The Morning Update

The USD firms, oil prices weaken, equity markets are mixed, and US yields rise as the US House returns to vote. The U.S. dollar edged higher as optimism grew over an imminent end to the government shutdown, though expectations for a December Federal Reserve rate cut limited gains. Meanwhile, the yen slipped to a nine-month low near 154.82 per dollar, prompting Japanese officials to issue fresh verbal warnings amid doubts about the effectiveness of non-intervention measures. Global equities were mixed as optimism over an imminent end to the U.S. government shutdown lifted sentiment and fueled a rebound in technology shares, with the Nasdaq 100 leading gains. European markets were mixed, with the FTSE 100 and Amsterdam’s AEX edging lower, while Chinese equities declined amid persistent concerns over the country’s slowing economic momentum. Elsewhere, oil prices slipped on profit-taking and concerns about demand after recent gains, while gold edged higher as softer U.S. data boosted bets on Fed easing. Bitcoin extended its rally, supported by renewed institutional inflows and improving market sentiment. Today's economic calendar is relatively quiet, with a focus on a flurry of Fed speakers, the BoC's Summary of Deliberations, and the OPEC monthly market report, which are expected to help drive intraday currency direction.

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In the news. Indian inflation cools more than expected in October, boosting hopes for further rate cuts. Oil and gas demand is expected to rise for 25 years without a global shift in course, according to the IEA. Softbank shares plunge as much as 10% after selling Nvidia stake. House poised to end historic shutdown over Democrats' objections. Quebec's independence talk is making bond investors nervous. Steeting denies plot to oust Starmer as UK Prime Minister. US airlines grapple with shutdown fallout as Thanksgiving nears. US tourism faces $5.7B US loss as Canadians continue to stay home. Russia is ready to resume talks with Ukraine in Istanbul, the foreign minister says.

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In currency markets. Japan’s Finance Minister Satsuki Katayama warned that the weak yen now poses more drawbacks than benefits, citing rapid and one-sided currency moves as a growing concern. In Australia, Deputy Governor Andrew Hauser said the RBA is assessing whether its 3.6% cash rate remains sufficiently restrictive, highlighting ongoing debate over policy settings. Meanwhile, the Indian rupee slipped as steady corporate dollar demand and broader weakness in Asian currencies weighed on sentiment. CNY is flat, while Asian currencies fall 0.2% on average against the USD. Trading currencies are mixed, with JPY weakening 0.5%, CZK falling 0.25%, KWD, PLN, DKK & NOK down 0.15%, AUD, NZD, and SEK are flat, while ZAR, CHF & MXN are up 0.1% against the USD.

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In commodity markets. Oil & Wheat prices weaken 0.7%. Natural Gas prices slipped 0.3%. Gold & Soybean prices firmed 0.4%. Silver prices rallied 1.8%. Copper prices are flat, and Coffee prices tumble 1.6%.

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CAD holding steady above 1.4000 as optimism over an imminent U.S. government reopening and expectations for a Federal Reserve rate cut shaped market sentiment. The U.S. dollar found modest support from hopes of renewed economic data releases, though weaker ADP employment figures limited its momentum. Traders are closely watching upcoming speeches from Fed officials Waller, Bostic, and Miran for further policy cues that could influence the pair’s direction. Meanwhile, the Canadian dollar remained resilient ahead of the Bank of Canada’s Summary of Deliberations, as investors assessed the central bank’s cautious stance and the supportive impact of firm crude oil prices.

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EURCAD slipped in early trading as the euro softened, even though oil prices declined. Sentiment around the Canadian dollar remained supported after the OPEC World Oil Outlook 2050 projected a continued rise in global crude demand, reinforcing Canada’s long-term export prospects. Investors are also eyeing the Bank of Canada’s Summary of Deliberations for clues on how policymakers view recent commodity and growth trends.

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EUR remained on the defensive below 1.1600 as traders awaited the U.S. House vote on the funding bill to end the prolonged government shutdown and fresh commentary from Federal Reserve officials. The pair held steady near 1.1570, with a mild upside bias limited by caution ahead of key speeches from Williams, Paulson, and Waller, which could shape expectations for a December rate cut. While softer U.S. labour data earlier in the week briefly supported EUR/USD, the lack of major economic releases and a cautious market tone kept the euro subdued in European trading.

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GBPEUR pair held steady in early trading, as traders awaited fresh data and central bank signals. Sterling’s gains were capped by expectations of BoE rate cuts, while the euro remained subdued amid sluggish momentum in the Eurozone.

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GBP continues to slide towards 1.3100 amid a rebound in the US Dollar as the U.S. government reopening appears increasingly likely and focus turns to votes in the U.S. House of Representatives. Weaker UK labour-market data, which heightens expectations of rate cuts from the Bank of England, are also weighing on the British Pound.