DBG Markets: Market Report for Oct 15, 2024

Market Overview

Iran has stated there is no basis for indirect talks with the U.S. until the issues in West Asia are resolved. In other words, no contact or chance for peace talks and agreements for de-escalation before they resolve their conflicts with Gaza and Lebanon. Oil prices have dropped despite rising tensions. Sources indicate that oil demand has decreased. This has led to lower oil prices even amidst escalation. However, there remains a possibility of a sudden surge in oil prices if Israel targets Iranian oil facilities, which could push oil prices past $100/barrel. The Central Banks conitnue to watch the developments in this war, particularly with Oil's prices on the line. A sudden Oil inflation may change the course of the markets--despite active efforts of keeping everything in check.

GOLDGOLD remains flat after yesterday‘s trading, consolidating slightly below 2653.515. A bearish trend may continue if 2643.644 holds as support and 2653.515 remains as resistance. We await further price movements to determine the market’s direction.

SILVERSILVER remains consolidated without significant movement. We will observe further price action for confirmation.

DXY The U.S. central bank initiated its easing cycle with a 50 basis point cut at its September policy meeting. Currently, traders assign an 89% chance of a 25 bps cut in November, with 45 bps of easing expected for the year. (FEDWATCH)The Dollar is rising due to a positive economic outlook and increased trading in safer alternatives, despite expectations of moderate rate cuts in November and December.

GBPUSDBOE Governor Andrew Bailey expressed optimism that cost-of-living pressures have not been as persistent as feared. However, he warned that the Bank of England is monitoring the Middle East crisis, concerned about a potential oil price shock. This caution is reflected in the Pound's recent technical downward trend. We continue to monitor the markets reaction to Middle East tensions. However, chances of a more aggressive rate cut in the coming months until the end of the year is on the table if things in Middle East align.

AUDUSD The Aussie dollar remains flat and consolidated between 0.67531 and 0.67142. Despite the Dollars recovery, prices are struggling to break lower. We await further price action for confirmation.

NZDUSD No changes are noted in the Kiwi as prices remain stagnant and consolidated. We await further price movements for clarity.

EURUSD The Euro is expected to see rate cuts this week. The European Central Bank (ECB) is poised to deliver its third interest rate cut of the year during its Thursday meeting, as inflation risks ease faster than expected. Sources suggest the markets are pricing in a 25-bps reduction in October and a follow-up cut to 3% at the ECB's December meeting. Market expectations for quicker monetary easing have increased, supported by dovish remarks from ECB officials and cooler inflation data from eurozone states like Germany. Bank of France Governor Francois Villeroy de Galhau confirmed that an October rate cut is "very likely," and hinted at further cuts.

USDJPY The Yen continues to rise as expected, with no changes to our readings.

USDCHF The Franc has broken upward after failing to breach 0.85541. We continue to expect further buying momentum until the price signals a shift in direction.

USDCAD Oil prices remain low due to weaker demand, despite tensions in the Middle East. However, we anticipate potential changes if the situation in West Asia intensifies. We will continue to monitor this market for developments.