Asia shares declined on Wednesday due to weakness in China, as investors brace for a closely contested U.S. election that could have significant implications for the world’s second-largest economy, even as Beijing tries to boost growth. Gold reached a record high as concerns over the tight U.S. presidential race supported the yellow metal, while bitcoin also approached a new peak as markets weighed the prospect of a victory by Republican candidate Donald Trump.MSCI’s broad Asia-Pacific index outside Japan fell, tracking a decline in Chinese assets. The CSI300 blue-chip index fell, while Hong Kong’s Hang Seng Index slid 1.5%. China’s latest stimulus package seems modest, with 60% dedicated to easing local government debt. Supporting the real estate industry is receiving more attention, but there is still little urgency surrounding more general structural problems like debt, deflation, and demographics. Though global investors remain extremely wary of any tariff threats in the event of a Republican sweep in next week’s U.S. elections, equity support may provide some boost to domestic confidence. Despite news that the European Union has planned to raise taxes on Chinese-built electric vehicles to as high as 45.3%, China’s new energy vehicles index increased by 0.2%.U.S. stock futures ticked higher overnight, buoyed by a solid result from Google-parent Alphabet, which reported quarterly revenue that beat estimates.Google’s stock price rose by nearly 4% post earnings due to a strong performance in its Cloud business, with a slight beat in YouTube and Search. However, the company has seen a significant reduction in the length of client engagements across various client types. After weeks of heated speculation about its contents, budget day has finally arrived in the UK. Chancellor Rachel Reeves will give the address in the House of Commons. As soon as she is done, HM Treasury, the OBR, and the DMO will release the formal paperwork. Although there will certainly be some mention of the fiscal aggregates in the Chancellor’s speech, the gilt market is unlikely to react significantly until the new DMO remit is released. It is anticipated that the government’s funding needs for 2024–2025 will be increased by £25 billion to £302.7 billion, of which £20 billion will come from extra gilt sales and £5 billion from an increase in the net stock of outstanding bills. Another important indicator for the market will be the overall rise in government borrowing throughout the five-year period from 2024–2025 to 2028–2029; the core case scenario is an increase of about £80 billion, but there are many more likely outcomes.Stateside, today’s ADP employment report may offer insights into how recent storms could affect Friday’s BLS employment report. Additionally, the initial estimate of Q3 GDP is expected to show solid consumer spending driving overall growth of 2.8% q/q SAAR. After the close of trade in New York Meta Platforms and Microsoft will report their financial results later today, followed by Apple and Amazon.com on Thursday. Investors will closely monitor these earnings reports to assess whether Wall Street can maintain the optimism surrounding technology and artificial intelligence that has driven indexes to record highs this year.
Overnight Newswire Updates of Note
(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)
CFTC Data As Of 25/10/24
Technical & Trade ViewsSP500 Bullish Above Bearish Below 5775
EURUSD Bullish Above Bearish Below 1.09
GBPUSD Bullish Above Bearish Below 1.3050
USDJPY Bullish Above Bearish Below 148
XAUUSD Bullish Above Bearish Below 2680
BTCUSD Bullish Above Bearish Below 69500
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