Earnings Season is In Focus
Several largest American companies will publish their financial results this week. BTCUSD and XAUUSD are skyrocketing. What's going on in the markets?
Chinese Economy Has Bounced Off the Bottom
Let’s go through the most exciting events for today.
The situation in the Chinese economy
The Chinese economy showed growth of 4.9% in the third quarter; the pace decreased compared to 2Q22 at 6.3%, which is better than market estimates of growth of 4.4%. Even though the figures were higher than expected, the numbers remain modest. Forecasts from most banks and analysts imply growth this year of just above 5 percent. The current trajectory, in principle, allows us to reach this figure at the end of the year.
Chinese investors sold the most US securities in four years. According to US Treasury data released Wednesday, the bulk of the $21.2 billion in sales in August came from US Treasuries and stocks.
'Cable' declines
The growth of consumer prices in the UK amounted to 6.7% in September. The annual figure is moving away from the maximum levels reached in October last year. The most significant contribution to the monthly change in CPI was made by lower prices for food, furniture, and household items. But prices for gasoline transport and hotel services are rising.
GBPUSD keeps falling. The resistance is at 1.2220, while the support line is at 1.2040.
Is American economy strong?
American Banks continued publishing their reports. Morgan Stanley reported the revenue at $13.3B vs. the expected $13.25B. EPS was released at $1.38. Net income fell to $2.2B vs. $2.9B in the previous month. Stocks reacted negatively and fell to $73.37.
According to the Fed’s Beige Book, overall prices continued to rise at a moderate pace, and most counties have seen little or no change in economic activity since the September report. Meanwhile, at the last FOMC meeting, Powell said that strong economic growth could prevent inflation from falling. If the economy turns out more robust than expected, the Fed must do more.
Oil prices
Oil reserves in the United States unexpectedly dropped by 4.5 million barrels over the week. Experts surveyed by S&P's commodities division expected an average reduction of only 30,000 barrels. The picture is approximately the same with gasoline and distillates: a drop of 2 million 400 thousand and 3 million 200 thousand, respectively, with much more modest expectations.
The United States has taken the first steps to end decades of sanctions that have stifled oil exports from Venezuela. At the moment, the relief is temporary: it is a six-month license allowing operations with the oil and gas sector of the republic. According to Bloomberg, in the foreseeable future - 6 months or more - production could increase by 200,000 barrels of oil per day, or about 25%.
XBRUSD has almost returned to its 50MA. From the technical point of view, the price formed a doji pattern. XBRUSD bounced from the resistance cluster 89.10 – 90.50. Bears may try to push the price to the support 87.10.
XAUUSD is trying to break 1950. If the bulls break the resistance – the next target will be 1990.
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