Daily Market Outlook, November 4, 2024
Munnelly’s Macro Minute...
"Remember Remember The 5th Of November”
The rebound in sentiment from Wall Street on Friday has helped Asian stock markets trade mostly higher on Monday. However, traders are still cautious because of the ongoing geopolitical tensions in the Middle East, the uncertainty surrounding the outcome of the US election, and the impending monetary policy announcement from the US Federal Reserve. Along with the Federal Reserve, the Bank of England (BoE), the Reserve Bank of Australia (RBA), Riksbank, and Norges Bank will all make rate decisions this week, giving investors global monetary policy catalysts. The Federal Reserve is expected to cut interest rates on Thursday regardless of the election result, with further cuts anticipated in December, though this may change depending on the president-elect. The Bank of England and Riksbank are also expected to cut rates, while other central banks are likely to hold steady. Oil prices have risen after OPEC+ delayed a planned production increase, indicating concerns about global demand. The standing committee of China's National People's Congress (NPC) will meet from November 4 to November 8, and it will be eagerly monitored for more information on a number of previously announced stimulus measures. Asia's trading was thinner on Monday since Japan was on vacation.
The euro and the yen nudged up against the dollar. A poll that showed Democratic candidate Kamala Harris with an unexpected 3-point lead in Iowa, primarily because of her appeal with female voters, may have contributed to the dollar's decline. Prior to the election, Harris and Republican nominee Donald Trump are still essentially tied in opinion polls, and the outcome may not be known for days after the votes close. With the Democrats catching up, the likelihood of a Republican sweep has dropped considerably. The outcome of the vote may not be known immediately, and there could be legal challenges that prolong the process. European investors will have to stay up late on Tuesday night to see the first results, since polls in Kentucky and Indiana close at 10pm GMT. Different news sites say that the final answer will be given anywhere from as soon as London gets to work on Wednesday to days or weeks from now. Given how close the polls were, the uncertainty about when the final result will come in reflects the larger question about the outcome itself.
Ahead of the US Election focus Important things that might affect markets on Monday ECB Board Member Piero Cipollone and ECB President Christine Lagarde attended the Eurogroup meeting. ECB members Claudia Buch, Christodoulos Patsalides, Frank Elderson, and Elizabeth McCaul's appearances U.S. durable goods and factory orders data for September; final Eurozone manufacturing PMIs for October.
Overnight Newswire Updates of Note
China Stimulus Uncertainty To Linger Post Law Makers' Meeting
China Urges France, EU To Arrive At Palatable EV Solution
RBA Set To Hold Key Rate To Counter Sticky Inflation Risks
German Coalition Squabbles Over FM’s New Proposals
BoE Expected To Cut Rates Despite Looser Fiscal Policy
UK’s Badenoch To Reveal New Conservative Shadow Cabinet
UK Trade Union Threatens Legal Action Over Winter Fuel Cut
Santander’s UK Unit Faces New Hit After Years Of Lag
Nvidia To Join Dow Jones Industrial Average, Replacing Intel
Investors From Stocks To Crypto Brace For US Election Volatility
Dollar Slips Ahead Of US Election; Fed Rate Cut Looms
Westpac Sees Credit Demand In 2025, Posts 3% Y/Y Profit Fall
Opec+ Members Delay Planned Rise In Oil Production
(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)
USD/JPY: 152.00 ($580.3m), 148.30 ($499.9m), 147.00 ($450m)
EUR/USD: 1.0820 (EU1.36b), 1.0970 (EU1.04b), 1.1250 (EU899.6m)
AUD/USD: 0.6600 (AUD1.47b), 0.6510 (AUD703.3m), 0.6400 (AUD550m)
USD/CAD: 1.4000 ($635.8m), 1.3800 ($609.1m), 1.3875 ($316.1m)
GBP/USD: 1.3000 (GBP800.4m), 1.2850 (GBP560m), 1.2650 (GBP360m)
USD/CNY: 7.3000 ($491.1m), 7.2000 ($420.8m), 6.9500 ($400m)
EUR/GBP: 0.8300 (EU425m), 0.8545 (EU424.8m), 0.8350 (EU370.1m)
CFTC Data As Of 1/11/24
Net USD G10 long +$8.88bn to +$18.7bn in Oct 23-29 IMM period; $IDX +0.13%
EUR +0.17%: speculative positions decreased by 21.8k contracts, now at -50.3k, lower ECB view weighs on EUR
JPY +1.55%; speculative positions decreased by 37.6k contracts, now at +25k, on hawkish Fed, less dovish BoJ
GBP +0.27%; speculative positions decreased by 8.2k contracts, now at +66.4k; less-dovish BoE lends support. Note large sterling dip post-budget not accounted for in this report
CAD +0.62%; speculative positions decreased by 26.9k contracts, now at -168k; shorts eyes July ATH -196k
AUD -1.78%; speculative positions decreased by 163 contracts, now at +27.5k; for now RBA least dovish c.bank
Equity fund managers cut S&P 500 CME net long position by 20,435 contracts to 1,045,389
Equity fund speculators trim S&P 500 CME net short position by 12,576 contracts to 292,035
Speculators increase CBOT US 10-year Treasury futures net short position by 52,992 contracts to 901,183
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 8000
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
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!