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27.11.202311:59 Forex Analysis & Reviews: US premarket on November 27: US stock market fails to start rally

US stock index futures opened lower after a couple of unsuccessful attempts to extend the rally on Friday. The S&P 500 futures fell by 0.2%, while the tech-heavy NASDAQ dropped by 0.3%. The industrial Dow Jones is trading almost unchanged.

European stock indices also remained largely steady, as economic data from China dampened the optimism following last week's global stock market rally. The Stoxx 600 index fell by less than 0.1%.

Exchange Rates 27.11.2023 analysis

Risk assets are under pressure due to news of slowing income growth in China's industrial companies, raising concerns about deflation in the world's second-largest economy. Fresh economic data this week will help traders assess whether the demand for risk assets seen this month will continue into December. The data includes inflation figures in the eurozone, business activity indices in China, and US personal consumption indicators on Thursday – the Federal Reserve's preferred measure of inflation, as well as business activity indices in the US and eurozone.

The rise in US bond yields at the opening is exerting some pressure on investor sentiment, contributing to the decline in US stock index futures, along with the Chinese markets, which are also under pressure. The yield on 10-year Treasury bonds jumped by a full five basis points to 4.51%, the highest level in over a week. The dollar's exchange rate remained virtually unchanged. This cautious start comes even as the VIX, an investor fear index, fell last week to its lowest level since January 2020.

Traders are also closely monitoring gold and oil, following indications from Israel and HAMAS that the temporary ceasefire in the Gaza Strip could be extended, potentially leading to the release of more hostages and prisoners. Oil prices are falling for the fourth day as traders await this week's postponed OPEC+ meeting.

The modest growth of Chinese industrial companies in Asia may prompt caution in terms of expansion or hiring new employees, which could further pressure prices. The Hang Seng China Enterprises Index fell by 1.4%, and the CSI 300 Index dropped by 1.3%. The yen strengthened against all currencies.

Exchange Rates 27.11.2023 analysis

As for the S&P 500, demand for the index remains. Bulls need to defend $4,557 and take control of $4,582. This will help strengthen the upward trend and open the possibility for a surge to $4,609. In addition, bulls should maintain control over $4,637, reinforcing the bulls market. In the event of a downward move due to reduced risk appetite, bulls will have to protect $4,557. A breakthrough would quickly send the trading instrument back to $4,539 and pave the way to $4,515.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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