{"id":85267,"date":"2026-11-05T18:35:06","date_gmt":"2026-11-05T07:35:06","guid":{"rendered":"https:\/\/www.icmarkets.com.au\/blog\/?p=85267"},"modified":"2026-11-05T18:35:26","modified_gmt":"2026-11-05T07:35:26","slug":"europe-fundamental-forecast-05-november-2026-ic-markets","status":"publish","type":"post","link":"https:\/\/www.icmarkets.com.au\/blog\/europe-fundamental-forecast-05-november-2026-ic-markets\/","title":{"rendered":"Europe Fundamental Forecast | 05 November 2026 | IC Markets"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Europe Fundamental Forecast | 05 November 2026 | IC Markets<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What happened in the Asia session?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>Asian markets were influenced primarily by the outcome of the U.S. midterm elections, which triggered a broad shift in global market sentiment. The Democratic victory reduced political uncertainty and raised hopes of a possible reduction in U.S.-Iran military tensions, putting significant pressure on the U.S. dollar and crude oil prices. Meanwhile, gold benefited from declining Treasury yields and dollar weakness, while the Australian dollar received additional support from a much stronger-than-expected trade surplus.<br \/><br \/><strong>What does it mean for the European &amp; US sessions?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Oil markets remain volatile as traders weigh improving global supply against concerns about geopolitical disruptions. JPMorgan&#8217;s warning that the market returned to a surplus in October is a bearish development for crude oil, particularly as recovering Middle Eastern exports and rising production elsewhere increase supply. However, falling U.S. crude inventories for a fifth consecutive week, alongside significant declines in gasoline and diesel stocks, provide some support for prices.<br \/><br \/><strong>The Dollar Index (DXY)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unemployment Claims (1:30 pm GMT)<br \/><br \/><strong>What can we expect from the DXY today?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The US dollar remains under pressure on Thursday following the Democrats&#8217; decisive midterm election victory, which has raised concerns about political gridlock and the future direction of US economic policy. Falling Treasury yields and improved global market sentiment are weighing on the greenback, while stronger-than-expected private-sector employment data and expectations of another Federal Reserve rate increase are providing some support.<br \/><br \/><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Federal Open Market Committee (FOMC) kept interest rates unchanged at 3.75%\u20134.00% at its October 27\u201328 meeting. The decision was approved by a 10\u20132 vote, following September\u2019s 25-basis-point rate hike. Two members preferred another 25-basis-point increase.<\/li>\n\n\n\n<li>The labor market remains relatively stable. The Fed noted that job gains have kept pace with workforce growth and that the unemployment rate has changed little. Employment conditions remain an important factor in future policy decisions.<\/li>\n\n\n\n<li>Inflation remains above the Fed\u2019s 2% target. Policymakers want more economic data to assess whether inflation is moving sustainably towards the target. Persistent inflation could increase the possibility of further rate hikes.<\/li>\n\n\n\n<li>The Fed upgraded its assessment of the U.S. economy from a solid pace of growth to a strong pace. Domestic spending remains resilient, productivity growth is strong, and business investment remains robust. However, geopolitical developments continue to create uncertainty.<\/li>\n\n\n\n<li>The Fed has kept the door open to further rate hikes if inflation remains elevated. The latest decision suggests policymakers want more evidence before making their next move. Markets are watching closely for signals about a possible rate increase in December.<\/li>\n\n\n\n<li>Chair Kevin Warsh continues to emphasize the importance of bringing inflation back to the 2% target. The October decision reflects a cautious approach, with the Fed waiting for more information before adjusting interest rates again.<\/li>\n\n\n\n<li>The Fed\u2019s decision could influence the U.S. dollar, Treasury yields, gold, and other financial markets. Expectations of higher interest rates may support the dollar and pressure gold, while signs of easing inflation could weaken the dollar and support gold prices. Market reactions will depend on incoming economic data and expectations for future policy.<\/li>\n\n\n\n<li>The next meeting is scheduled for 8 to 9 December 2026.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><br \/>Medium Bullish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Gold (XAU)<\/strong><strong><br \/><\/strong><strong><br \/><\/strong><strong>Key news events today<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>Unemployment Claims (1:30 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the Gold today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>Gold is showing renewed bullish momentum on Thursday after recovering above the important $4,000 level and reaching a two-week high. The main drivers are a weaker US dollar and declining Treasury yields following the US midterm elections. However, uncertainty surrounding the Federal Reserve&#8217;s December interest rate decision remains a potential obstacle, particularly with US employment figures due on Friday. Traders should also monitor developments involving Iran and the Middle East, as renewed geopolitical tensions could increase safe-haven demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias&nbsp; &nbsp;<\/strong> <strong><br \/><\/strong>Medium Bullish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Euro (EUR)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">ECB President Lagarde Speaks (6:00 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the EUR toda<\/strong>y?<br \/><br \/>The euro is showing signs of strength on Thursday, supported by rising eurozone inflation, expectations of another ECB interest-rate increase in December, and weakness in the U.S. dollar following the American midterm elections.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Eurozone inflation has climbed to 4.0%, its highest level in three years, strengthening expectations that the ECB may need to maintain a hawkish monetary policy. Meanwhile, stronger-than-expected economic growth provides additional support for the currency.<br \/><br \/><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>At its 29 October meeting, the ECB kept all three key interest rates unchanged. The deposit facility rate remains at 2.50%, the main refinancing operations rate at 2.65%, and the marginal lending facility rate at 2.90%. The ECB maintained its data-dependent, meeting-by-meeting approach, with no commitment to future rate changes.<\/li>\n\n\n\n<li>Inflation remains a major concern. Euro-area annual inflation rose to 3.8% in September, up from 3.2% in August. Higher energy prices were the main contributor, with energy inflation reaching 18.8%. This keeps inflation well above the ECB&#8217;s 2% target.<\/li>\n\n\n\n<li>Economic growth remains relatively modest. The ECB&#8217;s September projections expect GDP growth of 0.9% in 2026, 1.4% in 2027, and 1.5% in 2028. Although the economy has shown resilience, higher energy costs and geopolitical uncertainty continue to threaten the outlook.<\/li>\n\n\n\n<li>Economic confidence weakened in October. The Euro-area Economic Sentiment Indicator declined by 0.6 points to 96.9, marking its second consecutive monthly decline. Consumer confidence also weakened, suggesting continued pressure on household spending and business activity.<\/li>\n\n\n\n<li>Energy prices remain a major risk to the inflation outlook. The ECB warned that prolonged increases in oil and natural gas prices could push inflation higher while weakening economic growth. The bank is also monitoring whether higher energy costs begin spreading into wages and broader consumer prices.<\/li>\n\n\n\n<li>The ECB&#8217;s balance-sheet reduction continues. The APP and PEPP portfolios are gradually declining as the central bank no longer reinvests principal payments from maturing bonds. This process represents continued quantitative tightening and a gradual withdrawal of monetary support.<\/li>\n\n\n\n<li>The main focus heading into November is whether persistent inflation will require further interest rate increases. The ECB remains cautious as rising energy costs create inflation risks, while weaker economic confidence and tighter financing conditions could weigh on growth. Upcoming inflation and economic activity data will be important in determining the bank&#8217;s next policy decision.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">\u200bThe next meeting is on 16-17 December 2026.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><br \/>Medium Bearish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Swiss Franc (CHF)<\/strong><strong><br \/><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">SNB Chairman Schlegel Speaks (12:40 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the CHF today?<\/strong><strong><br \/><\/strong><br \/>The Swiss franc is receiving support from rising Swiss inflation and weakness in the U.S. dollar following the U.S. midterm elections. Switzerland&#8217;s inflation rate has increased to 1.5%, raising expectations that the SNB could consider interest-rate increases in 2027. However, the central bank&#8217;s current interest rate remains at 0.00%.<br \/><br \/><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>At its 24 September meeting, the SNB kept the policy rate unchanged at 0.00%, citing appropriate monetary conditions.<\/li>\n\n\n\n<li>Swiss inflation increased from 0.6% in May to 0.8% in August, mainly due to higher energy prices. The SNB expects inflation to rise somewhat in Q4 before easing during 2027.<\/li>\n\n\n\n<li>The SNB now projects average inflation of 0.7% in 2026, 0.8% in 2027, and 0.8% in 2028, assuming the policy rate remains at 0%.<\/li>\n\n\n\n<li>The SNB remains willing to intervene in the foreign-exchange market if necessary to maintain appropriate monetary conditions, particularly if exchange-rate movements become problematic.<\/li>\n\n\n\n<li>The SNB expects Swiss growth to remain moderate, forecasting 1.5\u20132% growth in 2026 and around 1.5% in 2027.<\/li>\n\n\n\n<li>The main risks remain Middle East tensions, elevated energy prices, global growth, and trade-policy uncertainty. Higher energy prices could increase inflation while weakening economic growth.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><br \/>The next meeting is on 10 December 2026.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><br \/>Weak Bearish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Pound (GBP)<\/strong><strong><br \/><\/strong><strong><br \/><\/strong><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">BOE Monetary Policy Report (12:00 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Monetary Policy Summary (12:00 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">MPC Official Bank Rate Votes (12:00 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Official Bank Rate (12:00 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">BOE Gov Bailey Speaks (12:30 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the GBP today?<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>The British pound is showing signs of strength heading into Thursday&#8217;s trading session, supported by expectations of a Bank of England interest-rate increase and a weaker US dollar following the US midterm elections. GBP\/USD has climbed towards 1.3485, while sterling has also benefited from the relatively positive market reaction to the latest UK Budget.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Central Bank Notes:<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interest-rate decision: The BoE held the Bank Rate at 3.75% at its 17 September 2026 meeting. The MPC voted 6\u20133, with three members supporting a 25-basis-point increase to 4.00%. The decision reflects a cautious approach as policymakers balance inflation risks against subdued economic activity.<\/li>\n\n\n\n<li>UK CPI inflation rose to 3.1% in August, up from 2.9% in July, remaining above the BoE\u2019s 2% target. Core CPI remained at 2.6%, while services inflation was 3.4%, indicating that underlying price pressures are still present.<\/li>\n\n\n\n<li>The ongoing Middle East conflict has contributed to higher and more volatile energy prices. The BoE expects inflation to rise further over the coming quarters, although the eventual impact will depend on how long energy prices remain elevated.<\/li>\n\n\n\n<li>The UK economy remains subdued, while weaker demand and a cooling labor market create challenges for the MPC. Policymakers must balance the risk of persistent inflation against the possibility of further weakening economic activity.<\/li>\n\n\n\n<li>Wage growth and services inflation remain important areas of focus. Although core inflation has been relatively stable, the rise in headline inflation means the MPC is likely to remain cautious about easing policy.<\/li>\n\n\n\n<li>The BoE is reviewing the pace and structure of its balance-sheet reduction. Its latest plans include slowing the pace of gilt sales, reflecting concerns around market conditions and the impact of quantitative tightening.<\/li>\n\n\n\n<li>The BoE\u2019s next decisions will remain data-dependent, with inflation, energy prices, wage growth, and economic activity determining whether rates remain unchanged or increase.<\/li>\n\n\n\n<li>The next meeting is on 5 November 2026.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Medium Bullish<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><br \/><\/strong><strong><br \/><\/strong><strong>The Canadian Dollar (CAD)<\/strong><strong><br \/><\/strong><strong><br \/><\/strong><strong>Key news events today<\/strong><strong><br \/><\/strong><strong><br \/><\/strong>BOC Gov Macklem Speaks (3:30 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Annual Budget Release (9:00 pm GMT)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What can we expect from the CAD today?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Canadian dollar is showing positive momentum heading into Thursday, supported by Canada&#8217;s stronger-than-expected trade surplus, the recent Bank of Canada interest-rate increase, and broad weakness in the US dollar. Expectations of further monetary tightening are also providing support, particularly as higher energy prices continue to create inflationary risks.<br \/><br \/>Central Bank Notes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>On 28 October 2026, the Bank of Canada raised its overnight interest rate by 25 basis points to 2.50%, ending its extended period of holding rates steady. The bank cited persistent inflation risks and stronger economic activity. Further rate increases remain possible.<\/li>\n\n\n\n<li>Canada&#8217;s economy grew by an annualized 3.3% in Q2 2026, with growth estimated at around 2% in Q3. However, new US tariffs and trade uncertainty are expected to slow economic activity in Q4.<\/li>\n\n\n\n<li>Unemployment has remained around 6.5%, indicating continued spare capacity in the labor market. Although employment conditions have stabilized, uncertainty over trade and economic growth remains a concern.<\/li>\n\n\n\n<li>Canada&#8217;s annual inflation rate rose to 3.1% in September, up from 3.0% in August. Higher gasoline prices were the main driver, while inflation excluding gasoline remained at 2.2% and core inflation measures stayed close to 2%.<\/li>\n\n\n\n<li>Persistently high global oil prices and Middle East tensions continue to increase fuel and transportation costs. The bank warned that these pressures could spread to other goods and services, keeping inflation elevated for longer.<\/li>\n\n\n\n<li>Renewed US tariffs and uncertainty over trade relations remain significant risks to Canada&#8217;s economic outlook. These pressures could weaken exports, delay business investment, and slow growth, while also increasing business costs.<\/li>\n\n\n\n<li>The BoC has raised its policy rate to 2.50% to limit the risk of persistent inflation. The bank may raise rates further if price pressures continue, but future decisions will depend on economic data, energy prices, and trade developments.<\/li>\n\n\n\n<li>The next meeting is on 9 December 2026.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Next 24 Hours Bias<\/strong><br \/>Medium Bullish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Oil<\/strong><strong><br \/><\/strong><strong><em><br \/><\/em><\/strong><strong>Key news events today<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No major news event<br \/><strong><br \/><\/strong><strong>What can we expect from the Oil today?<\/strong><br \/><br \/>Oil prices are experiencing significant selling pressure as expectations of a diplomatic resolution to the US-Iran conflict reduce fears of prolonged Middle Eastern supply disruptions. Brent and WTI have fallen for four consecutive sessions, with traders increasingly removing the geopolitical risk premium from crude prices. However, the decline in US crude inventories for a fifth consecutive week, the fall in distillate stocks, and OPEC+&#8217;s decision to maintain December production targets provide some underlying support.<br \/><br \/><strong>Next 24 Hours Bias<\/strong><strong><br \/><\/strong>Medium Bullish<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Europe Fundamental Forecast | 05 November 2026 | IC Markets What [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":79417,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[196,215,339],"tags":[],"class_list":["post-85267","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fundamental-analysis","category-market-analysis","category-recent-posts"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts\/85267","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/comments?post=85267"}],"version-history":[{"count":4,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts\/85267\/revisions"}],"predecessor-version":[{"id":85297,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/posts\/85267\/revisions\/85297"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/media\/79417"}],"wp:attachment":[{"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/media?parent=85267"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/categories?post=85267"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com.au\/blog\/wp-json\/wp\/v2\/tags?post=85267"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}