InvestMacro

By JustMarkets

As of Tuesday’s stock market close, the Dow Jones Index (US30) decreased by 0.12%, while the S&P 500 Index (US500) added 0.10%. The NASDAQ Technology Index (US100) closed positive by 0.08%. The broader market fluctuated on Wednesday amid mixed corporate news.

The US economic news on Wednesday was favorable for the dollar as wholesale sales for September rose by 2.2% m/m, which exceeded expectations of 0.9% and was the largest increase in 20 months. Meanwhile, the MBA weekly US Mortgage Applications rose by 2.5% week-over-week

On Thursday, markets are expecting Fed Chairman Powell’s comments during a conference call on monetary policy issues. On Wednesday, Powell did not comment on the economy or interest rates while delivering opening remarks at the Fed’s Research and Statistics Division Centennial Conference. Currently, markets are factoring in a 10% probability of a 25 bps rate hike at the next FOMC meeting on December 12-13 and an 18% probability of a 25 bps rate hike at the January 30-31, 2024 FOMC meeting.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) added 0.51%, France’s CAC 40 (FR40) gained 0.69%, Spain’s IBEX 35 (ES35) rose by 0.52%, and the UK’s FTSE 100 (UK100) closed negative by 0.11%.

The ECB’s monthly survey of consumer inflation expectations showed that 1-year Eurozone inflation expectations rose to a 5-month high of 4.0% in September from 3.5% in August, but 3-year inflation expectations were unchanged at 2.5%. Eurozone retail sales for September fell by 0.3% m/m, weaker than expectations of 0.2% m/m. ECB Governing Council representative Kazaks said yesterday that the ECB cannot rule out the possibility that further rate hikes may be needed.

Key messages from the Bank of England (BoE) Governor’s speech yesterday:

• It is really too early to talk about cutting rates;
• The main message is that we think policy should be restrictive for a long period of time, even though there are upside risks;
• We think policy is restrictive now, and economic growth is very weak.

Crude oil prices Wednesday extended Tuesday’s sharp losses as crude oil (WTI) fell to a 3-month low. Weakening oil demand contributed to the sell-off amid recent economic news indicating weakness in China’s economy. Additionally, crude oil has been pressured by hawkish central bank comments that have curbed speculation that central banks are done raising interest rates. Tuesday afternoon’s weekly API report was negative for crude oil as it showed that US crude inventories rose by 11.9 million barrels last week. There was no weekly EIA inventory report on Wednesday due to a system update.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.33% on Wednesday, China’s FTSE China A50 (CHA50) lost 0.28%, Hong Kong’s Hang Seng (HK50) was down by 0.58% for the day, and Australia’s ASX 200 (AU200) was positive by 0.26%.

In China, the latest data showed that both consumer and producer inflation fell in October, bringing the country into disinflation territory for the second time this year. The inflation data was released against a backdrop of disappointing trade data for October, with data released last week showing a steady decline in business activity in China during the month. The weak October data added to fears of a slowdown in China’s economic growth. However, more significant losses in Chinese equities were tempered by gains in real estate stocks, which rose amid reports that Beijing is considering additional measures to support the sector.

S&P 500 (F)(US500) 4,382.78 +4.40 (+0.10%)

Dow Jones (US30) 34,112.27 −40.33 (−0.12%)

DAX (DE40)  15,229.60 +76.96 (+0.51%)

FTSE 100 (UK100) 7,401.72 −8.32 (−0.11%)

USD Index  105.54 −0.01 (−0.01%)

• – China Consumer Price Index (m/m) at 03:30 (GMT+2);
• – China Producer Price Index (m/m) at 03:30 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+2);
• – Eurozone ECB President Lagarde Speaks at 19:30 (GMT+2);
• – US Fed Chair Powell Speaks at 21:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

As of Tuesday’s stock market close, the Dow Jones Index (US30) added 0.17%, while the S&P 500 Index (US500) increased by 0.28%. The NASDAQ Technology Index (US100) closed positive by 0.90% on Tuesday. The S&P 500 (US500 and NASDAQ (US100) indices hit 3-week highs yesterday, while the Dow Jones (US30) updated a one-month-high. But by the end of the trading day, the indices began to lose upward momentum amid hawkish FOMC comments.

The comments from Fed officials on Tuesday eased speculation that the Fed had stopped raising interest rates and proved bullish for the dollar. Minneapolis FRB President Kashkari said that while there has been encouraging inflation data for three months, it is not enough, and “we need to let the data continue to come to us to see if we have really put the inflation genie back in the bottle.” Chicago Fed President Goolsbee also said that the top priority for policymakers is to get inflation back to target, and the Fed does not want to commit to interest rate decisions in advance.

The latest economic data showed the US trade deficit for September widened to $61.5 billion from $58.7 billion in August, exceeding expectations of $59.8 billion.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) rose by 0.11%, France’s CAC 40 (FR40) fell by 0.39%, Spain’s IBEX 35 (ES35) lost 0.12%, and the UK’s FTSE 100 (UK100) closed negative by 0.10%.

German industrial production for September fell by 1.4% m/m, which was stronger than expectations of 0.1% m/m. The S&P German Construction PMI for October fell by 1.0 to 38.3, a record rate of contraction. The Eurozone’s Producer Price Index (displays the rate of inflation between factories) for September fell to 12.4% y/y, a record high since data collection began in 1982. All data is negative for the European currency.

Rapid wage growth in the Eurozone could keep inflation high for longer, and the European Central Bank should keep interest rates at or near record highs until next year to extinguish price pressures, the International Monetary Fund said on Wednesday.

Bank of England Chief Economist Pill hinted that an interest rate cut could come by the middle of next year. Markets now expect a 0.75% rate cut next year.

The strengthening of the US dollar on Tuesday had a negative impact on energy prices. In addition, weakening demand for oil led to a sell-off in the commodity after Chinese export shipments fell more than expected in October. As a result, crude oil (WTI) fell to a 3-month low, and gasoline fell to a 4-week low. However, investors should not forget that OPEC+ countries have extended production cuts until the end of the year and are likely to extend these quotas for the next year, so traders should not expect a strong drop in oil prices.

Asian markets were mostly declining yesterday. Japan’s Nikkei 225 (JP225) was down by 1.34% on Tuesday, China’s FTSE China A50 (CHA50) lost 0.66%, Hong Kong’s Hang Seng (HK50) decreased by 1.65% for the day, and Australia’s ASX 200 (AU200) was negative by 0.29% for Tuesday.

Chinese regulators held a symposium with several major property developers, including China Vanke Co Ltd, Poly Real Estate Group Co Ltd, and Longfor Properties Co Ltd, to assess their financial situation amid a prolonged slump in the real estate market. The news boosted hopes that the government would provide additional support for the weakened real estate sector, which has faced a series of high-profile defaults in recent years. However, sentiment towards China is still intact after weak trade balance data for October. The focus will now turn to China’s inflation data for the month, due for release on Thursday.

Bank of Japan Governor Kazuo Ueda said Wednesday that the central bank doesn’t necessarily have to wait for inflation-adjusted wage growth to turn positive before ending loose monetary policy. Ueda said the passive effect of rising import prices should fade, and wages and inflation need to rise in tandem for the BOJ to consider an exit from ultra-loose policy. Analysts expect Japan’s inflation-adjusted real wages, which fell for the 18th consecutive month in September, to continue falling next year as wage growth fails to catch up with persistent price increases.

S&P 500 (F)(US500) 4,378.38 +12.40 (+0.28%)

Dow Jones (US30) 34,152.60 +56.74 (+0.17%)

DAX (DE40)  15,152.64 +16.67  (+0.11%)

FTSE 100 (UK100) 7,410.04 −7.72 (−0.10%)

USD Index  105.51 +0.29 (+0.28%)

• – New Zealand Inflation Expectations (q/q) at 04:00 (GMT+2);
• – German Consumer Price Index (m/m) at 09:00 (GMT+2);
• – UK BoE Gov Bailey Speaks (m/m) at 11:30 (GMT+2);
• – Eurozone Retail Sales (m/m) at 12:00 (GMT+2);
• – Canada Building Permits (m/m) at 15:30 (GMT+2);
• – US Fed Chair Powell Speaks at 16:15 (GMT+2);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
• – US FOMC Member Barr Speaks at 21:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At Monday’s stock market close, the Dow Jones Index (US30) added 0.10%, while the S&P 500 Index (US500) increased by 0.18%. The NASDAQ Technology Index (US100) closed positive by 0.30% on Monday. Stocks rose on Monday on the back of positive developments from last Friday, when a weaker-than-expected October US jobs report and October ISM services report showed a slowing economy that could keep the Federal Reserve from raising interest rates and even start lowering them by the middle of next year.

On Monday, optimistic comments from Fed Vice Chair Brainard were favorable for stocks when she said the economy is performing exceptionally well and is near the point of sustained growth, with most forecasters dismissing the issue of recession. Currently, markets are pricing in a 10% probability of a 25 bps rate hike at the next FOMC meeting on December 12-13 and an 18% probability of a 25 bps rate hike at the January 30-31, 2024 FOMC meeting.

Booking Holdings (BKNG) shares closed higher by more than 4% after D.A. Davidson upgraded the stock from Neutral to Buy with a price target of $2,400. Airbnb (ABNB) shares were down more than 3% yesterday after Italy’s financial police confiscated €779 million ($835 million) from the company due to failure to pay a portion of taxes.

Growth in Canadian economic activity accelerated slightly in October, while a measure of prices fell to its lowest level in six months. The seasonally adjusted index rose to 53.4 from 53.1 in September. It was the third consecutive month the index exceeded the 50 threshold, indicating the sector is expanding.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) decreased by 0.35%, France’s CAC 40 (FR40) fell by 0.48% yesterday, Spain’s IBEX 35 (ES35) lost 0.56% and the UK’s FTSE 100 (UK100) closed around its opening price.

According to a survey released on Tuesday, the pace of growth in UK consumer spending last month was the slowest in more than a year, reflecting concerns about the cost of living in the run-up to Christmas. The Bank of England raised interest rates for 14 consecutive meetings until August this year. Last week, it said it planned to keep them at a 15-year high to keep inflation down, although it said the economy was stagnant and so far, the effect of the rate hikes had only been half felt.

Crude oil and gasoline prices closed moderately higher on Monday after Saudi Arabia and Russia confirmed they would maintain crude production cuts through the end of the year. The 23-nation OPEC+ coalition will meet again on November 26 to review oil production policy for 2024.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) jumped by 2.37% on Monday, China’s FTSE China A50 (CHA50) added 0.75%, Hong Kong’s Hang Seng (HK50) was up by 1.71% on the day, and Australia’s ASX 200 (AU200) was positive by 0.28% on Monday.

The Reserve Bank of Australia (RBA) expectedly to raise the interest rate by 0.25%. But the Australian dollar fell more than 0.8% as the rate hike was accompanied by softening language on the need for further increases. The RBA said in a statement that the recent rise in inflation is not material to an increase in the inflation outlook, with the impact of past rate hikes not yet fully reflected in the real economy, so there are reasons not to raise rates further.

Japanese household spending fell by 2.8% year-on-year in September, marking the seventh consecutive monthly decline, as households cut spending on food and other goods amid rising prices with real wages continuing to fall.

Chinese exports contracted more than expected in October amid deteriorating overseas demand, while an unexpected rise in imports caused China’s trade surplus to shrink to its lowest level in 17 months. The trade data showed continued headwinds for the Chinese economy, especially amid deteriorating economic conditions in China’s largest trading countries − Europe and the United States.

S&P 500 (F)(US500) 4,365.98 +7.64 (+0.18%)

Dow Jones (US30) 34,095.86 +34.54 (+0.10%)

DAX (DE40)  15,135.97 −53.28 (−0.35%)

FTSE 100 (UK100) 7,417.76 +0.03 (+0.01%)

USD Index  105.29 +0.27 (+0.26%)

• – China Trade Balance (m/m) at 05:00 (GMT+2);
• – Australia RBA Interest Rate Decision at 05:30 (GMT+2);
• – Australia RBA Rate Statement at 05:30 (GMT+2);
• – Switzerland Unemployment Rate (m/m) at 08:45 (GMT+2);
• – German Industrial Production (m/m) at 09:00 (GMT+2);
• – Eurozone Producer Price Index (m/m) at 12:00 (GMT+2);
• – US Trade Balance (m/m) at 15:30 (GMT+2);
• – Canada Trade Balance (m/m) at 15:30 (GMT+2);
• – US FOMC Member Williams Speaks at 19:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At Friday’s close, the Dow Jones Index (US30) added 0.66% (+4.68% for the week), while the S&P 500 Index (US500) was up by 0.94% (+5.29% for the week). The NASDAQ Technology Index (US100) closed positive by 1.38% (+5.71% for the week) on Friday. All three indices closed in positive territory and hit their monthly highs. A weak US unemployment report supported speculation after Wednesday’s FOMC meeting that the Fed’s rate hiking regime is over.

The US unemployment report released on Friday showed weaker-than-expected labor market dynamics. The US employment number for October rose by 150,000, which was weaker than expectations of 180,000. In addition, the September data was revised downward to 297,000 from 336,000. October’s US unemployment rate rose by 0.1 points to a nearly 2-year high of 3.9%, indicating a slight weakening of the labor market versus expectations of an unchanged 3.8%. A positive for inflation was the 0.2% m/m increase in average hourly earnings in October, which was slightly weaker than expectations of 0.3%.

Friday’s ISM Services Business Activity Index for October fell by 1.8 points to 51.8, which was weaker than expectations of a decline to 53.0. At the same time, the final October S&P US services PMI was revised downward. The PMI reports indicate some slowdown in the US services sector.

Equity markets in Europe traded without any unified dynamics on Friday. The German DAX (DE40) rose by 0.30% (+2.83% for the week), the French CAC 40 (FR40) fell by 0.19% (+3.23% for the week) on Friday, the Spanish IBEX 35 (ES35) rose by 0.36% (+3.78% for the week), the British FTSE 100 (UK100) closed negative by 0.39% (+1.73% for the week).

The Eurozone unemployment rate for September rose by 0.1 points to 6.5%, indicating a slightly weaker labor market compared to expectations of an unchanged unemployment rate of 6.4%. Germany’s trade report showed weakness in the economy, with exports for September down by 2.4% m/m and imports down by 1.7% m/m, weaker than expectations of 2.0% and 0.1%, respectively.

Tensions continue to rise not only in the Middle East but globally as the conflict between Israel and the Gaza Strip continues to intensify. As each side continues to call on their potential allies, the likelihood of a larger conflict could increase. If this happens, we could begin to see sell-offs in stock markets and rising oil and gold prices.

Asian markets were predominantly up last week. Japan’s Nikkei 225 (JP225) gained 4.02% for the week, China’s FTSE China A50 (CHA50) added 1.35% over five trading days, Hong Kong’s Hang Seng (HK50) ended the week up by 2.55%, and Australia’s ASX 200 (AU200) ended the week positive by 3.12%. Most Asian indices rose sharply on Monday as weaker-than-expected US jobs data reinforced expectations that the Federal Reserve has ended its rate hike cycle, while attention also shifted to upcoming economic data from China.

The Reserve Bank of Australia is preparing to raise interest rates at its meeting on Tuesday, following signs of renewed inflation and some hawkish comments from central bank officials. The RBA is expected to raise its target money rate by 25 basis points to 4.35% as stronger-than-expected third-quarter inflation data released in October prompted a number of analysts to adjust their expectations. Australian banks ANZ and Westpac pushed back their November rate hike forecasts from December, while UBS and ING also expect a rate hike at the RBA’s November 7 meeting.

Bank of Japan Governor Ueda said on Monday that the central bank needs to have more confidence that wages will continue to rise (rising wages lead to higher prices for services, which will fuel inflation), and as the economy remains strong, it is premature to think about an exit from accommodative policy.

S&P 500 (F)(US500) 4,358.34 +40.56 (+0.94%)

Dow Jones (US30) 34,061.32 +222.24 (+0.66%)

DAX (DE40)  15,189.25 +45.65 (+0.30%)

FTSE 100 (UK100) 7,417.73 −28.80 (−0.39%)

USD Index  105.07 +0.05 (+0.05%)

• – Japan Monetary Policy Meeting Minutes at 01:50 (GMT+2);
• – Japan Services PMI (m/m) at 02:30 (GMT+2);
• – Japan BOJ Gov Ueda Speaks at 06:10 (GMT+2);
• – German Services PMI (m/m) at 10:55 (GMT+2);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+2);
• – UK Construction PMI (m/m) at 11:30 (GMT+2);
• – Canada Ivey PMI (m/m) at 17:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By ForexTime 

*Note: This report was written before the US NFP data was published*

• Euro could see volatility next week thanks to EU data dump ​​​​​​

• Powell remarks could trigger move in USD

• EURUSD bear flag waits for fresh spark on D1 charts

• Key levels of interest found at 1.0690, 1.0530 and 1.0450

Caution remains the name of the game as the key US jobs report this afternoon (Friday, 3rd November) approaches.

Even with the growing anticipation, some keen investors may be keeping tab on what’s to come in the week ahead:

Monday, 6th November

• EUR: Eurozone S&P Global Services PMI, Germany factory orders
• JPY: BoJ September meeting minutes
• GBP: BoE chief economic Huw Pill speech

Tuesday, 7th November 

• CNH: China trade, forex reserves
• AUD: RBA rate decision
• EUR: Eurozone PPI, Germany industrial production
• JPY: Japan household spending
• USD: US trade, Kansas City Fed President Jeff Schmid speech

Wednesday, 8th November

• EUR: Eurozone retail sales, Germany CPI
• GBP: BOE Governor Andrew Bailey speech
• USD: US wholesale inventories, New York Fed President John Williams speech
• WSt30_m: Walt Disney earnings

Thursday, 9th November  

• CNH: China CPI, PPI, money supply, new yuan loans
• GBP: BOE chief economist Huw Pill speaks
• USD: US initial jobless claims, Atlanta Fed President Raphael Bostic, Richmond Fed President Tom Barkin, Fed Chair Jerome Powell speech

Friday, 10th November

• JPY: Japan M2 money stock
• NZD: New Zealand PMI
• EUR: ECB President Christine Lagarde speech
• GBP: UK industrial production, GDP
• USD: University of Michigan consumer sentiment, Fed speak

Our focus falls on none other than the world’s most traded currency, which is set to be influenced by numerous reports from Europe and the United States, along with speeches from Fed officials including Jerome Powell.

Before we discuss what to expect from the EURUSD next week, it is worth noting that the currency pair is under pressure with a bearish flag pattern in play on the daily charts.

A bearish flag is a candlestick chart pattern that signals the continuation of a downtrend once the technical bounce is finished.

A fresh fundamental spark could be required to trigger a significant technical move on the EURUSD. Here are 3 potential catalysts to keep an eye on in the week ahead:

1. EU data dump

The euro could see heightened volatility due to top-tier data from Europe in the first half of the week.

Concerns remain elevated over Europe’s outlook with economic growth contracting 0.1% in the third quarter of 2023. However, inflation has fallen to its lowest level in more than two years – strengthening the case for ECB doves and boosting expectations that the ECB will not raise rates further.

Investors will be paying close attention to some key data pieces ranging from Eurozone PMI’s, PPI and retail sales along German factory orders and industrial production among other significant releases from the region.

• The EURUSD could find itself under fresh selling pressure if overall economic data disappoints and boosts speculation around rate cuts in the first half of 2024.
• Euro bulls may draw support from strong economic data, especially if this supports expectations around rates remaining higher for longer

As of writing, traders are currently pricing in an 82% probability of a 25-basis point ECB cut by April 2024.

2. Powell remarks + US data

The Fed not only left interest rates unchanged at its November meeting but Powell also hinted that the central bank could be done with its most aggressive tightening cycle in 40 years.

Powell expressed optimism over the US economy but still warned that there was a long way to go on the inflation fight. Speeches from various Fed officials will be in sharp focus but on Thursday the spotlight shine on Powell as he participates in a panel on monetary policy challenges at the IMF’s annual research conference in Washington. It will be wise to keep an eye on US economic data which could influence monetary policy expectations.

• Should Fed officials strike a dovish tone and overall US data disappoint, this could strengthen the argument around the Fed being done with hikes – supporting the EURUSD as a result amid dollar weakness.
• If Powell along with Fed officials sounds more hawkish and US data beats forecasts, expectations could rise around one more Fed hike before the end of 2023, pulling the EURUSD lower as the dollar strengthens.

As of writing, traders are pricing in a 32% probability of a 25 basis point Fed hike by the end of 2023.

3. Technical forces: bear flag

A bear flag technical pattern could be in play on the daily charts with prices flirting around the 50-day SMA as of writing. Prices are trading below the 100 and 200-day SMA while the MACD trades below zero. Key resistance can be found at 1.0730 and 1.0690. Support may be identified at 1.0530 and 1.0450.

• Sustained weakness below 1.0730 may encourage prices to slip back towards 1.0530 before targeting the 1.0450 level.
• Should prices break above 1.0730, this may trigger a move towards the 200-day SMA around 1.0800.

According to Bloomberg’s FX model, there is a 74% chance that the EURUSD will trade between 1.0539 and 1.0768 range over the coming week.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By JustMarkets

As of Thursday’s stock market close, the Dow Jones Index (US30) increased by 1.70%, while the S&P 500 Index (US500) added 1.89%. The NASDAQ Technology Index (US100) closed positive at 1.78% yesterday. All three indices hit two-week highs. Hopes that the Federal Reserve will not raise interest rates again drove bond yields lower and supported stocks.

Thursday’s economic news out of the US was primarily dovish for Fed policy and bearish for the dollar. Weekly Initial Jobless Claims rose by 5,000 to 217,000, indicating a slightly weaker labor market than expectations of no change at 210,000. Nonfarm labor productivity rose by 4.7% in the third quarter, exceeding expectations of 4.3% and the highest in 3 years.

Apple (AAPL) posted its fourth consecutive loss on revenue of $89.5 billion, down 1% from the previous quarter. The company’s stock fell more than 3.5% on the report. Starbucks (SBUX) closed higher by more than 9% after reporting Q4 comparable sales growth of 8.0%, beating the consensus forecast of 6.31%. Qualcomm (QCOM) closed higher by more than 5% after reporting adjusted Q4 revenue of $8.67 billion. Moderna (MRNA) declined more than 6% and topped the Nasdaq 100 losers list after reporting a third-quarter loss per share of $9.53 after including $3.1 billion in redundancy costs and tax benefits. Airbnb (ABNB) closed down more than 3% after reporting Q4 revenue guidance of $2.13 billion to $2.17 billion, which was worse than expected.

Equity markets in Europe were mainly up yesterday. The German DAX (DE40) rose by 1.48%, the French CAC 40 (FR40) gained 1.85% yesterday, the Spanish IBEX 35 (ES35) added 2.04%, and the British FTSE 100 (UK100) closed positive at 1.42%.

The number of unemployed in Germany for October rose by 30,000, exceeding expectations of 14,000, indicating a weakening labor market. The unemployment rate rose by 0.1% to 5.8% in October, matching expectations and the highest rate in 2 years. Comments from ECB Governing Council spokesman Knott indicate that he favors a pause in ECB rate hikes.

On Thursday, the Bank of England (BOE) voted 6-3 to keep its key interest rate at 5.25%. It said the restrictive policy will likely be needed for an extended period to contain inflation. Bank of England Governor Bailey said policymakers are watching to see if further rate hikes will be required and that it is very early to think about cutting rates.

Swiss inflation remained at 1.7% y/y in October, matching the market consensus. The core rate rose to 1.5% y/y from 1.3%. The Swiss National Bank (SNB) has ensured that inflation is within the 0%-2% target range. One of the reasons the SNB has been able to keep inflation below target is the strong Swiss franc, which has kept inflation from rising. However, the SNB has expressed concern that inflation could exceed the 2% ceiling as electricity, rent, and public transportation costs have increased.

The EIA natural gas inventories report released Thursday showed an increase of 79 Bcf, which was in line with the consensus forecast but above the 5-year average of 57 Bcf. As of October 27, natural gas inventories were up 7.9% y/y and 5.7% above the 5-year seasonal average, indicating ample natural gas reserves ahead of the winter months.

In the Middle East, Israeli soldiers entered Gaza City, completing the encirclement of the urban area that is home to the main forces of the Palestinian militant group Hamas, but now face a host of challenges in fighting in the dense urban environment.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) gained 1.10% yesterday, China’s FTSE China A50 (CHA50) fell by 0.20%, Hong Kong’s Hang Seng (HK50) added 0.75% on the day, and Australia’s ASX 200 (AU200) ended Thursday positive at 0.90%.

Major Australian banks, including ANZ, ING, and Macquarie, raised home loan interest rates in anticipation of the Reserve Bank of Australia (RBA) raising the cash rate by 25 basis points at its next meeting.

S&P 500 (F)(US500) 4,317.78 +79.92 (+1.89%)

Dow Jones (US30) 33,839.08 +564.50 (+1.70%)

DAX (DE40)  15,143.60 +220.33 (+1.48%)

FTSE 100 (UK100) 7,446.53 +104.10 (+1.42%)

USD Index  106.14 −0.75 (−0.70%)

• – German Trade Balance (m/m) at 09:00 (GMT+2);
• – UK Services PMI (m/m) at 11:30 (GMT+2);
• – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+2);
• – US Nonfarm Payrolls (m/m) at 14:30 (GMT+2);
• – US Unemployment Rate (m/m) at 14:30 (GMT+2);
• – Canada Unemployment Rate (m/m) at 14:30 (GMT+2);
• – US ISM Services PMI (m/m) at 16:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At the close of the stock exchange on Wednesday, the Dow Jones (US30) index rose by 0.67%, and the S&P 500 (US500) index rose by 1.05%. The NASDAQ Technology Index (US100) closed positive at 1.64% yesterday. The S&P 500 (US500) and Nasdaq 100 (US100) indices hit one-week highs, and the Dow Jones Industrials index hit a 10-day-high. Weaker-than-expected ADP employment and ISM manufacturing reports in the US lowered bond yields and boosted stocks. Meanwhile, stock indices continued to rise in the afternoon after the FOMC committee left the rate unchanged at 5.5%, and Fed Chair Powell said that the Fed may suspend the interest rate hike campaign indefinitely: “Given how far we have come, along with the uncertainties and risks we face, the FOMC is proceeding carefully.”

Currently, markets are pricing a 19% chance of a 25 bps rate hike at the next FOMC meeting on December 12-13 and a 27% chance of a 25 bps rate hike at the January 30-31, 2024 FOMC meeting.

The latest economic data showed that the change in US employment numbers for October from ADP was positive 113,000, which was weaker than expectations of 150,000. The US Manufacturing Activity Index for October unexpectedly declined by 2.3 to 46.7, which was weaker than expected. JOLTS job openings in the US for September unexpectedly rose by 53,000 to a 4-month high of 9.553 million, stronger than expectations of a decline to 9.400 million.

Equity markets in Europe were mainly up yesterday. Germany’s DAX (DE40) rose by 0.76%, France’s CAC 40 (FR 40) gained 0.68% yesterday, Spain’s IBEX 35 (ES35) added 0.51%, and the UK’s FTSE 100 (UK100) closed positive 0.28%.

The Bank of England will hold a monetary policy meeting today. Investors expect the Bank of England to keep rates at a 15-year high of 5.25%, with policymakers predicted to reiterate that rates should remain at current levels for an extended period of time despite growing signs of weakness in the economy. But it should not be forgotten that while inflation in the UK has fallen, it remains the highest among major economies and is difficult to contain. So, any hawkish remarks from the Governor of the Bank of England may give temporary support to the British currency.

Silver prices came under pressure yesterday amid weaker-than-expected news from China and the US on weaker demand for industrial metals following unexpected declines in China’s Caixin manufacturing PMI and US ISM manufacturing PMI for October.

Oil prices retreated from their best levels after the dollar index rose to a 4-week-high yesterday and on signs of weakness in manufacturing activity in China and the US. Crude oil inventories rose by 773,000 barrels, according to the EIA, less than expectations of 1.8 million barrels. Also, keep in mind that geopolitical risks are supporting oil prices due to fears that an escalation of the conflict between Israel and Hamas could jeopardize oil supplies from the Middle East.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) gained 2.41% yesterday, China’s FTSE China A50 (CHA50) added 0.84%, Hong Kong’s Hang Seng (HK50) ended the day down by 0.06%, and Australia’s ASX 200 (AU200) ended Wednesday positive 0.85%.

Japan’s Nikkei 225 Index added 1.2% on Thursday, extending gains for the third consecutive session after the Bank of Japan took a less hawkish stance earlier in the week than many expected. A rise in technology stocks helped Australia’s ASX 200 index (AU200) climb 1.3% despite the country’s September trade surplus data falling to a 2.5-year low.

New Zealand’s unemployment rate has been on the rise. Unemployment rose to 3.9% from 3.6% in the last quarter. The employment report showed growing spare capacity in the labor market as higher interest rates cool the economy. Aggressive rate tightening by the Reserve Bank of New Zealand (RBNZ) has led to lower inflation, which fell to 5.6% in the third quarter. Inflation expectations are also falling, an encouraging sign that the RBNZ will seek to avoid a rate hike at its November meeting.

S&P 500 (F)(US500) 4,237.86 +44.06 (+1.05%)

Dow Jones (US30) 33,274.58 +221.71 (+0.67%)

DAX (DE40)  14,923.27 +112.93 (+0.76%)

FTSE 100 (UK100) 7,342.43 +20.71 (+0.28%)

USD Index  106.63 −0.03 (−0.03%)

• – Australia Trade Balance (m/m) at 02:30 (GMT+2);
• – Hong Kong Interest Rate Decision (m/m) at 04:30 (GMT+2);
• – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+2);
• – German Manufacturing PMI (m/m) at 10:55 (GMT+2);
• – German Unemployment Rate (m/m) at 10:55 (GMT+2);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
• – Norwegian Interest Rate Decision (m/m) at 11:00 (GMT+2);
• – UK BoE Interest Rate Decision (m/m) at 14:00 (GMT+2);
• – UK BoE Monetary Policy Statement (m/m) at 14:00 (GMT+2);
• – UK BoE Gov Bailey Speaks at 14:30 (GMT+2);
• – US Initial Jobless Claims (w/w) at 14:30 (GMT+2);
• – US Natural Gas Storage (w/w) at 16:30 (GMT+2);
• – Switzerland SNB Chairman Thomas Jordan speaks at 19:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By George Prior 

The Federal Reserve will almost certainly hold interest rates steady for the second meeting in a row today at the highest level in some 22 years.

This would support expectations from deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, of a year-end rally in 2023.

It also means that most investors will need to revise their investment portfolios.

The analysis from Nigel Green, deVere Group CEO and Founder, comes ahead of the US central bank’s Big Decision on interest rates at 2pm ET (7pm GMT).

He comments: “The markets will be buoyed by the Fed not raising rates as it means we’re nearer to the end of the most aggressive rate-hiking programme in generations.

“But the markets have already fully priced-in this Fed decision, so we don’t expect it to send stocks skyrocketing on this news alone.

“However, the Fed holding rates steady again does add fuel to our expectation of a 2023 year-end rally.”

On Tuesday, the deVere CEO told the media: “History shows that November is the second-best month of the year for markets, behind April.

“This November could be even more positive as some markets are currently in correction territory – falling by more than 10% – and so a swing to the upside will be more pronounced.

“Over 72 years there have been 34 market declines. Only 12 of these have turned into bear markets. When does a recovery typically happen? 96 days after the start of the correction. We’re now around day 90.

“If all this data holds up, we’re about to see a year-end rally, which investors would not want to miss out on.”

While the Fed may be done hiking, there is a wider expectation that they’re going to keep rates higher for longer.

As interest rates are anticipated to remain elevated for an extended period and a year-end market rally is expected, investors must adopt a prudent approach to navigate these evolving financial landscapes.

To thrive in such conditions, Nigel Green suggests five important strategies that investors should consider.

“First, maintain a well-diversified portfolio that spreads risk across various asset classes. Diversification can help mitigate the impact of rising interest rates and market volatility.

“Second, evaluate your risk tolerance and investment goals. Ensure that your portfolio aligns with your financial objectives, and consider adjusting your asset allocation accordingly.

“Third, given the potential for higher market volatility, active management can be valuable. Reassess and rebalance your portfolio as needed to capitalise on opportunities and manage risks effectively.

“Four, explore fixed-income investments that are less sensitive to interest rate changes, such as short-term bonds, structured notes or inflation-protected securities.

“Five, keep a long-term perspective and avoid making impulsive decisions based on short-term market movements. Stick to your investment strategy and avoid trying to time the market.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of offices across the world, over 80,000 clients and $12bn under advisement.

By JustMarkets

At Tuesday’s stock market close, the Dow Jones Index (US30) increased by 0.38%, while the S&P 500 Index (US500) added 0.65%. The NASDAQ Technology Index (US100) closed positive 0.48% yesterday. Stocks closed moderately higher on Tuesday amid mostly better-than-expected corporate earnings results.

The US economic news released Tuesday was mixed for the dollar and stock indices. On the positive side, the third quarter labor cost index rose by 1.1%, stronger than expectations of an additional 1.0%. In addition, the S&P CoreLogic composite-20 home price index for August rose by 2.16% year-over-year, which was stronger than expectations of 1.75% and was the most significant increase in 7 months. On the bearish side, the Conference Board US Consumer Confidence Index for October fell by 1.7 to a 5-month low of 102.6. In addition, the October Chicago PMI unexpectedly declined by 0.1 to 44.0, weaker than expectations of a rise to 45.0.

In the Middle East, Iran’s foreign minister on Tuesday called for utilizing the “last political opportunities” to end the war between Israel and Hamas. It was also reported that Yemen fired a ballistic missile at Israel, which was successfully shot down.

Equity markets in Europe traded yesterday without a single dynamic. German DAX (DE40) rose by 0.64%, French CAC 40 (FR40) yesterday rose by 0.89%, Spanish IBEX 35 (ES35) fell by 0.02%, and British FTSE 100 (UK100) closed negative 0.08%.

October Eurozone CPI declined to 2.9% y/y from 4.3%, weaker than expectations of 3.1% y/y and the lowest increase in 2 years. Core CPI slipped to 4.2% y/y in October from 4.5% y/y in September, which matched expectations and was the lowest reading in 15 months. Eurozone GDP declined 0.1% q/q in Q3 but grew 0.1% y/y, weaker than expected. German retail sales for September unexpectedly fell by 0.8% m/m, weaker than expectations of 0.5% m/m. Stournaras of the ECB Governing Council said that he believes interest rates in the Eurozone have peaked. He would consider cutting interest rates if inflation falls consistently and steadily below the 3% threshold in mid-2024.

Oil prices initially went up on Tuesday on fears that the conflict between Israel and Hamas could escalate on reports that Israel is shelling militant targets in Lebanon, which has the potential to widen the conflict. However, Tuesday’s global economic news was weaker than expected and negatively impacted energy demand and crude oil prices.

Asian markets traded without any unified dynamics. Japan’s Nikkei 225 (JP225) gained 0.53% yesterday, China’s FTSE China A50 (CHA50) declined by 0.07%, Hong Kong’s Hang Seng (HK50) fell by 1.69% on the day, while Australia’s ASX 200 (AU200) was positive 0.12% on Tuesday.

Recent Chinese manufacturing activity data indicates that Beijing’s stimulus measures have had a limited economic impact. Additional government spending will likely be required to lift the Chinese economy from a three-year slump. Due to this, investors are largely wary of investing in Chinese markets.

Japanese economic news released on Tuesday was mixed for the yen. On the bearish side, industrial production for September rose by 0.2% m/m, which was weaker than expectations of 2.5% m/m. Retail Sales for September unexpectedly declined by 0.1% m/m, which was weaker than expectations of 0.2% m/m. In contrast, Consumer Confidence for October unexpectedly rose by 0.5 to 35.7, stronger than expectations of a decline to 35.0.

S&P 500 (F)(US500) 4,193.80 +26.98 (+0.65%)

Dow Jones (US30) 33,052.87 +123.91 (+0.38%)

DAX (DE40)  14,810.34 +93.80 (+0.64%)

FTSE 100 (UK100) 7,321.72 −5.67 (−0.08%)

USD Index  106.74 +0.62 (+0.58%)

• – New Zealand RBNZ Gov Orr Speaks at 00:00 (GMT+2);
• – Japan Manufacturing PMI (m/m) at 02:30 (GMT+2);
• – Switzerland Manufacturing PMI (m/m) at 10:30 (GMT+2);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
• – US ADP Nonfarm Employment Change (m/m) at 14:15 (GMT+2);
• – Switzerland SNB Chairman Thomas Jordan speaks at 14:40 (GMT+2);
• – Canada Manufacturing PMI (m/m) at 15:30 (GMT+2);
• – US ISM Manufacturing PMI (m/m) at 16:00 (GMT+2);
• – US JOLTs Job Openings (m/m) at 16:00 (GMT+2);
• – US Crude Oil Reserves (w/w) at 16:30 (GMT+2);
• – US FOMC Statement at 20:00 (GMT+2);
• – US Fed Interest Rate Decision at 20:00 (GMT+2);
• – US FOMC Press Conference at 20:30 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.