Daily Market Outlook, January 26, 2024

Daily Market Outlook, January 26, 2024Munnelly’s Market Minute…“China Stimulus Bid Fades”Asian markets have experienced broad declines following a recent period of gains. The negative sentiment follows disappointing projections from chipmaker Intel, despite a strong finish to trading on Wall Street. U.S. markets were lifted by a robust GDP report, showing annualized growth of 3.3% in Q4, further bolstering hopes for a soft landing of the economy. Overnight, Japan reported a sharper-than-expected decline in Tokyo CPI to 1.6% from 2.4%, as the Bank of Japan mulls over potential interest rate increases this year. Hang Seng and Shanghai Comp experienced fluctuations as the impact of recent Chinese support measures diminished.In the UK, overnight release of the GfK consumer confidence index showed a positive start to the year, with the headline index improving to -19 from -22, surpassing consensus (-21). This marks the best reading in two years, propelled by recent positive news on inflation and expectations of interest rate cuts. There are no other significant UK data releases today, with markets focusing on next week's Bank of England policy update, which is not expected to change interest rates. Attention will be on any communication changes regarding potential future policy adjustments.European markets are still digesting yesterday’s ECB policy update, which saw no change in interest rates. President Lagarde stated that the Governing Council deemed it premature to discuss rate cuts. However, markets perceived a lack of strong resistance against speculation of a possible rate cut as early as April. This contrasts recent comments indicating no rate cut before summer. ECB speakers today include Simkus, Kazaks, and Vujcic. Kazaks, a hawk, cautioned against early rate cuts.Stateside, the December data for the US PCE deflator, the Fed's preferred inflation gauge, will be released. It has shown lower inflation trends compared to the CPI. Positive PCE inflation would boost hopes for an early Fed rate cut, despite Q4 GDP growth data surpassing expectations at 3.3% annualized growth. Headline PCE inflation is expected to rise from 2.6% to 2.7%, while the core measure is anticipated to fall from 3.2% to 3.0%, the lowest since early 2021.Overnight Newswire Updates of NoteUK Consumer Confidence Hits Two-Year High As Inflation CoolsBoJ Saw Need In December For Debate On Future Rate Hike PaceUS Tsy Sec. Yellen: 2024 Is Going To Be A 'Very Good' Year For The EconomyYellen Says Biden Would Seek Extension Of Some Trump Tax CutsWH Sullivan To Meet China’s Wang Yi To Discuss Houthi Attacks In Red SeaChina Presses Iran To Rein In Houthi Attacks In Red Sea, Sources SayBadenoch To Challenge UK PM Over Brexit Freedoms Sacrifice For N.IrelandUK Halts Trade Negotiations With Canada Over Hormones In Beef BanBiden Set To Halt Review Of Natural Gas Export Approvals On FridayIntel Plunges After Bleak Forecast Casts Doubt On Comeback BidT-Mobile Earnings Miss, But Subscriber Adds Top AT&T, VerizonVisa Profit Climbs Amid Higher Payments VolumeCapital One's Profit Drops On Higher Credit Loss Provisions, FDIC ChargeFTC Launches Inquiry Into AI Deals By Tech GiantsNintendo’s Next Switch Coming This Year With LCD, Omdia Says(Sourced from Bloomberg, Reuters and other reliable financial news outlets)FX Options Expiries For 10am New York Cut(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)EUR/USD: 1.0800 (1.3BLN), 1.0825 (530M), 1.0850 (1.2BLN), 1.0875 (1BLN)1.0890 (620M), 1.0925 (957M), 1.0950 (1BLN)USD/CHF: 0.8610 (225M), 0.860 (260M), 0.8660 (359M), 0.8760 (821M)EUR/CHF: 0.9400 (459M), 0.9425 (275M)AUD/USD: 0.6600-05 (675M). NZD/USD: 0.6070 (220M),0.6220 (524M)USD/CAD: 1.3390 (1.2BLN), 1.3500-10 (696M), 1.3600 (928M), 1.3620-25 (836M)USD/JPY: 147.30 (579M), 148.00 (331M), 148.50 (321M)One-week expiry options are influenced by the volatility risk associated with the Federal Reserve (Fed) and the Non-Farm Payrolls (NFP) report. The implied volatility for one-week options has increased after the Fed policy decision and the inclusion of NFP, but the price increase has been limited due to the recent lack of realized volatility in the foreign exchange (FX) market. The realized volatility for one-week options is significantly lower than the implied volatility in major currency pairings. Option holders are hoping for realized volatility to exceed implied volatility, and buyers are anticipating that any surprises from the Fed and NFP reports could boost FX volatility.CFTC Data As Of 12/01/24USD bearish decreasing -9,298CAD bearish increasing -992EUR bullish decreasing 14,150GBP bullish increasing 2,443AUD bearish increasing -3,151NZD neutral neutral -177MXN bullish neutral 2,370CHF bearish neutral -542JPY bearish neutral -4,803Technical & Trade ViewsSP500 Bullish Above Bearish Below 4850 Daily VWAP bullishWeekly VWAP bullishBelow 4800 opens 4780Primary support 4700Primary objective is 4910EURUSD Bullish Above Bearish Below 1.0930 Daily VWAP bullishWeekly VWAP bearishAbove 1.10950 opens 1.10Primary resistance 1.10Primary objective is 1.0730EURUSD Bullish Above Bearish Below 1.0930 Daily VWAP bullishWeekly VWAP bearishAbove 1.10950 opens 1.10Primary resistance 1.10Primary objective is 1.0730GBPUSD Bullish Above Bearish Below 1.2750Daily VWAP bullishWeekly VWAP bearishAbove 1.28 opens 1.2870Primary resistance  is 1.2785Primary objective 1.2570USDJPY Bullish Above Bearish Below 146.40 Daily VWAP bullishWeekly VWAP bullishBelow 146 opens 145.50Primary support 143.50Primary objective is 149AUDUSD Bullish Above Bearish Below .6650Daily VWAP bullishWeekly VWAP bearishAbove .6680 opens .6550Primary support .6525Primary objective is .6933BTCUSD Bullish Above Bearish below 43600Daily VWAP bearishWeekly VWAP bearishAbove  43590 opens 46000Primary support  is 40000Primary objective is 36097