US ISM Non-Manufacturing in Focus

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Key Data Coming

The US dollar has traded higher over the European morning on Tuesday, despite a better tone to risk markets. USD is still deriving some support from Friday’s NFP beat. Looking ahead today, focus is on the US ISM non-manufacturing print. This is a key reading for the US and any weakness will likely see USD sharply lower. The USD index trades 97.39 last, up off last week’s post-FOMC lows.

EUR Lower Again on Tuesday

EURUSD has been lower again today, weighed on by a resurgent US dollar. In her first speech as ECB president yesterday, Christina Lagarde refrained from making any comments on monetary policy. This was disappointing for traders looking to garner the first glimpse into the new ECB head’s view on monetary policy. EURUSD trades 1.1117 last, still down sharply from the 1.1217 level.

Brexit Delay Boosts GBP

GBPUSD has had a quieter session today, though remains in the green against the US dollar. For now, the GBP outlook is boosted by the Brexit delay and the diminished likelihood of a no-deal Brexit as a consequence. GBPUSD trades 1.2897 last, just shy of the October highs above 1.30. Focus this week is on the BOE which meets on Thursday.

SPX500 Hits Fresh Highs

Risk assets remains buoyant today. Optimism over US-China trade talks is the dominating factor for markets so far this week as traders continue to eye a deal being signed at the November APEC meeting in Chile. SPX500 is trading 3084.58 last, only just off the 3087.08 all-time highs. UK and European equities are higher today also as traders remain optimistic in the face of another Brexit delay.

Gold Lower, JPY Higher

Safe havens have had a mixed day so far with gold a little lower against USD while JPY remains higher. The risk-on tone to markets this week is weighing on safe haven demand though the recent policy divergence between the Fed and the BOJ (which refrained from easing this month) is keeping JPY supported here. XAUUSD is trading 1504.33 last, still holding above the round figure for now. USDJPY trades 108.83 last testing structural resistance once again.

Crude Rallying on Trade Deal Hopes

Oil prices have been firmly higher today, boosted by the general improvement in risk appetite this week. The prospect of a trade deal is very bullish for crude and would go along way to repairing the damaged global oil demand outlook. Crude trades 57 last as the market awaits the latest weekly API update later today ahead of the main EIA report tomorrow.

CAD Down on Dollar Recovery

USDCAD has been higher today, despite the strength in oil prices, as a stronger USD sets the tone of the day’s trading so far. Key US data later today could see a reversal in these moves however if we see any weakness while a stronger reading will see the USD advance continue. USDCAD trades 1.3124 last, back below the 1.3145 level.

RBA Holds Rates Unchanged

AUDUSD has been a little softer today, seeing some technical selling as price tests recent highs. Overnight, the RBA kept policy unchanged though struck a more optimistic tone in its policy statement, noting improvements in employment and inflation as well as house prices. AUDUSD trades .6920 last, still capped by .6926 for now.

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