The Morning Update

After yesterday’s rally, the USD is off, oil prices trade higher, equity markets move lower while bond yields rise. Fed speakers yesterday sounded cautious about future easing has given some wings to the USD and pushing treasury yield higher. The Greenback is sitting just off of August highs. Market participants see an 87% chance of a US rate cut at the November Fed meeting.

In other news. Putin to host a BRICS summit inviting 20 heads of state sending a clear message to the West that their attempts to isolate Russia has failed. Ukraine accuses North Korea of preparing to send 10,000 soldiers. Britain announces $3B loan for Ukraine from frozen Russian assets. China held a live-firing exercise from its territory closest to Taiwan one week after it launched a large-scale drill encircling the island. In the Middle East, Hezbollah said it launched rockets into Israel as Blinken returns looking for a cease fire agreement.

In currency markets. CNY and JPY edges down as 'Trump trade' supports dollar. INR continues its move lower reaching an all-time low. Australia, NZ dollars pinned near multi-month lows as US yields surge. The ZAR was stronger in early trade, buoyed by global precious metals prices and its appeal for carry trade.

In commodity markets. Oil prices are stable as Blinken arrives in the Middle East looking to secure a peace agreement coupled with the worries over the slowing Chinese demand. Gold hovers near record high on safe-haven demand – rising 32% this year. XAU remains strong moving 0.6% higher. Not to be left out, Copper is up 0.9% in early trading. Improved weather outlook in Russia and the US had a negative impact on wheat where it shed 1% this morning. Soybean followed suits on the back of increase supplies.

Current level USD Index                           103.917             Down 0.10%

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The USD/CAD trades at an 11-week low as the gap between U.S. and Canadian bond yields weighed on the currency. BoC is set to announce their interest decision tomorrow where the consensus is a 50-bps cut.

Current level USDCAD                              1.3833                 Up 0.10%

The EURCAD is stable this morning as we await the BoC’s interest rate decision scheduled for tomorrow.

Current level EURCAD                               1.4961                 Up 0.03%

The EUR continues to struggle as the ECB is expected to cut interest rates at the December meeting. While Fed policymakers see smaller interest rates cuts as appropriate going forward.

Current level EURUSD                               1.0818                 Up 0.03%

The GBPEUR continue to trade near 13-month high as we await fresh news.  

Current level GBPEUR               1.1996 (.8335)                             Down 0.07%    

The GBP trades with caution as investors await BoE Bailey’s speech for fresh guidance on interest rates. Bailey may reiterate a dovish stance on the interest-rate outlook, signaling that more interest-rate cuts are on the way.

Current level GBPUSD                               1.2983                 Down 0.01%

Other ccy levels vs C$. GBPCAD 1.7955 AUDCAD.9246  CADCHF.6258  CADJPY 109.01  CADTHB 24.19  CADCNY 5.1479  CADNOK 7.8895  CADSEK 7.6177  CADDKK 4.9797  CADZAR 12.7206

Other ccy level vs USD. JPY 150.80  CHF.8655  AUD.6683  NZD.6056  CNY 7.1206  MXN 19.9337  INR 84.0510  PLN 3.9900  CZK 23.333  ZAR 17.5992  ILS 3.7808  AED 3.6728  KWD 0.30635

Other Major X levels. EURCHF.9369  EURJPY 161.86  EURSEK 11.4085  EURNOK 11.8128 GBPCHF 1.1233  EURAUD 1.6191  GBPAUD 1.9414  AUDCHF .5787  AUDJPY 100.80  CHFJPY 174.37

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