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In focus today

In the euro area, focus turns to the final HICP inflation data for October. We expect the final print to confirm the flash release of 2.1% y/y headline inflation and 2.4% y/y core inflation.

In the US, the minutes from FOMC's October meeting could gather more attention, given the notably diverse views expressed by Fed speakers recently and the recent hawkish tilt in Fed communication. This shift has turned the December rate cut pricing back into essentially a coin flip. We still call for unchanged policy rates in the US at next month's meeting.

NVIDIA's earnings report is set for release, serving as a crucial test of the sustainability of this year's rally in AI-related stocks, particularly as most heavyweight tech stocks have faced increasing pressure. While the surge has captured investor enthusiasm, concerns about stretched valuations and potential signs of a bubble persist. Meanwhile, market sentiment remains cautious as US equities continue their longest losing streak since August.

In the UK, October inflation data is released. It will be very interesting to see whether softer inflation is now the trend or the September print was a fluke. Following weaker labour market data and growth, a December cut from the Bank of England is looking increasingly likely.

Overnight, China will announce its Loan Prime Rates, which normally are only changed to following adjustments to the PBOC's repo rates, which have remained unchanged for some time. As a result, the loan rates are expected to remain unchanged as well. However, we anticipate rate cuts in the coming months, as recent indicators suggest the domestic economy has been losing momentum.

Economic and market news

What happened yesterday

In the US, the ADP's new weekly employment growth, 'pulse', showed that private employers shed an average of 2.5k jobs a week for the four-week average ending 1 November, an improvement from last week's -11k ADP 'pulse'. Although this suggests sluggish job growth with modestly improving momentum, it is unlikely to change much for broader markets.

The Labor Department reported US jobless claims at 232k for the week ending 18 October, closely aligning with estimates based on state-level data. The partial figure was released due to a technical issue, with a department spokesperson confirming to Reuters that the full data series will become available on 20 November.

In Hungary, the central bank (MNB) held its key rate steady at 6.50%, with the monetary council highlighting the importance of a 'careful and patient approach to monetary policy' amid persistent risks tied to elevated inflation, trade policy, and geopolitical tensions.

Equities: Global equities had another weak session yesterday, falling 1.1%, when looking at face value, but underneath the surface it was a healthy rotation into defensives. Energy, healthcare and consumer staples ended the day in the green, while tech stocks declined 1.7%, and consumer discretionary names also suffered. Although the initial reaction to the large capex plans highlighted during the Q3 earnings season was positive, markets now seem to be reassessing the likelihood and implications of those investments, taking tech stocks 8% down since its late October peak. Over the past five trading sessions, cyclicals have underperformed defensives by around 4%, with attention increasingly shifting toward value stocks as well. The S&P 500 fell 0.8%, the NASDAQ dropped 1.2%, while the Russell 2000 was marginally higher at +0.3%. Overnight, Asian equities traded mixed to negative.

FI and FX: The Dollar caught a slight bid yesterday, with EUR/USD trading just below 1.16. Scandies traded to the weaker side through the first half of yesterday's session before turning around in the afternoon with both EUR/NOK and EUR/SEK closing 4-5 figures lower from intraday highs. The sour risk sentiment, with US equities extending their longest losing streak since August, benefitted bonds, with both Treasuries and Bunds trading lower across the curve. Meanwhile, SEK swap rates outperformed EUR yesterday, at the same time as 3-4bp of hikes for 2026 got stripped of, to an accumulated +10bp.

UK inflation eased in October, with headline CPI slowing from 3.8% yoy to 3.6%, just above the market’s 3.5% forecast. Core inflation (excluding energy, food, alcohol and tobacco) matched expectations at 3.4% yoy, down from 3.5% previously.

Goods inflation cooled, slipping from 2.9% yoy to 2.6%, while services inflation—still the stickiest component—eased from 4.7% to 4.5%.

On a monthly basis, headline CPI rose 0.4% mom.

The figures point to steady, gradual deceleration rather than sharp disinflation, leaving the BoE’s December cut narrative largely intact. Markets are unlikely to adjust pricing meaningfully until the Autumn Budget clarifies the fiscal stance. For now, the data reinforces a picture of easing, but not yet subdued, domestic price pressures.

Full UK CPI release here.

Daily Pivots: (S1) 1.1566; (P) 1.1587; (R1) 1.1603; More…

No change in EUR/USD's outlook and intraday bias stays neutral. On the upside, above 1.1655 will affirm the case that fall from 1.1917 has completed as a correction at 1.1467. Bias will be back on the upside for 1.1727 resistance first. However, break of 1.1561 will revive near term bearishness and target 1.1467 low 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 1.1328) holds, the up trend from 0.9534 (2022 low) is still in favor 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 long term outlook bearish.

Daily Pivots: (S1) 154.98; (P) 155.36; (R1) 155.89; More...

USD/JPY's rally is in progress and intraday bias stays on the upside for 100% projection of 146.58 to 153.26 from 149.37 at 156.05. Break there will pave the way to 158.85 key structural resistance. For now, outlook will remain bullish as long as 153.60 support holds, in case of retreat.

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 149.37 support will dampen this bullish view and extend the corrective pattern with another falling leg.

Daily Pivots: (S1) 1.3127; (P) 1.3152; (R1) 1.3170; More...

No change in GBP/USD's outlook and intraday bias remains neutral for more consolidations. Further decline is expected as long as 1.3247 support turned resistance holds. Break of 1.3008 will resume the fall from 1.3787, and target 138.2% projection of 1.3787 to 1.3140 from 1.3725 at 1.2831. Nevertheless, firm break of 1.3247 will suggest that fall from 1.3787 has completed as a corrective move already.

In the bigger picture, the break of 55 W EMA (now at 1.3182) is taken as the first sign that corrective rise from 1.0351 (2022 low) has completed. Decisive break of trend line support (now at 1.2824) will solidify this case and target 38.2% retracement of 1.0351 to 1.3787 at 1.2474 next. Meanwhile, in case of another rise, strong resistance should emerge below 1.4248 (2021 high) to cap upside to preserve the long term down trend.

Daily Pivots: (S1) 0.7956; (P) 0.7979; (R1) 0.8019; More…

USD/CHF's extended rebound and break of 55 4H EMA (now at 0.7986) argues that corrective pattern from 0.7828 low is still extending. Intraday bias is back on the upside for 0.8123 resistance. On the downside, below 0.7937 minor support will turn bias neutral first. Break of 0.7877 will bring retest of 0.7828 low.

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) 0.6476; (P) 0.6498; (R1) 0.6530; More...

AUD/USD is still bounded in range of 0.6457/6579 and intraday bias remains neutral. On the downside, break of 0.6457 will target 0.6413 cluster (38.2% retracement of 0.5913 to 0.6706 at 0.6403). Decisive break there will carry larger bearish implications. On the upside, break of 0.6579 will bring stronger rise to 0.6616 resistance. Firm break there will target a retest of 0.6706 high.

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. Break of 0.6413 support will suggest rejection by 0.6713 and solidify this bearish case. 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) 1.3954; (P) 1.4008; (R1) 1.4045; More...

USD/CAD's pullback from 1.4139 resumed by breaking through 1.3984 and intraday bias is back on the downside. Deeper fall would be seen towards 1.3886 support. But strong rebound should be seen there to preserve the whole rally from 1.3538. On the upside, above 1.4061 will turn bias to the upside for retesting 1.4139.

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), with rise from 1.3538 as the second leg. 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 1.3886 support holds. However, firm break of 1.3886 will revive the case that fall from 1.4791 is indeed a larger scale correction.

Daily Pivots: (S1) 0.9222; (P) 0.9244; (R1) 0.9280; More....

EUR/CHF's extended rebound suggests that a short term bottom was already formed at 0.9178, and lengthier consolidations would be seen. Still, outlook will remain bearish as long as 0.9325 resistance holds. Firm break of 0.9178 will resume larger down trend.

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 0.9377). 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. Otherwise, outlook will stay bearish in case of strong rebound.

Daily Pivots: (S1) 0.8800; (P) 0.8812; (R1) 0.8820; More…

Intraday bias in EUR/GBP stays neutral as sideway trading continues. Considering bearish divergence condition in 4H MACD, firm break of 0.8765 support will confirm short term topping. Deeper fall should then be seen back to 55 D EMA (now at 0.8734) even still as a correction. On the upside, however, sustained trading above 0.8867 fibonacci level will carry larger bullish implications. Next near term target will be 100% projection of 0.8354 to 0.8752 from 0.8631 at 0.9029.

In the bigger picture, rise from 0.8221 medium term bottom is still seen as a corrective move. Upside should be limited by 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Sustained trading below 55 W EMA (now at 0.8589) should confirm that this corrective bounce has completed. However, decisive break of 0.8867 will suggest that EUR/GBP is already reversing whole decline from 0.9267 (2022 high). That should pave the way back to 0.9267.