DBG Markets: Market Report for Oct 10, 2024

Market Overview

Israel Intensified Attacks. What Next？

Israel‘s multifront war continues as they intensify their attacks over the past five days. What is Israel’s plan？ So far, we do not know where this is heading. Speculation is rising, and discussions are ongoing. Some say they will hit Nuclear facilities but Biden's straight up denial of that scenario lessens the possibility of this. Others speculate that they will hit Iran's Oil facilities to go after their pocket, or go for the classic military bases and production facilities.

Right now, we are seeing increased conflict in Lebanon, where Netanyahu has expanded the ground invasion. Just a few hours ago, Netanyahu issued another warning to Lebanon, stating, “Lebanon will be like Gaza.” He gave the people a choice: remove Hezbollah from power or face the same fate as Gaza.

Israel has also intensified airstrikes on Beirut, targeting Hezbollah's top leaders. Having killed Hassan Nasrallah, Netanyahu now claims they have killed his successor Hashem Safieddine, and the successor to Safieddine. However, the Israeli Defense Forces (IDF) are still uncertain whether Hashem Safieddine was killed. Despite this, the conflict continues to escalate, even as Hezbollah expressed support for a ceasefire. Netanyahu remains resolute, making it clear that he will not slowdown for either the Hezbollah or Iran.

Meanwhile, Israeli media recently reported secret talks between the U.S., Arab states, and Iran regarding a de-escalation deal to end all wars. Unlike previous peace deals, this one faces added pressure due to the urgent threat of a regional war. The involvement of the Arab states may offer Netanyahu a unique proposal: a normalization deal. Will this come to fruition？ Without certainty, we must wait and see.

These conflicts could have serious repercussions on global markets and economies. The situation may lead to extreme poverty, unemployment, and a general slowdown in various countries. The most alarming possibility is whether this could threaten the current world order, raising the question of whether we are witnessing the spark of World War III.

GOLD - There is no change in our reading of GOLD after relatively flat trading yesterday, staying within the S&D zone as seen in the chart. We are waiting for any significant move out of the area to determine where the next run will be.

SILVER - SILVER has behaved similarly, and no particular change in our reading is required. We are waiting for further trading to occur in this market to see how it proceeds.

DXY - The Dollar is currently up, gaining more strength and momentum than we had expected. While we anticipated a break above 102.775, it happened earlier than the anticipated data release. Currently, we are pricing in a chance for this market to rise further with a small structural correction. The upcoming data is expected to be positive, possibly ruling out the chance of a rate cut this November.

GBPUSD - The Pound is still consolidated, with a slight breakout of structure under the S&D zone. Our reading on this does not change until further notice.

AUDUSD - The Aussie dollar has slowed its descent, finding support at 0.67142. We continue to view this market positively, with a chance of it falling further. However, we are waiting for more trading to occur before analyzing it further, as the possibility of a ceasefire in West Asia could push this market up in the short term.

NZDUSD - Similar to the Aussie dollar, we may see some recovery for the Kiwi, despite markets pricing in another rate cut this coming November.

EURUSD - The Euro broke lower and is now showing weakness in the markets. We are waiting to see where this will go and continue pricing it depending on the decisions regarding rate cuts in the coming week. The European Central Bank (ECB) is expected to cut its deposit rate by 25 basis points on Oct. 17 and again in December, according to over 90% of economists polled by Reuters, who now foresee a quicker decline in eurozone inflation.

USDJPY - The Yen shows significant weakness, breaking out of the upper boundary of this market. We are waiting to see where this will go, but currently, the bullish structure remains intact.

USDCHF - The S&D zone drawn at the peak of the Franc proves to be an important price point, leading to a price drop after reaching that zone. However, with the most recent bullish momentum, we can see that prices are most likely to continue moving upward. The intensified battles ongoing in West Asia will cause many to shift to the U.S. dollar.

USDCAD - The CADs overly bearish momentum is starting to stretch prices, with it moving toward 1.37261. We are waiting to see where the peak might be, but with the current trajectory, we may continue to see CAD weakness in the markets.