The Daily Brief: Your Economic Rundown

Market Overview

New West Asia Threat

The Hamas Chief Yahya Sinwar has been eliminated. There was some debate on whether they had succeeded, but it was confirmed after the DNA results matched. Celebrations have begun.

While his death is significant, its not the route to peace. Hamas still holds Israeli hostages, and this is of great importance to the Israeli people.

Until everything is resolved, his death signifies a new phase of the war, not peace.

Yesterday, the ECB cut rates as expected, and the Euros drop was further bolstered by stronger-than-expected U.S. data on sales and employment. With this move by the ECB, driven by the previous 1.8% inflation report, the BOE is expected to cut rates next month.

More clues on the BOE cut will be revealed next week. Regarding the FOMC cuts in November, the latest data has caused economists to question whether another cut is necessary or if they should pause to monitor inflation.

As long as inflation doesnt accelerate too quickly, gradual rate cuts are likely. If inflation spikes, expect a more hawkish stance on monetary policies. Given rising war tensions due to the killing of the Hamas Chief, upcoming elections, and Gold's rise to record highs, the world is leaning toward investing in more secure economies.

Were witnessing the aftereffects of the West Asia situation, as the latest data paints a clearer picture of market direction. A more robust dollar, Gold, Franc, and other safe-haven assets are expected to emerge. The only remaining question is: How will Israel attack Iran, or how will Iran react to the killing of the Hamas Chief？

Market Analysis

GOLD - As expected, Gold has reached new highs. Currently, there are no signs of a slowdown, and it may hit a new high around 2,800/oz. We could see this spike continue in upcoming sessions. Gold buying in the Asian session shows that many central banks are securing their accounts.

Were now witnessing what we predicted—a rise in Gold despite the stronger dollar due to increased global insecurity.

SILVER - Similarly, Silver is finding strength and is supported by 31.472. We expect further buying and a break above 32.518. However, we‘re unsure how Friday’s market close will affect prices, but we expect a significant event.

DXY - The Dollar has risen as expected after stronger U.S. data pointed to a continued robust economy. This relieves markets after the FOMCs rate cut scare. The latest data suggests a slower pace for rate cuts and a more hawkish stance in upcoming meetings. While the FED appeared dovish in recent announcements, the results suggest otherwise. This aligns with our expectation of worsening inflation due to oil concerns, which are currently delayed.

GBPUSD - The Pound is expected to decline further as the ECBs rate cut allows room for the BOE to follow suit in November. Unless an unexpected event in West Asia triggers a new phase of inflation due to oil supply concerns, expectations remain steady that the BOE will proceed with its rate cut. The current economic outlook suggests this move is likely unless inflation risks increase significantly.

AUDUSD - The Aussie dollar continues its gains. The Australian dollar appreciated past $0.67 on Friday, extending gains from the previous session as upbeat economic data from China bolstered demand. The Aussie is often seen as a liquid proxy for the yuan due to Australias reliance on exports to China.

Thursdays local currency rebound came after a strong domestic jobs report, reinforcing a hawkish outlook on Reserve Bank of Australia monetary policy. The economy added 64,100 jobs in September, far exceeding the forecast of 25,000, while the unemployment rate held steady at 4.1%.

However, the RBA warned it would closely monitor inflation to keep it under control. Although markets are pricing in rate cuts for December, theres still a chance the RBA could surprise the markets.

NZDUSD - The Kiwi continues its decline but shows signs of consolidation. Theres no significant momentum to push prices further down. We await more data to clarify the direction, though markets still expect further selling.

EURUSD - The Euro is consolidating after a hit from recent data. Expectations point to further declines. With that in mind, we see more opportunities to sell the Euro, especially if the ECB calls for another rate cut in December, assuming data aligns.

USDJPY - The Yen is finding new highs with weakness extending as expected. As long as markets continue in this direction, we expect the Yen to rise further.

USDCHF - The Franc remains bullish, with no significant changes in market outlook. We maintain a bullish bias until further data or market signals indicate otherwise.

USDCAD - The CAD continues its downward movement with good momentum, breaking previous lows. We maintain a bearish outlook for now, with prices testing 1.37435. However, tensions in West Asia could soon push oil prices higher, potentially boosting the currency. Well wait to see how this unfolds.