Euro Gains as Inflation Data Strengthens Hawkish Case for ECB
| Action Insight Mid-Day Report 10-31-24 |
Euro Gains as Inflation Data Strengthens Hawkish Case for ECB |
Euro strengthened broadly after Eurozone's flash CPI revealed stronger-than-expected increase in headline inflation, while the decline in core inflation has come to a halt. This data, coupled with the better-than-anticipated GDP figures released yesterday, has provided substantial support to the hawks within ECB. There appears to be no immediate need for ECB to accelerate monetary easing efforts. A 25 basis point rate cut at the December meeting is being solidified as the baseline. Yen is also displaying firmness following BoJ decision to maintain its current monetary policy earlier today. Additional support emerged from Governor Kazuo Ueda's remarks during the post-meeting press conference. Markets continue to anticipate the next rate hike to occur in the first quarter of next year. with some interpret Ueda's comments as leaving the possibility open for a December hike. However, two significant uncertainties remain: the formation of Japan's new government after the recent indecisive elections, and the outcome of the US presidential elections next week and their implications for Japan. Conversely, Dollar is on the softer side stronger-than-expected core PCE inflation reading. For the greenback to regain the dominance observed in recent weeks, robust non-farm payroll data due tomorrow would be essential, especially ahead of next week's elections..... |
GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.2919; (P) 1.2981; (R1) 1.3025; More... Intraday bias in GBP/USD remains neutral as range trading continues above 1.2906 temporary low. Further decline is expected as long as 1.3070 minor resistance holds. Below 1.2906 will target 61.8% retracement of 1.2298 to 1.3433 at 1.2732. However, considering bearish divergence condition in 4H MACD, firm break 1.3070 resistance will indicate short term bottoming, and turn bias back to the upside for stronger rebound. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:50 | JPY | Industrial Production M/M Sep P | 1.40% | 0.80% | -3.30% | | 23:50 | JPY | Retail Trade Y/Y Sep | 0.50% | 2.30% | 2.80% | 3.10% | | 00:00 | NZD | ANZ Business Confidence Oct | 65.7 | 60.9 | | 00:30 | AUD | Retail Sales M/M Sep | 0.10% | 0.40% | 0.70% | | 00:30 | AUD | Private Sector Credit M/M Sep | 0.50% | 0.50% | 0.50% | | 00:30 | AUD | Import Price Index Q/Q Q3 | -1.40% | -0.20% | 1.00% | | 00:30 | AUD | Building Permits M/M Sep | 4.40% | 2.20% | -6.10% | | 01:30 | CNY | NBS Manufacturing PMI Oct | 50.1 | 50.1 | 49.8 | | 01:30 | CNY | NBS Non-Manufacturing PMI Oct | 50.2 | 50.5 | 50 | | 02:48 | JPY | BoJ Interest Rate Decision | 0.25% | 0.25% | 0.25% | | 05:00 | JPY | Housing Starts Y/Y Sep | -0.60% | -4.10% | -5.10% | | 07:00 | EUR | Germany Import Price Index M/M Sep | -0.40% | -0.40% | -0.40% | | 07:00 | EUR | Germany Retail Sales M/M Sep | 1.20% | -0.50% | 1.60% | | 09:00 | EUR | ECB Economic Bulletin | | 10:00 | EUR | Eurozone CPI Y/Y Oct P | 2.00% | 1.90% | 1.70% | | 10:00 | EUR | Eurozone CPI Core Y/Y Oct P | 2.70% | 2.60% | 2.70% | | 10:00 | EUR | Eurozone Unemployment Rate Sep | 6.30% | 6.40% | 6.40% | | 11:30 | USD | Challenger Job Cuts Y/Y Oct | 50.90% | 53.40% | | 12:30 | CAD | GDP M/M Aug | 0.00% | 0.10% | 0.20% | 0.10% | | 12:30 | USD | Initial Jobless Claims (Oct 25) | 216K | 231K | 227K | 228K | | 12:30 | USD | Personal Income M/M Sep | 0.30% | 0.40% | 0.20% | | 12:30 | USD | Personal Spending Sep | 0.50% | 0.40% | 0.20% | | 12:30 | USD | PCE Price Index M/M Sep | 0.20% | 0.20% | 0.10% | | 12:30 | USD | PCE Price Index Y/Y Sep | 2.10% | 2.10% | 2.20% | | 12:30 | USD | Core PCE Price Index M/M Sep | 0.30% | 0.30% | 0.10% | 0.20% | | 12:30 | USD | Core PCE Price Index Y/Y Sep | 2.70% | 2.60% | 2.70% | | 12:30 | USD | Employment Cost Index Q3 | 0.80% | 0.90% | 0.90% | | 13:45 | USD | Chicago PMI Oct | 48.2 | 46.6 | | 14:30 | USD | Natural Gas Storage | 79B | 80B |
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