US-RUSSIA: Putin/Witkoff Meet @ 09:00ET/14:00GMT; Russia Claims Key Ukraine City
Russian President Vladimir Putin is set to meet at ~16:00 local time (09:00ET, 14:00GMT) with US presidential envoy Steve Witkoff and US President Donald Trump's son-in-law, Jared Kushner, to discuss the amended 19-point peace plan negotiated between American and Ukrainian officials in late November. Putin had called the initial 28-point peace plan a potential "basis" for a future agreement. However, this plan was viewed by Kyiv, its European allies, and Russia hawks in the US as too favourable towards Moscow.
- The meeting comes after Russia claimed that it has taken the key 'fortress belt' city of Pokrovsk in the Donbas. Pokrovsk has seen some of the most intense fighting of the war. Ukraine's armed forces deny that the city has been fully captured by Russian troops. The Institute for the Study of War writes, "Russian forces are not yet confirmed to have seized all of Pokrovsk despite operating within the town for over 120 days [...] though it remains unclear whether Ukrainian forces may occupy limited scattered positions in northern Pokrovsk."
- Even if Pokrovsk is not entirely in Russian hands, Moscow's forces have been making slow, steady (and costly) advances on the frontline in Donbas and the southern Zaporizhzhia oblast. The loss of Pokrovsk would make the neighbouring city of Myrnohad effectively impossible to defend. With these cities under Russian control, Moscow's forces would then be able to turn to the remaining 'fortress belt' cities of Kostyantynivka, Druzhkivka, Kramatorsk and Slovyansk. If Russia gained control of these cities it would mean effective full control of the Donbas, and leave Russian forces with a clearer path towards Kyiv.
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AUSSIE 10-YEAR TECHS: (Z5) Returns Lower
- RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
- RES 2: 95.960 - High Apr 7 (cont.)
- RES 1: 95.900 - High Oct 17
- PRICE: 95.670 @ 16:16 GMT Oct 31
- SUP 1: 95.510 - Low Sep 3
- SUP 2: 95.415/95.300 - Low May 15 / Low Jan 14
- SUP 3: 95.275 - Low Nov 14 (cont) and a key support
Aussie 10-yr futures slipped lower Wednesday on the back of hotter-than-expected Australian inflation. This returned prices lower despite nascent signs of a technical recovery as recently as last week. The sustainability of the pullback will be dependent on prices holding above key short-term support at 95.510, the Sep 3 low. Near-term resistance remains 95.780, the Sep 12 high. A clear break of this level signals scope for a continuation higher and opens 95.960, the 76.4% retracement level for the Sep’24 - Nov’24 downleg.
AUSSIE 3-YEAR TECHS: (Z5) Struck by Strong CPI
- RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
- RES 2: 96.780 - High Jun 26 (cont)
- RES 1: 96.700 - High Sep 12
- PRICE: 96.375 @ 16:13 GMT Oct 31
- SUP 1: 96.280 - Low May 15 (cont.)
- SUP 2: 95.900 - Low Jan 14 (cont.)
- SUP 3: 95.760 - Low 14 Nov ‘24
Having bounced well on the back of the mild US CPI print, Aussie 3-yr futures reversed course Wednesday on strong domestic inflation data containing RBA cut pricing through 2026. This keeps prices well below prior resistance at 96.615, the Sep 12 high, and refocuses attention on 96.280 as the next major support.
FED: Gov Waller: Still Advocating For A December Rate Cut
Gov Waller, one of the FOMC's more prominent doves, makes clear in an appearance on Fox Business that he supports a follow-up rate cut in December. He makes reference to Chair Powell's press conference comment that the Fed could skip a cut at the December meeting due in part to a lack of official government data during the federal shutdown (Powell: “what do you do if you are driving in the fog? You slow down").
- Waller says today: "Right now, we know that the labor market has been weak... We know inflation is going to come back down. Inflation expectations are anchored, and in that world, the standard of central bank wisdom is to look through it and proceed with worrying about the labor market. So in my view, we should just look at what the data is telling us and proceed on policy that way.... So this is why I'm still advocating that we cut policy rates in December, because that's what all the data is telling me to do. The fog might tell you to slow down. It doesn't tell you to pull over to the side of the road. You still have to go. You may want to be careful, but it doesn't mean to stop, and ... the right thing to do with policy is to continue cutting."
- This is of particular interest since he appeared to suggest he would have a more cautious outlook on further easing after cutting in October.
