Daily Broad Market Recap – November 7, 2024

The dust appears to have settled after the US election results were confirmed, with the US dollar paring some of its gains while Treasury yields fell.

On the other hand, risk assets such as US stocks and Bitcoin continued their gains as the Federal Open Market Committee maintained its dovish bias.

What economic headlines and updates led to price movements in the past sessions?

Titles:

• Japan’s average cash earnings settled at a reduced 2.8% year-on-year gain (preliminary reading at 3.0%, consensus at 3.0%) in September, as price increases overshadowed wage growth.
• Australia’s goods trade balance contracted from A$5.28 billion to A$4.61 billion as exports fell 4.3% in September while imports fell 3.1%.
• Chinese trade surplus Rose from $87.1 billion to $95.7 billion (expect $73.5 billion) in October, as exports rose 12.7% year-on-year while imports fell 2.3%
• German industrial production fell by 2.5% month-on-month in September after a downwardly revised rise of 2.6% in August.
• Germany’s trade surplus narrowed from €21.4 billion to €17.0 billion (vs. €20.8 billion expected) in September.
• France Private Payrolls Q3: -0.1% QoQ (0.0% expected, -0.1% previously)
• Eurozone retail sales for September: 0.5% m/m (0.4% expected, 0.2% previous)
• Bank of England cuts interest rates by 0.25% From 5.00% to 4.75% as expected in an 8-1 vote
• during Bank of England press conferenceGovernor Bailey noted that inflation is declining faster than expected and that he does not expect interest rates to return to very low levels
• in Bank of England quarterly monetary policy reportPolicymakers played down the impact of recent changes to the UK budget, stating that they “will not cut interest rates too quickly or too much.”
• Weekly initial unemployment claims in the United States: 221 thousand (223 thousand expected, 218 thousand previous)
• US non-farm primary productivity slowed from 2.5% to 2.2% q-o-q (2.6% expected) in Q3; Unit labor costs accelerated from 0.4% QoQ to 1.9% (1.1% expected)
• US Ending Wholesale Inventories for September: -0.2% m/m (-0.1% expected, -0.1% previously)
• Federal Open Market Committee cuts interest rates by 0.25% As expected in the November decision, stating that inflation “has made progress towards targets” and that the election results do not influence policy in the near term.

Broad market price movement:

Thursday’s price action appeared to be a mix of calm after the US election storm and some profit-taking, as most asset classes moved into an early consolidation phase while Bitcoin and the US dollar saw pullbacks.

The BTC/USD pair retreated from $76K levels during the Asian trading session, before bottoming out during market hours in London and making another strong rally to all-time highs of $76.8K, as a “red wave” through the US Congress sparked speculation. Of the most convenient regulations for encryption.

WTI also had a volatile day, starting strong and then turning lower on the Chinese trade balance release, before seeing a significant rebound during the New York session. US stock indices continued to rise after the election, with the S&P 500 and Nasdaq recording their third straight day in the green.

On the other hand, Treasury yields fell in the hours leading up to the FOMC statement, as traders likely adjusted their positions in anticipation of a Fed rate cut and a potential monetary easing bias in the future.

Forex market behavior: US dollar against major currencies:

Overlay of the US dollar against major currencies Chart by TradingView

The major pairs were off to a somewhat cautious start, before the US dollar fell across the board during Asian market hours, especially against the Australian and New Zealand dollars which appear to be deriving additional support from Chinese trade numbers.

The US currency managed to rally a few hours after the London session, with USD/CHF briefly rebounding into positive territory, before another bearish wave ensued. Sterling received a boost from the Bank of England’s decision, as the central bank cut interest rates as expected but emphasized a “gradual approach” to further easing.

The US weekly initial jobless claims report came in broadly in line with consensus at 221K but higher than the previous high of 218K. Quarterly unit labor costs and non-farm productivity beat estimates in the third quarter, although dollar bears appeared to be focusing on downgrades in the prior period’s data, leading to an overall bearish reaction for the US dollar.

Prices stabilized ahead of the FOMC decision and press conference, ultimately leading to another decline for the US dollar as the Fed appeared to stick with its easing plans, despite the US election results and calls for a pause in December.

Potential catalysts coming on the economic calendar:

• SNB Governing Council Member Martin’s speech at 8:00 AM GMT
• Swiss SECO Consumer Climate Index at 8:00 AM GMT
• Testimony from Bank of England Monetary Policy Committee member Bill at 12:15pm GMT
• Canada Employment Report 1:30 pm GMT
• UoM US Preliminary Consumer Confidence Index 3:00 PM GMT
• FOMC Member Bowman’s speech at 4:00 PM GMT
• China CPI at 1:30 AM GMT (November 9)

Focus could shift to the Canadian economy, which is preparing to print October employment data during the US session. Make sure to check us out Events guide This release is top notch, as it could bring additional volatility to the CAD pairs before the week comes to a close, and don’t forget to keep an eye on the preliminary consumer confidence number from the University of Michigan in the US as well.

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