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FINLAND JOBLESS RATE FALLS IN SEPTEMBER



Finland's jobless rate decreased in September, figures from Statistics Finland showed on Tuesday.

The unemployment rate for the 15 to 74 age group fell to 7.0 percent in September from 7.5 percent in the same month last year. In August, jobless rate was 6.5 percent.

The number of unemployed persons decreased to 191,000 in September from 203,000 in the last year.

The employment rate rose to 71.7 percent in September from 71.3 percent in the same month last year. The number of employed persons grew by 17,000 from a year ago to 2.52 million.

On a seasonally adjusted basis, unemployment rate fell to 7.6 percent in September from 7.7 percent in August.

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AUSTRALIA INFLATION DATA DUE ON WEDNESDAY



Australia will on Wednesday release Q3 numbers for consumer prices, highlighting a modest day for Asia-Pacific economic activity. Inflation is tipped to rise 0.8 percent on quarter and 3.1 percent on year after gaining 0.8 percent on quarter and 3.8 percent on year in the three months prior.

Australia also will see October results for the business confidence index from ANZ; in September, the index score was -7.2.

New Zealand will provide September figures for imports, exports and trade balance. In August, imports were worth NZ$6.49 billion and exports were at NZ$4.35 billion for a trade deficit of NZ$2.144 billion.

China will see September numbers for industrial profits; in August, profits surged 49.5 percent on year.

Thailand will release September data for industrial production; in August, production was down 4.15 percent on year.

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AUSTRALIA EXPORT PRICES CLIMB 6.2% ON QUARTER IN Q2



Export prices in Australia were up 6.2 percent on quarter in the third quarter of 2021, the Australian Bureau of Statistics said on Thursday - slowing from the 13.2 percent jump in Q2.

Import prices rose 5.4 percent on quarter, accelerating from 1.9 percent in the three months prior.

On a yearly basis, export prices skyrocketed 41.0 percent and import prices jumped 6.4 percent.

The main contributors to the jump in export prices included coal, coke and briquettes; gas, natural and manufactured goods; non-ferrous metals; meat and meat preparations; and petroleum, petroleum products and related materials.

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AUSTRALIA PRIVATE SECTOR CREDIT GAINS 0.6% IN SEPTEMBER



Private sector credit in Australia was up 0.6 percent on month in September, the Reserve Bank of Australia said on Friday - matching expectations and unchanged from the August reading.

On a yearly basis, credit jumped 5.3 percent - accelerating from 4.7 percent in the previous month.

Housing credit rose 0.6 percent on month and 6.5 percent on year, while personal credit fell 0.6 percent on month and 5.3 percent on year and business credit gained 0.7 percent on month and 4.6 percent on year.

Broad money gained 1.3 percent on month and 7.9 percent on year.

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AUSTRALIA NEW HOME LOANS SINK 2.7% IN SEPTEMBER



The total value of owner-occupied home loans in Australia was down a seasonally adjusted 2.7 percent on month in September, the Australian Bureau of Statistics said on Monday - coming in at A$20.69 billion.

That missed expectations for a decline of 2.0 percent following the 6.6 percent plunge in August.

Investment lending was up 1.4 percent on month at A$9.62 billion and overall home loans fell 1.4 percent on month to A$30.31 billion.

On a yearly basis, owner-occupied home loans gained 20.8 percent, while investment lending skyrocketed 83.2 percent and overall home loans jumped 35.5 percent.

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SOUTH KOREA INFLATION RISES IN OCTOBER



South Korea's consumer prices increased in October, figures from Statistics Korea showed on Tuesday.

The consumer price index rose 3.2 percent year-on-year in October, after a 2.5 percent increase in September. This was in line with economists' expectation.

Excluding food and energy, core consumer prices increased 2.4 percent in October, following a 1.5 percent rise in the preceding month.

On a monthly basis, consumer prices rose 0.1 percent in October, after a 0.5 percent increase in the previous month.

The core CPI grew 0.3 percent monthly in October, after a 0.1 percent fall in the prior month.

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Forex Analysis & Reviews: Is the Bank of England ready for a rate hike? What will happen to the pound



The central event of the week, which will determine the further movement of the dollar in pairs with other major currencies, not only in the short term, but also in the long term, is the Federal Reserve meeting. If we talk about GBP/USD, then another important catalyst for the movement is the Bank of England meeting. The central bank will announce its verdict on further monetary policy on Thursday.

If the Fed initially said that the rate hike is still far away, then the British central bank is more determined here. There are suggestions that the BoE will become the first central bank from developed countries to tighten policy. Such forecasts are not taken out of thin air, but dictated by representatives of the central bank. So, how big are the chances of a rate hike by the BoE?

The main reason for the abrupt change in the tone of the head of the Bank of England and the signals for tightening policy that have appeared is, of course, accelerating inflation. The indicator exceeded the target almost twice. The goal is 2%, the actual value is 3.1%. At the same time, all economists' forecasts agree that this is far from the final result, the indicator will exceed 4%, and by the end of the year it will reach 4.4%.

Customs regulations due to Brexit, an energy crisis, a shortage of truck drivers are just some of the reasons that are causing inflation to accelerate in the country. Local authorities are adding fuel to the fire. The country's chief treasurer, Rishi Sunak, last week announced tax cuts for pubs and restaurants and an additional £75bn for infrastructure, skills development and support for the poor. Meanwhile, previous statements were about tax increases. This step had to be taken due to the correction of the assessment of economic growth and damage from the pandemic.

Pro-inflationary forces are looming over England and the government is increasing spending. This means that the likelihood of a rate hike by the end of this year increases significantly. Investors estimate this step at 85%. As soon as the BoE begins the process of tightening policy, the pound will receive an impetus for growth. It is possible that this will happen on November 4. If the tone of the minutes is soft, the pound will drop.

Since BoE Governor Andrew Bailey has already signaled to the markets about a possible tightening of policy, this will not come as a surprise and a big surprise. For a more tangible growth of the pound, it is necessary for the central bank to act more harshly than market players now assume.

Three high-ranking representatives of the central bank, apparently, are ready to vote for a rate hike. However, the volume of the quantitative easing program is likely to remain at the same level - 875 billion pounds. This means that there are no strong drivers for the growth of the British currency at the moment.

Technical picture

The growth of the GBP/USD pair has slowed down. As confirmation that bullish sentiment for the pound will prevail in Forex again, it will be possible to consider a breakdown of the mirror level of 1.3641. Further, the road to the levels of 1.3686, 1.3723 and 1.3758 will open for bulls.

Otherwise, the bears will have the initiative and the level of severity, pulling the pound to 1.3594, 1.3568 and 1.3546.

Scotiabank believes that the central bank at its November meeting will nevertheless leave its policy unchanged. A rate hike this year may still occur, but the BoE, analysts say, will want to limit expectations for next year's rate. It is rather difficult to do this at the same time as the rate hike.

A downward test of the GBP/USD pair at 1.3600 is possible, but it can act as a strong support, and the next one is located at 1.3585. The breakthrough will make it possible to retest the level of the end of September - 1.3450.

The pound will be completely under the influence of the dollar until the BoE meeting.

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Forex Analysis & Reviews: Gold sharply surged and recovered all its losses yesterday



Gold made a sharp reversal following the disappointing decline on Wednesday to a 3-week low on Thursday. It rapidly rose in price and approached the key level of $ 1,800.

After the Fed's monetary policy meeting ended on November 3, the market was getting ready for a hawkish statement from the regulator.

In view of this, gold prices sharply declined quickly, received an additional boost from strong US employment data. On Wednesday, quotes sank by 1.4%, falling to their lowest level since October 12.

The situation changed after the final speech of the Fed Chairman. Jerome Powell made it clear that there is absolutely no connection between the upcoming reduction in asset purchases and a potential increase in interest rates. Moreover, he stressed that the central bank is not considering raising them in the near future.

This dovish remark of the Fed Chairman, who took a less rigid than expected position, literally inspired gold. The metal left the red zone after the close of trading on Wednesday and moved to a steady rise, which continued on Thursday.

On November 4, the noble asset showed the strongest intraday growth in 3 weeks. The bullion rose by 1.7%, or $29.60 yesterday, closing the session at $1,793.50.

Meanwhile, silver's value has also noticeably increased. Quotes rose 2.9%, or 68 cents, ending trading at $23.911.

In addition to the comments of the Fed's head, the precious metals market was also helped by the Bank of England's statement yesterday to recover. The regulator announced that it will not rush to increase interest rates and keeps them at the same level of 0.1% for the time being.

The announcement surprised investors, as many were betting that the British regulator could become the first major central bank to raise rates after the pandemic.

The unexpected decision of the Bank of England provoked a decline in British bond yields. Along with the fall of US bonds, this provided strong support for gold, analyst Fawad Razaqzada commented on the situation.

The expert also added that for a more significant strengthening of the precious metal, it is now important for the US currency to weaken its position. However, it is still moving along an ascending route. Yesterday, the dollar index rose by 0.4% against its main competitors. Due to the less aggressive than expected tightening of the Federal Reserve policy, as well as the emerging increase in interest in risky assets such as stocks, Razaqzada predicted that the US dollar may begin to decline, and this should contribute to the positive dynamics of gold and silver.

Market strategist George Milling-Stanley also draws investors' attention to the records that American stock indexes continue to set. In his opinion, the market is overheated and is far ahead of economic indicators, and stock prices are significantly higher than their real value.

At the same time, the expert does not expect a serious correction in the stock markets. He believes that even a small downward trend will be enough to bring gold back to the forefront in portfolios.

J. Milling-Stanley emphasized that the precious metal is now more attractive as a protective instrument against risks than as a hedge against inflation. And although the growing inflationary pressure has a positive effect on gold quotes, the prospects for the metal in the current context are still uncertain.

In order for gold to return to an annual yield of 16% as a result of high inflation, which, for example, was observed during the period of increased price growth in the 1970s, the analyst concluded that inflation should be currently above the current level for at least 4 months.

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US dollar is worried about the current inflation



The US dollar is worried about the unexpected turn in inflation after rising on the Fed's decision last week to start curtailing stimulus. In such a situation, analysts believe that the indicated currency runs the risk of seriously collapsing.

Currently, the US dollar is frozen in anticipation of inflationary surprises, which the American economy is rich in. Last Wednesday, the Fed kept the rate in the range of 0-0.25% and announced a reduction in the volume of asset purchases ($ 15 billion in November and December 2021). This is in line with market expectations, although many feared a tightening of the regulator's rhetoric. At the same time, the Fed still considers high inflation to be a temporary phenomenon.

According to Fed Chairman, Jerome Powell, the existing inflation rate does not correspond to price stability. He explains this phenomenon not by the US labor market's overheating, which contributes to the transition of high inflation into a stable form, but with the uneven recovery of the national economy and with disruptions of global supply chains. In view of this, the timing of the normalization of the US economy remains uncertain.

Experts believe that the current situation slows down the dynamics of the US dollar. At the beginning of the new week, the USD shows stability but remains below the highs of last Friday. According to analysts, the prolonged presence of the US dollar near two-year peaks hinders its further growth. It should be noted that after a weekly reduction, market participants increased their long positions on the greenback.

Last Friday, the US dollar managed to reach a 15-month high of 1.1513 after the publication of strong data on the US labor market. However, the triumph turned out to be temporary. The US dollar stabilized at the level of 1.1566. On Monday morning, the EUR/USD pair was trading near the level of 1.1562, trying to catch up, but without much success.

If American companies increase their prices, high inflation in the United States will last much longer than the Fed expects. Most organizations have to raise prices to protect their profits amid constant labor costs. If negative trends intensify, the central bank will have to raise federal funds rates, which will support the US dollar.

Experts think that the negative impact of inflation on the USD in the near future is unlikely. Market participants are confident that the Fed controls its level and is ready to maintain a soft monetary policy. Investors are wary of the regulator's uncertainty about the temporary nature of inflation and the timing of its return to the target 2%. Against this background, the risk of an error in MP increases. This will lead to a chain of incorrect economic calculations that can bring down the US dollar. However, the Fed may reconsider its attitude to inflation as a temporary factor in 2022. Previously, J. Powell emphasized that the existing monetary policy will be adjusted depending on current economic data.

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US dollar is trying to consolidate its position, leaving EUR/USD pair in a narrow range



The US employment data, released at the end of the previous week, allowed the greenback to renew its annual highs at 94.60 points

The data published on Friday showed the highest US job growth by 531,000 in three months in October and a decline of the unemployment rate to its lowest level by 4.6% since March 2020.

This data contributed to the USD strengthening, pushing EUR/USD to a 15-month low at 1.1514.

However, the pair was able to recoup its losses rather quickly and recovered to 1.1570 amid a wide dollar rebound.

The major Wall Street indices stimulated bulls in EUR/USD, which gained 0.2-0.6% on average and closed the past five days at new record highs.

The decline of the dollar was intensified by a 10-year Treasuries yield dropping to a 5-week low by 1.4360%.

Moreover, the greenback had been strengthening since the beginning of the week and investors decided to take profits before the weekend.

The dollar started the week positively, taking advantage of some weakening risk and a rebound in 10-year Treasury yields to 1.50%. However, this momentum did not continue. After updating to local highs around 94.30 the US currency resumed its decrease.

Meanwhile, the EUR/USD is struggling to extend its recovery from its lowest levels since July 2020, trading in a narrow range on Monday.

The publication of significant EU and US macro statistics is not scheduled for today. Therefore the main currency pair is influenced by the greenback dynamics.

Besides, the fundamental picture is still favorable for the dollar compared to the single currency. It means that EUR/USD recovery attempts may be held back by technical levels.

Experts at Westpac believe that strong data on the US labor market, the Fed's decision to begin winding down the asset buyback program, as well as the approval of the US House of Representatives the infrastructure investment plan will support the dollar.

According to experts, the divergence in rates of the US and European Central Banks will also favor the greenback.

At last week's FOMC meeting Federal Reserve Chairman Jerome Powell said that it was not the suitable time to raise interest rates as the national labor market had not fully recovered. He added that according to forecasts, it would happen no earlier than mid-2022. Until then, the Fed will display patience.

The data expected on Wednesday will likely point to a 5.8% year-over-year rise in US consumer prices in October. This will be a new major test for the US Central Bank. Its management insists on not rushing to raise rates.

Goldman Sachs, which recently changed its expectation of the Fed rate hike from the third quarter of 2023 to July 2022, believes an earlier hike could provide support to the dollar.

So far, the US Central Bank has promised to keep borrowing costs low despite the acceleration of inflation in the country.

As for the ECB, last Wednesday its head Christine Lagarde said that the regulator had previously set out clear conditions for raising interest rates and they would not be fulfilled in 2022.

According to strategists at Scotiabank, the EUR/USD pair has probably entered the consolidation phase. However, the break of 1.1500 is ahead and the test of 1.1400 will follow quickly.

The strategists said that a sharp fall of the pair for the last two weeks had strengthened the probability of testing 1.1500 amid the downward pressure since the end of May. They noted that the next support was only at 1.1422, and then at 1.1400, and its break would target EUR/USD at 1.1100. The strategists added that resistance was at 1.1600 and 1.1650.

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