General Market Analysis – 21/11/24

Markets Steady Ahead of Nvidia – Dow up 0.3%

US markets remained steady ahead of the key Nvidia earnings report today, with major indices trading close to flat. The S&P finished the day unchanged at 5,917, while the Dow added 0.32%, and the Nasdaq declined by 0.11%. Tech indices are expected to face pressure in the coming sessions as Nvidia shares dropped nearly 5% in after-hours trading following their update. Treasury yields moved higher once again, with the 2-year yield up 3.6 basis points to 4.308% and the 10-year yield increasing by 3.3 basis points to 4.412%. The dollar advanced, challenging recent annual highs, as the DXY rose 0.5% to 106.65. Oil prices dipped after stronger-than-expected US inventory data, with Brent down 0.68% to $72.81 and WTI off 0.75% to $68.87. Gold, meanwhile, gained 0.6%, closing at $2,647.23, as geopolitical concerns continued to provide support.

Dollar Back in Favour for Traders

The dollar saw another strong rise in trading yesterday, following a brief period of relief rallies for other currencies after weeks of sustained pressure. Both the dollar and US yields are now challenging recent high levels, with traders expecting potential breakthroughs into new topside ranges in the next few sessions. Despite a lack of significant US data and central bank updates this week, indicators point towards continued dollar strength. Geopolitical risks have increased in recent days, typically bolstering the greenback, while recent developments have done little to alter this trajectory. Federal Reserve members are scheduled to speak tonight, and any reinforcement of Fed Chair Jerome Powell’s comments last week—indicating no urgency to cut rates—could lead to further break trades in the near term.

Central Bankers in Focus Today

Thursday brings a strong focus on central banks for Asian markets, with Bank of Japan Governor Kazuo Ueda set to speak again, keeping Yen traders on alert. Later in the day, Reserve Bank of Australia Governor Michele Bullock is scheduled to speak. The European session is relatively light on the agenda, but the US session will feature some data releases once New York opens, including the weekly unemployment claims numbers (expected at 220,000), the Philly Fed Manufacturing Index (expected at 7.4), and the Existing Home Sales update (expected at 3.95 million). A series of speeches from Federal Reserve officials, including Goolsbee, Hammack, and Barr, will follow later in the session.

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