The longest government shutdown in the history of the US has officially come to an end. However, even with the shutdown over, today’s inflation report may still be postponed. According to Goldman Sachs, the Bureau of Labor statistics will likely schedule the NFP Employment Change for early next week.

Economists and analysts continue to expect the inflation rate to remain at 3%, with employment continuing to weaken. As a result, the stock market continues to rise, while the US Dollar remains unchanged. The price movement is largely due to its impact on interest rates. However, two members of the Federal Reserve officially came out opposing a rate cut in December.

As a result, the possibilities of a rate cut fell from 66% to 52% according to the Chicago Exchange. Although many economists continue to advise that the Federal Reserve is still likely to cut rates in December.

GBPUSD - Poor Economic Data Continues For the UK

The British Pound continues to decline for a third consecutive day, with downward momentum gaining due to further poor data. The UK’s employment data was originally triggering the downward price movement of the week. This includes the UK’s Unemployment Rate rising to 5% and salary earnings falling 0.2% below expectations. However, today’s UK Gross Domestic Product further increases the downward momentum.

The UK’s Gross Domestic Product fell from 0.0% to -0.1% and below previous expectations. The GDP expectations, which are also made public by the Office For National Statistics, also fell from 0.3% to 0.1%. Since the announcement at 07:00 (GMT), the price of the Pound fell 0.17%, but has since seen up-and-down volatility.

A positive factor for the Pound is Health Minister Wes Streeting de-escalating the latest political tensions. Sources within the Labour Party also reported a possible leadership change, with Health Minister Wes Streeting emerging as a potential candidate. However, Mr Streeting has since advised he has no desire to oust the current UK Prime Minister.

The British Pound is the worst performing currency of the week along with the Japanese Yen. The best performing currency remains the Swiss Franc and Australian Dollar.

NASDAQ - Cisco Beat Earnings Expectations, But Fed Members Oppose a December Cut

The NASDAQ and S&P 500 saw a day marked by contrasting performances between the first and second halves of the day. The NASDAQ rose in value during the Asian and US Sessions but fell during the US session. The decline was largely due to the comments made by two members of the Federal Reserve.

Two Federal Reserve officials voiced opposition to another interest rate cut at the December meeting, adding uncertainty to the Fed’s policy outlook. Previously, members had taken a neutral stance or advised that a cut was not certain. However, in recent weeks this is the first time members have outright opposed a rate cut.

Comments from Susan Collins, President of the Boston Fed, and Raphael Bostic, President of the Atlanta Fed, indicate the rate-setting committee may be shifting away from what was previously expected to be a third consecutive rate reduction next month. If the Federal Reserve does not cut in December, the NASDAQ could decline between 4-7% according to JP Morgan’s Strategists.

A positive factor for the NASDAQ is the end of the US shutdown officially coming to an end as well as the latest positive earnings reports. Last night, Cisco Systems made public their earnings for the 3rd quarter. The company’s revenue beat expectations by $11 million and earnings beat expectations by $0.02. In addition to this, an important factor for shareholders is the company’s forward-guidance figures were significantly higher than previous data.

Cisco stocks rose 3.14% on Wednesday and a further 7% after the announcement of the company’s earnings. On Wednesday, 58% of the most influential stocks (weight above 0.50%) rose in value with AMD stocks witnessing the strongest gains (+9.00%).

NASDAQ - Technical Analysis

Even with the decline during yesterday’s Asian session the price of the NASDAQ remains above most Moving Averages. The price is also trading slightly above the RSI’s neutral level on the 30-minute timeframe.

The NASDAQ continues to form higher highs and lows, but has not broken above the resistance level at $25,793.00. The price is almost forming a ‘head and shoulders’ price pattern, which would indicate a downward trend. This is something investors will continue to monitor, and if the price falls below $25,570.00, the ‘head and shoulders’ pattern will become more visible. However, if the price rises above $25,662.20, the pattern and bearish signal will fade, and buy signals will strengthen.

Key Takeaway Points:

• US government shutdown ends, but key economic reports such as inflation and employment data may still face delays.
• Rate-cut expectations fell from 66% to 52% after two Fed officials publicly opposed a December reduction.
• Economists and analysts continue to expect the inflation rate to remain at 3%, with employment continuing to weaken.
• UK economic data disappoints, with GDP contracting by 0.1% and unemployment rising, pressuring the British Pound further.
• Cisco released its Q3 earnings, beating revenue estimates by $11 million and EPS by $0.02, with stronger forward guidance. Cisco’s stocks rose 7.00%.