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In focus today

In Sweden, the Riksbank will release the semi-annual Business Survey at 9.30 CET. While often overlooked by markets, the survey has historically been a key input for the Riksbank's monetary policy deliberations. We expect it to align with the view of the Riksbank's main scenario at this juncture, with a still weak but gradually recovering economy. Given persistently high inflation, we are paying particular attention to the quantitative measures on expected price changes. The May 2025 report showed that companies selling to households planned to raise prices over the next 12 months, reflecting higher purchasing costs and their inability to fully offset previous cost increases.

Economic and market news

What happened overnight

The US and Japan have signed a framework agreement aimed at securing supply chains for critical minerals and rare earths, reducing dependence on China. In a statement, the White House emphasised that the deal seeks to enhance the resilience and security of critical mineral and rare earth supply chains for both nations.

What happened yesterday

In the euro area, bank lending continued to grow in September, with loans to non-financial corporations increasing by 2.9% y/y. The credit impulse, which correlates more closely with GDP growth, remained stable at 0.3% of GDP, indicating that lower policy rates are still supporting the economy. This suggests euro area GDP likely grew in Q3, albeit at a slower pace than in the first half of the year. We expect Thursday's GDP data to confirm a modest 0.1% q/q growth for Q3.

The German Ifo indicator rose slightly more than expected in October, rising to 88.4 from 87.7. However, the current situation assessment declined unexpectedly to 85.3 - the lowest since February - pointing to ongoing economic challenges. In contrast, expectations rose sharply to 91.6 from 89.8, signalling optimism. While Ifo's current situation assessment remains weaker than the recent uptick in PMIs, the rebound in expectations and stronger PMIs suggest a gradual recovery in the German economy over the coming year.

Equities: Equities were on a steady grind higher through yesterday's session. S&P 500 ended 1.2% higher, Nasdaq 1.9% and Russel 2000 0.3% higher, driven by (yet again) tech and cyclical stocks. Qualcomm announced that they will start shipping their new AI chip next year and led the rally. Overnight, Asian markets are somewhat mixed with Nikkei down 0.4% and Shenzen 300 up 0.2%.

FI and FX: USD continued to weaken overnight, with EURUSD moving towards 1.1670 and USDJPY dropping below 152 as a readout from Scott Bessent's meeting with Japan's Katayama indicated that BoJ policy and exchange rate volatility were discussed, serving as a reminder that the US administration prefers a weaker dollar. US yields fell from late afternoon and the 10y UST is now back just below 4%. We expect the Fed to announce an end to QT in Treasuries at Wednesday's meeting, and as a rate cut of 25bp is widely expected, this could be a bigger market mover in our view. With cuts fully priced for both October and December, we think near-term risks for the USD remain asymmetrically tilted to the upside. EURSEK remains at the lower end of the recent 10.90-11.10 range and EURNOK has been mostly sideways since Friday afternoon in a 11.62-11.66 range.

Daily Pivots: (S1) 203.56; (P) 203.90; (R1) 204.27; More...

Intraday bias in GBP/JPY is turned neutral with current retreat and some consolidations would be seen first. On the upside, above 204.22 will target a retest on 205.30 high. Break there will resume larger rise to 61.8% projection of 184.35 to 199.96 from 197.47 at 207.11. However, break of 201.89 will turn bias to the downside to extend the pattern from 205.30 with another falling leg.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a corrective pattern which might have completed at 184.35. Firm break of 208.09 high will resume the up trend from 123.94 (2020 low). Next target is 61.8% projection of 148.93 to 208.09 from 184.35 at 220.90. However, decisive break of 197.47 support will dampen this view and extend the corrective pattern with another fall.

Daily Pivots: (S1) 177.70; (P) 177.96; (R1) 178.30; More...

Intraday bias in EUR/JPY is turned neutral first with current retreat. Some consolidations would be seen below 178.21 temporary top, but downside should be contained well above 174.80 to bring another rally. ON the upside, break of 178.21 will resume larger up trend to 61.8% projection of 161.06 to 173.87 from 172.24 at 180.15 next.

In the bigger picture, up trend from 114.42 (2020 low) is in progress and should target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. Firm break of 172.24 support will suggests that it has turned into consolidations again. But still, outlook will continue to stay bullish as long as 55 W EMA (now at 167.87) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.8721; (P) 0.8729; (R1) 0.8738; More…

EUR/GBP retreated ahead of 0.8750 resistance and intraday bias remains neutral. On the upside, firm break of 0.8750 will resume larger rise from 0.8221 to 0.8867 fibonacci level. On the downside, though, break of 0.8654 support will now indicate near term bearish reversal.

In the bigger picture, rise from 0.8221 medium term bottom is seen as a corrective move. While further rally cannot be ruled out, upside should be limited by 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Considering bearish divergence condition in D MACD, firm break of 0.8654 support will be the first sign that this corrective bounce has completed. Sustained trading below 55 W EMA (now at 0.8562) will confirm, and bring retest of 0.8221 low.

Daily Pivots: (S1) 1.7729; (P) 1.7774; (R1) 1.7808; More...

Intraday bias in EUR/AUD stays on the downside as fall from 1.8160 is in progress for 1.7569 support. Break there will indicate that corrective pattern from 1.8554 already in its third leg, and target 1.7245. On the upside, above 1.7895 minor resistance will turn intraday bias neutral.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern, which might still be in progress. But outlook will stay bullish as long as 55 W EMA (now at 1.7391) holds, and up trend from 1.4281 (2022 low) is expected to resume through 1.8554 at a later stage.

Daily Pivots: (S1) 0.9252; (P) 0.9262; (R1) 0.9272; More....

Intraday bias in EUR/CHF stays neutral for the moment, and more consolidations could be seen above 0.9206. Upside should be limited below 0.9311 support turned resistance. On the downside, break of 0.9204 will confirm larger down trend resumption. Next target is 61.8% projection of 0.9660 to 0.9218 from 0.9452 at 0.9179. Firm break there will target 100% projection at 0.9010.

In the bigger picture, outlook remains bearish with EUR/CHF staying well inside long term falling channel after multiple rejection by 55 W EMA (now at 0.9385). Firm break of 0.9204 will resume the whole down trend from 1.2004 (2018 high). Next target is 61.8% projection of 1.1149 to 0.9407 from 0.9928 at 0.8851. Break of 0.9452 resistance is needed to be the first sign of medium term bottoming.

Daily Pivots: (S1) 0.6536; (P) 0.6548; (R1) 0.6567; More...

AUD/USD's break of 55D EMA suggests that corrective fall from 0.6706 has already completed with three waves down to 0.6439. Intraday bias is back on the upside for 0.6628 resistance first. Firm break there will target a retest on 0.6706 high. ON the downside, however, break of 0.6492 will resume the correction to 0.6413 cluster support (38.2% retracement of 0.5913 to 0.6706 at 0.6403).

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. Outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, sustained break of 0.6713 will be a strong sign of bullish trend reversal, and pave the way to 0.6941 structural resistance for confirmation.

Daily Pivots: (S1) 1.3970; (P) 1.3990; (R1) 1.4011; More...

Intraday bias in USD/CAD remains neutral as consolidations from 1.4078 is still extending. Further rally is expected as long as 1.3930 support holds. Break of 1.4078 will resume the rise from 1.3538 to 61.8% retracement of 1.4791 to 1.3538 at 1.4312.

In the bigger picture, price actions from 1.4791 medium term top is likely just unfolding as a correction to up trend from 1.2005 (2021 low). Based on current momentum, rise from 1.3538 is the second leg, and a third leg should follow before up trend resumption. That is, range trading is set to extend for the medium term. For now, this will remain the favored case as long as 1.3725 support holds.

Daily Pivots: (S1) 1.1625; (P) 1.1638; (R1) 1.1659; More…

Intraday bias in EUR/USD stays neutral as range trading continues. On the downside, below 1.1540 will resume the fall from 1.1917 and target 1.1390 support, or even further to 38.2% retracement of 1.0176 to 1.1917 at 1.1252. On the upside, though, break of 1.1727 resistance will turn bias back to the upside for 1.1778, and then retest of 1.1917 high instead.

In the bigger picture, considering bearish divergence condition in D MACD, a medium term top is likely in place at 1.1917, just ahead of 1.2 key psychological level. As long as 55 W EMA (now at 1.1301) holds, the up trend from 0.9534 (2022 low) is still expected to continue. Decisive break of 1.2000 will carry larger bullish implications. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep outlook bearish.

Daily Pivots: (S1) 1.3314; (P) 1.3333; (R1) 1.3356; More...

Intraday bias in GBP/USD remains neutral for the moment as range trading continues. On the downside, break of 1.3247 will target 1.3140 cluster (38.2% retracement of 1.2099 to 1.3787 at 1.3142). Strong support is expected there to contain downside to complete the corrective pattern from 1.3787. On the upside, break of 1.3470 resistance will turn bias back to the upside for 1.3526, and then 1.3725/87 resistance zone.

In the bigger picture, rise from 1.0351 (2022 low) is still seen as a corrective move. Further rally could be seen to 61.8% projection of 1.0351 to 1.3433 (2024 high) from 1.2099 (2025 low) at 1.4004. But strong resistance could emerge from 1.4248 (2021 high) to limit upside. Sustained break of 55 W EMA (now at 1.3191) will argue that a medium term top has already formed and bring deeper fall back to 1.2099.