Market Update 31/10/2024

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• Wall St. finished the day in negative territory with the Nasdaq and the S&P 500 both closing -.3%.  U.S. 10-year yields edged higher, while crude oil rose 2.2% to $68.70 a barrel. AUD/USD traded in a 0.6537/.65955 range before settling at 0.6575/80 ahead of the Asian open.

• Asian equities ended the day mixed, the Hang Seng and Shenzhen were -1.6% and -0.9% while the Nikkei closed +1.0%. The ASX finished weaker as consumers staples struggled, down -3.6%. AUD/USD reached 0.6571 highs post lunch despite a miss in Australia’s headline Q3 CPI (2.8% y/y vs 3.9% exp.) before being offered to 0.6537 lows.

• European equities all opened in the red, FTSE and DAX -0.5%, Stoxx -0.8%, and CAC -1.1% despite French GDP printing 0.4% q/q (0.3% est.). The US 10yr was lower at 4.23%, while Brent held steady at $71.5 per barrel. EUR/USD and GBP/USD both jumped ~25pts amongst broader dollar weakness as they traded 1.0844 and 1.3025 highs, while AUD/USD reached 0.6585 highs.

• Germany saw employment numbers print weaker as seasonally adjustment unemployment grew 27k (15k est.). Moreover, German state CPI prints came in higher than market forecasts, trimming the expectation of a 50bp cut for now. EURUSD rose above 1.0850 and hit its highest level in over a week at 1.0859. GBP/USD headed the other way to make lows near 1.2960 as NY arrived.

• US ADP employment printed at 233k in October, up from a positively revised 159k and well above expectations of 111k. Released shortly afterwards, US Q3 GDP printed at 2.8% QoQ, down from 3.0% and below forecasts of 2.9%. Personal Consumption rose 3.7% QoQ to easily beat expectations of 3.3% while Core PCE was 2.2%, down from 2.8% though above expectations of 2.1%.

• Little reaction to the data though the USD was modestly firmer with EUR/USD dropping briefly to new lows under 1.0810 while GBP/USD dipped to 1.29365 lows before recovering as UK Chancellor Reeves delivered a UK budget that contained few surprises.

• US Pending Home Sales for September rose 7.4% MoM and 2.2% YoY, well above expectations of 1.9% and -1.1% respectively. Little direct reaction to the data though the USD did continue to slide over the NY morning. AUD/USD rose to new highs of 0.65955 while GBP/USD moved up to 1.3043 with EUR/USD moving up to 1.0863 highs.

• Wall St was a little choppy at the open though settled with modest gains across much of the NY morning with the Dow up as much as 0.5%. European markets remained weak into the close and ended the day firmly in the red with the FTSE down 0.7% while the CAC and DAX closed down more than 1% on the day.

• Currencies generally settling into small ranges over the NY afternoon though USD/CAD did fall to lows under 1.3900 in late trade while EUR/USD made new daily highs above 1.0870. Closer to home and AUD/USD settled near 0.6580 as Sydney arrived.

• Wall St. remained soft late in the day with the Nasdaq and the S&P both 500 both trading-.3%.

To watch for
• JP – Sep P. Industrial Production y/y
• JP – Japan Buying Foreign Bonds
• JP – Sep. Retail Sales y/y
• JP – BOJ Target Rate
• NZ – Oct. ANZ Business Confidence
• AU – Sep. Building Approvals m/m
• AU – Sep. Retail Sales
• AU – Sep. Private Sector Credit Ticker
• CN – Oct. Composite PMI and Oct. Manufacturing PMI
• UK – BOE’s Breeden Speaks
• EU – ECB Publishes Economic Bulletin
• EU – ECB’s Panetta Panetta Speaks
• EU – Sep. Unemployment Rate
• CA – Aug. GDP y/y
• US – Initial Jobless Claims
• US – Sep. Personal Income and Spending

Mid-market rates.

Chart of the day