Daily Market Outlook - Monday, Oct. 28 -

Daily Market Outlook – Monday, Oct. 28

Oct 28, 2024Jeremy ParkinsonFinance0

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The results of Japan’s Lower House elections have led to a significant defeat for the Liberal Democrat-Komeito coalition. This is likely to contribute to ongoing volatility in the USDJPY exchange rate as political uncertainty in Japan is compounded by other macro risks, the benchmark Nikkei225 is trading sharply higher, gaining 1.8%. Mainland China stocks recovered from initial declines in early trading on Monday, while Hong Kong stocks also flipped from red to green as investors await potential outcomes of pivotal meetings at home and the U.S. presidential election next week. China’s blue-chip index advanced 0.15%, while the Hong Kong benchmark Hang Seng also posted modest gains of 0.15%. China’s top legislative body will meet from Nov. 4-8, with no mention on the agenda of highly anticipated debt and other fiscal measures. Earlier, China’s central bank announced it had activated its open market outright reverse repo operations facility and would use it to trade with primary dealers in open market operations on a monthly basis. Republican former President Donald Trump and Democratic Vice President Kamala Harris are in a tight race in key swing states ahead of the November 5 election. Investors are concerned about a disputed outcome disrupting global markets and triggering renewed geopolitical uncertainty.With important events like the Bank of Japan’s policy meeting, the October jobs report from the United States, the UK budget, and the aftermath of the Japanese election, this week will be busy. Governor Ueda continues to indicate a cautious stance to further tightening, and the Bank of Japan is anticipated to keep its policy rate at 0.25%. Japan will publish a range of economic data, such as retail sales, industrial production, consumer confidence, and unemployment. Stateside Investors will have access to a broad set of economic data, such as consumer confidence, ADP jobs, advance Q3 GDP, the September PCE price index, JOLTS job openings, ISM manufacturing PMI, and the monthly jobs report, even though the U.S. Federal Reserve enters a blackout period prior to its policy meeting on November 6-7. A major event for rates, investors, and sterling is expected to be Wednesday’s release of the UK’s first budget under the new Labour government. China will announce its official and Caixin manufacturing PMIs in the latter part of the week, while the euro zone will release flash Q3 GDP, sentiment indices, final October consumer confidence, and flash HICP. Additionally, 41% of S&P market cap is scheduled to report next week, which is the busiest week of the 3Q earnings season. Some of the key highlights include:Tuesday – AMD, GOOGLWednesday – META, MSFTThursday – AAPL, AMZN
Overnight Newswire Updates of Note

IMF Cuts Global Growth, Sees Weak Yen For Japan ECN Boost

Yen Weakens, Japan Stocks Advance, LDP Election Blow

China Launches New Lending Tool Ahead FY24 Loan Expiry

Top Chinese Official: Stimulus Aims To Boost Consumption

China’s Sept Industrial Profits Post Steepest Fall Of The Year

Popular Aussie-Kiwi Cross To Test Year’s High On Policy Outlook

Growth, Storm Impacted Jobs Data Set Table For Fed Meeting

Bond Market Faces Key 10-Day Test Amid Selloff

Gold Falls; US Economic Data in Focus

Israel’s Limited Attack On Iran May Help Spur Regional Deal

Oil Slumps 5% As Israel Limits Iran Strike To Military Targets

ECB’s Knot: Europe Must Tighten Finances, Stay Rate-Nimble

BoE’s Bailey: Pursues Digital Currency To Address Banking Gaps

UK Chancellor Historic Budget Ahead; Rules Out New Freeports

UK Banks Face Billions In New Payouts After Auto Loan Ruling

Boeing To Plan Over $15B Capital Raise As Soon As Monday

(Sourced from reliable financial news outlets)
FX Options Expiries For 10am New York Cut (1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

USD/JPY: 132.00 ($1.01b), 151.00 ($460m), 143.15 ($455m)

EUR/USD: 1.0900 (EU863.5m), 1.1100 (EU613.2m), 1.0750 (EU484.4m)

USD/CNY: 7.6000 ($347.4m)

USD/CAD: 1.3855 ($1.39b), 1.3850 ($909.6m), 1.3640 ($590.8m)

AUD/USD: 0.6660 (AUD944m), 0.6700 (AUD623.4m), 0.6550 (AUD450m)

EUR/GBP: 0.8500 (EU500m), 0.8800 (EU444.9m)

USD/MXN: 19.55 ($315.6m)

CFTC Data As Of 25/10/24

EUR net speculative long position disappears, now short 28,524 contracts, down from long 17,150 the previous week.

JPY long position drops to 12,771 contracts from 34,110.

GBP long position cut to 74,576 contracts from 85,802.

AUD long position increases to 27,679 contracts from 19,269.