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Market Update – November 16 – Stocks rally fizzles out


Profit-taking on overbought conditions was the general rational after bond bulls overzealously brought forward Fed rate cuts to the spring, and aggressively priced in 50 bps in easing by mid-year. The mixed signals from the data on retail sales, PPI, and the Empire State did not provide much direction. Treasuries gave back about half of Tuesday’s CPI-inspired rally as yields climbed about 7 bps across the curve.

Meanwhile, President Biden and Chinese leader Xi Jinping adopted a less contentious tone at their summit, though deep US-China disagreements remain.

  • Japanese exports grew for a second consecutive month in October but at a significantly slower pace, primarily due to decreased shipments of chips and steel to China.
  • Chinese data showed prolonged weakness in the property sector and dented some of the recent optimism about a recovery in the world’s second-largest economy. Chinese home prices fell the most in 8 years in October.
  • USDindex maintained its position above 104 on Thursday, showing stability after recent volatility.
  • AUDUSD and NZDUSD: The risk-sensitive Australian and New Zealand dollars dropped to 0.6474 and 0.5978 respectively, in response to declining regional equities and Australian rising jobless rate even as employment numbers improved in October.
  • Stocks:
    • Asian stocks declined, interrupting the week’s significant gains, following Chinese data. JPN225 ended 0.28% lower at 33,424.41, breaking a 3-day winning streak, influenced by profit-taking and a rebound in US Treasury yields.
    • US stocks closed slightly higher, with the US30 rising by 0.47%, the US500 gaining 0.16%, and the US100 ending flat.
  • #Target experienced a more than 15% increase following better-than-expected Q3 results, while #Microsoft introduced its first AI chip, Maia 100, and a cloud computing chip.
  • Energy: Oil extended declines after a government report showed swelling US crude inventories. USOIL dipped 0.9% to $75.97 a barrel, and UKOIL crude fell to $80.44 per barrel.
  • Metals: XAUUSD rose slightly, with spot gold traded at $1967 per ounce.
  • Cryptos: BTCUSD recovered a 2-day drift and returned above 37.3K, possibly attributed to profit-taking by sellers anticipating another SEC spot ETF delay; lower inflation and bond yields expected to support further crypto prices.

Interesting Mover: NZDUSD (-0.74%) holds ground above 4-months descending channel. Key support at 0.5940 and Key Resistance at 0.6000.

Click here to access our Economic Calendar

Andria Pichidi

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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Having completed her five-year-long studies in the UK, Andria Pichidi has been awarded a BSc in Mathematics and Physics from the University of Bath and a MSc degree in Mathematics, while she holds a postgraduate diploma (PGdip) in Actuarial Science from the University of Leicester.

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