Fundamental
Overview

The US Dollar remains the
strongest currency but overall, we haven’t got much action in the past couple
of weeks due to the lack of key catalysts and the market’s pricing remaining
largely unchanged around roughly three rate cuts by the end of 2025.

During the Asian session,
we saw the greenback getting a bid as Trump said that he will charge Mexico and
Canada a 25% tariff on all products coming into the US and will charge China an
additional 10% tariff.

On the CAD side, we had the
Canadian CPI last week and the data came in
stronger than expected. This decreased the chances of a 50 bps cut in December
with the market now seeing an 80% chance of a 25 bps cut and a total of 87 bps
of easing by the end of 2025 compared to 98 bps before the CPI report.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD spiked into the 1.4177 level overnight on the tariffs news. The
pair continues to trade above the 2-year highs with the buyers maintaining
control. The sellers will need to see the price falling back below the 1.3950
level to switch the bias to bearish and start targeting new lows.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor support
around the 1.41 handle. This is where we can expect the buyers to step in to
position for further upside. The sellers, on the other hand, will look for a
break lower to target a drop back into the 1.40 handle.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
nothing more we can add as we are now trading right at the support zone where
the buyers will look for a bounce, while the sellers will target a break. The
red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US Consumer Confidence report and the FOMC Meeting Minutes.
Tomorrow, we get the US PCE report and the latest US Jobless Claims figures. On
Friday, we conclude with the Canadian GDP.

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

As a critical resource in the global
economy, oil is integral not only to the energy sector but also to industries
such as transportation, manufacturing, and agriculture. Changes in its prices
impact inflation rates, production costs, and global trade. For instance, oil
price increases can accelerate global inflation. This effect ripples through
various sectors, with higher transportation and production costs driving up
prices for goods and services worldwide. Kar Yong Ang, a financial market
analyst at Octa Broker, deciphers current oil market trends, elucidating the
economic and trading implications for market participants to consider.

Current state of the oil market

In 2024, the global oil market faces an intricate balance of supply and
demand, with production hovering around 101.5 million
barrels per day,
closely mirroring daily consumption. OPEC+, primarily responding to concerns
over weak demand due to slowing economic growth in major markets, recently
implemented production cuts aimed at reducing volatility. Unlike previous
measures driven by supply shortages, this strategic adjustment seeks to
stabilise prices amid shifts in market sentiment and to offset demand
uncertainties from countries like China. Furthermore, sanctions affecting
Russian oil exports have introduced additional market opacity due to shadow fleet
operations.

Macroeconomic activity in major oil consumers, including the U.S. and
China, continues to drive global demand trends. Studies suggest a 1% global GDP
rise generally correlates with an approximate 0.8% increase in oil
demand,
underscoring how economic performance directly influences energy consumption.
In recent months, U.S. demand has shown a moderate decline due to inflation and high
interest rates, which have impacted consumer spending. China’s demand has been
tempered by a stabilising growth rate, signalling a softening in oil demand
from Asia’s largest economy.

Last autumn price peaks have given way to a more recent stabilisation,
with oil prices now ranging between $70 and $75 per
barrel. As of
middle November 2024, Brent crude was trading around $71.97, while West Texas
Intermediate (WTI) stood at $68.04 per barrel. This recent dip from the
previous week reflects the market’s sensitivity to both demand forecasts and
ongoing geopolitical factors.

Which factors affect the oil
market?

Political
tensions in oil-producing regions play a significant role in shaping global oil
prices. For example, recent sanctions on Russia have limited its oil export
capabilities, impacting around 4 million barrels per day, or roughly 5% of global
supply.
Additionally, production cuts by OPEC+ have introduced further supply
restrictions to stabilise prices. Such geopolitical decisions highlight the
importance of political stability in the oil sector.

In
the U.S., recent political shifts could lead to policy changes impacting
domestic oil production. Donald Trump’s re-election signals a potential return
to deregulation, favouring domestic production growth. His prior administration
expanded U.S. oil output to a record high of 13 million barrels
per day in 2019,
and similar policies could drive further supply increases. Higher U.S.
production, however, could introduce more supply into the global market, likely
exerting downward pressure on prices and potentially increasing market
volatility.

Technological
advancements and a shift towards renewable energy are gradually reducing the
reliance on traditional oil. The International Energy Agency (IEA) projects
that by 2040, renewable sources could meet over 40% of global
energy demand, as
countries aim to cut carbon emissions in line with climate goals. Despite these
shifts, oil is expected to remain essential for sectors like aviation and heavy
manufacturing, although overall demand may see a decline in the coming decades.

Future prospects of the oil
market

OPEC+
production decisions, global economic recovery trends, and seasonal demand
patterns will likely influence short-term oil market dynamics. Seasonal heating
demand during the winter months typically drives
prices upward,
especially in colder regions. Emerging markets, particularly in Asia, are
anticipated to see steady growth in oil demand as industrial activity expands.
This short-term demand increase could provide upward
pressure on prices,
balancing out some of the recent supply constraints.

In
the long term, the oil market faces a transformative shift as renewable energy
adoption accelerates. With governments worldwide investing heavily in
sustainable energy infrastructure, global oil demand is projected to decline
gradually over the next two decades. According to the IEA, global oil
consumption could decrease by as much as 25% by 2040 as electric vehicle adoption and
green technology become mainstream. This energy transition poses both
challenges and opportunities for the oil sector, requiring adaptation to
shifting consumer demands.

Trump’s
victory could significantly influence oil market dynamics through policies that
favour the oil and gas sector. His administration previously prioritised energy
independence, implementing deregulation policies that boosted domestic
production. A return to such policies could lead to increased U.S. output,
potentially intensifying competition in the global market and affecting price
stability.
Additionally, shifts in foreign policy could reshape trade relations with major
oil-producing nations, impacting global oil flows.

Oil
remains a critical asset within the global economy, influencing inflation,
production costs, and economic stability. At the same time, the asset’s price
is affected by geopolitical stability, OPEC decisions, technological advances,
environmental policies, global supply and demand, as well as the US dollar
strength since the price of oil is commonly denominated in US dollars. Traders
and investors should monitor these factors to be aware of recent market trends
and to be able to identify potential price movements more carefully.

About Octa

Octa is an
international broker that has been providing online trading services worldwide
since 2011. It offers commission-free access to financial markets and a variety
of services used by clients from 180 countries who have opened more than 52
million trading accounts. To help its clients reach their investment goals,
Octa offers free educational webinars, articles, and analytical tools.

The company is involved in a comprehensive network of charitable
and humanitarian initiatives, including the improvement of educational
infrastructure and short-notice relief projects supporting local communities.

Since its foundation, Octa has won more than 70 awards, including
the ‘Best Forex Broker 2023’ award from AllForexRating and the ‘Best Mobile
Trading Platform 2024’ award from Global Brand Magazine.

This article was written by FL Contributors at www.forexlive.com.

Fundamental
Overview

Copper continues
to have a hard time as the market demands more stimulus from the Chinese
officials to stimulate growth more strongly.

Copper has been
tightly correlated to the Chinese stock market in recent years which just shows
the strong dependence of the commodity to the Chinese economy. That should not
be surprising given that China is responsible for more than 60% of global copper
demand.

Overall, the
picture is more bullish than bearish for the copper market, but the mixed sentiment
will likely keep the momentum at bay until we get some key technical breakout
or strong catalyst to trigger a more sustained trend.

Copper
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that copper eventually broke below the upward trendline and extended the drop into the 4.05
level before bouncing. From a risk management perspective, the sellers will
have a better risk to reward setup around the downward trendline where there’s
also the resistance level for confluence. The buyers, on the other hand,
will need to see the price breaking above the trendline to regain control and
start targeting a rally into the 4.70 resistance next.

Copper Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we are now trading inside a range between the 4.10 support and 4.21
resistance. The market participants will likely continue to play the range by
buying at support and selling at resistance until we get a breakout.

Copper Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the recent price action. There’s not much else we can add here
as we will likely continue to trade in the range until we get a breakout. The
red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we have the US Consumer Confidence report and the FOMC Meeting Minutes.
On Wednesday, we get the US PCE report and the latest US Jobless Claims
figures.

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

• Recent CPI outturns show no asymmetry in inflation unwinding
• Fall in services PPI appears to be slowing but probably due to erratic components
• Risks to outlook is uncertain and difficult to gauge
• The lack of reliable data is hindering monitoring process

Do keep in mind that she’s arguably the most dovish member among the policy committee when reading into the comments above. Before the rate cut earlier this month, Dhingra was the only one who voted for a rate cut in the September meeting. So, her dismissing any „stickiness“ in price data is not surprising. On the final point, it’s another jab at the ONS and mirroring Lombardelli earlier here.

This article was written by Justin Low at www.forexlive.com.

• We should not focus too much on one set of data (regarding last week’s PMI data)
• We remain focused more on services prices and wages
• Labour market is still relatively tight

This reaffirms the narrative on „gradualism“ and if anything, she is shrugging off suggestions that could point towards a rate cut next month.

This article was written by Justin Low at www.forexlive.com.

Fundamental
Overview

Crude oil remains confined
in a range between the 72.00 resistance and the 67.00 support as the market
continues to weigh the future scenarios.

On one hand, we have the
Trump’s victory which might be seen as bearish in the short term for fear of
the tariffs and a slowdown in global growth as other countries could retaliate,
and an increase in supply.

On the other hand, the red
sweep should see Trump focusing more on tax cuts and domestic issues first which
should eventually lift global growth expectations. If we had a divided
Congress, then his first priority could have been indeed a trade war.

Moreover, we have also central
banks easing their monetary policies and that generally leads the manufacturing
cycle, which is likely to be supportive for the crude oil market.

More recently, we got the
news that OPEC+
could further extend its voluntary output cuts at the December meeting and another
better US
Manufacturing PMI which contributed to the bullish sentiment in the past
few days.

Crude Oil
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that crude oil is approaching the top of the range between the resistance around the 72.00 handle and the
support around the 67.00 handle. The focus will now be on the potential
breakout.

The buyers will want to see
the price breaking higher to increase the bullish bets into the 78.00 handle
next, while the sellers will likely step in around the resistance to position
for a drop back into the 67.00 support.

Crude Oil Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price recently broke above the middle of the range around the
69.50 level which acted as kind of a barometer for the short term sentiment.
The buyers piled in on a break higher to extend the rally into the top of the
range. The sellers will need to see the price breaking below it to increase the
bearish bets into the bottom of the range.

Crude Oil Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have an upward trendline
now defining the current bullish momentum. If we were to get a pullback, the
buyers will likely lean on it to position for the breakout of the range. The
sellers, on the other hand, will look for a break below the trendline and the
69.50 zone to target a drop into the 67.00 support. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we have the US Consumer Confidence report and the FOMC Meeting Minutes.
On Wednesday, we get the US PCE report and the latest US Jobless Claims
figures.

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

UPCOMING
EVENTS:

• Monday: PBoC MLF, German IFO.
• Tuesday: US Consumer Confidence, FOMC Minutes.
• Wednesday: Australia Monthly CPI, RBNZ Policy Decision, US
  Q3 GDP 2nd Estimate, US PCE, US Durable Goods, US Jobless
  Claims.
• Thursday: German CPI. (US Holiday)
• Friday: Tokyo CPI, Japan Unemployment Rate, France CPI,
  Switzerland Q3 GDP, Eurozone CPI, Canada GDP.

Tuesday

The US Consumer
Confidence is expected at 111.6 vs. 108.7 prior. Last month, consumer
confidence bounced back strongly from 99.2 in September to 108.7 in October.

Dana M. Peterson,
Chief Economist at The Conference Board said: “Consumer confidence recorded the
strongest monthly gain since March 2021, but still did not break free of the
narrow range that has prevailed over the past two years.”

“Consumers’
assessments of current business conditions turned positive. Views on the
current availability of jobs rebounded after several months of weakness,
potentially reflecting better labour market data.”

“Compared to last
month, consumers were substantially more optimistic about future business
conditions and remained positive about future income. Also, for the first time
since July 2023, they showed some cautious optimism about future job
availability.”

Wednesday

The Australian
Monthly CPI Y/Y is expected at 2.3% vs. 2.1% prior. The focus will be on the
Trimmed Mean Y/Y measure though which came out at 3.2% in the prior month. Inflation is slowly falling back to the
RBA’s target band of 2-3% and the market expects the first cut in February 2025.

The RBNZ is
expected to cut the Official Cash Rate (OCR) by 50 bps bringing the policy rate
to 4.25%. Inflation is back in the RBNZ’s target range, so the central bank can
focus on growth now especially with the unemployment rate continuing to climb.

The US PCE Y/Y is
expected at 2.3% vs. 2.1% prior, while the M/M measure is seen at 0.2% vs. 0.2%
prior. The Core PCE Y/Y is expected at 2.8% vs. 2.7% prior, while the M/M
figure is seen at 0.3% vs. 0.3% prior.

Forecasters can
reliably estimate the PCE once the CPI and PPI are out, so the market already
knows what to expect. Therefore, unless we see a deviation from the
expected numbers, it shouldn’t affect the current market’s pricing.

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 remain
around the cycle highs.

This week Initial
Claims are expected at 217K vs. 213K prior, while Continuing Claims are seen at
1909K vs. 1908K prior.

Friday

The Tokyo Core CPI
Y/Y is expected at 2.1% vs. 1.8% prior. Inflation in Japan is basically at
target but the BoJ remains cautious on hiking rates too fast. The commentary
remains elusive, but Governor Ueda highlighted once again the impact a weak yen
has on economic and price outlook. As a reminder, the weak yen was one of the
key factors that led the BoJ to raise interest rates in July.

The Eurozone CPI
Y/Y is expected at 2.4% vs. 2.0% prior, while the Core CPI Y/Y is seen at 2.9%
vs. 2.7% prior. The weak Eurozone PMIs on Friday led the market to raise the
chances of a 50 bps cut in December from 20% before the data to 60% after. We
will likely need an upside surprise to strengthen the case for a 25 bps move,
otherwise we could get to the meeting with a 50/50 chance.

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

Villeroy heads up the Bank of France. He spoke with Ouest-France newspaper, commenting on wages and CPI:

• “Prices are increasing less quickly than wages on average — this also allows us to lower interest rates”

Villeroy stressed that the ECB reaches its interest rate policy decisions independent of the Federal Reserve:

• “The proof is that we had started to lower interest rates at the beginning of June, and the Fed only lowered them three months later. With the fall in inflation, we will be able to continue to lower rates.”

**

The European Central Bank (ECB) is expected to cut rates at its next meeting, on December 12. 25bp is the expectation although weaker data has raised the prospect of a 50bp cut.

The Bank’s rate cut cycle so far:

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

The Fed’s twice yearly Financial Stability Report highlights:

• U.S. government fiscal sustainability tops the list of financial system risks cited in the Fed survey of market contacts for the semi-annual Financial Stability Report.
• Persistent inflation dropped to No. 5 on the risks list from No. 1 in the prior survey, now tied with global trade risks.
• Trade issues, last cited as a salient risk in May 2020, were previously a top concern during Trump’s first term in 2019.
• Middle East tensions, policy uncertainty, and a potential U.S. recession are among the top-cited risks in the Fed survey.
• The NY Fed surveyed 24 market contacts from August to October on risks to U.S. financial stability.
• Asset valuation pressures are „elevated,“ though corporate bond spreads remain low; business and household debt risks are considered „moderate.“
• Liquidity conditions in the Treasury cash market appear challenged and could amplify shocks.
• Financial sector leverage vulnerabilities remain notable, with hedge fund leverage near the highest levels since 2013.
• Stablecoin assets rose to nearly $170 billion by early November, with the potential for rapid scaling and vulnerability to runs.

This article was written by Greg Michalowski at www.forexlive.com.

• Major indices close higher for the trading week by the Russell 2000
• Baker Hughes oil rigs up 1 Gas rigs down -2
• European shares close higher despite weak data today
• Attack the currency trend: The EURUSD has been stepping lower with more selling today
• What is the latest tilt for US Treasury Secretary?
• University of Michigan consumer sentiment final for November 71.8 versus 73.7 estimate
• Tech giants stumble: Communication services slump amid mixed market signals
• S&P global manufacturing PMI 48.8 versus 48.8 estimate. Services 57.0 versus 55.2 estimate
• ECBs Nagel (Hawk): PMI data confirms that Germany is stagnating
• ECBs Villeroy: ECB is achieving a soft landing
• Canada retail sales for September 0.4% vs 0.4% estimate
• Canada October new housing price index MoM -0.4% vs 0.1% expected
• SNB chairman Schlegel: Switzerland needs flexible inflation target, as it currently has
• ForexLive European FX news wrap: Poor PMI data weighs on euro, pound

Markets:

• Gold up $37.21 or 1.4% $2706.61
• US 10-year yield 4.414%, -1 point basis points
• US 2-year yield 4.377%, +220 basis points
• WTI crude oil up $1.08 or 1.53% $71.19
• S&P 500 rose . For the week the index rose 1.52%
• NASDAQ rose . For the week the index rose 1.62%
• Russell 2000 rose . For the week the index rose 4.3079%
• Dow rose . For the week the index rose 1.76%
• European shares moved higher with the UK FTSE 100 rising 1.38% and German DAX rising 0.8% leading the way. France’s CAC rose 0.58% was the weakest performer.

The US dollar rose against all the major currency pairs, but was mixed for the week with the USD falling vs the CAD and the NZD.

• EUR, +0.58%. For the week, the US dollar rose by 1.18%.
• JPY +0.20%. For the week the US dollar rose 0.35%
• GBP, +0.47%. For the week the US dollar rose 0.71%
• CHF +0.87%. For the week the US dollar rose 0.74%.
• CAD +0.08%. The week the US dollar fell -0.70%
• AUD +0.25%. For the week the US dollar fell is 0.58%
• NZD +0.53%. For the week, the US dollar rose 0.54%
• DXY 0.57%. For the week the dollar index rose 0.0%

Fundamentally, the US data today was mixed with the S&P global PMI manufacturing and services indices higher.

• For Manufacturing PMI, the index moved from 47.8 to 48.8
• For the services index it surged to 57.0 from 55.3 last month.

From Chris Williamson, Chief Business Economist at S&P Global Market Intelligence

The business mood has brightened in November, with confidence about the year ahead hitting a two-and-a-half year high. The prospect of lower interest rates and a more probusiness approach from the incoming administration has fueled greater optimism, in turn helping drive output and order book inflows higher in November. The rise in the headline flash PMI indicates that economic growth is accelerating in the fourth quarter, while at the same time inflationary pressures are cooling. The survey’s price gauge covering goods and services signalled only a marginal increase in prices in November, pointing to consumer inflation running well below the Fed’s 2% target.

A concern is that growth remains heavily reliant on the services economy, with manufacturing production declining at an increased rate. However, the promise of greater protectionism and tariffs has helped lift confidence in the US good producing sector, which is already feeding through to higher factory employment. Factories are meanwhile stepping up their purchases of imported inputs as they seek to front-run tariffs, putting pressure on supply chains to a degree not seen for over two years. Any further stretching of these supply lines could see prices move higher as demand outstrips supply.

Later the University of Michigan sentiment came in weaker than expectations with the index moving to 71.8 from 73.0 preliminary, but was up from 70.5 last month. Inflation readings were mixed with the one-year inflation expectations remaining study a 2.6% versus the preliminary lower than the 2.7% last month. However the five-year inflation expectations rose to 3.2% from 3.0% last month.

Canada retail sales data for September came in and is expected 0.4% for the headline number but was expected 0.9% orders. The estimate for October came in fairly solid 0.7%.

Yields were mixed today with the shorter end higher and the longer end lower flattening the yield curve

• 2-year yield 4.377%, +20 basis points
• 5-year yield 4.305%, +0.2 basis points
• 10-year yield 4.414%, -1 point basis points
• 30-year yield referred 90%, -2.3 basis points
• 2-10 year spread is down -3.6 bps at 3.9 basis points
• 2-30 year spread is also down -2.8 bps at 22.4 basis point

Bitcoin reached another record level with the price reaching a $99,800 just to hundred dollars short of Bitcoin $100K. The digital currency that never sleeps will be eying the $100K level over the weekend. For the week, the price is up $9290.

Thank you for the support this week. Adam is back on Monday from the Finance Magnate conference in London.

This article was written by Greg Michalowski at www.forexlive.com.