Daily Broad Market Recap – November 6, 2024

Trump’s election victory dominated price action on Wednesday, sending most major assets to notable highs and lows.

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Our deets:

Titles:

• Trump’s expected election victory sent the US dollar, Treasury bond yields and stocks rising sharply
• German factory orders It jumped from -5.4% to 4.2% monthly in September; August reading was revised from -5.8%
• Spain Services PMI for October: 54.9 (56.6 expected, 57.0 previously)
• Italy Services PMI for October: 52.4 (50.3 expected, 50.5 previously)
• France’s final services PMI was revised higher from 48.3 to 49.2 in October
• Germany’s final services PMI rose from 51.4 to 51.6 in October
• The final Eurozone services PMI was revised higher from 51.2 to 51.6 in October
• UK Construction PMI for October: 54.3 (55.3 expected, 57.2 previous)
• Eurozone Producer Price Index for September: -0.6% (-0.5% expected, 0.6% previously)
• Canada Ivey PMI October: 52.0 (54.2 expected, 53.1 previous)
• EIA: US crude oil inventories rose by 2.1 million barrels in the week ending November 1 (+0.3 million expected, -0.5 million previous)

Broad market price movement:

Donald Trump’s big win in the 2024 presidential election sparked a broad market rally, with US stocks hitting record highs and Bitcoin rising to an all-time high above $76,000 on hopes of crypto-friendly policies.

Anticipation around Trump’s fiscal moves (read: tax cuts and increased government spending) pushed the 10-year Treasury yield to 4.44% and lifted the US Dollar Index, signaling stronger growth and inflation expectations.

With the dollar strengthening and yields rising, gold took a hit, seeing its biggest single-day decline since June 2021, falling to $2,660. Meanwhile, WTI swung widely before settling at $71.78, as traders weighed Trump’s energy policies against a strong dollar and rising US inventory data.

Forex market behavior: US dollar against major currencies:

Overlay of the US dollar against major currencies Chart by TradingView

The US dollar showed strong upward momentum following Trump’s election victory, starting with an initial rally during the Asian session. The rally gained real momentum in the European session, with EUR/USD falling 1.78%, as European traders took into account the impact of Trump’s win.

By the time the US markets opened, momentum had subsided, and we saw more subtle moves across currency pairs. For example, the USD/CAD pair held up relatively well with gains of 0.86%, as commodity prices and regional economic factors began to play a larger role once the initial reaction to the election slowed.

Potential catalysts coming on the economic calendar:

• German industrial production at 7:00 am GMT
• German Trade Balance at 7:00 AM GMT
• United Kingdom Halifax HPI at 7:00 AM GMT
• Eurozone retail sales monthly at 10:00 AM GMT
• Bank of England monetary policy decision at 12:00 noon GMT
• Bank of England Governor press conference at 12:30pm GMT
• Initial US jobless claims at 1:30pm GMT
• Initial unit labor costs in the United States at 1:30 PM GMT
• BOC member Kozicki will speak at 2:00 PM GMT
• FOMC statement at 7:00 PM GMT
• FOMC Governor Powell’s speech at 7:30 PM GMT
• Japanese household spending at 11:30pm GMT

Industrial production and trade balance data in Germany, along with retail sales in the Eurozone, could set the tone for the European session, while traders will closely monitor the Bank of England’s policy updates and speeches for any sterling-related volatility.

In the US, unemployment claims, productivity data, and the upcoming FOMC interest rate decision and statement are likely to trigger major moves, especially with expectations about possible shifts in monetary policy plans after Trump’s election.

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