Eurozone consumer confidence and Canadian retail sales in focus
USD/CAD=> The pair falls below 1.3450
EU Stoxx50 =>The index rises above 3900
Baidu=> The stock trades below $100
USD/CAD falls ahead of Canadian retail sales data
USD/CAD rallied 0.5% in the previous session after the loonie traced oil prices lower and after the USD benefited from safe-haven flows. A jump in COVID cases in China sent oil prices lower. However, prices have since recovered and are pushing higher today, supported by Saudi Arabia denying reports that the cartel planned to increase supply. Rising oil is helping boost the CAD. Canadian retail sales data is due today and is expected to fall after rising in the previous month. The data is likely to show that consumers are coming under pressure as interest rates keep rising and inflation remains elevated. Meanwhile, there is no high-impact data driving the USD; instead, Fed speakers will be in focus.
| Canada retail sales | Expected: -0.7% (-1.4%) | Previous: 0.7% |
Where might the USD/CAD price head to?
After finding support at 1.3240, the 100 sma and July high, USD/CAD rebounded before running into resistance at 1.35. The RSI is neutral, giving away a few clues. Buyers could look for a rise over 1.35, the weekly high, and 1.3570 to expose the upper band of the multi-month rising channel at 1.3615. Sellers might look for a fall below the 100 sma at 1.3260/40 and the November low. This could bring 1.30 the lower band of the channel into focus at 1.30.
Stoxx50 rise ahead of consumer confidence data
After falling 0.4% in the previous session, Stoxx50 is rebounding as the market mood cautiously improves and is ahead of consumer confidence data. Expectations are for morale to pick up again in November after hitting a record low in September, even as inflation remains high and households worry about their personal finances. Low consumer morale could hurt demand for riskier assets such as stocks. Stoxx 50 came under pressure yesterday amid concerns over rising COVID cases in China slowing global growth. German wholesale inflation fell for the first time in six months, dropping to 34.5%, the lowest level since June, down from 45.8% in September. This could suggest that inflation is starting to cool. ECB’s Philip Lane also said that the central bank could consider slower rate hikes from December. However, ECB’s Holzmann supports another 75-basis point move.
| EZ consumer confidence | Expected: -26 (1.6) | Previous: -27.6 |
Baidu Q3 earnings preview
Baidu is set to report Q3 earnings today ahead of the US open. The Chinese internet search engine is expected to report a net profit of 4.04 billion yuan ($567.4 million), a significant improvement from the net loss of CNY 16.56 billion posted in the same period a year earlier. Revenue is expected to fall 0.6% YoY to CNY31.74 billion. Attention will be on ad revenue, Baidu’s most significant revenue stream, and could come under pressure as COVID curbs disrupted marketing activities. AI cloud has been Baidu’s strongest growth area. However, the pandemic could have slowed revenue growth to 22%, down from 45% and 31% in the preceding quarter.
Support can be found at 91.60 (last week’s low) and 88.70 (October 21 low)
Resistance for the stock can be seen at 103 (50 sma) and 115 (September low).
