Market Outlook for the Week: Key Events and Reports

Traders Brace Themselves for a Busy Week Ahead

Today marks a relatively calm day in the market, allowing traders to catch their breath before a flurry of important events and reports set to shape the week. While today’s focus lies on the eagerly anticipated 10-year Bond Auction in the US, let’s take a closer look at the upcoming events that are poised to influence traders’ decisions.

The 10-year Bond Auction in the United States

The 10-year Bond Auction stands out as a crucial metric that measures the highest yield on 10-year government bonds sold through an auction. Traders closely monitor this auction’s outcome as it provides insights into market sentiment, risk appetite, and inflation expectations.

Tuesday: RBA Governor Bullock Speech

RBA Governor Bullock is expected to make a speech with potential cues regarding monetary policy changes, interest rate direction, and potential impacts on currency markets.

Britain’s Claimant Count Change and Average Earnings Index 3m/y

The release of Britain’s Claimant Count Change report offers insights into the health of the UK labor market. Meanwhile, the Average Earnings Index indicates the rate of wage growth, both of which have substantial implications for traders.

Date	Events and Reports
Monday	10-year Bond Auction in the United States
Tuesday	RBA Governor Bullock Speech
	Britain’s Claimant Count Change
	Average Earnings Index 3m/y
Wednesday	Key Inflation Metrics in the US
	Britain’s GDP m/m Report
Thursday	New Zealand’s GDP q/q
	Australia’s Employment and Unemployment Rate
	SNB Policy Rate and Press Conference
	Bank of England’s Monetary Policy and Official Bank Rate decisions
	ECB Policy Statement
	ECB Press Conference
	Main Refinancing Rate
	Key Reports from the United States
Friday	China’s Industrial Production y/y
	Eurozone Flash Manufacturing PMI
	Flash Services PMI
	BOC Governor Macklem’s speech
	Empire State Manufacturing Index

Wednesday: Key Inflation Metrics in the US

Wednesday will witness the release of key inflation metrics in the US, including Core CPI m/m, CPI m/m, and CPI y/y. These reports gauge changes in consumer prices and significantly impact market sentiment, interest rate expectations, and currency movements. The 30-year bond auction on the same day provides additional indicators of market sentiment.

Britain’s GDP m/m Report

Britain’s GDP m/m report, released on Wednesday, offers insights into the country’s economic growth rate on a monthly basis and influences trading decisions.

Thursday: New Zealand’s GDP q/q and Australia’s Employment and Unemployment Rate

The release of New Zealand’s GDP q/q offers insights into the country’s economic performance, while Australia’s Employment and Unemployment Rate figures provide important indicators of the labor market health.

Additionally, events such as the SNB Policy Rate and Press Conference, Bank of England’s Monetary Policy and Official Bank Rate decisions, ECB Policy Statement, ECB Press Conference, and Main Refinancing Rate will significantly impact currency pairs like EURUSD and GBPUSD.

Key Reports from the United States

Thursday also brings crucial reports from the United States, including Core Retail Sales m/m, Retail Sales m/m, and Unemployment Claims. These metrics help assess consumer spending trends and labor market conditions, influencing market sentiment, economic growth forecasts, and currency movements.

Friday: China’s Industrial Production y/y, Eurozone Flash Manufacturing PMI, and Flash Services PMI

Friday’s reports offer insights into manufacturing and services sectors, significantly impacting trading decisions, particularly in currency markets. Additionally, BOC Governor Macklem’s speech and the Empire State Manufacturing Index provide guidance on the Canadian dollar and the state of the US manufacturing sector respectively.

As traders brace themselves for this busy week, these events and reports will serve as critical indicators for market sentiment, economic health, and potential currency movements. Stay tuned for updates and be prepared to navigate the ever-changing financial landscape.

Disclaimer

This article is for informational purposes only and does not constitute financial advice. Please consult with a professional advisor before making any investment decisions.

Author

• 
  Phyllis Wangui

  Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.

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Yen Strengthens on Hawkish BoJ and Weak US Dollar Ahead of Non-Farm Payrolls

During the American session, the USD/JPY pair dropped further, hitting a low of 141.65, its lowest level since August. This decline can be attributed to the hawkish comments from Bank of Japan (BoJ) official Ueda, signaling an exit from ultra-loose monetary policy in the coming months.

Additionally, the weaker US Dollar has contributed to the sell-off, with the currency struggling to find demand.

USDJPY Daily Chart

Fed Rate Cut Speculation Weighs on the US Dollar

Speculation is growing that the Federal Reserve is finished with interest rate hikes and may start trimming rates as early as March. This sentiment, coupled with the cautious mood among investors ahead of key US employment figures, has further dampened the US Dollar’s strength. As a result, the Japanese Yen, considered a safe-haven currency, has experienced limited losses.

GBP/USD Rebounds, but Remains Below 1.2600

After reaching a two-week low below 1.2550 earlier in the day, the GBP/USD pair staged a rebound toward 1.2600. The US Dollar’s struggle to gain traction stems from signs of looser conditions in the US labor market ahead of the upcoming jobs report. Though technical indicators have yet to confirm a strong recovery, buyers may show interest if support forms around the 1.2600 level.

GBP/USD Daily Chart

US Dollar Faces Challenges Despite Employment Data Releases

Despite mixed employment-related data releases from the US on Wednesday, the US Dollar remained resilient due to risk aversion among investors. ADP Employment Change for November missed expectations at 103,000, and Unit Labor Costs fell by 1.2% in the third quarter. The lack of improvement in risk sentiment supported the US Dollar’s position.

DXY Chart

EUR/USD Hovers Around 1.0800 as US Dollar Weakens

EUR/USD gained traction during the American session, breaking above 1.0800 and reaching two-day highs. The US Dollar’s weaker stance, coupled with lower Treasury yields, has supported the pair’s upward movement ahead of the Nonfarm Payrolls report on Friday. Technical buyers may become more interested if the pair surpasses the 1.0820 level.

EURUSD Daily Chart

The USD/JPY pair continues its sell-off ahead of the Nonfarm Payrolls report, driven by hawkish BoJ expectations and a weaker US Dollar. 📉💸

Meanwhile, GBP/USD rebounds but remains below 1.2600, and EUR/USD rises above 1.0800 amidst the US Dollar’s weakness. 📈💷💶

Traders and investors remain cautious as they await the release of key employment figures, which will likely influence market sentiment and further impact these currency pairs. ⏳📊

Sideways Trading For Gold and Resistance at $2,040

Gold spot continues to trade sideways without a clear direction in the short term, facing resistance at $2,040. The price movement has been limited by lower Treasury yields, preventing a significant downward move. Despite the negative momentum from the retreats from all-time highs near $2,130, there are indications of consolidation.

XAUUSD Daily Chart

Market Expectations for Fed and US Dollar

From a fundamental standpoint, the market believes that the Federal Reserve (Fed) will not raise interest rates and anticipates rate cuts in 2024. This follows the trend of other central banks loosening monetary policy. While this sentiment could be negative for the US Dollar, the fundamentals of the US economy, including GDP growth and outlook, remain strong compared to other G10 currencies.

Conditions for Upside Resumption in Gold

To see a resumption of the upside in Gold, there needs to be some weakness in the US Dollar. Additionally, sustained low yields are crucial for supporting the upward movement in Gold prices. These conditions may eventually push Gold back towards its record highs.

Focus on Nonfarm Payroll and US Consumer Price Index

In terms of upcoming data releases, the market’s attention now shifts to Friday’s Nonfarm Payroll report. It is expected to show an increase of 180,000 jobs, which will provide insights into the strength of the labor market. Additionally, next week brings the FOMC meeting, where the Fed will discuss monetary policy, and on Tuesday, the US Consumer Price Index will be released, providing information on inflation trends.

Disclaimer:

All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Author

• 
  Zahari Rangelov

  Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.

  View all posts 

U.S. Crude Declines 4%, Gasoline Prices Hit Lowest Level Ahead of Holiday Season

U.S. crude oil prices dropped by 4% on Wednesday, reaching their lowest level since late June. The West Texas Intermediate (WTI) contract for January settled at $69.38 a barrel, falling $2.94, while the Brent contract for February declined $2.90 to settle at $74.30 a barrel.

WTI Crude Oil Cash Chart

Crude Oil Brent Cash Chart

Simultaneously, retail gasoline prices in the U.S. hit their lowest point since January, averaging $3.22 per gallon, just ahead of the holiday shopping and travel season. This decline in gasoline prices followed the downward trajectory of oil prices.

Gasoline Cash Chart

OPEC+ Efforts Fail to Boost Oil Prices

Despite efforts by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to boost prices, both U.S. crude and the global benchmark have fallen for five consecutive days. OPEC+ had promised to slash supply in the first quarter of 2024, but the market has remained skeptical.

Factors Contributing to Price Decline

The continuous decline in oil prices can be attributed to several factors. First, nations outside of OPEC+, particularly the U.S., have been pumping crude at an accelerated pace. Additionally, concerns about the Chinese economy have added to market worries.

Moreover, Moody’s downgraded China’s government credit rating outlook to negative from stable, exacerbating concerns about the global economy.

Mixed Picture for Demand and Supply

On Wednesday, U.S. data revealed a mixed picture for demand and supply. Crude inventories fell by 4.6 million barrels for the week ending December 1, while gasoline inventories rose by 5.4 million barrels, according to the Energy Information Agency.

The rise in gasoline stocks and the skepticism surrounding OPEC+’s commitment to supply cuts of 2.2 million barrels per day in the first quarter of 2024 have contributed to the downward pressure on oil prices.

The decline in U.S. crude oil prices, coupled with the lowest retail gasoline prices since January, reflects a complex set of factors. From concerns about the Chinese economy to increased crude production outside of OPEC+, the market is facing multiple challenges that have led to the current price decline.

Author

• 
  Phyllis Wangui

  Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.

  View all posts 

US Stocks Closed Mixed, Bond Yields Tumble on Heels of Slowing Labor Market Demand

Tuesday’s reading on job openings in October revealed a decline in labor market demand. Job openings slid to 8.73 million last month, down from 9.35 million in September and 10.47 million in the previous year. The number of hires and total separations remained relatively unchanged, indicating little change in quits (3.6 million) and layoffs and discharges (1.6 million).

Tech Sector Leads the Way

The tech sector was the biggest gainer of the day, with the Nasdaq Composite closing up about 0.3%. This positive performance contributed to the overall mixed results in the market. The benchmark S&P 500 hugged the flatline, while the Dow Jones Industrial Average dropped more than 0.2%, or roughly 80 points.

Doubts About Rate Hikes and Soft Landing

Investor enthusiasm has been impacted by doubts surrounding the Federal Reserve’s plans to end rate hikes. The market is now looking to upcoming labor market data to determine if the US economy is heading for a “soft landing.”

Key Data to Watch

Investors will closely watch the upcoming release of ADP private payrolls numbers on Wednesday and Friday’s crucial monthly jobs report. These reports could potentially provide insights into any shifts in the Federal Reserve’s policy course.

Company Highlights

• Tesla’s (TSLA) shares climbed about 1.5% following upbeat data from China. The electric vehicle maker is on track to achieve its best-ever quarterly deliveries in the country. Optimism is growing around Tesla’s controversial Cybertruck, which is expected to boost sales of other vehicle models within the company.
• Shares of CVS climbed 3% after the healthcare giant announced plans to change its prescription drug pricing. The company aims to transition to a simpler pricing model with increased transparency. This move could potentially result in cost savings for consumers starting next year.
• AT&T’s stock rose 4% on news of its network deal with Ericsson. The telecom giant plans to spend up to $14 billion on network equipment over a five-year deal with the Stockholm-based tech company. Ericsson shares also saw a 4.5% increase.
• Charter Communications’ stock dropped more than 8% following comments from CFO Jessica Fischer at a UBS media conference. Fischer mentioned the possibility of negative internet net additions in Q4. This statement also led to drops in the shares of other cable companies, such as Comcast (down 4%) and Disney (down 1.5%).
• Ferguson Plc (FERG) surged more than 4% after reporting Q1 revenue of $7.71 billion, beating expectations.
• Nvidia (NVDA) rose over 1% as it announced plans to collaborate with Japanese research organizations, companies, and startups to establish AI factories in Japan.
• Albemarle (ALB) declined over 3% after Piper Sandler downgraded the stock to underweight, citing a significant deterioration in the global lithium markets.
• KeyCorp (KEY) dropped over 3% after revising its Q4 noninterest income estimate downward.
• Procter & Gamble (PG) fell over 2% and led the Dow Jones Industrials’ losers after announcing expected charges of $2.0 billion to $2.5 billion from restructuring its business operations.
• Designer Brands (DBI) experienced a steep decline of over 32% following lower-than-expected Q4 adjusted EPS and a downgrade in its 2024 EPS forecast.
• Vornado Realty Trust (VNO) dropped over 3% after Moody’s Investors Service downgraded its senior unsecured debt rating.
• Atlassian Corp (TEAM) decreased by over 2% amid signs of insider selling, as the Co-CEO and founder sold $1.6 million worth of shares.
• SpringWorks Therapeutics (SWTX) declined over 8% after pricing an offering of 9.5 million shares below Monday’s closing price.
• Take-Two Interactive Software (TTWO) fell more than 1% as investors were disappointed with the lack of a specific release date for its Grand Theft Auto VI game.

Bond Yields Tumble as October Job Openings Fall to 2-1/2 Year Low, Signaling Cooling Labor Market and Dovish Fed Policy

Bond yields took a tumble today in response to disappointing October job openings data, which fell more than expected to a 2-1/2 year low. This indicates a cooling labor market and has dovish implications for Federal Reserve policy. The 10-year Treasury note yield dropped to a three-month low of 4.159%, while the German bund yield fell to a six-month low of 2.242%, and the UK gilt yield hit a six-and-a-quarter-month low of 4.008%.

Disclaimer:

All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Author

• 
  Phyllis Wangui

  Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.

  View all posts 

Bitcoin’s Price Surge and Market Developments

In recent days, Bitcoin has experienced a significant surge in price, surpassing $41,000 and reaching its highest level since April 2022. This upward trend has been fueled by various factors, including anticipation of the approval of a spot bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC), as well as the upcoming Bitcoin halving event. 

However, it is important to keep in mind that investing in Bitcoin carries inherent risks due to its volatility and fluctuating value.

BTCUSD Chart

The Rise of Bitcoin

Bitcoin, the first decentralized cryptocurrency, has become a prominent player in the financial world. Its recent price surge is seen as a positive indicator of further adoption and development. Investors and enthusiasts have long awaited the approval of a Bitcoin ETF, which would provide an easier and regulated way for institutional investors to enter the crypto market. The anticipated approval of this ETF by the SEC has contributed to the bullish sentiment surrounding Bitcoin.

The Potential Impact of a Bitcoin ETF Approval

If the SEC approves a spot bitcoin ETF, it could attract a large influx of new investors into the crypto market. This approval would provide legitimacy to Bitcoin as an investment asset and open the doors for institutional investors who have been waiting on the sidelines. The increase in demand resulting from this new wave of investors could potentially drive Bitcoin’s price even higher.

The Bitcoin Halving Event

Another factor contributing to Bitcoin’s price surge is the upcoming Bitcoin halving event. This event, which occurs approximately every four years, reduces the rate at which new Bitcoins are created. In the past, Bitcoin halvings have coincided with significant increases in the cryptocurrency’s price. The next halving is expected to take place in the coming months, further fueling optimism among Bitcoin investors.

Impact on the Market

Bitcoin’s rise has had a ripple effect on the broader market, particularly on crypto-focused stocks. Companies such as Coinbase and Microstrategy, which have a significant stake in the cryptocurrency industry, have experienced sharp increases in their stock prices. This surge in stock prices reflects the growing enthusiasm and interest surrounding cryptocurrencies among investors.

The Volatility of Bitcoin

While Bitcoin’s recent price rise is encouraging for investors, it is important to acknowledge the inherent risks associated with investing in cryptocurrencies. Bitcoin’s volatility and fluctuations in value make it a risky investment compared to traditional assets. It is crucial for investors to conduct thorough research, seek professional advice, and develop a sound risk management strategy before entering the crypto market.

The Importance of Risk Management

Investing in Bitcoin requires careful consideration of risk management strategies. Due to its volatile nature, it is advisable to only invest what you can afford to lose. Diversification, setting stop-loss orders, and staying updated with market trends and news are some ways to mitigate risk when investing in Bitcoin or any other cryptocurrency.

Bitcoin’s recent price surge, reaching its highest level since April 2022, can be attributed to factors such as anticipation of a spot bitcoin ETF approval by the SEC and the upcoming Bitcoin halving event. This rise is seen as a positive indicator of further adoption and development. However, it is important to approach cryptocurrency investments with caution due to the inherent risks involved. Conducting thorough research, seeking professional advice, and implementing sound risk management strategies are essential when considering investments in Bitcoin or any other cryptocurrency.

Read next:

Market Updates: Traders Expectations Ahead of JOLTS Data

Disclaimer:

All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Author

• 
  Phyllis Wangui

  Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.

  View all posts 

Market Updates: Traders Expectations Ahead of JOLTS Data

The GBP/USD pair is currently facing downward pressure as safe-haven demand for the US Dollar continues to soar amidst market volatility. Investors are seeking the US Dollar as a safe-haven asset due to the uncertain market conditions. This increased demand for the US Dollar has weighed on the GBP/USD pair.

Geopolitical tensions in the Middle East, particularly the conflict between Israel and Hamas, have further impacted the GBP/USD pair. These tensions have triggered a flight to safety, benefiting the US Dollar and putting downward pressure on the British Pound.

Similarly, the EUR/USD pair is experiencing a fall amidst the risk-averse sentiment in the market. The negative opening of Wall Street has heightened risk aversion among investors, causing them to seek safe-haven assets like the US Dollar. Additionally, the escalating geopolitical uncertainty, including the Middle East tensions, has contributed to the downward movement of the EUR/USD pair.

Key Factors Influencing GBP/USD and EUR/USD Pair Movements

Risk perception and geopolitical developments are key factors influencing the movements of both the GBP/USD and EUR/USD pairs. Traders and investors closely monitor market sentiment and any updates related to geopolitical events, such as conflicts or political developments, as they can significantly impact currency pairs.

For the GBP/USD pair, market perception of the British economy and any developments related to Brexit negotiations or UK political events play a crucial role in driving its movements. Geopolitical tensions, such as the Middle East conflict, also affect the safe-haven demand for the US Dollar, thereby impacting the GBP/USD pair.

As for the EUR/USD pair, traders pay close attention to the market sentiment towards the Eurozone economy, including economic indicators, monetary policy decisions, and any statements from European Central Bank (ECB) officials. Geopolitical uncertainties, such as tensions in the Middle East, can also contribute to the downward movement of the EUR/USD pair.

Upcoming Events to Watch

Traders should keep an eye on several upcoming events that could impact the currencies such as the GBP/USD and EUR/USD pairs:

• Australia’s Cash Rate, RBA Rate Statement, and GDP q/q: The decisions made by the Reserve Bank of Australia regarding interest rates and their accompanying statements can significantly influence market sentiment. Additionally, the release of Australia’s GDP data for the previous quarter can indirectly impact currency pairs.
• US ISM Services PMI, JOLTS Job Openings, and ADP Non-Farm Employment Change: These economic indicators provide valuable insights into the health of the US economy. Traders carefully analyze the ISM Services Purchasing Managers’ Index (PMI), JOLTS Job Openings data, and the ADP Non-Farm Employment Change report to gauge the strength and direction of the US labor market. Any surprises in these releases can have a notable impact on the US Dollar and subsequently affect currency pairs.
• Canadian BOC Rate Statement, Overnight Rate, and US Unemployment Data: Traders keep a close eye on the announcements from the Bank of Canada (BOC) regarding interest rates and the accompanying rate statement. These statements provide insights into the BOC’s monetary policy decisions and future outlook for the Canadian economy. Furthermore, the release of US unemployment data, such as the Non-Farm Payrolls report, can influence the strength of the US Dollar and consequently impact currency pairs.

Gold Prices Experience Correction amidst Increased Risk Aversion

Gold prices have recently experienced a correction, dropping below the $2,050 mark. This correction can be attributed to a combination of factors, including the recovery in US Treasury bond yields and increased risk aversion among investors.

The increase in US Treasury bond yields has made them more attractive to investors, diverting some demand away from gold. Additionally, the heightened risk aversion in the market has led to a surge in demand for safe-haven assets like the US Dollar, which has further challenged XAU/USD (the symbol for gold prices).

Investors will continue to monitor these factors, as well as any developments in the global economy and financial markets, to assess the potential impact on gold prices.

Disclaimer:

All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Author

• 
  Zahari Rangelov

  Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.

  View all posts