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I posted earlier to expect verbal intervention today:

• Eyes and ears open today – “Verbal intervention threat rises as USD/JPY rises above 150”

Its just after 10am in Tokyo. Maybe officials aren’t out of bed yet.

Or they’ve given up 😉

This article was written by Eamonn Sheridan at www.forexlive.com.

US Stocks Fall from Record Levels – Dow down 0.8%

US stock markets fell from record levels yesterday as investors focused on key earnings reports and the market priced in a more dovish Federal Reserve. The Dow dropped 0.78%, the S&P fell 0.17%, while the Nasdaq bucked the trend, rising 0.27% as Nvidia closed at a record high. Treasury yields pushed higher, hitting a 12-week peak, with the 2-year gaining 7 basis points to reach 4.025% and the 10-year benchmark climbing 10.5 basis points to close at 4.180%. The dollar also strengthened, with the USD/JPY notably surpassing the key 150.00 level, and the DXY index rising 0.5% to 103.98. Oil prices regained some of last week’s 7% losses, with Brent climbing 1.68% to $74.29 and WTI increasing 1.94% to $70.56 per barrel, while gold remained flat after reaching a new record high at $2,740.37.

Yen in Focus Again for FX Traders

The yen is once again the focus for FX traders as geopolitical factors overshadow the current underlying fundamentals. The USD/JPY surged through the key psychological level of 150 yesterday, hitting a new monthly high of 150.88, a level not seen since late July. The upcoming US election is having a growing impact on markets, with “Trump trades” gaining traction in recent weeks as the race remains neck-and-neck. Some traders believe either political outcome will likely bring further inflationary pressures to the US economy, boosting the dollar. However, most agree that a Republican victory would lead to a more significant market shift.

Central Bankers in Focus Today for Markets

Geopolitics is expected to play a major role in market movements today as investors react to potential US election outcomes and focus on various central bank updates in the days ahead. While there is little economic data on the calendar for the next three trading sessions, key speeches from central bankers will take centre stage. The BRICS summit in Kazan, Russia, begins today, with emerging market traders closely monitoring any developments. Later in the US session, attention will shift to speeches from prominent figures, including Bank of England Governor Andrew Bailey and ECB President Christine Lagarde. The latest Richmond Manufacturing Index data is also due for release, though central bank commentary is likely to overshadow it.

The post General Market Analysis – 22/10/24 first appeared on IC Markets | Official Blog.

That comment in quote marks is via Mizuho in their weekly outlook.

• “Verbal intervention threat rises as USD/JPY rises above 150.”

That is pertinent for the session here today for sure, with USD/JPY having gained mover than 150 points since its Asia time low on Monday.

Also pertinent from the same analysts is this:

• Buoyancy retained for the week ahead as opportuneities for effective
  intervention action may elude in the abscence of major releases.

As I said last week, yeah, USD/JPY drops but the bids gobble it up .

These are 4 hour candles showing the recent uptrend:

This article was written by Eamonn Sheridan at www.forexlive.com.

Reuters report, citing unnamed sources on Fidelity International (investment management services including mutual funds, pension management and fund platforms) is cutting around 500 jobs in China:

• largest downsizing in recent years
• cuts seem mainly in Dalian tech/operations centre

This article was written by Eamonn Sheridan at www.forexlive.com.

UBS on the US election result:

• The election outcome may not be known for several weeks after the ballot closes on 5 November. The prospect of recounts and legal contests means that the winner might not be known before 11 December, the deadline for states to declare their electoral college votes. And even that date might not fully draw a line under the outcome if the result is still undecided or contested. Investors deferring investment plans in anticipation of the election result therefore need to factor in the potential risk and cost of a potentially long wait.

—

I very much doubt this. I don’t know which political experts UBS is employing or using as consultants. Not knowing until after December 11 seems extreme. But h

We’ll see.

This article was written by Eamonn Sheridan at www.forexlive.com.

New Zealand trade data not moving NZ dollar upon release, around 0.6030

This article was written by Eamonn Sheridan at www.forexlive.com.

• US Social Security to run dry in 2031 under Trump and 2034 under Harris
• Mixed bag for the major US indices. Nasdaq up, but S&P and Dow down
• US 10-year yields rise above the 200-day moving average
• Crude oil futures settle at $70.56
• Even more from Kashkari: Excess savings have been spent down
• Citi upgrades 0 to 3-month-old forecast for gold to $2800 versus $2700
• More Kashkari: It wasn’t labor markets that caused inflation
• Fed’s Kashkari: A rising budget deficit would mean interest rate would be higher
• European shares close lower. German DAX falls after closing at record high on Friday
• USD higher. Yields higher. Stocks lower.
• BOE’s Greene: Cautious and gradual approch to easing is appropriate
• US Sept leading indicators -0.5% vs -0.3% expected
• Tech and energy sectors lead gains as semiconductors stumble
• More from Logan: My business contacts are optimistic looking forward
• Kickstart the FX trading day for Oct 21 w/ a technical look at the EURUSD, USDJPY & GBPUSD
• Let’s hope Goldman Sachs is wrong
• Fed’s Logan: Expects gradual cuts if the economy meets forecasts
• ForexLive European FX news wrap: Dollar holds firm, gold extends run in quiet trading
• ECB’s Kažimír says all options are on the table for December meeting

Apart from the Leading indicators which have been forecasting a downturn for over 2 year now (there has only been one month that was positive since April 2022), the day was void of economic data.

Yields were the focus today as they continued their move to the upside. The 10 year yield moved up 12.1 basis points at 4.195%, and is closing above its 200 day MA at 4.187% (see post here). The yield is also above the 50% of the 2024 trading range at 4.172%. The 10 year yield reached a low of 3.605% in September just before the Fed cut rates by 50 bps. Since then, the yield is up 59 basis points.

A look at the yield curve shows:

• 2 year 4.0317, up 7.7 bps
• 5 year 3.958%, up 10.7 bps
• 10 year 4.195%, up 12.1 bps
• 30 year 4.994%, up 11.7 bps.

The USD moved higher today as well with the:

• EURUSD: THe EURUSD is falling away from its 200 day MA at 1.0870 after testing it in the Asian Pacific session, and is extending toward the low from last week at 1.0810. A move below that level will have traders looking toward the swing low from August 1 at 1.0776.
• GBPUSD: The GBPUSD is also heading and testing the low from last week at 1.29729. The next target comes in at the 100 day MA and the 61.8% at 1.2958. If that level is broken in the new trading day, it will increase the bearish bias. The 200 day MA is much lower, however, at 1.2797. There is interim support targets at 1.2938 and then a swing area at 1.2844 to 1.2867.
• USDJPY: The USDJPY is closing near highs for the day and in the process is moving above the 50% midpoint of the move down from the July high to the September low and also the 100 day MA. Both are at 150.76.
• USDCHF: The USDCHF was lower and testing the 38.2% near the start of the US session at 0.86318, but found willing buyers near the level and is closing at 0.8661. The highs from last week reached 0.8669 on three separate occasions. Get above it in the new trading day and traders will be looking toward 0.8700.

There was some Fedspeak:

Lorie Logan, President of the Boston Federal Reserve, highlighted the need for the Fed to remain flexible with monetary policy decisions as the economy evolves. She noted the current strength and stability of the economy but acknowledged downside risks to the job market and challenges in achieving the inflation target. Logan expects gradual rate cuts if economic forecasts are met, with balance sheet reductions and rate cuts working in tandem. She emphasized that liquidity remains abundant in money markets and over time aims for minimal balances in the reverse repo facility, possibly adjusting the repo rate if needed. Logan shared that her business contacts are optimistic but mindful of potential risks, and she closely monitors financial conditions indexes.

Meanwhile, Minneapolis Fed President Kashkari stated that inflation wasn’t driven by the labor market. He emphasized the importance of avoiding a recession and noted recent labor market weakness as a reason for previous rate cuts. He also commented that consumer savings are dwindling, and delinquencies for lower credit score borrowers are rising. Kashkari mentioned that monetary policy has mainly anchored inflation expectations rather than reduced demand. He sees modest rate cuts ahead, with faster cuts possible if labor market weakness escalates.

IN the US stock market today, the first day after a week that closed higher for the 6th consecutive week, the market was mixed. The Dow was hit the hardest. The Nasdaq rose modestly. The S&P close in between:

• Dow INdustrial average down -344.31 points or -0.80% at 42931.60
• S&P fell -10.69 points or -0.18% at 5853.98
• Nasdaq rose 50.45 points or 0.27% at 18540.01..

Nvidia traded to a new all time high and was up 4.14%.

Amex, Merck, Travelers, HomeDepot, Goldman Sachs all Dow stocks and all fell more than 2% on the day.

This article was written by Greg Michalowski at www.forexlive.com.

A nonpartisan report compared Harris and Trump policies. In brief:

• reserve fund for Social Security would run empty by 2031 under Trump
• runs empty in 2034 under Harris
• “Social Security is nine years from insolvency, and neither campaign has a plan to solve it”
• “But President Trump’s plans would make it much, much worse.”

The report is from a nonpartisan source, Committee for a Responsible Federal Budget (CRFB).

There are plenty of media reports on it, here is an ungated one if you are after more.

–

The election is on November 5. Polling will ramp up in the two weeks ahead of then. Current polling is showing a very close race.

This article was written by Eamonn Sheridan at www.forexlive.com.

The major US stock indices are closing with mixed results.

The Dow industrial average was the biggest loser with a decline of -0.80%. The NASDAQ index rose by 0.27% and the S&P was in between with a decline of -0.18%.

Looking at the losers in the Dow, there were 12 of the 30 with declines of 1% or more. The declines were led by American Express (-2.19%,), Merck (-2.17%) and Travelers (-2.17%).

Dow losers of 1% or more:

• American Express: -2.19%
• Merck & Co: -2.17%
• Travelers: -2.17%
• Home Depot: -2.06%
• Goldman Sachs: -2.02%
• Nike: -1.74%
• Dow: -1.69%
• Amgen: -1.53%
• Coca-Cola: -1.41%
• J&J: -1.39%
• Visa A: -1.30%
• P&G: -1.02%

Boeing was the outperformer with a gain of 3.11%. Apple rose by 0.66%. There were only 7 of 30 Dow stocks which were positive on the day.

Some other winners today included:

• Trump Media & Technology Group: +5.81%
• NVIDIA: +4.14%
• Boeing: +3.11% (Dow stock)
• Zoom Video: +2.34%
• SoFi Technologies: +2.21%
• Uber Tech: +1.68%
• Fortinet: +1.25%
• AMD: +1.24%
• Schlumberger: +1.22%
• Super Micro Computer: +1.14%
• Netflix: +1.09%

This article was written by Greg Michalowski at www.forexlive.com.

It was a tough one for the bond bulls on Monday as the 10-year ratcheted above the 200-day moving average for the first time since July. I wrote about bonds earlier in the day and the idea that they were pricing out a recession but it’s tough to argue that’s still the trade as the recent range breaks.

The market is sensing some inflationary impulses and a Fed pause much sooner than believed a month ago — as soon as December and more-likely-than-not by the Jan 29 meeting.

The risk is that this leads to some reflexivity back into stocks and the broader economy. The level of rates is certainly relevant for real estate-facing sectors once again. The dollar has also undoubtedly noticed as USD/JPY tracks this chart very closely.

This article was written by Adam Button at www.forexlive.com.

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

This article was written by Eamonn Sheridan at www.forexlive.com.

Citi has upgraded its:

• 0 to 3 month forecast for gold to $2800 from $2700.
• Sets 6-12 month target to $3000 an ounce.
• Increases 6– 12 month target for silver from $38 an ounce to $40 an ounce

Gold is currently trading near unchanged at $2720.60

Looking at the daily chart below, the price of gold is channeling with a top-side target currently at $2752 and moving higher.

Silver is currently trading at the highest level since November 2012.

This article was written by Greg Michalowski at www.forexlive.com.