HFMarkets (hfm.com): Market analysis services. - Страница 28

[HFblogNews]

Date: 17th October 2024.

Stocks steady ahead of ECB, BTC Up, Oil below $70.


Asia & European Sessions:

• Wall Street, Treasuries, the US Dollar, and Gold all gained yesterday amid a variety of factors. Earnings beats, rate cut expectations, growth concerns, geopolitical risks, some stability in oil all contributed. The market continues to price for -25 bp rate cuts in November and December.
• The Dow bounced 0.79% to 43,077 to its 38th record high of the year. Financials helped pace after more earnings beats, this time from JPM. Weakness in some tech shares, including ASML, limited the advance in the S&P500 and NASDAQ.
• Asian shares predominantly rose today following stronger-than-expected earnings reports from major companies like Morgan Stanley and United Airlines. Chinese markets lost momentum after a press briefing on the property market failed to announce significant stimulus measures.
• European stocks are expected to have a lackluster opening as traders await a decision from the ECB regarding monetary policy.
• The rally in Chinese shares lost momentum after a press briefing on the property market failed to announce significant stimulus measures. The CSI 300 in China reversed a rally of up to 1.3% after officials revealed plans to expand support for “white list” projects to 4 trillion yuan ($562 billion) from the previously deployed 2.23 trillion yuan.
• ECB Preview: with headline inflation below target and signs that services price inflation has peaked, the ECB’s focus has switched from inflation risks to growth concerns. The flurry of comments from ECB officials over the past week have pretty much confirmed that Lagarde will deliver another 25 bp cut on Thursday. We expect the ECB to cut again in December, although the central bank head may once again stop short of committing to another move just yet. Even if the ECB cuts rates by a further 50 bp this year, policy settings will remain restrictive and the “end-rate” of the current easing cycle is likely to be higher than markets expected initially and clearly above the low point of the last easing cycle. That will likely keep bonds volatile.

Financial Markets Performance:

• The USDIndex climbed to 103.55, a third straight session over 103 and is up 3 handles from the 100.79 close on September 30. The rally broken the 200-day SMA.
• Oil dipped below the $70.00 per barrel. Energy prices have generally been influenced by oil market fluctuations, particularly as fears diminish over potential Israeli attacks on Iranian oil facilities, which could disrupt exports to China and other regions. Additionally, concerns about demand strength amid China’s economic slowdown have impacted oil prices.
• Bitcoin rallied with markets viewing the climb as a sign that markets anticipate a victory for pro-crypto Republican candidate Donald Trump in the US presidential election.
• Gold rose to $2685 per ounce.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

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[HFblogNews]

Date: 18th October 2024.

Global Markets Steady as China’s Economic Data Surprises, Gold Hits New Record.


As the US economy continues to show resilience, traders further reduced their expectations for Federal Reserve rate cuts in the remaining meetings of 2024. Strong US retail sales data for September exceeded forecasts, highlighting sustained consumer spending, which is powering economic growth.

Asia & European Sessions:

• A rally in risk and some unwinding of haven trades hit Treasuries.
• A stronger than expected September retail sales report weighed on Treasuries at it furthered expectations the FOMC will reduce rates at a more moderate pace into year end. And it added to prospects the Fed may only cut one more time this year with the November implied rate at -22 bps and the December contract at -41 bps.
• Asia equities rose earlier today as the central bank introduced new lending programs to boost corporate share buybacks and equity purchases. However Chinese equities edged down after official data showed slowing economic growth at 4.6% in the Q3 from 4.7% in Q2, underscoring investor uncertainty over government stimulus measures first announced in September.
• Netflix reported net income of $2.36 billion, roughly 6% above Wall Street predictions. Netflix saw a stronger-than-anticipated revenue boost in the latest quarter, alongside solid subscriber (5.1mln) growth, even with fewer blockbuster releases.

Financial Markets Performance:

• The USDIndex climbed to 103.60,supported by widening rate and growth differentials. The downshift in expectations on Fed cuts, this week’s easing, albeit cautious, from the ECB, the chance for an aggressive -50 bp easing from the BoC, and the unwinding of BoJ rate hike outlooks have been supportive.
• The USDJPY broke to 150 level, the best since the end of July. It could rally further given the less dovish view on the Fed and if there are no signs of MoF intervention.
• The GBPUSD has stabilized and firmed slightly to 1.3060, but is largely recovering from the drop to 1.2990 which is the weakest since mid-August.
• The EURUSD has slumped to 1.0807 and is the weakest since the end of July. Concurrently, USDCAD has risen to 1.3795, the highest since early August.
• Gold prices hit a record high, extending a long-running bullish trend as investors sought safe-haven assets. Gold spot prices rose to $2,713. The rise in gold prices, fueled by inflation and geopolitical uncertainty, has been consistent since late 2022.
• Bitcoin also saw gains, rising to $68,350, with some investors viewing it as a hedge similar to gold.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

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[HFblogNews]

Date: 21st October 2024.

Gold at historic high, US equities nearly at record high!


Asia & European Sessions:

• Global financial markets are being influenced by the health of the US & Chinese economies, alongside the impact of Middle East conflicts and broader geopolitical concerns.Chinese banks’ decision to lower lending rates follows a series of government measures aimed at spurring economic growth and stabilizing the housing market.
• Wall Street finished in the green on the day and for the week. Earnings beats added to signs of a strong economy and a pick up in big tech to boost the major averages.
• The Dow rallied another 0.09% to 43,275 for its 39th record high of the year. The S&P500 was 0.40% higher at 5864, its 47th peak for 2024.
• Asian markets showed mixed performance as investors awaited new catalysts for trading.
• Gold surged to a record high, $2732, with silver, palladium, and platinum also rising, driven by rising demand amid Middle East tensions and positioning ahead of the upcoming US presidential election.
• Oil prices ticked higher after sharp declines the previous week, as concerns eased over potential Israeli strikes on Iranian oil facilities in retaliation for a missile attack earlier in the month. Iran, a major crude producer, plays a key role in global exports, particularly to China. Lingering concerns over China’s demand have also weighed on oil prices.
• Big week ahead with: BoC rate decision, lots of ECB & Fed Speeches, global PMIs, US retail sales, earnings from Tesla, Verizon, Coca-Cola, IBM, Amazon.com.

As the US election approaches, investors are positioning themselves for potential outcomes, with odds leaning toward a Trump victory and Republican control of Congress. Traders are reviving bets on assets that performed well after Trump’s 2016 win, particularly focusing on the impact of potential policies like increased trade tariffs.

Financial Markets Performance:

• The USDIndex pulled back to 103.40.
• The USDJPY fell to 149.07, as the Yen strengthened for a 2nd day against the US Dollar, as traders positioned for Japan’s parliamentary election on Sunday. Polls suggest that the ruling Liberal Democratic Party and Komeito coalition could fall below the 233-seat majority threshold.
• Oil prices closed in the red, testing $68.69 per barrel before closing -1.8% lower at $69.37 per barrel and the weakest of the month, largely on supply concerns.
• Bitcoin neared $70,000 today, supported by strong inflows into ETFs ($2.4 bln) and optimism regarding US regulatory developments for the largest digital asset.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

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[HFblogNews]

Date: 22nd October 2024.

Stocks’ rally ran out of steam?


Asia & European Sessions:

• A number of factors weighed on Treasuries and EGBs, but the underlying element was inflation anxiety. Several factors, including concerns over bond supply and stronger US economic data, are contributing to the bond selloff.
• The resilience of the US economy, diminishing expectations for Fed rate cuts, the bounce in Oil prices, the acceleration in rate cut prospects from the BoC, BoE, and ECB, fears of fiscal largess, and the massive stimulus from China all added to the likelihood price pressures could remain sticky.
• Wall Street was mixed in relatively quiet action.
• Additionally, traders are betting on the risk of a Republican win in the US election, which could lead to looser fiscal policy and increased tariffs under Donald Trump, potentially worsening the federal deficit and stoking inflation.
• Asian equities declined for a 2nd consecutive day, along with bonds, as traders reassessed cooling expectations for Federal Reserve rate cuts this year. This followed a decline in US equities after a strong run-up to all-time highs.
• Australian and New Zealand bonds also fell.
• Investors in Japan pulled back ahead of the upcoming general election on Sunday, with stocks, bonds, and the Yen all declining simultaneously amid polls suggesting the ruling coalition could lose its majority.
• The Nikkei dropped 1.4%, reaching its lowest level since early October.
• Gold rose to $2,733.41 in Asia, following Monday’s record high of $2,740.59. Gold has surged nearly 30% this year, hitting successive all-time highs, with momentum accelerating as the Fed pivoted to cutting rates. Hedge funds have been increasing net-long positions in gold, and ETF inflows have also contributed to the rally. Traders are also adjusting portfolios ahead of the US election on Nov. 5, with gold seen as a safe bet during times of geopolitical and economic uncertainty.

Financial Markets Performance:

• The USDIndex hit a multi-month high, largely on the less dovish view on Fed policy and reached 104.00, the first time at that level since late July.
• The USDJPY rallied to 151 for the first time since July.
• Oil prices increased 1.9% to $70.54 per barrel.
• Gold relinquished another new high at $2740.59 before closing down -0.02% at $2720.85 per ounce.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

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[HFblogNews]

Date: 23rd October 2024.

XAGUSD: Increased retail demand sends silver prices soaring


Silver maintained its recent gains to around $34.8 per ounce on Tuesday, holding at its highest level in nearly 12 years as uncertainty surrounding the US election, Middle East tensions and bets on further monetary easing fuelled safe-haven demand for the precious metal.

Expectations of stronger industrial demand for silver, which is a key component used in solar panels, as the world shifts to cleaner energy, also boosted prices. In addition, top metals consumer China has recently introduced a series of stimulus measures to revive economic growth. Earlier this week, the People’s Bank of China cut its one- and five-year lending rates by 25 basis points to 3.1% and 3.6% respectively. On Friday, the PBOC also moved to support Chinese equity markets and announced that it may lower bank reserve requirements again before the year ends.

The main catalyst behind the recent rally has been rising retail demand for silver, which has become an attractive asset for investors seeking protection against ongoing changes in monetary policy.

As global central banks signal a shift towards a more accommodative stance, investors are increasingly looking at silver as a cost-effective hedge against inflation and currency devaluation. This trend is particularly evident in the context of silver’s price performance relative to gold.

While gold recently reached a record high of $2,748 per ounce, silver is still well below its all-time high of $49.78, reached in April 2011, indicating further appreciation potential. Investor sentiment has also been supported by recent developments in China, where authorities have imposed aggressive monetary measures aimed at revitalising the economy. These measures are expected to stimulate economic activity, which is likely to boost actual demand for silver and other industrial metals in the coming months.

Demand for gold and silver as a store of value was also strong, due to expectations that whoever wins the US presidential election next month, fiscal spending will rise and increase the budget deficit. Moreover, dovish comments from ECB President Lagarde on Tuesday were bullish for the precious metal, when she said the direction of interest rate movements in the Eurozone is clear.

From a technical perspective, XAGUSD has successfully broken the resistance line of the bullish pennant pattern, confirming the positive implications of this technical setup. The current bullish trajectory suggests that silver could reach the FE100% projection level of $36 from the $11.63 – $30.07 and $17.b54 drawdowns. The move above the 52-week EMA informs that the ongoing bullish trend might last even longer, as long as the $32.49 resistance that is now switching to function as support holds. Given the current dynamics, the outlook for silver is still bullish.

The possibility of a short-term correction, however, remains valid due to profit-taking.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Ady Phangestu
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

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[HFblogNews]

Date: 24th October 2024.

Mixed earnings, Stocks rebound, Dollar in a pull back.


Asia & European Sessions:

• Treasuries extend losses on anxieties and uncertainties, rise in yields hits stocks. Election jitters remain prominent, along with geopolitical worries.
• Wall Street was hammered also as some earnings disappointed, and bad news from some tech companies. An E. coli outbreak at McDonald’s also impacted.
• Expectations for deficit financing no matter who wins the election, and the concomitant surge in debt are further exacerbating inflation fears. A tepid 20-year auction added to the market’s woes.
• Fed’s Beige Book showed moderate growth and prices, decent labor market. US existing home sales fell -1.0% to 3.840 mln rate.
• Bank of Canada cut its overnight target rate by -50 bps to 3.75%, as widely expected. This is a 4th straight cut and ties the lowest rate since October 2022. While the statement indicated the timing and pace of future action will be guided by data, it was also indicated that more cuts are likely if the economy evolves as expected. The jumbo-sized cut is meant to boost growth and keep CPI close to 2%.
• Eurozone Composite PMI lifted to 2-month high of 49.7 in October from 49.6 in the previous month. German data actually came in somewhat better than expected, while French reports disappointed. The marginal improvement in the headline still leaves the Composite PMI in contraction territory, with new orders falling for a fifth consecutive month and at a similar pace as in September.
• UK October flash services PMI 51.8 vs 52.4 expected.

Financial Markets Performance:

• The NASDAQ lost -1.60%, with the S&P500 tumbling -0.92%, while the Dow slid -0.96%.
• The USDIndex hit 104.40, breaking the April-June support which turned into a key Resistance level. It rallied against all G10 peers.
• The USDJPY closed at 152.70 after paring its jump to 153.185, the highest since July amid risk the LDP and coalition partner Komeito could lose their majority at the weekend general election.
• The USDCAD settled back to 1.3825 after the BoC’s jumbo -50 bp cut and dovish guidance.
• Oil prices increased 1.9% to $70.54 per barrel.
• Gold fell -1.19% to $2716.17 per ounce after several fresh record highs.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

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[HFblogNews]

Date: 25th October 2024.

UK Debt Set To Rise: How Will the GBP React?

• The UK Chancellor looks to change Fiscal Policy in order to allow the UK to borrow 70 million GBP more.
• The IMF increases its forecast for the UK economy to recover this year from 0.7% to 1.1%. UK PMI data underachieved on Thursday.
• The NASDAQ increases 0.55% as Tesla’s latest earnings data increase shareholder sentiment.
• The US Dollar Index retraces after increasing in value for 4 consecutive weeks.

GBPUSD – UK To Change Fiscal Policy To Increase Debt Levels!

The GBPUSD exchange rate trades slightly lower during this morning’s asian session but looks to be regaining momentum. In addition to this, the GBPUSD continues to remain below most Moving Averages despite the upward price movement on Thursday. The downward price movement on Thursday was largely due to a decline in the US Dollar and not necessarily the Pound strengthening. For this week, the British Pound has fallen 0.65% against the currency market and traders will closely watch the Pound’s reaction to the UK’s Autumn budget.



The US Dollar is the best performing currency of the past 7 days and is the best performing of the day so far. The US Dollar continues to be supported by significant economic data. This includes the Weekly Unemployment Claims which fell to 227,000, New Home Sales rising to 738,000 and Flash PMI data reading slightly higher than previous expectations.

The Beige Book made public yesterday indicates that economic activity remained steady in September 2024. However, companies reported a modest uptick in hiring, a general easing of inflation pressures, and input costs rising faster than sales prices, which impacted business profitability. Lastly, the Federal Reserve continues to support the US Dollar as the market predicts a 0.25% rate cut.

The Bank of England on the other hand are likely to cut interest rates at the next meeting but it is not clear whether the BoE will cut 0.25% or 0.50%. Meanwhile, investors are watching the Autumn budget set for October 30th with a close eye. The UK Chancellor is looking to change Fiscal Policy in order to allow the UK to borrow 70 million GBP more. This could be a challenge and if global investors are not comfortable with the risk, this could pressure the Pound. This is something also previously seen under the Truss administration, but economists do not expect such a sharp nosedive. Lastly, yesterday’s UK PMI data for both the Services and Manufacturing sectors fell lower than the previous month and lower than current expectations.

However, if the price of the GBPUSD continues to decline, where does technical analysis point to a trigger point? As the price retraces back to the previous swing high, traders will look for the price to regain momentum before speculating a decline. The latest bullish swing measures 0.14%. Therefore if the price falls below 1.29618, investors will consider the momentum an opportunity. This will also push the price back below the 200-bar SMA on the 5-Minute Chart.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

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[luckyfx]

How to get access to your exclusive webinars? Should I top up my live account for that?

 

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[HFblogNews]

Date: 28th October 2024.

Elections Have Consequences: Market Impacts and Economic Outlook.


The world will be on tenterhooks during the two most consequential weeks of the year, and probably for the foreseeable future. The US election looms large and the outcome, including the House and Senate results, will have wide-ranging consequences. But the race remains too close to call which will keep the market nervous.

US data will be closely monitored too with the crucial jobs report ahead. Japan is coming off of Sunday’s election where there is risk the LDP could lose its majority. The BoJ is also due to meet but no policy changes are seen. In the UK, anxieties over another possible “Truss moment” have weighed ahead of the autumn budget report. Eurozone data is likely to provide ammo for ECB doves and hawks alike, to heighten uncertainties over the ECB’s December stance.

US Election Insights​

The November 5 election draws ever nearer and is the focal point. The markets are increasingly nervous over the hotly contested outcome that remains a dead heat — Trump or Harris, and whether there is a clean sweep or a divided Congress. Over the recent weeks attention on the election has pushed data to the background. However, the upcoming October jobs report and major earnings releases are set to capture attention. It is a week of important data, and though the numbers will be mostly lost in the election headlights, they will help set outlooks on the economy and inflation as the FOMC calibrates policy.

This week’s data calendar features:

• October Nonfarm Payroll Report (Friday)
• Advance Q3 GDP (Wednesday)
• Q3 Employment Cost Index (Thursday)
• Job Openings and Labor Turnover Survey (Tuesday)
• Personal Income and Consumption Data (Thursday)

The job report is anticipated to show a 140k increase in payrolls, a slowdown from September’s 254k surge. The unemployment rate is expected to hold steady at 4.1%. Q3 GDP growth is projected at 3.2%, up from 3.0% in Q2.

Tech Earnings, Treasury Supply Challenges and Market Reactions​

Major earnings reports will fight for attention too. Additionally, the Treasury will sell a record volume of bills and coupons and announce quarterly borrowings and the refunding auctions. Fedspeak is the only thing not on the slate as it goes dark into next week’s FOMC meeting.

Several big tech earnings reports will dominate a heavy calendar including 5 of the “Magnificent 7.” Those include Google and AMD (Tuesday), Meta and Microsoft (Wednesday), Apple, Amazon, and Intel (Thursday). There will be keen interest in the impacts of AI and capex spending. The NASDAQ climbed 0.56% to a new record high Friday after further strong gains on Tesla. Meanwhile, the S&P 500 is down from its 47th record peak of 5864 from October 18. The -0.96% decline on the week broke 6 consecutive weeks of gains. And the index just broke a record that dated back to the 1950s where it went 31 sessions without back-to-back losses. So far this earnings season, 35% of the S&P has reported, with 79% beating profit estimates and 58% beating on revenues.

The US Treasury is set to auction a record $663 billion in notes, which could pose challenges for the bond market. The increased supply may lead to higher yields, as the market adjusts to the influx of debt.

The debt managers have already announced $183 bln in 2-, 5-,and 7-year notes, condensed into Monday and Tuesday. This includes $69 bln in 2s and $70 bln in 5s on Monday. Both remain at record levels. Typically the doubling up of auctions is detrimental to both. The $44 bln in 7-year notes is on tap Tuesday, along with the $30 bln 2-year FRN. The market cheapened slightly on Friday, leaving yields near multi-month highs. The 2-year was up 2 bps at 4.097% as the 4.10% made for a solid ceiling and is likely to be threatened this week. The rate held the 4-handle all of last week. The 5- and 7-year rates were up 3 bps to 4.065% and 4.145%, respectively.

Europe Updates​

ECB President Lagarde still did her best to deliver a cautious cut on October 17, but the doves have been out in force since then to demand that the option of a 50 bp move be put on the table at the December meeting. At the moment, it doesn’t look as though there was a majority in favor of a jumbo cut, but with the risks to the growth outlook tilted to the downside, some are eager to bring rates to neutral as soon as possible. Whether rates will have to go below neutral remains to be seen and will also depend on geopolitical developments.

Data releases this week are likely to give both the hawks and the doves something to argue with. Preliminary GDP estimates for the third quarter are due, and data for Germany are likely to confirm that the Eurozone’s largest economy is back in recession. We expect German GDP to have contracted -0.1% q/q (median same) in the third quarter, after a similar contraction in the second quarter of the year. French GDP, however, is set to have risen another 0.2% and Spain is likely to have outperformed once again with growth of 0.6% q/q. Against that background, overall Eurozone GDP growth is set to have held steady at 0.2% q/q (median same).

Confidence data has been mixed so far, and while PMI reports disappointed, the German Ifo reading came in much better than expected. With that in mind, we expect the ESI Economic Confidence reading to nudge up to 96.4 (median 96.3) from 96.2 in the previous month. The labor market has also started to register the uncertain growth outlook and the German seasonally adjusted jobless number is expected to have risen a further 13K (median 15K), which should lift the sa unemployment rate to 6.1% (median same) from 6.0% in September. This is still low by German standards, but will help to keep a lid on wage growth down the line.

Headline inflation, meanwhile, dropped sharply in September and is likely to back up again with the preliminary CPI number for October. Base effects from energy prices and government support schemes have been the main reason for the variations in recent months, and the focus for the ECB and markets remains on core and services price numbers. Those remain far above the ECB’s 2% target, but further confirmation that services price inflation in particular has peaked would add to the arguments in favor of further rate cuts.

The data calendar also has German import prices, and retail sales, as well as additional national CPI and GDP numbers. There are a number of ECB speakers, including Schnabel and Nagel, who are on the hawkish side of the spectrum.

UK Economic Outlook​

As the autumn budget approaches on October 30, uncertainty looms over fiscal policies following past budget mishaps. Following the experience with Truss’ disastrous budget, markets are understandably nervous. Chancellor Reeves has flagged a large hole in this year’s finances that she is unlikely to fill with tax hikes alone. That means higher debt targets and leaves some risk of market volatility around the budget presentation.

Key data releases meanwhile are thin on the ground. The BoE is set to release money supply and lending data early in the week. The final Manufacturing PMI meanwhile is expected to be confirmed at 50.3, which essentially signals stagnation, rather than real expansion across the manufacturing sector.

The coming weeks are critical for economic direction in the US and beyond. The outcomes of the election and major economic reports will set the tone for market reactions and policy adjustments moving forward.

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Please note that times displayed based on local time zone and are from time of writing this report.

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Andria Pichidi
HFMarkets

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