safe haven

Oil up, capital flows into safe haven on Mid-East tensions

By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank  

Capital flows into the safety of US dollar and gold this morning, while oil is up almost 4% after Hamas' unexpected attack on Israel wreaked havoc in the region last Friday, and tensions have been mounting since then. There are rumours that Iran helped Hamas organize its attack, and the US said it's sending warships to the region. The escalation of the tensions sent a panic wave into the financial markets on Monday open. The barrel of American crude traded past $87pb, as fears of a potential retaliation against Iran threaten the passage of vessels carrying oil through the Strait of Hormuz and flip the market rhetoric from a potentially slowing global oil demand to tight global supply.  

It is difficult to predict the extent of the price action on geopolitical shocks. The fact that the US and Iran are pulled into the turmoil hints that tensions may further escalate. F

The Swing Overview – Week 25 2022

The Swing Overview – Week 25 2022

Purple Trading Purple Trading 27.06.2022 13:52
The Swing Overview – Week 25 There was a rather quiet week in which the major world stock indices shook off previous losses and have been slowly rising since Monday. However, this is probably only a temporary correction of the current bearish trend.  The CNB Bank Board met for the last time in its old composition and raised the interest rate to 7%, the highest level since 1999. However, the koruna barely reacted to this increase. The reason is that the main risks are still in place and fear of a recession keeps the markets in a risk-off sentiment that benefits the US dollar. Macroeconomic data We had a bit of a quiet week when it comes to macroeconomic data in the US. Industrial production data was reported, which grew by 0.2% month-on-month in May, which is less than the growth seen in April, when production grew by 1.4%. While the growth is slower than expected, it is still growth, which is a positive thing.   In terms of labor market data, the number of jobless claims held steady last week, reaching 229k. Thus, compared to the previous week, the number of claims fell by 2 thousand.   The US Dollar took a break in this quiet week and came down from its peak which is at 106, 86. Overall, however, the dollar is still in an uptrend. The US 10-year bond yields also fell last week and are currently hovering around 3%. The fall in bond yields was then a positive boost for equity indices. Figure 1: US 10-year bond yields and USD index on the daily chart   The SP 500 Index The SP 500 index has been gaining since Monday, June 20, 2022. However, this is probably not a signal of a major bullish reversal. Fundamental reasons still rather speak for a weakening and so it could be a short-term correction of the current bearish trend. The rise is probably caused by long-term investors who were buying the dip. Next week the US will report the GDP data which could be the catalyst for further movement.  Figure 2: The SP 500 on H4 and D1 chart   The index has currently reached the resistance level according to the H4 chart, which is in the region of 3,820 - 3,836. The next strong resistance is then in the area of 3,870 - 3,900 where the previous support was broken and turned into the resistance. The current nearest support is 3 640 - 3 670.    German DAX index The manufacturing PMI for June came in at 52.0. The previous month's PMI was 54.8. While a value above 50 indicates an expected expansion, it must be said that the PMI has essentially been declining since February 2022. This, together with other data coming out of Germany, suggests a certain pessimism, which is also reflected in the DAX index. Figure 3: German DAX index on H4 and daily chart The DAX broke support according to the H4 chart at 12,950 - 12,980 but then broke back above that level, so we don't have a valid breakout. Overall, however, the DAX is in a downtrend and the technical analysis does not show a stronger sign of a reversal of this trend yet. The nearest resistance according to the H4 chart is 13,130 - 13,190. The next resistance is then at 13 420 - 13 440. Strong support according to the daily chart is 12,443 - 12,600.   Eurozone inflation at a new record Consumer inflation in the Eurozone for May rose by 8.1% year-on-year as expected by analysts. On a month-on-month basis, inflation added 0.8% compared to April. The rise in inflation could support the ECB's decision to raise rates possibly by more than the 0.25% expected so far, which is expected to happen at the July meeting.  Figure 4: EUR/USD on H4 and daily chart From a technical perspective, the euro has bounced off support on the pair with the US dollar according to the daily chart, which is in the 1.0340 - 1.0370 range and continues to strengthen. Overall, however, the pair is still in a downtrend. The US Fed has been much more aggressive in fighting inflation than the ECB and this continues to put pressure on the bearish trend in the euro. The nearest resistance according to the H4 chart is at 1.058 - 1.0600. Strong resistance according to the daily chart is at 1.0780 - 1.0800.   The Czech National Bank raised the interest rate again Rising inflation, which has already reached 16% in the Czech Republic, forced the CNB's board to raise interest rates again. The key interest rate is now at 7%. The last time the interest rate was this high was in 1999. This is the last decision of the old Bank Board. In August, the new board, which is not clearly hawkish, will decide on monetary policy. Therefore, it will be very interesting to see how they approach the rising inflation.   The current risks, according to the CNB, are higher price growth at home and abroad, the risk of a halt in energy supplies from Russia and generally rising inflation expectations. The lingering risk is, of course, the war in Ukraine. The CNB has also decided to continue intervening in the market to keep the Czech koruna exchange rate within acceptable limits and prevent it from depreciating, which would increase import inflation pressures. Figure 5: The USD/CZK and The EUR/CZK on the daily chart Looking at the charts, the koruna hardly reacted at all to the CNB's decision to raise rates sharply. Against the dollar, the koruna is weakening somewhat, while against the euro the koruna is holding its value around 24.60 - 24.80. The appreciation of the koruna after the interest rate hike was probably prevented by uncertainty about how the new board will treat inflation, and also by the fact that there is a risk-off sentiment in global markets and investors prefer so-called safe havens in such cases, which include the US dollar.  
The Swing Overview - Week 26 2022

The Swing Overview - Week 26 2022

Purple Trading Purple Trading 04.07.2022 10:50
The Swing Overview - Week 26 2022 After ashort-term upward correction, the indices resumed their bearish trend and closed the week in the red. Along with this risk-off sentiment, commodity currencies weakened, as did the British pound and the euro. Gold is losing ground as a means of inflation protection and has fallen back below the USD 1,800 per ounce. The US dollar, on the other hand, is still the strongest currency amid the looming recession. Macroeconomic data The number of new home sales in the US for May reached 696,000, beating expectations of 588,000. This is positive news.   On the other hand, the negative news is the drop in consumer confidence, which reached 98.7 for May (103.2 the previous month). The drop in consumer confidence is expected to affect consumer spendings. It is evident that American consumers are reluctant to spend in times of rising prices and are accumulating savings for the future. This is of course contributing to the economic slowdown and the risk of a recession in the US is thus becoming stronger. This was confirmed by the GDP data, which fell for the third month in a row.   The fall in GDP last month was 1.6%. GDP was therefore negative in 1Q 2022. If it is also negative in 2Q2022, it will be an official confirmation of the recession defined by two negative quarters in a row. Jerome Powell suggested this week that the risk of the economy being damaged by higher rates is less important than restoring price stability. This heightens fears that a slowdown in the US economy will take the whole world down with it. So in times when central banks are tackling inflation, this risk will set the tone for some time.    This situation is positive for the US dollar, which is seen by investors as a safe haven asset in times of uncertainty. The dollar therefore remains close to this year's highs.  Although the yield on 10-year US Treasuries has fallen below 3%, the overall trend in bond yields is still upwards. Figure 1: US 10-year bond yields and USD index on the daily chart   The SP 500 Index The strengthening on the SP 500 Index that we have seen in the week of June 20 was really just a short-term correction to the overall downtrend, as we have previously suggested. Last week saw another sell-off and so the overall downtrend on the index continues.   Figure 2: The SP 500 on H4 and D1 chart   The nearest resistance according to the H4 chart is in the range of 3,810 - 3,820. The next resistance is 3,930 - 3,950. A support is 3 640 - 3 670.    German DAX index  The German Ifo Business Climate Index which measures the expectations of manufacturers, builders and sellers for the next 6 months continued to show a value of 92.3, which is worse than the previous month when the index value was 93.0. The fall in the reading suggests some pessimism, accentuated by current market uncertainties, which include the impact of the war in Ukraine and high inflation, which in Germany for the month of June was 7.6% year-on-year. However, inflation fell by 0.1% month-on-month.   The labour market has also indicated problems. The number of unemployed in Germany rose by 133 000, while the market had expected a fall of 6 000. This was very negative news, which triggered a strong sell-off on the Dax on Thursday. On the other hand, retail sales were positive, rising by 0.6% in May, while a 5.4% decline was recorded in April. Figure 3: German DAX index on H4 and daily chart The DAX has broken support according to the H4 chart at 12,850, which has now become the new resistance, which is in the 12,820 - 12,850 range. The next resistance according to the H4 chart is then at 13,280 - 13,375. The strong support according to the daily chart is 12,443 - 12,620, which price is currently approaching.    Eurozone inflation at a new record Eurozone consumer inflation reached another record high in June, rising by 8.6% year-on-year. This is higher than analysts' expectations, who predicted a rise of 8.4%. Inflation is therefore continuing to rise, so the expectation that the ECB could raise rates by more than 0.25% in July is on target and this could support the euro's growth. On the other hand, there is a strong dollar which could continue to slow down bulls on the euro.   Figure 4: EUR/USD on H4 and daily chart The nearest resistance according to the H4 chart is at 1.048 - 1.0500. The next resistance is at 1.0600 - 1.0610. Support is at 1.0360 - 1.0380.   Gold broke the $1,800 price tag The development in gold has once again confirmed that investors prefer US bonds instead of gold, which, in addition to being considered a "safe haven" along with the US dollar, also brings a small but still certain return. The strong dollar is not good news for gold, which has fallen below the key support of USD 1,800 per ounce.  Figure 5: Gold on H4 and daily chart The nearest resistance according to the H4 chart is therefore in the zone of USD 1,800 - 1,807 per ounce. Below this resistance we have several supports. The closest one is 1 780 - 1 787 USD per ounce.  
The Swing Overview - Week 26 2022 - 08.07.2022

The Swing Overview - Week 26 2022 - 08.07.2022

Purple Trading Purple Trading 08.07.2022 09:47
The Swing Overview - Week 26 2022 After ashort-term upward correction, the indices resumed their bearish trend and closed the week in the red. Along with this risk-off sentiment, commodity currencies weakened, as did the British pound and the euro. Gold is losing ground as a means of inflation protection and has fallen back below the USD 1,800 per ounce. The US dollar, on the other hand, is still the strongest currency amid the looming recession. Macroeconomic data The number of new home sales in the US for May reached 696,000, beating expectations of 588,000. This is positive news.   On the other hand, the negative news is the drop in consumer confidence, which reached 98.7 for May (103.2 the previous month). The drop in consumer confidence is expected to affect consumer spendings. It is evident that American consumers are reluctant to spend in times of rising prices and are accumulating savings for the future. This is of course contributing to the economic slowdown and the risk of a recession in the US is thus becoming stronger. This was confirmed by the GDP data, which fell for the third month in a row.   The fall in GDP last month was 1.6%. GDP was therefore negative in 1Q 2022. If it is also negative in 2Q2022, it will be an official confirmation of the recession defined by two negative quarters in a row. Jerome Powell suggested this week that the risk of the economy being damaged by higher rates is less important than restoring price stability. This heightens fears that a slowdown in the US economy will take the whole world down with it. So in times when central banks are tackling inflation, this risk will set the tone for some time.    This situation is positive for the US dollar, which is seen by investors as a safe haven asset in times of uncertainty. The dollar therefore remains close to this year's highs.  Although the yield on 10-year US Treasuries has fallen below 3%, the overall trend in bond yields is still upwards. Figure 1: US 10-year bond yields and USD index on the daily chart   The SP 500 Index The strengthening on the SP 500 Index that we have seen in the week of June 20 was really just a short-term correction to the overall downtrend, as we have previously suggested. Last week saw another sell-off and so the overall downtrend on the index continues.   Figure 2: The SP 500 on H4 and D1 chart   The nearest resistance according to the H4 chart is in the range of 3,810 - 3,820. The next resistance is 3,930 - 3,950. A support is 3 640 - 3 670.    German DAX index  The German Ifo Business Climate Index which measures the expectations of manufacturers, builders and sellers for the next 6 months continued to show a value of 92.3, which is worse than the previous month when the index value was 93.0. The fall in the reading suggests some pessimism, accentuated by current market uncertainties, which include the impact of the war in Ukraine and high inflation, which in Germany for the month of June was 7.6% year-on-year. However, inflation fell by 0.1% month-on-month.   The labour market has also indicated problems. The number of unemployed in Germany rose by 133 000, while the market had expected a fall of 6 000. This was very negative news, which triggered a strong sell-off on the Dax on Thursday. On the other hand, retail sales were positive, rising by 0.6% in May, while a 5.4% decline was recorded in April. Figure 3: German DAX index on H4 and daily chart The DAX has broken support according to the H4 chart at 12,850, which has now become the new resistance, which is in the 12,820 - 12,850 range. The next resistance according to the H4 chart is then at 13,280 - 13,375. The strong support according to the daily chart is 12,443 - 12,620, which price is currently approaching.    Eurozone inflation at a new record Eurozone consumer inflation reached another record high in June, rising by 8.6% year-on-year. This is higher than analysts' expectations, who predicted a rise of 8.4%. Inflation is therefore continuing to rise, so the expectation that the ECB could raise rates by more than 0.25% in July is on target and this could support the euro's growth. On the other hand, there is a strong dollar which could continue to slow down bulls on the euro.   Figure 4: EUR/USD on H4 and daily chart The nearest resistance according to the H4 chart is at 1.048 - 1.0500. The next resistance is at 1.0600 - 1.0610. Support is at 1.0360 - 1.0380.   Gold broke the $1,800 price tag The development in gold has once again confirmed that investors prefer US bonds instead of gold, which, in addition to being considered a "safe haven" along with the US dollar, also brings a small but still certain return. The strong dollar is not good news for gold, which has fallen below the key support of USD 1,800 per ounce.  Figure 5: Gold on H4 and daily chart The nearest resistance according to the H4 chart is therefore in the zone of USD 1,800 - 1,807 per ounce. Below this resistance we have several supports. The closest one is 1 780 - 1 787 USD per ounce.  
Fed's Final Hike Unlikely as Economic Challenges Loom

Market Volatility Ahead: US Debt Ceiling Agreement and Wave Patterns in Currency Markets

InstaForex Analysis InstaForex Analysis 29.05.2023 11:35
Both instruments continue to decline steadily even with the news background, which is not always "strong". Over the weekend, however, there was quite expected news from the U.S. Congress about the national debt limit.   US Treasury Secretary Janet Yellen reaffirmed June 1 as the "hard deadline" for the US to raise the debt ceiling or risk defaulting on its obligations. Since no one in the market doubted that the Democrats and Republicans would eventually find common ground, the decision and its announcement were just already expected.   US President Joe Biden's press office reported that the White House and House Republicans have striked an agreement, meaning an official bill will be passed by June 1 that would raise the debt ceiling by another $2 trillion. Problem solved, and the week could start volatile for the markets.       There is nothing scheduled for Monday. Nevertheless, many instruments can show good activity as they haven't had the opportunity to react to the news of raising the debt limit over the weekend. Since this decision is positive for the US economy, it is reasonable to expect an increase in demand for the US currency. However, some analysts believe that the recent appreciation of the US dollar was driven by rising risk aversion sentiment.   Despite the default risk that threatened the US and the dollar, many investors may have used it as a "safe haven." Personally, I don't believe in such an assumption, but I can't speak for every individual. I expect active movements on Monday, but it doesn't make sense to guess the direction. In any case, regardless of the direction of both instruments, we can assume that this movement will not disrupt the overall wave pattern. If the euro and the pound rise on Monday-Tuesday, it can be considered as a corrective wave within a downtrend.   In the opposite case, the main wave will continue to form. We have much more important news and reports, such as the US labor market or inflation in the European Union. The wave pattern is highly important for the market right now, as instruments can move in a certain direction based solely on it. The topic regarding central bank rates is currently losing some of its appeal.   Last week, there were many speeches by European Central Bank and Federal Reserve members, but we did not receive any clarity on the topic. I believe that there is a consensus on this issue, and the new speeches did not change it.     Based on the analysis conducted, I conclude that the uptrend phase has ended. Therefore, I would recommend selling at this point, as the instrument has enough room to fall. I believe that targets around 1.0500-1.0600 are quite realistic. These are the targets I suggest for selling the instrument.   The wave pattern of the GBP/USD pair has long indicated the formation of a new downtrend wave. Wave b could be very deep, as all waves have recently been equal. A successful attempt to break through 1.2445, which equates to 100.0% Fibonacci, indicates that the market is ready to sell. I recommend selling the pound with targets around 23 and 22 figures. But most likely, the decline will be stronger.    
Analyzing the Euro's Forecast Amidst Eurozone Data and Global Factors

Analyzing the Euro's Forecast Amidst Eurozone Data and Global Factors

Santa Zvaigzne Sproge Santa Zvaigzne Sproge 07.07.2023 10:15
As the Eurozone grapples with the latest economic data, investors and market participants are keen to understand the forecast for the Euro (EUR). We engage in a conversation with Santa Zvaigzne-Sproge, CFA, to gain insights into the potential implications of recent developments on the Euro's performance. The manufacturing and services Purchasing Managers' Index (PMI) in the Euro area has shown signs of decline, introducing downward pressure on the common currency. This suggests a potential deterioration in economic health and raises concerns about the onset of a recession. These factors may impact the valuation of the Euro against other major currencies.     FXMAG.COM: In light of the latest data from the Eurozone, what forecast can you make for the EUR?   Santa Zvaigzne-Sproge, CFA: Lowering manufacturing and services PMI in the Euro area might contribute to downward pressure on the common currency as they indicate a potential deterioration of economic health and a potential recession.   However, the Euro value may be more dependent on the ECB's decisions on further interest rate hikes and the value of the US Dollar. During recent uncertainties in the financial markets, the US Dollar has been slightly regaining strength due to its “safe haven” asset features.   Furthermore, the FED is expected to raise key interest rates in their July meeting potentially giving additional strength to the US Dollar. Meanwhile, continued deterioration of macroeconomic data in the Euro area may push the ECB to halt raising interest rates resulting in a weakening Euro.   
The UK Contracts Faster Than Expected in July, Bank of England Still Expected to Hike Rates

Emerging Market Turmoil Boosts Demand: US Dollar Stays Strong as Chinese Renminbi Faces Pressure

ING Economics ING Economics 16.08.2023 12:02
FX Daily: Unruly EM currencies keep the dollar in demand The combination of US yields at their highs and some intense pressure on emerging market currencies are maintaining the US dollar's status as a worthy safe haven. Today's focus will be on whether the Chinese renminbi falls any further after the surprise rate cut overnight and what should be some decent US July retail sales data. Expect the dollar to stay bid.   USD: Strong US retail sales should help The dollar pushed ahead around 0.7% yesterday as pressure on EM currencies around the world encouraged more dollar demand. Very much in focus remains China's renminbi (CNY), which hit a new low overnight after the People's Bank of China surprised with a 15bp rate cut in its Medium Term Lending Facility. USD/CNH (the liquid offshore pair) has pushed up to a new high for the year above 7.30 and has its sights set on last October's high at 7.3750. We mention the renminbi so much in this dollar section since weakness drags most of the Asian FX complex with it and provides a bullish undercurrent to the dollar across the board. Nonetheless, a rate cut from China is a stimulus and perhaps means that some of the commodity currencies do not have to fall as much. The rate cut also provides a tailwind to renminbi-funded carry trades. In terms of what comes next from China, we could possibly see a cut in the required reserve ratio (RRR) on FX deposits - this was cut to 6% from 8% last September in an attempt to take some pressure off the renminbi. In quiet markets, the US dollar might also be getting some support from events in Argentina (see below) and the market is watching USD/RUB trade through 100. Here, the Central Bank of Russia has an emergency rate meeting today, which is expected to result in a large hike and perhaps some tightening of capital controls.  For the dollar itself, July US retail sales should be strong and keep US two-year yields near 5%. It seems the market is indeed settling into the view that the policy rate will be kept at these levels for an extended period - providing few reasons to sell the 5%+ yielding US dollar. DXY can probably trade bid within a narrow 103.00-103.50 range today. And please take a look at our August edition of FX Talking for all our latest FX views. 
USD/JPY Eyes Psychological Level of 150.00 Amidst BoJ's Monetary Policy and Fed's Rate Hike Expectations

USD/JPY Eyes Psychological Level of 150.00 Amidst BoJ's Monetary Policy and Fed's Rate Hike Expectations

InstaForex Analysis InstaForex Analysis 27.09.2023 14:12
For the fourth consecutive day, the USD/JPY pair is steadily heading towards the psychological level of 150.00, currently trading above the 149.00 mark.   The Japanese yen continues to face pressure due to the Bank of Japan's decision last week to maintain the status quo. At the end of the September meeting, the Japanese central bank left its ultra-loose policy unchanged, refraining from any hints of possible changes in the near future.   Additionally, earlier this week, Bank of Japan Governor Kazuo Ueda stated that the current policy has a significant stimulative effect on the economy, and the main position is to patiently maintain monetary easing. He added that Japan's economy is at a critical stage in achieving a positive wage growth cycle and sustainable inflation at 2%, which is not yet visible. Such statements dispel hopes of a future exit from the massive stimulus program and continue to undermine the yen. On the other hand, the Federal Reserve has indicated that interest rates will not be falling in the near future. It openly stated that there will be further rate hikes by the end of the year, with only two rate cuts expected in 2024, instead of the previously speculated four, as anticipated three months ago.   Many FOMC members still express uncertainty about the end of the fight against inflation. Consequently, this supports the prospects for further tightening of monetary policy. This, in turn, led to selling in the U.S. bond market and pushed the yield on 10-year Treasury bonds to the highest level since 2007, which became a key factor in the recent rise of the U.S. dollar to a 10-month peak and continues to support the USD/JPY pair's upward trajectory.   Nevertheless, the prevailing risk-off environment favors the relative status of JPY as a safe haven and limits the potential for spot price growth. But it should not be forgotten that Japanese authorities will intervene in the currency market to support the national currency. This restrains bulls from pushing USD/JPY to new levels. In fact, Japanese Finance Minister Shunichi Suzuki issued a new warning against the recent weakness of the yen and stated last week that the government would not rule out any options to address excessive volatility in the currency markets.   This, in turn, requires caution before taking positions regarding the continuation of the established upward trend observed since mid-July. However, for now, the fundamental backdrop supports the pair's growth. But it is worth paying attention to today's news regarding the dollar before rushing into betting on further moves.  
EPBD Recast: A Step Closer to Climate-Neutral Buildings

Mid-East Tensions Drive Surge in Oil Prices: US Dollar and Gold Emerge as Safe Havens

ING Economics ING Economics 09.10.2023 16:05
Oil up, capital flows into safe haven on Mid-East tensions By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank   Capital flows into the safety of US dollar and gold this morning, while oil is up almost 4% after Hamas' unexpected attack on Israel wreaked havoc in the region last Friday, and tensions have been mounting since then. There are rumours that Iran helped Hamas organize its attack, and the US said it's sending warships to the region. The escalation of the tensions sent a panic wave into the financial markets on Monday open. The barrel of American crude traded past $87pb, as fears of a potential retaliation against Iran threaten the passage of vessels carrying oil through the Strait of Hormuz and flip the market rhetoric from a potentially slowing global oil demand to tight global supply.   It is difficult to predict the extent of the price action on geopolitical shocks. The fact that the US and Iran are pulled into the turmoil hints that tensions may further escalate. From a price perspective, the $90pb level is expected to shelter decent offers in US crude, as escalation and prolongation of Mid-East tensions could be the final straw that could bring the world very close to the brink of recession, and temper appetite for oil. It's too early to call.   From a geopolitical perspective, this war is different from the one in 1973 because the political and the geopolitical landscape is unalike. First Arabic countries are not attacking Israel together. Second, OPEC countries do have spare capacity that they restrict willingly to maintain oil price at above the $80pb, but they don't necessarily think of tripling oil prices – which would only accelerate the energy transition. Third, yes, the US could continue to tap into its strategic oil reserves to level out a potential price shock even though SPR is down to a 40-year low following the Ukrainian war and finally, the Ukrainian war and embargo on Russian oil are already in play and the West has little margin to impose another embargo on Arab oil. This being said, potential retaliation against Tehran is a serious upside risk for oil prices. We will keep an eye on developments, but don't speculate on a full-blast rise in oil prices for now.   Trading in Asia was mixed, stocks in Tel Aviv lost 6.5%, sentiment in Europe is sour and the US equity futures are down. Gold acts as a strong safe haven. The price of an ounce jumped past the $1850 level this morning, and further escalation of tensions should drive capital into the safety of gold. The upside potential extends to a distant $2000 per ounce, but gains due to geopolitical tensions are not expected to last long. What will remain decisive for gold's medium, long-term performance will be the US yields. For now, they are on a rising path.   Even though last Friday seems like it was ages ago, the NFP printed a shocker 336K new nonfarm job additions. But the wages growth was softer than expected and the unemployment rate held steady at 3.8%, instead of cooling down to 3.7% as expected by analysts. Expectations of November rate hike are steady, there is near 80% chance of no rate hike.  This week, the market attention will shift to the big bank earnings, and to the latest US inflation update. The US consumer price inflation is seen easing from 0.7% to 0.3% on a monthly basis thanks to the cooling energy prices over the past month, and the yearly CPI figure could soften from 3.7% to 3.6%. The core CPI, which is more important for the Fed expectations, is expected to have eased to 4.1%. The US 10-year yield is at the highest level since 2007; no surprise or a good surprise could spark interest from bond traders at the current levels.  

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