General Comment

The past week has been fairly calm relative to economic announcements and other news that could cause turbulence in the markets. So, it makes sense for volatility to drop compared to previous weeks. Jerome Powell’s speech last Thursday at the International Monetary Fund stood out. Jerome Powell appeared rather hawkish, pointing out how there could be new rate hikes, how the war with inflation remains open, and that there is still a long way to go. These statements made sense to trigger a correction in the markets but on Friday we saw a strong upward rally and more so in the final hours before the weekly close.

Christine Lagarde’s statements were rather hawkish too, as she pointed out that new interest rate hikes by the European Central Bank are not ruled out, but it seems that markets have formed the view that in most central banks of major economies, this will not happen, and this creates a climate of optimism. Of course, it remains open to the case of how long the interest rates may remain at current levels. So far, the picture of the United States economy is very encouraging, while the rest of the world’s economies do not seem to be particularly negative at the moment so they could maintain rates for a longer time without fearing heavy consequences.

A related concern was caused last week by the inflation announcements in China. Inflation in China for October was reported at -0.2%, which is a deflation case and raises concerns about consumption and growth in the country. The other cause for concern at this period is the war in the Middle East, but since it does not seem to be spreading to neighboring countries, the markets remain calm.

Stock indices in Europe and the United States continued their upward trend for a second week. As far as commodity markets are concerned, the sharp correction caused in major commodities such as gold and oil has been striking. The U.S. dollar strengthened against its main competitors after two declining weeks, while we saw an upward reaction for bond yields with the U.S. 10-year closing the week at close to 4.65%. Finally, regarding cryptocurrencies, the upward rally continued for another week, as we will see in detail below.

The current week without a doubt is dominated by the announcement of inflation in the United States next Tuesday. This announcement will largely determine the monetary policy of the United States in the coming months, and according to all statements now by Fed officials, these moves depend on economic data and results. Another measure of inflation is announced the day after, and it has to do with the producer price index. Markets will also pay particular attention to China’s industrial production and retail sales announcements on Wednesday. The Eurozone announces GDP and inflation, while the UK will announce inflation, retail sales, and the unemployment rate. After a week of calm in the markets, high volatility is quite likely to return.




US SP500 index was bullish last week, closing at 4,415 points with profits of 1.30%. The hawkish tone of Jerome Powell on Thursday prevented the SP500 from performing significant profits but it could not change the positive sign of the week, as Friday was a day with a strong uptrend. The increase in stock prices coincided with heightened attention on bond yields. Both the U.S. 10-year and 30-year bond yields experienced a decline, marking a departure from the previous day’s rise influenced by Powell’s statement and an auction characterized by weak demand. Bond yields remain at high rates, the prevailing scenario regarding interest rates is that higher rates could be maintained for a long time but it seems that the markets keep a perception of optimism. It is something that makes sense since the macroeconomic results in the USA so far are impressive, far from a recession case. A very critical announcement for the upcoming Fed’s behavior is the inflation on Tuesday. Unless the result is too high, the positive market sentiment may not change so we prefer long positions for one more week.



The German DAX40 index was slightly bullish last week, closing at 15,234 points, with profits of 0.30%. Recent statements from Powell’s speech, expressing uncertainty about the adequacy of the current monetary policy in addressing inflation, have had repercussions on European markets. While the DAX40 had a second consecutive profitable week, it had a retracement on Friday, not following the rally that the U.S. indices performed. The diverse reactions observed in European markets underscore the difficulties confronting investors as they navigate a landscape characterized by inflation worries, speculations about interest rates, and negative macroeconomic results. Last week, Germany had an improved picture of PMIs and factory orders but industrial production keeps on decreasing and inflation remains at high levels. The Eurozone GDP & HICP announcements will affect the European stock indices this week but the markets will also keep their eyes on the other side of the Atlantic, especially regarding the inflation result. Two weeks of bullish reactions did not affect the long-term downtrend that started last summer for DAX40. We may try short positions this week.



The British FTSE100 index moved downward last week, closing at 7,361 points, losing about 0.77%. Until last Thursday, FTSE100 was performing profits even if the speech of the head of the Bank of England created some worries. Andrew Bailey has expressed concerns about the dangers associated with “fragmentation” in the global economy and has advocated for increased collaboration in establishing international regulatory standards. The big drop for FTSE100 took place on Friday after the announcements of the UK economy. The UK GDP remained unchanged in Q3 2023, the manufacturing & industrial production were below market expectations and the total trade balance in September was negative for one more month. The storm of announcements will carry on this week as well: inflation, unemployment rate, and retail sales will be announced. The outlook of the UK economy remains negative, the high inflation may bring more interest rate hikes or at least it could maintain the already existing high rates for a long time so short positions is our selection for the current week.



The previous week was bearish for gold, with the next month’s futures closing at $1,932.6 and losses close to 3%. The substantial decline in gold prices was mainly driven by the hawkish statements of Fed head Jerome Powell. These remarks diminished expectations for potential interest rate cuts, at last until next spring or summer. Gold’s decline also aligned with the strength of the U.S. dollar and the expectation of crucial U.S. inflation results. Markets are closely observing inflation data that are announced every month to assess the Federal Reserve’s potential actions regarding interest rates. The comeback of the bond yields that we saw last week, also had a negative impact on non-yielding gold. In the near future, the macroeconomic conditions may become conducive for gold. As the U.S. monetary tightening cycle approaches its end and the dollar approaches its potential zenith, there is a possibility of a reduction in U.S. 10-year yields and we could see the dollar weaker. Such a change could enhance the investment attractiveness of gold so we may try long positions this week.


US Oil

Last week was bearish for oil with the next month’s futures closing at $77.33, with of 4.35%. It was the third week in a row with significant losses for oil prices. The oil demand outlook has been weakened by the hawkish indications from Fed head Jerome Powell regarding interest rates. Jerome Powell said that the current interest rates are insufficient to mitigate price pressures. The conflict between Israel and Palestine is anticipated to stay localized between the two parties, posing no substantial disruption to the oil supply chain and that is why it does not create reasons (so far) for strong bullish reactions. Contributing to the intricacies of the market was China, the globe’s largest oil importer, displaying indications of an economic deceleration according to the updated results. China’s manufacturing is dropping while the exports and the trade balance were both announced well markets’ expectations, indicating new worries regarding oil demand. Oil prices had critical losses of close to 20% during the last 7 weeks and many investors would consider this situation as an oversold opportunity. Things are not too bad at least: many economies have still decent results and the war in the Middle East remains local. We may try long positions this week.



EURUSD (Euro US Dollar)
Last week was bearish for EURUSD as it opened at 1.0720 and closed at 1.0684. Jerome Powell’s speech last Thursday was decisive for the exchange rate since that day saw the biggest drop, largely due to the strengthening of the US dollar. Powell’s hawkish statements were enough to create this effect. The picture of the European economy remains stagnant. The producer price index in the Eurozone fell by 12.4% last month, proving once again that inflation is falling. However, other economic measures remain negative. Retail sales fell 2.9% while PMI indicators remained firmly below 50. The bet on EURUSD in the coming period will be the perception of the markets in relation to interest rates. The main scenario says interest rates will not be raised further by either the Fed or the ECB, but the pending issue that remains open is how long they will be kept at current levels. Next week will be quite decisive as inflation is announced in the United States. It is not excluded that this mini uptrend that has started since the beginning of October for the exchange rate, from the price area of 1.05, will continue and therefore we may try buy positions this week.


GBPUSD (Great Britain Pound – US Dollar)

Bearish was the last week for GBPUSD, which opened at 1.2357 and closed at 1.2226. The week has been on a downtrend for the exchange rate since its beginning, but those trends accelerated on Thursday with Jerome Powell’s speech at the International Monetary Fund. The impression given to the markets is that interest rates will remain high for a long time and that is something that strengthens the US dollar. Bank of England chief Andrew Bailey, in a speech on Wednesday, said he was concerned about the impact it would have on the country’s economy or very tight monetary policy. But on Friday the mood changed partially for sterling after the positive financial results were announced. The current week is quite critical not only because of the announcement of the United States inflation but also because of the announcements of unemployment, retail sales, and inflation in the United Kingdom. The fact is that the problem of high inflation is more acute in the United Kingdom than in the United States, and this may play a decisive role in the coming period. We may try buy positions this week.


USDJPY (US DollarJapanese Yen)

USDJPY was strongly bullish last week, opening at 149.33 and closing at 151.49. Almost all factors affecting the exchange rate have contributed to its rise. The U.S. dollar strengthened mainly due to Jerome Powell’s speech last Thursday. We also saw a recovery in bond yields. In Japan, nothing seems to change though. The head of the Bank of Japan, Ueda, said on Thursday that it is still too early to think about changing very loose monetary policy and negative interest rates. Based on this continued monetary policy from the Bank of Japan, the yen continues to weaken and the USDJPY is once again very close to multi-year highs. Usually at these levels, well above 150, there are downward reactions; this may be accompanied this week by a weakening of the U.S. dollar mainly due to the announcement of U.S. inflation. On this basis, we would prefer sell positions this week.


EURJPY (EuroJapanese Yen)
Bullish was last week for EURJPY which opened at 160.12 and closed at 161.87. The euro was not particularly strong last week but the exchange rate managed to hit new multi-year highs based mainly on the weakness of the yen. Loose monetary policy and negative interest rates continue, and statements by officials from the Bank of Japan are converging in the direction of their maintenance. The current week may have higher volatility due to major announcements in the Eurozone and Japan. The uptrend is very strong and we’re keen to follow it with our buy positions this week.


EURGBP (Euro – Great Britain Pound)

Last week was bullish for the EURGBP, as it opened at 0.8662 and closed at 0.8737. For about three months, the exchange rate has developed an upward trend and has escaped the 0.85 price range that has been its balance point for several months. The Bank of England’s indecision for more anti-inflation action and the Eurozone’s decent economic picture at least for now have helped in this direction. Despite all these, the euro does not have such strong reasons to develop a strong uptrend against the sterling so a possible retracement cannot be ruled out. We will prefer sell positions this week.


USDCAD (US Dollar – Canadian Dollar)

Bullish was the last week for USDCAD, as it opened at 1.3654 and closed at 1.3797. During a week when there were no major economic news announcements about Canada’s economy, it made sense for the U.S. dollar and oil price movements to dominate. The U.S. dollar strengthened, pulling the pair higher and oil prices, which for the third week in a row had a significant fall, weakened the Canadian dollar. The only major announcement for this week is Canada’s industrial production next Friday, so the U.S. dollar and oil will dominate again. In particular, oil prices are quite low, and a rebound will help the Canadian dollar recover as well. Of course, important announcements about the United States economy especially that of inflation will also play a big role. We may try sell positions this week.


USDCHF (US DollarSwiss Franc)
The USDCHF had an upward course last week as the opening price was at 0.8983 and the closing price was at 0.9021. The exchange rate followed the strengthening of the U.S. dollar after there were no decisive factors that positively or negatively affected the Swiss franc. The unemployment rate for last month was announced in Switzerland at 2.1% with no change. Investment sentiment also plays an important role during this period, since when fear and concerns prevail in the markets there is demand for the Swiss franc, which is generally considered a safe haven asset. A key role this week will be played by the announcements of the United States and mostly the inflation, but if the climate worsens, we will see the exchange rate below 0.90 again and for that reason, we prefer sell positions this week.


AUDUSD (Australian Dollar – US Dollar)

Strongly bearish was the last week for AUDUSD, which opened at 0.6504 and closed at 0.6353. As well as the strengthening of the US dollar the week has been problematic for the Australian dollar as well and so the exchange rate has seen this big drop. The Bank of Australia raised interest rates by 0.25%, but that didn’t help the country’s currency much. According to the statements that followed, the inflation problem continues to remain significant, but the bank’s next moves will be data-dependent, and this has been interpreted by the markets as dovish behavior. Another thing that negatively affected the Australian dollar was the news from China. China’s deflation (- 0.2% last month), and the big drop in exports and trade balance, are intensifying concerns about China’s economy which directly affects both Australia’s economy and currency. However, it is striking that last week’s fall could not cover the gains of the week before and so in the event of a weakening of the US dollar we could see an upward reaction to the exchange rate and therefore we could try buy positions this week.



Last week, Bitcoin was heavily bullish and closed at $37,086 with profits of more than 5.80%. Bitcoin is currently moving to its highest price since the May of 2022. Last Wednesday, the opportunity emerged for the SEC to approve 12 Bitcoin spot ETFs by November 17. In their recent market analysis released on Thursday, Bloomberg Intelligence analysts James Seyffart and Eric Balchunas expressed a belief in a 90% likelihood of Bitcoin spot ETF approvals by January 10, 2024. On Friday, SEC head Gary Gensler spoke with CNBC about the potential revival of FTX, bringing a new wind of optimism to the crypto community. Another impressive piece of evidence is that Bitcoin’s on-exchange supply has recently experienced a substantial decline. As per Santiment’s data (Santiment is a platform that provides cryptocurrency-related data and insights for traders), the supply of Bitcoins decreased from 1.32 million on May 10 to 1.07 million on November 10. A reduction in supply typically leads to a decrease in selling pressure. Of course, many traders and crypto investors could consider profit-taking since the 36.5% performance of the last month seems quite attractive. On the other hand, it’s not easy to fight the strong uptrend. We prefer to stay out this week.



The information in this report is of a general nature only. It is not a piece of personal financial advice. It does not take into account your objectives, financial situation, and personal needs.

a-Quant is not responsible for your actions and recommends you contact a licensed financial advisor before acting on any information contained in this general information report.

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