BOE, Fed policies set to shape the market after Trump Victory
The Indian rupee sank to a record low of 84.28 on Wednesday, dropping 0.2%—its worst single-day fall in over four months—amid a surge in the dollar and U.S. bond yields following Donald Trump’s projected victory in the U.S. presidential election. The dollar saw its biggest one-day jump since March 2023, while Bitcoin hit an all-time high as traders bet on a Trump win, with Fox News projecting he defeated Democrat Kamala Harris.
Crude Oil:
Oil prices settled lower as investors weighed a strong U.S. dollar against the potential that U.S. President-elect Donald Trump’s foreign-policy plans could squeeze global oil supply. Trump’s election triggered a large sell-off that pushed oil prices down by more than $2 per barrel during early trade as the U.S. dollar rallied, currently at its highest level since September 2022. A stronger dollar makes greenback-denominated commodities such as oil more expensive for holders of other currencies and tends to weigh on prices. Brent crude oil futures settled down 0.81%, at $74.92 per barrel. U.S. West Texas Intermediate (WTI) crude settled 0.42%, to $71.69.
Gold:
Gold prices hit a near three-week low with dollar holding strong as ‘Trump trades’ soared, while investors also kept a close tab on the upcoming Federal Reserve policy meeting. Republican Donald Trump claimed victory in the 2024 presidential contest after Fox News projected that he had defeated Democrat Kamala Harris, which would cap a stunning political comeback four years after he left the White House.
Copper:
Copper prices tumbled as victory for Republican Donald Trump in the U.S. presidential election spurred concerns that major electrification initiatives would be rolled back, dampening demand for the highly conductive metal. Trump said he would “rescind all unspent funds” under the Inflation Reduction Act (IRA), the Biden-Harris administration’s signature climate law to decouple the global supply chain from China.
The IRA includes hundreds of billions of dollars in subsidies for electric vehicles (EV), solar and wind energy to increase production of strategic minerals at home. It was seen as an incentive boost for investments in lithium, copper and nickel outside China.
Prices action (MCX)
Gold 76655 (-2.36%), Silver 90820 (-4.04%), Copper 826.35 (-3.86%) Crude Oil 6075 (+0.35%) Natural gas 232 (+2.61%)
Major Economic Data and Event released yesterday
· France Services PMI, compiled by S&P Global, fell to 49.2 in October from 49.6 in September, below the 50.0 threshold that indicates economic growth but better than an earlier 48.3-point flash estimate.
· Eurozone composite Purchasing Managers’ Index for the currency union, compiled by S&P Global and seen as a good gauge of overall economic health, rose to 50.0 in October from September’s 49.6.
· Italy Purchasing Managers’ Index for Italian services came in at 52.4 last month, up from 50.5 in September, comfortably above the 50 level that separates growth from contraction.
· German PMI rose to 51.6 from 50.6 in September, marking the first acceleration in growth in five months. Any reading above 50 indicates expansion.
Major Economic Data and Event scheduled today (BOE, Fed policies)
Japan
At 5.00am- Average Cash Earnings y/y. Data is foreseen at 3% from previous 2.8%.
Above data could have a neutral impact on the Yen.
China
Time – Tentative
Trade Balance. Data is foreseen at 560B from previous 583B.
USD-Denominated Trade Balance. Data is foreseen at 73.5B from previous 81.7B.
Eurozone
At 12.30pm-
German Industrial Production m/m. Data is foreseen at -1.1% from previous 2.9%.
German Trade Balance. Data is foreseen at 20.8B from previous 22.5B.
At 1.15pm- French Prelim Private Payrolls q/q. Data is foreseen at 0.0% from previous -0.1%.
At 3.30pm- Retail Sales m/m. Data is foreseen at 0.4% from previous 0.2%.
Above data could have an mixed impact on the Euro.
UK
At 12.30pm – Halifax HPI m/m. Data is foreseen at 0.2% from previous 0.3%.
At 5.30pm-
BOE Monetary Policy Report. Monetary Policy Summary.
MPC Official Bank Rate Votes. Expect 0-8-1, previous 0-1-8.
Official Bank Rate. Expect 4.75% from 5.00%.
Above data could have a negative impact on the Pound.
US
At 7.00pm-
Unemployment Claims. Data is foreseen at 223k from previous 216k.
Prelim Nonfarm Productivity q/q. Data is foreseen at 2.6% from previous 2.5%.
Prelim Unit Labor Costs q/q. Data is foreseen at 1.1% from previous 0.4%.
At 9.00pm- Natural Gas Storage.
At 12.30am-
Federal Funds Rate. Forecast 4.75% from previous 5%.
FOMC Statement.
At 1.00am- FOMC Press Conference.
Above data could have a volatile impact on the dollar.
Until then, Happy Trading!
Commodity Samachar Securities
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Also Read: Trump’s 2024 Win: Forex Focus on Market Surge , Trump’s 2024 Win: Forex Focus on Market Surge
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