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In focus today

In the US, the University of Michigan's preliminary October consumer sentiment survey is set for release this afternoon, with focus on consumers' inflation expectations. In September, 1-year inflation expectations remained elevated at 4.8%, while 5-year expectations rose to 3.9%, both exceeding the Fed's target. Amid delays in other economic data due to the government shutdown, today's release will provide key insights to markets. If inflation expectations remain elevated, it could support the case for a more cautious and gradual approach to monetary policy adjustments.

In Sweden, key economic indicators will be released today at 8.00am, including flash estimates for GDP, production (PVI), and the consumption indicator for August. Retail sales have improved, suggesting a somewhat positive consumption figure, despite occasional discrepancies between the measures. Monthly GDP is highly volatile, whereas production and consumption data tend to provide a more reliable guide.

In Norway, we get the inflation figures for September where we believe the core inflation (CPI-ATE) was unchanged at 3.1 %, in line with consensus but marginally lower than Norges Bank expected in the September MPR at 3.2 %.

Economic and market news

What happened overnight

In the FX space, the US Treasury has finalised a $20 bn currency swap framework with Argentina and begun purchasing pesos in the open market, fulfilling President Trump's pledge to support the struggling country. Following the breakdown of Bretton Woods, such interventions have occurred only four times since 1996, according to the New York Fed. The announcement modestly strengthened the peso and sent Argentine dollar bonds higher.
What happened yesterday

In the Israel-Palestine conflict, Israel's cabinet approved the first phase of Trump's 20-point plan to end the Gaza war in the early hours of Friday, marking the formal confirmation from both Israel and Hamas. The ceasefire is set to take effect within 24 hours of the deal's signing, and hostages are expected to be released within 72 hours. The greater challenge now lies in implementing the second phase, as Israel has not committed to a full troop withdrawal or a definitive end to the conflict. On the other side, Hamas has agreed not to govern Gaza but seeks further negotiations on disarmament, troop redeployment, and the role of an international stabilisation force.

Equities: Equities edged slightly lower yesterday, with defensive sectors outperforming in what was otherwise a calm session.

We've entered a classic wait-and-see mode ahead of the upcoming U.S. data flow and the reopening of U.S. markets after the holiday. The Q3 earnings season will kick off in earnest next Tuesday, which is likely to re-energize sentiment.

In the US yesterday, Dow -0.5%, S&P 500 -0.3%), Nasdaq -0.1%, and Russell 2000 -0.6%.

In Asia this morning, equities trade modestly lower after a strong run earlier in the week. South Korea stands out as an exception, rising after reopening from its Golden Week holidays.

U.S. futures are marginally higher, while European futures are broadly unchanged.

FI and FX: Markets are adopting a more optimistic stance on France, as reflected in the tightening of the 10Y Oat-Bund spread during yesterday's session. Despite this positive sentiment on France, EURUSD continued its downward trajectory, potentially influenced by the somewhat dovish ECB minutes released yesterday. Today our focus is on Norway's inflation release and several key economic indicators out of Sweden.

Daily Pivots: (S1) 1.1521; (P) 1.1585; (R1) 1.1627; More...

Intraday bias in EUR/USD stays on the downside, as fall from 1.1917 is in progress for 1.1390 support. Break there will target 38.2% retracement of 1.0176 to 1.1917 at 1.1252. On the upside, above 1.1647 minor resistance will turn intraday bias neutral first. But risk will stay on the downside as long as 1.1778 resistance holds, in case of recovery.

In the bigger picture, rise from 1.0176 (2025 low) is seen as the third leg of the pattern from 0.9534 (2022 low). 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916 was already met. For now, further rally will remain in favor as long as 1.1390 support holds, and firm break of 1.2000 psychological level will carry larger bullish implications. However, firm break of 1.1390 will suggest that rise from 1.0176 has already completed and bring deeper fall to 55 W EMA (now at 1.1265) and below.

Daily Pivots: (S1) 152.40; (P) 152.81; (R1) 153.51; More...

USD/JPY edged higher to 153.26 but quickly retreated. Intraday bias stays neutral first and some more consolidations could be seen. Downside should be contained above 149.95 resistance turned support to bring another rally. On the upside, above 153.26 will resume larger rise to 100% projection of 142.66 to 150.90 from 145.47 at 153.71. Firm break there will pave the way to 161.8% projection at 158.80.

In the bigger picture, current development suggests that corrective pattern from 161.94 (2024 high) has completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. On the downside, break of 145.47 support will dampen this bullish view and extend the corrective pattern with another falling leg.

Daily Pivots: (S1) 1.3250; (P) 1.3334; (R1) 1.3389; More...

Intraday bias in GBP/USD is back on the downside as fall from 1.3725 resumed through 1.3322. Deeper decline should be seen to 1.3140. Strong support is expected from there to bring rebound to complete the corrective pattern from 1.3787 high. On the upside, above 1.3394 minor resistance will turn intraday bias neutral again first.

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 be seen from 1.4248 (2021 high) to limit upside. Sustained break of 55 W EMA (now at 1.3176) will argue that a medium term top has already formed and bring deeper fall back to 1.2099.

Daily Pivots: (S1) 0.8019; (P) 0.8047; (R1) 0.8092; More…

Current rise from 0.7878 is seen as correcting whole fall from 0.9200. Intraday bias stays on the upside for 0.8170 resistance. Firm break there will target 38.2% retracement of 0.9200 to 0.7828 at 0.8352. On the downside, below 0.8001 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8332 support turned resistance holds (2023 low).

Daily Pivots: (S1) 0.6526; (P) 0.6569; (R1) 0.6598; More...

Intraday bias in AUD/USD remains neutral at this point. On the downside, break of 0.6519 support and sustained trading below 55 D EMA (0.6558) will confirm rejection by 0.6713 fibonacci resistance, and bring deeper fall to 0.6413 cluster support (38.2% retracement of 0.5913 to 0.6706 at 0.6403). Nevertheless, above 0.6628 resistance will retain near term bullishness, and bring retest of 0.6706 high instead.

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) 1.3959; (P) 1.3996; (R1) 1.4059; More...

USD/CAD's rise from 1.3538 resumed with acceleration. Intraday bias is back on the upside with focus on 1.4014/7 cluster resistance. Sustained break there will argue that fall from 1.4719 has completed at 1.3538 already. Further rise should then be seen to 61.8% retracement at 1.4312. On the downside, though, break of 1.3930 should indicate rejection by 1.4014/7 and bring deeper fall back to 1.3725 support.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017) holds. However sustained trading above 1.4014 will suggest that it's more likely just a correction, and the larger up trend would be in favor to resume through 1.4791 at a later stage.

Daily Pivots: (S1) 0.9307; (P) 0.9319; (R1) 0.9336; More...

Intraday bias in EUR/CHF stays neutral, and further decline is still expected with 0.9371 resistance intact. On the downside, below 0.9295 will resume the fall from 0.9425 to 0.9265 support. Firm break there will bring deeper decline to 0.9218 low.

In the bigger picture, the down trend from 0.9204 (2018 high) might still be in progress considering that EUR/CHF is staying well inside the long term falling channel. However, with bullish convergence condition in W MACD, downside potential should be limited in case of another fall. Instead, firm break of 0.9660 resistance will be an important sign of medium term bullish trend reversal.

Daily Pivots: (S1) 0.8671; (P) 0.8685; (R1) 0.8707; More…

Intraday bias in EUR/GBP remains neutral at this point. On the downside, below 0.8654 will resume the fall from 0.8750 to 0.8631 support. Decisive break there will indicate near term reversal and turn outlook bearish for 38.2% retracement of 0.8221 to 0.8750 at 0.8548. However, break of 0.8703 will suggest that pull back from 0.8750 has completed and bring retest of this resistance instead.

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 0.8631 support will be the first sign that this corrective bounce has completed. Sustained trading below 55 W EMA (now at 0.8539) will confirm, and bring retest of 0.8221 low.

Daily Pivots: (S1) 1.7584; (P) 1.7630; (R1) 1.7688; More...

Intraday bias in EUR/AUD stays on the downside at this point. Fall from 1.8155 is seen as the third leg of the corrective pattern from 1.8554 high. Deeper decline should be seen to 100% projection of 1.8155 to 1.7588 from 1.7929 at 1.7362. On the upside, above 1.7672 minor resistance will turn intraday bias neutral again first.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern. Deeper fall could be seen as the pattern extends, but downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Uptrend from 1.4281 is expected to resume at a later stage.