All eyes were on the U.S. elections on Tuesday, encouraging pre-event positioning and volatile price action among the major assets.
U.S. dollar alternatives like bitcoin and gold gained ground, while U.S. equities found support from a potential Trump win.
Headlines:
- RBA kept its rates at 4.35% as expected and maintained a hawkish bias that supported AUD early Tuesday
- China Caixin services PMI for October: 52.0 (50.5 expected, 50.3 previous)
- Switzerland jobless rate steady at 4.6% as expected in October
- French industrial production sank 0.9% m/m in Sept (-0.5% forecast, previous reading downgraded from 1.4% to 1.1%)
- Spanish unemployment change in Oct: 26.8K (26.5K expected, 3.2K previous)
- S&P Global final services PMI for the U.K. upgraded from 51.8 to 52.0 in October
- Canada’s trade deficit widened from 1.5B CAD (downgraded from 1.1B CAD shortfall) to 1.3B CAD in Sept, as exports fell 0.1% while imports dropped 0.4%
- US trade deficit widened from $70.8B to $84.4B in Sept ($83.4B shortfall expected) as exports fell 1.2% while imports rose 3%
- US S&P Global final services PMI in Oct downgraded from 55.3 to 55.0
- US ISM services PMI in Oct at 56.0 (53.8 forecast, 54.9 previous) as employment rose for the third time in four months while prices dipped 1.3 points
Broad Market Price Action:
Major assets started off steady as traders prepared for the U.S. elections, with most markets staying in ranges—except for Bitcoin. BTC/USD broke out, riding a late Monday rally to hit $69,000 by the European session. Gold, another alternative to the dollar, also pushed higher in Asian and early European trading.
Volatility spiked during the U.S. session as election uncertainties put pressure on the 10-year Treasury yields, keeping investors from piling into the dollar. At the same time, anticipation of a potential Trump win gave U.S. equity markets a lift.
The main assets bounced around during the U.S. services PMI release but ultimately wrapped up the day close to their U.S. session levels.
FX Market Behavior: U.S. Dollar vs. Majors:
The Greenback took fresh hits around the Asian and European session openings, likely as traders unloaded USD ahead of the U.S. election drama.
In the U.S., mixed final S&P and ISM services PMI reports slowed the dollar’s slide, keeping it choppy before dollar bears took over and pushed it lower through the end of the day.
Upcoming Potential Catalysts on the Economic Calendar:
- Germany factory orders at 7:00 am GMT
- Spain services PMI at 8:15 am GMT
- Italy services PMI at 8:45 am GMT
- France final services PMI at 8:50 am GMT
- Germany final services PMI at 8:55 am GMT
- Eurozone final services PMI at 9:00 am GMT
- U.K. construction PMI at 9:30 am GMT
- Eurozone PPI at 10:00 am GMT
- Eurozone ECB President Lagarde to give a speech at 2:00 pm GMT
- Canada Ivey PMI at 3:00 pm GMT
- EIA U.S. crude oil inventories at 3:30 pm GMT
- BOC member Carolyn Rogers to give a speech at 5:25 pm GMT
- RBNZ Gov Orr to give a speech at 7:10 pm GMT
- Japan cash earnings at 11:30 pm GMT
European traders are seeing Germany’s factory orders and a fresh round of PMI reports today, which could stir up volatility for European currencies like the euro, pound, and Swiss franc during the session.
We’ll also hear from ECB President Lagarde, Bank of Canada’s Rogers, and RBNZ’s Governor Orr, so expect currency-specific moves in the European and U.S. sessions.
Meanwhile, U.S. election headlines could keep driving the broader market mood, impacting key assets like oil, gold, bitcoin, and stocks.
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