Daily Market Outlook, October 4, 2024
Munnelly’s Macro Minute…
"Crude Spikes As Geopolitical Risk Rockets ”
Escalating tensions in the Middle East have cast a shadow over global markets ahead of the weekend, and oil prices are on the brink of their largest weekly gain in over a year on Friday. Despite the fact that the majority of equity indexes and stock futures are in positive territory, investors are speculating about the possibility of imminent retaliatory strikes by Israel against Iran, which is limiting their gains. Brent crude futures are anticipated to experience a weekly increase of approximately 8%, which would be the most significant since February 2023. Conversely, U.S. crude futures are expected to experience a weekly increase of 8.2%, which would be the largest since March of last year. Despite the fact that U.S. President Joe Biden has stated that he does not anticipate a "all-out war" in the Middle East, he has previously suggested that the U.S. was considering strikes on Iran's oil facilities as a response to Tehran's missile attack on Israel. In spite of the fact that oil prices have returned to the levels they were at just one month ago and oil has recovered from a low base, the pressure on world stocks and investors' risk appetite is beginning to mount. Should oil prices continue to increase and geopolitical tensions persist, investors may need to reevaluate their inflation forecasts. Jerome Powell, the chairman of the Federal Reserve, is likely also being kept on his toes by the possibility of a broader conflict in the Middle East. This may have contributed to his statement that the U.S. central bank would likely continue to implement quarter-percentage-point interest rate reduction in the future. In addition, the day will feature numerous speeches from policymakers at the European Central Bank and one from the head of the Bank of England.
Overnight Newswire Updates of Note
US Port Workers Agree To End Their Strike
Japan’s Ishiba Orders Economic Package As Election Looms
Japan Econ Minister Akazawa: Aims To Overcome Deflation Under Ishiba
Israeli Strike On Beirut Targets Hezbollah Official Hashem Safieddine
AUS Dollar Solid, Traders Expect The RBA To Keep Policy Restrictive
Pound Drops Most Since 2022 Against Euro As BOE Eyes Faster Cuts
Oil Edges Up On Middle East Conflict, But Supply Outlook Limits Gains
Hong Kong Markets Resume Rally; Investors Weigh China Stimulus
China’s Cash Funds Lose Billions In Rush Back to Stock Market
TSMC, Amkor To Bring Advanced Chip Packaging To US For First Time
Robinhood To Launch Margin Trading In UK Expansion Drive
Bitcoin Dominance Nears 3-Year High Amid Altcoin Weakness
(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)
EURUSD: 1.0960-70 (1.5BLN), 1.1000 (3.4BLN), 1.1040-50 (1BLN)
1.1070-80 (803M), 1.1100 (1.6BLN)
USD/CHF: 0.8275 (1.4BLN), 0.8400 (700M), 0.8450 (570M), 0.8575 (706M)
0.8675 (630M)
EUR/GBP: 0.8410-15 (587M)
AUD/USD: 0.6820 (375M), 0.6835 (452M), 0.6850 (1.6BLN), 0.6880 (326M)
USD/CAD: 1.3500-10 (2BLN), 1.3530-40 (433M), 1.3540-45 (776M)
1.3555 (400M), 1.3580 (600M), 1.3595-1.3600 (1.2BLN)
USD/JPY: 145.00 (536M), 146.00 (776M), 146.25 (929M), 146.50 (1.3BLN)
147.00 (364M), 148.00 (1BLN)
EUR/JPY: 166.45 (1BLN). AUD/JPY: 99.50 (305M)
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
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Past performance is not indicative of future results.
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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!