Sample Category Title

Daily Pivots: (S1) 152.37; (P) 154.31; (R1) 155.50; More...

Deeper than expected fall in GBP/JPY dampened our original bullish view and suggests that rise from 148.93 might have completed. Intraday bias is now on the downside for 148.93 key support level. On the upside, though, break of 156.22 minor resistance will revive near term bullishness and bring retest of 158.19 high instead.

In the bigger picture, rise from 123.94 is seen as the third leg of the pattern from 122.75 (2016 low). The stay above 55 week EMA affirms medium term bullishness. Current rise should now target 61.8% retracement 195.86 (2015 high) to 122.75 at 167.93 next. In any case, outlook will remain bullish as long as 148.93 structural support hold, even in case of deep pull back.

Market movers today

• Today's highlight will be the US non-farm payrolls. Labour supply issues remains a key macro theme, and US labour market developments are particularly interesting to watch now that the Fed has started tapering and rate hikes are foreseen next year. With our expectation of a 450k jobs growth in October (vs. 194k in Sep) we are slightly more optimistic than the consensus (425k)
• We also keep an eye on industrial production figures from Germany after a weaker than expected rebound in factory orders on Thursday.
• Euro area retail sales data is also due today. Consensus expects 0.2% growth m/m in September vs. 0.3% in August.
• On the ratings side, we may get updates from Fitch on France and from Moody's on Italy.
• In Sweden, the Debt Office releases October borrowing requirements, see more below.

The 60 second overview

Bank of England unchanged: In line with our base case, BoE kept monetary policy unchanged yesterday. They signalled that a rate hike will be appropriate in the coming months if data is broadly in line with expectations. We continue to expect three hikes next year.

Norges Bank: As expected NB kept policy rates unchanged. The current rate path continues to indicate a hiking cycle starting in December.

German manufacturing: September factory orders disappointed somewhat with a modest rebound of 1.3% following a steep 8.8% decline in August. The recent slowing is likely related to the lack of supplies. Orders remain at a high level though, about 10% above the pre-pandemic level.

Global slowdown: This morning we released Top 10 global cycle indicators - more weakness where we track the outlook for the global manufacturing cycle. As the title indicates, the majority of indicators still point to more weakness in global PMI's over the next six months. A small ray of light is a turn in our Chinese credit impulse, which points to a bottom in the global cycle in around 9 months. But until then we are likely to turn lower.

Equities: Equities closed mostly higher on Thursday in an uneventful session. As yields ticked lower, the big story was growth outperforming value. Sector performance was well known from last year, with (semis) and consumer discretionary (AMZN, autos) leading the way while financials came under pressure. S&P 500 closed up 0.4%, Dow -0.1%, Nasdaq 0.8% and Russell 2000 -0.1%. US futures are unchanged this morning and Asian markets mostly lower.

FI: There was a significant rally in the global fixed income markets after the Bank of England monetary policy meeting. BoE did not hike rates and sounded a lot less hawkish compared to the market pricing. This took the markets completely by surprise and bonds fell significantly and spreads such as the BTPS-Bund spread tightened.

FX: Oil prices dropped after OPEC+ decided to go ahead with its planned output hike. As expected, the EUR/GBP moved higher on BoE. EUR/DKK dropped to the lowest level since the beginning of October. The importance of clear central bank communication became crystal clear yesterday in the CEE FX space.

Credit: Credit markets - and particularly the high-beta segment performed very well yesterday. iTraxx Xover tightened 10.5bp (closing in 248bp) and Main 1.7bp (to 48.8bp). HY bonds tightened 4bp while IG ended broadly unchanged.

Nordic macro

In Sweden, the Debt Office releases October borrowing requirement, it expects to borrow SEK14.1 bn. This is the first print after the new forecast was announced in late October. The Debt Office has gradually been reducing the funding forecast for more than a year now. It remains to be seen whether this trend continues or enough is enough now.

Daily Pivots: (S1) 130.78; (P) 131.68; (R1) 132.33; More....

EUR/JPY's correction from 133.44 is extending and deeper fall could be seen. But downside should be contained above 130.45 resistance turned support to bring rebound. On the upside, above 132.55 minor resistance will bring retest of 133.44 first. Firm break there will resume larger up trend from 114.42. However, firm break of 130.45 will dampen out bullish view and bring deeper fall back to 127.91 key support.

In the bigger picture, rise from 114.42 (2020 low) is still in progress and the strong support support from 55 week EMA affirms medium term bullishness. Further rise would be seen to retest 137.49 (2018 high). Decisive break there will resume the whole long term rise from 109.03 (2016 low). Next target will be 100% projection of 109.03 to 137.49 from 114.42 at 142.88. This will now remain the favored case as long as 127.91 support holds.

Daily Pivots: (S1) 0.8493; (P) 0.8529; (R1) 0.8595; More...

Intraday bias in EUR/GBP remains on the upside at this point. Rebound from 0.8401 would target a test on 0.8656 resistance. Firm break there will carry larger bullish implications. However, on the downside, break of 0.8459 minor support will bring retest of 0.8401 low instead.

In the bigger picture, price actions from 0.9499 (2020 high) are still seen as developing into a corrective pattern. Deeper fall could be seen as long as 0.8656 resistance holds, towards long term support at 0.8276. However, firm break of 0.8656 resistance would argue that a medium term bottom was already formed. Stronger rise would be seen to 0.8861 support turned resistance to confirm completion of the corrective pattern.

Daily Pivots: (S1) 1.5548; (P) 1.5585; (R1) 1.5624; More...

Intraday bias in EUR/AUD remains mildly on the upside for 55 day EMA (now at 1.5788). Sustained break there will argue that whole fall from 1.6434 has completed and bring stronger rally. On the downside, through, below 1.5532 minor support turn turn bias back to the downside for 1.5353. Break there will target a test on 1.5250 low.

In the bigger picture, the down trend from 1.9799 (2020 high) is in progress. Firm break of 1.5250 low will confirm resumption nand target 61.8% retracement of 1.1602 (2012 low) to 1.9799 at 1.4733. Sustained break there could bring more downside acceleration to 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623. In any case, break of 1.6434 resistance is needed to signal medium term bottoming, or outlook will stay bearish.

Daily Pivots: (S1) 1.0522; (P) 1.0557; (R1) 1.0578; More....

Intraday bias in EUR/USD remains on the downside for the moment. Current down trend from 1.1149 should target 100% projection of 1.1149 to 1.0694 from 1.0936 at 1.0481. On the upside, above 1.0602 minor resistance will turn bias neutral for consolidations. But outlook will stay bearish as long as 1.0678 support turned resistance holds.

In the bigger picture, current downside momentum argues that fall from 1.1149 is probably resuming the downside from 1.2004 (2018 high). Next focus is 1.0505 (2020 low). Decisive break there will confirm this bearish case and target 61.8% projection of 1.2004 to 1.0505 to 1.1149 at 1.0223 next. Strong support from 1.0505 will bring rebound first. But outlook will stay bearish as long as 1.0936 resistance holds.

Daily Pivots: (S1) 0.7422; (P) 0.7440; (R1) 0.7468; More...

Intraday bias in AUD/USD remains mildly on the downside as fall from 0.7555 is in progress. Sustained trading below 55 day EMA (now at 0.7394) will argue that rebound from 0.7105 is complete with three waves up to 0.7555. That would also argue that fall from 0.8006 is ready to resume through 0.7105 low. On the upside, above 0.7470 minor resistance will turn bias back to the upside for 0.7555 resistance again.

In the bigger picture, with 0.6991 cluster support (38.2% retracement of 0.5506 to 0.8006 at 0.7051) intact, we're seeing price action from 0.8006 as a correction only. That is, up trend from 0.5506 low would resume after the correction completes. In that case, main focus will be 0.8135 key resistance (2018 high). Sustained break there will carry larger bullish implications. However, sustained break of 0.6991 will argue that the whole medium term trend has indeed reversed.

Daily Pivots: (S1) 1.2402; (P) 1.2437; (R1) 1.2496; More...

USD/CAD is staying in consolidation from 1.2286 and intraday bias remains neutral. Upside of recovery should be limited by 1.2497 resistance. . On the downside, break of 1.2286 will resume the fall from 1.2947 to retest 1.2005 low. However, firm break of 1.2497 will turn bias back to the upside for stronger rebound.

In the bigger picture, the rejection by 38.2% retracement of 1.4667 to 1.2005 at 1.3022 argues that rebound from 1.2005 is merely a corrective rise, which is complete. More importantly, the down trend from 1.4667 (2020 high) is not over yet. Sustained break of 1.2005 will extend the down trend to next long term fibonacci level at 61.8% retracement of 0.9406 to 1.4689 at 1.1424. In any case, outlook will not turn bullish as long as 1.2947 resistance holds.

Daily Pivots: (S1) 1.1517; (P) 1.1567; (R1) 1.1605; More...

Intraday bias in EUR/USD remains neutral as it's staying in range above 1.1523. Further decline is expected as long as 1.1691 resistance holds. On the downside, break of 1.1523 will resume the fall from 1.2265, and that from 1.2348 too, for long term fibonacci level at 1.1289 next. However, firm break of 1.1691 will indicate short term bottoming and turn bias back to the upside for stronger rebound, towards 1.1908 resistance.

In the bigger picture, price actions from 1.2348 should at least be a correction to rise from 1.0635 (2020 low). As long as 1.1908 resistance holds, deeper fall would be seen to 61.8% retracement of 1.0635 to 1.2348 at 1.1289. Nevertheless break of 1.1908 resistance will revive medium term bullishness and turn focus back to 1.2348 high.

Daily Pivots: (S1) 1.3414; (P) 1.3556; (R1) 1.3641; More...

Intraday bias in GBP/USD remains on the downside for retesting 1.3410 low first. Firm break there will resume larger fall from 1.4280 to 1.3164 medium term fibonacci level. On the upside, above 1.3604 minor resistance will mix up the near term outlook and turn intraday bias neutral first.

In the bigger picture, the structure of the fall from 1.4248 suggests that it's a correction to the up trend from 1.1409 (2020 low) only. While deeper fall cannot be ruled out yet, downside should be contained by 38.2% retracement of 1.1409 to 1.4248 at 1.3164, at least on first attempt, to bring rebound. On the upside, firm break of 1.4376 key resistance (2018 high) will add to the case of long term bullish reversal. However, sustained trading below 1.3164 will revive some medium term bearishness and target 61.8% retracement at 1.2493.