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Daily Pivots: (S1) 1.3075; (P) 1.3109; (R1) 1.3171; More...

GBP/USD is staying in consolidations and intraday bias remains neutral. Further decline is expected with 1.3247 support turned resistance intact. Break of 1.3008 will resume the fall from 1.3787 and target 61.8% retracement of 1.2099 to 1.3787 at 1.2744. Sustained break there will pave the way to 1.2099 support next.

In the bigger picture, the break of 55 W EMA (now at 1.3185) is taken as the first sign that corrective rise from 1.0351 (2022 low) has completed. Decisive break of trend line support (now at 1.2780) 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) 152.55; (P) 153.35; (R1) 153.86; More...

USD/JPY is still extending consolidations from 154.47 and intraday bias remains neutral. Further rally is expected as long as 151.52 support holds. Above 154.47 will resume larger rise from 139.87 to 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.

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) 0.8045; (P) 0.8076; (R1) 0.8092; More…

USD/CHF is staying in consolidations and intraday bias remains neutral. On the upside, firm break of 0.8123 will extend the corrective rally from 0.7828 to 138.2% projection of 0.7828 to 0.8075 from 0.7872 at 0.8213. On the downside, sustained break of 55 D EMA (now at 0.8007) will argue that the corrective bounce has completed and 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) 0.6456; (P) 0.6487; (R1) 0.6512; More...

Intraday bias in AUD/USD remains neutral first. Below 0.6457 will target 0.6439 support, and then 0.6413 cluster (38.2% retracement of 0.5913 to 0.6706 at 0.6403). Strong support could be seen there to bring rebound. However, sustained trading below 0.6403/13 will carry larger bearish implications.

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) 1.4091; (P) 1.4116; (R1) 1.4141; More...

Intraday bias in USD/CAD remains neutral and more consolidations could be seen below 1.4139 temporary top. On the upside break of 1.4139 will resume larger rally from 1.3538 to 100% projection of 1.3725 to 1.4078 from 1.3886 at 1.4239. However, sustained break of 55 4H EMA (now at 1.4052) will bring deeper fall back to 1.3886 support instead.

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 1.3886 support holds. However, firm break of 1.3886 will revive the case that fall from 1.4791 is indeed a larger scale correction.

Global markets turned defensive again as risk aversion returned, led by a renewed wave of selling in technology shares. The U.S. tech rout, which rattled Wall Street overnight, spread to Asia, triggering broad weakness across regional equity markets. Japan was hit especially hard, with SoftBank and semiconductor names leading the decline. Traders noted growing anxiety that the earlier AI rally may have reached overbought extremes, prompting profit-taking and algorithmic unwinds.

Additionally, investor nerves were compounded by signs of strain in the U.S. labor market, as well as poor trade data from China. In the US, layoff tracker data showed that over 153k job cuts were announced in October, marking the worst October figure in more than two decades. The sudden spike in layoffs adds to fears that labor market conditions are softening faster than expected, particularly troubling given the absence of key economic releases during the prolonged U.S. government shutdown. The lack of official data leaves policymakers and markets alike flying partly blind.

Meanwhile, China’s October trade report dealt another blow to sentiment. The fading of tariff frontloading has left China’s export engine sputtering, and with U.S. demand constrained by tariffs and sluggish global trade, Beijing now faces the challenge of reigniting domestic demand to fill the gap. Yet, confidence remains fragile, with investors wary that further delays in stimulus rollouts could deepen the slowdown.

Currency markets reflected the risk-off tone, with Yen leading the pack for the week so far, followed by Euro and Dollar. Kiwi remained the weakest, trailed by Aussie and Loonie, while Sterling and the Franc stayed mid-range.

In Asia, at the time of writing, Nikkei is down -1.72%. Hong Kong HSI is down -0.94%. China Shanghai SSE is down -0.06%. Singapore Strait Times is down -0.10%. Japan 10-year JGB yield is flat at 1.684. Overnight, DOW fell -0.84%. S&P 500 fell -1.12%. NASDAQ fell -1.90%. 10-year yield fell -0.064 to 4.093.

China exports fall -1.1% in October as tariff frontloading fades

China’s trade momentum faltered in October, with exports contracting -1.1% yoy, far below expectations for a 3.0% rise and the weakest reading since February. The figures suggest that the earlier tariff frontloading surge has fully dissipated, exposing underlying fragility in external demand. In particular, shipments to the U.S. tumbled -25.2% yoy, extending a seven-month run of double-digit declines. Exports to the EU inched up 0.9% and to ASEAN gained 8.9%.

Imports increased a modest 1.0% yoy, missing forecasts of 3.2%, as domestic consumption and industrial demand was muted. Purchases from the U.S. fell -23%, underlining the structural damage caused by persistent tariff barriers. Trade surplus stood at USD 90.07 B, reflecting sluggish imports rather than export strength.

The trade figures come amid renewed political friction between Beijing and Washington. Early October saw tensions flare after US President Donald Trump threatened 100% tariffs in response to China’s decision to expand export controls on rare earth metals. A meeting between Trump and President Xi Jinping in South Korea last week helped ease market nerves, resulting in a one-year extension of the bilateral truce that had been due to expire on November 10.

Still, the truce provides only limited near-term relief. U.S.-bound Chinese exports continue to face average tariffs of about 45%, well above the profit-neutral level of 35% identified by analysts.

Fed’s Hammack: Policy barely restrictive, inflation still too high

Cleveland Fed President Beth Hammack struck a notably hawkish tone overnight, warning that monetary policy remains only “barely restrictive” after last week’s rate cut. She remains concerned about high inflation and believes policy should continue “leaning against it.” She reiterated her opposition to the Fed’s decision to lower the federal funds rate by 25bps to 3.75%–4.00%.

Hammack said policy should stay "mildly restrictive" to ensure inflation returns to the 2% objective in a “timely fashion” while minimizing risks to employment. She forecast inflation to end the year near 3%, remaining elevated through 2026 before gradually easing back toward target.

On the labor front, Hammack said she does not assign high odds to a downturn, though subdued hiring may point to “more fragility”.

Fed’s Musalem: Policy near neutral, tariff impact on inflation to fade in 2026

St. Louis Fed President Alberto Musalem said overnight that this year’s interest-rate cuts have been “appropriate”, but warned that policymakers must remain cautious about inflation risks. Speaking at an event, he emphasized the need to “lean against above-target inflation while continuing to provide some insurance to the employment sector,” suggesting that while the easing cycle has helped stabilize growth, vigilance is still warranted as inflation remains above 2%.

Musalem described current monetary settings as “somewhere between modestly restrictive and neutral,” noting that financial conditions are now close to neutral and “rather supportive of economic activity and the labor market.”

On inflation drivers, Musalem highlighted U.S. trade tariffs as a lingering source of upward price pressure but said their impact has so far been blunted by corporate pricing restraint. He expects this effect to dissipate in the second half of 2026, paving the way for inflation to resume its gradual return toward the 2% target.

USD/CAD Daily Outlook

Daily Pivots: (S1) 1.4091; (P) 1.4116; (R1) 1.4141; More...

Intraday bias in USD/CAD remains neutral and more consolidations could be seen below 1.4139 temporary top. On the upside break of 1.4139 will resume larger rally from 1.3538 to 100% projection of 1.3725 to 1.4078 from 1.3886 at 1.4239. However, sustained break of 55 4H EMA (now at 1.4052) will bring deeper fall back to 1.3886 support instead.

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 1.3886 support holds. However, firm break of 1.3886 will revive the case that fall from 1.4791 is indeed a larger scale correction.

China’s trade momentum faltered in October, with exports contracting -1.1% yoy, far below expectations for a 3.0% rise and the weakest reading since February. The figures suggest that the earlier tariff frontloading surge has fully dissipated, exposing underlying fragility in external demand. In particular, shipments to the U.S. tumbled -25.2% yoy, extending a seven-month run of double-digit declines. Exports to the EU inched up 0.9% and to ASEAN gained 8.9%.

Imports increased a modest 1.0% yoy, missing forecasts of 3.2%, as domestic consumption and industrial demand was muted. Purchases from the U.S. fell -23%, underlining the structural damage caused by persistent tariff barriers. Trade surplus stood at USD 90.07 B, reflecting sluggish imports rather than export strength.

The trade figures come amid renewed political friction between Beijing and Washington. Early October saw tensions flare after US President Donald Trump threatened 100% tariffs in response to China’s decision to expand export controls on rare earth metals. A meeting between Trump and President Xi Jinping in South Korea last week helped ease market nerves, resulting in a one-year extension of the bilateral truce that had been due to expire on November 10.

Still, the truce provides only limited near-term relief. U.S.-bound Chinese exports continue to face average tariffs of about 45%, well above the profit-neutral level of 35% identified by analysts.

St. Louis Fed President Alberto Musalem said overnight that this year’s interest-rate cuts have been “appropriate”, but warned that policymakers must remain cautious about inflation risks. Speaking at an event, he emphasized the need to “lean against above-target inflation while continuing to provide some insurance to the employment sector,” suggesting that while the easing cycle has helped stabilize growth, vigilance is still warranted as inflation remains above 2%.

Musalem described current monetary settings as “somewhere between modestly restrictive and neutral,” noting that financial conditions are now close to neutral and “rather supportive of economic activity and the labor market.”

On inflation drivers, Musalem highlighted U.S. trade tariffs as a lingering source of upward price pressure but said their impact has so far been blunted by corporate pricing restraint. He expects this effect to dissipate in the second half of 2026, paving the way for inflation to resume its gradual return toward the 2% target.

Cleveland Fed President Beth Hammack struck a notably hawkish tone overnight, warning that monetary policy remains only “barely restrictive” after last week’s rate cut. She remains concerned about high inflation and believes policy should continue “leaning against it.” She reiterated her opposition to the Fed’s decision to lower the federal funds rate by 25bps to 3.75%–4.00%.

Hammack said policy should stay "mildly restrictive" to ensure inflation returns to the 2% objective in a “timely fashion” while minimizing risks to employment. She forecast inflation to end the year near 3%, remaining elevated through 2026 before gradually easing back toward target.

On the labor front, Hammack said she does not assign high odds to a downturn, though subdued hiring may point to “more fragility”.

Key insights from the week that was.

As Half Yours’ forged ahead to take the Melbourne Cup, RBA Governor Bullock and the Monetary Policy Board (MPB) made clear they are not willing to gamble on inflation’s return to target, opting to keep the cash rate on hold at 3.6% at their November meeting. The unanimous decision came as no surprise to market participants after annual trimmed mean inflation printed at 3.0%yr in Q3. The MPB conceded that some of this acceleration was due to “temporary factors”, but there was also “evidence of more persistence”. The RBA’s revised forecasts now see the unemployment rate at 4.4% over the forecast horizon (up from 4.3%), while underlying inflation holds above the mid-point of the target range through 2026, then draws close in 2027.

Highlighted by Westpac Chief Economist Luci Ellis in this week’s video update, with policy only mildly restrictive, the RBA can afford to keep the cash rate at current levels while it assesses the inflation trend for a couple more quarters without too much of a risk to activity. We expect two more 25bp rate cuts from the RBA, but not until May and August next year.

Turning to the outlook for the consumer. Our card activity data continues to point to a solid uptrend in consumer demand; however, the Q3 update on household spending muddied the waters, real spending surprising to the downside with a meagre 0.2% lift compared to Q2’s 0.9% gain. The susceptibility of household demand to sentiment and the cost of living was also called out by the RBA’s latest business liaison which characterised consumers as “value conscious”. We will receive a full update on consumer demand and household finances in the National Accounts release on 3 December, but this will only be for Q3. We may not get a full picture on the susceptibility of consumer demand to changing interest rate expectations until early-to-mid-2026.

The uncertainty over the timing and scale of further interest rate cuts notwithstanding, October’s Cotality data points to household wealth compounding at a rapid rate, with home prices across the major capital cities growing at a circa 12% annualised pace during the 3 months to October. The RBA believes these gains may boost spending in time. That said, one household’s gain is another’s loss vis a vis affordability; and an increase in spending ahead of income requires a willingness to dissave or take on additional debt. Bear in mind as well that the support afforded by rate cuts and policy measures such as the recent roll-out of the First Homebuyer Guarantee Scheme will fade in coming months as prices move higher. Tight supply, however, will remain a support for price growth for the foreseeable future.

Offshore, the data flow was again light as the current US Government shutdown became the longest ever. The ISM manufacturing and service PMIs point to soggy conditions, the headline indexes remaining below average and the employment measures consistent with an outright reduction in headcount in October. Challenger job cuts also spiked to the highest October reading in over 20 years, taking year-to-date job losses above 1 million. Challenger, Gray and Christmas report that the reductions have been concentrated in technology and warehousing and are in part due to AI adoption. Note that this measure is an estimate of gross job cuts. ADP private payrolls is, in contrast, a measure of net job creation. The latter survey reported a 42k job gain in October, leaving the 6-month average at a modest, but positive, 20k. Apart from Governor Miran, Fed speakers this week kept their options open for the December meeting, continuing to raise concerns over inflation risks as well as threats to the labour market.

Across the Atlantic, the Bank of England’s Monetary Policy Committee left the Bank Rate unchanged at 4.0%. The decision was a 5-4 split decision, and the communications carried a dovish tone. The minutes revealed that among the five members in the majority, four were concerned about the persistence of inflation. One member, Governor Bailey, judged that slack in the UK economy is rising; however, he preferred to “wait and see if the durability of disinflation is confirmed”. The forward guidance was explicit, stating that “Bank Rate is likely to continue on a gradual downward path” if the disinflationary process continues.

There were few changes to the BoE’s forecasts. CPI inflation is expected to fall below 3% around Q2 next year, then return to around 2% in Q2 2027 – a very similar path the August projection. GDP growth is expected to remain in the 1–1.5% range until early 2027, with some acceleration towards a 2% pace from late-2027. With Governor Bailey likely to favour a cut if current trends persist, we now anticipate a further 25bp policy easing at the MPC’s final meeting of the year in December and a 25bp rate cut per quarter through the first half of 2026.