Daily Market Outlook, October 27, 2023

Daily Market Outlook, October 27, 2023Munnelly’s Market Commentary… Asia – Asian stocks are trading with a positive bias, driven by well-received earnings reports from Amazon and Intel, which lifted sentiment after a mostly lower close on Wall Street. The Nikkei 225 is experiencing gains, primarily driven by its Industrial sectors, potentially in response to the US GDP metrics, while Pharmaceuticals are underperforming, with Takeda shares declining over 7% following their earnings report. The Hang Seng and Shanghai Composite opened with mixed performance, with the former showing strength as its earnings season gains momentum. However, sentiment for China remains muted, despite reports from China's Securities Journal suggesting that China is likely to reduce the reserve requirement ratio in the fourth quarter to support government bond issuance.Europe – There are no significant data releases in the UK today. Next week, the Bank of England (BoE) money and credit data, as well as the Lloyds Bank Business Barometer report, are among the releases scheduled before the Monetary Policy Committee (MPC) policy decision is announced. The BoE is expected to keep interest rates unchanged at 5.25%.In the Eurozone, Spain is set to release the first estimates of Q3 GDP today, becoming the first of the "big 4" Eurozone economies to do so. Market expectations suggest a slowdown in Spain's economic expansion to 0.2% from 0.5% in Q2, possibly influenced by higher interest rates impacting the economy. Figures for Germany, France, Italy, and the Eurozone as a whole are all scheduled for release next week.US – Stateside, the most significant data release today is the US PCE deflator for September, which is the Federal Reserve's preferred measure of inflation. Similar to the previously released CPI figures, it's anticipated that headline PCE inflation will remain unchanged at 3.5%. However, the core measure, which excludes energy and food, is expected to decrease to 3.7% from the previous 3.9%. The declining trend in inflation, along with the recent increase in Treasury bond yields, contributes to the expectation that the Fed will maintain unchanged interest rates in its upcoming meeting next week. Nevertheless, robust economic activity, as indicated by the Q3 GDP report released yesterday, could potentially complicate the longer-term policy outlook. Strong personal spending figures projected for September suggest substantial momentum at the end of the quarter, which may carry over into Q4.FX Positioning & Sentiment The diminishing volatility in the foreign exchange (FX) markets is likely to undermine the strength of the US dollar. As volatility decreases for major currency pairs, the likelihood of successful FX bets becomes less certain. Recent market trends have seen a significant flow of funds into safer assets, bolstering the US dollar, gold, and the Swiss franc. However, as currency markets grow quieter, this support for these assets may weaken. Meanwhile, the recent decline in stock prices has approached a robust support zone.CFTC Data As Of 20-10-23USD net spec long remained steady in Oct 11-17 period, $IDX +0.42% in periodEUR$ -0.42% in period, specs +6,878 contracts bottom-fishing, now +82,410,$JPY +0.77%, specs -3,182 contracts; bulls wary of MoF, pair holds near highGBP$ -0.84% specs -1,161 now -11,209; low BoE rate/growth view weighsAUD$ (-1.01%) specs -4,162 , $CAD (+0.49%) specs -2,050 on weak growth viewBTC +3.86% in period, specs -824 contracts now +327, BTC ending near weeks high on upbeat ETF outlook( Source Reuters)FX Options Expiries For 10am New York Cut (1BLN+ represent larger expiries, more magnetic when trading within daily ATR)EUR/USD: 1.0500 (1.5B), 1.0510 (1.1B), 1.0525-35 (929M), 1.0540-50 (2.3B)EUR/USD: 1.0595-00 (1.4B), 1.0650 (1.0B), 1.0675 (1.3B), 1.0700-05 (1.3B)USD/JPY: 150.00 (5.1B), 150.25 (529M), 150.50 (793M), 151.00 (1.8B)GBP/USD: 1.2100 (581M), 1.2150 (579M), 1.2185-90 (1.3B)USD/CAD: 1.3835 (961M). AUD/USD: 0.6225 (580M), 0.6290-00 (893M)USD/ZAR: 19.2500-2700 (539MOvernight Newswire Updates of NoteUS Strikes Iran-Linked Sites In Syria In Retaliation For Attacks On US TroopsJapan FinMin Suzuki Declines To Comment About Currency InterventionJapan's Matsuno Expects BoJ To Coordinate With Govt On MonPolFed Hikes Still In Play On Strong Economy, PIMCO’s Clarida WarnsUS Tsy Sec. Yellen Says GDP Data Show Us Economy Is ‘Doing Very Well’Yellen Says Yield Surge Is Due To Strong Economy, Not DeficitsNew US House Speaker Says Ukraine, Israel Funding Request Should Be SplitOil Rises More Than $1 On Fears Of Spread Of Middle East ConflictGold Officially Outperforms Stocks In 2023 As Oct Rally ContinuesAsian Shares Track US Futures Higher, Bonds Hold GainsAmazon Reports Robust Sales While Cloud Growth Remains SteadyFord Earnings Fall Short Of Estimates After Tentative Deal With UAWIntel Stock Rises On Earnings Beat And Strong Revenue GuidanceCapital One Beats Profit Estimates On Interest Income BoostITC Issues Potential Apple Watch Import Ban In Masimo Patent FightTesla Reverses China Price Cut, Adding $2,000 To Model Y Variant(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Technical & Trade ViewsSP500 Bias: Bullish Above Bearish Below 4200Above 4200 opens 4260Primary resistance  is 4280Primary objective is 410020 Day VWAP bearish, 5 Day VWAP bearishEURUSD Bias: Bullish Above Bearish Below 1.06Below 1.0550 opens 1.0480Primary support is 1.05Primary objective is 1.0420 Day VWAP bearish, 5 Day VWAP bearishGBPUSD Bias: Bullish Above Bearish Below 1.22Below 1.21 opens 1.1950Primary support  is 1.21Primary objective 1.2420 Day VWAP bearish, 5 Day VWAP bearishUSDJPY Bias: Bullish Above Bearish Below 149.25Below 149 opens 148.50Primary support 144.50Primary objective is 15120 Day VWAP bullish, 5 Day VWAP bullishAUDUSD Bias: Bullish Above Bearish Below .6400Above .6475 opens .6525Primary resistance  is .6620Primary objective is .627020 Day VWAP bearish, 5 Day VWAP bearishBTCUSD Bias: Bullish Above Bearish below 32000Below 27100 opens 26500Primary support  is 30000Primary objective is 3700020 Day VWAP bullish, 5 Day VWAP bullish