Insights 
VT 
Markets begin the week on a cautious note as traders brace for a packed schedule of central bank meetings, featuring the Federal Reserve, the Bank of Japan, and the European Central Bank. The US Dollar Index (USDX) holds near 98.80 after retreating from 99.28, while gold steadies around USD 4,190 following a modest correction.
The coming days could bring heightened volatility if the Fed delivers its much-anticipated 25–50 basis-point rate cut, and if the Bank of Japan hints at a possible lift-off in December. Meanwhile, equity markets will keep a close watch on the quarterly earnings reports from major tech giants: Apple, Microsoft, Alphabet, Meta, and Amazon, which could set the tone for broader market sentiment.
Central Banks In Focus
Federal Reserve: Policy Pivot Approaching
Investors are largely expecting a 25-basis-point rate cut from the Fed at its October meeting, though a 50-basis-point move remains on the table. The upcoming Advance GDP figures (forecast at 3.0% quarter-on-quarter versus 3.8% previously) and Core PCE data (expected at 0.2% month-on-month) will be key in determining whether the Fed’s dovish stance remains warranted.
A softer tone from the Fed could add further downward pressure on the dollar while supporting gold and risk assets. However, traders may stay restrained until Chair Jerome Powell’s post-meeting comments shed light on how aggressive the easing cycle might be.
Bank Of Japan: December Hike In Sight
Japan’s inflation remains above target, with September’s core CPI holding at 2.9% year-on-year and the October services PMI coming in at 52.4, evidence that domestic demand remains firm. On the other hand, manufacturing activity continues to lag, with the PMI slipping to 48.3, justifying the Bank of Japan’s cautious tone.
Markets now expect a “hawkish hold” at this week’s meeting, with the first interest rate increase, potentially to 0.75%, becoming a more probable scenario in December.
Should the Fed begin cutting rates while the BoJ tightens policy later in the year, the resulting divergence could narrow the yield gap between the US and Japan, placing additional downward pressure on the USD/JPY pair as we head towards year-end.
Key Symbols To Watch
– XAUUSD
– USDJPY
– SP500
– USOIL
– USDX
Market Movements Of The Week
USDX is currently around 98.80, facing resistance at 99.28 and 99.80. A dovish Fed cut could push USDX below 98.50. However, a surprise 25 bps cut or cautious tone may stabilise it above 99.00.
USDJPY is trading above 153.20; a hawkish BOJ could drive the pair lower toward 151.80. If the Fed cuts aggressively, downside pressure could intensify. Resistance seen near 153.80–154.00 if BOJ holds steady.
Gold retreated after testing USD 4,190 resistance. A move above USD 4,200 could reopen gains toward USD 4,275. Support lies near USD 4,000. Watch PCE data for direction.
SP500 printed new highs with immediate support at 6,750. Earnings from big tech will guide sentiment. Sustained breakout above 6,800 keeps the uptrend intact.
USOil is consolidating near $61.00–60.30 support zone. A break above $62.50 could target $65.00. Demand concerns remain tied to global growth data.
Key Events This Week
27 October
1. RBA Gov Bullock Speaks
Watch tone for policy bias amid inflation pressures.
29 October
1. Australian CPI y/y, Forecast: 3.10%, Previous: 3.00%
A hot print could extend AUD gains ahead of the Nov meeting.
2. Canadian Overnight Rate, Forecast: 2.25%, Previous: 2.50%
BoC likely to pause. Focus on forward guidance.
30 October
1. US Federal Funds Rate, Forecast: 4.00%, Previous: 4.25%
25–50 bps cut expected. The tone will steer the USD reaction.
2. Japanese Policy Rate, Forecast: 0.50%, Previous: 0.50%
Hawkish hold expected. Watch for December hints.
3. US Advance GDP q/q, Forecast: 3.00%, Previous: 3.80%
Growth cooling could validate Fed easing bias.
4. European Main Refinancing Rate, Forecast: 2.15%, Previous: 2.15%
ECB on hold. Focus on inflation commentary.
31 October
1. US Core PCE Price Index m/m, Forecast: 0.20%, Previous: 0.20%
Key inflation gauge for Fed trajectory.
