The Morning Update

The USD retreats, oil weakens, equity markets are higher, and US yields are mixed amid Middle East optimism. The U.S. dollar eases in early trading as improving optimism around U.S.-Iran negotiations supports risk sentiment and reduces demand for the greenback. Attention now turns to Tuesday’s key U.S. inflation report, which will be closely watched for evidence that higher energy costs are feeding into broader prices and for what that could mean for expectations of another Fed hike in December. Global equity markets are broadly higher, led by gains in European banks and a recovery in technology shares, while U.S. futures also point to a firmer open. Sentiment has improved as the immediate fallout from Nvidia’s investigation into whether CEO Jensen Huang was targeted in a foreign-intelligence effort appears contained for now, although the issue remains a risk for the wider AI trade. European equities are also benefiting from stronger bank earnings and renewed deal activity, while lower oil prices continue to support the broader risk backdrop. Elsewhere, oil prices weaken as optimism around U.S.-Iran diplomacy reduces the geopolitical risk premium, while Bitcoin remains under pressure amid softer speculative demand and recent ETF outflows. Gold prices strengthen above $4,100 as safe-haven demand improves and investors position ahead of Tuesday’s U.S. inflation data. Today’s economic calendar is light, with U.S. Wholesale Inventories and speeches from Fed officials Bowman, Goolsbee and Barkin, alongside BoE Governor Bailey, as markets look ahead to tomorrow’s U.S. CPI inflation report.

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News Headlines. Nvidia shares fall 5% as scrutiny turns to Jensen Huang's relationship with alleged Chinese spy. Trump says he was 'too tough' on immigrants as he floats amnesty deal. Congress returns with government funding, Pete Hegseth and the debt limit on the agenda. US Treasury yields stead as investors await more economic data. Chinese wholesale inflation highest in over four years as consumer gauge slows. TSX futures climb as softer oil eases inflation worries; Us inflation awaited. Eurozone Sentix Investor Confidence Index slips to 2.4 in November from 2.7 in October.EUR extends modest gains as the USD gives back part of Friday’s payroll-driven advance and markets continue to price the possibility of another ECB hike in December. October Eurozone inflation at 4.0% has kept policy expectations relatively firm, while lower oil prices are easing pressure on the region’s energy import bill and providing an additional tailwind for the single currency. The move is being tempered by softer Sentix confidence, lingering concerns over France’s fiscal outlook and signs that broader Eurozone growth momentum remains uneven.

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In currency markets. Against the USD, the New Zealand dollar led G10 gains, rallying around 1.5% as a rebound in global technology stocks improved risk appetite, while preliminary election results suggested New Zealand’s governing coalition could retain power. Other G10 currencies also strengthened as the USD retreated from Friday’s sharp rally following stronger-than-expected U.S. employment data. The Kuwaiti dinar reportedly weakened sharply, although the move remains unconfirmed and may reflect a pricing anomaly rather than a fundamental shift in the currency.

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In commodity markets. WTI -2.87% | Nat Gas +0.13% | Gold +1.01% | Silver +1.56% | Copper +1.59% | Palladium +1.17% | Coffee -0.81% | Cocoa -1.33% | Soybeans +0.10% | Wheat -0.42%

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CAD firms modestly in early trading after posting its steepest daily decline since January on Friday, when a surprise 4,700 drop in employment and a rise in unemployment to 6.7% reduced expectations for another BoC hike this year. The loonie remains vulnerable to softer oil prices and the widening Canada-U.S. rate differential, although improved sentiment around U.S.-Canada trade relations is providing some support. Attention this week is likely to remain focused on Tuesday’s key U.S. inflation report, while Canada’s domestic calendar is lighter, with building permits on Thursday and manufacturing sales on Friday among the main releases.

EURCAD firms modestly as weaker oil prices weigh on the commodity-sensitive CAD, while last week’s soft Canadian jobs report continues to reduce expectations for another BoC hike this year. The euro is also finding some support after its recent pullback, with markets still keeping the possibility of a December ECB move in play, although French fiscal concerns remain a constraint.

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EUR extends modest gains as the USD gives back part of Friday’s payroll-driven advance and markets continue to price the possibility of another ECB hike in December. October Eurozone inflation at 4.0% has kept policy expectations relatively firm, while lower oil prices are easing pressure on the region’s energy import bill and providing an additional tailwind for the single currency. The move is being tempered by softer Sentix confidence, lingering concerns over France’s fiscal outlook and signs that broader Eurozone growth momentum remains uneven.

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GBPEUR edges higher as GBP finds support ahead of Governor Bailey’s first scheduled speech since last week’s BoE rate hike, with investors looking for clues on whether another increase could follow in December. The pound is also benefiting from the BoE’s relatively firm policy stance, while the euro is being held back by softer Eurozone sentiment data and lingering fiscal concerns. Bailey’s remarks later today are the main near-term catalyst, with UK Q3 GDP later this week providing the next major domestic test.

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GBP advances to session highs against the USD as improved risk sentiment and optimism around U.S.-Iran negotiations weigh on the greenback. GBP is also supported by last week’s BoE rate hike and the prospect of further tightening, with Governor Bailey’s remarks today closely watched for additional guidance on the timing and scale of any follow-up move. Attention then turns to Tuesday’s U.S. CPI report, which will be key for December Fed expectations and could determine whether the dollar’s current weakness extends.