Market Update – November 12 – USD Holds its multi-month bid

USD (USDIndex 95.16) spiked to 95.26 (a new 16-mth high) Euro at 14-mth low, USDJPY close to 4-yr high, Commodity & EM Currencies pressured too. Stocks mixed, Asian markets firmer and Treasury futures  re-open positively. Next milestone – US Retail Sales on Tuesday (8.5-10% increase?). German Wholesale prices much hotter than expected (+0.6% vs 0.4% & 0.2% last time) . Xi Ping the new “helmsman”, Russia & Ukraine issues swirl.
US Yields (10yr trades at 1.566%, a up 1.7bp after Thursday’s holiday.    
Equities mixed, Dow -0.44%, NASDAQ +0.52%   USA500 +2.5 (+0.06%) at 4649 – Big movers; TSLA rival RIVN +22%, FreeportMc +9%, GM & NVidia both +4.3%,  Disney -7%. USA500.F trades lower at 4646.
USOil – struggles & fails to hold $80.00,  the stronger USD and OPEC cutting its 2021 oil demand forecast due to high prices.
Gold holds at highs too to trade at $1857 now. A close over the psychological $1850 tonight would be 7 consecutive days of gains, something it hasn’t done since July 2020. Then it rallied from under $1800 to $1970 in 8 consecutive days, it topped at $2072 6 days later..
FX markets – EURUSD down to 1.1435 earlier, lifted to 1.1450, USDJPY back over 114.00, & Cable back to 1.3385. AUD & NZD at 5-wk low.

European Open – The German 10-year Bund future is up 12 ticks at 170.54, alongside broad gains in Treasury futures. DAX and FTSE 100 futures are up 0.1% and U.S. futures are outperforming slightly, although there is some lingering anxiety on US warnings of a potential Russian invasion in Ukraine. Inflation concerns also continue to linger, as markets try to map out the future ECB path based on central bank comments and official forecast. For the BoE, the weaker than expected GDP print yesterday has seen markets scaling back rate hike expectations. Do arguments for an early move remain valid?

Today – Eurozone Industrial Production, US JOLTS, Uni. of Michigan, ECB’s Lane, Fed’s Williams.

Biggest FX Mover @ (07:30 GMT) NZDCHF (+0.22%)  Bounced from 0.6460 again today, but remains under 0.6500. Faster MAs aligned higher,  MACD signal line & histogram risning but under 0 line, RSI 53 & neutral. H1 ATR 0.00081, Daily ATR 0.0052.

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Stuart Cowell

Head Market Analyst

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