The Morning Update

The USD holds steady, oil prices slip, equity markets are up, and US yields rise as investors focus on the key US inflation report. The U.S. dollar remains steady but under pressure as investors position for a widely expected Fed rate cut next week. Broader risk-on sentiment, supported by rising global equities and firm commodity markets, continues to weigh on the greenback. Traders are now focused on the upcoming PCE inflation release — the Fed’s preferred gauge of price pressures — which is expected to confirm that conditions remain supportive of further policy easing. Global equity markets are pushing higher as investors grow more confident that an imminent Fed rate cut will help extend the year-end rally. Softer yields and improving risk appetite are supporting gains across U.S., European, and Asian indices, with tech and cyclicals continuing to lead the advance. While sentiment is broadly upbeat, valuations remain elevated, leaving markets sensitive to incoming economic data and policy signals. Elsewhere, oil prices slipped as improved risk appetite and a softer dollar tempered demand for energy markets, while gold firmed slightly as traders positioned ahead of key U.S. inflation data. Bitcoin weakened toward the $91,000 level, reflecting fading momentum in crypto markets ahead of next week’s Fed decision. Meanwhile, copper surged to a fresh all-time high, supported by tightening supply conditions and upgraded forecasts tied to expectations of imminent U.S. rate cuts. In focus today, the CAD Jobs report, the US Core PCE Price Index and the Michigan Consumer Sentiment Index will help provide direction to currency markets.

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In the news. US stocks set for double-digit gains in 2026, say Wall Street banks. Chinese challenger to Nvidia surges 425% in market debut. Trump announces 'historic' peace treaty between Rwanda & DR Congo. UK workers set to get unlimited compensation for unfair dismissal. Merz rushes to Brussels to twist De Wever's arm on the Ukraine loan. Warner Bros. begins exclusive deal talks with Netflix. The US urged Europeans to oppose the EU plan for a loan to support Ukraine. Stellantis to get Canada default notice after moving Jeep line to the US. Shell-led LNG Canada's second processing unit still down. Putin talks with Modi on oil, trade and arms.

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In currency markets. The Australian dollar is firmer as steady commodity prices and an improved global risk tone support demand for higher-beta currencies. The South African rand is also strengthening, helped by a narrower current-account deficit and renewed investor confidence following the country’s eurobond issuance. Meanwhile, the Chinese yuan remains steady, with state-owned banks stepping in to moderate recent appreciation and manage currency volatility. CNY are steady, while INR eased 0.15% against the USD. Trading currencies turn positive, with JPY, KWD, NOK, & DKK flat, CZK, PLN, MXN, CHF & SEK up 0.1%, USD & ZAR gaining 0.25%, and AUD strengthening 0.45% against the USD.

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In commodity markets. Oil, Natural Gas, & Soybean prices slipped 0.2%. Gold prices firmed 0.25%. Silver prices rallied 2%. Copper prices strengthened 1.3%. Coffee prices weakened by 0.9%, and Wheat prices eased by 0.5%.

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CAD is steady near a five-week high, supported by firmer commodity prices and a stronger tone across domestic equity markets. Recent upside surprises in Canadian macro data — including stronger-than-expected GDP and prospects for increased fiscal spending — have helped bolster sentiment ahead of Friday’s labour market report. Economists expect a modest 5,000-job pullback in November and a slight rise in the unemployment rate to 7% from 6.9%. However, this comes after two months of robust job gains, making the report an important gauge of whether the labour market is cooling enough for the Bank of Canada to remain on hold comfortably next week.

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EURCAD is trading broadly flat as contrasting forces on both sides of the cross leave neither currency with a clear directional advantage. The euro is holding steady after stronger eurozone GDP and employment readings, while the Canadian dollar is supported by firmer commodity prices and improving domestic macro momentum ahead of the jobs report. With both the ECB and BoC expected to remain on hold in the near term, and markets awaiting key U.S. PCE data for broader risk cues, EUR/CAD is likely to stay range-bound for now.

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EUR is trading broadly flat near 1.1650 as earlier gains faded, even after eurozone GDP and employment data showed a firmer-than-expected pickup in economic momentum. Growth accelerated to 0.3% in Q3 while employment strengthened both quarterly and annually, underscoring a more resilient backdrop than previously assumed. Markets are now squarely focused on the Fed’s preferred inflation gauge — the U.S. PCE Price Index — with trading activity steady as investors await confirmation that price pressures remain contained ahead of next week’s pivotal policy decision.

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GBPEUR is steady as both currencies draw support from balanced but diverging policy expectations. Sterling benefits from reduced UK budget uncertainty and firm Fed-driven dollar weakness, though prospects of further BoE easing at its next meeting cap gains. The euro remains underpinned by resilient eurozone data and expectations that the ECB will hold policy steady, keeping the cross confined to a narrow range.

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GBP is edging higher towards 1.3350, supported by persistent softness in the U.S. dollar as markets maintain firm expectations for a Fed rate cut next week. Sterling continues to trade with a positive bias following the removal of UK budget uncertainty, though expectations of a more dovish Bank of England later in the year temper the move's strength. With traders awaiting the Fed’s preferred inflation gauge, the U.S. PCE Price Index, GBP/USD remains steady as markets hold back from taking large positions ahead of key data.