Daily Market Outlook, November 24, 2022

‘Markets Thankful Fed Likely To Tap The Brakes on Rates ’

  • Overnight Asian equities were buoyed by a positive close on Wall Street, with US markets closing at near two-month highs, as markets cheered the FOMC minutes, the Fed appear to be coalescing around a slower pace of rate hikes, with a ‘substantial majority of Fed policymakers agreeing that it would ‘likely soon be appropriate to reduce the rate of rate increases, the bullish close in the US was further supported by China signalling an intention to add further monetary stimulus, which could include a cut in banking reserve requirement ratios, this stimulus announcement comes against a backdrop of record Covid infections in the country, with localised lockdowns and other restrictions weighing on the economic outlook.

  • For the day ahead: with the US offline for the Thanksgiving holidays, volumes will be muted later today, this morning's focus in the UK will be on CBI industrial survey data, yesterday's PMI data confirmed continued contraction in both services and manufacturing, with manufacturing outpacing declines in services sentiment, CBI data is expected to confirm a fourth successive month of concerns regarding orders within the factory sector. Bank of England’s Pill and Ramsden also speak today.  In the Eurozone all eyes will be on the German IFO survey, which is anticipated to signal further weakness after printing a nineteen-month low in October, on the glass-half-full side of the ledger, markets will be hoping to see the second month of improvement in the expectations component of the survey, likely driven by a pullback in gas and energy prices. Markets will also eye the ECB minutes and speakers Schnabel and De Guindos for a more timely perspective on the ECB rate trajectory

Overnight Headlines

  • Fed Minutes Show Most Officials Favoured Slowing Rate Rises Soon

  • Asian Shares Higher On Signs Of U.S. Fed Slowdown, China Stimulus

  • US Dollar Slips, Risk Sentiment Improves After Fed Minutes Revealed

  • China Daily Covid Cases Rise To 29,754, Most During Pandemic

  • Bank of Korea Hikes By Quarter Point, Slowing Pace Of Recent Gains

  • China Signals Likely Reserve Requirement Cut to Aid Growth

  • Nomura Cuts China’s Growth Forecasts On Slow Covid Reopening

  • China Must Be Quick In Curbing Covid Spread - People’s Daily

  • Japan Output Decreases For First Time In Three Months - PMI

  • European Council Pres To Visit China Next Month For Summit With Xi

  • BoC Reiterates Inflation Remains Too High, Higher Rates Still Needed

  • Goldman Sachs Cautious On Yuan On Covid, Bullish Kiwi On RBNZ

  • Bill Ackman Shorting Hong Kong’s Dollar On Bet Peg Will Break

  • China Bond Rally Fades As PBoC Easing Cycle Seen Nearing an End

  • Oil Holds Decline As EU Wrangles Over Plan To Cap Russian Crude

  • Goldman Says Higher Oil Cap Curbs Risk Of Retaliation By Russia

  • Asian Shares Higher On Signs Of U.S. Fed Slowdown, China Stimulus

  • Larger Protests Under Control At Foxconn's Major iPhone Factory In China

Technical & Trade Views

SP500 Bias: Bullish Above Bearish Below 3975

Technicals

  • Primary support is 3975

  • Primary upside objective is 4120

  • Next pattern confirmation, acceptance above 4050

  • Failure below 3950 opens a test of 3900

  • 20 Day VWAP bullish, 5 Day VWAP bullish

EURUSD Bias: Bullish Above Bearish below 1.0340

Technicals

  • Primary support is 1.0340

  • Primary upside objective is 1.0620

  • Next pattern confirmation, acceptance above 1.0485

  • Failure below 1.03 opens a test of 1.0220

  • 20 Day VWAP bullish, 5 Day VWAP bullish

  • Today’s New York Cut Option Expiries: 1.0340-50 (992M), 1.0370-80 (790M)

1.0400 (1.11BLN)


GBPUSD Bias: Bullish Above Bearish below 1.1950

1.2050 Target Achieved, New Pattern Emerging

Technicals

  • Primary support is 1.1950

  • Primary upside objective 1.22

  • Next pattern confirmation, acceptance above 1.21

  • Failure below 1.19 opens a test of 1.1770

  • 20 Day VWAP bullish, 5 Day VWAP bullish

  • Today’s New York Cut Option Expiries: 1.1840 (236M), 1.1865-70 (300M)

USDJPY Bias: Bullish above Bearish Below 142.20

Technicals

  • Primary resistance is 142.20

  • Primary downside objective is 136

  • Next pattern confirmation, acceptance below 138

  • Acceptance above 142.20 opens a test of 143

  • 20 Day VWAP bearish, 5 Day VWAP bearish

  • Today's New York Cut Option Expiries: 138.00 (816M), 140.25-30 (815M)

140.65 (275M), 141.15 (600M)


AUDUSD Bias: Bullish Above Bearish below .6680

Technicals

  • Primary support is .6680

  • Primary upside objective is .6900

  • Next pattern confirmation, acceptance above .6775

  • Failure below .6660 opens a test of .6600

  • 20 Day VWAP bullish, 5 Day VWAP bullish

  • Today’s New York Cut Option Expiries: 0.6675-85 (478M)

BTCUSD Bias: Intraday Bullish Above Bearish below 16100

Technicals

  • Intraday 16100 is primary resistance

  • Primary upside objective is 17000

  • Next pattern confirmation, acceptance below 16750

  • Failure 16000 opens a test of 15500

  • 20 Day VWAP bearish, 5 Day VWAP bullish