Markets Calmly Awaiting the Election Results

Wednesday’s Asian session brought us important inflation data from China, where we finally see some cooling down on its running inflation. The previous number was 2,8%, experts were expecting 2.4% and the number that hit our screens in the middle of the night was 2.1%. Can that be a sign for other major economies? It could be, but we need to remember the zero-Covid policy in China, which is strongly affecting domestic demand, hence the lower inflation. Remember, other economies don’t have that factor to contend with…

We’re still waiting for the final results of the US Elections but so far, it looks like there won’t be any surprises. The Democrats will keep the Senate and the Republicans will take control of the House of Representatives. The problem is that the election is still too close to call and anything can happen. The USD continues its bearish correction, while stocks remain firm. Yesterday, major indices including the Dow Jones and DAX, managed to set new mid-term highs, so there, the positive sentiment persists.

A few interesting findings from the Forex market. EURUSD has remained above parity and yesterday, managed to set new, mid-term highs. USDJPY dropped sharply yesterday but managed to defend the 145 support (key in the long-term) and used this area to initiate a bullish correction today.

An interesting thing happened yesterday on Gold. XAU finally managed to break the 1680 USD/oz resistance and this bullish attack can be considered a major buy signal. Better late than never. Gold is finally surging during times of rising inflation!

One thing worth mentioning is that this rise happens while oil drops sharply, so we can’t say that this is just a casual move caused be a weakening USD.

The calendar today is surprisingly empty for a Wednesday. Oil traders will definitely look on the Crude Oil Inventories data where we are expecting a rise of 0.3M barrels. But worry not, you won’t be missing tier-1 data for long. Tomorrow, we’ll be getting the US’s inflation data and those are the numbers that everybody’s waiting for!