The FOMC is the highlight of today, but Japan's drama continues to grip the market. The Ministry of Finance has warned of the possibility of material interventions in the foreign exchange markets, while the BOJ purchased bonds in an unexpected operation the day after it downgraded its 1.0% cap.
The yen has a slight bias towards firmer trading. The Swiss Franc is also slightly firmer. However, the other G10 currency are a bit weaker.
Gold, which had a negative outside day yesterday, increased its losses up to $1975 and then stabilized.
Yesterday, December WTI dropped to near 4-week lows near $80.75 per barrel. It is now trading at around $82.
Market participants continue to try and decipher Bank of Japan intentions. Kanda, the MOF official, warned in Tokyo early this morning that officials were prepared to act if needed. A few hours later, the BOJ bought Japanese government debt in an unscheduled transaction.
The BOJ was a major factor in the biggest yen sell-off since six months. The dollar rose 1.70%, approaching the high of last year (JPY152).
The Australian dollar, which had been stalled near $0.6385, has now pulled back towards support at $0.6315. The Australian dollar is consolidating and trading towards $0.6350.
Yesterday, the preliminary estimate for October's Eurozone CPI was reported at 2.9%. This is the lowest level since June 2022. The core rate for the eurozone is 4.2%. This is its lowest level since 2022.
Yesterday, the euro reached a five-day peak near $1.0675 a few hours before CPI and Q3 growth figures that were weaker than expected.
The euro trended down until the European markets closed. The euro continues to trade heavier, and has extended yesterday's loss up to $1.0545 (near Monday's low).
The final UK manufacturing PMI for October fell to 44.8, from a preliminary estimate of 45.2, but was still slightly higher than the final reading of 44.3 in September. The contraction eased again for the second consecutive month.
The BOE will meet tomorrow.
Yesterday, sterling peaked at $1.22 during early North American trading and was then sold to $1.2120. Sterling hasn't been able rise above $1.2160 since the low was established. The currency is still above the low of yesterday.
There are a lot of US data available ahead of the FOMC conclusion. Three groups of data are available. First, we have the data on the labor market. The second report is a real sector report: September's construction spending, and October's auto sales. Today, the third category of data is surveys.
According to the prices on the swaps and Futures markets, traders believe that the Fed has finished and the next step will be a cut.
Canada's economy continues its disappointing performance. In July and August, the economy stagnated. Economists expected a small growth in both of these months.
Today is the manufacturing PMI. This is not a typical market mover.