November trading begins with a sharp decline in crude oil and another round of headlines surrounding negotiations between the US and Iran. The overnight/weekend reports point to continued diplomatic engagement, but conditions surrounding sanctions and the reopening of the Strait remain significant hurdles.
Iranian negotiators left Doha on Sunday, although sources said their departure was not due to difficulties in the negotiations. A draft proposal has been circulated for feedback, and a follow-up meeting remains possible.
Iranian foreign ministry spokesman Baghaei said messages continue to be exchanged and that the US must make a decision. He described the issues as complex and presented Iran’s willingness to compress implementation of its seven-day proposal into two days as a sign of goodwill. However, Iran also maintains that the Strait cannot reopen before US sanctions are lifted.
Separately, Kyodo reported that a senior Iranian official linked reopening to US acceptance of seven conditions. The official suggested Iran could adopt a more flexible position on the nuclear issue if an agreement on reopening the Strait is reached.
For traders, continued talks keep the possibility of an agreement alive. The conditions attached to those talks leave plenty of room for another shift in expectations. Neverthless, oil is starting the week sharply lower, but the headlines have yet to deliver a confirmed agreement.
The dollar is mixed. Swiss franc leads the gains
The US dollar is losing ground against the Swiss franc, euro, British pound and Canadian dollar, while advancing against the Australian dollar, Japanese yen and New Zealand dollar.
The Swiss franc is the strongest currency in the supplied snapshot, with USDCHF down 0.74% at 0.8189. The euro is also finding buyers, with EURUSD up 0.52% at 1.1216. GBPUSD is trading at 1.3422, up 0.23%.
On the other side, AUDUSD is down 0.33% at 0.7007, making the Australian dollar the weakest of the major currencies. USDJPY is up 0.20% at 157.84, while NZDUSD is down 0.05% at 0.5625. USDCAD is little changed at 1.3971, down 0.01%.
That combination gives the morning a mixed currency tone. Buyers and sellers will need to take their direction from the individual pairs and the technical levels that define risk.
Currency ranges: EURUSD and USDCHF have already stretched
Using the session highs and lows from the price snapshot and the 22-day average ranges (around a month of trading), the price action today is lively with the EURUSD, GBPUSD and USDCHF trading near the ATR or above that range so far. Looking at the EURUSD and GBPUSD, each has corrected into the NA session. The USDHF is trading near its low of the days trading range.
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EURUSD: 1.1155–1.1237 — 82 pips, or 122% of its 67-pip average.
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GBPUSD: 1.3380–1.3449 — 69 pips, or 97% of its 71-pip average.
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USDJPY: 157.48–157.99 — 51 pips, or 63% of its 81-pip average.
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USDCHF: 0.8190–0.8253 — 63 pips, or 124% of its 51-pip average.
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USDCAD: 1.3951–1.3987 — 36 pips, or 56% of its 64-pip average.
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AUDUSD: 0.7004–0.7036 — 32 pips, or 74% of its 43-pip average.
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NZDUSD: 0.5609–0.5645 — 36 pips, or 84% of its 43-pip average.
EURUSD and USDCHF have already exceeded their normal daily ranges, while GBPUSD has nearly completed its average. That does not prevent further movement, but traders chasing those moves should recognize how much ground has already been covered.
USDCAD and USDJPY have the most room to extend relative to their averages. A data surprise or a technical break could provide the next push. The average range is context, however, rather than a requirement that prices travel farther.
Stocks start November higher after a rough October
US stock futures are pointing to a higher opening as traders kickstart a new week and month. The gains offer some relief after a difficult October, particularly for the technology sector, where concerns about AI spending, profitability and earnings expectations weighed on sentiment.
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Dow futures: Up 175 points.
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S&P 500 futures: Up 33 points.
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Nasdaq futures: Up 193 points.
The early rebound gives buyers a chance to regain some control. The next test is whether those gains can hold and build after the opening bell. Following October’s selling, a stronger start is encouraging, but buyers still need to show they can sustain the momentum.
Apple earnings after the close
Apple’s earnings after the close will provide an important early test for the new month. Investors will focus on iPhone demand, services growth and guidance for the holiday quarter. Commentary on AI features and their ability to encourage upgrades will also be closely watched, along with whether higher memory-chip costs are putting pressure on margins.
For the broader technology sector, the question remains whether earnings and guidance can support renewed buying. Apple’s results could help determine whether today’s rebound gains traction or sellers use the bounce to lean against higher prices.
Treasury yields: Short end higher, long end lower
US Treasury yields are mixed, with the two-year yield moving higher while longer maturities edge lower:
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2-year: 4.5999%, up 1.89 basis points.
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5-year: 4.7215%, down 0.05 basis points.
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10-year: 4.9207%, down 0.83 basis points.
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30-year: 5.2911%, down 1.79 basis points.
The moves leave the curve flatter in the supplied snapshot. There is no uniform move higher or lower in yields to give the dollar a clear direction across the board.
Oil drops more than 4%. Metals rebound
Crude oil is the standout mover, trading at $99.81, down $4.31 or 4.14%, as the Iran negotiation headlines remain in focus. The move puts oil back below $100, with traders watching whether further diplomatic progress can sustain the selling.
Spot gold is trading at $3,900.175, up $24.53 or 0.63%. Silver is up 1.90% at $50.0392, while copper is up 0.67% at $6.5255.
Bitcoin is moving in the opposite direction, down $460 or 0.59% at $77,773. The gains in metals are therefore not being matched across all alternative assets.
North American calendar: ISM manufacturing takes center stage
The calendar builds toward the 10:00 AM ET releases:
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9:30 AM ET – Canada S&P Global Manufacturing PMI, October – Forecast: not shown – Previous: 51.5.
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9:45 AM ET – US S&P Global Manufacturing PMI, October final – Forecast: 56.0 – Previous: 55.9.
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10:00 AM ET – US Construction Spending, September – Forecast: 0.3% – Previous: 0.9%.
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10:00 AM ET – US ISM Manufacturing PMI, October – Forecast: 54.5 – Previous: 54.5.
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10:00 AM ET – ISM Manufacturing Prices Paid – Forecast: 77.5 – Previous: 77.9.
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10:00 AM ET – ISM Manufacturing Employment – Forecast: 52.0 – Previous: 52.7.
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10:00 AM ET – ISM Manufacturing New Orders – Forecast: not shown – Previous: 55.3.
The ISM headline will give traders another reading on manufacturing growth, but the details could carry just as much weight. Prices paid will help frame the inflation discussion, while employment and new orders will provide a check on hiring and underlying demand.
A stronger headline accompanied by persistent price pressure would give traders a different message from one supported by improving orders and easing costs. Watch the components before drawing a conclusion from the headline alone.
This article was written by Greg Michalowski at investinglive.com.