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The US dollar is generally higher against other major currencies and has started to recover against several emerging market currencies with pairs such as USD/MXN, USD/INR or USD/CNH trading.
Sentiment in equity markets was slightly mixed. While US indices such as the US Tech 100 and US 500 traded slightly lower, European markets such as the Germany 40 and Europe 50 continued to rise. While these indices were under some pressure on Monday morning, Chinese bourses such as the China A50 and Hong Kong 50 were up close to 2%.
German producer price index (PPI) data for October will be released this Monday morning. Overall, analysts expect a significant inflation rate, albeit at a lower level compared to the previous month, with the PPI annualized rate of increase at 45.8% and monthly inflation at 2.3%, which is rarely reached in normal times. On an annual basis.
We know the results of the Chicago Central Government National Activity Index from USA. The index’s last reading was 0.1, which isn’t a bad thing because a zero level indicates that the economy’s growth was at historical average levels, according to the Chicago Fed’s official website.
New Zealand trade balance data will be released later during the Asia-Pacific trading session.
EUR/USD
The EUR/USD pair fell below the 1.03 level for the first time in ten days overnight on Monday as the dollar slowly but steadily gained momentum over the past few days.
US fundamentals released on Friday were somewhat mixed, as existing home sales in October came in slightly better than expectations at 4.43 million, although it was already down 28.4% on a year-over-year basis. Meanwhile, leading indicators deteriorated further, falling to -0.8% m/m from -0.4% in the previous reading.
Looking ahead to next Wednesday, PMI manufacturing and services figures for the Eurozone and Germany are expected, followed by Friday, GDP figures for Germany for the third quarter.
WTI oil
Oil fell for a third straight day on Friday, trading at the lowest levels since late September at times. On a weekly basis, WTI crude oil prices fell nearly 10%, the worst weekly performance since July.
The US Baker Hughes oil rig count rose slightly from the previous week, reaching 623, a new post-pandemic high.
As usual, the American Petroleum Institute (API) will release its weekly statistics report this Tuesday, followed on Wednesday by the Energy Information Administration (EIA) with its weekly petroleum report, which also includes data on weekly changes. Crude oil, gasoline and distillate stocks data.
$500
Equity markets again ran relatively steady with somewhat mixed results between different markets. While the US 500 index ended Friday’s session modestly higher, the US Tech 100 index finished in the red. However, on a weekly basis, both ended up lower.
As oil prices continued to decline, stocks in the energy sector ( US Energy ETF -0.79%) underperformed the market average. Stocks associated with the at least partially legalized cannabis business (US Cannabis ETF -3.77%) also fell. Yes, from a weekly perspective, this ETF was still in the green at the end of Friday’s session due to its strong performance earlier this week.
Palo Alto Networks (+6.90%) was one of the best performing stocks in the market after its strong quarterly results, which saw the company’s revenue grow 50% year-over-year and reported strong earnings results. The company issued an outlook indicating continued growth, as revenue is expected to reach $1.630-1.66 billion in the second quarter, up from $1.6 billion in the first quarter.
As earnings season winds down, more major companies will not release quarterly results this week than in previous weeks. Even so, some market-shattering events could happen, such as Zoom Video Communications -this Monday- or companies like Autodesk, Best Buy and Baidu giving out numbers.
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