Last week, the United States saw several important economic indicators. In the Federal Reserve’s November minutes, officials expressed a preference for a cautious approach to future interest rate cuts, noting that the labor market showed no signs of a rapid deterioration. The Core Personal Consumption Expenditures (PCE) Price Index showed a growth of 2.8%, in line with expectations but higher than the previous reading of 2.7%. On the other hand, the number of initial jobless claims dropped to 213,000, indicating an improvement in the labor market. The GDP growth rate for the quarter was 2.8%, slightly lower than the previous reading of 3.0%. U.S. crude oil inventories declined more than expected by 1.844 million barrels. In the housing market, new home sales fell to 610,000, while durable goods orders rose by 0.2%, surpassing negative expectations. Additionally, the Consumer Confidence Index reached 111.7, higher than the previous reading of 109.6 but lower than expected. In the Eurozone, the Consumer Price Index (CPI) showed a 2.3% year-on-year growth, while the Core CPI (excluding food and energy) was lower than expected at 2.7%. In Switzerland, GDP for the third quarter grew by 2.0%, exceeding expectations. In New Zealand, the central bank cut the interest rate by 50 basis points to 4.25%. In Australia, the CPI rose by 2.10%, lower than expectations. In Japan, Tokyo’s CPI increased by 2.2%. In China, the Non-Manufacturing Purchasing Managers’ Index (PMI) dropped to 50.0, while the Manufacturing PMI showed slight growth at 50.3.
Market Analysis
USD/JPY Pair
The U.S. dollar weakened against the Japanese yen, reaching 149.46 on Friday, November 29, 2024, its lowest level since October 21, 2024, due to expectations that the Bank of Japan will raise interest rates at its meeting on December 18, 2024. If the pivot point of 150.23 is broken for the USD/JPY pair, support levels may be targeted at 148.92, 148.14, and 146.84. On the upside, resistance levels may be targeted at 151.01, 152.32, and 153.10.
Salesforce
Salesforce shares have risen by approximately 27% year-to-date. The market is looking forward to the company’s Q3 earnings report tomorrow, Tuesday, December 3, 2024. Analysts expect earnings of $2.44 per share, up from the previous $2.11 per share. Revenues are expected to reach $9.35 billion, compared to the previous $8.72 billion.
Coffee
Coffee futures in New York (Arabica) continue their upward trend, reaching $335 on Friday, November 29, 2024, the highest level in 47 years. These contracts have risen by about 70% year-to-date. The reasons for this surge include concerns about crop yields in major producers, particularly Brazil and Vietnam—the world’s two largest coffee producers—both of which have been affected by climate change, including heatwaves and droughts. Additionally, global supply chain issues are raising concerns about a slowdown in supplies, which threatens to increase costs for coffee producers and consumers alike. The Relative Strength Index (RSI), currently at 78, indicates that the coffee futures market is in overbought territory, signaling positive momentum.
Dow Jones Index
The Dow Jones reached a new record high of 45,082 points on Friday, November 29, 2024. This represents a 19% increase year-to-date. The index is supported by expectations of a U.S. interest rate cut, with markets pricing in a 68% chance of a 25-basis point reduction at the upcoming Federal Reserve meeting on December 18. If the pivot point of 43,853 is broken, support levels may be targeted at 43,382, 42,468, and 41,997. Resistance levels could be targeted at 44,767, 45,238, and 46,152.
Key Events This Week
Markets are awaiting several important economic indicators and data releases this week:
- Today, the Manufacturing PMI will be released for Australia, Japan, the Eurozone, the UK, and the U.S., along with retail sales in Australia, the Caixin Manufacturing PMI in China, the unemployment rate in the Eurozone, and the construction spending and Manufacturing PMI from the Institute for Supply Management (ISM).
- On Tuesday, markets are expecting the Consumer Price Index (CPI) in Switzerland and job openings in the U.S.
- On Wednesday, markets are anticipating GDP data and the Services PMI for Australia, Japan, the Eurozone, the UK, and the U.S., along with the Caixin Services PMI in China, factory orders, the Non-Manufacturing PMI from ISM, the ADP nonfarm employment change, and crude oil inventories in the U.S. Markets are also waiting for a speech from Federal Reserve Chairman Jerome Powell.
- On Thursday, markets will focus on the UK Construction PMI, U.S. jobless claims, and the Ivey PMI in Canada.
- Finally, on Friday, Japan will release its Household Spending Index, the Eurozone will report its GDP, and Canada will release its nonfarm payrolls report, unemployment rate, average hourly earnings, and the change in employment and unemployment rates.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
