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With global markets in a sea of red and US Treasury rates close to three-month highs on Friday, Asian markets began the potentially volatile month warily as investors awaited U.S. payroll data, even though a rate cut is widely expected next week. Ahead of Tuesday's U.S. presidential election and the Federal Reserve's policy meeting the following day, investors await Friday's nonfarm payrolls report. Following a sell-off overnight, Amazon's 5.3% post-bell rally, which increased its market capitalisation by $104 billion, helped Nasdaq futures recover modestly After the close, the beleaguered Intel's shares rose 7% as a result of its unexpectedly optimistic revenue forecasts. With a 0.3% decline, MSCI's broadest index of Asia-Pacific stocks outside of Japan fell 1.9% for the week. A higher yen clouded the outlook for Japanese exporters, causing Tokyo's Nikkei to drop 2.1%. Hong Kong's Hang Seng index increased and China's blue chips crept up after data revealed that factory activity in China resumed expanding in October. Despite both firms exceeding earnings projections, shares of Microsoft and Facebook's parent company Meta Platforms dropped 6% and 4% overnight as investors feared that rising artificial intelligence will reduce their earnings. Since data indicated that U.S. consumption remained strong and inflation indicators indicated that price pressures were abating, a quarter-point rate drop by the Fed is 94% priced in, barring a significant surprise in the U.S. payrolls report. As a result of claims that Iran is preparing to launch a retaliation strike on Israel from Iraqi territory in the coming days, oil prices continued their upward trend, with Brent prices rising over 2% to $74.13 per barrel.

Investors will be closely monitoring whether UK government bonds (gilts) continue their sell-off and if the pound breaks its 200-day moving average, as markets assess Chancellor Rachel Reeves' debut budget. Investors fear the budget's emphasis on spending could put upward pressure on inflation, leading investors to bet that the Bank of England may need to slow the pace of future rate hikes. Two-year gilt yields have surged 27 basis points this week, though this pales in comparison to the 89-basis-point rout following Liz Truss' 2022 effort.

In the U.S., earnings reports from Exxon Mobil and Chevron, along with the high-profile ISM manufacturing survey and the non-farm payrolls report, are on the agenda. Hurricanes and strikes have made it challenging to interpret the jobs data. Forecasts centre on a rise of 113,000 new jobs in October, but a strong ADP report and lower jobless claims data suggest the risks are skewed to the upside. The unemployment rate is likely to have remained at 4.1%, so barring a major surprise, markets will likely maintain their bets that the Federal Reserve will cut rates by a quarter-point next Wednesday.
 

Overnight Newswire Updates of Note

• IMF: Asian Economies’ Resilience Face Test As Risks Mount
• China Bond Traders Are Getting Squeezed By Stock Bets
• China’s Mfg PMI Swings Back Into Expansion In Oct
• Japan’s Factory Declines Accelerate As Demand Sags
• Australia’s Household Spending Edges Down, Rates Take Toll
• US Job Creation To Slow Significantly
• US Trsy Yellen, China Banker Discuss Financial Monitoring
• Fed Seen On Track To Cut Rates Next Week And In December
• Dollar Falls Against Yen, US Data Leaves Rate Cut Hopes Intact
• Amazon Beats Estimates For Quarterly Revenue
• Apple’s Revenue Beats Expectations On Higher iPhone Sales
• Intel Announces $18.7B In Restructuring, Impairment Charges
• Boeing Union Endorses Latest Offer To End Crippling Strike
• AstraZeneca Probe In China Adds To Investors Concerns
• Middle East Growth Prospects Dim On War's Lasting Scars

          (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)

• EUR/USD: 1.0800 (925M), 1.0840 (1.1B), 1.0850 (773M), 1.0900 (1.4B)
• EUR/USD: 1.1000 (1.5B). EUR/CHF: 0.9350 (517M). USD/CHF: 0.8650 (1.9B)
• USD/JPY: 152.00 (909M), 153.00 (606M), 155.00 (537M). GBP/JPY: 196.00 (657M)
• GBP/USD: 1.2800 (1.1B), 1.2850 (655M), 1.2900 (942M), 1.2950 (632M)
• GBP/USD: 1.3000 (583M), 1.3275 (507M)
• AUD/USD: 0.6700 (451M), 0.6750 (462M). NZD/USD: 0.6100 (720M)
• USD/CAD: 1.3800-10 (830M), 1.3875-85 (1.1B), 1.3900 (508M), 1.3940 (996M)
   

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.
• CAD short position grows to 140,631 contracts from 122,393.
• Speculators trim CBOT US 10-year Treasury futures net short position by 16,874 contracts to 848,191
• Equity fund managers raise S&P 500 CME net long position by 15470 contracts to 1,065,824
• Equity fund speculators trim S&P 500 CME net short position by 19,439 contracts to 304,612
   

Technical & Trade Views

SP500 Bullish Above Bearish Below 5775

• Daily VWAP bearish
• Weekly VWAP bearsih
• Below 5720 opens 5660
• Primary support 5660
• Primary objective 5950

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EURUSD Bullish Above Bearish Below 1.09

• Daily VWAP bullish
• Weekly VWAP bearish 
• Above 1.09 opens 1.0980
• Primary support 1.0750
• Primary objective 1.0750

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GBPUSD Bullish Above Bearish Below 1.3050

• Daily VWAP bullish
• Weekly VWAP bearish
• Below 1.29 opens 1.27
• Primary support is 1.29
• Primary objective 1.31

(Click on image to enlarge)

USDJPY Bullish Above Bearish Below 148

• Daily VWAP bullish
• Weekly VWAP bullish 
• Below 148 opens 144
• Primary support 148
• Primary objective is 156

(Click on image to enlarge)

XAUUSD Bullish Above Bearish Below 2680

• Daily VWAP bullish
• Weekly VWAP bullish
• Below 2670 opens 2600
• Primary support 2550
• Primary objective is 2800

(Click on image to enlarge)

BTCUSD Bullish Above Bearish Below 69500

• Daily VWAP bullish
• Weekly VWAP bullish
• Below 69000 opens 64000
• Primary support is 58000
• Primary objective is 80000

(Click on image to enlarge)

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