U.S. dollar firmed, oil prices advanced, equities climbed on strong corporate earnings, and bond yields eased ahead of key inflation data. Markets awaited the September U.S. Consumer Price Index (CPI), expected to show stable headline inflation and further cooling in core prices, offering important clues on the Fed’s next policy move. Meanwhile, yesterday’s data showed steady jobless claims and softer housing figures, reinforcing signs of a gradual cooling in the U.S. economy. Trump announced he is terminating all trade negotiations with Canada over an Ontario ad quoting Ronald Reagan to criticize U.S. tariffs, calling it “fraudulent” and “egregious.” Prime Minister Mark Carney heads to the Indo-Pacific Summit this week, navigating relations with both Trump and Xi, with a potential bilateral meeting with China’s leader at the APEC Summit in Gyeongju yet to be confirmed. The U.S. and China resumed trade talks in Kuala Lumpur as Washington prepared a probe into Beijing’s compliance with the 2020 deal, signaling renewed dialogue but lingering tensions. Bitcoin trades around $111,000, up modestly as it consolidates ahead of U.S. CPI data, with rising institutional adoption and bullish options sentiment tempered by potential volatility and recent large wallet movements.
In the news. Trump announce that he will not deploy federal agents to San Francisco, agreeing with Mayor Daniel Lurie to forgo militarized immigration enforcement while continuing cooperation on drug crime. Japan’s new Prime Minister Sanae Takaichi, backed by a right-wing coalition, gains room to pursue ambitious defense policies and discuss security with Trump, but her narrow parliamentary majority may limit how quickly reforms can be implemented. Kim Jong Un celebrated North Korea’s alliance with Russia as reaching a “historic peak” on the first anniversary of his troops’ deployment to Ukraine.
In currency markets. The CNY held steady as markets digested mixed economic signals, while the Japanese yen weakened on ongoing risk appetite. The MYR showed modest gains supported by strong commodity inflows, and the THB edged higher, reflecting cautious investor sentiment in the region. AUD showed tentative gains but remained under pressure, while NZD traded cautiously near key resistance ahead of U.S. CPI data. MXN and CZK held steady, ZAR strengthened on higher commodity prices, and PLN edged up on robust economic sentiment.
In commodity markets. Crude oil and natural gas prices edged lower, pressured by a stronger U.S. dollar and cautious market sentiment ahead of U.S. inflation data. Gold slipped roughly 1.5% as investors booked profits after recent gains, while silver plunged about 6%, correcting sharply from a 10-year high. Copper also edged down 0.2%, pressured by a stronger U.S. dollar and cautious market sentiment, reflecting a temporary cooling in commodities following a period of strong performance. Wheat and soybeans advanced on stronger export demand and optimism over U.S.-China trade talks, while coffee remained largely unchanged amid stable supply expectations. Beef, however, came under pressure, particularly feeder cattle, as U.S. ranchers and markets reacted to President Trump’s plan to import more Argentine beef to lower consumer prices, raising concerns about domestic competition and potential impacts on U.S. livestock profitability.
USD/CAD edged higher as the U.S. dollar strengthened amid mixed Canadian economic data and ahead of the Bank of Canada’s policy meeting on October 29, despite optimism over trade and higher oil prices.
EUR/CAD rose as the euro gained against the Canadian dollar, despite mixed Canadian economic data and ahead of the Bank of Canada’s October 29 policy meeting.
EUR/USD eased as the euro weakened slightly against a firmer U.S. dollar. The euro faced pressure despite steady ECB policy expectations, while the dollar gained on cautious market sentiment amid ongoing economic uncertainty and potential shifts in U.S. interest rate expectations.
GBPEUR rose modestly as the pound strengthened against the euro. The euro remained under pressure amid stable ECB policy expectations, while the pound benefited from resilient U.K. economic sentiment and investor positioning ahead of upcoming U.K. data releases.
GBPUSD slipped as the pound weakened against the U.S. dollar, pressured by soft U.K. economic sentiment and a firmer dollar.
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