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Following the conflicting signals from Wall Street overnight, Asian stock markets are mainly trading higher on Wednesday as traders react to the Biden administration’s fresh drive for a Middle Eastern cease-fire. The markets are being weighed down by the recent increase in bond rates and declining hope on the direction of the interest rate. On Tuesday, Asian markets closed mostly down. CME Group’s FedWatch Tool shows an 89.6% possibility of a 25bps rate decrease next month, based on recent remarks made by US Fed officials implying the central bank intends to progressively lower rates. The Japanese stock market is experiencing a slight decline in volatile trading on Wednesday, continuing the losses from the previous two sessions, as a result of the mixed signals from Wall Street overnight. The Nikkei 225 is trading below the 38,300 level, with traders remaining cautious ahead of the upcoming general election this weekend. China and Hong Kong stocks rose on Wednesday, boosted by the prospect of government support for the economy, despite the uncertainty surrounding the extent and timing of stimulus measures.The prospect of a Donald Trump presidency has been a focus for investors, with Trump’s policies, including tariffs and restrictions on undocumented immigration, expected to increase inflation. This, in turn, has supported the dollar on expectations that U.S. rates may remain relatively high for a longer-than-anticipated period. Trump’s odds of beating Vice President Kamala Harris, the Democratic candidate, have recently edged higher on betting websites, though opinion polls show the race to the White House remains too tight to call. With less than two weeks to go before the Nov. 5 election, investors are bracing for volatility in the markets. The yield on benchmark U.S. 10-year notes traded 4.234% in Asian hours, its highest in three months.The Bank of Canada is expected to increase the pace of easing to 50bps on Wednesday, taking the target rate down from 4.25% to 3.75%. This decision is based on revised lower inflation forecasts, weaker growth assumptions, and the lagged effects of monetary policy, as well as global demand risks. The tight housing market is not likely to deter policymakers from easing, as downside price risks appear more prominent at this stage of the cycle.
Overnight Newswire Updates of Note
(Sourced from reliable financial news outlets)As the US elections draw near, the financial markets are bracing for potential volatility, presenting both opportunities and challenges for traders. To help navigate this crucial period, we have launched the a comprehensive resource tailored 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)
CFTC Data As Of 18/10/24
Technical & Trade ViewsSP500 Bullish Above Bearish Below 5750
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EURUSD Bullish Above Bearish Below 1.10
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GBPUSD Bullish Above Bearish Below 1.32
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USDJPY Bullish Above Bearish Below 148
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XAUUSD Bullish Above Bearish Below 2645
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BTCUSD Bullish Above Bearish Below 63000
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