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The US is expected to announce another set of measures on Monday designed to further restrain China’s ability to develop advanced artificial intelligence

• The reports cite “people familiar with the matter”
• could include sanctioning dozens of Chinese companies that produce equipment for making semiconductors
• also placing restrictions on a handful of chip manufacturing plants, some of which have ties to the Chinese tech giant Huawei

Via WIRED.

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

New Zealand November 2024 Business Survey

Business confidence 64.9%

• prior 65.7

Activity outlook 48.0%

• prior 45.9

ANZ comments:

• Business confidence eased 1 point to +65 in November, but expected
  own activity rose 2 points to +48.
• Experienced own activity rose a point
  to -10, while past employment lifted from -15 to -12.
• Pricing intentions fell 2 points to a net 42% of firms intending to raise
  prices in the next 3 months. The average amount by which they intend
  to raise eased from 1.7% to 1.6%.
• In good news for the RBNZ, inflation
  expectations dropped markedly from 2.8% to 2.5%, likely impacted by
  the Q3 CPI print of 2.2% y/y.

***

Earlier from NZ today:

• Data from New Zealand today confirms signs of still-rising unemployment

Yesterday:

• ForexLive Asia-Pacific FX news wrap: RBNZ 50bp rate cut as expected, NZD jumped anyway

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

Stats NZ released its monthly ‘Employment Indicators’ data, for October 2024:

• there are over 35,500 fewer jobs now in NZ than there were a year ago
• over 30,000 jobs gone in the 15-29 age bracket
• number of filled jobs for October 2024 fell by over 2,000 (0.1%) to 2.36 million
• September was revised down to a 0.1% fall
• in the past seven months the filled jobs numbers have consecutively fallen by between 0.1%-0.4%

In its statement accompanying their 50bp rate cut yesterday, the Reserve Bank of New Zealand said wage growth is slowing, employment levels are declining, and unemployment is expected to rise further. The peak unemployment rate was revised down to 5.2%. Currently, as of the September 2024 quarter, New Zealand’s seasonally adjusted unemployment rate is 4.8%, up from 4.6% in the previous quarter (the highest unemployment rate since the December 2020 quarter).

More from the RBNZ decision can be found here:

• ForexLive Asia-Pacific FX news wrap: RBNZ 50bp rate cut as expected, NZD jumped anyway

New Zealand’s government stripped the full employment mandate from the RBNZ. The Bank is now required only to target the inflation rate. For the unemployed, I guess the government’s message is ‘let them eat cake’?

The RBNZ next meet on February 19:

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

• A down day for the major indices ahead of the Thanksgiving day holiday
• RBNZ Asst Gov Silk: Manufacturing, retail, construction will start to see recovery in 2025
• Atlanta Fed GDPNow growth estimate for Q4 rises to 2.7% from 2.6% on November 19
• Crude oil futures settles at $68.72
• Assuming Trump actually puts the tariffs on Canada and Mexico
• Bitcoin races up to 100 and 200 hour MA and finds some apprehension
• When the bond market turns, USD/JPY gets crushed. 5 reasons behind the drop
• European equity close: A third day of declines this week
• US sells 7-year notes at 4.183% vs 4.197% WI
• EIA weekly US oil inventories -1844K vs -605K expected
• US pending home sales for October 2.0% versus -2.0% estimate
• US October core PCE +2.8% y/y vs +2.8% expected
• Kickstart your trading day with a technical look at the EURUSD, USDJPY, GBPUSD and USDCHF
• US October durable goods orders MoM 0.2% vs 0.5% expected
• US October advance wholesale inventories +0.2% vs -0.2% prior
• US October advance goods trade balance -$99.1 billion vs -$108.7 billion prior
• US Q3 GDP (second estimate) +2.8 vs +2.8% expected
• US initial jobless claims 213K vs 216K estimate
• What is driving the FX markets technically. A look at the major currency pairs today
• ForexLive European FX news wrap: Dollar eases lower ahead of US data flurry
• US MBA mortgage applications w.e. 22 November +6.3% vs +1.7% prior

Markets:

• Gold up $4.02 or 0.15% at $2636.60
• US 10-year yield 4.249%, -5.2 basis points
• US 2-year yield 4.223%, -3.1 basis points
• WTI crude oil down four cents or -0.2% and $68.72
• S&P 500 fell -22.89 points or -0.38% to5998.74
• NASDAQ fell -113.82 points or 0.59% to 19060.48
• Russell 2000 rose 1.88 points or 0.08% to 2426.19 .
• Dow fell -138.25 points or -0.31% to 44722.06

No new records were recorded in the major indices today (S&P and Dow closed at records yesterday)

The US dollar is trading lower versus all the major currency pairs. The dollar index is down -0.89% on the day

• EUR, -0.75%
• JPY -1.28%
• GBP, -0.86%
• CHF -0.5%
• CAD -0.19%
• AUD -0.39%
• NZD -1.03%

The US PCE data for the month of October was released today. The favored measure of inflation from the Federal Reserve came in as expected with the headline of 0.2% and the core of 0.3%. Year on year measures came in at 2.3% and 2.8% respectively. Although as expected, inflation remains sticky.

In other data today,

• Personal income was higher than expected or 0.6% versus 0.3%, and consumption was also higher and +0.4% versus 0.3% estimate.
• Initial jobless claims continue to skim near lower levels and 213K vs 216K estimate . However, continuing claims rose to the highest level since November 2021 for both the weekly number and the four week moving average indicative of a more weaker employment picture
• The 2nd look at US GDP came in as expected at 2.8% with consumption and 3.5% versus 3.7% in the initial guesstimate. PS The Atlanta Fed GDPNow estimate for Q4 is also solid at 2.7% vs 2.6% previously.
• Durable goods orders were marginally lower than expectations but revisions were higher.
• Advance goods trade balance came in at $-99.08 billion which was higher than the deficit -108.2B last month The trade numbers for goods especially are elevated due to potential dockworkers strikes (for last month), and may now be influenced by tariffs under the Trump administration.

A widening trade deficit might solicit a lower dollar over time making US goods abroad more competitive.

US yields moved lower with the two-year down -3.1 basis points any 10 year down -5.2 basis points. The US treasury successfully auctioned off 7-year notes with a tail of -1.4 basis points. The bid to cover was higher than the 5-month average at 2.71X vs 2.59X average. The 2 and 5 year auctions were also well received earlier this week.

Bitcoin moved back to the upside after bottoming at $90,742 yesterday. The price today is up $4400 or 4.7% and $96,328. The high price last week reached just under the $100K level at $98,800.

Technically:

• EURUSD moved above it 38.2% retracement of the November trading range at 1.05628. It is trading right around that level going into the close for the day. Stay above that retracement level would give the buyers were confidence. Moving below Macy the price rotated back toward the Tuesday high 1.0544. A move below that level would target the 200 hour moving average of 1.0520 in the new trading day.
• USDJPY fell sharply today after falling yesterday. The move lower today broke below the old November below reached on November 6 and 151.275. The current prices trading at 151.155. If that old low can put a ceiling on the correction, more selling can be anticipated in the new trading day. Move above and we could see rotation back toward its 200 day moving average of 151.980.
• GBPUSD: The GBPUSD extended above its 200 hour moving average of 1.2613 and also above the high prices from Monday and Tuesday near the same level.That gave the buyers the go-ahead to push higher. The run to the upside did not stop until reaching 1.26933 which was about six pips short of the 38.2% retracement of the November trading range at 1.2699 (and the natural resources at 1.2700). The current prices trading at 1.2678. Close support is at 1.2660 in the new trading day. Getting above the 1.2700 level would have traders targeting the falling 100 bar moving average on the 4-hour chart at 1.27266.
• NZDUSD: The NZDUSD was not influenced by the 50 basis point from the Reserve Bank of New Zealand. The price is up 1.06% on the day. The move to the upside took the price up to test is falling 100 bar moving average only 4- hour chart and 0.5904 (currently). The current prices trading at 0.58947 with close support at the broken 38.2% retracement of the November trading range at 0.5889. ON the topside a break of the 0.5904 MA level would have traders looking toward the 50% of the month range at 0.59173. Conversely, break back below the 38.2% at 0.5889 could turn the buyers back to sellers after the corrective move higher over the last two trading days.

Thank you for your support on the day before Thanksgiving. Good fortune with your trading.

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

ICYMI, in a note Citi analysts cautioned that Trump’s proposed tariffs could lead to a decline in S&P 500 earnings by a few percentage points.

• They noted that the market has not yet fully accounted for this risk, particularly with the new tariffs targeting China, Canada, and Mexico.
• Industries with substantial trade exposure, such as Canada’s energy exports, are likely to feel the impact.
• These tariffs could lower S&P 500 earnings in 2025 and significantly affect gross margins.
• However, previous instances of tariff relief suggest potential flexibility, and market attention is now transitioning from election concerns to uncertainty surrounding policies.

—

The ‘Trump tariff’ concerns seem to be being rapidly priced by the market … shrugged off even! Still, a wobble today:

• A down day for the major indices ahead of the Thanksgiving day holiday

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

From New Zealand are business confidence and activity indicators, from the ANZ Business Outlook Survey. This is a monthly assessment conducted by ANZ Bank New Zealand. It gauges the sentiments and expectations of businesses across various sectors in New Zealand. It serves as a leading economic indicator, offering insights into business confidence, anticipated activity levels, export intentions, investment plans, employment expectations, and inflationary pressures.

The previous results, for October, indicated a continued rise in business optimism across New Zealand:

• headline business confidence index increased by 5 points to +66, marking the highest level since March 2014.
• expected own activity metric, which reflects firms’ projections for their own operations, edged up by 1 point to +46.
• construction sector showed a significant uplift in reported past activity, while the retail sector experienced a decline, potentially linked to a drop in consumer confidence during the same period
• inflation expectations among businesses eased slightly to 2.8%, down from 2.9% in September. However, pricing intentions rose marginally, with a net 44% of firms planning to increase prices in the near term, up from 43% the previous month

Yesterday in New Zealand we had the Reserve Bank of New Zealand’s final statement for the year:

• ForexLive Asia-Pacific FX news wrap: RBNZ 50bp rate cut as expected, NZD jumped anyway

**

Following the data from NZ is capex from Australia. The Australian Bureau of Statistics (ABS) publishes data on private new capital expenditure (capex). This quarterly report provides insights into the actual capital expenditures by businesses on buildings, structures, equipment, plant, and machinery, as well as their future investment intentions. Today we’ll get the Q3 2024 data. The previous 2024 quarter summaries:

June 2024 Quarter Highlights:

• Total New Capital Expenditure: Decreased by 2.2% to $39,834 million.
• Buildings and Structures: Fell by 3.8% to $20,866 million.
• Equipment, Plant, and Machinery: Slight decline of 0.5% to $18,967 million.
• Estimate 3 for 2024-25: Projected at $170.7 billion, marking a 10.3% increase from Estimate 2.

March 2024 Quarter Highlights:

• Total New Capital Expenditure: Rose by 1.0% to $40,487 million.
• Buildings and Structures: Decreased by 0.9% to $21,449 million.
• Equipment, Plant, and Machinery: Increased by 3.3% to $19,038 million.
• Estimate 2 for 2024-25: Estimated at $155.4 billion, a 6.8% rise from Estimate

**

Reserve Bank of Australia Governor Bullock is speaking on Thursday evening (Sydney time) at a Committee for Economic Development of Australia (CEDA) event. CEDA is a public policy think tank.

• This snapshot from the ForexLive economic data calendar, access it here.
• The times in the left-most column are GMT.
• The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

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.

The major indices move lower on the day ahead of the Thanksgiving day holiday tomorrow. The markets will reopen on Friday.

The mega caps and technology stocks moved lower with Dell leading the way after disappointing guidance for the Q4:

A snapshot of the closing levels shows:

• Dow industrial average -138.25 points or -0.31% and 44722.06
• S&P index -22.89 points or -0.38% and 5998.74.
• NASDAQ index -113.82 points or -0.59% at 19060.48
• Russell 2000 did close marginally higher by 1.883 points or 0.08% and 2426.19.

Dell shares led the decline with a decline of $-17.36 or -12.25% at $124.38. Earnings be expectations but revenues and guidance fell short.

Other movers today included :

• Oracle fell -4.03%
• Nvidia -1.15%
• Microsoft -1.17%
• Amazon -1.02%
• Meta -0.76%
• Intel -1.66%
• Tesla -1.58%
• Arm Holding -2.45%
• Tesla -1.58%
• AMD -1.07%
• Taiwan Semi Conductor -1.44%
• CrowdStrike -4.59%
• Salesforce -3.84%
• Adobe -2.21%

After the closing FTC has launched a broad antitrust investigation of Microsoft. Shares are down an additional -0.48% in after-hours trading.

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

Crude oil futures is settling at $68.72. That’s down five cents or -0.07%. The high price today reached $69.33. The low price was at $68.18.

Technically, the high price today extended briefly above its 200 hour moving average at $69.19. Getting above that moving average and then the higher 100 hour moving average at $69.73 would tilt the technical bias more in favor of the buyers.

In

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

Few people think Trump will actually follow through with 25% across-the-board tariffs on Canada and Mexico, at least not for any length of time.

But with Trump you need to prepare for anything and that’s what Deutsche Bank has done today with forecast scenarios that illustrate where US inflation will lad with tariffs.

This chart shows how US inflation could develop in scenarios where half or three-quarters of the costs of the tariffs are passed on to end users.

“US imports from Canada and Mexico represent
about 4.7% of headline personal consumption expenditures and 5.4% of core.
Should that extra 25pp tariff be passed along through all stages of production,
that would be expected to increase the core PCE price level by 1.4% (5.4% times
25pp),” they write. “So a strong potential boost that would be
a further headache for the Fed. For now, the team assume no further increases
in the price level in 2026 but it is of course complicated and the risk would
be other tariffs cause a general reset of price expectations higher.”

The kicker here is that this is just Canada and Mexico. If that pair were to be hit by tariffs that high, then China, Europe and the rest of the world would surely be stung as well.

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

German foreign intelligence service says:

• Kremlin sees Germany as an adversary
• Says Germany is in direct confrontation with Moscow
• Russia has started to use “kinetic” measures against the West including acts of sabotage against infrastructure
• Expects further escalation of the situation

Earlier today, it was reported that Trump would pick Keith Kellogg as the envoy to end the war with Russia.

Here’s a recent article where he lays out how he would end it.

• Continue arming Ukraine while pursuing formal ceasefire negotiations, with aid conditional on Ukraine agreeing to peace talks
• Delay Ukraine’s NATO membership in exchange for security guarantees and a verifiable deal with Russia
• Ukraine keeps its claim to all territories but agrees to pursue diplomatic means for recovery, acknowledging it may take significant time
• Use partial sanctions relief on Russia as incentive for peace steps; implement levies on Russian energy to fund Ukraine’s reconstruction
• Seek an interlocutor trusted by both sides (suggests Trump could fill this role) for negotiations, noting Biden’s limited engagement with Putin
• Provide Ukraine with bilateral security agreement ratified by Senate, similar to arrangements with Korea and Taiwan
• Continue military support even after negotiations to prevent Russian aggression, while rejecting Russian demands for Ukrainian demilitarization

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

USD/JPY is down a whopping 260 pips today following a 140-pip decline yesterday. The pair is trading at 150.46 fr om a high of 156.76 mid-month.

That’s a real turn and it’s particularly dramatic today as the US dollar is dogged by month-end flows.

It’s a case of “up the escalator, down the elevator” that’s typical of bull markets.

The turn in this pair has come with a few drivers, listed in order of importance:

1) The top in Treasury yields

A series of strong auction this week have helped to knock 10s down to 4.25% from 4.50%, with the move accelerating today on a strong sale of 7s.

2) Scott Bessent in charge

The market took comfort in Trump putting a Wall St. FX and hedge fund guy in charge. That points to a guy who loves stock market gains more than tariffs and someone who will be tempered, at least somewhat.

3) Tariffs (or not)

The counter-point to that is that Trump announced tariff plans for Canada, Mexico and tariffs. But if you look below the surface, those don’t sound like real threats and instead are related to solvable problems around drugs and migrants (not the economy). That’s another sign he isn’t overly committed to tariffs (though the market could have a re-think on that at any point).

4) Weaker dollar

One thing that Bessent has floated is allowing the currency to do the work. Rather than tariffs and trade wars, there is a way for Trump to accomplish his main goals (US reshoring, better trade balance, stock market gains) with a weaker currency, provided there is international, buy-in, particularly from China.

5) Japan turning up

Japan is rolling out a $141 billion economic package with a focus on boosting wages. BOJ Governor Ueda also talked about domestic wages as a driver of inflation. He also said they will continue to raise rates and the market sees a 61% chance of a hike on Dec 19. Now there is some domestic weakness as well, so this is a finely-balanced discussion but there is some divergence with the US in place.

You don’t have to look beyond what happened earlier this year to get a sense of how this can go. As 10s fell from 4.6% in June to 3.6% in April, the pair fell 2000 pips. That’s what happens when levered carry gets unwound.

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