Market Overview - Page 47

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.

The Canadian dollar has weakened in anticipation of the Bank of Canada's rate decision. However, if the Bank of Canada's comments remain dovish, the USDCAD pair could continue to rise.

The S&P500 and other US indices are showing signs of a potential correction before the election, with the sentiment on Greed territory and the VIX volatility index indicating heightened nervousness. There is potential for the S&P500 to reach a correction target of 5600-5700.

Silver prices surged last week, reaching 12-year highs. While a short-term correction may occur, the rally could continue and potentially reach all-time highs near $50.