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Markets start the week on cautious footing ahead of a heavy central-bank lineup that includes the Federal Reserve, Bank of Japan, and European Central Bank. The dollar index (USDX) remains near 98.80 after retreating from 99.28, while gold hovers around $4,190 following a corrective pullback.
The upcoming days could see sharp repricing if the Fed delivers a widely anticipated 25 to 50 bps cut and the BoJ signals a December lift-off. Equity traders are also eyeing mega-cap earnings from Apple, Microsoft, Alphabet, Meta and Amazon, which could sway broader sentiment.
Central Banks in Focus
Federal Reserve: Policy Pivot in Sight
Markets currently price a 25 bps Fed rate cut at the October meeting, with a smaller probability of a deeper 50 bps move. The Advance GDP report (forecast 3.0% q/q vs 3.8% prior) and Core PCE (expected 0.2% m/m) will test whether the easing narrative by the Fed remains justified.
A dovish Fed cut could weaken the dollar further, lifting gold and risk assets, though traders may stay cautious until Chair Powell’s post-meeting guidance clarifies the pace of future easing.
Bank of Japan: December Hike Base Case
The inflation rate of Japan remains above the 2% target, with September core CPI at 2.9% y/y and October services PMI at 52.4, underscoring resilient domestic demand. However, weak manufacturing data (PMI at 48.3) supports a cautious approach. Markets largely expect a “hawkish hold” this week, with the first rate hike (to 0.75%) now seen as more likely in December.
This divergence of Fed cutting while BoJ tightens later could narrow the USDJPY rate gap and pressure the pair lower into year-end.
Upcoming Events
| Date | Currency | Event | Forecast | Previous | Analyst Remarks |
| 30 Oct | USD | Federal Funds Rate | 4.00% | 4.25% | 25–50 bps cut expected; tone will steer USD reaction. |
| 30 Oct | JPY | BoJ Policy Rate | 0.50% | 0.50% | Hawkish hold expected; watch for December hints. |
| 30 Oct | USD | Advance GDP q/q | 3.00% | 3.80% | Growth cooling could validate Fed easing bias. |
| 31 Oct | USD | Core PCE Price Index m/m | 0.20% | 0.20% | Key inflation gauge for Fed trajectory. |
Key Symbols to Watch for the Week
Gold (XAUUSD)
- Gold retreated after testing $4,190 resistance.
- A move above $4,200 could reopen gains toward $4,275.
- Support lies near $4,000
- Watch PCE data for direction.
US Dollar Index (USDX)
- Currently around 98.80, facing resistance at 99.28 and 99.80.
- A dovish Fed cut could push USDX below 98.50.
- A surprise 25 bps cut or cautious tone may stabilise it above 99.00.
USDJPY
- 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 to 154.00 if BoJ holds steady.
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
- Consolidating near support zone between $61.00 and $60.30.
- A break above $62.50 could target $65.00.
- Demand concerns remain tied to global growth data.
Bottom Line
As the new week unfolds, the market focus sharpens on upcoming policy decisions from the Fed and BoJ, both could recalibrate major currency pairs. At the same time, gold and the Japanese yen remain highly reactive to shifts in yield spreads and inflation dynamics, underscoring their role as barometers of macro sentiment. Meanwhile, a packed calendar featuring U.S. Core PCE data and heavyweight tech earnings promises to inject fresh volatility across global markets.
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