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Dollar traders seem to be feeling nervous ahead of the U.S. midterm elections since this would gauge confidence in the Trump administration. Meanwhile, sterling paused from its earlier decline as U.K. officials assured that a Brexit deal is close to done.

The Swiss franc, on the other hand, found itself at the bottom of the forex heap while the Loonie drew support from Poloz’s hawkish views.

  • U.S. Markit final services PMI upgraded from 54.7 to 54.8
  • U.S. ISM non-manufacturing PMI dipped from 61.6 to 60.3 vs. 59.3 forecast
  • BOC Governor Poloz: Central bank has positive outlook but monitoring risks closely
  • European Commission wants Italy to revise budget
  • U.K. PM May: Brexit deal 95% complete
  • RBA interest rate decision coming up

Major Events/Reports:

Shaky risk appetite

Investors still seem to be feeling jittery with trade and geopolitical risks in play and the U.S. midterm elections coming up. Equity indices closed mixed:

  • Dow 30 index is up 190.87 points to 25,461.70 (+0.76%)
  • S&P 500 index is up 14.83 points to 2,737.89 (+0.54%)
  • Nasdaq is down 28.14 points to 7,328.85 (-0.38%)

Gold is up, taking advantage of dollar weakness and risk-off action, while crude oil chalked up more losses.

  • The precious metal is up to $1,233.10 per troy ounce (+0.18%)
  • WTI crude oil is down to $62.73 per barrel (-0.65%)
  • Brent crude oil is down to $72.72 per barrel (-0.16%)

Italy told to revise 2019 budget

Nope, Italy’s spending plans ain’t gonna fly with the European Commission as finance ministers from 19 member nations said that revisions need to be made. Their statement indicated:

We look forward for Italy and the Commission to engage in an open and constructive dialogue and for Italy to cooperate closely with the Commission in the preparation of a revised budgetary plan which is in line with the Stability and Growth Pact.

However, Finance Minister Giovanni Tria says that the budget will not change but they are discussing a compromise, insisting that the level of debt will fall at some point. Italy has until November 13 to make revisions and the Commission will send its feedback by November 21.

PM May assures Brexit deal is near

Hopes for a Brexit transition deal were once again lifted on remarks by PM May who once again assured that it is 95% complete.

However, Irish PM Varadkar reportedly rejected the U.K.’s latest pitch, stating that Ireland was open for “a review mechanism” for the border backstop but that “the outcome of any such review could not involve a unilateral decision to end the backstop.”

Now PM May is faced with yet another difficult task to secure the backing of her cabinet to get a transitional deal through.

Major Market Mover(s):

GBP

Sterling recovered slightly from its dismal performance in the earlier trading session as U.K. officials continued to fan Brexit deal flames.

GBP/CHF is up 86 pips to 1.3100 (+0.66%); GBP/JPY rose 83 pips to 147.63 (+0.58%); GBP/USD pulled up to 1.3044 (+0.56%), and GBP/CAD rebounded to 1.7096 (+0.51%).

AUD & NZD

This comdoll duo also found themselves mostly in positive territory as a few risk-off flows faded throughout the session and a bit of dollar weakness came in play.

AUD/CHF is up to .7241 (+0.35%); AUD/USD is up 19 pips to .7212 (+0.26%), AUD/CAD bounced to .9453 (+0.25%); and EUR/AUD is down 14 pips to 1.5818 (-0.08%)

NZD/CHF is up 29 pips to .6698 (+0.34%); NZD/CAD recovered to .8472 (+0.29%); NZD/JPY is up to 75.47 (+0.12%), and EUR/NZD retreated to 1.7102 (-0.13%).

Watch Out For:

  • 12:30 pm GMT: Japanese household spending y/y (1.6% expected, 2.8% previous)
  • 4:30 am GMT: RBA monetary policy statement (Here’s what to expect.)