Forexlive European FX news wrap: Choppy price action persists 0 (0)

It’s been another quiet session in terms of data releases. The only notable data point was the US NFIB Small Business Optimism index which ticked higher compared to the prior month.

We had also many ECB speakers confirming a rate cut in October which the market has already priced in weeks ago. The price action in the FX market remains rangebound as we continue to wait for the US CPI release on Thursday.

In the equity space, the Chinese markets continue to trade around the daily lows while the US and European markets have been grinding higher.

In the commodities space, crude oil is down 1.88% on the day since the peak hit in the overnight session at $78.46 with the pullback in the Chinese equities being the likely culprit. Copper is another big loser as it’s been even more sensitive to the Chinese markets lately. Gold, on the other hand, remains rangebound as the recent rally in real yields continues to weigh on the market.

The American session will be empty in terms of key data releases and the Fedspeak will take the centre stage once again as we get Fed’s Bostic and Fed’s Collins speaking.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Go to Forexlive

Libya’s NOC reports crude production up to 1.13M BPD after force majeure lifted 0 (0)

  • Libya’s NOC says daily production reached 1,133,133 BPD of crude oil and condensate in the last 24 hours – Statement.
  • Libya’s NOC says recovery comes just days after the lifting of the force majeure – Statement.

This article was written by Arno V Venter at www.forexlive.com.

Go to Forexlive

Riksbank’s Bunge says more confident that high inflation is behind us 0 (0)

  • Riksbank’s Bunge: We are more confident that the period of high inflation is behind us.
  • Riksbank’s Bunge: At the same time, we are in a mild downturn and it is important that the Swedish economy now recovers.

This article was written by Arno V Venter at www.forexlive.com.

Go to Forexlive

China’s Premier Li vows stronger policy coordination with timely implementation 0 (0)

  • China’s State Council held special study session on economic policies on Tuesday – State media.
  • China’s Premier Li: Will strengthen policy coordination – State media.
  • China’s Premier Li: Policy implementation should reflect good timing, strength, and pace – State media
  • China’s Premier Li: All sides should actively roll out policy measures to stabilise growth – State media.

This article was written by Arno V Venter at www.forexlive.com.

Go to Forexlive

PepsiCo expect higher borrowing costs to impact consumer spending 0 (0)

  • PepsiCo says inflation and higher borrowing costs over the last few years continue to impact consumer spending – Prepared Remarks.
  • PepsiCo – Expect 2024 inflationary pressures to moderate vs prior year, but some commodity costs to remain elevated.
  • PepsiCo: „Believe our snack categories remain attractive.“
  • PepsiCo – Continue to see long runway of profitable growth for international business.
  • PepsiCo: Sees improved Quaker Foods North America net revenue in Q4 as recall-affected production resumes.
  • PepsiCo: Expects consumers to remain value conscious amid inflation.
  • PepsiCo – Pockets of elevated geopolitical tension & macroeconomic pressure expected to persist in some international market in 2024.

Given the Fed and market’s focus on the labour market, there will be increased focus on the consumer for the Q3 earnings season.

This article was written by Arno V Venter at www.forexlive.com.

Go to Forexlive

Forexlive European FX news wrap: Treasury yields extend the gains 0 (0)

It’s been a a quiet session in terms of data releases with the Eurozone retail sales being the only highlight. The data came in better than expected but the market ignored the release.

The most notable movers in the markets have been Treasury yields and crude oil. Regarding the former, the market priced out all the agressive rate cuts expectations and it’s now even leaning on a more hawkish side compared to the Fed’s projections. Speaking of the latter, the tensions in the Middle East remain high and that’s been supporting the price alongside a better macro outlook.

In the FX space, we are seeing a bit of a pullback in the US Dollar given that the market has already priced out the rate cuts. Looking forward, it’s now about the US CPI on Thursday as a hot report could see the market pricing in a pause for the Fed and give the greenback an extra boost.

In the American session, we have some Fedspeak. All of the scheduled speakers are known hawks, so some hawkish comments after the NFP report shouldn’t be surprising.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Go to Forexlive

ING says an October ECB cut is not guaranteed 0 (0)

  • Market expects a 25bp rate cut from the ECB next week, driven by weak economic sentiment and inflation falling below 2%.
  • Arguments for a cut include worsening growth and inflation outlooks, with disinflationary trends and some ECB officials showing support for a cut.
  • But the bank says there are valid arguments against a cut and point to the lack of new hard data since September, reliance on sentiment indicators which hasn’t been very reliable, and persistent services inflation.
  • ECB’s cautious stance suggests there is a risk that the bank may wait until December for more updated projections before cutting rates.
  • Market pressure to cut is less influential during an easing cycle, making it less likely for the ECB to act just to meet expectations.
  • Outcome is uncertain, with both rate cuts and a potential hawkish surprise possible

Personally I think it’ll be a very hard sell to the doves to argue against a cut after the recent batch of inflation and PMI data.

Yes, PMI data has been unreliable, but the trend has been clear.

This article was written by Arno V Venter at www.forexlive.com.

Go to Forexlive

Crude Oil Technical Analysis – Strong macro and geopolitical drivers in action 0 (0)

Fundamental
Overview

Crude oil rallied strongly last
week following the tensions in the Middle East between Israel and Iran. We also
got some key technical breakouts that increased the bullish momentum.

Last Friday, we also got a strong US NFP report which cast aside recessionary fears and strengthened the case for a future pick up in activity amid the Fed’s easing.

In the big picture, central
bank easing generally leads the manufacturing cycle, so we can expect global
growth to pick up, especially after the Fed’s 50 bps cut and the Chinese
officials surprising with strong easing measures.

All these reasons should be
bullish for the market and support prices in the next months barring a
recession. As a reminder, positioning in crude oil is still near record lows.

Crude Oil
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that crude oil broke above the major trendline and extended the gains into new
highs as the bullish momentum increased. The target for the buyers should now
be the 80 handle where we can expect the sellers to step in to position for a
drop back into the 70s.

Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we now have a minor upward trendline defining the current bullish
momentum. If the price were to pull back, we can expect the buyers to lean on
the trendline to position for new highs, while the sellers will look for a
break lower to position for a drop back into the 72 handle.

Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have the upper bound of the average daily range for today standing right around the
key 77.50 swing level. If the price extends into the swing level we can expect the
sellers to step in for a pullback into the minor trendline, while the buyers
will likely continue to lean on the trendline to keep targeting new highs.

Upcoming
Catalysts

This week the calendar is a bit empty on the data front. The main events are all
scheduled for the latter part of the week. On Thursday, we have the US CPI and
the US Jobless Claims. On Friday, we conclude with the US PPI and the
University of Michigan Consumer Sentiment report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Go to Forexlive

All eyes on Chinese equities after last week’s bank holidays 0 (0)

It’s not everyday that major equity benchmarks move like meme stocks.

Chinese equities have been an a rip since the country came out with their new stimulus plans, and there has been numerous articles of big players rushing in and desperately trying to get some China exposure.

The HK50 below is up nearly 40% since the September lows. Amazing moves.

However, China was away last week for bank holidays, and with China back tomorrow there will be a keen to see how equities trade after the bank holidays.

At some stage markets will take a breather as it usually does, but I’m not in the mood to guess when that will happen, especially not when momentum is this strong.

One to keep an eye on this week though.

This article was written by Arno V Venter at www.forexlive.com.

Go to Forexlive