EURUSD
- EUR/USD Price: EUR/USD hovers near 1.0550 in Thursday’s European session as risk-off sentiment intensifies due to escalating conflict between Russia and Ukraine. Safe haven flows into the US Dollar are keeping the pair subdued.
- ECB Signals: ECB Governing Council member Yannis Stournaras highlighted that the Eurozone is nearing its 2% inflation target. This progress could prompt the ECB to consider adjustments to its monetary policy stance.
- ECB’s Inflation Outlook: ECB policymaker Francois Villeroy de Galhau noted a shift in risks for growth and inflation to the downside. This outlook could influence the central bank's future decisions, especially if economic conditions deteriorate further.
- EU Financial Stability: The EU Financial Stability Review flagged heightened sovereign vulnerabilities and risks from escalating geopolitical tensions and global trade disputes. These factors contribute to uncertainty in the Eurozone's economic landscape.
- Cautious Fed Approach: Boston Fed President Susan Collins emphasized a cautious approach to interest rate cuts, balancing the risk of moving too quickly or too slowly. This stance could impact the USD's strength, influencing the EUR/USD dynamics.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: EUR/USD remains weighed down by geopolitical tensions and the Dollar's strength, while mixed ECB signals and EU economic risks add further complexity. A clearer trajectory will depend on geopolitical developments and upcoming monetary policy signals from the ECB and Fed.
GBPUSD
- GBP/USD Price: The GBP/USD pair remains near 1.2650 in Thursday’s early European session, influenced by a softer US Dollar. The lack of directional bias highlights market caution ahead of key economic data releases.
- Fed's Cautious Stance: Fed Governor Michelle Bowman reiterated concerns over elevated inflation, emphasizing the importance of a careful approach to rate reductions. This cautious sentiment tempers expectations for aggressive USD depreciation.
- Fed Rate Cut: A Reuters poll revealed that nearly 90% of economists expect the Federal Reserve to reduce rates by 25 basis points in December, which would bring the fed funds rate to 4.25%-4.50%. This aligns with market sentiment for modest policy easing.
- UK Borrowing: UK public sector borrowing reached £17.4 billion in October 2024, up £1.6 billion from the same period in 2023. This marks the second-highest October borrowing level since records began, adding fiscal concerns to the UK’s economic outlook.
- US Initial Jobless Claims: Market participants await US initial jobless claims data, expected to increase slightly to 220k for the week ending November 16. This data point could influence the US Dollar’s immediate trajectory and GBP/USD performance.
| SMA (20) | Falling |
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| RSI (14) | Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: GBP/USD remains directionless as markets await clearer signals from US data and Fed policy guidance. Elevated UK borrowing could pressure the Pound, while USD sentiment will hinge on jobless claims and rate cut expectations.
GOLD
- Gold Price: Gold continues its upward trajectory, trading around $2,660 early Thursday, marking a one-and-a-half-week high. The sustained bullish tone reflects ongoing market uncertainty and support for safe-haven assets.
- Hawkish Fed Commentary: Federal Reserve officials signaled a more hawkish stance on Wednesday, leading to a reduction in market expectations for a December 25 basis points rate cut. This shift could exert pressure on non-yielding assets like gold.
- Fed's Mixed Messaging: Kansas Fed President Jeffrey Schmid struck a dovish tone, advocating for a reduction in policy restrictiveness due to full employment, moderating inflation, and steady growth. This contrasts with broader hawkish signals, creating mixed implications for gold.
- Rate Cut Probability: The CME FedWatch Tool now reflects a 52% probability of a 25- bps rate cut in December, significantly down from 83% a week prior. Reduced rate cut expectations could limit gold's upside potential in the near term.
- Post-Nvidia Forecast: Nvidia's disappointing revenue forecast has added to broader market anxiety. While revenue growth remained impressive at 94% YoY, market nervousness supports safe-haven demand, indirectly benefiting gold prices.
Closing statement: Gold's bullish momentum remains supported by broader economic uncertainty and safe-haven demand. However, diminishing rate cut expectations could cap gains in the near term. The metal’s trajectory will likely hinge on further economic data and Fed signals.
CRUDE OIL
- WTI Price: West Texas Intermediate (WTI) crude oil holds steady around $69.25 on Thursday. The market remains under pressure as mixed fundamental factors influence short-term pricing dynamics.
- Rising US Crude Stocks: The Energy Information Administration (EIA) reported an increase in crude oil inventories last week, adding bearish pressure to the market. A higher supply outlook often suppresses oil prices.
- Weak Chinese Demand: China, the world's largest crude importer, reported a 5.4% year-over-year decline in October crude demand. This ongoing weakness contributes significantly to bearish sentiment in the oil market.
- Geopolitical Tensions: Ukraine's deployment of Western weapons in attacks on Russian territory has escalated geopolitical tensions. Moscow's warnings of significant retaliation create uncertainty, potentially supporting oil prices amid supply risk fears.
- Sverdrup Situation: Equinor announced the restoration of full production at the Johan Sverdrup oilfield following a power outage. This development alleviates some supply- side concerns but has limited impact on broader pricing pressures.
| SMA (20) | Slightly Falling |
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| RSI (14) | Slightly Falling |
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| MACD (12, 26, 9) | Falling |
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Closing statement: WTI crude faces downward pressure from rising US inventories and weak Chinese demand, offset by geopolitical risks and restored Norwegian output. The near-term outlook hinges on further geopolitical developments and updates on Chinese economic activity.
DAX
- DAX Declines: The DAX fell by 0.29% on Wednesday, extending losses from a 0.67% drop on Tuesday. Geopolitical tensions related to the Ukraine war and fears of potential US tariffs on EU goods weighed heavily on sentiment.
- Auto Sector: The auto sector faced significant losses, with Dr. Ing. h.c. F. Porsche AG Preferred Stock dropping by 4.52%, followed by declines in Mercedes Benz Group (- 1.85%), Porsche (-1.81%), Volkswagen, and BMW. Weak sector performance reflects sensitivity to economic uncertainty.
- German Producer Prices: German producer prices decreased by 1.1% year-over-year in October, following a 1.4% drop in September. The decline signals weakening demand and a potential easing of inflationary pressures.
- Eurozone Wage Growth: Wages in the Eurozone rose by 5.42% in Q3 2024, up from 3.54% in Q2. While this could boost consumer spending, the sharp increase in wages raises concerns about demand-driven inflation, which might deter aggressive rate cuts by the ECB.
- Eurozone Consumer Confidence: On Thursday, the Eurozone Consumer Confidence Index is anticipated to improve slightly, from -12.5 in October to -12.4 in November. Positive trends in consumer confidence could influence ECB rate expectations and market sentiment.
| SMA (20) | Rising |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Falling |
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Closing statement: The DAX remains under pressure amid geopolitical and trade risks, with auto sector weaknesses and falling producer prices highlighting economic vulnerabilities. Rising wages and upcoming consumer confidence data will shape sentiment toward ECB monetary policy in the near term.