• 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.

• Hurricane hunters sees hurricane Milton as a major hurricane
• ING says an October ECB cut is not guaranteed
• All eyes on Chinese equities after last week’s bank holidays
• US 10-year treasury yields back above 4%
• Risk is trading mostly cautious so far across major asset classes
• Eurozone retail sales YY 0.8% vs 1.0% expected
• Reserve Bank of India Urges Banks to Avoid Large Short Bets as Rupee Nears Record Low
• Euro Zone Investor Morale Rebounds in October Amid Rising Expectations
• Market Outlook for the Week of 7th – 11th October
• Japan PM’s Bold Move: No Capital Gains Tax Hike to Boost Investment
• Weekly update on interest rate expectations
• Japanese firms anticipate prolonged China slowdown, BoJ official reveals
• Goldman Sachs Slashes US Recession Odds Following Strong Jobs Report
• What are the main events for today?
• German retail sector faces economic uncertainty, no growth in consumer spending expected
• The @Newsquawk Europe Market Open – APAC stocks began on front foot. Eyes on geopolitics
• BP Shifts Strategy, Eyes Investments in Iraq and Permian Basin
• UK House Prices Rise in September, Beating Expectations Actual: 0.3% Expected: 0.2%
• German Factory Orders Plunge in August -5.8% Expected: -1.9% Previous: 2.9%
• BOJ Report: Price Hikes and Wage Increases Spreading Across Japan
• Japan’s Leading Index Falls Short of Expectations in August Report

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.

• NHC says NOAA Hurricane Hunters find Milton a major hurricane.
• NHC says Hurricane Milton about 750 mi (1210 km) west-southwest of Tampa Florida; maximum sustained winds 120 mph (195 km/h).

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

• 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.

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.

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.

• Monday: Eurozone Retail Sales. (China on holiday)
• Tuesday: Japan Average Cash Earnings, RBA Meeting Minutes,
  US NFIB Small Business Optimism Index.
• Wednesday: RBNZ Policy Decision, FOMC Meeting Minutes.
• Thursday: Japan PPI, ECB Meeting Minutes, US CPI, US
  Jobless Claims, New Zealand Manufacturing PMI.
• Friday: UK GDP, Canada Labour Market report, US PPI, US
  University of Michigan Consumer Sentiment, BoC Business Outlook Survey.

Tuesday

The Japanese
Average Cash Earnings Y/Y is expected at 3.1% vs. 3.6% prior. Wage growth has
turned positive lately in Japan and that’s something the BoJ always wanted to
see to meet their inflation target sustainably. The data shouldn’t change much for the
central bank for now as they want to wait some more to assess the developments
in prices and financial markets following the August rout.

Wednesday

The RBNZ is
expected to cut the OCR by 50 bps and bring it to 4.75%. The reason for such
expectations come from the unemployment rate being at the highest level in 3
years, the core inflation rate being inside the target range and high frequency
data continuing to show weakness. Moreover, Governor Orr in the last press
conference said that they considered a range of moves in the last policy
decision and that included a 50 bps cut.

Thursday

The US CPI Y/Y is
expected at 2.3% vs. 2.5% prior, while the M/M figure is seen at 0.1% vs. 0.2%
prior. The Core CPI Y/Y is expected at 3.2% vs. 3.2% prior, while the M/M
reading is seen at 0.2% vs. 0.3% prior.

The last US labour
market report came out much better than expected and the market’s pricing for a
50 bps cut in November evaporated quickly. The market is now finally in line
with the Fed’s projection of 50 bps of easing by year-end.

Fed’s Waller
mentioned that they could go faster on rate cuts if the labour market data
worsened, or if the inflation data continued to come in softer than everybody
expected. He also added that a fresh pickup in inflation could also cause the
Fed to pause its cutting.

Given the recent
NFP report, even if the CPI misses slightly, I don’t think they would consider
a 50 bps cut in November anyway. That could be a debate for the December
meeting if inflation data continues to come below expectations.

The US Jobless
Claims continues to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market.

Initial Claims
remain inside the 200K-260K range created since 2022, while Continuing Claims
after rising sustainably during the summer improved considerably in the last
weeks.

This week Initial
Claims are expected at 230K vs. 225K prior, while there’s no consensus for
Continuing Claims at the time of writing although the prior release showed a
decrease to 1826K.

Friday

The Canadian
Labour Market report is expected to show 28K jobs added in September vs. 22.1K
in August and the Unemployment Rate to increase to 6.7% vs. 6.6% prior. The
market is pricing an 83% probability for a 25 bps cut at the upcoming meeting
but since inflation continues to surprise to the downside, a weak report will
likely raise the chances for a 50 bps cut.

The US PPI Y/Y is
expected at 1.6% vs. 1.7% prior, while the M/M figures is seen at 0.1% vs. 0.2%
prior. The Core PPI Y/Y is expected at 2.7% vs. 2.4% prior, while the M/M
reading is seen at 0.2% vs. 0.3% prior.

Again, the data is
unlikely to get the Fed to debate a 50 bps cut at the November meeting even if
it misses. The risk now is for inflation to get stuck at a higher level or even surprise to the upside.

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

Hello traders and investors! This is Itai Levitan, an experienced market analyst at ForexLive.com, tracking crude oil for you today as well as what I am looking at. Let’s dive into the insights you need to make informed trading decisions. 🌊

Recent Rally Highlights 🚀

Strong Uptrend: Crude oil prices have surged by approximately 14% in less than four days, which signals significant bullish momentum. This sharp rally reflects market dynamics, particularly supply constraints, Iran’s ballistic missile attack on Israel (will there be an Israel response on Iran?) and heightened demand.
Personal Experience Tip: I see a lot of retail traders looking at the rally with FOMO. In my experience, such rapid price movements often suggest that traders may be pricing in unexpected news or geopolitical developments but pros should focus more on where to enter, more than where oil is going. The key is the entry point. Now you’re ready for my Crude Oil price forecast video.

Technical Patterns: From the above video showing crude oil technical analysis as well as my predictions, I am starting out from the broaer view on the weekly chart, where I’ve identified:

• Three perfect touchpoints along the bottom trendline, showcasing a consistent support level.
• A triangle pattern formed by the top red resistance line with significant touchpoints, suggesting potential breakout scenarios.

Key Technical Levels to Watch 🔍

Potential Retracement Zones:

• $73.30 Level: This level aligns with the red trendline retest and notable volume profile levels. Historically, such alignments can indicate strong support.
• $72.00 Zone: Between $71.90 and $72.10, this range has served as a strategic entry point in previous market cycles.

Resistance Areas:

• First Zone: Between $76.50 and $77.50, marked by the purple VWAP line from a key high. According to technical studies by John Murphy, VWAP often acts as a dynamic support or resistance zone, especially in volatile markets.
• Second Zone: Near $78.50, just below the August open at $78.59, this area could present a significant barrier as it represents prior high liquidity zones.

Trading Strategy Insights 🧠

Risk Management:

Placing stop-loss orders is essential to managing potential downside risks. In case support levels like $72.00 fail, it’s crucial to re-evaluate your strategy. Consider setting stop-loss orders just below the trendline, ensuring you’re protected from unexpected reversals.

Profit Targets:

• Partial Profit-Taking: Securing profits between $76.50 and $77.50 can mitigate risk, while monitoring the price near $78.50 for full profit potential. Historically, major resistance zones can cause significant retracements, so taking some off the table helps manage exposure.
• Market Participation: Swing traders could capitalize on the broader market momentum, while day traders should keep adjusting their strategies to accommodate shorter timeframes.

From my own trading experience, patience in waiting for optimal entry points tends to improve risk-to-reward ratios, especially in trending markets like crude oil.

Final Thoughts 💭

While the bullish trend in crude oil is currently strong, entry timing is crucial due to recent rapid price movements. Keep a close eye on the highlighted levels, and stay adaptable to changes in market dynamics, including geopolitical tensions, economic reports, or unexpected supply disruptions.

I have covered my own opinion for the short term crude oil price prediction. You should always do your own research and for those that want to look at a higher timeframe and fundamentals, you can check out the International Energy Agency on oil, as fluctuations in global supply chains remain a key factor influencing short-term price movements.

As always, trade wisely, stay informed, and manage your risks!

For more insights and real-time updates, visit ForexLive.com. Have a successful trading week! 📊🌟

This article was written by Itai Levitan at www.forexlive.com.

• Saudi Aramco raised the official selling price of its key Arab Light crude to Asia by 90 cents, bringing it to a $2.20 per barrel premium over the regional benchmark
• vs. expected 65 cents / bbl
• cut the price of all grades to Europe and the US though

Saudi Aramco is the state owned oil producer.

—

The oil price jumped last week in response to a ratcheting higher of conflict in the Middle East.

Chart from ForexLive free charting, access it here

This article was written by Eamonn Sheridan at www.forexlive.com.

In the week leading up to the holiday beginning Chinese authorities announced an array of economic stimulus measures. SOme of the measures were aimed specifically at the property sector, such as:

• reductions in down-payment ratios
• reductions in mortgage rates
• an easing in property buying restrictions

China’s state broadcaster CCTV reported a statement from the Ministry of Housing and Urban-Rural Development on Saturday saying that the measures are having success. The statement cited the number of people visiting houses and sales offices, as a reflection of buying intentions, along with increased participation in sales promotions.

—

The data these officials are citing is not sales, but I think we can give them some benefit of some doubt of increased activity. I’ll be waiting for more solid data. Chinese equity markets have not been waiting for more solid data, they recorded historic gains in the week leading to the holidays and Hong Kong markets, which reopened on Wednesday last week, have added gains also.

I’m not in front of my regular PC to post a chart, so here’s a quick one from CNBC. Shanghai Composite over the past year. You can see the extent of the rally in the last week of September.

Chinese markets reopen on Tuesday, October 8.

This article was written by Eamonn Sheridan at www.forexlive.com.