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Hoping Hunt's message won't have the same effect as Kwarteng's mini-budget

Good morning

It’s a mixed bag this morning, the US dollar has held or even reversed some of its losses, with EURUSD now 1.0910 and USDJPY back up to 149.15. GBP however has held its recent gains, GBPUSD now at 1.2530 and GBPEUR up to 1.1485. FOMC minutes released yesterday evening show Fed are seeing the risks of raising rates too much versus too little are far more balanced now, suggesting we’ll see rates on hold into the year end. I still think its unlikely we will see rate cuts in Q1 2024, perhaps not even Q2, but Fed have made it clear their rate moves are highly data-dependent.

CAD brushed off yesterdays inflation numbers with USDCAD staying in its tight range. I mentioned yesterday the converging trend lines in USDCAD, the upper bound is now around 1.3735, the lower is 1.3685, I’m watching for a break of either level.

Gold made its way back above $2000/oz, so far staying under the $2010 level but any further USD weakness could see XAUUSD higher again. For now there seems to be short term interest in selling gold with a close stop. You may recall that back on 26th Oct I looked at a one month gold call with a strike of $2000, cheapened up with a $2075 knock out. That expires on 28th Nov so I’m rather hoping we hold above $2000, preferably ticking up a little higher but not too far!

I’ve not been following this AI story much but perhaps I should have done as it all sounds rather intriguing. Sam Altman was the CEO of OpenAI until just a few days ago when he was fired by the board. He was offered a job by Microsoft but it now appears that Altman is returning to OpenAI. I’m going to have to get to the bottom of this just to see if I can work out what really went on.

Israel and Hamas have agreed to a pause in fighting which leads to the release of 50 Israeli hostages, which in turn will lead to the release of 150 Palestinian women and children held in detention by Israel. Those numbers may increase on both sides and would then lead to an extension of the ceasefire. We haven’t yet been told when the ceasefire will begin but it is supposed to be imminent. Whether this will lead to the end of fighting remains to be seen, Israel is still intent on getting rid of Hamas.

Attention this afternoon will be on the UKs Autumn Statement. It is just over one year ago that Truss and Kwarteng triggered the UKs financial crisis with their disastrous mini-budget. We are hoping that todays announcement is a little more restrained and sensible. Otherwise we have a fairly busy US calendar with some releases brought forward due to tomorrows Thanksgiving.

Thanksgiving tends to send financial markets to sleep as many Americans make a long weekend of it. Black Friday sales have pretty much started already, some of which aren’t great, but there are some decent bargains to be had. For example Nike have a 25% off everything deal on their website, which makes the cost of the kids trainers mildly more bearable.

- 09.30 BoE monetary policy hearings

- 12.45 UK autumn forecast

- 13.30 US durable goods, initial jobless claims

- 15.00 US Michigan sentiment survey

- 15.00 EU consumer confidence

- 16.30 BoCs Macklem speaks

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