Daily Market Outlook, November 14, 2023

Daily Market Outlook, November 14, 2023Munnelly’s Market Commentary… Asia – stocks exhibited a mixed performance as markets awaited the release of US Consumer Price Index (CPI) data.  The Nikkei 225 saw advancement, driven by earnings releases and Japan's consideration of corporate tax breaks for companies implementing an 8% wage increase. Meanwhile, the Hang Seng and Shanghai Composite indices displayed indecisiveness, influenced by weak New Yuan Loans and Aggregate Financing data. Price action remained range bound ahead of the Biden-Xi meeting, where an announcement of a deal on a fentanyl crackdown by China was anticipated. The varied performance across these markets reflects the influence of both domestic factors, such as earnings and economic data, and broader geopolitical considerations, such as the upcoming meeting between leaders from the US and China. Investors are navigating a complex landscape influenced by a mix of economic indicators and global events. Upcoming Chinese industrial production and retail sales data are highly anticipated as timely updates on the state of the world's second-largest economy. The data releases will provide crucial insights into the current economic activity, given ongoing concerns about growth in China. The consensus expectation is that the data will confirm a faltering in activity. The market will closely analyse indicators such as industrial production and retail sales.Europe – The latest labour market data from the UK shows a decrease in the annual growth of regular pay, dropping to 7.7% in September compared to the previous figure of 7.9%. Additionally, overall pay growth also experienced a decline, falling to 7.9% from an adjusted 8.2%. However, there are still challenges in interpreting the data, which makes it difficult for the Office for National Statistics (ONS) to accurately assess the tightness of the labour market. Despite these challenges, the ONS described the overall situation as being similar to the previous quarter. This data provides insights into the ongoing changes in wage growth in the UK, which is an important factor in understanding the wider economic situation and informing policymakers about the state of the labour market.In the German ZEW survey for November, it is anticipated that both the current conditions and expectations readings will have increased. Despite the near-term growth outlook remaining uncertain, the forecast suggests a fourth consecutive rise in expectations, reflecting optimism and hopes for improvement in the coming year. The ZEW survey serves as a key indicator of economic sentiment in Germany, and these expected rises in current conditions and future expectations signal a positive outlook among survey participants, potentially hinting at an anticipated economic recovery.US – Stateside, The upcoming US Consumer Price Index (CPI) data is anticipated to be a key release for global financial markets, closely observed for insights into the interest rate outlook. Forecasts indicate a decline in annual headline inflation for October, primarily attributed to the recent decrease in oil prices and its ripple effect on gasoline prices. The prediction suggests a drop to 3.3% from the 3.7% recorded in September, marking the lowest rate in three months, though not a new low for the year. In contrast, core inflation, which excludes volatile food and energy prices, is expected to remain stable at 4.1%. Despite a notable decline earlier in the year, the recent months have seen a slowdown in the improvement of core inflation. This deceleration is particularly evident in service sector inflation, indicating a level of persistence in certain components of the inflationary landscape. The CPI data will be closely scrutinised for its implications on monetary policy and the broader economic environment.FX Positioning & Sentiment The USD and EUR are experiencing a stall in their movements due to verbal intervention from Japan. Over the past 24 hours, there has been caution observed as the Japanese Finance Minister, Suzuki, has made repeated comments on the foreign exchange market, which has helped limit the gains of the USD and EUR. Both the USD/JPY and EUR/JPY are currently at their highest levels in terms of trends, and these moves are supported by fundamental factors. The USD/JPY reached 151.92 overnight, just below the high of 151.94 seen on October 22nd, which was the last time intervention occurred. The EUR/JPY reached 162.37 yesterday, marking its best performance since the high of 169 seen in July and August of 2008. The recent movements in the FX market have been more orderly and do not fall into the category of excessive volatility. It is believed that the comments on FX from Japanese officials are also a result of questions from reporters to the Ministry of Finance. However, actual intervention is seen as unlikely by most players in Tokyo. It is viewed as unnecessary to take any risks, as any declines in the USD and EUR are met with strong buying instead. CFTC Data As Of 10-11-23CAD bearish -3,555EUR bullish 11,287 GBP bearish -1,547 AUD bearish decreasing -4,760NZD bearish -747MXN bullish 867 CHF bearish -2,047JPY bearish increasing -8,558 Gold bullish increasing 32,422USD bullish decreasing 9,060 (CFTC)FX Options Expiries For 10am New York Cut (1BLN+ represent larger expiries, more magnetic when trading within daily ATR)EUR/USD: 1.0690-1.0700 (1.8BLN).USD/CHF: 0.9100 (694M)GBP/USD: 1.2190-1.2200 (300M), 1.2250-60 (505M)AUD/USD: 0.6350-55 (1.5BLN). NZD/USD: 0.5910 (875M)USD/JPY: 150.00 (675M), 151.00 (413M)Overnight Newswire Updates of NoteFed’s Barr Says Supervisors Scrutinise Banks’ Interest-Rate RisksYellen Says She Disagrees With Moody’s Negative Outlook On USGOP Johnson Turn To Democrats To Pass Plan To Avert ShutdownUS To Buy 1.2Mln Barrels Of Oil For Strategic Petroleum ReserveChina Economy Likely Struggled To Gain Traction Despite StimulusBoJ Aim For Higher Prices And Wage Hikes, Deputy Governor SaysJapan FinMin: Will Continue To Take Necessary Steps On FX MovesGoldman Sees Australia And NZ Inflation Falling Below 3% In 2024Australian Consumer Sentiment Slumps Following RBA’s Rate HikePoll: ECB To Hold Rates Through Mid-2024 Despite Halting EconomyPM Sunak Opens Rift With Tory Right By Reviving Centrist CameronBogus BlackRock XRP Filing Spoofs ETF Watchers, Crypto Traders(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Technical & Trade ViewsSP500 Bias: Bullish Above Bearish Below 4375Below 4350 opens 4285Primary support 4200Primary objective is 446820 Day VWAP bullish, 5 Day VWAP bullishEURUSD Bias: Bullish Above Bearish Below 1.0630Below 1.06 opens 1.0540Primary support 1.06Primary objective is 1.0820 Day VWAP bullish, 5 Day VWAP bullishGBPUSD Bias: Bullish Above Bearish Below 1.2230Below 1.22 opens 1.2150Primary support  is 1.2069Primary objective 1.245020 Day VWAP bearish, 5 Day VWAP bullishUSDJPY Bias: Bullish Above Bearish Below 150Below 149 opens 148.30Primary support 147.30Primary objective is 152.5020 Day VWAP bullish, 5 Day VWAP bullishAUDUSD Bias: Bullish Above Bearish Below .6450Below .6290 opens .6250Primary support .6330Primary objective is .662020 Day VWAP bearish, 5 Day VWAP bullishBTCUSD Bias: Bullish Above Bearish below 34000Below 33600 opens 32400Primary support  is 30000Primary objective is 3700020 Day VWAP bullish, 5 Day VWAP bullis