policy by the US Federal Reserve. The Core Consumer Price Index in September accelerated from 3.2% to 3.3%, while the broader measure slowed from 2.5% to 2.4%, while analysts had expected 2.3%. The NZD/USD pair is also under pressure from the decision of the Reserve Bank of New Zealand (RBNZ), published on Wednesday: as expected, the interest rate was reduced by 50 basis points to 4.75%, effectively confirming that officials have managed to weaken inflation to the upper limit of the target range.

The USD/JPY pair is showing minor growth, consolidating near 148.70. The day before, the instrument demonstrated a moderate decline, retreating from the local highs of August 2, which was due to the publication of macroeconomic statistics in the United States. In particular, markets paid attention to the September inflation data. The Consumer Price Index slowed down from 2.5% to 2.4% year-on-year, while analysts had expected 2.3%, and in monthly terms it rose by the previous 0.2%, contrary to preliminary estimates of 0.1%. At the same time, the Core CPI excluding Food and Energy accelerated from 3.2% to 3.3% with neutral forecasts, while in monthly terms the indicator added another 0.3% with expectations of 0.2%. Slightly more resilient inflation in the country has reduced the likelihood of another cut in borrowing costs by the US Federal Reserve in November. However, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, about 80.0% of experts expect an interest rate adjustment of –25 basis points. Meanwhile, statistics from Japan provided minor support to the yen the day before: the index of domestic prices for corporate goods in September rose from 2.6% to 2.8%, while analysts expected 2.3%, and the index of producer prices of goods showed zero dynamics after –0.2% with a forecast of –0.3%. At the same time, the volume of Bank Lending in September adjusted from 3.0% to 2.7%.

The XAU/USD pair is showing quite active growth, developing the "bullish" impetus formed the day before, when the instrument managed to retreat from the local lows of September 20. At the same time, the further upward dynamics of the instrument is limited by some strengthening of positions on the American currency against the backdrop of reduced expectations of new easing of monetary policy by the US Federal Reserve. In particular, the day before, investors paid attention to the publication of macroeconomic statistics on inflation in the US: thus, in September, the Consumer Price Index slowed from 2.5% to 2.4% in annual terms relative to forecasts of 2.3% and remained at 0.2% in monthly terms, although experts expected a decrease to 0.1%. At the same time, the Core CPI excluding Food and Energy accelerated from 3.2% to 3.3%. Thus, the probability of the US Federal Reserve adjusting its interest rate in November, according to the Chicago Mercantile Exchange (CME) FedWatch Tool, has decreased from 90.0% to 80.0%. Further supporting gold is ongoing geopolitical tensions in the Middle East, where Israel has been conducting a limited military operation in southern Lebanon since October 1.