Daily Market Outlook, December 5, 2024
Munnelly’s Macro Minute...
"Bitcoin Bulls Break 100k”
Asian markets displayed mixed results on Thursday after Wall Street reached record highs. A disappointing report on U.S. services data heightened investor optimism about the possibility of an interest rate cut by the Federal Reserve. Overnight, the S&P 500, Nasdaq, and Dow all set new record levels. The price of one bitcoin has surged to six figures, crossing the $100,000 threshold. This milestone appeared increasingly likely following Donald Trump's election as the next U.S. president, given his crypto-friendly campaign platform. While reaching this figure is symbolic, it highlights the growing prominence of cryptocurrencies in today’s financial markets. Some commentators jokingly speculated that persuasive conversations from children and grandchildren during Thanksgiving may have contributed to pushing bitcoin past this milestone, particularly as investors had shown hesitation at that level in the preceding weeks. However, the true driving force behind this momentum stemmed from significant investments by large investors and the introduction of new bitcoin ETFs.
MSCI's broad index of Asia-Pacific shares outside Japan saw a slight decline, as losses in Hong Kong outweighed gains in Australia and Japan. The Nikkei in Japan rose about 0.6%, reaching a three-week high, while Hong Kong's Hang Seng index fell approximately 1%. The U.S. ISM survey revealed a slowdown in services sector activity for November, following significant gains in previous months. The benchmark 10-year Treasury yields edged down three basis points to 4.182%, remaining steady during Asian trading hours. Federal Reserve Chair Jerome Powell made cautious comments at a New York Times event on Wednesday, acknowledging that the economy is performing well but not strongly opposing market expectations for interest rate cuts. Earlier this week, Fed Governor Christopher Waller expressed support for a potential rate cut later in December. The main focus Staeside for the week will be the U.S. employment figures released on Friday, as a strong report could influence trends in the bond market.
Significant increases in German stocks seem to stand in stark contrast to the overall pessimism seen throughout Europe. The situation in France deteriorated on Wednesday, as parliament approved a no-confidence motion against the government for the first time since 1962. Countries that were once considered stable, like Germany, France, Japan, and South Korea, are now experiencing political uncertainty. In Asia, French bond futures remained steady, as did the financial markets in South Korea, where a parliamentary motion to impeach President Yoon Suk Yeol was introduced following a failed attempt to enforce martial law. With rising concerns about political turmoil, there may be a growing interest in cryptocurrency investments as a means to mitigate the risks linked to traditional asset classes. On the economic front, the upcoming U.S. jobs report on Friday is expected to be crucial, as a strong outcome could challenge market expectations for interest rate reductions. Furthermore, European retail sales figures will be eyed after German industrial orders remain in negative territory.
Overnight Newswire Updates of Note
BTC $100K Monster 2024 Rally Reaches New Heights
Oil Slightly Firmer Ahead Of OPEC+ Supply Decision
French PM To Resign On Friday As Political Crisis Festers
ING: ECB Yield-Curve Control A Possibility To Cap Surge
People's Daily: China Can Accept GDP Growth Of Less Than 5%
China’s Shift Momentum To Local Chips; Post - US Tariff Scare
Dovish BoJ Policymaker Nakamura: Not Objecting To Rate Hike
Australia Trade Balance Up More Than Expected In Oct
ETF That Amplifies Bet On US Market Leaders Highlights Concerns
Trump's Mid-East Envoy Diplomatic Gaza Ceasefire Jan Push
BoK’s Rhee: Volatility Will Slowly Cool To Pre-Turmoil Level
(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: 1.0440-50 (2.3BLN), 1.0475-80 (1.3BLN), 1.0500-05 (1.8BLN)
1.0525-35 (1.7BLN), 1.0550 (1.3BLN), 1.0560-65 (1.8BLN)
1.0580 (752M), 1.0600 (1.2BLN)
USD/CHF: 0.8725-30 (624M), 0.8820-25 (425M), 0.8840-50 (346M)
EUR/GBP: 0.8435-45 (410M)
GBP/USD: 1.2600 (954M), 1.2625 (209M), 1.2650 (306M), 1.2670-85 (492M)
1.2725 (260M), 1.2750 (1BLN)
AUD/USD: 0.6440-45 (903M), 0.6500 (486M), 0.6550-60 (943M)
USD/CAD: 1.3950 (490M), 1.3975-80 (510M), 1.4030 (327M), 1.4050 (300M)
1.4100 (374M), 1.4150 (268M), 1.4215 (643M)
USD/JPY: 149.00 (412M), 149.50 (305M), 149.70 (262M), 150.00 (790M)
AUD/JPY: 98.00 (1.2BLN), 100.00 (1BLN)
CFTC Data As Of 29/11/24
Equity fund managers raise S&P 500 CME net long position by 60 contracts to 1,079,539
Equity fund speculators trim S&P 500 CME net short position by 29,885 contracts to 258,924
Euro net short position is -42,557 contracts
Japanese yen net short position is -46,868 contracts
Swiss franc posts net short position of -37,071
British pound net long position is 40,315
Bitcoin net short position is -2,084 contracts
Speculators trim CBOT US Treasury bonds futures net short position by 6,123 contracts to 35,645
Speculators increase CBOT US 10-year Treasury futures net short position by 91,701 contracts to 907,502
Speculators increase CBOT US 5-year Treasury futures net short position by 113,816 contracts to 1,983,026
Speculators increase CBOT US 2-year Treasury futures net short position by 23,473 contracts to 1,447,344
Technical & Trade Views
SP500 Bullish Above Bearish Below 6000
Daily VWAP bullish
Weekly VWAP bullish
Below 5990 opens 5930
Primary support 5795
Primary objective 6100
EURUSD Bullish Above Bearish Below 1.0450
Daily VWAP bullish
Weekly VWAP bearish
Above 1.0590 opens 1.0728
Primary resistance 1.0950
Primary objective 1.0728
GBPUSD Bullish Above Bearish Below 1.26
Daily VWAP bullish
Weekly VWAP bearish
Above 1.2760 opens 1.2859
Primary resistance 1.3050
Primary objective 1.2859
USDJPY Bullish Above Bearish Below 154
Daily VWAP bullish
Weekly VWAP bearish
Below 150 opens 148
Primary support 150
Primary objective is 157.50
XAUUSD Bullish Above Bearish Below 2600
Daily VWAP bearish
Weekly VWAP bullish
Below 2530 opens 2467
Primary support 2530
Primary objective is 2800
BTCUSD Bullish Above Bearish Below 92000
Daily VWAP bullish
Weekly VWAP bullish
Below 91000 opens 87500
Primary support is 85000
Primary objective is 100,000 TARGET HIT NEW PATTERN EMERGING
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Past performance is not indicative of future results.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!