North American News
Choppy day in the bond market ends with a strong bid
- What’s going on in bonds?
It was an interesting day in the bond market. There was a strong bid for bonds but that was undermined by a terrible Treasury auction with a 3.3 bps tail.
But in the last minutes of the day, the bid returned. Could that be short-covering ahead of CPI? Or a flight to safety after a rough decline in stocks. Plenty has been written about the US election and the crypto meltdown this week but the inflation report is going to be the driver of markets.
US treasury auctions off $35 billion of the 10 year at high yield of 4.14%
- WI level at the time of the auction was 4.106%
- High yield 4.14%
- WI level at the time of the auction 4.106%
- bid to cover 2.23X vs. the six-month average of 2.41X
- Tail 3.4 basis points vs. six-month average of 1.3 basis points
- Directs 18.1% vs. six-month average of 18.8%
- Indirects 57.5% vs. six-month average of 64.8%
- Dealers 24 4% vs. the six-month average of 16.4%
Atlanta Fed GDPNow growth estimate for Q4 rises to 4.0%
- Price level for the new quarter
The Atlanta Fed GDPNow growth estimate for Q4 rose to 4.0% from 3.6% previously.
In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2022 is 4.0 percent on November 9, up from 3.6 percent on November 3. After last week’s employment situation report from the US Bureau of Labor Statistics and this morning’s wholesale trade report from the US Census Bureau, the nowcasts of fourth-quarter real personal consumption expenditures growth and fourth-quarter real gross private domestic investment growth increased from 4.0 percent and 0.7 percent, respectively, to 4.2 percent and 2.1 percent, respectively.
Fed’s Barkin willing to risk economic downturn to control inflation
- Comments from the Richmond Fed President
- Inflation fight ‘may lead’ to downturn but that is a risk the Fed will have to take
- Fed rate hikes ‘challenged’ but ‘artificial elements’ in current economy including high consumer savings and a lack of labor supply
- Cant let inflation fester and expectations rise
- US could continue to face labor constraints going forward
- Supply chains improving ‘slowly and inconsistency’
The Fed warning that it will sack the economy to control inflation isn’t entire new but when it’s a relentless headline, it’s not going to improve the risk mood or investment in the real economy.
Commodities
Gold plummets on soft US Treasury auction
- Gold is now back in the hands of the bears as traders get set of US CPI.
- US yields and the Dollar rising may have set the high of the week in Gold.
Gold is under pressure following, dropping at the turn of the past hour after a spike to the day’s highs, trapping breakout traders long when the US treasury notes sold today at 4.140% compared to 4.106% in the moments before the auction in the WI market. Since the sale, Us yields have surged, supporting the US dollar and weighing heavily on gold.
Gold is currently trading at $1,702.46, down some 0.46% after falling from a high on the day of $1,722.34 and is taking on the London of $1,703.16. Meanwhile, the Gold price has given something to both the bulls and the bears on the day as the following analysis will illustrate.
Looking ahead, all eyes will be on the US inflation data in Thursday’s US Consumer Price Index. Investors will be looking for clues in the data to see if it can spur the Federal Reserve to continue to increase interest rates well into next year. The data could be a good litmus test to gauge whether investors are about to turn their backs on the greenback once and for all despite the Fed’s Chair, Jerome Powell, recent pushback against the pivot sentiment.
Silver struggles around the 200-DMA and tumbles toward the $21.10s area
- Silver struggles to break the 200-day EMA at $21.48 after hitting a daily high of $21.61.
- Silver Price Analysis: A doji in the daily chart suggests Silver is consolidating.
Silver price remains unable to clear the 200-day Exponential Moving Average (EMA) at $21.48 decisively, retreats after hitting a daily high of $21.61, trading below its opening price by 0.15%. At the time of writing, the XAGUSD is trading at $21.19 a troy ounce.
Silver (XAGUSD) Price Analysis: Technical outlook
The Silver rally stalled at around the 200-day EMA at $21.48, in the last couple of days, with Wednesday’s price action set to form a doji, meaning that buyers could be refraining from testing higher prices, with the US Consumer Price Index (CPI) report for October, right around the corner. It should be noted that if XAGUSD tumbles below $21.00, a fall toward this week’s low at $20.38 is on the cards,
Short term, the XAGUSD appears to be forming a top at around $21.40-60. The Relative Strength Index (RSI), at bearish territory with a downslope, suggests some selling pressure piling, but a break below the confluence of Wednesday’s low and the daily pivot point at $21.16 would exacerbate a test of the psychological $21.00.
XAGUSD key resistance levels lie at $21.60, followed by the R1 daily pivot at $21.82 and the $22.00 mark.
EU News
European equity close: Mixed bag but well-above the lows
- Closing changes for the main European bourses
- Stoxx 600 -0.2%
- German DAX -0.1%
- UK FTSE -0.1%
- French CAC -0.1%
- Spain IBEX -1.5%
Other News
Tesla breaks support: Falls to the lowest since 2020
- Is the final general being executed?
There is no stock that better-exemplified the bull market of the past decade, and especially the covid bull market. It traded at a split-adjusted $23.37 in March of 2020 and rose as high as $414.50.
Many high-flying tech stocks have reverted to pre-covid levels ($51 fro Tesla) and some all the way to covid lows, if not lower.
The idea of full-self driving is still sci-fi and likely won’t happen any time soon. That will leave Tesla to compete on price and supply chains with major automotive manufacturers, who are slowly closing the driver-assistance gap on Tesla. Meanwhile, Musk is divided as the CEO of three companies and his public image is taking a battering.
What’s scary here though are the technicals. The break of $179 — especially on a daily/weekly close — is a big problem.
Cryptocurrency News
Binance walks away from the FTX deal – WSJ
- That’s the end of that
The WSJ reports that any potential deal is off.
The next deal that Sam Bankman-Fried will be making will be with prosecutors.
FTX’s hole could be as high as $6B
- The good news is it seems to be limited to that
Hitting the bid from FTX in its FTT token at $22 when it was there, would have been a great trade.
Meanwhile, Bitcoin traded to a new low at $16794. Have no fear, that is still up 336% from the March 2020 covid low. Why worry.
Join Our Whats App Group for all the latest stock market news
https://chat.whatsapp.com/KuCI3obDFfz7J6QI8tK1fX
