Forex Today: Asia risk-off back in vogue, Carney´s speech in focus

Forex today witnessed a theme of risk-aversion across Asia this Tuesday, as the sentiment soured on the back of the losses in the Asian equities and the US stocks futures, as the European political worries combined with the US-Saudi geopolitical tensions dent the appetite for the risk assets.

As a result, the Antipodeans remained heavy near multi-week lows, with the Kiwi emerging the weakest below the 0.6550 level. The Aussie headed to October lows while the USD/JPY changed course and dropped back towards the 112.50 support area amid increased safe-haven bids for the Yen. The US dollar remained broadly bid and consolidated near weekly highs above the 96 handle, as risk sell-off underpinned.

Amongst the commodities, both crude benchmarks traded weaker, with the US oil falling back on the $ 69 handle while Brent tested $ 79.50 level. Gold prices on Comex held onto the recent gains above $ 1225.

Main topics in Asia

Iron ore prices are back on the high side - BI Australia

UK's Hammond set for GBP 13bn a year windfall in budget - FT

London housing slump to survive for some time - Bloomberg

White House: Trump wants additional 10% middle-income tax cut

Shanghai Composite drops in early trade, recovery rally stalls near 61.8% Fib

Nikkei hits lowest level since Aug. 21, trades well below 200-day EMA

Key Focus ahead

Tuesday also sees a light macro calendar, as all the action begins in the second-half of this week, with the key focus likely to be the ECB policy decision and US Q3 advance GDP numbers.

For today, the German PPI, UK CBI industrial trends survey and BOE Chief Economist Haldane´s speech will offer some trading impetus in the European session while the BOE Governor Carney´s speech is due during the NA trades, although his speech is likely to be on the topic of artificial Intelligence and may not have any impact on the markets.

Also, of note will be the speeches by the FOMC members Kashkari, Bostic and Evans among a couple of other US minority data releases. At 1400 GMT, the Eurozone consumer confidence data will be reported while the API weekly crude stocks data will be published at 2030 GMT.

The macro news will continue to play a second fiddle to the Italian political and Brexit-related headlines while the US-Saudi tensions will also continue to drive the market sentiment.

EUR/USD: 1.1422 (76.4% Fib) back in focus, EU's Centeno confident of Italy budget deal

The focus is back on the key support of 1.1422, which is the 76.4% Fibonacci retracement of the rally from 1.1301 to 1.1815. The bearish technical setup will likely play out today as Italy's populist government is not backing away from its plan to hike public spending.

GBP/USD on the wrong side of 1.3000 as Brexit angst returns to the fold

With Brexit at the forefront once again, Tuesday's economic calendar is looking thin for the upcoming session, though the Bank of England's (BoE) own Mark Carney will be speaking in Canada at the Annual Machine Learning and Market for Intelligence Conference.

Market Comment | Cautious tone remains in an eventful week. ECB meeting preview

An eventful week will come: the ECB, Turkey’s and Colombia’s Central Bank meetings (we do not expect any change in any of them), while investors’ focus will remain on Brexit talks and the S&P sovereign credit rating for Italy at the end of this week.

BoC min-preview: Will raise policy rate 25bp to 1.75% - Rabobank

“We fully expect the BoC to raise the policy rate 25bp to 1.75% on Wednesday, 24th October.”

US mid-term elections to send US into gridlock? – Goldman Sachs

David Kostin, Goldman's Chief US Equity Strategist, offers his take on the upcoming US mid-term elections due on November, 6 and its impact on the US equity markets.