KBC Market Research Desk
KBC Bank
Friday's trading sentiment was initially slightly risk-off. European equities and the euro held a downward bias during a mainly technical driven trading session. Risk climate turned for the better as the US joined however. Markets took comfort in a few headlines by trade negotiators suggesting the US and China "made headway". All looks set to sign the phase 1 deal at the APEC summit in November. EMU stocks reversed intraday losses, US equities headed north. The SP 500 even set a new record high. The dollar outperformed on FX markets. EUR/USD slipped below 1.11 (1.108), USD/JPY inched higher towards 108.67.
Asian markets begin the week on decent footing in the wake of WS's fresh alltime highs. China outperforms amid trade optimism. USD/CNY declines to 7.06. In Argentina, current president Macri conceded losing the elections to opposition candidate Fernandez over the weekend. The central bank already announced tighter capital controls in the vote's aftermath. USD/ARS stopped short of closing at another record high last Friday. EUR/USD is marginally grinding higher close to but below 1.11., but struggles not to fall below 1.11. USD/JPY is holding in the 108.70 area. Yen investors are looking forward to this week's BoJ meeting.
Today's economic calendar contains only secondary data and does no justice to what will be an important week. US investors brace for the Fed, the manufacturing sector's ISM and the payrolls report. Q3 GDP growth figures are due in the EMU and the US. The backloaded agenda might keep investors sidelined for today though. EUR/USD technical picture didn't alter dramatically even after slipping below 1.11 – but holding well above 1.10. Brexit uncertainty hasn't been removed (yet?), capping the pair's upward potential. At the same time, the dollar probably won't make much headway ahead of the Fed meeting. This should give EUR/USD some downside protection.
Sterling reversed Friday's intraday losses mainly on a U-turn in sentiment. EUR/GBP closed marginally lower near 0.864 even as France voiced opposition to a three-month delay in Brexit. This morning's headlines however suggest that Macron caved in after all. The EU's draft proposal would now postpone the deadline until January 31 with the option to leave on November 30 or December 31 if both sides ratify the deal earlier. EUR/GBP barely moves, confirming our view that sterling discounted quite some positive news already. Focus now turns to early elections: will Johnson's call now get the support it needs?
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
Recommended Content
Editors’ Picks
AUD/USD: Next upside target comes at 0.6550
AUD/USD managed well to shrug off the marked advance in the Greenback as well as geopolitical tensions, regaining the area above the 0.6500 hurdle ahead of preliminary PMIs in Australia.
EUR/USD: Further losses now look at 1.0450
Further strength in the US Dollar kept the price action in the risk-associated assets depressed, sending EUR/USD back to the 1.0460 region for the first time since early October 2023 prior to key releases in the real economy.
Gold faces extra upside near term
Gold extends its bullish momentum further above $2,660 on Thursday. XAU/USD rises for the fourth straight day, sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war. Markets await comments from Fed policymakers.
Ethereum Price Forecast: ETH open interest surge to all-time high after recent price rally
Ethereum (ETH) is trading near $3,350, experiencing an 10% increase on Thursday. This price surge is attributed to strong bullish sentiment among derivatives traders, driving its open interest above $20 billion for the first time.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.