Market Overview - Page 33

The US labour market experienced a major employment failure in October, but this does not indicate an imminent recession. Manufacturing continues to decline, but the service sector is growing to compensate.

Major US indices struggled to regain growth, with the Dow Jones slipping below last week's lows and the Nasdaq100 approaching its mid-July peak before a wave of selling.

The dollar has seen a correction after weeks of growth, which is typical before important elections. Gold has been performing well, reaching all-time highs, but it has also experienced corrections in the past.

Market picture Polls and forecasts have yet to produce a clear frontrunner in the US presidential race. In recent days, there has been a widespread view that markets are pricing in a Trump victory, but for many investors it is.

The Dollar Index stabilised in the 0.5% range for the fifth session, quietly finding its feet after a near 5% rally over the past thirty days. Since last week, currency market participants have taken a wait-and-see approach after four weeks.

The price of crude oil has fallen to its lowest levels in two months due to Israel's strike on Iran, causing a drop in the geopolitical risk premium. The decline in drilling activity, coupled with the increasing contribution of alternative energy sources, could lead to further declines.

In the upcoming week, we are expecting higher volatility, preliminary 3Q24 GDP estimates, BoJ Rate Decision and US NFP.

The US stock market experienced a decline after six weeks of gains. The Fear and Greed Index is a cause for concern, as it is moving out of a stable range. Tesla's stock saw a significant jump, while McDonald's faced negative attention.

The strength of the dollar is not due to its own strength, but rather the weakness of other currencies. Stocks and gold are rising alongside the dollar. Traders are reducing risks before important events in November. Potential pullback targets for the dollar are 103.8, 103.33, and 102.7.

Gold continued to hit all-time highs in the first half of the week, peaking at $2,758, lately retreating. Meanwhile, Palladium was star of the week among the metals.

Despite weak PMI figures for October in the UK, GBPUSD rebounded by 0.5% due to a tired US dollar. The indices still indicate growth, but caution is advised for GBPUSD buyers.

Flash Eurozone PMI showed mixed data, with Germany's business activity beating forecasts and France's service sector declining further. The stronger-than-expected German data temporarily halted the euro's decline, but it is unlikely to change the trend or the ECB's dovish stance on interest rates.