Daily Market Outlook, September 20, 2024 

Munnelly’s Macro Minute…

"BoJ Takes Up The Central Bank Batton”

Investors are continuing to celebrate the Federal Reserve's half-point interest rate reduction on Wednesday while also evaluating the policy actions of the Bank of Japan, and the Chinese central bank. China is contemplating the removal of some of the most severe remaining restrictions on home purchases, as previous measures have failed to stimulate a stagnant real estate market. Asian equities are generally higher on Friday. The Japanese market was the top performer in the region, although it has retreated from session highs. This is due to the Bank of Japan's decision to maintain its key short-term interest rate at approximately 0.25% to 0.1%, as was anticipated. In July, the bank increased its rates. Governor Ueda of the Bank of Japan declared, "Our decision regarding monetary policy will be contingent upon the current economic, price, and financial conditions." Japan's real interest rates continue to be exceptionally low. We will modify the level of monetary support and raise interest rates if our economic and price forecasts are met.”

In the UK, retail sales for August were reported to be significantly higher than anticipated. The core ex-fuel measure increased by 1.1% m/m, surpassing the consensus of 0.5% m/m, and in response to revisions that were upward for July. The headlines also conveyed a comparable narrative. However, this most recent batch of consumer news is consistent with the fact that there are more headwinds to consider for overall economic growth in H2 than there were in H1 2024, in addition to the seven point decline to -20 in the GfK consumer confidence index for September reported overnight.

There is not much data scheduled for the rest of the day; instead, investors will be paying attention to speeches from central bank speakers, In the UK Catherine Mann, who serves as an external member on the Monetary Policy Committee of the Bank of England. In the eurozone a discussion between International Monetary Fund Managing Director Kristalina Georgieva and President Christine Lagarde of the European Central Bank will garner attention in light of the Fed’s move. Finally from The Federal Reserve Bank of Philadelphia's President, Patrick Harker, will make a speech later in the day in the US session.

Overnight Newswire Updates of Note

  • Israel Strikes Lebanese Targets As Hezbollah Chief Warns ‘Red Lines’ Crossed

  • BoJ Seen Keeping Rates On Hold As Market Awaits Hints Of Next Hike

  • BoE Presses Pause On Rate Cuts, Highlights ‘Gradual Approach’

  • ECB’s Panetta: ECB's Easing Path May Accelerate In Next Months

  • New French Government Deal Struck, Former PM Attal Says

  • Lawmakers Say Crypto Legislation Could Come By Year-End

  • Toyota, Honda To Set Capex And R&D Spending Records Amid EV Pivot

  • Walmart Plans Instant Bank Payments, Cutting Out Card Networks

  • Germany Eyes Uniper IPO After Historic Energy Crisis Bailout

  • Uniper And ConocoPhillips Agree 10-Year Natural Gas Supply Deal

          (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: 1.1000 (776M), 1.1040-50 (758M), 1.1100 (2.7BLN)

  • 1.1120-30 (744M), 1.1135-40 (456M), 1.1150 (3.1BLN)

  • 1.1175-80 (1.7BLN), 1.1200 (2.0BLN), 1.1225 (1.2BLN)

  • 1.1250 (600M)

  • USD/CHF: 0.8450 (307M), 0.8475-85 (1.43BLN)

  • GBP/USD: 1.3150 (900M), 1.3220-30 (375M), 1.3250-60 (1.8BLN)

  • 1.3300-10 (980M), 1.3325 (301M)

  • EUR/GBP: 0.8375-85 (900M), 0.8425-30 (900M)

  • AUD/USD: 0.6665-75 (1.0BLN, 0.6700 (404M)

  • 0.6750-55 (427M), 0.6790-00 (1.1BLN), 0.6830-50 (473M)

  • NZD/USD: 0.5980 (820M), 0.6040 (250M), 0.6105 (520M)

  • USD/CAD: 1.3500 (352M), 1.3515 (200M), 1.3535 (300M)

  • 1.3570-75 (530M), 1.3580-85 (1.9BLN), 1.3590-95 (1.2BLN)

  • 1.3600-05 (1.0BLN)

  • USD/JPY: 141.00 (900M) 142.00 (666M), 143.00-20 (354M)

  • 143.50 (247M)

  • USD/ZAR: 17.00 (300M), 17.50 (230M)

CFTC Data As Of 13/9/24

  • Euro net long position is 81,433 contracts

  • Japanese Yen net long position is 55,770 contracts

  • Swiss Franc posts net short position of -21,304 contracts

  • British Pound net long position is 90,288 contracts

  • Equity fund managers cut S&P 500 CME net long position by 6,179 contracts to 985,040

  • Equity fund speculators trim S&P 500 CME net short position by 18,194 contracts to 253,368

  • Speculators increase CBOT US 10-year Treasury futures net short position by 19,278 contracts to 1,022,105

Technical & Trade Views

SP500 Bullish Above Bearish Below 5670

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Below 5650 opens 5630

  • Primary support 5475

  • Primary objective is 5700 - TARGET HIT, NEW PATTERN EMERGING

EURUSD Bullish Above Bearish Below 1.1140

  • Daily VWAP bullish

  • Weekly VWAP bearish

  • Above 1.12 opens 1.1240

  • Primary resistance 1.12

  • Primary objective 1.0950

GBPUSD Bullish Above Bearish Below 1.3230

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Below 1.32 opens 1.3140

  • Primary support is 1.2730

  • Primary objective 1.3390

USDJPY Bullish Above Bearish Below 141.50

  • Daily VWAP bullish

  • Weekly VWAP bearish

  • Above 143.70 opens 144.30

  • Primary resistance 143.70

  • Primary objective is 138.50

XAUUSD Bullish Above Bearish Below 2530

  • Daily VWAP bearish

  • Weekly VWAP bullish

  • Below 2500 opens 2460

  • Primary support 2430

  • Primary objective is 2598 - TARGET HIT, NEW PATTERN EMERGING

BTCUSD Bullish Above Bearish Below 60000

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Below 54000 opens 50000

  • Primary support is 500000

  • Primary objective is 700000