Daily Broad Market Recap – October 29, 2024

Market correlations appear to be out of sync in recent trading sessions, as crude oil had its own path while US stocks reacted to earnings data.

Gold advanced more than 1% on the day while BTC/USD rose to all-time highs at the $73,000 levels.

What economic headlines and updates drive price action?

Titles:

• Japan’s unemployment rate improved from 2.5% to 2.4% (2.5% expected) in September
• German Consumer Climate GfK It improved from -21.0 to -18.3 in October, and the September reading was revised from -21.2
• The UK Shop Price Index fell from -0.6% y/y to -0.8% y/y in October; The price of the inflatoin store is at its lowest levels in more than three years
• UK mortgage approvals rose from 65,000 to 66,000 (expected to reach 65,000) in September; Net individual lending fell from £4.2 billion to £3.8 billion (expected £4.1 billion)
• Iranian Revolutionary Guard He threatened to deliver more “crushing” strikes against Israel in the coming days
• The US government shared plans to purchase up to 3 million barrels of oil To help replenish the Strategic Petroleum Reserve for delivery until May 2025
• US S&P/Case-Shiller Home Price Index August 2024: -0.3% mo (expect -0.1% mo; previous 0.0% mo)
• The US goods trade deficit widened from $94.2 billion to $108.2 billion in September ($95.9 billion deficit expected) as exports fell $3.6 billion from the previous month while imports rose $10.4 billion.
• Job opportunities in the United States JOLTS September: 7.44 million (expect 7.8 million; previous 7.86 million)
• Consumer Confidence Index issued by the US Conference Board October: 108.7 (98.5 forecast; 99.2 previous)
• Swiss Central Bank Chairman Schlegel indicated that the central bank may reduce interest rates in the coming quarters
• US private sector inventories decreased by 0.57 million barrels versus an estimated increase of 2.3 million barrels

Broad market price movement:

Price action was mixed among high-yielding assets early in the Asian session, as West Texas Intermediate crude continued to decline on the back of strengthening expectations of a possible ceasefire in Gaza, which eased global concerns about supplies.

Meanwhile, gold and Bitcoin rose from the start and maintained their upward trajectory throughout the day, as investors appear to be looking for higher returns compared to their usual safe-haven options. The energy commodity eventually rose at the start of the London session likely due to rising geopolitical tensions, as Iran threatened “more crushing” strikes on Israel in response.

Treasury yields also rose, with 10-year Treasury yields rising to new highs of 4.34%, before giving up gains when the US dollar faltered on a downbeat jobs report.

US stocks appeared to get off to a rocky start but eventually ended the day in the green, with the Nasdaq closing at record levels, thanks to positive earnings data from Alphabet and Visa.

Forex market behavior: US dollar against major currencies:

Overlay of the US dollar against major currencies Chart by TradingView

Volatility was high for major currency pairs during the Asian trading session, with the Japanese yen getting some support from a better-than-expected unemployment rate early while the Australian and New Zealand dollars took hits from risk-off flows.

As it turned out, a Reuters report revealed China’s plans for a 10 trillion yuan stimulus, but that money would be spread out over three years and used mainly to settle local government debts and buy dormant real estate.

Germany reported stronger than expected consumer confidence data for September, with the reading rising from -21.0 to -18.3 during the month versus a consensus of -20.4, providing a bit of support to the common currency.

However, the dollar quickly strengthened against the majority of its counterparts (except against the British pound which rose on positive UK budget outlook) a few hours after the London session, as safe haven demand returned.

The US currency quickly gave up most of these gains when the JOLTS jobs report came in weaker than expected, prompting traders to revise non-farm payrolls forecasts, ignoring the upward surprise in the CB Consumer Confidence Index.

Potential catalysts coming on the economic calendar:

• Preliminary German Consumer Price Index Coming
• UK Autumn Forecast Budget Statement Coming
• French consumer spending and quarterly GDP at 6:30 AM GMT
• Swiss economic gauge KOF at 8:00 AM GMT
• Spanish CPI and GDP at 8:00 AM GMT
• Testimony of SNB Chairman Schlegel at 9:00 AM GMT
• Eurozone preliminary GDP at 10:00 AM GMT
• Nonfarm employment change in the United States 12:30 pm GMT
• The United States has a GDP 12:30 pm GMT
• US Home Sales Pending at 2:00 PM GMT
• US crude oil inventories from the US Energy Information Administration at 2:30 PM GMT
• Bank of Canada Governor Macklem’s speech at 8:15 PM GMT

There is no shortage of high-level catalysts today, as volatility could rise during the London session with the release of… Preliminary CPI and GDP readings from Eurozone economiesAnd also expected UK Budget Statement.

Later, the focus could shift back to US fundamentals, e.g ADP Nonfarm Employment Change Report It is likely to provide more NFP evidence while A preview of third quarter GDP It could shake things up too.

As always, keep an eye on the headlines affecting overall market sentiment, and don’t forget to check out our brand new Forex Correlation Calculator!