The Morning Update

The USD holds firms, oil prices remain steady, equity markets are mixed, and US yields rise ahead of Nvidia earnings and uncertainty over the Fed. The U.S. dollar edged higher at the start of the week as traders positioned cautiously ahead of a heavy slate of delayed U.S. economic data, including Thursday’s nonfarm payrolls report. Market sentiment remained subdued, with investors trimming bets on a December Fed rate cut amid uncertainty over how the data backlog will affect the policy outlook. Global equity markets started the week lower, while U.S. stock futures edged higher, lifted by gains in technology shares as investors looked ahead to Nvidia’s earnings and the release of delayed U.S. economic data. Futures on the S&P 500 rose 0.3% and Nasdaq 100 contracts gained, supported by a 5.5% premarket jump in Alphabet after Berkshire Hathaway disclosed a new stake. Despite the rebound in U.S. futures, sentiment remained cautious following last week’s volatility and uncertainty over the Federal Reserve’s next policy move, with traders awaiting the release of upcoming payroll data and the Fed’s October meeting minutes for clearer guidance. Elsewhere, oil prices were flat as traders awaited fresh demand cues, while gold eased amid reduced safe-haven demand. Bitcoin strengthened on improved market sentiment and renewed investor interest in digital assets. In focus this week, on Monday, the CAD CPI and the NY Empire State Manufacturing Index. Tuesday, US ADP Employment Change 4-week avg, and US Factory Orders. Wednesday, UK CPI, UK PII Core Output, UK Retail Sales, EU Non-Monetary Policy ECB Meeting, EU Inflation report, FOMC Minutes. Thursday, the US Average Hourly Earnings, US NFP & Unemployment reports. Friday, Retail Sales, EU PMI reports, CAD Retail Sales, ECB President Lagarde Speech, EU PMI Reports, UK PMI Reports, US S&P PMI reports, alongside a flurry of Fed speakers this week, will help direct currency markets' direction.

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In the news. Goldman is on the brink of its best M&A performance in 24 years. Japan's economy shrinks as US tariffs weigh on exports. Trump backs vote to release Epstein files. Poland blames sabotage for the blast on a major railway line. The EU warns of costs without a deal on using Russia's frozen assets for Ukraine. Bangladesh's ousted PM Hasina sentenced to death for the crackdown on students. Zelenskiy says Ukraine will obtain 100 Rafale warplanes. Canadian home sales regain positive momentum in October. China escalates Japan spat with threats of economic retaliation. Peter Thiel's fund sold off its entire Nvidia stake in the third quarter.

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In currency markets. The euro, sterling, and yen all traded slightly lower against the dollar as investors awaited key U.S. data for clues on the economy’s post-shutdown recovery. Japan’s yen showed little reaction to data confirming a 1.8% annualized GDP contraction in Q3, though it remains near a nine-month low, keeping traders alert for possible intervention by Japanese authorities. Sterling held steady but stayed under pressure ahead of the November 26 UK budget and upcoming inflation data, while the Swiss franc eased from recent highs after last week’s flight-to-safety flows faded. CNY eased 0.1%, and Asian currencies on average fell 0.35% against the USD. Trading currencies came under pressure, with PLN, CHF, AUD, NZD, and CZK weakening 0.3%, NOK, JPY, & DKK fell 0.2%, MXN & KWD down 0.1%, and SEK & ZAR flat against the USD.

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In commodity markets. Oil & Silver prices are flat. Natural Gas prices tumbled 1.7%. Gold prices fell 0.6%. Copper prices weakened 0.75%. Coffee prices rallied 2.35%, while Soybean and Wheat prices strengthened by 0.85%.

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CAD slipped in early trading but held on to weekly gains, supported by stronger factory sales data and firm oil prices. Markets are now focused on the upcoming Bank of Canada inflation report, with policymakers expected to emphasize that while headline inflation is near 2%, underlying price pressures remain slightly above target. This reinforces expectations that the BoC will keep interest rates on hold in the near term while assessing the impact of recent data on its policy outlook.

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EURCAD pair edged lower as the euro weakened on soft Eurozone growth data, while the Canadian dollar found support ahead of today’s Bank of Canada focus. Investors are watching for any policy signals from the BoC that could reinforce expectations of a prolonged rate pause, keeping the pair under mild downward pressure.

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EUR remained under pressure, trading near 1.1600 as renewed U.S. dollar demand and cautious market sentiment weighed on the pair. Investors trimmed expectations for a December Fed rate cut while awaiting a backlog of delayed U.S. economic data, keeping risk appetite subdued. Comments from ECB Vice President Luis de Guindos expressing confidence in inflation convergence but warning about tariff and debt risks failed to support the euro. Meanwhile, fresh tensions between China and Japan further dampened sentiment ahead of key U.S. data releases and Fed speeches later in the day.

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GBPEUR pair edged higher in early trading as the euro faced headwinds and the pound drew support from prospects of upcoming data. Markets are awaiting fresh UK economic releases and Eurozone indicators, both of which could influence expectations for the Bank of England (BoE) and the European Central Bank (ECB) policy outlooks. Diverging growth signals and central bank paths between the UK and the Eurozone are contributing to the modest movement in the cross.

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GBP is flat in early trading as investors await key UK economic data later this week, including inflation and GDP reports. These releases are expected to provide clearer insight into the outlook for growth and price pressures, helping shape expectations for the Bank of England’s next move. Market sentiment remains cautious ahead of the November 26 budget, keeping GBP/USD capped below 1.3200.