Daily Market Outlook, October 3, 2024 

Munnelly’s Macro Minute…

"China Rally Stalls After 30% Advance, Markets Muted Ahead Of US Payrolls”

Stocks on Wall Street lacked clear direction on Wednesday, initially declining but then recovering to close slightly higher after fluctuating around the flatline throughout the trading session. China's mainland markets are closed for Golden Week, while Hong Kong's Hang Seng index fell 2% after rising 6.2% the day before. The benchmark is still up a remarkable 30% in just three weeks after China announced a slew of stimulus measures to boost its struggling economy. Japanese stocks surged, and the yen declined on Thursday as the possibility of additional monetary policy tightening this year receded. The US dollar gained against the Japanese yen, reaching the highest level in a month. The dollar had already surged 2% after Japan's newly-elected Prime Minister Shigeru Ishiba stated that the country was not ready for further interest rate increases, following a meeting with central bank governor Kazuo Ueda. Ueda also indicated that the central bank would proceed cautiously in deciding whether to raise rates. Additionally, dovish BOJ policymaker Asahi Noguchi said the BOJ must patiently maintain its accommodative monetary conditions. The euro remained under pressure as markets began to bet on the European Central Bank cutting rates at its meetings in October and December. This shift in expectation came after a key policy hawk, Isabel Schnabel, stated her belief that inflation would return to target levels.

PMIs across Europe on Thursday are expected to show a further slowdown in economic activity, reinforcing expectations for interest rate cuts in the region. While services are expanding in the UK, composite PMIs in Germany and other regions of Europe are expected to drop in September data.

Stateside, jobless claims and the ISM services survey will dominate Thursday's data, but Friday's payroll figures will be the principal macro catalyst of the week. Markets will also eye comments by Raphael Bostic, President of the Federal Reserve Bank of Atlanta, and Neel Kashkari, President of the Federal Reserve Bank of Minneapolis.

Overnight Newswire Updates of Note

  • Chinese Stock Rally Cools In Hong Kong As Tech Shares Slump

  • BoJ Policy Board Dove Backs Keeping Financial Conditions Easy

  • BoJ Must Patiently Maintain Loose Policy, Says Board Member Noguchi

  • Israel Reports First Deaths In Lebanon And Bolsters Fighting Hezbollah

  • EU Support Is Enough To Impose Chinese EV Tariffs, Sources Say

  • Biocon Biologics Refinances USD 1.1 Billion Debt

  • Yen Extends Losses Following The Comments From New PM Ishiba

  • OPEC+ Makes No Changes To Plans For Reviving Oil Production

  • Gold Rally Cools As Traders Eye Mideast Developments, US Data

  • Japan’s Nikkei 225 Jumps 2.5% As Yen Weakens; Hong Kong Stocks Fall

  • Westpac Enters Into Agreement To Sell Auto Finance Loan Book

  • SoftBank’s Son Envisions AI Running Households In Next Few Years

          (Sourced from reliable financial news outlets)

As the US elections draw near, the financial markets are bracing for potential volatility, presenting both opportunities and challenges for traders. To help navigate this crucial period, we have launched the US Elections - Traders Hub, a comprehensive resource tailored to meet the needs of traders at every level.

FX Options Expiries For 10am New York Cut 

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

  • EUR/USD: 1.1000 (2BLN), 1.1025 (1.1BLN), 1.1050-60 (4.3BLN)

  • 1.1070-80 (4BLN), 1.1100-05 (5BLN)

  • USD/CHF: 0.8455 (365M), 0.8470-80 (607M), 0.8500-15 (1.8BLN)

  • EUR/CHF: 0.9425 (495M). NZD/USD: 0.6310 (1.4BLN)

  • GBP/USD: 1.3130-40 (630M), 1.3200 (189M), 1.3260 (240M), 1.3300 (381M)

  • AUD/USD: 0.6700 (1.6BLN), 0.6750 (300M), 0.6785 (1.2BLN), 0.6850-65

  • (1.2BLN), 0.6875 (426M), 0.6890-0.6900 (1.3BLN), 0.6950 (739M)

  • AUD/NZD: 1.0950-65 (572M), 1.1000 (530M), 1.1050 (276M)

  • USD/CAD: 1.3500 (431M), 1.3550-55 (1.4BLN)

  • AUD/JPY: 101.40 (467M), 102.95 (343M)

  • CHF/JPY: 170.00 (478M), 171.50 (840M)

  • USD/JPY: 145.00 (2.4BLN), 145.25 (400M), 145.75 (1.2BLN), 145.95-146.00

  • (746M), 146.50 (645M), 147.00 (875M), 147.40 (310M), 148.00 (1.7BLN)

CFTC Data As Of 27/9/24

  • Japanese Yen net long position is 66,011 contracts

  • Swiss Franc posts net short position of -19,290 contracts

  • British Pound net long position is 86,992 contracts

  • Euro net long position is 71,698 contracts

  • Bitcoin net short position is -1,546 contracts

  • Equity fund managers raise S&P 500 CME net long position by 45,709 contracts to 1,067,272

  • Equity fund speculators trim S&P 500 CME net short position by 33,670 contracts to 328,635

  • Speculators trim CBOT US 10-year Treasury futures net short position by 68,748 contracts to 1,025,278

Technical & Trade Views

SP500 Bullish Above Bearish Below 5735

  • Daily VWAP bearish

  • Weekly VWAP bullish

  • Below 5720 opens 5680

  • Primary support 5575

  • Primary objective 5820

EURUSD Bullish Above Bearish Below 1.1180

  • Daily VWAP bearish

  • Weekly VWAP bullish

  • Below 1.1120 opens 1.10

  • Primary support 1.10

  • Primary objective 1.1250

GBPUSD Bullish Above Bearish Below 1.3230

  • Daily VWAP bearish

  • Weekly VWAP bullish

  • Below 1.31 opens 1.29

  • Primary support is 1.29

  • Primary objective 1.29

USDJPY Bullish Above Bearish Below 142.50

  • Daily VWAP bullish

  • Weekly VWAP bearish

  • Above 141.50 opens 138

  • Primary resistance 148

  • Primary objective is 148.38

XAUUSD Bullish Above Bearish Below 2645

  • Daily VWAP bearish

  • Weekly VWAP bullish

  • Below 2600 opens 2550

  • Primary support 2550

  • Primary objective is 2720

BTCUSD Bullish Above Bearish Below 60000

  • Daily VWAP bearish

  • Weekly VWAP bullish

  • Below 57000 opens 52000

  • Primary support is 500000

  • Primary objective is 700000