Although bond yields are slightly subdued, USD is starting to build some support versus safer haven currencies. There is little data in the European morning, so US Consumer Confidence will be in focus later.
- Main drivers: Mixed to mild positive sentiment again; Facebook share buyback and Tesla soars; Russia wants steady OPEC+ production increase; US Consumer Confidence later.
- Mixed to mildly positive sentiment: With US indices pushing all-time highs, Asian markets took a positive handover. Enthusiasm has waned slightly into the European session today, but markets are still broadly positive. Tight ranges on forex majors, commodities slightly pulling back lower.
- US corporate results positive: Facebook results were mixed (beat on earnings, missed on revenue) but announced a $50bn share buyback. Tesla shares shot up over 12% after a $4.2bn order from Hertz. Today’s results include Microsoft, Alphabet (Google) and Twitter [positive for Wall Street]
- Russia wants OPEC+ production increases maintained: The current monthly increase is set at 400,000 barrels per day. Russia does not want this to increase at the November meeting next week. This is in line with what Saudi and Nigeria have said recently [Oil supportive but not positive]
- Central bank speakers: No Fed speakers – FOMC now into the “Blackout Period”.
- Economic Data:
US Consumer Confidence at 1400GMT expected to slip slightly to 108.3 (from 109.3 in August)
New Home Sales at 1400GMT expected to increase slightly to 755,000 (from 740,000 in August)
- Broad outlook: Risk positive bias still on indices but forex majors are trading mixed.
- Forex: USD just showing a few signs of finding support against the safe haven currencies.
EUR/USD falling under 1.1600 support seriously questions the recovery now and starting to lean corrective on technical indicators. Resistance for near-term positions initially around 1.1615. Below 1.1570 opens 1.1525
GBP/USD consolidating above 1.3735 but in danger of losing the recovery momentum. Holding back above 1.3800 would improve the outlook again.
AUD/USD recovery uptrend is intact and holding 0.7450/0.7475 support is important for the continued recovery. However, needs to get back above 0.7545 to re-engage the bull run.
- Commodities: recent strength is just beginning to stall slightly as USD threatens to develop support.
Gold closing above $1800 was a positive signal but needs to close above $1810 to open $1834. Today’s pullback is a test of how strong the bulls are. If this is used as a chance to buy around $1790/$1800 support, then it will be a strong signal.
Silver a succession of higher lows needs to continue. Support at $24.00 needs to hold as the rebound is just beginning to pull back early today. Resistance is building at $24.82.
Brent Crude oil crept to three-year highs yesterday but has failed to follow this through, as the move has just consolidated early today. The importance of support at $83.60 is growing. Key resistance at $86.95.
- Indices: Wall Street into all-time highs and now stopping today. US corporate earnings are certainly helping. This is even helping to drag European markets higher.
S&P 500 futures all-time highs now, looking strong on momentum. With strength in the bull run, we continue to back the move higher. Support initially at 4529/4551.
DAX breaking out above 15,600 has opened 15,770/15,800. Looking strong on momentum for a continued move higher. Good support now 15,530/15,600.
FTSE 100 breaking out above 7246 to levels not seen since February 2020. Next resistance 7355/7400.