General Market Analysis – 11/09/24

US Markets Mixed Ahead of Debate and Data – Nasdaq up 0.8%

US stock indices had a mixed trading day yesterday as investors anticipated the potential impacts of the first presidential debate between Kamala Harris and Donald Trump, along with key CPI data. The Dow Jones fell by 0.23%, while the S&P 500 and Nasdaq posted gains, finishing up 0.45% and 0.84%, respectively. The dollar and treasury yields hovered around recent levels, with the dollar rising 0.06% on the index. Treasury yields dipped slightly, with the 2-year yield down 2 basis points to 3.643%, and the 10-year yield off by 1.4 basis points, closing at 3.685%.

Oil was the standout mover of the day, with Brent crude hitting a three-and-a-half-year low, dropping 3.69% to $69.19 a barrel. WTI fell further, losing 4.31% to close at $65.75 a barrel. Meanwhile, gold edged higher, gaining 0.5% to finish at $2,516.61 an ounce.

Inflation Data is Not the Only Focus Today

It has already been a long trading week in the US, with markets largely treading water ahead of today’s crucial US CPI data release. However, it is not the only event drawing attention. The first presidential debate could also influence market sentiment. That said, investors are likely to place more weight on the data than political developments—unless, of course, something extraordinary happens. The headline figures are expected to show a 0.2% month-on-month increase for both CPI and core CPI, with a year-on-year rise of 2.5%. Any significant deviations from these expectations could trigger sharp market movements as traders reassess how much the Federal Reserve might cut rates next week.

Busy Day Ahead for Traders

Traders face a relatively full calendar of risk events today, offering a bit of something for everyone. During the Asian session, investor attention will remain unusually fixed on US markets due to the presidential debate, which could have far-reaching consequences following Joe Biden’s recent departure.

In Europe, the focus will shift to the UK’s GDP release, where a 0.2% month-on-month growth is expected. Currency traders will be watching the pound closely for any significant moves following the announcement.

However, the main event remains the US session, with the key CPI data release expected early in the day. Oil traders, in particular, will be bracing for further volatility, especially with the release of US inventory data, which could add further turbulence to an already unstable market.

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