NASDAQ 100
The first market is NASDAQ 100. We are dancing around the 200-day EMA, and there are reports now that the Americans and the Iranians have come to some type of concession when it comes to the nuclear program in Iran. We’ll wait and see if that actually produces anything, but that could be a positive catalyst.
Quite frankly, the market sold off pretty drastically over the last couple of days. A bounce would make a certain amount of sense. We do get the JOLTS number later today, and of course, we get nonfarm payrolls on Friday, so that comes into the picture.
That being said, we did get an important release from Microsoft as far as earnings are concerned last week on Thursday, and that shows maybe some of the AI picture. The results showed revenue of $92.3 billion for the quarter ending September 30, up 19% year-over-year. Cloud revenue increased 30% to $63.9 billion, and Azure, which would probably be the more important part here, grew 48%.
This suggests that the commercial case for cloud management and AI probably still continues to be important. Therefore, I’m looking for a rally. I need to see at least yesterday’s candle taken out to the upside, though.
Platinum
Platinum is kind of back and forth during the trading session here on Tuesday. The supply backdrop is worth noting. Valterra Platinum’s October 23 third-quarter report showed total platinum group metal production in concentrate down 6% to 804,000 ounces. Refined PGM output fell 41% to 576,900 ounces, reflecting a shift of scheduled processing maintenance and stock counts into the third quarter.
Crucially, though, the nine-month refined production was broadly unchanged year-over-year, and therefore, it suggests whether or not the inventories are going to be satisfactory for customer requirements is front and center. It also suggests that the monetary policy part of the situation in platinum needs to come to the rescue.
While demand is not picking up, and if the economy slows down, platinum gets hit because it’s highly levered to manufacturing. Right now, it looks like rallies have probably faded up to about $1,600.
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See all NASDAQ 100 forecastsEUR/CHF
The euro against the Swiss franc is an interesting one because today we fell pretty quickly and then bounced from an area that was important, right around 0.9120. We are trying to form a hammer. We’ll see if this kicks off a bounce.
It is an interest-rate differential play. I do like getting paid at the end of every session. The Swiss inflation development coming out today: the Federal Statistical Office reported consumer prices rose 0.2% month-over-month and 1.5% year-over-year. Heating oil, petrol, and diesel were among the major contributors, so we can only read so much into that. This is newly published October information coming out of Switzerland.
The policy gap still favors the Europeans. The ECB retained its 2.5% deposit rate on the 29th, while the SNB’s September 24 decision left its policy rate at zero. That’s a 2.5% difference between the two. This looks like a buy-the-dip market. This could be a move to the upside just waiting to happen.
AUD/JPY
Finally, the Australian dollar against the Japanese yen. We saw an initial breakdown, but we turned around. The Reserve Bank of Australia decided to raise its cash rate target by 25 basis points to 4.85%. The vote was 6-3, which was a little more surprising than the decision.
They said that inflation is broadly based and forecast that it would not return to the top of its 2-3% target range until late 2027, meaning next year. On October 30, the Bank of Japan maintained its overnight call rate of around 1.25%. One dissenter preferred a rise of 25 basis points.
In other words, there’s a 3.60% differential between these two currencies right now. The wider gap strengthens the interest-rate rationale for holding Australian dollars against the yen. It doesn’t necessarily guarantee that we are going to go higher, but I like this setup. I do think eventually we need a little bit of momentum to come into play, but we get paid to hold this. I’m a buyer of dips here.
