Morning Market Review for 24.10.2024

EUR/USD

The EUR/USD pair is showing weak growth, recovering from local lows of July 3, updated the day before. The instrument is testing 1.0790 for a breakout, while trading participants expect the emergence of new movement drivers. Among other things, October business activity statistics for the eurozone and the US will be published today. Forecasts call for a weak increase in the eurozone Manufacturing PMI from 45.0 points to 45.1 points and in the Services PMI — from 51.4 points to 51.6 points, while the Composite PMI is likely to adjust from 49.6 points to 49.7 points. In Germany, the Manufacturing PMI is expected to decline from 40.6 points to 40.5 points, and the Services PMI — from 50.6 points to 50.5 points. Data from France also do not promise confident growth: the Services PMI is expected to remain at the previous level of 49.6 points, while the Manufacturing PMI may decrease from 44.6 points to 44.4 points. Meanwhile, forecasts for US indicators suggest an increase in the S&P Global Manufacturing PMI from 47.3 points to 47.5 points, while the Services PMI a decrease is expected from 55.2 points to 55.0 points. Some pressure on the single currency's position was exerted the day before by October data on Consumer Confidence in the eurozone, which improved slightly from –12.9 points to –12.5 points. Finally, European investors are discussing the prospects for further monetary easing by the European Central Bank (ECB): in her recent speech, the regulator's President Christine Lagarde admitted that the agency has not decided on the pace of further reductions in borrowing costs yet. At the same time, the official did not rule out the possibility of reducing the interest rate by 50 basis points at once at the next meetings. In October, the ECB adjusted the indicator by –25 basis points and slightly improved its inflation forecasts for 2025.

GBP/USD

The GBP/USD pair is trading with a weak upward trend, staying close to the local lows of August 16, updated the day before. The reason for the active decline in the British currency rate yesterday was the speech by the Governor of the Bank of England, Andrew Bailey, who again hinted at the possibility of easing monetary parameters in November. Among other things, the official noted that inflation in the country was lower than expected a year ago. At the same time, he emphasized that the Bank of England has yet to fully assess the scale of structural changes in the economy that have occurred recently. In any case, Bailey has previously said that the cautious approach to reducing borrowing costs could change if there is consistent evidence of easing inflationary pressures. There is now nothing stopping the Bank of England from adjusting the interest rate in November, perhaps even at a faster pace than originally expected. Investors are also increasing expectations that the rate will be cut again in December: the market currently estimates the probability of such a scenario at 60.0%. According to data released last week, annual inflation in the UK slowed in September from 2.2% to 1.7%, compared with a forecast of 1.9%, while the Core Consumer Price Index fell from 3.6% to 3.2%, compared with a preliminary estimate of 3.4%. Business activity data are due out in the UK today, with analysts expecting the S&P Global Manufacturing PMI to fall to 51.4 points in October from 51.5 points and the Services PMI to fall to 52.2 points from 52.4 points. Meanwhile, forecasts for similar statistics from the US, which will also hit the market today, suggest an increase in the Manufacturing PMI from 47.3 points to 47.5 points, while the Services PMI may decrease from 55.2 points to 55.0 points.

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Publication date:

24 October 2024 - 11:28 (GMT)

The AUD/USD pair is showing moderate growth, recovering from previous local lows from August 16, updated the day before. The instrument is testing 0.6650 for a breakout, receiving some support from macroeconomic publications from Australia. The Commonwealth Bank's Services PMI rose to 50.6 points in October from 50.5 points, with a neutral outlook, and the Commonwealth Bank's Composite PMI rose to 49.8 points from 49.6 points. Meanwhile, the S&P Global Manufacturing PMI fell from 46.7 points to 46.6 points. US business activity statistics will hit the market today at 15:45 (GMT+2): analysts expect mixed dynamics, which are unlikely to provide significant support to the national currency. The S&P Global Manufacturing PMI in October could adjust from 47.3 points to 47.5 points, and the Services PMI could adjust from 55.2 points to 55.0 points. In addition, American investors are assessing the data on Existing Home Sales, presented the day before: the indicator in September fell 1.0% after –2.0% in the previous month. Markets also analyzed the US Federal Reserve's monthly survey, the Beige Book, published on Wednesday, which reflected either continued or a moderate decline in economic activity in most US counties.

The USD/JPY pair is showing a moderate decline, correcting after active growth the day before, as a result of which quotes managed to update local highs from July 31. The US currency's position is weakening under pressure from technical factors and expectations of the release of October business activity statistics from S&P Global. Analysts expect the Services PMI to slow from 55.2 points to 55.0 points, while the Manufacturing PMI is likely to adjust from 47.3 points to 47.5 points, but will still remain below the psychological level of 50.0 points, which separates growth from stagnation. At 14:30 (GMT+2), jobless claims data will be released: according to forecasts, Initial Jobless Claims for the week ending October 18 will increase from 241.0 thousand to 242.0 thousand, while Continuing Jobless Claims for the week ending October 11 may change little from the previous value of 1.867 million. Meanwhile, some pressure on the yen's position is being exerted by macroeconomic statistics on business activity: the Manufacturing PMI in October showed a decline from 49.7 points to 49.0 points, while analysts expected 49.8 points, and the Jibun Bank Services PMI fell from 53.1 points to 49.3 points. Japan will release Tokyo CPI data for October tomorrow, with the Consumer Price Index excluding Fresh Food expected to slow to 1.7% from 2.0%. A weakening reading could put significant pressure on the Bank of Japan's stance on further monetary tightening.

The XAU/USD pair is showing weak growth, recovering from a fairly active decline the day before, which did not allow the instrument to consolidate at new record highs near 2760.00. Technical factors are putting pressure on quotes, while the macroeconomic and news background changes little. The day before, investors paid attention to statistics on Existing Home Sales in the US: in September, the indicator fell by 1.0% after –2.0% in the previous month, and in absolute terms, sales slowed from 3.86 million to 3.84 million, while analysts expected 3.90 million. In addition, the focus of attention of traders yesterday was the monthly review from the US Federal Reserve, the Beige Book, according to which economic activity in the country remained virtually unchanged in September-October. Most US counties reported declines in manufacturing, while the banking sector remained stable or showed slight growth. Activity in the residential property market remained the same, while the lack of affordable housing in many cities remains a serious problem for citizens. Today at 15:45 (GMT+2), the US will present October business activity data from S&P Global: forecasts suggest a decrease in the Services PMI from 55.2 points to 55.0 points, while the Manufacturing PMI may be adjusted from 47.3 points to 47.5 points.