Posted at 09 November 2022 / Categories Market Roundups
Market Roundup
•US NFIB Oct Small Business Optimism 91.3, 91.3 forecast, 92.1 previous
•US Redbook (YoY) 7.6% ,9.7% previous
•US IBD/TIPP Economic Optimism 40.4, 41.5 forecast,- 41.6 previous
•US 3-Year Note Auction 4.605% ,4.318% previous
Looking Ahead - Events, Other Releases (GMT)
•13:30 China Oct CPI (MoM) 0.3% forecast, 0.3% previous
•13:30 China Oct CPI (YoY) 2.4% forecast, 2.8% previous
•13:30 China Oct PPI (YoY) -1.5% forecast, 0.9% previous
•05:00 Japan Oct Economy Watchers Current Index 48.4 previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD: The euro strengthened on Tuesday as rising German bond yields boosted the euro, but a strong reading of the consumer price index later this week could reverse the currency's slide. Traders kept an eye on U.S. midterm elections, whose outcome may usher in an era of divided government in Washington that would likely foil big social spending plans by Democrats. CPI data is due to be announced on Thursday, with economists forecasting the monthly and annual core numbers to advance 0.5% and 6.5%, respectively. Signs of improving inflation, though, might not slow the Federal Reserve's policy tightening that federal fund futures forecast will peak at 5.095% in June 2023. The euro rose 0.55% to $1.066.Immediate resistance can be seen at 1.0093 (38.2%fib), an upside break can trigger rise towards 1.0187 (Sep 13th high).On the downside, immediate support is seen at 0.9994(50%fib), a break below could take the pair towards 0.9941 (9DMA).
GBP/USD: The British pound strengthened on Tuesday as the dollar fell across the board as investors await the outcome of the midterm elections that will determine control of Congress. Republicans have gained momentum in polls, with analysts forecasting a split government in which Republicans win control of the House of Representatives and possibly the Senate.However, markets may need to suspend their judgement for a few days after the election until the full results are known.Markets will also closely watch consumer price data for October, due on Thursday, for indications about the Federal Reserve’s future monetary policy path. Immediate resistance can be seen at 1.1573 (38.2%fib), an upside break can trigger rise towards 1.1681(Higher BB).On the downside, immediate support is seen at 1.1466(9DMA), a break below could take the pair towards 1.1348(50%fib).
USD/CAD: The Canadian dollar strenthed against its U.S. counterpart on Tuesday, with the currency holding near a key technical level as investors eyed U.S. midterm elections and awaited a key U.S. inflation report later this week. The U.S. elections will determine control of Congress. It could lead to policy gridlock, including less fiscal stimulus.U.S. inflation data for October, due on Thursday, could offer clues on the outlook for further outsized interest rate hikes by the Federal Reserve.The price of oil, one of Canada’s major exports, slipped as worsening COVID-19 outbreaks in China heightened fears of lower fuel demand. U.S. crude prices were down 0.8% at $91.02 a barrel . Immediate resistance can be seen at 1.3478 (38.2%fib), an upside break can trigger rise towards 1.3571 (9DMA).On the downside, immediate support is seen at 1.3405 (Lower Bollinger Band), a break below could take the pair towards 1.3341 (50%fib).
USD/JPY: The dollar declined against the yen on Tuesday as traders looked ahead to key U.S. inflation figures this week that could influence the Federal Reserve’s rate-hike narrative. Investor focus is also on the U.S. midterm elections later in the day that will determine control of Congress and could spur moves all over the market. A conclusive result could take days. Market participants also kept a close tab on any news surrounding COVID-related curbs in China. The dollar hit a one-week low of 146.35 per yen. Strong resistance can be seen at 146.88(23.6%fib), an upside break can trigger rise towards 147.91(21DMA).On the downside, immediate support is seen at 145.32 (Lower BB), a break below could take the pair towards 144.11(38.2%fib).
Equities Recap
European stocks closed higher on Tuesday with traders building up some positions ahead of the outcome of the U.S. midterm elections, and the crucial U.S. consumer inflation data.
The UK's benchmark FTSE 100 closed up by 0.08 percent, Germany's Dax ended up by 1.15 percent, and France’s CAC finished the day up by 0.39 percent.
Wall Street ended higher on Tuesday during voting in midterm elections that will determine control of the U.S. Congress, with investors betting on a political stalemate that could prevent major policy changes.
Dow Jones closed up by 1.02 percent, S&P 500 ended up 0.56 percent, Nasdaq finished the day down by 0.49 percent.
Treasuries Recap
U.S. Treasury yields fell on Tuesday, moving within narrow ranges, as investors awaited U.S. inflation data that could show deceleration for October and ahead of a midterm elections outcome that may shift the current government dynamic.
The yield on 10-year Treasury notes was down 8.6 bps at 4.1276%.U.S. 30-year Treasury yields were down 4.7 bps at 4.2661%.
Commodities Recap
Gold prices rose more than 2% on Tuesday to breach the key $1,700 per ounce level, following a fall in the dollar and bond yields as well as some technical buying, while market focus remained on U.S. inflation data later this week.
Spot gold rose 2.4% to $1,714.23 per ounce by 1:42 p.m. ET (1842 GMT). U.S. gold futures settled 2.1% higher at $1,716.
Oil prices fell more than $2 on Tuesday in choppy trading on growing worries about fuel demand as COVID-19 outbreaks worsened in top crude importer China, and jitters about the outcome of U.S. midterm elections.
Brent futures for January delivery fell $2.56 to $95.36 a barrel, a 2.6% loss. U.S. crude fell $2.88, or 3.14%, to $88.91 per barrel.