Daily Market Outlook, October 18, 2024 

Munnelly’s Macro Minute…

"PBOC Launches It’s Swap Facility, Markets Overlook Mixed Data To Trade Higher”

China's stock market rose on Friday as the central bank launched a swap facility to boost the equity market, although other Asian markets were mixed amid data confirming a slowdown in the world's second-largest economy. The U.S. dollar hovered near an 11-week high against major peers, supported by robust economic data and market speculation about a potential election victory for Donald Trump, which helped push gold to a new record high. China's central bank governor also signalled more interest rate cuts, but investors have been frustrated by the lack of details from Chinese authorities on their economic stimulus measures. China's economic growth in the third quarter slightly missed expectations, though it still expanded year on year. The announcement of the most aggressive stimulus since the pandemic at the end of last month has overshadowed the recent data, even though the lack of detail in subsequent press briefings has diminished the initial momentum.

The ECB cut interest rates by 25bps, taking the main deposit rate to 3.25%. President Lagarde defended the decision, noting the disinflationary process is on track and price risks are now probably to the downside. Economic activity has been weaker than expected, and the existing growth forecasts are too optimistic, suggesting a further rate cut in December is likely.

Another positive UK retail sales report, September building on the better performance in August with a +0.3% m/m gain for both the inc and ex-fuels measures. The improvement comes despite a weak performance from food retailers, more than offset by stronger department store spending and robust non-food store sales. Sales trends are looking more robust, and the outlook ought to remain constructive as declining shop prices and solid wage growth underpin consumer spending power. It's a quiet end to the week on the data slate Stateside with Housing starts and a smattering of FED speakers, all of whom markets have heard from repeatedly since the rate decision earlier this month.

Overnight Newswire Updates of Note

  • China’s Reports Q3 GDP: 4.6% Close To Expectations

  • China Data Mixed, Highlighting Stimulus Urgency

  • China Urges Swift Implementation New Financial Policies

  • China’s Mega Banks Trim Deposit Rates, Stimulus Hits

  • Japan’s Inflation Slows, First Time Since April Ahead Of BoJ

  • NZ Escalates Dispute With Canada Over Dairy Exports

  • US Blinken: War Must End Without Hamas Ruling Gaza

  • US Tsy Sec. Yellen: High US Tariff Wall 'Deeply Misguided'

  • Mark Cuban Joins Harris On Trail To Hit Trump Over Tariffs

  • Japan Warns On Sudden Moves After Yen Hits 150 Range

  • Asian Stocks Rise; Treasuries Steady After Selloff

  • GS, Blackstone To Sell Novel Fund Finance Bond

  • Nvidia-Backed Firm Eyes D-Center Near Jap’s Nuclear

  • Netflix Beats Wall Street’s Forecasts In Every Major Metric

          (Sourced from reliable financial news outlets)

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FX Options Expiries For 10am New York Cut

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.0770-75(1.3BLN), 1.0800 (537M), 1.0850 (1.4BLN), 1.0875-85 (738M)

  • 1.0925-35 (1BLN), 1.0940-50 (1.8BLN)

  • USD/CHF: 0.8490 (1.5BLN), 0.8600 (300M), 0.8700 (1BLN)

  • AUD/USD: 0.6750 (331M), 0.6800 (681M). NZD/USD: 0.6120 (295M)

  • AUD/NZD: 1.0985 (300M)

  • USD/CAD: 1.3695-1.3705 (820M), 1.3715-20 (1BLN)

  • USD/JPY: 149.50 (815M), 149.80 (260M), 150.00 (273M), 150.65 (1.1BLN)

  • 151.00 (598M)

CFTC Data As Of 11/10/24

  • Japanese Yen net long position is 36,528 contracts

  • British Pound net long position is 93,135 contracts

  • Euro net long position is 39,098 contracts

  • Bitcoin net short position is -1,282 contracts

  • Swiss Franc posts net short position of -22,459 contracts

  • Equity fund speculators increase S&P 500 CME net short position by 26,533 contracts to 328,810

  • Equity fund managers cut S&P 500 CME net long position by 6,124 contracts to 1,041,583

  • Speculators trim CBOT US 10-year Treasury futures net short position by 183,760 contracts to 960,129

Technical & Trade Views

SP500 Bullish Above Bearish Below 5750

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Below 5720 opens 5660

  • Primary support 5575

  • Primary objective 5760

EURUSD Bullish Above Bearish Below 1.11

  • Daily VWAP bearish

  • Weekly VWAP bearish

  • Above 1.1030 opens 1.1120

  • Primary support 1.0850

  • Primary objective 1.0850 - TARGET HIT NEW PATTERN EMRGING

GBPUSD Bullish Above Bearish Below 1.32

  • Daily VWAP bullish

  • Weekly VWAP bearish

  • Below 1.31 opens 1.29

  • Primary support is 1.29

  • Primary objective 1.29

USDJPY Bullish Above Bearish Below 144

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Below 141.50 opens 138

  • Primary resistance 152

  • Primary objective is 152

XAUUSD Bullish Above Bearish Below 2645

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Below 2600 opens 2550

  • Primary support 2550

  • Primary objective is 2720

BTCUSD Bullish Above Bearish Below 57000

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Below 57000 opens 52000

  • Primary support is 500000

  • Primary objective is 700000