starter relatively calm. The S&P broad market index is losing 0.1% to 4550 points.
U.S. 10-year Treasuries’ yields are steady at 4.48%. The U.S. Dollar is
weakening by 0.1%. Even crude prices are falling down by 0.4% to $80.00 per
barrel of Brent crude.
no stress news during the last weekend, so markets are in a relative
standstill. Some hope for the U.S. GDP data on Wednesday for the volatility to
be increased, some hope for Federal Reserve’s (Fed) favorite PCE price index on
Thursday in this regard. Traders are looking for the Organisation of Petroleum
Exporting Countries and its allies (OPEC+), while most of investors will listen
carefully to Fed’s Chair Jarome Powell statements this Friday. Some business activity
data in China and inflation in the Eurozone will be published on Thursday, but
this data will be overshadowed by the U.S. inflation-OPEC+-Powell triangle.
500 index has entered a period of a potential reversal this week. It is very important
for the index to pass through this period uneventful without any major
sell-offs below 4350-4370 points. Otherwise, the Christmas stock rally could be
spoiled by a huge decline of the index. However, most important and potentially
market-moving events of this week are scheduled on Thursday and Friday. This
will give investors less time to react on the negative data and rhetoric. PCE
Price index is expected to slow down following weaker October CPI data two
weeks ago. If PCE data will disappoint investors strong sell-offs could be initiated.
Powell could also make some hawkish statement to undermine investors’ bets on
interest rates cut in May 2024. Any particular decision seems not to be made so
far, and would largely depend on PCE data that will be released this Thursday. If
it will be in line with current expectations, Powell could be neutral. This
would be a signal for the start of the Christmas rally.
The OPEC+ story will
come in parallel. Large oil producer have to find a solution to keep prices
above $83.00-85.00 per barrel. Saudi Arabia may announce an extension of its oil
production cut by 1.0 million bpd beyond December 2023. Would it be enough to
keep prices at these levels is not certain. Negative scenario suggest prices
would dive towards the nearest support at $74.00-76.00 per barrel. This would
be another reason for U.S. stocks to rally.
the S&P 500 index is moving within the upside formation with targets at 4450-4550
that have already been met. In case of an upside scenario for this week new
targets at 4800-4900 points by the end of the year could become available.
prices continue to consolidate below the resistance at $83.00-85.00 per barrel.
The nearest support level is at $74.00-76.00 per barrel. This level will become
a primary target in case prices fail to hold above the resistance.
are moving inside the mid-term upside formation with targets at $2000-2100 per
troy ounce that have already been met. Prices have not properly tested the
support at $1910-1930 per ounce, and bounced towards the resistance at
$1990-2010 per ounce. A breakthrough of this resistance may push prices to
$2100 per ounce. Otherwise, a war premium is seen deflating with prices slowly
moving down towards the $1830 per ounce mark.
Greenback reached its primary correction targets at 1.08500-1.09500 against the
Euro. Any further correction is largely associated with a Christmas stock
rally. In this scenario, the EURUSD may rise towards 1.12000-1.13000. Alternatively,
the Greenback could resume is strengthening towards the parity with the single