The news shaping the markets today

Ukraine’s nuclear energy firm said there were signs of Russian forces looking to leave the Zaporizhzhia power plant. The news sent WTI crude oil prices lower this morning.

Australia’s retail sales fell by 0.2% to A$35.02 billion in October, following 0.6% growth in the previous month. The latest reading also missed market estimates of a 0.5% rise and exerted pressure on the AUD/USD forex pair.

China’s industrial profit contracted by 3.0% year-over-year to 69.78 during yuan in the first ten months of the year, versus a 2.3% decline in the earlier period, which sent the CNY/USD pair lower in forex trading this morning.

Canada reported a government budget deficit of C$2.2 billion in September, versus a deficit of C$11.4 billion in the year-ago month. Despite this, the CAD/USD forex pair remained under pressure.

Mexico’s current account deficit widened to $5,505 million in the third quarter, from $4,324 million in the year-ago quarter, which sent the MXN/USD pair lower in forex trading this morning.

What’s happening: Chinese stocks ended mixed on Friday despite a big announcement from the PBoC (People’s Bank of China).

What happened: China’s benchmark Shanghai Composite Index traded higher after the country’s central bank loosened bank reserve requirements.

However, one of the country’s major indices settled lower amid a surge in covid-19 cases.

Why it matters: Asia’s largest economy has been suffering this year due to the government’s strict zero-covid policy.

The country reported another record high surge in covid-19 cases, forcing the government to impose strict restrictions in various major regions. The re-imposition of curbs resulted in public unrest in the Zhengzhou region.

China’s local covid-19 cases climbed to 32,695 on Thursday, setting a fresh daily record for a second day in a row, with cities enforcing measures to control the spread of infection. Large parts of Beijing are in a seven-day lockdown after the city recorded over 1,800 fresh infections on Thursday. The situation fuelled concern around a slowdown in the economy.

The People’s Bank of China lowered the reserve requirement ratio for financial institutions by 25bps, which would release approximately 500 billion yuan in long-term liquidity and provide some support to economic growth.

The bank had made a similar move in April. The reserve requirement ratio for big banks has now fallen to 11%, which is the lowest level since mid-2007. However, the weighted average ratio still stands at 7.8% for financial institutions.

“Without allowing people to resume a normal life style, additional fiscal stimulus and monetary easing will only generate very little impetus for demand recovery,” Bank of America analyst Helen Qiao said in a note to clients.

The Shanghai Composite Index gained 0.4%, or 12.38 points, to close at 3,101.69 on Friday, while the Shenzhen Composite Index, tracking equities on the country’s second exchange, declined by 0.7%, or 13.96 points, to settle at 1,984.18. The blue-chip CSI300 index climbed 0.5% in the session.

What to watch: Investors will keep an eye on China’s covid-19 numbers and the government’s moves to control the spread. The manufacturing and services PMI, due for release later this week, will also remain in focus.

The markets today

Bitcoin will be in focus today after ending Friday’s trading session in positive territory

Context: Bitcoin rebounded on the last trading day of the week, remaining above the key $16,500 resistance level.

Details: Last week was positive for the overall cryptocurrency market. Although traders are still digesting news of the FTX fallout, the overall market capitalisation rose by more than $10 billion.

However, Bitcoin contributed only minimally to this overall increase in valuation, as the world’s largest cryptocurrency lost around 1% over the course of the week. Bitcoin made attempts to breach the $17,000 level last week but kept receding towards the $16,500 mark.

Meanwhile, Binance Coin gained sharply, around 12% over the same period, to trade around $300, reigniting confidence in the crypto market.

The surge in prices came after Binance announced the launch of a new website to explain its proof-of-reserves system. Although this will begin with Bitcoin reserves, the world’s leading exchange is planning to add other cryptocurrencies over the next couple of weeks.

Litecoin was another cryptocurrency that saw solid gains over the last seven days, rising more than 20%.

What are expectations: Traders will keep an eye on other leading platforms, which may also take steps to inject more confidence in the crypto market. Crypto trading may also receive some support from the holiday season.

Other Markets: European indices closed mostly higher on Friday, with the FTSE 100, DAX 40 and CAC 40 up by 0.27%, 0.01% and 0.08%, respectively, and the Stoxx Europe 600 down by 0.02%.

Support & resistances for today

Market snapshot

What else to watch today

Eurozone’s loans to households, loans to non-financial corporations and money supply M3, UK’s CBI distributive trades survey’s retail sales balance, Brazil’s value of loans, government revenues and Central Bank of Brazil’s focus market readout, Mexico’s balance of trade, Canada’s current account, Saudi Arabia’s money supply M3 and value of loans, as well as US Dallas Fed manufacturing index.

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