Daily Market Outlook, October 31, 2024
Munnelly’s Macro Minute…
"Asian Markets In The Red As US Tech Earnings Fail To Impress”
Asian stocks declined on Thursday as semiconductor stocks mirrored overnight drops on Wall Street, while Meta Platforms and Microsoft warned of accelerating costs for artificial intelligence, investors continue to become cautious on mounting capex without requisite revenue expansion. This raised concerns about similar issues for Amazon, which reports earnings along with Apple after the close in New York today. The yen rose from near a three-month low against the dollar, with the Bank of Japan's statement containing some hawkish undertones, leading some analysts to suggest the possibility of a December interest rate hike. More broadly, the dollar took a pause, having retreated from a near three-month peak against major peers on Wednesday. Investors were also cautious ahead of the U.S. non-farm payrolls data on Friday, the presidential election next Tuesday, and a Federal Reserve policy decision on Thursday. Japan's Nikkei share average closed the day down 0.5%. After surveys on Chinese manufacturing and services did indicate some uptick in activity, mainland Chinese blue chips fell 0.7% and Hong Kong's Hang Seng fell 0.3%, reversing earlier gains. Officials hold a week-long conference next week, investors are expecting Beijing to provide more clarity on stimulus; however, markets are cautious regarding another round of detail light disappointment.
Away from the UK, the data calendar is still very busy. In the Eurozone October flash inflation will be released, there might be some upside risk to the widely held belief that the euro area will grow by 1.9% year over year, given the positive news from yesterday's German numbers. However, the ECB is probably going to examine the September hike in the annual rate because energy price base effects are a feature this month.
Stateside, the September personal income and spending deflator data is released today, after yesterday's close-to-expected 2.8% q/q SAAR US GDP for Q3. the headline inflation rate on this metric is expected to be 0.2% m/m, while the core inflation rate is expected to be 0.3% m/m. Although yesterday's ADP employment report's record-breaking 233k was more than twice as high as anticipated, the median wage drop for those changing jobs somewhat eased, falling 0.5 percentage points to 6.2% year over year. In addition to the data from JOLTS and Consumer Confidence earlier in the week showing that overall momentum in the US employment market is continuing slowing, the pay growth difference for those who are not changing jobs is narrowing.
Overnight Newswire Updates of Note
EU Inflation Set To Rise; To Remain Below ECB Target
BoJ Keeps Policy Interest Rate On Hold At 0.25%
Japan’s Factory Output Picks Up As Economy Sputter
Japan Retail Sales Gain 0.5% On Year In September
Yen Under Pressure As BoJ Keeps Rates Steady
China’s Factory Activity Expands, First Time Since April
Aussie Retail Hold Firm, Augur Well For Consumption
NZ Housing Market Bogged Down By Flood Of Listings
MicroStrategy Plans To Raise $42B To Buy More BTC
Samsung’s Profit Rises After Business Offsets AI Gloom
Microsoft Sails As AI Frenzy To Double-Digit Cloud Growth
Meta Rides AI Boom To Stellar Less Than Exp Earnings
VW Proposes 10% Pay Cut To Tackle Crisis
FMR PM Sunak: UK Budget Contains Broken Promises
(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: 1.0775-80 (1.3B), 1.0800 (2.3B),1.0825 (744M),1.0840 (508M),
EUR/USD: 1.0850 (1.2B), 1.0900 (3.4B), 1.0925 (2.3B), 1.0950 (757M)
EUR/USD: 1.0970 (507M), 1.0980 (977M), 1.1000 (1.2B)
USD/JPY: 151.50 (656M), 152.00 (1.4B), 153.00 (743M), 153.50 (1.7B)
USD/JPY: 154.00 (620M), 154.50 (530M), 155.00 (666M)
GBP/USD: 1.2900 (429M), 1.2950 (480M), 1.2995-1.3000 (805M), 1.3260 (537M)
EUR/GBP: 0.8300 (1.0B), 0.8325 (634M), 0.8350 (1.7B), 0.8400 (700M)
EUR/GBP: 0.8450 (501M). EUR/CHF: 0.9365 (550M)
AUD/USD: 0.6610 (621M), 0.6750 (928M). NZD/USD: 0.6020 (712M)
AUD/NZD: 1.0950 (934M), 1.1100 (924M), 1.1150 (751M)
USD/CAD: 1.3700 (1.4B), 1.3725-35 (870M), 1.3765 (687M), 1.3950 (423M)
USD/CAD: 1.4000 (642M)
CFTC Data As Of 25/10/24
EUR net speculative long position disappears, now short 28,524 contracts, down from long 17,150 the previous week.
JPY long position drops to 12,771 contracts from 34,110.
GBP long position cut to 74,576 contracts from 85,802.
AUD long position increases to 27,679 contracts from 19,269.
CAD short position grows to 140,631 contracts from 122,393.
Speculators trim CBOT US 10-year Treasury futures net short position by 16,874 contracts to 848,191
Equity fund managers raise S&P 500 CME net long position by 15470 contracts to 1,065,824
Equity fund speculators trim S&P 500 CME net short position by 19,439 contracts to 304,612
Technical & Trade Views
SP500 Bullish Above Bearish Below 5775
Daily VWAP bearish
Weekly VWAP bearsih
Below 5720 opens 5660
Primary support 5660
Primary objective 5950
EURUSD Bullish Above Bearish Below 1.09
Daily VWAP bullish
Weekly VWAP bearish
Above 1.09 opens 1.0980
Primary support 1.0750
Primary objective 1.0750
GBPUSD Bullish Above Bearish Below 1.3050
Daily VWAP bullish
Weekly VWAP bearish
Below 1.29 opens 1.27
Primary support is 1.29
Primary objective 1.31
USDJPY Bullish Above Bearish Below 148
Daily VWAP bullish
Weekly VWAP bullish
Below 148 opens 144
Primary support 148
Primary objective is 156
XAUUSD Bullish Above Bearish Below 2680
Daily VWAP bullish
Weekly VWAP bullish
Below 2670 opens 2600
Primary support 2550
Primary objective is 2800
BTCUSD Bullish Above Bearish Below 69500
Daily VWAP bullish
Weekly VWAP bullish
Below 69000 opens 64000
Primary support is 58000
Primary objective is 80000
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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!