Market Update – October 29 – USD Lower, Stocks hit highs, Apple & Amazon Miss

• USD (USDIndex 93.45) Slipped on a miss for 3Q GDP & the ECB ending PEPP in March but neither ruling out nor confirming rate hikes. Yields remains the main driver of sentiment as spreads remain at March 2020 lows.  Stocks hit record highs before surprises misses from APPL & AMZN,  FB re-branded to META “Meta is moving beyond 2D screens toward immersive experiences like augmented and virtual reality to help build the next evolution in social technology.” and Biden pushed hard for $1.75trn budget plan. Its also week and month end trading day.
• Evergrande – paid another bond dollar coupon (on default day
• US Yields (10yr close at 1.568) lifted in Asian now 1.61%.
• Equities new ATH for – USA500 -44 (+0.98%) at 4596 (Nasdaq +1.39%) – Big movers – CAT +4.00%, TSLA +3.78%, APPL+2.5% (then fell -3.4% after hours) – USA500.F back to 4566. Asian equities very mixed.
• USOil up from lows yesterday at $79.40 (again) to $81.40 
• Gold another volatile day (1810-1792) cannot hold $1800 and trades at $1794 now.
• FX markets largely flat at month end – EURUSD  rallied post ECB to 1.1692 now at 1.1665, Cable capped by 1.3800 trades at 1.3785, USDJPY now 113.60.

Overnight  Signs that the RBA is ditching its attempt at yield control, a stronger set of data from AUD (PPI, Retail Sales) & a weak set of data from JPY (Ind. Prod, Consumer Confidence and Housing Starts). French GDP – a big beat (+3.0% vs 2.2% & 1.1% last time) & CPI a tick stronger.

European Open – The December 10-year Bund future has lost 61 ticks in early trade, Treasury futures are also under pressure. Tapering speculation has come back with a vengeance. ECB comments yesterday confirming that PEPP will end on time in March next year. The ECB now has until December, to make up its mind, the BoE meets next week and chief economist Pill (big Hawk) confirmed that it will be a “live” meeting, which means the possibility of a rate hike will be discussed at least. Stocks are hit as yields spike higher and DAX and FTSE 100 futures are currently down -0.45 and -0.2% respectively.

Today – German GDP, EZ CPI, US PCE Price Index,Chicago PMI, Canadian GDP Earnings: BNP Paribas, Daimler, Danske Bank, Eni, EssilorLuxottica, Safran, Signify, Swiss Re; Exxon, Chevron, Phillips 66, AbbVie, Colgate-Palmolive

Biggest FX Mover @ (06:30 GMT) EURUSD (+0.19%) EUR giving up some of the post ECB bid. Faster MAs rolling over lower, 21Hr being tested, MACD signal line & histogram colling but still positive, RSI 54 and neutral. H1 ATR 0.0007, Daily ATR 0.0051.

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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EURUSD Poised to Decline on Potentially Dovish ECB Stance

ECB will hold a meeting today. Market participants are primarily concerned about the ECB’s reaction function to upside inflation risks, as well as how the European regulator perceives the prospects for “second-round” of inflation effects. This will determine the demand for European assets and, accordingly, the euro.Central banks around the world are gradually moving towards tightening monetary policy in response to rising prices and the associated rise in inflationary expectations of investors and households. The European Central Bank is considered one of the least inclined to rush to cut stimulus, but it should be borne in mind that inflation in the Eurozone accelerated to 3.4% (maximum since 2007), and the pace of asset purchases continues to remain at levels close to the levels of 2020, when the economy was experiencing deep recession.The Minutes of the September meeting of the ECB showed that the Governing Council discussed gradual slowdown in the pace of asset purchases under the PEPP program. Therefore, investors should be interested in how quickly the ECB will move to raise rates. This will depend on how worried the ECB is that the inflation shock, triggered primarily by supply disruptions, will translate into wage inflation, as an income shock could trigger another round of inflationary effects that could keep inflation elevated next year. In this case, it will harm recovery. That is why the yield curve in some developed countries begins to gradually flatten – long interest rates rise relatively to short interest rates, that is, the shift in demand happens from short-term debt instruments to the ones with longer-maturity. This may mean that expectations of stagflation are gradually beginning to emerge in the market – expectations of a period with low rate of real output and high rate of inflation.In the past few days, EURUSD has been in consolidation, fluctuating in the range of 1.158-1.1620. There is a risk that the ECB will disappoint investors today, pointing out a more modest pace of exit from the anti-crisis policy, which, in the face of price pressures, may trigger a search for yield elsewhere. In this case, the demand for the euro may suffer and the EURUSD rate may test the lower border of the downtrend at around 1.1520 and below:

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Dollar Up, but Near One-Month Low After ECB Policy Decision Strengthens Euro

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Dollar wallows near one-month low as strong euro, stock rally weigh

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How to help your children climb the property ladder

Getting your children onto the property ladder is far from simple. Nicole Garcia Merida explores the different options facing parents.

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Euro Jumps to 1-Month High as ECB's Lagarde Fails to Calm Rate Hike Bets

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The genuine bargains in the investment-trust sector

A discount to net asset value should never be the primary reason for buying this type of fund, says Max King. These seven, however, look too cheap and boast encouraging long-term records

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The huge potential of mRNA technology

The new technology made its name when it delivered Covid-19 vaccines in record time. But it could be pressed into use in many other areas too. Simon Wilson reports.

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Investors go wild for Trump’s Spac

Former US president Donald Trump launched a new social network last week that went through a special purpose acquisition vehicle (Spac). Matthew Lynn analyses.

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Share tips of the week – 29 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.

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U.S. Posts Weakest Growth of Pandemic Recovery on Supply Woes

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ExxonMobil earnings preview for the third quarter of 2021

ExxonMobil

ExxonMobil is an American multinational oil and gas company headquartered in Irving, Texas. ExxonMobil was founded in 1999 after the merger of Exxon Corporation (which was called Standard Oil of New Jersey) with Mobil Corporation (which was called Standard Oil of New York State). The company has multiple sub-brands, namely, ISO, ExxonMobil Chemical, Mobil, and Exxon.

The company fell seven places and became the 10th on the Fortune 500 list due to the global shutdown that cut energy demand in 2020. It reported an annual loss of $22 billion in 2020, the largest loss the company has ever incurred, and there was also a huge rise in debt.

The company’s second-quarter 2021 profits came in at $4.7 billion, or $1.10 per share, compared to a loss of $1.1 billion in the second quarter of 2020. This increase in profits was due to increased demand for natural gas and oil and better quarterly contributions in Lubricants and chemicals. $9.7 billion in cash flow from operating activities funded debt reduction, capital investments, and dividends.

In July 2021, the company signed memoranda to explore the development of CO2 infrastructure in France and to participate in the Carbon Capture and Storage (CCS) project in Scotland. The collaboration in the Normandy region of France seeks to develop CCS technology with the goal of reducing CO2 emissions by up to 3 million metric tons per year by 2030. The Acorn CCS project in Scotland plans to capture and store approximately 5 million to 6 million metric tons of CO2 per year by 2030.

Technical Analysis

On the daily time frame, the 50 SMA (blue) is above the 200 SMA (red) and this confirms the continuation of the bullish trend. The upward trend continues from October 29, 2020 until now. The highest peak reached was at 64.92 and the lowest support at 31.09. It is now trading at 64.13.

Meanwhile the MACD signal line and histogram are above the 0 line and continue to rise, and RSI (14) is at 67.41 and refers to the top which shows the rise.

Here in the following chart, we find the main pivot and the levels of support and resistance, and we find them converging to each other, so the main pivot appears at 62.92. There are three resistances: the first resistance at 63.49, the second resistance at 63.75, and the third resistance at 64.32. There are three supports and they are: the first support at 62.62, the second support at 62.00 and the third support at 61.70.

As for the Bollinger bands, the upper band of the volatility channel is at 64.35 while the downside comes in at 58.99 (20-day SMA at 61.70). We notice here that the upper, middle and lower bands are approaching each other, and this indicates a period of low volatility. We also find the Standard Deviation Index (20) at 1.369 in the oversold area, while the Average True Range (14) is at a value of 1.23. Hence the asset is showing an intraday increasing positive bias before the earnings release, with major support at 53.71. The medium-term outlook remains positive as the asset is flat at 4-month highs with a bullish crossover from the 20- and 50-day simple moving averages and rising MACD lines suggesting that the bulls are still in control. A break below 53.71 could open the door to 52.13 (August low), while a further rise above 64.14 could draw attention to the 70 area.

Click  here  to access Hot Forex’s economic calendar

Islam Salman

Market Analyst – Middle East

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Join Me Today For Our Weekly Live Trade & Market Analysis Session

Join Me Today For Our Weekly Live Trade & Market Analysis SessionMarkets are on the move, join me today for 'Real Time Actionable Analysis' on over 20 charts & some high probability setups, last weeks long USDZAR now risk free - @ 1pm BST today - register here for today's session bit.ly/32YUTrI#PlantheTradeTradethePlan #ManageYourRISK #ProcessOverOutcome #PlayingtheProbabilities #forex #futurestrading #StockTrading #tickmill_official #PalmTreeTrader

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Investment Bank Month End FX Flows

CITI: Month-End FX Hedge Rebalancing: October 2021 Preliminary Estimate· The preliminary estimate of month-end FX hedge rebalancing needs points to slightly above average USD selling this week.· Global equities bounced strongly in October after previous month’s losses with the US market leading the recovery. The MSCI US equity index reached a new record last Thursday, 21 October. Although US fixed income is down on the month, the gain in equities dominates and this has likely left foreign investors with US assets under-hedged.· The signal is a USD sell even against currencies like CAD where local equities have done even better than the US ones, because we assume foreigners hold more US assets and tend to hedge them to a greater degree.· Poor performance of Japanese assets means that foreigners may also buy JPY to reduce hedges, adding to domestic JPY buying needs. At +1.6 standard deviations, the signal to buy JPY and sell USD is strongest among major currencies this month.· There are no major data releases or central bank speakers currently scheduled ahead of the 4pm London WMR fix this Friday.

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