EURUSD
- The European Central Bank (ECB) decided to keep interest rates unchanged last week, but it is expected to start cutting interest rates in Q2 next year. This is due to disinflationary pressures and sluggish GDP growth in the Eurozone. The weak PMI data also indicates an increased risk of recession.
- The US Dollar (USD) has weakened after the Federal Open Market Committee (FOMC) policy meeting. The FOMC chose to keep the federal funds rate unchanged at 5.25–5.50%, in line with expectations. This has provided some support to the EUR/USD pair.
- The private sector payroll growth in the US increased modestly in October, with a rise of 113,000 jobs compared to 89,000 in September. However, this figure fell short of market expectations, which were for a 150,000 increase.
- The JOLTS jobs opening data unexpectedly rose to 9.553 million, surpassing expectations of 9.25 million. This suggests that there are significant job opportunities in the US job market.
- The ISM Manufacturing PMI registered the lowest reading since July, dropping to 46.7 in October. This indicates a slowdown in the manufacturing sector, which can have broader implications for the US economy.
| SMA (20) | Slightly Rising |
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| RSI (14) | Neutral | |
| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: The ISM Manufacturing PMI registered the lowest reading since July, dropping to 46.7 in October. This indicates a slowdown in the manufacturing sector, which can have broader implications for the US economy.
GBPUSD
- GBP/USD has entered a consolidation phase after approaching the 1.2200 level. This consolidation is occurring following recent developments and amid uncertainties in the market.
- The US Dollar (USD) has weakened after the Federal Reserve (Fed) decided to maintain interest rates at their current levels. The odds of the Fed not raising rates in the near term have increased, particularly after the Fed's press conference.
- The market's attention is now shifting to the upcoming Bank of England (BoE) policy meeting. The BoE is expected to maintain its current monetary policy without any changes.
- There are signs of slowing economic activity and decreasing inflationary pressures in the UK, which are likely influencing the BoE's decision to keep rates steady.
- Investors will closely watch the vote split within the Monetary Policy Committee (MPC) during the BoE meeting. This split can offer insights into market expectations regarding future rate decisions and play a significant role in affecting the British Pound (GBP).
| SMA (20) | Slightly Rising |
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| RSI (14) | Neutral | |
| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: GBP/USD is in a consolidation phase after encountering the 1.2200 level, and this movement has been influenced by the weakening US Dollar following the Fed's interest rate decision. The market's focus is now on the BoE meeting, where the BoE is expected to keep rates unchanged due to concerns about economic activity and inflation. The MPC's vote split during the meeting will be closely monitored by investors for its implications on future rate decisions and the value of the British Pound.
GOLD
- Gold price has been in a recovery mode in Thursday's trading as investors assess the future trajectory of interest rates, particularly after recent developments regarding the Federal Reserve (Fed).
- During the Fed's press conference, Fed Chair Jerome Powell discussed the rise in long-term yields. He emphasized that for such an increase in yields to influence monetary policy, it needs to be persistent and driven by higher-term premiums.
- Powell noted that the current monetary policy is already restrictive. While the FOMC has left the door open for another rate hike, there seems to be no rush to do so.
- Powell acknowledged that the Fed has a long way to go in bringing inflation back to the 2% target. He also mentioned that financial conditions have tightened, and there are plenty of risks in the economic landscape.
- Gold traders are keeping an eye on the Bank of England's (BoE) monetary policy decision expected later in the day. The key interest rate is likely to remain unchanged at 5.25% for the second consecutive meeting.
Closing statement:In summary, gold price has been recovering as investors reassess their expectations regarding interest rates, with the possibility of Fed rate cuts being priced in. The Fed's stance is seen as relatively cautious, with an acknowledgment of inflation challenges and economic risks. Investors are also watching for the outcome of the Bank of England's meeting, which is expected to result in an unchanged interest rate.
CRUDE OIL
- Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $81.30. This follows a three-day losing streak and was influenced by the recent Federal Open Market Committee (FOMC) meeting.
- The FOMC's decision to pause the interest rate hike cycle has had an impact on oil prices. While the FOMC has left the door open for another rate hike, the market perception is that the hiking cycle is likely over. This has led to a weaker US Dollar (USD) in the currency markets, which can support oil prices.
- Escalating tensions in the Middle East are a concern, as they could exacerbate existing disruptions in the energy markets caused by the conflict in Ukraine. This geopolitical instability is a factor influencing oil prices.
- Chinese manufacturing data is showing signs of weakness, with the manufacturing Purchasing Managers' Index (PMI) falling below 50 in October. This indicates slower production and weaker demand, raising doubts about the optimism for a recovery in the world's second-largest economy.
- Oil traders are closely monitoring the release of the US weekly Initial Jobless Claims on Thursday. On Friday, the focus will shift to the highly influential US Nonfarm Payrolls report, which can have a substantial impact on oil prices.
| SMA (20) | Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: WTI oil prices have rebounded after a brief decline, driven by the FOMC's decision to pause interest rate hikes. Geopolitical tensions in the Middle East and concerns over Chinese manufacturing data are adding uncertainty to the oil market. Upcoming US economic data, particularly the Nonfarm Payrolls report, will be closely watched for their potential impact on oil prices.
DAX
- The DAX stock index was influenced by US labor market data on Wednesday. The release of a weaker-than-expected ADP employment report eased expectations for a December interest rate hike by the Federal Reserve (Fed).
- The ISM Manufacturing employment Purchasing Managers' Index (PMI) indicated a softer labor market in the US, which is an important factor for investor sentiment.
- Among the DAX-listed stocks, bank and auto sector stocks were among the front-runners on Wednesday, potentially due to the influence of the US labor market data.
- On Thursday, the focus will shift to the German economy. Key economic indicators include German unemployment and finalized manufacturing PMI figures for October. Investors will closely monitor these data points. A larger-than-expected rise in unemployment or a higher unemployment rate could have an impact, particularly on consumer-focused stocks.
- Corporate earnings reports will continue to be a focal point for the DAX. Zalando, a prominent company, is among the big names set to release earnings on Thursday. Positive or negative earnings reports from major companies can significantly affect stock performance.
| SMA (20) | Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: In summary, the DAX is facing challenges due to weak economic data in Europe, but corporate earnings have provided some support. The focus will soon shift to the US labour market data and the Federal Reserve's interest rate decision, which are expected to influence the DAX's performance.