Monday November 6th ,2023
The USD sold off, oil prices, equity markets and US yields are up as we start the week. The USD remains under pressure after Friday’s weaker than expected employment figures hovering near multi-week lows. A month after Hamas’ attackon Israel, the Israeli troops have surrounded Gaza City and are expected to enter early in the week. The death toll is said to have surpass 10,000 people with nearly 40% of them being minors. US Secretary of State Blinken has been travelling the region trying to limit the impact from Netanyahu’s refusal to consider a US proposed intermittent cease fire in order to provide much neededaid to Gaza civilians.
In other news. It is widely expected that Putin will run again in the March 2024 presidential election, which will keep him in power until 2030. South Koreaplans to launch it’s first spy satellite at the end of the month. Zelensky requesting more military and financial assistance from the US as well as inviting former President Trump to make good on the claim that he could end the war swiftly. For the first time in seven years, the Australian PM and Chinese President met earlier today in Beijing.
In currency news. Recession fears heighten as Eurozone outlook remains very weak. RBA set to announce its interest rate decision on Tuesday, where it is expected that they will raise by 25bps to 4.35%. Asian currencies are mixed this morning with CNY up 0.45%, MYR 2.0%, IDR 1.2%, while the JPY, THB and PHP areoff 0.20%. AUD and NZD hedged lower 0.10% and 0.40% respectively. ZAR and MXN are flat as we start the week.
In commodity markets. Oil prices rose on Monday, after top exporters Saudi Arabiaand Russia reaffirmed their commitment to extra voluntary oil supply cuts until the end of the year. Nat gas off 3.5%, Gold down 0.25%, Silver up 0.25%, Coppe up 1%, Wheat trades lower by 0.6% while soybean rose 1.1%.
CADis holding on to Friday’s gains as market participants digest last week’s employment figures. The weaker than expected non-farm payroll have some thinking that there will be no need for further hike in the US and perhaps push the Fed closer to an eventual lowering of rates.
EURCAD iks stable as we start the week as the focus remains on the USD.
EUR continues its move higher to start the week being fueled once again by last week’s US economic data. Growing consensus that the FED will keep interest stable in the near future and that the ECB will follow suit as given the Euro aboost.
GBPEUR is continuing its rally that started last Friday hovering around a 1-month high.
GBP continues it’s move upward as the USD remains under pressure. As with most currencies, the GBP has seen a risk-on strategy which helped fueled this rally.The expectation that policy divergence between the Fed and BoE will not widen further as helped the GBP.
The USD rallies, oil prices firm, equity markets are up, and US yields gain on signs of softening inflation.
The USD firms, oil prices grain, while equity markets are mixed, and US yields ease as attention moves to Fed Chair Powell's speech on Friday.