Overall Market Sentiment: Cautious risk-on as Gaza ceasefire headlines trim the energy risk premium and in-line Fed minutes avoid pushing back on easing expectations. Gold stays near record highs.
Currency Outlooks
🔻 USD: Fed funds futures price roughly a 90 to 95 percent chance of a 25 bp cut on October 29, with additional easing by year-end still on the table. The 2s10s curve remains modestly positive, which tends to cap the dollar when growth risks linger. Last night’s minutes offered little pushback against market pricing, leaving the dollar sensitive to softer private labor or services reads while official data remain patchy. Key DXY zones: 98.20 and 98.80 topside, 97.70 support.
🔺 EUR: French headlines point to tentative government progress and calmer risk premia, with the 10-year OAT–Bund spread hovering in the low-80s to 90 bps area after widening earlier in the week. Markets still price negligible odds of an October ECB move, so EUR trades mainly against the USD path. Levels: support 1.1600 then 1.1580, resistance 1.1760 then 1.1810.
🔻 JPY: October BoJ hike odds have faded while intervention risk perception rises as 150 approaches. If the Fed minutes pull front-end U.S. yields down further, USDJPY should pivot lower quickly. Levels: resistance 148.80 and 150.00, support 147.20 then 146.50.
⚖️ GBP: Sterling remains range-bound with the BoE in wait-and-see mode and domestic catalysts light. Direction is mostly USD and European risk premia. Levels: 1.3400 support, 1.3600 resistance; a daily close above 1.3600 opens 1.3720.
🔻 CAD: Oil is softer after ceasefire headlines and a second straight U.S. crude build. EIA reported a 3.7 million barrel crude stock increase, refinery utilization at 92.4 percent, and Cushing near 22.7 million barrels. Without Brent reclaiming the low 70s, CAD rallies likely stay shallow. USD/CAD: support 1.3850, resistance 1.3950 then 1.4000.
⚖️ AUD: The RBA is on hold and China’s post-holiday reopen keeps risk constructive. AUD trades the dollar and commodities near term. Levels: 0.6500 support, 0.6670 resistance; a sustained break targets 0.6750.
🪙 Gold: Holds near a historic breakout above 4,000 on safe-haven demand and Fed-cut pricing; dips likely find buyers while front-end yields stay anchored.
🛢 Oil: Risk premium faded on ceasefire news and higher U.S. inventories; without a quick push back toward the low 70s, energy-beta FX stays on the back foot.
📈 Stocks: Bias is mixed-to-positive into earnings and minutes digestion. A gentle USD pullback plus stable long yields favors quality growth over deep cyclicals.
