The US dollar
The USD continued to fall on Tuesday’s Fed rate cut expectations, benefiting most equity markets across the globe and gold.
The Australian dollar
The AUD was on the rise again on Tuesday, lifted by hawkish comments from its new governor in the minutes that followed the decision to raise rates by 25 basis points to 4.35% a fortnight ago. Michele Bullock said that even though there was a credible case to keep rates steady, board members saw the risk that inflation expectations could rise if rates were not raised. The board also noted that the Reserve Bank of Australia (RBA) cash rate remains below the main rates of many other countries. Markets are pricing only a 5% chance it will hike again in December, but imply around a 40% risk it might move once more in the new year.
Canadian CPI data
It is quieter on the economic data front, but investors will be keeping across an update from Canada on inflation with the least October consumer price index (CPI) release. At 1.30 p.m., the markets are expecting Canada to report price growth of 3.2% year-over-year, down from 3.8% the previous month.
A few macroeconomic indicators are expected in the US. Starting at 1.30 p.m. with the Chicago Federal Reserve System (Fed) national activity index, followed by existing home sales for the month of October. Economists forecast a 1.3% fall compared to September.
But currency traders are really waiting for the Federal Open Market Committee (FOMC) minutes, which were exceptionally released a day earlier, because of Thanksgiving. These minutes are seen by some as a potential pivot in Fed policy. After last week’s CPI, many have revised their expectations, up to the point that about 30% of them believe the Fed could begin lowering rates as early as next March.
Zoom Video Communications
Zoom Video Communications shares rose in extended trading after the company raised its annual revenue and profit forecasts, boosted by demand for its new Al products introduced during the third quarter. Zoom earned $1.29 per share on an adjusted basis, surpassing expectations of $1.09. Revenue also beat expectations, reaching $1.14 billion, up 3.2%. It now expects annual adjusted profit per share between $4.93 and $4.95, higher than its prior forecast of $4.63 and $4.67. It also raised its revenue forecast.
Al tech giant NVIDIA is reporting after the market close. The artificial intelligence chip leader is expected to deliver another blockbuster revenue forecast. However, the focus will be on whether widening US curbs on sales of its high-end chips to China could hamper that run. The Street sees earnings of $3.36 per share on revenue of $16.18 billion. These results will also be a major test for the Al-powered rally that has helped drive up the U.S. stock market this year, with the Philadelphia semiconductor index up nearly 50% in 2023.
HP is also scheduled to report its Q4 earnings after the US closing bell. Analysts on Wall Street are also projecting that HP will announce quarterly earnings of $0.90 per share in its forthcoming report, representing an increase of 5.9% year over year. The estimate for revenues stands at $13.82 billion, suggesting a decline of roughly $1 billion in the prior-year quarter.
Most of that revenue decline will be down to the group’s personal systems division, which is the part of the business that builds desktops and notebooks. This division is forecast to lose 9.8% in revenue compared to last year. HP tried to reassure the market a month ago, saying it expected PC demand to stabilise by the end of the year and announcing a 5% increase in dividends.