Central bank speakers in the limelight

The US Dollar Index pulled away from the 2021-high it set at 94.62 on Friday but managed to close the second straight week in the positive territory, supported by the upbeat October jobs report. In the absence of high-tier macroeconomic data releases, markets started the new week in a quiet manner and investors will keep a close eye on central bank speakers on Monday. FOMC Chairman Jerome Powell will deliver the opening remarks at a virtual conference titled ‘Gender and the Economy Conference’. New York Federal Reserve President John Williams, Fed Vice Chair Richard Clarida, Fed Governor Bowman and Bank of England (BoE) Governor Andrew Bailey will also be speaking later in the day.

On Friday, the US Bureau of Labor Statistics announced that Nonfarm Payrolls (NFP) rose by 531,000 in October, surpassing the market expectation of 425,000. Wall Street’s main indexes finished the week at new all-time highs but US stock index futures are losing between 0.15% and 0.35% in the early European session on Monday. Meanwhile, the 10-year US Treasury bond yield, which lost nearly 10% in the second half of the week, is trying to stage a rebound toward 1.5%. Late Friday, US Democrats passed a $1 trillion infrastructure bill.

EUR/USD seems to have gone into a consolidation phase a little above mid-1.1500s after dropping toward 1.1500 on Thursday. Sentix Investor Confidence for November will be featured in the European economic docket.

GBP/USD suffered heavy losses following the BoE’s decision to leave its policy rate unchanged last week. In an interview with Bloomberg TV, Governor Bailey said that it’s not their job to guide financial markets on interest rates. With the BoE event out of the way, investors will shift their attention to headlines surrounding Brexit talks.

USD/JPY edged lower amid falling US T-bond yields in the second half of the previous week and stays relatively quiet around mid-113.00s on Monday. The Bank of Japan’s ‘Summary of Opinions’ of its October policy meeting showed that the recent JPY weakness was a reflection of the differential in inflation, monetary policy stance between Japan and other countries.

Gold capitalized on falling US T-bond yields and broke above several key resistance levels to end the week at its strongest level since early September near $1,820. XAU/USD looks to extend its rally as technical indicators point to a bullish shift in the near-term outlook.

Cryptocurrencies: Following a two-week consolidation phase above $60,000, Bitcoin regained its traction and broke above $65,000 on Monday. The all-time high for BTC sits at $67,000. Ethereum preserves its bullish momentum at the start of the week and trades above $4,700.

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