Risk sentiment remains steady and contained as the week draws to a close, with markets showing little volatility ahead of the weekend. Equities are generally stable, helping to maintain a cautious but calm environment before next week’s key events, particularly the upcoming FOMC meeting.
In the foreign exchange market, major currencies are mostly unchanged. The Australian dollar and New Zealand dollar have edged slightly higher, with AUD/USD rising 0.4% to 0.6635, reaching its highest level since mid-September. There appears to be little resistance to a potential attempt at testing the 0.6700 level again.
The US dollar is ending the week on firmer footing following a sluggish performance earlier. EUR/USD is flat around 1.1648, while USD/JPY has seen a modest 0.1% increase to 155.18, recovering from a session low of 154.34. The 155.00 level is proving to be a significant floor, as buyers continue to prevent a decisive break and daily close below this mark.
Equity markets reflect a similarly subdued tone. European indices are posting modest gains, aiming to finish the week on a positive note after a setback at the start of the week. US futures are also slightly higher, with S&P 500 futures up 0.2%, as Wall Street gradually moves toward record highs again.
In other markets, bond yields are largely unchanged amid subdued demand. Gold prices have climbed back above $4,200, although momentum remains limited despite a recent breakout from a technical flag/wedge pattern. WTI crude is down 0.2% to $59.54, and Bitcoin has slipped 1.0% to $91,205.
Key economic releases included the Eurozone final Q3 GDP growth, which was confirmed at 0.3% quarter-on-quarter, slightly above the preliminary 0.2% estimate. Germany’s industrial orders for October rose 1.5% month-on-month, well above the expected 0.4%. France’s trade balance improved slightly to a deficit of €3.92 billion from €6.58 billion previously. UK Halifax house prices in November were flat, showing no change compared with the prior 0.6% monthly rise.
Italy’s statistics office has cut its GDP growth forecast for 2025 to 0.5%. Meanwhile, the Swiss government has adopted a draft negotiating mandate for a trade agreement with the United States. On the policy front, India’s rupee weakened again following the Reserve Bank of India’s recent rate cut, with the currency’s trend remaining negative. RBI Governor Malhotra emphasised that market forces would determine currency levels. In Japan, the economy minister left monetary policy decisions to the Bank of Japan, while the chief cabinet secretary promised appropriate measures against disorderly foreign exchange moves. China’s commerce ministry dismissed reports that it would step up efforts to boost consumption.
With the absence of the US non-farm payrolls report this Friday, traders have fewer catalysts to digest before the weekend. Attention will now shift to a packed schedule of central bank meetings next week, with the FOMC in particular likely to drive significant market activity.
Original Source: Justin Low of investinglive.com
