U.S. and Canadian banks were closed for the holiday, but that didn’t stop some asset classes like crude oil and bitcoin from chalking up volatile moves.
Here’s what’s driving the markets so far.
Headlines:
- On Friday after the market close, China’s National People’s Congress Standing Committee confirmed 10 trillion yuan ($1.4 trillion) to allow local governments to reduce their “hidden” debts
- On Saturday, China reported a 0.3% year-on-year CPI reading for October (0.4% expected, 0.4% previous) – its slowest gain in four months
- China’s PPI slid 2.9% y/y in October (-2.5% expected, -2.8% previous)
- BOJ Summary of Deliberations discussed the need for caution in hiking rates, remained vague on December move
- Japan’s current account surplus shrank from 3.15T JPY to 1.27T JPY (2.80T JPY forecast)
- New Zealand quarterly inflation expectations for the next two years picked up from 2.03% to 2.12% in Q3 2024
- Chinese new loans slowed from 1590B CNY to 500B CNY in Oct (770B CNY forecast)
- Japan’s Economy Watchers sentiment index dipped from 47.8 to 47.5 (47.2 forecast) in Oct
- French, Canadian and U.S. banks closed for their respective holidays
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Commodities like gold and crude oil had a rough Monday, as the former ended more than 2% lower for the day while the latter chalked up more than 3% in losses, likely in reaction to weak Chinese inflation data printed over the weekend and persistent market disappointment over the country’s stimulus efforts.
Bitcoin bulls, on the other hand, were having the time of their lives as BTC/USD soared to fresh record highs past the $89K mark in anticipation of crypto-friendly regulations during Trump’s administration.
U.S. bond markets were closed on Veterans Day, but 10-year yields remained elevated while the S&P 500 index closed flat.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Major Currencies Chart by TradingView
Data flow was light on Monday, with only a handful of mid-tier reports like New Zealand’s quarterly inflation expectations report and China’s new loans data on deck. This paved the way for mostly sideways price action early in the day, before a general turn higher for the U.S. dollar right around the London session.
The yen was notably weaker versus the dollar throughout the day, as the Bank of Japan’s policy meeting minutes released over the weekend revealed that officials preferred to stay cautious about tightening moves and refrained from dropping hints about a December hike.
The euro also chalked up losses at the start of the week, with political uncertainty in Germany weighing on the shared currency, along with another set of potential trade conflicts with the U.S. during Trump’s presidency.
Upcoming Potential Catalysts on the Economic Calendar:
- Japan’s preliminary machine tool orders at 6:00 am GMT
- U.K. claimant count, jobless rate and average earnings index at 7:00 am GMT
- BOE MPC member Huw Pill’s speech at 9:00 am GMT
- German and eurozone ZEW economic sentiment indices at 10:00 am GMT
- FOMC member Waller’s speech at 3:00 am GMT
- FOMC member Barkin’s speech at 3:15 pm GMT
- FOMC member Kashkari’s speech at 7:00 pm GMT
- FOMC member Harker’s speech at 10:00 pm GMT
- Japan’s PPI report at 11:50 pm GMT
Sterling volatility could come in play later today, as the U.K. gears up to print its latest employment data, which could then influence the Bank of England’s (BOE) policy outlook.
After that, the focus would likely shift to the U.S. dollar since a number of FOMC officials are lined up to give testimonies and possibly drop hints on the central bank’s future moves.
Check out our brand new Forex Correlation Calculator if you’re planning on taking any trades!
