official Market Update by Solidecn.com

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A Shift in the Dollar: Weak Data Sparks Talk of Rate Cuts

On Tuesday, the dollar index stabilized at around 103.1, marking its lowest point in three months. It's poised to close November with a near 3% decline, the most significant monthly fall in a year. This downturn follows weak economic indicators, fueling speculation that the Federal Reserve might halt interest rate hikes and possibly reduce rates next year. 

Market predictions suggest a 25% likelihood of rate cuts by March 2024, increasing to 45% by May. Looking forward, investors are keenly awaiting the release of PCE prices, the Fed's preferred inflation measure, alongside personal income, spending data, and the ISM Manufacturing PMI for more clues. This week also features speeches from several Fed officials at different events. The dollar has weakened notably, especially against the yen and antipodean currencies.

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XRPUSD Update: Ripple Struggles Below Pivot, Targets 0.58

Ripple is currently experiencing a bearish trend, staying below the 0.609 pivot, which suggests a continuing downward movement. The upper band of the bullish flag is acting as resistance. As the price remains under R1, there's growing expectation that it might head towards S1 (0.58).

If the price breaks through S1, sellers might then aim for the next level, S2.

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The Oil Market's Recent Dip: OPEC+ Strategy and Economic Factors

On Tuesday, WTI crude futures saw a slight uptick, trading around $75 per barrel after experiencing losses in four straight sessions. This change comes amid worries about potential further delays in the upcoming OPEC+ meeting, which may result in continuing the existing oil production policy. 

Saudi Arabia is advocating for a cut in production quotas to stabilize the market, yet no agreement has been reached so far. The meeting, initially scheduled for November 26, has been pushed to November 30 because of disagreements over output quotas, particularly involving Nigeria and Angola. Since September 27th, there has been a more than 15% decline in the oil market, attributed to abundant supplies and global economic uncertainties.

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U.S. Natural Gas Futures Dip Amid High Storage and Production

U.S. natural gas futures are hovering around $2.9/MMBtu, a level close to their lowest in twelve weeks. This pricing trend is primarily due to high storage levels, unprecedented production rates, and a dip in demand. Recent data from the U.S. Energy Information Administration (EIA) revealed a modest withdrawal of 7 billion cubic feet from gas storage in the week ending November 17. This figure is notably smaller than the 60 billion cubic feet withdrawal during the same period last year and falls short of the five-year average decline of 53 billion cubic feet.

Currently, U.S. gas stockpiles stand about 7% above the usual levels for this time of year. The EIA points to robust natural gas production and milder winter temperatures as the key reasons for these ample inventories. The warmer weather has led to a reduced need for heating, with forecasts predicting a 4% decrease in heating degree days compared to the last decade's average. This is expected to result in a 2% reduction in space heating consumption, compared to the five-year average. Adding to the supply situation, November has seen an average gas output of 107.6 billion cubic feet per day, an increase from the previous record of 104.2 billion in October.
 

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Germany's Import Prices: A Continuing Decline

In October 2023, Germany saw a continued decrease in the cost of imported goods, marking the eighth month of this trend. The reduction in import prices was 13.0%, slightly less than the anticipated 13.4%. This ongoing drop stems largely from the high prices experienced in 2022 due to the conflict in Ukraine. The biggest decrease was in energy imports, which were 43.5% cheaper than the previous year. This includes significant reductions in the prices of natural gas, hard coal, electricity, mineral oil products, and crude oil. Intermediate goods and agricultural products also saw price drops, as well as both durable and non-durable consumer goods, albeit to a lesser extent. On the flip side, the cost of capital goods actually went up a bit.

For a catchy and visually appealing representation of this topic, I would suggest an image that creatively illustrates the decline in import prices in Germany. It could depict a downward graph or arrow, symbolizing the price reduction, set against a backdrop of key items such as energy sources and consumer goods. The overall tone should be informative yet engaging.

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GBPUSD Sees Strong Uptrend, Caution Advised for Long Positions

The GBPUSD currency pair recently began a stronger upward movement, surpassing its previous bullish trend. As of now, it's trading near 1.2703, with the RSI indicator indicating an overbought condition for nearly a day. Our previous technical analysis of GBPUSD cautioned that the pair was overbought, advising against long positions for retail traders. This advice remains relevant and applicable.

For investors considering going long, the 1.260 level presents a good and fair entry point, should there be any price adjustments in the GBPUSD pair.

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EURUSD Fundamentals

On Wednesday, the Euro struggled to maintain its strength above the 1.1000 level against the US Dollar, ultimately retreating to around 1.0990 as trading began in Europe. Conversely, the US Dollar, referred to as the Greenback, is wavering around 102.70, despite recovering from earlier dips in the 102.50-102.45 range, as indicated by the USD Index (DXY).

The current monetary policy landscape remains stable for now. However, investors are speculating about potential interest rate reductions by the Federal Reserve (Fed) and the European Central Bank (ECB) come spring 2024.

Attention in the Eurozone is now turning towards Germany’s forthcoming release of preliminary inflation data for November. Meanwhile, in the US, the spotlight is on several key economic indicators, including the advanced Q3 GDP Growth Rate, preliminary figures for Goods Trade Balance, and Mortgage Applications as monitored by the MBA. The day in North America will conclude with the publication of the Fed’s Beige Book.

Adding to this, Cleveland Fed’s Loretta Mester, a hawkish figure and 2024 voter, is scheduled to speak, potentially offering further insights into future economic policies.

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US Stock Futures Rise: A Sign of Economic Optimism

FxNews - On a recent Wednesday, the US stock market showed signs of optimism before the market opened. Futures, which are contracts to buy or sell assets at a later date for a price agreed upon now, indicated an upward trend. Both the S&P 500 and the Dow Jones, two major stock market indices, were expected to rise by approximately 0.3%. The Nasdaq 100 futures, representing a third significant index, were poised to see an even more substantial increase of nearly 0.4%.

Factors Influencing the Market

Several factors contributed to this positive outlook. First, comments from officials at the Federal Reserve, the central bank of the United States, suggested a more accommodating monetary policy. They hinted that the period of increasing interest rates might be over, raising hopes of reduced borrowing costs in the coming year. This change in tone from the Fed can make it cheaper for individuals and businesses to borrow money, potentially stimulating economic activity.

Additionally, a decrease in Treasury yields, which are the returns on government securities, was seen as favorable for stocks. Lower yields often make stocks more attractive to investors compared to bonds.

Key Economic Indicators and Corporate News

Investors were also anticipating the release of revised figures for the US Gross Domestic Product (GDP) growth and initial data on corporate profits. GDP growth rate is a crucial indicator of the overall health of the economy, reflecting the total value of goods and services produced over a specific period. Positive GDP growth suggests a thriving economy, while a decline can indicate economic challenges.

On the corporate side, General Motors (GM) saw its shares jump over 5% in premarket trading. This surge was a reaction to the company's announcement of a $10 billion share buyback program, indicating confidence in its future financial performance. In contrast, shares of Las Vegas Sands, a major hospitality and gaming company, fell by about 5% after news that its largest shareholder planned to sell $2 billion worth of shares.

Assessing the Economic Implications

The overall sentiment in the US stock market on this day was positive, which is generally beneficial for the economy. Rising stock prices can increase wealth for investors and boost consumer confidence, leading to more spending. When companies like GM announce significant share buybacks, it often reflects their confidence in their financial health, which can further stimulate economic growth.

However, large sales of shares, like in the case of Las Vegas Sands, can sometimes raise concerns about a company's future prospects, potentially impacting investor confidence.

Impact on the Economy

• Positive Indicators: Higher futures, dovish Federal Reserve comments, and rising corporate shares like those of GM are all positive signs for the economy. They indicate investor confidence and a potentially growing economy.
• Cautionary Signs: Large share sales and fluctuations in key economic indicators like GDP growth and corporate profits require careful monitoring as they can signal shifts in economic stability.

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EURUSD: Testing the Waters at 1.096

 

In the EURUSD market, the bears are currently putting pressure on the 1.096 support level. At the same time, the RSI indicator has exited the overbought zone, yet there's a noticeable divergence present. If the EURUSD manages to stay above 1.0963, the market sentiment is likely to remain bullish.

 

 

However, if the price of EURUSD dips below 1.0963, this bullish trend may pause. In this case, the focus will shift to how the market responds to the pivot point, which is also backed by the lower boundary of the bearish channel.

 

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USDCAD Eases Selling Pressure, Eyes 1.35 Level

Solid ECN - Today, the USDCAD experienced a reduction in selling pressure, settling below the flag's median line. The pair is now finding its footing below the middle line, around the 64.8% Fibonacci level on the 4-hour chart. A bearish movement towards 1.35 is anticipated, matching the 78.6% Fibonacci level.

A closer look at the 4-hour USDCAD chart reveals a divergence in the Awesome Oscillator with its bars turning green, while the RSI indicator suggests the likelihood of a price correction. The pair is currently restrained by the 23.6% Fibonacci level, which is preventing it from recovering more of its recent losses. 

As long as it stays below this level, the price is expected to fluctuate within the 1.35 to 1.36 range.

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How Hong Kong’s Retail Sector Slowed Down in October

In October 2023, Hong Kong’s retail sector grew by only 2.7% compared to the same month last year. This was a big drop from the 10.0% growth rate in September 2023. It was also the lowest growth rate since December 2022.

One of the main reasons for this slowdown was the decline in sales of some essential items, such as food, drinks, tobacco, fuels, and consumer durable goods. These items are usually bought by local residents for their daily needs. However, due to the high inflation and the COVID-19 pandemic, many people reduced their spending on these items.

Another reason was the weak demand for luxury goods, such as jewellery, watches, clocks, and valuable gifts. These items are usually bought by tourists and wealthy customers. However, due to the travel restrictions and the political unrest, many tourists and investors stayed away from Hong Kong.

On the other hand, some categories of retail sales still performed well in October 2023. These included clothing, footwear, and other consumer goods. These items are usually bought by young and fashionable customers. They also benefited from the online shopping platforms and the festive promotions.

Compared to September 2023, retail sales increased by 6.1% in October 2023. This was mainly because of the seasonal factors and the low base of comparison. However, this increase was not enough to offset the year-on-year slowdown.

The Impact of Retail Sales on the Economy

Retail sales are an important indicator of the economic health of a country or a region. They reflect the level of consumer confidence, income, and spending. They also affect the employment, tax revenue, and business activity of the retail sector.

Therefore, the slowdown in retail sales in Hong Kong could have a negative impact on the economy. It could reduce the income and profits of the retailers and their suppliers. It could also lower the tax revenue and the public spending of the government. It could also discourage the investment and the innovation of the retail sector.

However, the slowdown in retail sales could also have some positive effects on the economy. It could encourage the consumers to save more and spend less. It could also motivate the retailers to improve their efficiency and quality. It could also stimulate the diversification and the transformation of the retail sector.

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Lithium Prices Continue to Fall

The price of lithium carbonate, a key ingredient for making batteries, has dropped to CNY 120,000 per tonne. This is the lowest price since August 2021. The reason for this price drop is that there is more lithium than people need. People are not buying as many electric vehicles (EVs) as expected in China, which is the biggest market for lithium batteries. Instead, battery makers are using up their existing stocks of lithium, which they bought when the Chinese government gave them a lot of subsidies in 2021 and 2022. Some experts now think that there will be enough lithium for everyone until 2028. This is a big change from the previous predictions that there would be a shortage of lithium soon. In November 2022, the price of lithium was as high as CNY 600,000 per tonne.

The situation is not much better in other countries. In the US, people are not buying many EVs either, because they have to pay more interest on their loans. This makes them less willing to spend money on big items like cars. Meanwhile, the production of lithium is still going strong. Mineral Resources, the second-largest producer of spodumene, a type of lithium ore, plans to double its output in Western Australia next year.

The Effect of Lithium Prices on the Economy

Lithium prices are an important indicator of the economic health of the battery and EV industries. They show how much demand and supply there is for lithium, and how much profit and cost there is for the producers and consumers of lithium. They also affect the employment, tax revenue, and business activity of these industries.

Therefore, the fall in lithium prices could have a negative impact on the economy. It could reduce the income and profits of the lithium miners and battery makers. It could also lower the tax revenue and the public spending of the governments that support these industries. It could also discourage the investment and the innovation of these industries.

However, the fall in lithium prices could also have some positive effects on the economy. It could encourage the consumers to save more and spend less. It could also motivate the lithium miners and battery makers to improve their efficiency and quality. It could also stimulate the diversification and the transformation of these industries.

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EURUSD

The EURUSD currency pair's downtick slowed near the lower line of the bullish flag. This pivotal mark is additionally supported by the Ichimoku cloud. For the bullish trend to maintain, the price should hold above the cloud and/or the 23.6% Fibonacci level. In this case, we can expect the EURUSD to continue its upward trend inside the flag.

To trigger a long trade on the pair, it is recommended to patiently wait for the technical indicators to support the bullish scenario. The Stochastic oscillator hovers in the oversold zone, while the ADX indicator is about to cross above the 20 level. While the ADX indicator demonstrates that the trend is lacking momentum, the stochastic oscillator or RSI should cross above the signal lines.

Conversely, the bullish flag will be invalid if the bears close and stabilize the price below the 23.6% Fibonacci level. Please note, this event won't invalidate the bullish trend as long as the EURUSD hovers above the Ichimoku cloud.

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UK Housing Market Sees Hope: Latest Trends in House Prices

In recent months, the housing market in the United Kingdom has seen a notable shift. As of November 2023, the Nationwide House Price Index, a key indicator of house price trends, reported a year-on-year decrease of 2%. This figure is particularly interesting as it's the smallest drop in house prices we've seen in the past nine months, since February. What's more, this reduction is less than what experts had predicted, which was a decline of 2.3%.

Month-on-Month Changes and Economic Impacts

If we look at the month-to-month changes, there's a small but positive sign. House prices in November edged up by 0.2% compared to October, which itself had seen a 0.9% increase. This upward trend, albeit slight, is a change from the continuous decline observed over the past ten months.

The Role of Interest Rates

A key factor in this scenario is the change in interest rate expectations. These expectations have recently gone down, leading to a decrease in longer-term interest rates. This is important because these rates heavily influence the pricing of fixed-rate mortgages, a common choice for homebuyers.

Robert Gardner, Nationwide's Chief Economist, commented on this development. He believes that if these trends continue, they could significantly ease the financial burden on potential homebuyers. This easing could, in turn, revive activity in the housing market, which has been somewhat subdued in recent times.

Economic Assessment: Beneficial or Detrimental?

When assessing the economic implications of these developments, it's a mixed bag. On one hand, falling house prices can indicate a weakening economy and lower consumer confidence. On the other hand, a slower decline in prices, along with reduced interest rates, could encourage more people to enter the housing market, potentially stimulating economic activity. This could be beneficial for the economy, as a robust housing market often reflects and contributes to overall economic health.

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France's Manufacturing Sector Faces Continued Challenges in 2023

In November 2023, the French manufacturing sector faced its tenth straight month of downturn, indicating persistent challenges in the industry. According to the S&P Global France Manufacturing PMI, the index saw a slight increase to 42.9, a marginal improvement from the preliminary estimate of 42.6 and a small step up from 42.8 recorded in the previous month. Despite this slight uptick, the situation remains concerning as this represents the most significant contraction since May 2020.

Factors Behind the Contraction

This continued decline can be attributed to a notable drop in demand. The new orders that factories received kept falling, mostly due to overall weaker market conditions. As a consequence, manufacturing output saw its sharpest decline since May 2020. This decline in production and orders has led to various repercussions within the manufacturing sector. Factories have been reducing their workforce, cutting down on purchasing activities, and experiencing significant drops in their stock of inputs, the largest since May 2020.

Price Trends and Future Outlook

On a somewhat positive note, the rate of input price inflation has stabilized, following a six-month trend of decreasing prices. However, looking forward, the mood among manufacturers remains overwhelmingly gloomy. With expectations of reduced orders, especially from the automotive and construction sectors, there's a strong sense of pessimism for the year ahead.

Economic Implications

The prolonged contraction in France's manufacturing sector is a concern for the economy. A healthy manufacturing sector is often a sign of a robust economy, as it creates jobs, stimulates trade, and contributes to GDP growth. The current downturn could lead to job losses, reduced consumer spending, and a slowdown in economic growth. However, the stabilization in input prices may provide some relief to manufacturers, potentially easing cost pressures.
 

 

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Bitcoin Bulls Break Resistance, Eye $40,000 Next

The price of bitcoin climbed over the 38,250 level in the latest trading session, continuing its bullish trend. However, the bitcoin bulls are facing the middle line of the bullish flag as their next obstacle. The technical indicators show that the RSI still has some space to reach the overbought zone. At the same time, the awesome oscillator bars changed to green, indicating the strength of the upward movement.

The middle line of the flag is unlikely to resist the buying force. As a result, analysts at FxNews predict that the BTCUSD price will go up and target the $40,000 mark, which matches the top line of the flag.

This analysis is valid as long as the pair is trading within the bullish flag.

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USDCAD Downtrend Continues, Fibonacci Levels in Focus

 

The downward trend of USDCAD has reached 1.352, which pushed the Stochastic oscillator into the oversold zone. At the same time, the RSI indicator is also approaching the oversold level, which suggests that the pair may enter a consolidation phase in the next week.

 

 

In this case, the pair may face the %38.2 level of the Fibonacci as a resistance. This level could attract more sellers to put more pressure on the pair and extend the downtrend to the %50 level Fibo and then the %61.8 level.

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Spain's Tourism Bounces Back to Pre-Pandemic Heights

In October 2023, Spain saw a significant surge in foreign tourist arrivals, marking a 13.9% increase compared to the previous year, with a total of 8.2 million visitors. This figure not only surpasses last year's statistics but also shows a 7.8% growth from the pre-pandemic levels of October 2019, highlighting a robust recovery in the tourism sector.

The majority of these tourists came from the United Kingdom, accounting for 1.7 million visitors (12.2% increase), followed by Germany with 1.1 million visitors (8% increase), and France with 990,000 visitors (9% increase). Additionally, there was a significant rise in visitors from the United States (25.7% increase), the Netherlands (19.6% increase), and Ireland (15.1% increase), indicating a growing global interest in Spanish destinations.

Catalonia emerged as the most popular region, attracting 20.4% of the total tourists. Reflecting on the first nine months of 2023, Spain welcomed 74.7 million international visitors, which is 18.2% more than in 2022 and marginally higher (0.2%) than the pre-pandemic figures of 2019. These numbers signify a strong recovery and a positive outlook for Spain's tourism industry, re-establishing its position as a top global destination.

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EURUSD at a Crossroads: Resistance Clash and Trend Predictions

The EURUSD pair is approaching a critical point, the 23.6% resistance level, which interestingly aligns with the Ichimoku cloud. Currently, the technical indicators are hinting at a potential sell-off. If the price manages to remain under the cloud, there's a strong chance we'll see a further downward trend, potentially reaching the 38.2% level, and maybe even the 50% mark.

However, there's another side to consider. Should the EURUSD pair successfully break through the 23.6% resistance and maintain its position above this level, it would suggest a shift in momentum. In such a scenario, the current bearish outlook would no longer be valid, indicating a possible change in trend.

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Latest on GBPUSD: Bullish Flag & Ichimoku Insights

The GBPUSD currency pair is trading inside the bullish flag and above the Ichimoku cloud, indicating a bullish trend. However, the ADX indicator is approaching the 20 level, which suggests that the trend is weakening, and the pair is losing momentum. We expect the value of GBPUSD to rise again and target the upper band of the bullish flag, which is a continuation pattern of the previous uptrend.

On the other hand, the bullish scenario would be invalidated if the GBPUSD price falls below the cloud, which would signal a bearish reversal.