Market Overview: November 7, 2024
Today, the markets are waiting for major decisions from the Bank of England (BoE) and the Federal Reserve (Fed). Both are expected to announce interest rates. The BoE’s decision, alongside the vote split, will give insights into its outlook amidst inflationary pressures. Later in the day, the Fed’s rate decision will be closely watched. The Chair’s commentary in the press conference will also be under scrutiny for any signals on future U.S. monetary policy.
Key Data Out Today
- EUR Retail Sales YoY (Sep): Forecast 1.3%, Previous 0.8%
- GBP BoE Interest Rate Decision: Forecast 4.75%, Previous 5%
- GBP BoE Minutes & Monetary Policy Report
- GBP MPC Vote Results
- Rate Cut: 7 votes
- Rate Hike: 0 votes
- Rate Unchanged: 2 votes
- USD Fed Interest Rate Decision: Forecast 4.75%, Previous 5%
- USD Fed Monetary Policy Statement & FOMC Press Conference
Energy & Precious Metals
- Crude Oil: Up 0.37% at $71.96, showing strength after a steady week.
- Brent Oil: Up 0.45% at $75.26, with a weekly increase driven by supply concerns.
- Gold: Down 0.32%, trading at $2655.43 as the dollar steadies post-election.
- Silver: Down 0.37%, holding at $31.06, reflecting cautious investor sentiment.
Currency Movements
- EUR/USD (Euro to US Dollar): Up 0.14% at 1.0747 — Euro is slightly stronger. However, caution remains ahead of the Fed’s decision. This decision could impact USD strength. With also retail sales expected later from Europe which could sway the euro.
- GBP/USD (British Pound to US Dollar): Up 0.40% at 1.2934 — The Pound shows resilience, with markets betting on a dovish BoE tone. Traders are watching closely for signals on potential rate cuts to address slowing UK inflation.
- AUD/USD (Australian Dollar to US Dollar): Up 0.83% at 0.6621 — AUD sees gains with improved risk sentiment. Investors move into riskier assets amid hopes for economic reforms after Trump’s victory.
- NZD/USD (New Zealand Dollar to US Dollar): Up 0.85% at 0.5988 — Kiwi dollar benefits from a risk-on mood. It is also spurred by positive global market sentiment following election news. Expectations of steady RBNZ policies contribute to this sentiment.
- USD/JPY (US Dollar to Japanese Yen): Down 0.15% at 154.07 — The yen strengthens marginally, with traders anticipating Fed caution. The USD remains sensitive to any signs of rate changes as market sentiment remains risk-off for JPY.
- USDCNY (US Dollar to Chinese Yuan): Down 0.15% at 7.1889 — Yuan shows slight resilience amid Fed-related uncertainty, with markets anticipating any dovish tones from the U.S. central bank to support CNY stability.
- USD/CHF (US Dollar to Swiss Franc): Down 0.07% at 0.8751 — CHF benefits from cautious USD trading. With safe-haven demand for CHF persisting, USD/CHF movement is aligned with Fed outlook expectations.
- USD/CAD (US Dollar to Canadian Dollar): Down 0.43% at 1.3888 — CAD gains on higher oil prices, supported by a stable energy market. Markets are watching the Fed’s decision, which could affect CAD if USD shifts significantly.
Things to Keep a Watch On:
- Bank of England’s Rate Decision (12:00 GMT): Markets are highly anticipating the BoE’s stance on rate cuts and policy guidance. A dovish tone could weigh on GBP, while any unexpected hawkishness may boost the currency.
- Governor Bailey’s Speech (12:30 GMT): Following the BoE’s decision, Governor Bailey’s remarks will be key. Traders will look for his outlook on inflation, economic growth, and any hints regarding future rate cuts.
- Federal Reserve’s Interest Rate Decision and FOMC Press Conference (19:00-19:30 GMT): The Fed’s decision will heavily influence USD pairs. A pause is expected. However, any shift in tone during the press conference could impact USD strength. It could also affect market risk sentiment.
- U.S. Crude Oil Inventory Report (15:30 GMT): With oil prices slightly recovering, this report could influence energy markets. It may also affect currencies sensitive to oil prices, like CAD.
- Global Risk Sentiment Post-Election: Following Trump’s election win, risk sentiment has fluctuated. Watch for any news regarding proposed economic reforms or policy changes that may impact global market sentiment and risk-sensitive currencies.
- Eurozone Economic Data (Retail Sales YoY, 10:00 GMT): The Euro is facing challenges. Stronger-than-expected data may offer a temporary boost to EUR pairs.
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