Trade Desk Client Note
Global Futures Market Review
Dollar Dump On Swap Rate Cut
Latest Market Update:
- BREAKING NEWS: "ECB, FED other major central bank to lower the pricing of existing USD liquidity swaps by 50BPS". Take care this is extreme. Price explosions are happening across all asset classes as equity indices and credit is bought. It was noted that today would be volatile. This is the reason that near-term targets and realistic outlooks regarding trend, momentum, and sentiment need to be factored into each trading day. This is exactly why all traders and investors, of all levels, need to have a support mechanism in place.
- Commodity Update: Gold: Sup 1698 Res 1730 Neutral 1712. Silver: Sup 31.20 Res 32.50 Neutral 31.85. Oil: Sup 96.15 Res 102.00 Neutral 99.05.
- Equity/USD Update: S&P500: Sup 1170 Res 1225 Neutral 1194. Dax: Sup 5630 Res 5995 Neutral 5765. DXY: Sup 78.30 Res 79.95. Neutral 79.15.
- Forex Update: EUR: Sup 1.3195 Res 1.3505 Neutral 1.3350. GBP: Sup 1.5390 Res 1.5765 Neutral 1.5580. JPY: Sup 77.25 Res 78.60 Neutral 77.90.
Recent Market Updates:
- The Month-end ramp is finally underway in reaction to LIBOR and Bullion fixings which co-incided with a rate cut from the Peoples Bank of China. Volatility will build as global futures adjust fair value and book-balancing will dominate near-term trade as November is wrapped up. Volume numbers are low, and new cash is not coming into the market which allows price ramps to more easily take a hold. SP 500 Futures trade is hitting main resistance at 1205 which will be a pivotal number to hold above for year-end bullish outlooks to remain realistic.
- Near-term signals have formed on EUR, GBP, and CHF, which will drop in value if equities move lower. 1175 on SP 500 is pivotal support. The ride into year-end will be volatile, with low-participation levels enabling volatile moves. Breaking headline news will dominate. Global asset class outlooks remain very mixed, showing no indication that violent intra-day swings off support and resistance will end soon.
- Ratings agency Fitch affirmed its AAA rating on United States long-term debt, BUT revised its outlook to Negative. Dominoes are aligned in regard to credit outlooks, after a new call today for the US to stand behind Euro-zone debt. In response the low-volume end-of-day ramp in equities was not backed by credit or interest rate markets.
- Traders and investors are seeing unique trading conditions, and for those with no access to Futures market trade the wait for the cash market open may be a long time coming. A near-term USD/CHF signal is forming with a break above 0.9265, targeting 0.9310. It is an unusual time of day and will onloy follow through easily if credit markets drop lower; bank early and often.
- Moves in equity markets triggered near-term Trade Plan numbers, but have not impacted mid-term trend, momentum, or sentiment reads. Global Charting reviews on ES, DXY, XAU, XAG, and WTI reveal pivotal price points are being hit. Equities may struggle to hold this move. Month-end Window Dressing began with equity indices and risk being bought. The Trade Plans caught most of the moves. Bank early and often as test of both support and resistance are likely this week.