As we get into Q4, just about everyone is coming around to the idea that the Chinese economy has bottomed out. I still hold my reservations as we all know, data from China is well.. data from China. In any case, HSBC is the latest to revise higher their forecasts for China following their lower revisions in September here.
They now see 2023 GDP growth forecast at 5.2% from 4.9% previously and 2024 at 4.9% from 4.6% previously.
This article was written by Justin Low at www.forexlive.com.
At the moment, it looks like the market is still
trading based on inflation and interest rate expectations, but the softening in
the labour market as seen with the last NFP and Jobless Claims last
week, is gathering pace and it’s something to keep a close eye on.
Dow Jones Technical
Analysis – Daily Timeframe
On the daily chart, we can see that the Dow Jones is
consolidating at a key resistance level at
35000 following the incredible rally triggered by the miss in the US CPI
report. The rally was indeed overstretched as depicted by the distance from the
blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.
Dow Jones Technical
Analysis – 4 hour Timeframe
On the 4
hour chart, we can see that the price is now near the upward trendline. This is
where we can expect the buyers to step in with a defined risk below the
trendline to position for a break above the 35000 resistance. The sellers, on
the other hand, will want to see the price breaking lower to pile in and
position for a drop back into the 34000 support.
Dow Jones Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the
price is diverging with
the MACD right
at the key resistance level. This is generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, it might be a
confirmation for the sellers that might indeed see a deeper pullback into the
34000 support. Watch out for what happens around these key levels.
Upcoming Events
This week is pretty empty on the data front with the US
on holiday for Thanksgiving Day in the final part of the week. Tomorrow, we
have the FOMC Meeting Minutes but it’s unlikely to be market moving given that
it’s three-weeks old data. On Wednesday, we have the US Jobless Claims report
which is probably going to be the most important release of the week. Finally,
on Friday, we conclude the week with the latest US PMIs.
This article was written by FL Contributors at www.forexlive.com.
With core inflation still closer to 6% at this stage, I’d be wary if I were Sunak to take it as a given that price pressures will continue to fall off in the same way it did over the last year. But as a politician, he does face tough questions and critique, so you can’t blame him for suggesting that they are well on course to claim victory already. We’ll see if he can say with such confidence the remarks above at the same time next year. I wouldn’t be surprised if we’re still revisiting the same conversation again by the middle of next year.
This article was written by Justin Low at www.forexlive.com.
If there’s any consolation for the dollar today, it is that there isn’t an overwhelmingly positive risk mood to pile on the misery for the greenback. US futures are still looking rather tentative, keeping little changed in European trading thus far. Meanwhile, European indices are trading more mixed and that isn’t really leaving much to work with for risk trades.
In the bond market, there is also a more tentative mood with 10-year Treasury yields up slightly by 1.4 bps to 4.454% on the day. Meanwhile, 2-year yields are down 0.9 bps to 4.898% so there’s no real conviction for the most part.
Going back to stocks, as long as the gains from the last two weeks are being consolidated, that is still a positive development. US indices continue to aim towards the highs for the year in the latest push higher and that remains the case as we get into trading this week: Stocks look poised for a potential retest of the year’s highs
This article was written by Justin Low at www.forexlive.com.
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