News and analysis

US holidays, with an early close of equity markets, briefly shifted the focus into currency trading. The Yen-related pairs topped the charts, following the Bank of Japan's gradual retreat from low interest rate policy. Japanese central bankers' retreat from several decades of their ultra-simulative stance is clearly at odds with the start of cutting borrowing costs in almost every other part of the world. Lower rates in Dollars, Euros, British pounds etc are eagerly awaited, while the Bank of Japan is signalling to raise its short-term rates from the current 0.25% after lifting its previous bond yield cap and tapering its bond purchase program. As a result, USDJPY got a negative slope and even ducked under the major psychological support line at 150 in the early morning hours of Friday. I think it could fall down faster, but the country's new PM Shigeru Ishiba wants to spend nearly 14 trillion yen, an equivalent of more than $90 billion, for a package of special measures to balance the social damage from rising living costs. It is going to be funded by a supplementary budget legislation to be launched just before the end of this week. This would create more public debt pressure for Japan's financial system. The debt is now exceeding 1,100 trillion yen, being the biggest percentage burden among advanced nations compared to the size of its economy, and the further moves on exit from zero rates increases the cost of serving this stratospheric debt. Japan will spend approximately 27 trillion yen, or nearly 25% of its annual budget, on debt-servicing costs.

Such considerations are constraining the pace of national currency's strengthening, yet it is going on with varying success in all Yen-related pairs like EURJPY, GBPJPY as well. However, AUDJPY is probably the crowd's next favourite in short positioning, as the pair just had its previous support levels around 100 freshly broken only a couple of days before, with a huge space for further sliding below. The Reserve Bank of Australia is later than other regulators in launching its own version of a rate easing cycle. It is going to start the dovish steps only in May 2025, according to the bank officials' hints and many analysts, citing a resilient employment curve and rather steady business conditions. Markets would probably see only two or three 0.25% reductions during the next 12 months in Australia. The cash rate is at 4.35%, after additional raising above 4% in June 2023, yet softer-than-expected consumer price indications in the recent month and some softening in the labour market may form the ultimate driver for the Reserve Bank of Australia to open the door to an early 2025 easing.

As spring may come early or late, but it is going to come in several months anyway, so that interest rate cutting would touch the Australian Dollars' value some sooner or later as well. Rate cutting is an overall trend in the whole community of developed economies, which are all interconnected and extremely interdependent, and so I think the market sentiment of buying the Japanese Yen against other reserve currencies will push AUDJPY to go down, targeting at a 93-95 range for the beginning. Again, all pairs containing Japanese Yen are usually very well synchronized. My basic scenario for the next week already is further accelerating their move down, led by the growing inertia momentum technically, while keeping in mind lower goals fundamentally. Looks like a good opportunity for short-term bets.

Cardano (ADA) is up 4.7% to $1.06550, outperforming the broader market as Bitcoin (BTC) edges down 0.6% to $96,233. In November, ADA has surged an impressive 200.0%, with prices peaking at $1.15460 last Saturday, marking a monthly gain of 239.0%—the most significant performance among the top 50 cryptocurrencies. However, strong overbought conditions are evident. While upside spikes to $1.40000 remain possible, betting on further gains is highly risky without a confirmed correction to $0.80000 to reset the market's momentum.

Maker (MKR) is up 6.3% this week, trading at $1,837.00 and outperforming the broader market as Bitcoin (BTC) declines by 2.1% to $95,015. Earlier this week, MKR reached as high as $2,076.00 on Monday, while BTC fell 3.3% on the same day.

Despite the positive momentum, Maker has struggled to break through key resistance levels at $1,900 and $2,000. However, the token appears to be building strength for another attempt. Many altcoins have already surpassed similar resistance barriers, suggesting that MKR may soon follow suit.

CrowdStrike is among the most disputed stocks on Wall Street since its faulty software update on July 19, 2024 has been responsible for the largest global outage in history, affecting millions of Windows-based devices, transactions and cloud services, check-in systems at airports etc. The cybersecurity giant lost nearly half of its market value during the next couple of weeks following the incident, which was equivalent to about $50 billion. CrowdStrike withstood a backstabbing blow conducted by its own program code bugs, however. Its shares managed to recover 88% of the one-off price damage to touch a $375 barrier this Monday, November 25, just one day and one night before the firm's Q3 earnings. Apparently, a rehabilitation period is progressing normally, as the stock initially fell only 3% to 6% in after-hours following the release and then kept within this frame of losses when the regular trading resumed on Wednesday. This looks like a worthy answer in the given circumstances. Going back to fundamentals, CrowdStrike's financial performance consists of a 32% increase in its annual recurring revenue (ARR) which came out at $3.86 billion to exceed its inner preliminary guidance by a total of $0.964 billion. The firm's agreeable commitment to transparency and customer trust helps a lot, so that the company's long-term goal of reaching $10 billion in ARR by the fiscal year of 2031 could be a rather realistic and potentially achievable business targeting. Particularly for the recent quarter, CrowdStrike sales climbed by 29% to $1.01 billion to generate an EPS (equity per share) of $0.93 instead of $0.81 cents in consensus estimates. The Q3 profit number was exactly at the company's Q1 level, which was the second best quarterly result before the incident. CrowdStrike estimated its current quarter revenue to be between $1.03 billion and $1.04 billion, with a supposed annual adjusted EPS from $3.74 to $3.76, up from a previously forecasted range of $3.61 to $3.65.

From our point of view, these bare facts may confirm that CrowdStrike quickly cured its fresh wounds. Yet, this does not mean that an immediate price increase should be expected. Our baseline scenario after the quarterly report suggest that a retest of some lower area, let's say between $315 and $330 per share, would be desirable to attract more picking up investment power. We generally agree with Citigroup estimates which maintained a Buy rating on CrowdStrike and raised their price target to $400 from the previous $300, though mentioning impacts from Chinese cyber competition and extended sales cycles after the outage, but we could project such a target with a caveat of high chance of touching lower levels first, before the next wave of price recovery would be formed.

"Our single platform approach and trailblazing innovation continue to resonate at-scale,” CEO George Kurtz commented on better-than-feared results. "While the outage impact is still in play, Flex and financial services (CFS) are driving greater module adoption, larger deal sizes, and longer duration contracts... with customers opting for more modules vs. extended deal terms as part of the Customer Commitment Package (CPP)", Oppenheimer analysts noted, suggesting a likely recovery in the second half of 2026. "Hyper-growth modules in Cloud Security, Identity Protection, and Log Scale collectively surpassed $1 billion in ARR", according to conference call papers presented by CrowdStrike. Back to Citigroup analysis, they also feel offerings like FalconFlex end-to-end fleet management system to improve logistics and delivery and CrowdStrike Falcon Spotlight (CFS), which is a dynamic vulnerability management solution equipped with intuitive dashboards and filtering capabilities, will have a positive strategic impact on retention, expansion, competitive positioning, average selling price, and market consolidation. City also sees the growth pace of bookings in remaining performance obligations at approximately 70% YoY.