### United States
Upcoming polls in Japan will precede those in the U.S., where the election outlook remains uncertain. Meanwhile, the Federal Reserve Chair, Jerome Powell, has shown a lack of urgency, endorsing recent rate outlooks suggesting two quarter-point cuts later this year, contingent upon expected economic developments. This stance has supported the dollar, which is trading stronger against all G10 and emerging market currencies. Market activity appears consolidative, keeping key chart points intact. U.S. index futures showed mixed results, and bonds rallied; the 10-year Treasury yield decreased by nearly four basis points to 3.74%. While gold has recovered half of its recent losses, November WTI oil prices are sliding, recently touching their lowest level since September 11.
The September ISM manufacturing survey and the JOLTS job openings report, both released at 10:00 am ET, attract attention. Job openings are predicted to have declined for the third straight month, aligning with the longest decrease since 2008. The session will also reveal auto sales data, expected to reach a 15.6 million unit annualized pace, reflecting an increase. The GDP estimates by the Atlanta Fed and the NY Fed stand at 3.1% and 3.0%, respectively. The Fed Chair’s recent remarks suggested a high threshold for another rate cut, reducing market expectations of a significant cut in November. The ongoing dockworkers strike on the East Coast and in the Gulf is anticipated to disrupt supply chains, potentially raising inflation.
### Eurozone
Recent data reveal a decrease in September inflation below 2% for the four largest eurozone countries. The annual inflation rate moderated to 1.8% from 2.2% in August, marking the lowest level since June 2021. Confidence in an ECB rate cut has grown, with more than a 90% chance discounted for October. In foreign exchange, the euro has fluctuated modestly, trading above $1.12 intraday but closing below it. Support for the euro is noticeable near the $1.1070-80 area.
### United Kingdom
The new Labour government in the UK is preparing its first budget for submission later this month. In currency markets, sterling remained below last week’s peak near $1.3435, dipping to session lows around $1.3350 and later falling to $1.3325 in the European morning. Support is expected in the $1.3300-15 range.
### China
Holidays in China muted market activities, reflecting a quieter trading environment. The offshore yuan experienced downward pressure as the yen weakened and U.S. rates rose. The currency has been trading near recent lows within established resistance levels.
### Japan
Japan’s Q3 Tankan survey reported slight improvements over Q2, although capital expenditure plans have been curtailed. The unemployment rate fell back to 2.5% in August. Given the recent call for snap elections and weaker-than-expected industrial output, a rate hike by the BOJ seems unlikely soon. The focus remains on accommodative monetary and fiscal policies, with another supplemental budget potentially in the works.
### Canada
Canada could face snap elections if the Bloc Quebecois withdraws support from the minority Liberal government as threatened. The U.S. dollar traded within a narrow range against the Canadian dollar, with market activity focusing on potential levels and upcoming option expirations.
### Australia
Australia reported a 0.7% increase in August retail sales, exceeding expectations. Simultaneously, building permits decreased by 6.1% after a revised surge in the prior month. The Australian dollar experienced fluctuations, trading within a consolidative range while eyeing new highs.
### Mexico
Mexican markets are closed for the inauguration of Claudia Sheinbaum, the country’s first woman president. The U.S. dollar traded within Friday’s range against the Mexican peso, with the market assessing whether recent movements represent consolidation before an upward trend or a potential topping pattern.
