Daily Market Outlook, November 17, 2023

Daily Market Outlook, November 17, 2023Munnelly’s Market Commentary… Asia – stocks traded mixed, reflecting a choppy performance in the United States as yields declined and market participants digested soft U.S. data releases. The Nikkei 225 exhibited indecision amid a lack of fresh catalysts and balanced comments from Bank of Japan (BoJ) Governor Ueda. Meanwhile, the Hang Seng and Shanghai Composite faced pressure, with the Hong Kong benchmark dragged lower by significant losses in Alibaba after it scrapped its cloud business spinoff due to U.S. chip restrictions. Additionally, energy names in the region were affected by the decline in oil prices.Europe – UK retail sales for October fell by 0.3%, with September's fall revised higher to 1.1%. Retail sales have declined in three of the last four months, indicating challenges for consumer spending and potential risks to economic growth. The remaining European data calendar for today is light. The Eurozone CPI for October is a second reading that is not anticipated to be revised. The initial reading showed a significant decline in annual inflation to 3.9%, down from 4.3% in September, primarily influenced by energy prices. Core inflation, excluding food and energy prices, also decreased, albeit to a lesser extent, to 4.2% from 4.5%. Both measures are expected to decline further in the coming months. Today, there are a number of central bank policymakers who are scheduled to give speeches, including Megan Greene and Dave Ramsden from the Bank of England. During the last policy update, Greene was one of the few who voted in favour of increasing interest rates. In a recent interview, she mentioned that she does not anticipate rates to decrease for a significant amount of time, but it remains to be seen if she will confirm that they do not need to increase again. In the previous two updates, Ramsden agreed with the majority who did not support any further rate hikes. It will be interesting to see how he reacts to this week's inflation data, which was lower than expected. However, comments made by Ramsden suggest that he will echo the sentiment of BoE Governor Bailey, who believes that rate cuts are still a long way off.US – Stateside, It is predicted that there will be a slight decrease in US housing starts in October following a significant increase in September. However, there is a more positive outlook for future growth as building permits are expected to rise. The housing construction sector has been greatly affected by higher interest rates in recent years, and although there have been some indications of stabilisation in 2023, there has not been a clear upward trend yet. The fluctuating interest rates have not helped to boost confidence in the industry, but there may be some encouragement for producers as signs suggest that interest rates have reached their peak.FX Positioning & Sentiment During testimony in the Diet today, Ueda stated that he cannot definitively say that a weak yen is bad for Japan's economy. He believes that it is beneficial for exports and the profits of Japanese companies operating globally, but it does cause domestic inflation to rise due to increased import costs. Ueda declined to comment on currency levels, but stated that they should reflect the fundamentals and move stably. Additionally, Akazawa from the Ministry of Finance (MOF) stated that they will not intervene in the foreign exchange market simply because the yen is weak. Any intervention will be aimed at preventing excessive volatility, and there is no specific level in mind for when to intervene. It appears that the MOF and Bank of Japan have no plans to intervene at this time, as volatility has been low and may continue to decrease, with the USD/JPY pair currently trading between 150-152.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: 1.0800 (1.2BLN), 1.0825 (1.2BLN), 1.0850 (1.3BLN)1.0875 (1BLN), 1.0900-10 (1BLN)USD/CHF: 0.9000 (587M). EUR/GBP: 0.8750 (1BLN)GBP/USD: 1.2300 (651M), 1.2380-90 (393M), 1.2400 (681M)AUD/USD: 0.6465-75 (922M), 0.6500 (678M)NZD/USD: 0.5975 (250M), 0.6025 (300M)USD/CAD: 1.3650 (740M), 1.3680-85 (883M), 1.3700 (677M), 1.3775 (500M)USD/JPY: 149.95-150.00 (364M), 150.50 (223M), 151.00 (401M), 151.70 (500M)Overnight Newswire Updates of NoteFed Officials Tell US Senator: Room To Reduce Balance SheetFed’s Mester Wants ‘Further Evidence’ Inflation Been DefeatedNew York Fed’s Perli: Yield-Surge Persistence Rest On CausesBiden To Corporate Execs: Stable US-China Ties Benefit WorldChina Asks Some Banks To Cap Rates On Short-Term FundingBoJ’s Ueda: Argue Easy-Policy Exit Once Inflation Near TargetJapan Official: Not Targeting Exact Level On When To InterveneUS, EU Back UN Postwar Gaza Force, Add Pressure On IsraelBank Of England Officials Repel Against Market Rate Cut BetsHunt Plans Pension Revamp To Unlock Billions For InvestmentUK Businesses Plead To Hunt For Lasting Investment Tax BreakOil Sinks Into Bear Market As Robust Supply Pressuring OPEC+(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Technical & Trade ViewsSP500 Bias: Bullish Above Bearish Below 4470Below 4400 opens 4370Primary support 4420Primary objective is 454020 Day VWAP bullish, 5 Day VWAP bullishEURUSD Bias: Bullish Above Bearish Below 1.08Below 1.0650 opens 1.0550Primary support 1.0650Primary objective is 1.096420 Day VWAP bullish, 5 Day VWAP bullishGBPUSD Bias: Bullish Above Bearish Below 1.2430Below 1.24 opens 1.2350Primary support  is 1.2185Primary objective 1.257020 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 bearishAUDUSD Bias: Bullish Above Bearish Below .6450Below .6290 opens .6250Primary support .6330Primary objective is .659020 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 bullish