Yen Tops G10 Scoreboard in Quiet Asian Trading

The yen continues to top the G10 scoreboard in quiet Asian trading this morning, discarding dovish comments for BoJ governor Ueda. He expects inflation to slow in FY2025, adding that there’s not enough certainty that the central bank will reach its price goal sustainably. US Treasury yields recover 1-3 bps in technically insignificant trading. Today’s economic calendar won’t inspire much.

Hawkish BOE Policy May Support the British pound

During the early European trading session, GBPUSD declined as the U.K. Retail Sales figures came out lower than anticipated. Today, traders should focus on the upcoming U.S. Building Permits report at 1:30 p.m. UTC. If the figures exceed expectations, GBPUSD may drop below 1.23400. Contrarily, lower-than-expected Building Permits numbers could sustain the current short-term upward trend in GBPUSD.

Easing U.S. Inflation Pushes Gold Higher

XAUUSD was relatively flat during the Asian and early European trading sessions. Market participants now focus on the upcoming U.S. Building Permits report at 1:30 p.m. UTC. Lower-than-expected figures may push the gold price towards 2,000. However, XAUUSD may correct downwards if the numbers are higher than expected. 'Spot gold may break a resistance at $1,989 per ounce and rise into a range of 1,999–2,003, driven by a wave 3' said Reuters analyst Wang Tao.

GBP/USD Edges Lower on Soft UK Retail Sales

The British pound is trading lower on Friday. In the European session, GBP/USD is trading at 1.2381, down 0.27%. The pound has shown sharp swings this week, notably a 1.78% jump on Tuesday after US inflation was weaker than expected, sending the US dollar sharply lower against the majors. The pound is up 1.28% this week.

Australian Dollar Takes a Breather After Wild Week

The Australian dollar has bounced back on Friday after losses a day earlier. In the European session, AUD/USD is trading at 0.6487, up 0.24%.

Euro Drifting as Eurozone Inflation Falls to 2.9%

The euro is trading quietly on Friday. In the European session, EUR/USD is trading at 1.0870, up 0.17%. The US dollar sustained sharp losses after a soft inflation report on Tuesday, and the euro took advantage with a massive gain of 1.68% the same day. Since then, the euro has been relatively calm.

Bitcoin's Volatility Within An Uptrend

Tactically, we focus on the increased volatility of Bitcoin, which has fallen below 34500 since the beginning of the week, then rebounded sharply to 38000 and is trading near the midpoint of that range at 36500 at midday on Friday. Despite the volatility, bitcoin has remained in an uptrend since late October, while the volatility is clearing overbought conditions and making room for further gains.

Sunset Market Commentary

Until about a month ago, market momentum for yields was to drift higher ‘by default’ at days with no market relevant news. A series of softer (or softly perceived) data since then triggered a 180-degree turn in market momentum. Central bankers’ ‘higher for longer mantra’ has been put aside.

Week Ahead – Fed Minutes and Eurozone PMIs on the Menu

It’s been a tough month for the US dollar. A string of disappointing data releases coupled with an announcement that the Treasury will shift its debt issuance towards shorter-dated maturities came together to engineer a heavy decline in US bond yields, which in turn has reduced the dollar’s interest rate advantage. 

Has Dollar Rally Run Its Course?

The US dollar suffered a major blow this week after the US CPI data revealed that inflation cooled by more than anticipated in October, adding credence to investors’ view that the end credits of the Fed’s tightening crusade have already rolled, despite Chair Powell and several of his colleagues pushing back against such expectations recently.