Daily Market Outlook, November 20, 2024
Munnelly’s Macro Minute...
"Geopolitical Tensions Abate As Markets Await Nvidia Earnings Event”
On Tuesday, global markets were roiled by geopolitical tensions; however, the situation stabilised as the U.S. trading session progressed, resulting in a more optimistic atmosphere in Asia on Wednesday. Although tensions between the United States and Russia regarding Ukraine continue to be a source of concern, the global landscape appears to be relatively positive. This evening, Nvidia's earnings announcement is eager;y anticipated by investors. Markets predict that Nvidia, the world's largest company, will report robust financial results, with a projected 82.8% increase in revenue from the previous year. Expectations are high as the company's shares have already surged 5% overnight. Trading in options suggests a potential swing of nearly $300 billion in market value, which could lead to a potentially chaotic trading session ahead. Bitcoin surpassed $94,000 for the first time, driven by expectations that the incoming U.S. President-elect Donald Trump's administration will be favourable towards cryptocurrencies. Trump is yet to announce his choice for Treasury secretary, but the announcement could come as early as Wednesday.
In the UK October CPI inflation rate of 2.3% y/y was 0.1% higher than the market and BoE's 2.2% forecast. Core CPI climbed to 3.3% y/y from 3.2%, below the consensus expectation of 3.1%, although services CPI grew to 5.0%, matching the BoE staff forecast from the November MPR. This CPI report's major indicators somewhat exceeded forecasts. The well-flagged quarterly reset of the OFGEM energy price cap concentrated energy price impacts on the headline rate.Flights and used automobiles were the second largest contributor to the annual rate, according to the ONS. This shows that some core-level news is due to volatile items, which the BoE filters out, especially services. An already unlikely December rate decrease seems even less likely given today's inflation data.
Ahead of the Nvidia earnings event, there are several Federal Reserve officials scheduled to speak later, as well as European Central Bank President Christine Lagarde, all of whom are worth monitoring to see how interest rates in Europe and the U.S. may continue to diverge.
Overnight Newswire Updates of Note
UK Oct CPI Rise Likely To Keep MPC On Gradual Easing Path
Citadel Securities Aims As Big Player In Eurozone Bond Trading
China Leaves Benchmark LPRs Unchanged, As Expected
Chinese Ship Spotted Where Baltic Sea Cables Were Cut
US Commission: Strip China's Privileges, Let Trump Impose Tariffs
Japan PM Ishiba Hopes To Work With Trump, Not Confront Him
Japan’s Exports Grow Amid Global Risks, Supporting Recovery
Aussie Budget Faces Smaller Revenue Gains, Less Corporate Tax
Fed's Schmid: Uncertain How Far Interest Rates Can Fall
Hurricanes, Boeing Strike Likely Cut At Least 100K Jobs, US Oct Payrolls
Options Pricing Shows “Nvidia Earnings Outweigh Fed, Jobs Data”
US-Russia Fright Fades, Nvidia Vigil Almost Over
France’s Macron Urges Putin To ‘Be Reasonable’ On Nuclear Weapons
(Sourced from reliable financial news outlets)
FX Options Expiries For 10am New York Cut
(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.0500 (1BLN), 1.0525-30 (821M), 1.0540-50 (2.4BLN)
1.0585 (814M), 1.0620-25 (2BLN), 1.0640-50 (925M)
GBP/USD: 1.2575 (350M), 1.2775 (400M), 1.2850-60 (300M)
AUD/USD: 0.6450-55 (568M)
NZD/USD: 0.5850 (250M), 0.5945-50 (505M)
USD/CAD: 1.3860 (1BLN), 1.4000 (616M)
USD/JPY:154.00 (330M), 154.75-82 (1BLN), 155.00 (1BLN), 156.00 (1BLN)
CFTC Data As Of 15/11/24
Bitcoin net short position is -1,798 contracts
Swiss franc posts net short position of -32,694 contracts
British pound net long position is 56,050 contracts
Euro net short position is -7,437 contracts
Japanese yen net short position is -64,902 contracts
Equity fund managers raise S&P 500 CME net long position by 86,527 contracts to 1,079,480
Equity fund speculators increase S&P 500 CME net short position by 94,124 contracts to 288,809
Speculators trim CBOT US 2-year Treasury futures net short position by 62,488 contracts to 1,423,871
Speculators trim CBOT US 10-year Treasury futures net short position by 2,469 contracts to 815,801
Technical & Trade Views
SP500 Bullish Above Bearish Below 5960
Daily VWAP bearish
Weekly VWAP bullish
Below 5790 opens 5700
Primary support 5795
Primary objective 6100
EURUSD Bullish Above Bearish Below 1.0650
Daily VWAP bullish
Weekly VWAP bearish
Above 1.07 opens 1.08
Primary resistance 1.0950
Primary objective 1.0380
GBPUSD Bullish Above Bearish Below 1.2750
Daily VWAP bullish
Weekly VWAP bearish
Above 1.28 opens 1.30
Primary resistance 1.3050
Primary objective 1.25
USDJPY Bullish Above Bearish Below 154
Daily VWAP bullish
Weekly VWAP bullish
Below 154 opens 152
Primary support 148
Primary objective is 157.50
XAUUSD Bullish Above Bearish Below 2600
Daily VWAP bullish
Weekly VWAP bearish
Below 2590 opens 2530
Primary support 2530
Primary objective is 2800
BTCUSD Bullish Above Bearish Below 85000
Daily VWAP bullish
Weekly VWAP bullish
Below 84000 opens 80000
Primary support is 64000
Primary objective is 100,000
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. 73% and 72% 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!