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 Tesla’s better-than-expected profits gave investors some last minute relief overnight. After reporting strong third-quarter earnings and surprising analysts with a forecast for a 20–30% increase in sales next year, Tesla’s stock surged 12% in after-hours trade. Futures on the S&P 500 increased by 0.4%, while those on the Nasdaq increased by 0.7%. The so-called Magnificent Seven tech firms saw significant losses ahead of their quarterly reporting, and U.S. markets had been down for three days in a row before the overnight recovery. Asian stocks fell on Thursday, the dollar stayed close to three-month highs, and U.S. rates increased as market anxiety persisted due to the outcome of the U.S. election. Higher U.S. Treasury rates, the uncertainty surrounding the U.S. election, and mounting anticipation of a more cautious Federal Reserve easing tempo all combined to limit risk sentiment. Market anxiety is exacerbated by growing expectations of Donald Trump’s potential return to the White House. In Asia, the Nikkei in Tokyo recovered from previous losses to gain 0.2%. Declines in Chinese equities put pressure on MSCI’s broadest index of Asia-Pacific stocks outside of Japan, which fell 0.3%. The Hang Seng index in Hong Kong lost 1.2%, while the blue chips in China slid 0.5%. The yen weakened across the board after Bank of Japan Governor Kazuo Ueda stated that it was still taking time to achieve the central bank’s inflation goal. The case for a strong yen remains compelling, but the normalisation process is rarely smooth. The market has repriced expectations for Fed rate cuts, and the US economy continues to grow at a solid pace. The translation of the US/Japan 2y OIS spread to the currency looks exaggerated, and factors like potential Trump tariffs may be influencing price action. Carry might seem appealing, but the sustainability of swap spread levels is questionable. A cautious approach to the USD/JPY rally seems prudent at current levels.Markets in Europe on Thursday will focus on preliminary Purchasing Managers’ Index (PMI) readings, particularly from the euro zone, where growth prospects have become a concern. Business activity in the bloc is expected to remain in contractionary territory, keeping pressure on the European Central Bank (ECB) to cut rates sooner. ECB President Lagarde said the bank would need to be cautious in further easing, although sources indicate policymakers are debating whether rates need to go below neutral to stimulate the economy. Futures pricing shows traders expect rates to fall below 2% by June next year. This has weighed on the euro, which is down over 3% this month and on track for its steepest monthly decline since April 2022. PMI figures for the UK and US will also be released, with growth likely to fare better than in the euro zone.
 Overnight Newswire Updates of Note

  • BoE’s Bailey: UK Inflation Cools Faster
  • China Struggles to Overcome US Chip Design Control
  • Bears Target China’s Yuan Amid Trump Hopes
  • Ueda: BoJ Normalization Concerns Me Constantly
  • Japan Finance Chief Warns on Yen’s Slide
  • Japan Factory Activity Declines For 4th Month
  • Australia October Manufacturing PMI Drops To 46.6
  • T-Mobile Raises Subscriber Forecast After Strong Quarter
  • IBM Drops as Consulting Sales Disappoint
  • Tesla Shares Surge on Better-than-Expected Profit
  • Boeing Workers Reject Latest Contract Offer
  • Kering Predicts Lowest Profit Amid Gucci Woes
  •           (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: 1.0735 (280M), 1.0750-55 (4.0BLN), 1.0775-85 (3.63BLN)
  • 1.0800-10 (2.7BLN), 1.0830 (230M), 1.0850 (980M)
  • 1.0865-80 (1.32BLN), 1.0895-00 (2.42BLN)
  • USD/CHF: 0.8600-10 (682M), 0.8740 (238M). EUR/CHF: 0.9475 (494M)
  • GBP/USD: 1.2900-05 (835M)
  • EUR/GBP: 0.8325 (400M), 0.8335-40 (1.0BLN), 0.8350-60 (760M)
  • AUD/USD: 0.6605 (1.6BLN), 0.6640-50 (1.43BLN)
  • NZD/USD: 0.6065-75 (1.4BLN), 0.6090 (700M). AUD/NZD: 1.0975 (606M)
  • 1.1040 (334M). USD/CAD: 1.3745-80 1.62BLN), 1.3800-10 (1.7BLN)
  • 1.3850-60 (552M), 1.3925 (817M)
  • USD/JPY: 149.90-00 (1.2BLN), 150.50 (216M), 150.90-00 (950M)
  • 151.50 (991M), 151.75 (250M), 152.00 (1.53BLN), 152.45-50 (946M)
  • AUD/JPY: 100.00 (625M)
     
  • CFTC Data As Of 18/10/24

  • Euro net long position is 1750 contracts
  • Japanese Yen net long position is 34,110 contracts
  • Swiss Franc posts net short position of -26,161 contracts
  • British Pound net long position is 85,802 contracts
  • Bitcoin net short position is -1,872 contracts
  • Equity fund managers raise S&P 500 CME net long position by 8,773 contracts to 1,050,355
  • Equity Fund speculators trim S&P 500 CME net short position by 4,760 contracts to 324,051
  • Speculators trim CBOT US 10-year Treasury futures net short position by 95,064 contracts to 865,065
     
  • Technical & Trade ViewsSP500 Bullish Above Bearish Below 5750

  • Daily VWAP bearsih
  • Weekly VWAP bullish 
  • Below 5720 opens 5660
  • Primary support 5660
  • Primary objective 5950
  • EURUSD Bullish Above Bearish Below 1.0950

  • Daily VWAP bearish
  • Weekly VWAP bearish 
  • Above 1.1030 opens 1.1120
  • Primary support 1.0750
  • Primary objective 1.0750
  • GBPUSD Bullish Above Bearish Below 1.31

  • Daily VWAP bullish
  • Weekly VWAP bearish
  • Below 1.31 opens 1.29
  • Primary support is 1.29
  • Primary objective 1.29 – TARGET HIT NEW PATTERN EMERGING
  • USDJPY Bullish Above Bearish Below 148

  • Daily VWAP bullish
  • Weekly VWAP bullish 
  • Below 146.50 opens 144
  • Primary resistance 152 – TARGET HIT NEW PATTERN EMERGING
  • Primary objective is 152
  • XAUUSD Bullish Above Bearish Below 2680

  • Daily VWAP bullish
  • Weekly VWAP bullish
  • Below 2600 opens 2550
  • Primary support 2550
  • Primary objective is 2800
  • BTCUSD Bullish Above Bearish Below 63000

  • Daily VWAP bearish
  • Weekly VWAP bullish
  • Below 62000 opens 59000
  • Primary support is 50000
  • Primary objective is 70000
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