Brent Crude Stumbles As Market Sentiments Turn Cautious

Commodity

Economic

Summary:

Brent crude oil prices have continued to slip, touching 71.74 USD a barrel on Tuesday.

Brent crude oil prices have continued to slip, touching 71.74 USD a barrel on Tuesday. This marks a downturn influenced by China’s underwhelming stimulus measures. The market’s lack of confidence in China’s rejuvenation efforts, coupled with persistently weak inflation and subdued energy demand within the country, has led to this downturn.

Compounding the downward pressure on oil prices, the US dollar’s strength makes commodity investments less attractive, as a robust USD typically dampens demand for dollar-priced assets like oil. However, the geopolitical landscape, which often serves as a driver for oil price volatility, appears stable for now. With reduced tensions in the Middle East, some risk premiums previously embedded in Brent prices have been alleviated.

Investors eagerly anticipate the monthly OPEC report expected later today, which is set to provide deeper insights into the supply-demand dynamics. This report has the potential to influence market sentiments significantly and is a key focus for investors as they consider global oil demand forecasts for 2025.

Brent technical analysis

On the H4 chart of Brent, the market continues to develop a broad consolidation range around the level of 73.66, extending to the level of 71.33. Today, we expect a growth link to the level of 73.66. After reaching this level, developing another downside structure to 71.22 is possible. Further, we will consider the probability of the beginning of the growth wave development to 76.00, with the prospect of the trend’s continuation to 80.80, the local target. Technically, this scenario is confirmed by the MACD indicator. Its signal line is under the zero level and is directed downwards.

Brent Crude Stumbles As Market Sentiments Turn Cautious_1

On the H1 Brent chart, the market has formed a consolidation range around 73.66 and worked out a downward wave to 71.33, the local target. Today, a correction link for this downward wave is likely with a target at 73.66, followed by another wave of decline to 71.22. At this point, the potential of the downward wave can be considered exhausted. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is under 50 and is directed strictly downwards to 20. Brent Crude Stumbles As Market Sentiments Turn Cautious_2

Source: RoboForex Ltd

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Glendon

Economic

Technical analysis plays a critical role in helping traders understand market trends, forecast price movements, and develop effective trading strategies. By analyzing historical price data and using various indicators, traders can gain insights into potential market conditions, identify entry and exit points, and optimize their risk management strategies. This article explores the top technical analysis tools used by traders and how they can enhance your trading approach.

1. Moving Averages (MA)

Moving averages are one of the most widely used technical analysis tools in the trading world. They smooth out price data over a specified period, helping to identify trends and market direction. The two most common types are the Simple Moving Average (SMA) and Exponential Moving Average (EMA).

Simple Moving Average (SMA):

The SMA is calculated by averaging the closing prices over a specified number of periods. This type of moving average is useful for identifying long-term trends but can be slower to react to price changes.

Exponential Moving Average (EMA):

The EMA gives more weight to recent prices, making it more responsive to price fluctuations. Traders often use the EMA to spot shorter-term trends.

Moving averages are particularly useful when combined with other indicators like the Relative Strength Index (RSI) or Moving Average Convergence Divergence (MACD). When the price crosses above or below a moving average, it can signal a potential buy or sell opportunity.

2. Relative Strength Index (RSI)

The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. It oscillates between 0 and 100 and is primarily used to identify overbought or oversold conditions in a market.

RSI above 70 typically indicates an overbought market, suggesting that the asset might be due for a pullback.

RSI below 30 suggests an oversold market, which could be a signal that the asset is undervalued and due for a reversal.

Traders often use the RSI in conjunction with other indicators to confirm trends and refine their entries and exits. The RSI can also help in spotting divergence, where the price moves in one direction while the RSI moves in the opposite, signaling a potential reversal.

3. Moving Average Convergence Divergence (MACD)

The MACD is another essential technical analysis tool that combines both trend-following and momentum indicators. The MACD consists of two lines: the MACD line and the signal line.

The MACD line is calculated by subtracting the 26-period EMA from the 12-period EMA. The signal line is a 9-period EMA of the MACD line.

When the MACD line crosses above the signal line, it is considered a bullish signal, indicating a potential buying opportunity. Conversely, when the MACD line crosses below the signal line, it is seen as a bearish signal, suggesting a potential sell.

The MACD can also be used to identify divergence, which occurs when the price forms new highs or lows while the MACD does not, signaling a potential change in the trend.

4. Bollinger Bands

Bollinger Bands are volatility indicators that consist of three lines: the middle band (SMA), the upper band, and the lower band. The upper and lower bands are typically set two standard deviations away from the middle band, which represents the moving average.

When the price moves close to the upper band, it indicates that the asset may be overbought.

When the price moves near the lower band, it suggests that the asset may be oversold.

Bollinger Bands are particularly useful for identifying periods of low volatility, known as consolidation, and when the market may break out into a new trend. Traders often look for price action near the bands, followed by a significant move, which may signal the start of a new trend.

5. Fibonacci Retracement

Fibonacci retracement is a popular tool used to identify potential support and resistance levels based on the key Fibonacci levels. These levels are derived from the Fibonacci sequence and are used to predict areas where the price may reverse or stall during a trend.

The key Fibonacci retracement levels are:

23.6%

38.2%

50%

61.8%

100%

Traders use these levels to identify potential reversal points during pullbacks or retracements in a trend. For example, if a price is trending upwards and then starts to pull back, traders will look for support at one of these Fibonacci levels to anticipate the continuation of the trend.

6. Stochastic Oscillator

The Stochastic Oscillator is another momentum indicator that compares the closing price of an asset to its price range over a specific period. It ranges from 0 to 100 and is used to identify overbought and oversold conditions.

A value above 80 suggests the market is overbought, and a potential reversal could be imminent.

A value below 20 indicates an oversold market, potentially signaling a buying opportunity.

Traders typically use the stochastic oscillator in conjunction with other indicators, such as the RSI or MACD, to confirm potential signals and improve the accuracy of their trades.

7. Volume Indicators

Volume indicators are essential tools for traders to gauge the strength of a price movement. Higher trading volume can signal increased interest in an asset and can validate the price movement, while lower volume may indicate a lack of commitment and potential for a reversal.

On-Balance Volume (OBV):

This indicator tracks the cumulative volume flow and is used to confirm price trends. An increasing OBV suggests strong buying pressure, while a decreasing OBV indicates selling pressure.

Volume Moving Average:

This tool smooths out volume spikes to identify long-term trends and volume anomalies.

Volume indicators are particularly useful in spotting breakouts, as a significant increase in volume during a price move can signal a strong trend continuation.

Conclusion

Technical analysis tools are invaluable for traders looking to understand market movements, identify trends, and make informed decisions. By mastering indicators such as moving averages, RSI, MACD, and Bollinger Bands, traders can develop a solid strategy that improves their chances of success. However, it’s important to remember that no single indicator is foolproof. Combining multiple tools and always considering market context is crucial to building a well-rounded trading approach.

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Glendon

Economic

Oil and natural gas are two of the most crucial energy commodities in the global economy, often seen as complementary in their use and importance. Many traders and investors wonder if these two energy markets rise and fall together, as they have an undeniable connection in terms of their roles in energy production, heating, electricity, and transportation. While oil and natural gas can sometimes move in tandem, the reality is more complex. Understanding the factors that influence both markets is essential for anyone involved in energy trading or investment.

The Basic Relationship Between Oil and Natural Gas

At first glance, it may seem logical to assume that the prices of oil and natural gas are closely related, given that they are both fossil fuels. Both commodities are primarily used for energy production, with oil predominantly used for transportation, heating, and industrial purposes, while natural gas is widely used for heating, electricity generation, and as a feedstock in the chemical industry. Furthermore, both markets are affected by geopolitical events, economic growth, and energy demand.

However, despite these similarities, the prices of oil and natural gas do not always move in the same direction. While there are periods when both markets rise or fall together, they can also exhibit independent price movements driven by different factors.

Why Oil and Natural Gas Prices Don’t Always Move in Tandem

Market Supply and Demand Dynamics

The most significant factor that influences the prices of both oil and natural gas is supply and demand. However, the supply and demand for these two commodities can be influenced by different factors, which may lead to independent price movements.

Oil Prices:

Oil is largely influenced by factors such as OPEC production cuts or increases, geopolitical tensions in oil-producing regions, and global oil supply levels. For example, when OPEC decides to reduce oil production to stabilize prices, it can lead to a rise in oil prices, while natural gas may not necessarily be affected in the same way.

Natural Gas Prices:

Natural gas, on the other hand, is more sensitive to seasonal changes, particularly in the colder months when demand for heating rises. Additionally, natural gas supply is often subject to local factors, such as pipeline capacity and storage levels, as well as weather conditions, which can cause prices to fluctuate independently from oil prices.

Global Weather Events

Severe weather events, such as hurricanes and cold winters, can disrupt the supply of natural gas more than oil, leading to significant price fluctuations. For instance, hurricanes in the Gulf of Mexico can damage natural gas production facilities and pipelines, leading to a sharp increase in natural gas prices. Oil prices may not experience the same volatility during such events since global oil supply chains are less vulnerable to localized disruptions.

Different Consumption Patterns

Oil and natural gas have different consumption patterns across industries and geographical regions. While oil is more widely used for transportation and industrial purposes, natural gas is increasingly used for electricity generation and heating in regions like North America and Europe. Changes in demand for electricity or heating can directly impact natural gas prices, while oil prices may remain unaffected by these seasonal changes.

Moreover, natural gas is often seen as a cleaner alternative to coal in electricity generation. As governments around the world push for more sustainable energy sources, demand for natural gas has risen in some regions, driving prices higher. Meanwhile, oil demand has been more stable in the transportation sector, which does not experience the same seasonal fluctuations.

Energy Substitution and Competition

In some cases, natural gas and oil can act as substitutes for each other, especially in the power generation sector. When natural gas prices rise significantly, utilities may switch to oil-based power generation, which can put upward pressure on oil prices. However, when oil prices rise, it may make natural gas more attractive for power generation, especially if the cost of natural gas is relatively lower. This substitution effect can sometimes lead to a correlation between the two markets, but it also means that price movements in one commodity may not always align with the other.

When Do Oil and Natural Gas Prices Move Together?

Although oil and natural gas prices can move independently, there are certain conditions where the two markets tend to move in sync:

Global Economic Growth

In times of strong global economic growth, both oil and natural gas demand tends to rise as industrial activity increases, transportation needs grow, and power generation requirements expand. During periods of global economic expansion, both oil and natural gas prices may rise together as demand for energy increases across the board.

Geopolitical Events

Geopolitical events, such as tensions in oil-rich regions like the Middle East or sanctions on major oil-producing countries, can cause both oil and natural gas prices to rise simultaneously. This happens because such events can affect energy supply chains globally, impacting both oil and natural gas markets. Additionally, in times of geopolitical uncertainty, investors may view both oil and natural gas as safe-haven assets, causing prices to move in the same direction.

Shifts Toward Energy Transition

As the world increasingly shifts towards cleaner energy sources, the relationship between oil and natural gas prices could become more interconnected. Both energy sources are being replaced in certain regions by renewable energy options like solar and wind power. However, natural gas is often seen as a transitional fuel, bridging the gap between coal and renewables. As a result, both oil and natural gas markets may face similar pressures from policy shifts and investments in alternative energy sources, causing prices to rise or fall in tandem.

Conclusion

In summary, while oil and natural gas prices are often linked by their shared role in the global energy market, they do not always rise and fall together. The two commodities can be influenced by different supply and demand dynamics, seasonal factors, weather disruptions, and consumption patterns. While they may move in sync during times of global economic growth or geopolitical crises, their price movements can diverge depending on regional factors and market conditions.

Traders and investors should carefully consider the underlying factors influencing each market before making investment decisions. By understanding the unique drivers behind oil and natural gas prices, traders can better navigate the complexities of these two important energy markets and develop more informed strategies.

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Glendon

Economic

Gold has long been regarded as a safe-haven asset and a store of value, particularly in times of economic uncertainty. As a result, it has attracted investors looking for stability and protection against inflation. However, gold isn't only for long-term investors—day traders also flock to gold for short-term opportunities, especially through exchange-traded funds (ETFs), which provide a liquid and cost-effective way to trade gold without holding the physical metal.

Day-trading gold ETFs can be an excellent way to profit from the volatility of gold prices, but it requires a strong understanding of the markets, effective strategies, and the right tools to manage risk. This article offers top tips for traders looking to maximize their success when day-trading gold ETFs.

What Are Gold ETFs?

Gold ETFs are financial instruments that track the price of gold and allow investors to gain exposure to gold without owning the physical commodity. The most popular gold ETFs, such as SPDR Gold Shares (GLD) or iShares Gold Trust (IAU), trade like stocks on major exchanges, providing traders with an easy and liquid way to invest in gold.

Unlike traditional investments in physical gold, which can involve storage and security concerns, trading gold ETFs allows for quick entry and exit, making them ideal for day traders. Gold ETFs are also typically less expensive to trade than buying physical gold or trading gold futures contracts.

Top Tips for Day-Trading Gold ETFs

Understand Gold Price Drivers

To be successful at day-trading gold ETFs, you need to understand what drives the price of gold. The value of gold is influenced by several factors, including:

Global Economic Conditions:

Economic uncertainty, inflation, and market volatility tend to drive gold prices higher as investors flock to safe-haven assets.

Interest Rates:

Gold is sensitive to interest rates. When central banks, such as the U.S. Federal Reserve, raise interest rates, gold can experience downward pressure since higher rates make other investments, like bonds, more attractive.

U.S. Dollar Strength:

Gold and the U.S. dollar typically have an inverse relationship. A stronger dollar can lead to lower gold prices, as it makes gold more expensive for foreign buyers.

Geopolitical Events:

Events such as political instability, trade wars, or conflicts can lead to higher demand for gold as a hedge against risk.

Day traders should stay informed about these macroeconomic factors and monitor news that may cause short-term price fluctuations in gold ETFs.

Focus on Liquid Gold ETFs

Not all gold ETFs are equally liquid, and liquidity is an essential factor when day trading. You want to trade ETFs that have a high average daily trading volume, ensuring you can enter and exit trades quickly without facing significant slippage.

Popular liquid gold ETFs include:

SPDR Gold Shares (GLD):

One of the largest and most traded gold ETFs, GLD offers a simple and effective way to track the price of gold.

iShares Gold Trust (IAU):

Another highly liquid gold ETF, IAU provides a cost-effective way to trade gold.

Invesco DB Gold Fund (DGL):

This ETF is designed to track the performance of gold futures contracts, offering a slightly different exposure to gold prices than physical gold-backed ETFs.

Use Technical Analysis for Short-Term Trends

Day traders rely heavily on technical analysis to make decisions based on price movements and chart patterns. When trading gold ETFs, you should focus on short-term charts and indicators that can help you identify entry and exit points.

Some essential technical indicators for gold ETF day traders include:

Moving Averages:

The 50-day and 200-day moving averages are crucial for identifying overall market trends. Short-term moving averages, such as the 5-period and 10-period, can help pinpoint precise entry points.

Relative Strength Index (RSI):

The RSI helps identify overbought or oversold conditions. When RSI is above 70, gold ETFs may be overbought, while an RSI below 30 signals oversold conditions.

MACD (Moving Average Convergence Divergence):

MACD is a momentum indicator that helps traders spot potential buy or sell signals when the MACD line crosses above or below the signal line.

Support and Resistance Levels:

Identifying key price levels where gold ETFs have previously reversed direction (support) or faced resistance (resistance) is essential for setting profit targets and stop-loss levels.

Trade with Risk Management in Mind

Gold prices can experience significant fluctuations, especially in times of geopolitical tension or economic uncertainty. As a day trader, managing risk is critical to protecting your capital. Implementing solid risk management strategies will help you stay in the game, even when trades don’t go as planned.

Here are a few risk management tips for day trading gold ETFs:

Set Stop-Loss Orders:

A stop-loss order ensures that your trade will automatically close if the price moves against you by a set amount. This limits your potential losses and prevents emotional decision-making.

Use Position Sizing:

Don’t risk too much on any single trade. Many traders use a risk percentage model, where they risk only 1–2% of their trading capital per trade.

Take Profits Early:

Don’t get greedy. Set profit targets at key resistance levels, and take profits when the ETF reaches your predetermined target.

Monitor Gold’s Correlation with Other Assets

Gold ETFs can sometimes show correlations with other assets, such as stocks, bonds, or commodities. For example, during times of market stress, gold often rises while equities fall, providing a potential hedge. Conversely, gold prices may drop when risk appetite in the market increases, and traders prefer equities or high-yield investments.

Understanding these correlations can provide day traders with additional insight into when to buy or sell gold ETFs. If you notice a strong correlation between gold and another asset class, it may help inform your decisions regarding timing and trade placement.

Stay Updated with Global News

Day-trading gold ETFs requires real-time information to react quickly to news events. Economic data releases, central bank announcements, and geopolitical developments can all impact the price of gold.

Make use of news feeds, economic calendars, and trading platforms with built-in news to keep you informed throughout the day. News that affects gold can move the market rapidly, and having the latest updates will help you make timely and informed decisions.

Consider Using Leverage Carefully

Some traders may use leverage to amplify their gains in gold ETFs. While leverage can increase your potential profit, it also increases your risk. Leverage should be used cautiously, and it’s essential to have a solid understanding of how it works before using it in day trading.

Conclusion

Day-trading gold ETFs can offer significant opportunities for profit, especially if you have a strong understanding of the market and employ sound trading strategies. By focusing on liquid ETFs, using technical analysis, implementing risk management techniques, and staying informed about global developments, you can increase your chances of success. Gold’s role as a safe-haven asset makes it a key player in any trader’s portfolio, and with the right approach, you can effectively capitalize on the short-term price movements of gold ETFs.

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Warren Takunda

Economic

Germany's economic sentiment took a sharp downturn in November, with analysts pointing to a potent combination of internal political gridlock and global uncertainties following Donald Trump's election in the United States.

Despite a brief recovery in October, the mood among Germany's financial experts has soured once more, weighed down by the enduring struggles of the country's coalition government and Trump's unpredictable trade agenda.

The ZEW Economic Sentiment Index, which tracks the outlook of up to 300 economists, bankers, and industry analysts, fell to 7.1 points in November, down from 13.1 in October and significantly below both expectations of 13 points and the one-year average of 25 points.

This latest ZEW reading is the index's second-lowest level in 2024. Views on Germany's current economic situation have also soured. The ZEW's current situation index, which tracks how financial market experts perceive present economic conditions, dropped by 4.5 points to -91.4.

Concurrently, the Federal Statistical Office confirmed on Tuesday that Germany's headline inflation rate rose to 2% year-over-year in October, up from 1.6% in September and in line with earlier estimates.

Eurozone outlook dims as political and economic risks rise

Germany's economic outlook mirrors broader concerns across the eurozone.

In November, the ZEW Economic Sentiment Index for the eurozone declined from 20.1 points in October to 12.5, missing the market's expected figure of 20.1. Similarly, views on the eurozone's current situation fell, with the index decreasing by 3.0 points to -43.8.

According to ZEW President Achim Wambach, Germany's economic sentiment reflects ongoing concerns over political and trade risks, particularly with respect to recent developments in the United States.

"Economic expectations for Germany have been overshadowed by Trump's victory and the collapse of the German government coalition," said Wambach.

He added that economic sentiment in the US is rising, while outlooks for China and the eurozone have grown more pessimistic.

Wambach explained, "The outcome of the US presidential election is likely to be the main reason for this...a very dynamic development of economic expectations."

Germany's internal challenges meet geopolitical tensions

Wambach highlighted that Germany's economic challenges are compounded by ongoing geopolitical tensions, with Donald Trump's trade policies expected to add further strain.

"Europe benefits from open markets.

"Trump, on the other hand, wants to introduce higher tariffs and reduce taxes for companies in the USA. This will exacerbate Europe's economic problems, as European companies will feel even more compelled to produce in the USA instead of delivering finished products there," he noted.

Wambach also stressed that Germany urgently needs a more proactive government to drive an investment agenda, bolster infrastructure, and focus on Europe's economic security.

He emphasised that merely adhering to fiscal conservatism won't solve Germany's structural issues: "Germany urgently needs a government capable of taking action that reduces climate policy to its efficient core," Wambach said, calling for a robust, investment-focused approach to ensure resilience amid mounting economic headwinds.

Market impacts: Stocks and euro decline

The German DAX index fell by 0.7% during Tuesday morning trading, mirroring declines across European indices, with the broader Euro STOXX 50 also falling by 0.7%.

Bayer AG, the pharmaceuticals and crop sciences giant, saw shares plummet over 11% due to underwhelming earnings and downgraded future projections.

Across the broader eurozone market, France's CAC 40 led losses with a drop of over 1%. Shares of luxury companies such as Kering and LVMH fell 4.6% and 2.2% respectively, with investors wary of Trump's proposed trade restrictions, which could harm European exports to key markets, including China.

Investor anxiety over a Trump administration was further stoked by speculation that US Senator Marco Rubio, a well-known hawk on China, could be tapped as Secretary of State.

Meanwhile, the euro continued its slide against the US dollar, falling 0.4% to reach a seven-month low at around 1.06 levels.

The single currency has lost value in seven out of the past eight weeks, largely due to expectations that Trump's trade policies could strengthen the dollar by curbing imports and stimulating domestic growth.

Source: Euronews

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Warren Takunda

Cryptocurrency

Crypto market capitalization has reached a new all-time high of $3.12 trillion — close to surpassing France’s gross domestic product (GDP).

On Nov. 11, total crypto market capitalization soared 7% over 24 hours, mostly on a surge in Bitcoin , which rallied to $89,500.

If the crypto market were a country, it would be the eighth-largest in GDP terms behind the United States, China, Germany, Japan, India, the United Kingdom and France.

Meanwhile, Bitcoin’s market cap alone is now over $1.77 trillion — larger than Spain’s GDP, according to the International Monetary Fund.

The last time the total crypto market cap was at $3 trillion was Nov. 15, 2021, shortly after Bitcoin reached its previous all-time high of $69,000 in the 2020-2021 bull market, according to CoinGecko, which tracks 15,129 coins from 1,149 crypto exchanges.

Crypto Market Cap Hits $3.1T High, May Soon Surpass France’s GDP_1

Change in the crypto market cap over the last month. Source: CoinGecko

The crypto market cap is now larger than that of tech giant Microsoft and is closing in on Nvidia and Apple, the world’s two most valuable companies, Google Finance data shows.

The Bitcoin price rally also pushed its market cap above that of silver again on Nov. 11. Crypto Market Cap Hits $3.1T High, May Soon Surpass France’s GDP_2

Crypto Market Cap Hits $3.1T High, May Soon Surpass France’s GDP_2

The fifth to 12th largest assets by market cap. Source: Companies Market Cap

Speaking to Cointelegraph, founder of 10x Research Markus Thielen said he expects Bitcoin dominance to “remain strong” as the crypto market cap moves toward $4 trillion.

“We anticipate Bitcoin’s dominance to remain strong, with the current rally primarily centered on Bitcoin and extending toward Ethereum and Solana.”

“We firmly expect Bitcoin to reach $100,000 before year-end.”

A Bitcoin price tag of $100,000 would take its market cap to nearly $2 trillion.Not everyone agrees with Thielen.Rachael Lucas, a crypto analyst at BTC Markets, told Cointelegraph that a crypto market rally toward $4 trillion would likely be driven by a “massive surge in altcoins,” thus causing a decline in Bitcoin’s dominance.

Thielen also said a few Solana-based tokens may outperform the market and many high-performers from the 2020-2021 bull cycle may underperform.

Bitcoin is currently priced at $89,478 — up 11% over 24 hours and within striking distance of crossing the $90,000 mark.

Source: Cointelegraph

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Stocks

December S&P 500 E-Mini futures are down -0.20%, and December Nasdaq 100 E-Mini futures are down -0.21% this morning as investors assessed the potential policy impact of Donald Trump’s cabinet selections, while also awaiting comments from Federal Reserve officials, the next round of quarterly results, as well as Wednesday’s release of a key U.S. inflation report.

In yesterday’s trading session, Wall Street’s main stock indexes closed higher. Bristol Myers Squibb climbed over +10% and was the top percentage gainer on the S&P 500 after rival AbbVie plummeted on news that its two mid-stage trials of a schizophrenia drug failed to meet their primary endpoints. Also, Tesla advanced more than +8% and was the top percentage gainer on the Nasdaq 100, building on last week’s +26% surge amid expectations that the incoming Trump administration will support the company. In addition, Salesforce rose over +6% and was the top percentage gainer on the Dow after CEO Marc Benioff announced the company would hire 1,000 workers to capitalize on the “amazing momentum” for its AI product. On the bearish side, Monolithic Power Systems tumbled about -15% and was the top percentage loser on the S&P 500 after Edgewater said the company’s Blackwell allocation was at risk.

Meanwhile, investors have raised their exposure to the U.S. equities benchmark to the highest level in three years following Trump’s victory, indicating that the rally might lose momentum, according to Citigroup analysts. The new administration is expected to include prominent China hawks, and strategists are considering the possibility that Trump’s economic policies could drive inflation and influence the Federal Reserve’s interest rate trajectory.

Market participants are looking ahead to the U.S. consumer inflation report for October, which is scheduled for release on Wednesday. The CPI is expected to accelerate to +2.6% y/y from +2.4% y/y in September, while the core CPI is projected to remain unchanged from September at +3.3% y/y.

“With the election and another rate cut in the rear-view mirror, the question is whether bulls can keep pushing the market to new highs,” said Chris Larkin at E*Trade from Morgan Stanley. “Aside from any potential profit-taking after such a strong surge, this week’s inflation data may determine whether the market pads its gains.”

U.S. rate futures have priced in a 68.5% chance of a 25 basis point rate cut and a 31.5% chance of no rate change at the next central bank meeting in December.

On the earnings front, notable companies like Home Depot , Shopify, Spotify , Sea Limited , Occidental Petroleum, and Flutter Entertainment are set to report their quarterly figures today.

The U.S. economic data slate is mainly empty on Tuesday. However, investors will focus on speeches from Fed Governor Christopher Waller, Richmond Fed President Thomas Barkin, Minneapolis Fed President Neel Kashkari, and Philadelphia Fed President Patrick Harker.

In addition, the Fed’s Senior Loan Officer Opinion Survey on Bank Lending Practices will be released today. The SLOOS report will provide updates on the conditions, supply, and demand of bank loans extended to U.S. customers.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.368%, up +0.39%.

The Euro Stoxx 50 futures are down -0.80% this morning as investors digested a new round of economic data and quarterly earnings reports. Mining, bank, and chemical stocks led the declines on Tuesday. Data from the Office for National Statistics showed on Tuesday that U.K. wages grew at a slower pace in September, while the unemployment rate rose more than anticipated, paving the way for further rate cuts from the Bank of England. Separately, final data released by the Federal Statistical Office confirmed that Germany’s annual inflation rate was 2.0% in October, up from 1.6% in September. Meanwhile, investors stay focused on the potential impact of Donald Trump’s policies on the European economy and the changing political landscape in Germany. Bloomberg reported on Tuesday that German Chancellor Olaf Scholz’s Social Democrats and opposition lawmakers have agreed to hold an early federal election on February 23rd. In corporate news, Bayer Ag slumped over -11% after cutting its full-year operating earnings guidance. Also, Brenntag Se plunged more than -9% after the chemicals distributor reported weaker-than-expected quarterly core profit.

U.K.’s Average Earnings ex Bonus, U.K.’s Unemployment Rate, Germany’s CPI, Germany’s ZEW Economic Sentiment Index, and Eurozone’s ZEW Economic Sentiment Index were released today.

U.K. Average Earnings ex Bonus came in at 4.8% in the three months to September, stronger than expectations of 4.7%.

U.K. Unemployment Rate was at 4.3% in the three months to September, weaker than expectations of 4.1%.

The German October CPI arrived at +0.4% m/m and +2.0% y/y, in line with expectations.

The German November ZEW Economic Sentiment Index has been reported at 7.4, weaker than expectations of 13.2.

Eurozone November ZEW Economic Sentiment Index stood at 12.5, weaker than expectations of 20.5.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -1.39% and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.40%.

China’s Shanghai Composite Index closed lower today as concerns over escalating Sino-American tensions further dampened sentiment following a series of disappointing economic data. Insurance and semiconductor stocks led the declines on Tuesday. At the same time, home appliance and energy stocks advanced. Data released after the market closed on Monday showed that Chinese banks extended 500 billion yuan ($69.1 billion) in new loans last month, a sharp decrease from September’s figure and well below the forecasted 770 billion yuan ($106.4 billion). “Weak loan growth for both households and corporates continues to underscore fragile domestic demand,” analysts at Bank of America said in a note. Also, data released over the weekend pointed to persistent deflationary pressures in the world’s second-largest economy. Adding to the negative sentiment, reports indicated that U.S. President-elect Donald Trump is poised to appoint two men known for their strong criticism of China to key positions in his new administration, heightening concerns about geopolitical tensions. On the positive side, Bloomberg reported that China plans to cut taxes on home purchases. According to the report, regulators are developing a proposal that would permit major cities, including Shanghai and Beijing, to reduce the deed tax for buyers to as low as 1%, down from the current level of up to 3%. In corporate news, Shantui Construction Machinery slid about -5% after revealing plans to acquire Shanzhong Construction Machinery for 1.84 billion yuan.

Japan’s Nikkei 225 Stock Index reversed earlier gains and closed lower today. Chip-related stocks weighed on the index on Tuesday, tracking their U.S. peers lower. Japanese Prime Minister Shigeru Ishiba on Monday unveiled a 10 trillion yen ($65 billion) plan to enhance the nation’s chip and artificial intelligence industries through subsidies and other financial incentives. The multi-year investment initiative seeks to bolster critical supply chains amid ongoing U.S.-China trade tensions. Meanwhile, Japan’s industry minister, Yoji Muto, said Tuesday that the government does not plan any tax increase to fund its chip aid. Investors also focused on the Bank of Japan’s monetary policy outlook following the latest summary of opinions, which showed a split among policymakers regarding the timing of future rate increases. In corporate news, Nissan Motor surged over +12% after activist investor Effissimo revealed a stake in the struggling automaker. Also, Recruit Holdings gained over +3% after the company boosted its full-year revenue and net profit guidance. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -2.66% to 23.08.

Pre-Market U.S. Stock Movers

Live Nation Entertainment climbed over +6% in pre-market trading after reporting better-than-expected Q3 EPS.

SentinelOne gained more than +2% in pre-market trading after Deutsche Bank upgraded the stock to Buy from Hold with a price target of $32.

Twilio rose over +1% in pre-market trading after Wells Fargo upgraded the stock to Overweight from Equal Weight with a price target of $120.

Source: Barchart

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Brent Crude Stumbles As Market Sentiments Turn Cautious

Brent technical analysis

Source: RoboForex Ltd

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Simple Moving Average (SMA):

Exponential Moving Average (EMA):

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Conclusion

Germany's Economic Sentiment Falters as Trump's Win Casts Shadow

Eurozone outlook dims as political and economic risks rise

Germany's internal challenges meet geopolitical tensions

Market impacts: Stocks and euro decline

Source: Euronews

Crypto Market Cap Hits $3.1T High, May Soon Surpass France’s GDP

Change in the crypto market cap over the last month. Source: CoinGecko

The fifth to 12th largest assets by market cap. Source: Companies Market Cap

Source: Cointelegraph

Stock Index Futures Fall as Trump Rally Pauses, U.S. Inflation Data and Fed Speak Awaited

Source: Barchart

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