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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.

The post General Market Analysis – 21/11/24 first appeared on IC Markets | Official Blog.

That’s around 141bn USD.

Earlier this week Japanese Economic Revitalisation Minister Akazawa empasized that its crucial the p[package contains measures to boost wages.

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

UBS analysts continue to highlight gold and oil as strategic hedges against the prevailing macroeconomic and geopolitical environment, forecasting notable price increases for both commodities in the coming years.

The bank projects gold prices to reach $2,900 per ounce by September 2025, driven by a confluence of factors, including expectations of lower interest rates, uncertainty surrounding President-elect Donald Trump’s policy agenda, and robust central bank purchases globally.

• “Gold’s role as a safe-haven asset remains compelling given these dynamics,” UBS noted.

On the oil front, UBS anticipates Brent crude to rise to $80 per barrel, citing supply constraints and a likely underestimation of demand growth. Additionally, the bank flagged potential disruptions in crude exports and production from Iran and Venezuela, particularly if geopolitical pressures intensify under Trump’s second term.

• “Tighter market conditions could amplify upward pressure on oil prices,” UBS added.

These forecasts underscore the bank’s view that both commodities offer resilience in the face of heightened economic and geopolitical uncertainty.

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

US politics website POLITICO with the report.

• Trump plans to revive the Keystone XL oil pipeline on his first day back in the White House.

The yoyo ride so far:

• The Keystone XL pipeline’s U.S.-Canada border permit was rejected by President Obama in 2015, approved by Trump in 2017, and revoked by Biden in 2021.
• After Biden’s decision, TC Energy, the pipeline’s developer, abandoned the project and removed installed segments.

TC Energy no longer owns the pipeline system, and any effort to rebuild would require new local permits.

• U.S. oil production has reached record levels, reducing the economic necessity of Canadian crude imports to the Gulf Coast.

• Canadian oil exports hit record levels in 2024, aided by a new pipeline link to the West Coast, making Keystone XL less critical.

Full report is here.

Old pic.

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

Reports out of New Zealand today that New Zealand Treasury plans to revise economic and fiscal forecasts due to a sustained slowdown in productivity.

In brief:

• Economic recovery, previously expected in late 2024, is now anticipated to begin later, according to Chief Economic Adviser Dominick Stephens.

• Slower economic growth is reducing tax revenue, increasing challenges for the government to balance its budget.

• The government reported a larger-than-expected deficit for 2023-24 but committed to disciplined public spending to achieve a surplus.

• Productivity levels in 2024 have reverted to pre-pandemic levels, with contractionary manufacturing and service activity indicating minimal growth.

***

As for the Reserve Bank of New Zealand. New Zealand’s economy contracted in Q2 2024, prompting the RBNZ to cut rates twice, this year, so far. Another reduction is expected at the November 27 meeting.

• The benchmark rate was cut by 50 basis points to 4.75% in October, following a prior August cut (first since March 2020).

This article was written by Eamonn Sheridan 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.

• Fed’s Collins looks to be on the fence re a December interest rate cut
• Late day rally pushes Dow and S&P up. Nasdaq lower but well off lows
• ECBs Stournaras: ECB policy has tamed inflation
• Crude oil futures settled at $68.87
• US treasury sells $16 million of 20 year bond the high yield of 4.680%
• More from Bowman:It’s concerning we’re recalibrating policy w/out reaching inflation goal
• Fed’s Bowman: Fed may be closer to neutral policy then policymakers currently think
• More from BOE’s Ransden: October CPI data only marginally above BOE’s forecast
• More from Cook:Productivity is such a long run stable trend that exceeding it is very hard
• European indices close lower
• BOE Ramsden: Recent trends toward loan relatively stable inflation should continue
• Fed’s Cook: If inflation progress slows w/ jobs still solid, could see pause
• Weekly oil inventory data from the EIA is due soon. The private survey showed a huge build
• Bitcoin trades to another new record high at $94,852
• Tech sector shifts: Investor focus on software innovation and defensive plays
• US Commerce award $1.5B to GlobalFoundries as part of the Chips Act
• What technical levels are in play for some of the major currencies vs the USD
• ForexLive European FX news wrap: Dollar starts to perk up again
• US MBA mortgage applications w.e. 15 November +1.7% vs +0.5% prior

Markets:

• Gold up $16.73 or 0.63% had $2648.75
• US 10-year yield 4.415%, +3.7 basis points
• US 2-year yield 4.320%, +4.9 basis points
• WTI crude oil down nine cents at $69.08
• S&P 500 unchanged
• NASDAQ fell -0.11%
• Russell 2000 unchanged
• Dow up 0.32%

The US dollar moved back higher after a few days of declines. The dollar index (DXY) rose 0.46%

• EUR, +0.52%
• JPY +0.53%
• GBP, +0.28%
• CHF +0.25%
• CAD +0.18%
• AUD +0.44%
• NZ +0.66%D

The economic calendar was void of any economic releases today. However, there was two Fed Governors who spoke. FIrst Feds Lisa Cook spoke and was ambidextrous in her economic and policy views. She said:

Fed’s Cook highlighted that the U.S. economy is in a strong position, with robust growth, a largely normalized labor market, and signs of continued disinflation. While core inflation remains somewhat elevated, housing services are the primary driver of this excess. Cook noted that recent wage growth moderation boosts confidence in further disinflation, though inflation progress may slow, potentially warranting a pause in rate adjustments. She emphasized that past rate cuts were significant in removing policy restrictions, with future adjustments depending on data, outlook, and risk balance, which she described as roughly even. Cook also pointed to the potential for underestimated productivity gains, particularly from AI, suggesting the economy’s underlying potential could be higher than expected. She acknowledged diminishing downside risks to jobs and reaffirmed that labor market weakness in recent data reflects temporary factors like strikes and storms. Looking ahead, she indicated that continued growth with easing inflation may justify further reductions in policy rates toward neutral, though elevated inflation suggests the Fed’s work is not yet complete.

Later Fed’s Michelle Bowman also spoke, but her comments were more hawkish:

Bowman emphasized the need for a cautious and flexible approach to monetary policy, noting that the central bank may already be closer to a neutral policy rate than many policymakers believe. She highlighted that her estimate of the neutral rate is significantly higher than pre-COVID levels and supported the November Fed rate cut as a gradual move toward easing. Bowman expressed concerns about recalibrating policy without fully achieving inflation goals, noting that progress in lowering inflation appears to have stalled, with elevated inflation and strong demand for affordable housing contributing to persistent price pressures. While the economy remains strong and the labor market is near full employment, Bowman acknowledged potential risks to price stability and noted that unemployment is below her estimate of full employment, with weaker hiring contributing to its recent rise. She also emphasized the importance of patient, cautious adjustments and policies that support workforce mobility, particularly citing challenges in labor availability, including those faced by her own farming family. Lastly, Bowman reiterated that Congress would need to mandate any central bank digital currency if deemed necessary

The US treasury auctioned $16 billion of 20 year bonds and the usual 1 PM, and investors did not show up. The auction high yield came in 3.0 basis points above the WI level at the time of the auction. The Bid to cover was below the six-month average and the dealers were saddled with a whooping 22.6% of the auction versus the six-month average of 11.2%. UGLY.

Yields moved higher today help by a comments mostly from Bowman along with the poor auction results. A snapshot of the market shows:

• 2-year yield 4.305%, +3.4 basis points
• 5- year yield 4.273%, +2.5 basis points
• 10 year yield 4.406%, +2.7 basis points
• 30 year yield 4.591%, +2.6 basis points

In Europe, ECB’s Stournaras stated that the ECB’s monetary policy has successfully tamed inflation and expects it to converge to the 2% target by early 2025. He emphasized the need for the ECB to avoid an inflation undershoot as conditions evolve. Stournaras noted that interest rates are likely to remain restrictive for an extended period, but sees given persistent downside risks to Eurozone growth (so why keep rates restrictive?).

Technically speaking:

EURUSD: The EURUSD started the day with a modest extension higher that took the price to the high of a swing area target at 1.06097. The price also got closer to its falling 200-hour moving average. That moving average currently comes in 1.05958. The subsequent fall to the price below its 100 hour moving average at 1.05617. A correction after the break tried to extend back above that moving average level, but quickly reversed. That push the pair back down toward the low from last Friday’s trade at 1.04956. The low price reach 1.0506 which was good enough for a new low for the day and week, but momentum cannot be sustained in the price bounced back higher into the close. The current price is trading at 1.0534. That is below the 100-hour moving average of 1.05617, but above the low price from last Friday and lowest level for the year (going back to October 2023).

USDJPY: The USDJPY higher in the Asian session and in the process extended above its 100 hour moving average currently at 155.00. The high price extended to 155.88 before rotating back to the downside and to the 100 hour moving average. Support buyers leaned against that level and pushed the price modestly off of the key moving average level at 155.40 currently. Going in the new day, the 100 hour moving average will be a key barometer. Stay above that level (at 155.00) and the buyers are in control. Move below and then below the 200 hour moving average of 154.697, and the sellers take more control in the short term.

GBPUSD: The GBPUSD moved higher earlier in the day and tested the high price from last Friday’s trade near 1.2719. The high price today reached 1.2714 and found one sellers. The subsequent fall took the price below its 100 hour moving average of 1.2657 where the price has remained into the close. That moving average will be the short-term bias defining level for both the buyers and sellers. Stay below is more bearish. Move above is more bullish at least in the short term. On the downside, the low price yesterday stalled near 1.2612. The low price from last Friday reached 1.2596. Move below those levels opens the door for further selling.

AUDUSD The AUDUSD moved higher in the early Asian session and in the process extended above its falling 200 hour moving average:. However, momentum could not be sustained the price spent the US session moving down to a new wall at and technical target at its 100 hour moving average. Support buyers leaned against the level and bounced modestly into the end of day. The 100 hour moving average comes in at 0.6488. Moving below that level and staying below that level in the new trading day would be more bearish. Conversely, staying above and extending above the falling 200 hour moving average (currently at 0.65124) would give the buyers some added confidence.

Good fortune with your trading.

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

Buying into the US close, sent the Dow industrial average into positive territory. The S&P index is closing unchanged.

The NASDAQ index is still closing down on the day but well off its lows. At session lows the NASDAQ was down -263.08 points andIs closing the day down only 28 points.

A snapshot of the closing levels shows:

• Dow industrial average rose 139.53 points or 0.32% at 43408.47
• S&P index rose 0.23 points or 0.0% at 5917.22
• NASDAQ index closed down -21.32 points or -0.11% at 18966.14

The small cap Russell 2000 close unchanged

Nvidia earnings will be announced after the close with volatility expected at plus or minus 8%. Data center ($28.5B) and guidance will be eyed ($0.82 and $36.78). Data center guidance is $31.96B. Gross margins will also be of interest with expectations of around 75% for the current quarter and expectations of 73.5% in Q4 guidance

Nvidia shares closed at $145.89 down $1.12 or -0.76%

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

Nvidia will announce its earnings after the close today. Sharea are lower today with the price trading down about -$3.00 or -2.10%. at $144.00. The all-time high closing level is at $148.88.

What are the expectations?

Earnings Expectations

• Adjusted quarterly earnings: $0.74 per share versus $0.40 last year (85% YoY increase)

• Revenue: $33.2 billion versus $18.12 billion last year (84% YoY increase)

• Fiscal Q4 sales guidance: $37.7 billion (KeyBanc estimate, down from $40 billion)

• Fiscal Q4 earnings outlook: $0.83 per share (KeyBanc estimate, down from $0.88 per share)

Analyst Sentiment

• 90% of Wall Street analysts recommend buying the stock

• KeyBanc maintains Overweight rating and $180 price target

Drivers

• Strong demand for AI infrastructure and Blackwell AI chips. Jensen Huang called demand for it’s newest Blackwell chip “insane” back on October 3

• Growing demand in robotics and traditional computing sectors

• Emerging demand from AI software developers

Challenges

• Reported overheating issues with Blackwell servers (unconfirmed by Nvidia)

• Supply chain challenges around production ramp

• Increased pressure among China hyperscalers to use domestic AI solutions.

Last quarter earnings came in at $0.68 versus $0.647 estimate. Revenues were at $30.04 billion versus $28.74 billion. Shares fell -6.38% from $125.61 to a closing level to $117.59 the next day. The price fell -18.14% to its low close on September 6 at $102.83 before starting its rebound to the upside which reached a new record level of $149.77 intraday on November 8.

Shares in 2024 are up about 192%

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

Crude oil futures are settling at $68.87. That is down $0.52 or -0.75%.

The weekly EIA inventory data today showed:

• Crude oil inventories build of 0.545Mvs build 0.138M estimate. Prior week +2.089 million
• Gasoline inventories build of 2.054M vs build 0.859M estimate. Prior week -4.407M
• Distillate inventories drawdown of -0.114M vs drawdown -0.020M estimate. Prior week -1.394M
• Cushing inventories drawdown of -0.140M vs. drawdown -0.688M last week.

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

US treasury sell $16 billion of 20 bonds a high yield of 4.68%:

• High yield 4.68%
• WI level at the time of the auction 4.65%.
• Tail 3.0 basis points versus the six-month averages 0.1 basis points
• Directs (domestic buyers) 7.9% versus six with average of 17.2%
• Indirects 69.5% versus six-month average of 71.6%
• Dealers 22.6% vs six with average of 11.2%

Auction Grade: F

There are no redeeming qualities of the auction with low domestic demand, below average international demand, a tail of 3.0 basis points, well above the 0.1 bp average over the last 6 months. The Dealers are caught holding the bag and needed to distribute the balance.

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

The US treasury will sell… well auction…. $16 billion of 20 year bonds at the top of the hour.

The six-month averages of the major components shows:

• Bid to cover 2.60X
• Tail 0.1 bps
• Directs (domestic demand): 17.2%
• Indirects (international demand): 71.6%
• Dealers: 11.2%

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