Macro Commentary Jan 2024: Expert Insights

Financial Report Summary: Major Market Insights for October 2024

U.S. Dollar Index® (USDX) Performance: The USDX finished October with a robust 3.38% gain, closing at 103.88. This strong monthly performance allowed the USDX to recover from its losses over prior months, driven by strong U.S. economic data and rising demand for the dollar.

Key Economic Data and Events:

October 1st: The USDX started the month with a 0.44% gain to 100.93, despite weaker-than-expected ISM Manufacturing PMI data. The index demonstrated strength by closing above the midpoint of the daily Bollinger Bands, overcoming resistance at the daily 30 EMA.
October 3rd: ISM Services PMI posted a reading of 54.9, indicating continued expansion. This contributed to the USDX closing higher at 101.75 (up 0.34%).
October 6th: Nonfarm Payrolls for September significantly exceeded expectations, reporting 254,000 new jobs (later revised to 223,000), well above the forecasted 140,000. This marked the strongest employment data since March 2024, bolstering the USDX to close up 0.58% at 102.28.
October 10th: Annual Core Inflation edged up slightly to 3.3% from 3.2%, surpassing expectations. Meanwhile, CPI eased

to 2.4% from 2.5%, reinforcing a mixed inflation narrative that led to a modest USDX gain of 102.77 (up 0.11%).
October 24th: The USDX experienced its most significant single-day decline of the month, down 0.37% to 103.92, despite positive preliminary S&P Global Services PMI data. This drop was influenced by a simultaneous release of slightly weaker Manufacturing PMI data
October 30th: The ADP Employment Change report indicated 233,000 new jobs, far exceeding the expected 115,000 and September's revised 159,000. However, slightly weaker preliminary Q3 GDP data at 2.8% (below expectations and Q2’s 3.0%) contributed to bearish sentiment, closing the USDX at 103.86 down 0.25% on the day.

Weekly and Daily Performance Trends:

First Week of October: The USDX recorded its strongest weekly performance since early 2024, closing up 2.05% after strong employment data and favourable ADP Employment Change figures.
Mid-October: Following Columbus Day, bullish sentiment continued, supported by stronger-than-expected Retail Sales data. The USDX rose 0.59% over the week.
End of October: The USDX maintained gains despite slight pullbacks. It reached a

high of 104.52 on October 29th but retreated to 103.88, showing resilience even amid mixed economic signals.

Equity and Energy Market Overview:

Bitcoin (Coinbase BTC): After a slight initial dip, Bitcoin surged, closing the month up 9.58% at $69,895, after almost reaching its all-time high of $73,835 (October high $73,624). This rise was attributed to the increased interest in digital assets, partly due to the Presidential campaign, ongoing developments in central bank digital currencies (CBDCs) and regulatory news.
Emini Crude Oil (QM): Crude oil jumped to a high of $78.53 but pulled back to close the month with a 2.8% gain at $69.25, reflecting concerns linked to geopolitical tensions involving Israel and Iran. Market participants anticipate further price volatility.

Market Sentiment and Risk Considerations:

Geopolitical Influences: Middle East conflicts, notably between Israel and Iran, impacted crude oil prices and contributed to global market volatility. Iran’s potential response to Israeli military actions raised concerns over potential disruptions in oil supply.
Economic Outlook and Fed Policy: The FOMC's dovish stance was underscored by

September's rate cut of 50 basis points. Although the Fed hinted at possible further cuts into 2025, these are expected to be fewer than initially anticipated.

Technical Analysis:

USDX: Strong buy signals were evident based on moving averages. The index traded above the daily SMA & EMA 20 and 30, confirming an uptrend on the daily chart.
Bitcoin: Technical indicators suggested a bullish environment, with prices projected to range between $59,000 and $87,000 in the following month.
Crude Oil: Indicators pointed to a selling bias, though historical volatility suggested possible price ranges between $62.00 and $84.00.

Economic Projections:

The U.S. economy is projected to sustain moderate growth as inflation stabilizes, although mixed data indicates caution. The Fed's monetary policy will likely aim to balance economic growth with inflation control.

Conclusion: October 2024 saw the USDX regain momentum with a 3.38% increase, bolstered by strong job data and robust retail figures. Bitcoin performed exceptionally well, while Brent crude exhibited volatility due to geopolitical developments. Market

'Macro Commentary'October 2024