Oil sinks 8.9% and stocks rally as the midterm sweep hits the dollar; BoE up next

Daily Wrap, Wednesday, 4 November 2026. Published 22:15 UTC.

Risk-on: Indices averaged +1.68% over 24h and JPY sat near the bottom of the strength table (-0.16) as oil fell -9.03%. Gold (+3.35%) and a firm CHF (+0.3) reflect a weaker dollar and lower yields more than fear.

In short

• The Democrats' midterm sweep set the day. XTIUSD fell -8.94% to 88.48 on hopes of an end to the Iran war, while US30 rose 3.38% and US500 1.61%. XAUUSD gained 3.33% to 4061.99 and XAGUSD 4.97%.
• USD finished bottom of the strength table at -0.39, but US jobs data trimmed the slide. ADP beat (86K vs 69K f/c) and the ISM Services employment index rose to 51.4, outweighing misses in ISM Services (54.5) and the S&P Composite (55.9). EURUSD is -0.32% since the NY Open at 1.12276 and USDCAD +0.34% at 1.39794.
• Thursday is central-bank heavy. The BoE decides at 12:00 UTC (f/c 4% from 3.75%, hike votes f/c 7), with Lagarde at 12:00 and Bailey at 12:30. SNB's Schlegel and US Initial Jobless Claims (f/c 196K) follow at 13:30.

Themes

Oil's war premium unwinds at speed

XTIUSD is -14.61% on the week, and the market ignored both a surprise crude draw and IRGC reports of tankers destroyed near Hormuz. The desk sees the market aggressively pricing de-escalation, but after this slide an escalation headline carries sharp snapback risk. CAD lost an oil tailwind, and USDCAD is +0.34% since the NY Open.

Dollar sold on politics, steadied on jobs

USD was sold broadly after the midterms, with DXY slipping toward 101.00, EURUSD rejected at its 1.1273 neckline, GBPUSD reaching a seven-week high of 1.3503 and USDCHF a two-month low of 0.8127. The ADP beat and a firmer ISM employment index pulled the majors back. The desk sees a crowded bearish dollar setup into Friday's payrolls (f/c 65K).

Metals squeeze off washed-out lows

Gold reclaimed 4,000 and silver pushed through its 52.32/52.50 zone, while XPTUSD added 5.89% on the day. The desk frames gold's bounce as short-covering after liquidation-driven October losses, with 79% December Fed-hike odds as the cap. Silver remains inside its downtrend channel below 53.50, and the gold/silver ratio eased to about 77.8.

Yen lags even as the dollar slides

USDJPY dipped to 157.39 on the midterm news but recovered to 158.406, and JPY sits second-weakest on the strength table at -0.16. The pair is pinned between carry demand and intervention risk around 158.50-158.60. Tokyo says it is watching 'with a high sense of urgency', and the BoJ minutes land at 23:50 UTC.

What moved

• XTI/USD −8.94% Democrats taking Congress raised hopes of pressure to end the Iran war, which overwhelmed a surprise EIA crude draw (-0.865M vs +0.9M expected); the desk notes the precise trigger is unclear.
• XAU/USD +3.33% The midterm sweep revived fiscal concerns and pushed the dollar and 10-year yields lower (about 6bp to 4.904%), lifting gold back over 4,000 from a 3919.69 low.
• XAG/USD +4.97% Silver reversed sharply from about 48.96 as the sweep hit the dollar and bid Treasuries; the desk reads the move as short-covering from deeply oversold levels.
• US30 +3.38% Stocks staged a V-shaped recovery from the post-election dip as the dollar and yields fell, on a range 3.84 times a normal day.
• US500 +1.61% The index joined the post-midterm rebound; the platform flagged a 0.58% jump in 15 minutes at 14:46 UTC, straight after the S&P Global PMI release.

Releases

• USD ADP Employment Change 86K. The beat helped the dollar pare its post-midterm losses: EURUSD is -0.32% and GBPUSD -0.21% since the NY Open.
• USD S&P Global Composite PMI 55.9. Equities shrugged off the miss: USTEC jumped 1.28% and US500 0.58% in the 15 minutes to 14:46 UTC.
• USD ISM Services PMI 54.5. The platform tied a 2.7% hourly jump in BTCUSD to the release, but the dollar still ends the day firmer than at the NY Open.
• USD ISM Services Employment Index 51.4. The desk credits the firmer jobs component, alongside ADP, for the dollar's partial recovery; USDCHF is +0.24% since the NY Open.
• USD ISM Services Prices Paid 73. The slight easing took a little edge off inflation worries, and metals held their gains through the release.

Levels to watch

• EUR/USD 1.1273 Double-bottom neckline, rejected today at the intraday high.
• GBP/USD 1.3503 Seven-week swing high; the uptrend is pausing just beneath it.
• USD/CHF 0.8127 Two-month low set today, in a downtrend of lower highs since mid-October.
• USD/JPY 158.60 Upper edge of the broad range, where rising lows are pressing.
• XAU/USD 4,000.00 Round-number support reclaimed today after the rebound from the 3895.5 higher low.

Ahead

• 23:50 UTC JPY BoJ Monetary Policy Meeting Minutes Any hint on hike timing from a BoJ that held at 1.25% matters for a yen that lagged even as the dollar fell, with USDJPY pressing its upper range.
• 00:30 UTC AUD Trade Balance (MoM) A 1200M surplus is expected (prev 495M) for an Aussie driven mainly by USD and risk swings after a dovish RBA hike.
• 07:00 UTC EUR Factory Orders s.a. (MoM) A 4.8% rebound is forecast after -10.6%, the first euro-area data of the session, ahead of Lagarde.
• 08:05 UTC EUR ECB's Schnabel speech Markets will listen for whether a December hike is a done deal after 4.0% HICP, with EURUSD just under its neckline.
• 10:00 UTC EUR Producer Price Index (YoY) Euro-area producer prices are forecast at 10.9% (prev 8.2%), adding to the inflation case behind ECB hike pricing.
• 12:00 UTC GBP BoE Interest Rate Decision A 25bp hike to 4% is fully priced with about three more behind it, so guidance decides GBP and GBPJPY; much of GBP's rally owes to USD weakness.
• 12:00 UTC GBP BoE MPC Vote Rate Hike Seven hike votes are forecast (prev 3), and the desk flags a dovish split as the bigger risk to a priced-in GBP.
• 12:00 UTC EUR ECB's President Lagarde speech A December hike is already priced, so the desk sees a clear endorsement as needed to move EURUSD through its 1.1275 area, while growth caution has more room to deflate it.
• 12:30 UTC GBP BoE's Governor Bailey speech Bailey's remarks on further tightening will be tested against the extra hikes priced into the curve.
• 13:30 UTC CHF SNB Chairman Schlegel speech This is the first SNB read on the 1.5% CPI surprise; the market still prices a 0% hold, so tightening or FX-sale talk would expose USDCHF and EURCHF.
• 13:30 UTC USD Initial Jobless Claims Claims are forecast at 196K, the next labour read before Friday's payrolls, for a dollar that leaned on resilient jobs data today.
• 13:30 UTC USD Unit Labor Costs Unit labour costs are forecast at 0.6% (prev 1.2%) and feed December Fed-hike pricing, which matters for gold, silver and the dollar.

The BoE's 12:00 UTC decision and vote split, alongside Lagarde and Schlegel, will show whether the post-midterm dollar slide extends into Friday's payrolls or stalls on resilient US jobs data.