Morning Wrap (21.10.2024)

• We are beginning a new week of trading on international financial markets. As a reminder, Friday's session saw sizable rallies in precious metals (gold and silver), which knocked out their historical or multi-year peaks. What's more, Bitcoin broke out above $67,000, paving the way for a retest of psychologically important resistances near $70,000.

• On both classes of instruments, the observed movements are extended today, with gold gaining 0.3%, silver adding more than 1% and Bitcoin 0.5%.

• In Asia, the number 1 topic today turns out to be the PBoC's decision to cut annual and 5-year lending rates. However, the decision had already been announced earlier by Chinese officials, so the markets' reaction to the decision is negligible today.

• Chinese mainland indices are gaining nearly 1% today, while the Hang Seng is losing 0.7% in value.

• At the same time, futures are pointing to lower openings in today's European and US sessions.

• In the FX market today, we are primarily seeing sizable gains in the Japanese yen, with the Canadian dollar and British pound, among others, trading under pressure.

• UBS raised its forecast for China's full-year real GDP growth in 2024 to 4.8% (from 4.6%).

• Israeli Prime Minister Netanyahu said he is undeterred by his war aims after a reported drone attack on his private residence. Brent crude oil is gaining nearly 0.2% today.

• The macro calendar for today's session is relatively empty. On Monday, representatives of the Federal Reserve will speak, including Logan, Kashkari, Schmidt, Daly. In Europe, however, investors will learn PPI data from Germany and data from the Polish labor market in the morning.

Heatmap showing volatility on individual currency pairs at the moment. Source: xStation