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Daily Market Outlook, September 24, 2024

The People's Bank of China made headlines overnight with significant stimulus measures aimed at meeting an ambitious 5% annual growth target for 2024. The reserve requirement ratio was cut by 0.5% and banks are expected to make further cuts before the end of the year. This will allow them to provide additional liquidity to their customers. Other measures taken to stabilize the property market include reducing the minimum deposit requirement for second home buyers from 25% to 15% and reducing the 1-week reverse repo operation rate from 0.2% to 1.5%. There was also mention of creating an equity stabilization fund through the central bank swap facility. The first market watch is that the Chinese stock index was the biggest gainer throughout the Asian session, gaining over +3.5% on the day, which is not surprising. But when it comes to credit-driven stimulus, it feels like we have been there before, but China's property crisis continues to worsen and the stock market is underperforming. While most Asian currencies appreciated against the dollar, the MSCI Asia Pacific Index rose 0.8%. China intends to inject at least 800 billion yuan ($114 billion) of liquidity into its stock market, allowing funds and brokerages to use central bank funds to buy stocks. In Australia, the Reserve Bank of Australia maintained its cash rate target of 4.35%, in addition to reiterating that it was "taking no decision" on policy. Elsewhere, gold hit a record high and oil prices rose after Israel attacked Lebanon. Further stimulus measures in China drove gains in European stocks on Tuesday after disappointing business activity surveys on Monday reinforced expectations of further easing by the region's central bank. Futures for Germany's DAX index, home to many of the largest automakers with operations in China, hit a record high. Wall Street futures also strengthened as Asian markets reached their highest point in nearly two and a half years. Europe's luxury goods stocks, such as LVMH and mining companies, are highly dependent on their profits in the world's second-largest economy. With no noteworthy data events for the European economy, traders may be looking for clues on the path of U.S. interest rates after the Federal Reserve cut rates by 50 basis points last week. U.S. personal consumption expenditures data, the Fed’s preferred inflation indicator, is expected on Friday, while employment data is due next week, with the market divided over whether a 50 basis point or 25 basis point cut was made in November. Overnight Newswire Updates of Note China pushes stimulus to meet growth targets Australia's central bank keeps rates unchanged, defying easing trend BOJ watchers eye LDP election Japan factory output falls in September Wall Street is concerned about the continuation of Fumio Kishida's reforms Boeing offers pay raise to end strike Visa faces DOJ debit card antitrust case Meta launches AI chatbot with celebrity voices OpenAI X account hacked, sent encrypted messages FTC approves Chevron's $53 billion Hess Oil deal Germany's RWE acquires Texas LNG project German business confidence expected to fall Labour's push for UK business sparks concerns (Sourced from reliable financial news outlets) As the US election approaches, financial markets are bracing for potential volatility, which presents both opportunities and challenges for traders. To help navigate this critical period, we have launched the US Elections - Traders Hub, a comprehensive resource designed to meet the needs of traders at every level. FX Options Expiries For 10am New York Cut (1BLN+ represents larger expiries, more magnetic when trading within daily ATR) EUR/USD: 1.1120-25 (3.5BLN), 1.1130-35 (511M), 1.1160-65 (911M) 1.1180 (271M), 1.1200 (1.1BLN) USD/CHF: 0.8400 (381M), 0.8450 (675M), 0.8600 (1.3BLN) GBP/USD: 1.3185-00 (434M), 1.3400 (1.1BLN) EUR/GBP: 0.8415-25 (317M). EUR/SEK: 11.20 (400M), 11.50 (573M) NZD/USD: 0.6150 (250M), 0.6350 (603M) USD/CAD: 1.3560-65 (320M), 1.3600 (1.BLN) USD/JPY: 143.50 (300M), 144.00 (441M), 144.25 (200M) AUD/JPY: 99.00 (1BLN) CFTC Data As Of 20/9/24 Equity fund managers increased their S&P 500 CME net long position by 36,522 contracts to 1,021,562 Equity fund speculators increased their S&P 500 CME net short position by 108,938 contracts to 362,306 contracts Speculators increased their net short position in CBOT 10-year Treasury futures by 71,921 contracts to 1,094,026. Euro net long position is 69,646 contracts The net long position in the Japanese yen is 56,840 contracts Swiss franc net short position is -17108 contracts GBP net long position is 62,979 contracts Bitcoin net short position is -973 contracts Technical & Trade Views SP500 Bullish Above 5670, Bearish Below 5670 Daily VWAP Bullish Weekly VWAP Bullish Below 5650 opens 5630 Primary support 5475 Primary objective is 5750 EURUSD Bullish Above Bearish Below 1.1160 Daily VWAP Bearish Weekly VWAP Bullish Above 1.12 opens 1.1240 Primary resistance 1.12 Primary objective 1.0950 GBPUSD Bullish Above Bearish Below 1.3230 Daily VWAP Bullish Weekly VWAP Bullish Below 1.32 opens 1.3140 Primary support is 1.2730 Primary objective 1.3390 USDJPY Bullish Above Bearish Below 1.142.50 Daily VWAP Bullish Weekly VWAP Bullish Below 142 opens at 140.50 Primary resistance146 Primary objective 146 XAUUSD Bullish Above Bearish Below 2530 Daily VWAP Bullish Weekly VWAP Bullish Below 2610 opens at 2580 Primary support is 2430 Primary objective is 2560 BTCUSD Bullish Above Bearish Below 60000 Daily VWAP Bullish Weekly VWAP Bullish Below 54000 opens 50000 Primary support is 500000 Primary objective is 700000

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Publication date:

2024-09-24 21:11:51 (GMT)

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