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EURUSD
The European currency shows multidirectional dynamics of trading during the morning session, holding near the local highs of September 22, updated at the end of last week. Investors are in no hurry to open new long positions on the instrument, as they are concerned about inflation statistics released last Friday. In September, the Consumer Price Index in the euro area reached a new record high of 10.0%, which strengthened the confidence of market participants that the European Central Bank (ECB) will continue the policy of tightening monetary conditions and may even noticeably accelerate in this matter. In addition, the escalation of the military conflict on the territory of Ukraine, which provoked the rapid development of the energy crisis in the region, remains a significant factor of uncertainty. Pressure on the euro at the beginning of the week was exerted by uncertain macroeconomic statistics from Europe. The Manufacturing PMI from S&P Global in September showed a decline from 48.5 points to 48.4 points with neutral forecasts. Data from Germany further disappointed the markets: the Manufacturing PMI in September fell from 48.3 points to 47.8 points, while analysts did not expect any changes. Today, the focus will be on European statistics on the dynamics of producer inflation, where current forecasts suggest acceleration in the growth of the Producer Price Index in monthly terms from 4.0% to 5.0%, and from 37.9% to 43.2% in annual terms.


GBPUSD
The GBPUSD pair shows flat trading dynamics during the morning session, consolidating slightly above 1.1300 and updating local highs from September 22. British investors reacted to the government's initiative to cut taxes unprecedented in the past 50 years with sales of the pound, as a result of which the currency corrected to an all-time low against the US dollar, and since the beginning of the year it has lost 20%, but the decision to amend the program suspended the fall in quotations. Despite the fact that, according to officials, the reform is designed to stimulate economic growth in a crisis, it caused a negative reaction from experts who believe that its full implementation could lead to an increase in inflation and the volume of the country's public debt. The day before, the Ministry of Finance announced the abandonment of the initiative to reduce duties for the wealthiest segments of the population (the abolition of the 45% maximum income tax rate). However, the rest of the fiscal policy changes are still in place and the UK government intends to implement them, as well as a program to subsidize electricity bills for households and businesses. Additional support for the instrument on Monday was provided by not the most confident macroeconomic statistics from the US. The Manufacturing PMI from the Institute of Supply Management (ISM) in September showed a decrease from 52.8 points to 50.9 points, while the forecast was 52.2 points. In the UK, the Manufacturing PMI from S&P Global/CIPS adjusted from 48.5 points to 48.4 points with neutral preliminary estimates.


XAUUSD
Gold prices are consolidating near the level of 1.700.0 after active growth the day before, when the quotations were significantly supported by the fact of the decrease in the yield of US bonds, which reacted to the appearance of uncertain macroeconomic statistics from the USA. In particular, the Institute for Supply Management (ISM) Manufacturing PMI in September showed a decrease from 52.8 points to 50.9 points, which was the lowest value since May 2020. The yield on 10-year bonds dropped to 3.587% the day before after reaching 3.804% the day before. Gold was also supported by the fact that the RBA only raised interest rates by 25.0 basis points, and the UK government decided to abandon some of its most criticized fiscal reforms. It also sparked speculation about a more measured rate hike by the Bank of England. It is likely that the agency will not increase the estimated rate of adjustment until the end of the year.
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EURUSD
During the Asian session, the EUR/USD pair is correcting slightly after a steady growth the day before, trading near 0.9960 and holding on to local highs from September 20. The euro is heading towards the psychological level of parity with the dollar, but so far the "bulls" are only acting on the weakening of the US currency, while the fundamental background remains negative. In particular, at the beginning of the week, investors drew attention to a further decline in business activity in the euro area in the manufacturing sector. The S&P Global Manufacturing PMI corrected in September from 48.5 points to 48.4 points, while the same indicator in Germany fell from 49.1 points to 47.8 points amid a decrease in consumer demand for goods, as well as production restrictions due to growth in the cost of electricity, which turned out to be worse than the neutral market forecasts. Today, traders drew attention to the data on producer inflation in the eurozone in August. As expected, in monthly terms, the Producer Price Index rose from 4.0% to 5.0%, and in annual terms it increased from 38.0% to 43.3%, while the forecast was 43.2%. On Wednesday, European investors are waiting for the publication of a block of data on the dynamics of Imports and Exports from Germany, as well as statistics on business activity in the Services sector.


GBPUSD
The pound is slightly reduced during the morning session, retreating from the local highs of September 15, updated the day before. The British currency, like many others against the US dollar, has been showing a smooth corrective growth since last week, receiving support both from technical factors and from a decrease in the yield of US Treasury bonds, as well as from the decision of the United Kingdom government to revise its plans for reducing the fiscal burden after large-scale criticism. In particular, officials are likely to abandon the idea of reducing income tax for the wealthiest segments of the population. The focus of investors on Wednesday is a block of data on business activity in the Services sector from S&P Global. Current forecasts suggest that the indicator will remain unchanged at 49.2 points, but skeptics insist on a further decrease in the level of activity. With the opening of the US session, the focus will shift to similar data from the US, where the release of a report from the company Automatic Data Processing (ADP) on employment in the private sector is also expected during the day.


XAUUSD
Quotes of the XAU/USD pair are being corrected from the local high of September 13, updated the day before, when the instrument consolidated above 1.7 thousand dollars per troy ounce amid a depreciation of the American currency. In particular, investors drew attention to the fall in the yield of government bonds: 10-year bonds fell to 3.615% during trading on Tuesday, while at the beginning of the week the yield exceeded 3.8%. Moderate support for gold on the eve was provided by weak macroeconomic data from the US. Factory Orders in August reflected a zero trend after falling by 1.0% in July, while analysts expected growth to 0.3%. JOLTS Job Openings in August also were disappointing, showing a decline from 11.17 million to 10.053 million. On Wednesday, the market will focus on Automatic Data Processing's (ADP) private sector employment report, as well as the Institute for Supply Management's (ISM) September data set on US service sector business activity.
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EURUSD
The European currency shows weak growth during the Asian session, correcting after the active decline the day before, which did not allow the EUR/USD pair to consolidate on new local highs from September 20. At the moment, the instrument is testing the level of 0.9900 for a breakout, waiting for new drivers to move. During the day, investors will follow the publication of a block of macroeconomic statistics on the dynamics of Factory Orders in Germany and August data on Retail Sales in the eurozone. In the meantime, traders are evaluating last Wednesday's data, which showed a modest 1.6% increase in Exports from Germany after falling 2.1% last month, with preliminary estimates of 1.0%. Imports for the same period added 3.4% after falling by 1.5%, although analysts had projected a value of 0.7%, and the German Trade Surplus in August corrected from 5.4 billion euros to 1.2 billion euros, which was significantly below expectations of 4.0 billion euros. Additional pressure on the positions of the single European currency was also exerted by weak statistics on business activity: for the Services sector, the indicator from S&P Global fell from 48.9 points to 48.8 points in September, contrary to forecasts of 50.2 points.


GBPUSD
The pound shows a weak upward trend against the US currency during the morning session, consolidating near 1.1350 after a rather sharp decline the day before. The US dollar was supported on Wednesday by macroeconomic statistics, while the British currency remained under the pressure of growing uncertainty around the new policy of Prime Minister Liz Truss. The UK government was subjected to widespread criticism against the backdrop of the proposed reform to reduce taxes. Despite the fact that some of the measures have been postponed, Truss still intends to achieve a reduction in the fiscal burden, without specifying how these programs will be financed. Meanwhile, today's macroeconomic data from the UK also contributed to a moderate increase in buying sentiment for the instrument: the index of business activity in the Services sector from S&P Global in September showed a moderate increase from 49.2 points to 50.0 points, while analysts did not expect changes at all, and the Composite PMI from S&P Global/CIPS for the same period also rose from 48.4 points to 49.1 points with the same forecast.


XAUUSD
Gold prices show a slight increase, recovering from an uncertain decline the day before and trying to consolidate above 1720.0; however, the activity of the "bulls" remains only moderate. Pressure on the positions of the instrument yesterday was exerted by macroeconomic statistics on employment in the private sector, as well as the decision to raise interest rates by 50 basis points by the Reserve Bank of New Zealand. After adjusting the indicator by only 25 basis points on Tuesday by the Reserve Bank of Australia, some investors hoped that the world's central banks would begin to weaken the "hawkish" rhetoric, primarily counting on the easing of the US Federal Reserve's policy, but so far there are no serious signals for a change in trend. The attention of traders is gradually shifting to Friday's publication of data on the US labor market. Current forecasts suggest that the national economy created only 250.0 thousand new jobs in September after rising by 315.0 thousand last month, while the Unemployment Rate is likely to remain at its previous level of 3.7%.
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EURUSD
The European currency returned to the decline, testing the level of 0.9800 for a breakdown and developing the "bearish" momentum formed the day before, when the EURUSD pair updated its local highs from September 20. Investors are closing part of long euro positions ahead of the publication of the September report on the US labor market, which, as some experts hope, will help determine the prospects for a further increase in the US Federal Reserve interest rate before the end of this year. Additional pressure on the positions of the single currency was exerted by the uncertain macroeconomic statistics from Europe. In August, Factory Orders in Germany fell by 2.4% from –1.1%, although analysts had expected a reduction of only 0.7%, and in annual terms, the figure lost 4.1% after falling by 13.6% in the previous month; however, it turned out to be noticeably better than forecasts at the level of –11.4%. The volume of Retail Sales in the euro area in August showed a decrease of 0.3% after a decrease of 0.4%, and in annual terms, the rate of decline accelerated from –1.2% to –2.0%, which turned out to be worse than analysts' forecasts at –1.7%. Today, in addition to data from the US, European investors will focus on German statistics on Industrial Production and Retail Sales in August.


GBPUSD
The pound is trading in different directions, consolidating near 1.1150. Trading activity remains subdued as investors await the publication of the final report on the US labor market for September, hoping to receive signals about possible next steps by the US Federal Reserve regarding monetary tightening. Earlier it was reported that the regulator is planning at least one major increase in interest rates before the end of the year, and the growth could reach 1.25% at once. This will become possible only with the publication of strong macroeconomic statistics on the labor market, otherwise officials will try to take a more cautious position. The macroeconomic statistics from Great Britain published on Thursday didn't affect the dynamics of the instrument too much. Nevertheless, the Construction PMI in September showed an increase from 49.2 points to 52.3 points, while the forecast was for a decrease to 48.0 points. Today, the focus of investors' attention will be a quarterly report from the Bank of England, as well as a speech by the representative of the regulator, David Ramsden.


XAUUSD
The XAU/USD pair is correcting at the end of the trading week, retreating from the local highs of September 13, but holding above 1700.0. Moderate pressure on the position of the instrument is exerted by expectations of the publication of the report on the US labor market for September, which will help predict the next steps of the US Federal Reserve in the matter of tightening monetary policy. The next meeting of the US regulator will take place in early November, and preliminary estimates of experts suggest that the interest rate will be increased by 75 basis points, while about 25% of specialists are confident in a softer tightening of 50 basis points. Adjustments by 1.00% or 1.25% are not excluded, but so far there are no formal prerequisites for this. Additional pressure on gold was also exerted by the growth in the yield of ten-year government bonds: the day before, it was fixed at 3.813% after closing at 3.759% a day earlier.
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EURUSD
The European currency shows mixed trading dynamics, consolidating near 0.9730. Market activity remains relatively low as US stock exchanges are closed for Columbus Day. The single currency noticeably weakened in the second half of last week after the publication of Friday's report on the US labor market, which confirmed the commitment of the US Federal Reserve to the course of further tightening of monetary policy. Thus, in September, 263.0 thousand new jobs were created after 315.0 thousand recorded in the previous month. Analysts had expected growth of the indicator by only 250.0 thousand. At the same time, the Average Hourly Earnings in September maintained a monthly growth rate of 0.3%, but slowed down in annual terms from 5.2% to 5.0%. At the same time, the Unemployment Rate fell from 3.7% to 3.5%, while investors did not expect any changes. Weak macroeconomic statistics from Germany put additional pressure on the instrument. Retail Sales fell 1.3% in August after increasing 1.9% a month earlier, while analysts had expected a decline of 1.0%. In annual terms, the decline in sales accelerated from -2.6% to -4.3%, which turned out to be slightly better than experts' forecasts at the level of -5.1%.


GBPUSD
The British pound is trading with multidirectional dynamics, holding near the level of 1.1070. The "bears" took a break after a three-day decline in the instrument, which did not allow the GBP/USD pair to consolidate on new local highs from September 15. In turn, the pound remains under pressure after the publication of a rather strong report on the US labor market for September last Friday, which strengthened investor confidence that the US Federal Reserve will continue its policy of raising interest rates. However, the pace of monetary tightening is likely to depend on the specific situation at any given moment. Investors also expect tomorrow's publication of the report on the UK labor market for August-September. Forecasts suggest that the Average Hourly Earnings excluding Bonus in August could accelerate from 5.2% to 5.3%. At the same time, the Unemployment Rate is likely to remain at the same level of 3.6%, and the Claimant Count in September may fall sharply by 11.4 thousand after rising by 6.3 thousand in the previous month.


XAUUSD
Gold prices are falling at the beginning of the week, developing a "bearish" momentum, formed in the middle of last week, when the instrument updated its local highs from September 12. Pressure on the quotes of the XAU/USD pair is exerted by a strong report on the US labor market published at the end of last week, which gives the US Federal Reserve a certain degree of freedom in the matter of further tightening of monetary policy. The report showed a decrease in the Unemployment Rate from 3.7% in August to 3.5% in September, while Nonfarm Payrolls increased by 263.0 thousand, which was slightly better than the expected 250.0 thousand. According to CME Group surveys, more than 80% of analysts expect the US Federal Reserve to raise the rate by another 0.75% in early November, and about 18% believe that the value will be adjusted by 0.50%. Pressure on gold is also exerted by the actions of other global regulators. In particular, the Bank of England and the European Central Bank (ECB) are also set to continue aggressively raising interest rates as inflationary pressures intensify in the regions.
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Dollar rises as an inflation hedge

Dollar rose on Monday as a hedge against inflation ahead of major US consumer prices today this week. Last Friday, the payrolls report showed the US economy added 263 thousand new jobs in September, beating estimates of 248 thousand, and after adding 315 thousand jobs in August.
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Unemployment fell unexpectedly to 3.5%, beating expectations of staying at 3.7%. Now markets look forward to major US inflation data later this week, which will influence the Federal Reserve's policy decisions.

The dollar index rose 0.2% to 113.03 as of 17:50 GMT, with a session-high at 113.3, and a low at 112.6.
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Sterling rebounds as dollar stalls

Sterling gained ground in European trade, holding above two-week lows against dollar despite ongoing negative pressures on the currency after recent statements by BoE Governor, and negative GDP data. The greenback gave up two-week highs on profit-taking ahead of US producer prices data later today and consumer prices data tomorrow.

GBPUSD rose 0.8% to 1.1057, with the lowest since September at 1.0922, after losing 0.8% yesterday, the fifth loss in a row.
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Andrew Bailey
Bank of England Governor Andrew Bailey said the BoE will end its emergency bonds purchases program next Friday, and asked pension funds managers to rebalance the positions accordingly. The BoE launched an emergency program on September 28 to purchase long-term UK treasury bonds to restore balance and support the market and great volatility back then.


Contraction
Earlier UK data showed the GDP contracted monthly in August by the worst pace in 19 months, hurting risk appetite once more. Such negative outlook for the economy cut chances of a 1% rate hike by the BoE in November.


The Dollar
The dollar index fell 0.2% on Wednesday off two-week highs at 113.59 on active-profit taking against a basket of major rivals. Now investors await important US producer prices data for September, which will offer clues on inflation and will help guide Federal Reserve's policies.
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Sterling climbs nearly 1% despite GDP contraction data

Sterling rose against most major currencies on Wednesday despite some negative UK data. Earlier UK data showed GDP contracted 0.3% m/m in September while analysts expected no change in the growth rate.

The Greenback
The dollar index rose 0.2% to 113.4 as of 17:05 GMT, with a session-high at 113.5, and a low at 113.05. Tomorrow, market await consumer prices data for September. Such data will give a clue about the future directions for the Federal Reserve on monetary policies and rate decisions. Earlier US data showed producer prices rose 0.4% m/m in September, above estimates of 0.2%.

The Federal Reserve will release minutes of the September meeting, at which it decided to hike rates by 75 basis points, the third such hike in a row to 3.25%, the highest since 2008.
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Wall Street declines after inflation data​

US stock indices declined on Thursday amid concerns about a tighter monetary policy by the Federal Reserve following inflation data. US consumer prices rose 8.2% in September, beating estimates of 8.1%, and less than 8.3% in the previous reading. Core prices, excluding food and energy, rose 6.6%, also above estimates of 6.5%, and above the previous reading's 6.3%.​

• Core consumer prices rose 0.6% on a monthly basis, up from 0.4% in August.​
• US unemployment claims jumped to 228 thousand in the week ending October 8 from 219 thousand in the previous reading, while analysts expected 225 thousand.​
• Dow Jones fell 0.7%, or 206 points to 29,004, while S&P 500 shed 1%, or 36 points to 3,540, as NASDAQ declined 1.4%, or 145 points to 10,275.​

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Dollar climbs after a batch of US data

Dollar rose against major currencies on Friday, bolstering the gains following a batch of new data.​

• The data showed retail sales were flat last month, while analysts expected a 0.2% rise.​
• Core sales rose 0.1% last month, beating estimates of a 0.1% dip.​
• Michigan\Reuters consumer confidence index rose to 59.8 in October from 58.6 in September.​
• Recent data this week showed consumer prices rose 8.2% in September, while analysts expected 8.1%, and compared to 8.3% in August.​
• Such data bolsters the case for aggressive policy tightening and rate hikes by the Fed, which threatens a global recession.​

The dollar index rose 0.8% to 113.2 as of 17:56 GMT, with a session-high at 113.4, and a low at 112.1.
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