Traders mostly stayed on the sidelines on Monday as traders price in the uncertainty of the U.S. elections and this week’s top-tier calendar events.
Still, crude oil got a small boost from OPEC+ delaying a production increase plan while bitcoin, equities, and the U.S. dollar unwound some of the “Trump trade” moves.
Headlines:
- Over the weekend, OPEC+ members agreed to delay output hike by one month
- Wall Street’s Trump trade unravels after a shock poll dented his election odds
- Australia MI inflation gauge up from 0.1% m/m to 0.3% in Oct
- HCOB France final Manufacturing PMI confirmed at 44.5 as expected in October
- HCOB Germany final Manufacturing PMI revised higher from 42.6 to 43.0 (42.6 expected) in October
- HCOB Eurozone final Manufacturing PMI revised higher from 45.9 to 46.0 in October; Job shedding held close to September’s 49-month high; Output prices fell by the greatest extend in six months
- Eurozone Sentix Investor Confidence improved from -13.8 to -12.8 in November; “No positive turnaround scenario can be derived from this data”
- U.S. Factory Orders in September 2024: -0.5% m/m (-0.5% m/m forecast; -0.8% m/m previous)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Major assets held within wide ranges most of the day, as a lack of fresh catalysts and uncertainty about this week’s anticipated events kept traders largely on the sidelines.
WTI crude oil popped above $70.00, hitting $71.70, after OPEC+ members postponed their planned production increase for at least another month. Rising tensions over the weekend, with Iran issuing threats against Israel, may have added to the push in oil prices.
Meanwhile, a weekend poll showing a tighter race between U.S. presidential contenders Trump and Harris led to some profit-taking on “Trump trades.” European and U.S. equities edged down, bitcoin slid to new November lows below $68,000, and spot gold stayed muted below $2,750.
U.S. 10-year Treasury yields also gapped lower, hovering around 4.30%, as election uncertainty and expectations of a Fed rate cut later this week pressured bond yields.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Major Currencies Chart by TradingView
The U.S. dollar gapped lower and started Monday on a weak note after weekend polls reflected a much tighter presidential race.
The Greenback saw fresh bearish pressure at the start of the European session but also swung higher after the U.S. September factory orders report came in line with market estimates.
The U.S. session upswing took the dollar slightly higher against “riskier” counterparts like AUD, NZD, GBP, and EUR but also lower against JPY, CHF, and CAD.
Upcoming Potential Catalysts on the Economic Calendar:
- Switzerland unemployment rate at 6:45 am GMT
- France government budget balance at 7:45 am GMT
- France industrial production at 7:45 am GMT
- Spain unemployment change at 8:00 am GMT
- U.K. final services PMI at 9:30 am GMT
- U.S. presidential and congressional elections
- Canada trade balance at 1:30 pm GMT
- U.S. trade balance at 1:30 pm GMT
- U.S. ISM services PMI at 3:00 pm GMT
- New Zealand quarterly employment data at 9:45 pm GMT
- BOJ meeting minutes at 11:50 pm GMT
All eyes will be on the U.S. presidential elections, which could either limit volatility or cause erratic price action among the major assets as headlines pour in. While the world awaits the results, top-tier reports like the U.S. ISM services PMI and Canada’s trade data may cause currency-specific price swings.
In Europe, mid-tier reports like Switzerland’s unemployment rate and the U.K.’s services PMI can influence the price action of European currencies like GBP and CHF on top of overall risk sentiment.
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