Daily Market Outlook, November 18, 2024
Munnelly’s Macro Minute...
"A Pause In The Dollar Rally Supports Asian Markets. As Traders Eye Nvidia Earnings”
Global stocks started the week stronger ahead of Nvidia's highly anticipated earnings release. South Korean markets jumped more than 2% on Monday, the biggest daily gain in two months, as Samsung Electronics rose 6% on promises to buy back shares. Chinese equities started the week on a positive note, with the CSI300 blue-chip index advancing over 1% and the Shanghai Composite Index also climbing over 1%. Hong Kong's Hang Seng Index also rose. China's yuan was steady on Monday as the dollar's rally took a breather, while the central bank renewed its support through market guidance and signs of economic recovery helped rein in the currency's fall. In Japan, the central bank governor's speech provided no clarity on the country's rate outlook.The Bank of Japan governor reiterated that the central bank will raise rates if economic and price developments align with forecasts but did not mention a potential December hike. The Japanese yen has fallen around 7% since October against a resurgent dollar, reaching past 156 per dollar for the first time since July, raising concerns about potential intervention from Japanese authorities.
After Chair Jerome Powell's hawkish turn last week, futures suggest a 62% likelihood the Federal Reserve will cut next month. At least seven Fed officials will speak this week, and dealers expect moderate cuts. If Trump picks a Treasury Secretary who supports tariffs and debt-funded tax cuts, it could affect his policies. The NY Times stated that Trump is considering former Fed Governor Kevin Warsh, millionaire Marc Rowan, Scott Bessent, and Howard Lutnick, Elon Musk's chosen candidate.
On the macro front Global flash PMIs on Friday and the UK, Japan, and Canadian inflation reports are the main economic indications for the week. The week's data highlight will be the flash November PMIs, which are due on Friday and offer a health check on the global economy. According to data from October, the manufacturing indexes in the majority of important economies stayed below 50. With October prints due in the UK on Wednesday, Japan on Thursday, and Canada on Tuesday, inflation will also be a major focus. As energy prices rise, the UK's headline CPI and RPI are predicted to rise, while the core and services CPIs are predicted to fall. Core inflation excluding fresh food is expected to be 2.1% YoY in Japan, while core-core inflation excluding fresh food and energy is expected to be 2.2%.
From the European Central Bank (ECB), President Lagarde and other ECB officials have a long list of scheduled appearances. Other notable data releases include consumer confidence and retail sales figures in the UK on Friday. In Japan, economic data due include private core machinery orders on Monday and the trade balance on Wednesday. The G20 Leaders' Summit kicks off in Rio de Janeiro today; however, given President Elect Trump's absence, not much is expected to be gleaned from that meeting. The AI bellwether Nvidia, the largest stock in the world by market capitalisation ($3.6 trillion), will release its most significant corporate earnings report on Wednesday. US retailers, such as Walmart, Target, Lowe's, and TJX, will provide an update on the status of US consumers. Palo Alto Networks and Deere are two other noteworthy US names for next week. XPeng and Baidu from China also report.
Overnight Newswire Updates of Note
BoJ’s Ueda: Rates To Rise If Economy Aligns With Forecasts
BoJ Chief Sees Higher Chance Of Wage-Driven Inflation In Japan
Japan’s September Machinery Orders Fall 0.7% Month/Month
Australia To Safeguard Cash Payments As Digital Shift Grows
Goldman Cuts Australia Economic Outlook On Trump Tariff Impact
Goldman: ‘Go For Gold’ As Central Banks Buy, Fed Cuts In ‘25
China Ready To Work With Trump, Xi Tells Biden
Biden Authorises Ukraine’s Use Of US-supplied Long-Range Missiles
Trump May Review Biden’s Decision On Ukraine With US Missiles
Oil Boss Chris Wright Named As Donald Trump’s Energy Secretary
German Greens EM Habeck To Lead Snap Election Campaign
UK Home-Sellers Offer Large Discounts After Budget Disappoints
UK Inflation Hiccup May Buttress Case For BoE Caution
(Sourced from reliable financial news outlets)
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.0500 (1.2BLN), 1.0520 (1BLN), 1.0550-60 (545M), 1.0600 (2.1BLN)
1.0625 (1.2BLN), 1.0650 (625M)
USD/CHF: 0.8700 (340M). EUR/CHF: 0.9325 (279M)
EUR/GBP: 0.8400-05 (380M). GBP/USD: 1.2700-10 (215M)
NZD/USD: 0.5835 (852M), 0.5970 (510M)
AUD/NZD: 1.1025 (434M). USD/CAD: 1.3950 (789M)
USD/JPY: 154.50 (450M), 155.50 (230M). EUR/JPY: 165.25 (272M)
CFTC Data As Of 15/11/24
Bitcoin net short position is -1,798 contracts
Swiss franc posts net short position of -32,694 contracts
British pound net long position is 56,050 contracts
Euro net short position is -7,437 contracts
Japanese yen net short position is -64,902 contracts
Equity fund managers raise S&P 500 CME net long position by 86,527 contracts to 1,079,480
Equity fund speculators increase S&P 500 CME net short position by 94,124 contracts to 288,809
Speculators trim CBOT US 2-year Treasury futures net short position by 62,488 contracts to 1,423,871
Speculators trim CBOT US 10-year Treasury futures net short position by 2,469 contracts to 815,801
Technical & Trade Views
SP500 Bullish Above Bearish Below 5960
Daily VWAP bearish
Weekly VWAP bullish
Below 5790 opens 5700
Primary support 5795
Primary objective 6100
EURUSD Bullish Above Bearish Below 1.0650
Daily VWAP bearish
Weekly VWAP bearish
Above 1.0650 opens 1.08
Primary resistance 1.0950
Primary objective 1.0490 - TARGET HIT NEW PATTERN EMERGING
GBPUSD Bullish Above Bearish Below 1.2750
Daily VWAP bearish
Weekly VWAP bearish
Above 1.28 opens 1.30
Primary resistance 1.3050
Primary objective 1.27 - TARGET HIT NEW PATTERN EMERGING
USDJPY Bullish Above Bearish Below 154
Daily VWAP bearish
Weekly VWAP bullish
Below 154 opens 152
Primary support 148
Primary objective is 157.50
XAUUSD Bullish Above Bearish Below 2600
Daily VWAP bearish
Weekly VWAP bearish
Below 2590 opens 2530
Primary support 2530
Primary objective is 2800
BTCUSD Bullish Above Bearish Below 85000
Daily VWAP bullish
Weekly VWAP bullish
Below 84000 opens 80000
Primary support is 64000
Primary objective is 100,000
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!