The U.S. dollar continued its downward trajectory following comments from Federal Reserve Governor Waller, who hinted at a potential December rate cut. Market odds for a rate cut have climbed to approximately 76%, up from 66% last week. Among G10 currencies, only the Japanese yen performed worse today, declining around 0.25%. Equity markets in Asia-Pacific and Europe are advancing, with the Stoxx 600 in Europe posting its fourth consecutive session of gains, equaling its longest rally since May. Meanwhile, U.S. index futures are mostly unchanged.
Gold remains firm, trading near the upper end of yesterday’s range but below $2,650, while January WTI crude seems to be forming a base near $68.

Asia-Pacific Markets
The Japanese government has approved a JPY 14 trillion supplemental budget, shifting attention back to the Bank of Japan. While Governor Ueda has left the door open for potential action on December 19, no firm commitment has been made.
Australia’s central bank is expected to maintain its policy stance during next week’s meeting.
Despite stronger U.S. 10-year Treasury yields supported by better-than-expected economic data, the dollar weakened against the yen, briefly touching JPY 149 before stabilizing in North American trading. The Australian dollar, pressured by a wider current account deficit, has rebounded modestly today after closing at a weekly low yesterday.

European Markets
The European Central Bank is set to meet next week, with markets broadly anticipating a 25-basis-point rate cut on December 12. Speculation of a larger move has diminished, with odds now at roughly 15%.
The euro initially fell to $1.0460, influenced by French economic concerns and stronger U.S. data, before recovering to $1.0530 in early European trading. Resistance is expected in the $1.0540-50 range.
Sterling also struggled, declining to a three-session low near $1.2615 after rising through all sessions last week. It has since stabilized.

American Markets
Stronger-than-expected U.S. data yesterday continued to highlight the economic divergence between the U.S. and Europe. Key data releases today include the October JOLTS report, with a small increase anticipated following September’s steep 5.3% decline.
Canada’s calendar remains light ahead of tomorrow’s releases of Q3 productivity and November PMI data.