Focus Today on Preliminary PMI Figures Seeking New Market Catalysts
This week has seen a rise in the U.S. dollar and yen weakness, but today there has been a temporary adjustment. The market is currently searching for new catalysts.
Early in the week, there were few major economic indicators, with sentiment driving market movements. However, today, several economic indicators are scheduled for release, offering potential new insights on the fundamentals.
Key Events and Indicators Today
The following economic indicators are scheduled for release today:
- France, Germany, Eurozone, UK, and US: October preliminary manufacturing and services (non-manufacturing) PMI figures
- US: Initial jobless claims (10/13 – 10/19), new home sales (September)
These indicators could impact the rate cut pace of the ECB, BoE, and Fed, with particular attention to economic sentiment and labor market data.
- US: There is a growing view that the pace of rate cuts may slow, contributing to dollar strength.
- ECB: Concerns about recession are high, pointing to potential acceleration in rate cuts.
- UK: In a transitional phase, with the impact of the October 30 budget announcement on inflation being closely monitored by the market.
Key Remarks Today
Notable speeches scheduled today include:
- Loretta Mester, Cleveland Fed President
- Catherine Mann, Bank of England Member
- Mārtiņš Kazāks, Latvian Central Bank Governor
- Philip Lane, ECB Chief Economist
- Andrew Bailey, Bank of England Governor
The market will be watching how these remarks influence sentiment.
USD/JPY Movement
USD/JPY has pulled back from the upper 152 yen level to the lower 152 yen range in the Tokyo market, following verbal interventions by Finance Minister Kato and Chief Cabinet Secretary Aoki, along with a pause in rising U.S. bond yields. The dollar index is also seeing a correction from the previous day’s gains, but remains above the 200-day moving average. The USD/JPY’s 200-day moving average is positioned at 151.40, about 1 yen below the current level.
Outlook and Strategy
While dollar buying is currently undergoing a correction, the upcoming U.S. manufacturing PMI results could trigger further market movements. Given the buildup in dollar longs, if the indicators prompt a shift to dollar selling, I plan to engage in active trading to capitalize on that trend.
