Market Sentiment Improves Slightly, BoC and Riksbank Rate Decisions

Risk Sentiment Improves Somewhat, but Concerns Remain

The dollar traded lower against most of the other G10 currencies on Tuesday. It lost the most ground against the commodity currencies AUD and NZD, while it gained fractionally only against NOK. The greenback traded virtually unchanged against JPY and SEK.

DAX Cash Index — Technical Outlook

During the European afternoon, the DAX cash index showed some good strength, where the bulls managed to lift it from its lows near 11225. At the time of this analysis, the German cash index is balancing slightly below its key resistance at 11450, which if broken, could lift the index a bit higher. But all this could still be seen as a correction, given that DAX remains below its short-term downside resistance line taken from the peak of the 4thof October.

BoC Set to Hike, Riksbank Expected to Stand Pat

Apart from political developments, investors are likely to turn attention back to monetary policy today, as two G10 central banks decide on interest rates: The Bank of Canada and the Riksbank.

EUR/CAD — Technical Outlook

EUR/CAD is balancing slightly above its short-term tentative upside support line drawn from the low of the 3rdof October. Even though we saw the euro falling against the Canadian dollar since the beginning of this week, as long as the upside line remains intact, we will aim higher again in the short-term. Also, in support to the upside idea, the pair continues to form higher lows.

As for the Rest of Today’s Events

During the European morning, we get the preliminary manufacturing and services PMIs for October from several European nations and the Eurozone as a whole. Both the bloc’s manufacturing and services indices are expected to have declined, to 53.0 and 54.5 from 53.2 from 54.7 respectively, something that could drive the composite PMI down to 53.9 from 54.1. Even though, the services sector appeared to have stabilized somewhat in the second half of the year, manufacturing activity is set to experience its 10thconsecutive slowdown.



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