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HFMarkets (hfm.com): Market analysis services.

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Date: 23rd January 2024.
 

Market Recap: Asia stocks higher; Yen up post Ueda’s comments.

BOJ-696x385.png
Economic Indicators & Central Banks:
 
  • China: Reports that Chinese officials are looking into a rescue package for the beleaguered stock market has given Asian equities, and particularly the Hang Seng, a big lift. Sources suggest authorities are proposing some $278 bln be invested in onshore funds.
  • Japan: The BoJ left policy unchanged, maintaining its -0.100% policy rate and keeping YCC intact, as well expected. BoJ governor Ueda said there is more certainty in the outlook, which saw JGBs paring earlier gains. There were no significant indications on forward guidance. We see more of a dovish lean from the downwards forecasts, with the Bank likely to leave its stance in ultra-accommodative mode until April when the wage talks should be under our belt.
2024-01-23_10-29-59.jpg

Market Trends:
 
  • Asian stock markets mostly moved higher, with the Hang Seng surging 3% to a session peak of 15,472 before paring gains to 15,345. The CSI rose to 3240 after slumping to a 5 year low of 3218 yesterday. It was at a 2023 peak of 4201 in late January 2023.
  • The JPN225 (Nikkei) is up 0.29% to 36,630.
  • Stock futures are higher across Europe, but while the US100(NASDAQ) has found buyers, the US30(Dow Jones) is slightly lower but holds above its record high at 38k.
  • Microsoft and other tech giants along with Goldman shares, which jumped 1%, have boosted the Dow higher.
Financial Markets Performance:
 
  • The USDIndex slipped to 102.70 from 103.384 and is seeing broadbased declines.
  • USDJPY has been choppy, spiking to 148.55 before drifting down to 147.86.
  • Oil prices reached $75 again, as US and UK launch new strikes at Iran-backed Houthi rebels in Yemen, adding to the tension in Middle East.
  • BTCUSD dropped below $40,000 as the launch of the first US ETF holds the digital currency abated, as investors take profits off the table. Ether, the second-largest cryptocurrency, fell 6% to $2,325.Copy-of-TELEGRAM-.png
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 24th January 2024.
 

Market Recap: China bourses move higher amid stimulus hopes; JGB yields spike.

eu_update_pic_nov18-1-696x391.jpg
Economic Indicators & Central Banks:
 
  • Expectations the FOMC is done hiking rates continued to support Wall Street even if aggressive rate cut bets have been trimmed, while earnings were mixed.
  • Yields remain mostly higher, but off their peaks after the decent 2-year auction ($60 bln 2-year note sale). The Treasury is selling $61 bln in 5-year notes Wednesday and $41 bln in 7-year notes Thursday.
  • Corporate supply has helped keep the market heavy. IADB priced a $4 bln 5-year SOFR. Also, Romania sold $4 bln in 5- and 10-year notes. Sweden sold a $2 bln 2-year. Bank of New Zealand priced a $750 mln 5-year. Cote d’Ivoire has a $2.6 bln 2-parter. CPPIB Capital offered $1.5 bln in 3-year SOFR.
  • Japan reported its exports jumped nearly 10% in December.
  • Japanese markets underperformed, with both stocks and bonds hit by speculation that the BOJ is laying the ground for an exit from the negative interest rate environment.
  • The China Securities Regulatory Commission, called for better protections for investors and for instilling confidence in the potential for gains in the markets, which have faltered in recent months.
2024-01-24_09-52-20.jpg

Market Trends:
 
  • Asia: Hong Kong’s Hang Seng surged 2% to 15,569.39, helped by gains in technology companies like e-commerce giant Alibaba, which surged 3.8%. JPN225 (Nikkei) lost 0.8% to 36,226.48.
  • The US500 added to its gains, rising 0.29% to its third straight fresh all-time high at 4864.6 US30 however was drag lower as 3M tumbled more than 10% on Tuesday after the company’s 2024 profit outlook came in below expectations.
  • eBay will lay off about 9% of its full-time workforce.
  • Procter & Gamble climbed 4.1% & United Airlines flew 5.3% higher after stronger profit for Q4 2023.
  • Netflix rallied 8% afterhours after the video streaming service handily beat subscriber estimates in the Q4.
  • ASML Holding, a chipmaking equipment maker, reported Q4 earnings that beat expectations and its best-ever quarterly orders, but it kept a cautious outlook for 2024 as it faces new restrictions on exports to China.
  • Futures are higher across Europe and the US as Treasuries and Eurozone bonds advance.
Copy-of-TELEGRAM-1.png

Financial Markets Performance:
 
  • The USDIndex found legs and rallied to 103.57. It was firmer against 7 of its G10 peers
  • USDJPY steadied on 147.70 as Yen gained support after chief Kazuo Ueda said on Tuesday that the prospects of achieving the BOJ’s inflation target were gradually increasing.
  • Oil finished -0.3% lower at $74.51 per barrel and Gold was 0.3% higher at $2028.34 per ounce.
  • Bitcoin steadied around $39,700, after sliding as low as $38,505 on Tuesday for the first time since Dec. 1.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date : 25th January 2024.

Market Recap: Has US avoided recession in 2023? ECB also on tap.

eu_update_1200x628-e1567669197104-696x339.pngTrading Leveraged Products is risky
Economic Indicators & Central Banks:
 
  • Treasuries were weak with yields extending higher still, hit by the double whammy of stronger than expected PMI data and an ugly 5-year auction.
  • The healthy rally on Wall Street also weighed, though stocks trimmed gains into the close.
  • China bourses continued to rally after the PBOC stepped up support measures yesterday by cutting reserve requirements, while hinting at possible rate cuts.
  • ECB Preview: The central bank is widely expected to keep policy settings unchanged and stick with a wait-and-see stance for now, which means rate cuts are not on the immediate agenda.
2024-01-25_10-27-46.jpg

Market Trends:
 
  • Hang Seng and CSI 300 already staged a late rally yesterday and continued to move higher today, with gains of 1.8% and 2.0% respectively.
  • European futures are in the red, however, as the ECB meeting comes into view.
  • US futures are slightly higher on the anticipation of US GDP later on which could provide clues as to where US rates might be headed.
  • Tesla’s profits plummet! Tesla (-5.93% after hours) posted a 23% decline in profits for 2023, its 1st annual decline since 2017!
  • Microsoft becomes 2nd company ever to top $3 trillion valuation on AI-driven rally. Apple remains at the top.
  • FAA halts Boeing 737 MAXproduction expansion. Boeing -1.32% after hours.
Copy-of-TELEGRAM-2.pngFinancial Markets Performance:
 
  • The USDIndex slipped to a session nadir of 102.52 but bounced back to 103.25 to close over the 103 level for a 7th straight session.
  • EURUSD is steady at 1.0880. The USDJPY regained some ground after hints at rate rises in Japan triggered selling in the Japanese government bond market. It remains below 148.
  • USOIL was up 1.45% to $75.44 per barrel amid ongoing geopolitical risks and following a bigger than expected US inventory draw.
  • Gold was down -0.83% to $2012.50 on the stronger PMI data and further trimming in rate cut bets. Markets have reined in expectations for early rate cuts in the US and Europe, and BoJ governor Ueda yesterday hinted that the exit from the negative interest rate environment is coming into view. That should keep gold range bound for now.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 29th January 2024.

The Week Ahead – Earnings, Central Banks and Geo-Political Tensions!


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  • Tensions rise in the Middle East as three US Soldiers are killed in a base near the Syrian-Jordan border after being attacked by Iran-backed militants. Crude Oil price opens 1.15% higher.
  • Gold rose 0.63% on Monday due to rising tension in the Middle east. Traders are evaluating whether the market will witness a “risk-off” sentiment this week.
  • All eyes on the Federal Reserve’s press conference on Wednesday. Analysts expect the Federal Fund Rate to remain unchanged, but the Press Conference will signal the Fed’s future path.
  • The US economy grew 3.3% in the latest quarter, beating expectations of 2.0%. In addition to this, Pending Home Sales rose 8.3% and the Core PCE Index rose from 0.1% to 0.2%.
XAUUSD – Geo-Political Tension Again on The Rise

The US Dollar Index did open Monday’s trading slightly higher, however, has fallen 0.10% over the past 2 hours as of the time of writing. Instead, investors are increasing exposure to Gold. Gold prices are trading 0.63% higher during this morning’s Asian Session and have risen above the most recent resistance levels. When evaluating technical analysis, the price of the commodity is trading above price sentiment indicators, above the neutral on most oscillators and above the day’s VWAP. Here we can see potential “buy” signals, however, investors also should note significant resistance points at $2,037.80. This level has triggered declines on eight occasions over the past month. If the price maintains momentum and crosses this level, Gold will move into the “buy” region of the Fibonacci levels.

The price is largely being driven by two factors: the decline in the Dollar and lower investor sentiment due to rising Middle East tensions. The group which conducted the attack is not yet known, however, President Biden has already advised the US will retaliate. According to the White House, the group is most likely an Iranian-backed militant group which is the main concern for investors. Though investors should note that this will only have a short-term effect if the situation does not escalate.

The next price drive will be the Federal Reserve’s Press Conference and the central bank’s forward guidance on interest rates. This will determine if institutions decide to further expose their funds to the Dollar or look for alternatives. The main alternatives will be Gold and US Bonds. If investors are unconvinced the Fed will keep rates high, Gold could benefit from a weaker Dollar. Tomorrow’s JOLTS Job Openings could also create further volatility.

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USA100 – Investors Eye Earnings and Fed Press Conference

US investors are concerned about the developments over the weekend and as a result the rising oil price. Another concern for investors is also if the Fed gives an ultra-hawkish signal on Wednesday after strong economic data last week. Last week, the US PMI rose higher than expectations as did the economy’s Gross Domestic Product. Though stocks and shareholders will equally be monitoring this week’s quarterly earnings reports from major companies.

Tuesday Quarterly Earnings Report

Microsoft – +1.01% over the past week.

Alphabet – +3.30% over the past week.

AMD – +1.58% over the past week.

Wednesday Quarterly Earnings Report

Apple – Unchanged over the past week.

Amazon – +1.35% over the past week.

Meta – +1.61% over the past week.

The performance of the USA100 will largely depend on whether the above earnings are higher than Wall Street’s expectations and on the Fed’s Press Conference. If the Fed is viewed as “ultra-hawkish”, stocks are likely to experience significant pressure if earnings do not exceed expectations.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 30th January 2024.

The Yen Tops All Competitors and Investors Turn to Tech Earnings.


Fotolia_7596044_XS.jpg
  • Monday’s best performing currency was the Japanese Yen which took advantage of a lack of economic data and a rise in geopolitical tensions.
  • Analysts advise institutions may increase exposure in the Yen due to geopolitical tensions. Japan’s unemployment rate declines to 2.4%, the lowest in 10-months.
  • The USA100 rises ahead of tonight’s vital quarterly earnings reports. Of NASDAQ’s 20 most influential stocks, only three saw a slight decline.
  • Tesla and Illumina were NASDAQ’s best performing stocks, rising more than 4% each.
USA100 – Microsoft and Alphabet Earnings Upcoming

The USA100 rose 1.21% on Monday as demand again rose ahead of major earnings from five of the “magnificent seven”. Tonight, investors await the quarterly earnings reports from Microsoft, which yesterday rose 1.43%, and Alphabet, which rose 0.68%. However, investors must also monitor the earnings data from AMD which is the 11th most influential stock for the index.

Even with the strong bullish price action over the past 4 weeks, investors should be cautious about short-term volatility. During this morning’s Asian session, the USA100 is trading 0.16% lower. US indices are known to decline towards the end of the US session and within the Asian session. However, if the price maintains momentum, sell signals can arise. On the 2-hour chart, the price is trading above the 75-bar Exponential Moving Average and above the “neutral” on the RSI. Both indicate strong buying sentiment. However, the latest candlestick is bearish meaning buy signals are not currently active. Fibonacci levels indicate support may be found between $17,505.88 and $17,5870. If the price rises above $17,633, signals will again arise.

Copy-of-TELEGRAM-MARKET-UPDATE-75-1024x577.png

So far this morning the US Dollar Index is trading lower, and bonds are increasing in value. Both are indications that the stock market can potentially gain. However, in order for the USA100 to see significant upward price movement, the index will also need to be supported by tonight’s earnings data.

XAUUSD – Fed’s Future Guidance Key For Gold

Gold is currently experiencing strong volatility in both directions but continues to see buyers overpowering sellers. If we look at the price action from the price gap, the commodity rose by 0.47% and from Friday’s close 0.72%. We can see here even with strong bearish volatility at times throughout the day, Gold still finalized a considerable increase. Gold’s price rose a further 0.15% during this morning’s session, but analysts are slightly cautious about the resistance level.

Copy-of-TELEGRAM-MARKET-UPDATE-74-1024x577.png

The resistance level at $2,040 has been intact throughout the whole month and was only temporarily able to break above this level. Nonetheless, trend and momentum indicators are signalling upward price movement. Today’s CB Consumer Confidence and JOLTS Job Openings will significantly influence the price action of the Dollar and subsequently Gold. If the two economic releases read higher than expectations, Gold can potentially correct back downwards. However, a lower figure can further fuel the upward movement due to its hedge against inflation and alternative to the Dollar.

According to the US Commodity Futures Trading Commission’s latest report, the number of buy contracts rose by 2.211 thousand and sell contracts fell 11.280 thousand. Here we can see a possible shift towards bullish speculation.

EURJPY – Japanese Yen Currently The Best Performance Currency

The best performing currency of the day and the week so far is the Japanese Yen. Investors are returning to the Japanese Yen as most currencies within the G7 are expected to cut rates in the upcoming months, whereas analysts expect the Bank of Japan to slightly increase rates just before the summer. According to fundamental analysts, the Yen’s haven status can also serve as an alternative to the Dollar while geopolitical tensions rise.

The Japanese Yen is increasing against all currencies but one of its strongest price movements is against the Euro. The Euro has been put under pressure from a dovish outlook set by investors, not necessarily the Central Bank representatives. In addition to this, France’s Flash GDP figures for the latest quarter read 0.0%, meaning the country was very close to officially being in a recession. Investors now turn to Germany and Italy. If both regions also see lower a lower gross domestic product growth rate, the Euro can experience further pressure.

The Japanese Yen on the other hand is likely to be influenced by three releases scheduled for tonight’s Asian Session. Japan will release the Bank of Japan’s Summary of Opinions, the Prelim Industrial Production and Retail sales. Higher data and a more hawkish central bank can support the Yen further, as did today’s Japanese Unemployment Rate. Japan’s unemployment rate today fell from 2.5% to 2.4%. investors also should note that weaker US data can also support the Japanese Yen indirectly.

Copy-of-TELEGRAM-MARKET-UPDATE-73-1024x577.png


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 31st January 2024.

US Technology Stocks Decline Ahead of the Fed’s Press Conference.


Fotolia_687822_XS-e1541601641504.jpg
  • US Technology Stocks decline ahead of the Fed’s interest rate decision and press conference. Only the Dow Jones witnessed bullish price movement during the US session.
  • Both Microsoft and Alphabet beat earnings and revenue expectations, but stocks declined. Find out why below.
  • The Euro rose in value against all currencies on Tuesday, but the region’s Gross Domestic Product continues to indicate stagnation and a risk of a recession.
  • The US Dollar Index trades higher but US Bond yields fall to weekly lows.
USA500

The SNP500 fell 0.33% during yesterday’s trading session and formed a 0.10% bearish gap during this morning’s Asian session. The price has since formed a price range which traders can use as a breakout level at $4,909.11 and $4,901.40. The decline in the index was largely triggered by the upcoming Federal Reserve Press Conference and “profit taking”, according to analysts.

Overnight the market focused on the quarterly earnings reports from Microsoft and Alphabet. Microsoft is the most influential stock and holds a weight of 7.31%. Microsoft stocks fell by 0.28% before the announcement and a further 0.25% after the announcement. Volatility levels were relatively low and according to analysts, the upcoming Fed announcement may potentially be the reason why. In addition to this, Microsoft did not add anything particular to their forward guidance which disappointed investors.

Microsoft.png

Microsoft Earnings beat expectations by 5.80% and Revenue by 1.45%. In addition to this, investors are also cautious about the fact that growth is largely being witnessed in the Azure and cloud services. Whereas the other 7 sectors are seeing relatively lower growth. Bloomberg advises the company earnings are solid and do not indicate a need for a selloff or significant decline. However, neither do we have any indications of upward price movement.

Alphabet stocks on the other hand saw a larger decline after their earnings report was published. The earnings per share figure was 2.50% higher than expectations and revenue only 1%. Even though the earnings were higher than expectations, shareholders were still largely disappointed. The previous 4 quarters saw earnings beat between 7% and 10%. According to analysts, investors took this as an opportunity to cash in profits and so there was no need to hold onto positions for the time being.

Of the USA500’s most influential 10 stocks, only 2 ended the day higher and from the 50 most influential stocks 28 rose in value. Here we can see that the individual stocks and components are not giving a clear picture and most likely tonight’s Fed comments will determine the price movement over the next 24-48 hours.

Copy-of-TELEGRAM-MARKET-UPDATE-78-1024x577.png
 
EURUSD

The Euro saw moderate increases against all currencies during the European session but lost momentum once the US session opened. However, the price this morning is showing much stronger volatility in favor of the Dollar. In addition to this the US Dollar Index is rising in value during this morning’s Asian Session. So, are investors increasing their exposure to the Dollar ahead of tonight’s Federal Reserve decision, statement, and press conference? Traders will monitor if this will be the pattern for the day.

The Dollar is once again being supported by considerably stronger than expected economic data. JOLTS Job Openings rose from 8.93 million to 9.03 million, higher than the previous 2 months and higher than expectations. In addition to this the CB Consumer Confidence also rose to its highest level since December 2021. If the Federal Reserve Chairman, Jerome Powell, gives a more hawkish press conference compared to recent ones, the Dollar can indeed potentially rise further. For example, if the Fed advises the FOMC will not vote for rate cuts in the first 2 quarters for the year.

When monitoring technical analysis, the price of the exchange is below trend lines, in the sell zone of oscillators and trading below the regression channels. All factors currently indicate Dollar dominance.

Copy-of-TELEGRAM-MARKET-UPDATE-79-1024x577.png


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 1st February 2024.

Dollar Rises As Fed Confirms No Rate Cut At March’s Meeting.


eurusdlibra-696x364.png
  • The Federal Reserve Chairman advises journalists that interest rate cuts are not likely in March. However, bond yields continue to decline indicating institutions continue to believe cuts are impending.
  • The USA100 declines by 2.5% over two consecutive days after earnings data was unable to support individual stocks.
  • Futures market points lower in Europe and Asian stocks show no clear direction. Traders are considering if investors will take advantage of the lower price ahead of tonight’s vital earnings data.
  • Stock traders turn their attention to earnings from Apple, Amazon and Meta. The three stocks make up almost 18% of the NASDAQ.
EURUSD – The US Dollar Rises Against All Currencies!

The EURUSD exchange saw one of the highest levels of volatility amongst the “major currency pair” category. The exchange rate saw two significant impulse waves which can be explained using fundamental factors. The first impulse wave was in favor of the Euro and was largely due to the German inflation data reading higher than expectations. The correction which followed in the US session was due to the Fed’s comments on future interest rates.

Copy-of-TELEGRAM-MARKET-UPDATE-80-1024x577.png

This morning the exchange rate trades 0.30% lower and continues to obtain sell signals against the Dollar. The US Dollar Index is trading at its highest level since early December 2023. The Euro on the other hand is not witnessing any significant price movements against other major competitors. The Euro upward price movement was generally weak against the Dollar as German inflation still fell despite the smaller decline and also French inflation fell by a considerable -0.2%.

The US Dollar saw some negative economic data for the first time in over two weeks in yesterday’s session. The ADP Non-Farm Employment Change read 41,000 lower than expectations and the Employment Cost Index for the quarter fell to its lowest level since July 2021. Nonetheless, the Federal Reserve confirmed in their press conference that a rate cut in March is not likely. According to analysts, the Fed will not likely cut at the March meeting unless employment data takes a serious hit. According to the CM Exchange, there is a 92% chance of a rate cut in May and a certain cut by June at the latest. The Fed did not give any indications that this is not possible and is being backed this morning by declining yields. The question is who will opt for larger and more frequent cuts, the Fed, the ECB or the Bank of England.
 
USA100 – Will Investors Continue Profit Taking?

The USA100 saw a considerable downward price movement on Wednesday and order flow analysis indicates seller overpowering buy orders. In addition to this, the assets traded below the volume weighted average price throughout the whole day. Technical analysis and order flow indicate a decline in the asset; however, traders also need to consider if investors will look to re-enter at a lower price.

This will largely depend on tonight’s earnings data. Analysts expect Apple, Amazon, and Meta to witness significantly higher earnings as well as revenue. However, the question is whether the companies will beat expectations. Investors will also be closely monitoring reviews on the new Apple headset. These reviews and future sales figures can significantly affect Apple stocks which hold 8.78% of the NASDAQ. So far, reviews are positive in terms of the technology and experience, but negative in terms of the price and demand due to the high cost.

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GBPJPY – Investors Turn Their Attention to Bank of England Votes

The GBPJPY is decreasing in value for its fourth consecutive day and is trading at its lowest level since January 16th. Throughout the year the Japanese Yen is expected to perform well due to being the only Central Bank which will not be cutting interest rates. However, in the short-term, the price action will depend on this afternoon’s Bank of England Press conference and “Committee Votes”.

The rate decision is without a doubt not going to change this month, however, the change in votes can create volatility. Analysts expect 2 members of the committee to vote for another interest rate increase, which is lower than last month’s 3 votes. If the votes are more hawkish than expectations, the Pound can rise. Whereas less votes for rate increases or a vote for a decrease would significantly pressure the Pound.

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Technical analysis signals a downward trend when evaluating momentum and trend-based indications. However, the price has fallen to the previous resistance level which can be flipped to a support.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 2nd February 2024.

The S&P500 Renews Its All-Time-Highs. Investors Turn to Upcoming US Data.


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  • Investors take advantage of the lower purchasing price amongst technology company stocks. The NASDAQ recovers and trades closer to previous highs.
  • Apple, Amazon, and Meta earnings beat Wall Street’s expectations. Apple falls 2.92%, Amazon rises 7.11% and Meta trades more than 15% higher.
  • Apple revenue rises for the first time in over 12-months. Nonetheless, investors still sold shares as the company confirmed they are encountering difficulty in China, one of their largest markets. China previously has accounted for up to 25% of Apple’s revenue.
  • Analysts expect the US Unemployment Rate to rise from 3.7% to 3.8% and for the NFP Employment Change to read 188,000.
USA500 – Earnings Push the USA500 to All-Time Highs

The USA500 was the best performing index on Thursday increasing in value by 1.25% and rising to a new all-time high. Technical analysis currently continues to indicate upward price movement. The asset trades above moving averages, above the Volume Weighted Average Price and oscillators continue to indicate buyers are controlling the market. The only concern for investors is the previous resistance level and if demand will decline at such a high price.

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The price this morning trades within a price range between $4,937.90 and $4,928.87. If the price breaks above this level the assets’ buy signals can potentially strengthen. The upward price movement is supported by company earnings data. Apple, Amazon and Meta easily beat earnings and revenue data. Apple was the only stock which saw a decline after earnings due to negative data from China, its second most important market. Meta and Amazon on the other hand saw a significant rise in demand.

The Unemployment Rate is expected to increase from 3.7% to 3.8% and the Average Hourly Earnings to decrease from 0.4% to 0.3%. The Nonfarm Payrolls may also decrease from 216,000 to 188,000. According to analysts, the ideal release would be slightly weaker figures but not weak enough to indicate harsher economic conditions. Though weaker data can prompt the Fed to consider a rate cut earlier. However, higher and stronger employment data can temporarily pressure the stock market as it supports rates remaining higher for longer.

Important earnings reports will continue today and on Monday for the USA500. This morning ExxonMobil and Chevron will announce their earnings. Over the past month, neither stock has seen any significant bullish price movement. On Monday, McDonald’s and Caterpillar will announce their earnings. Both stocks are trading slightly higher in 2024.
 
GBPUSD – Bank of England Member Votes for Rate Cut!

The price of the British Pound rose in value against the currency market as a whole and the US Dollar Index moderately fell. During yesterday’s session the Cable rose 0.46% and is also trading higher this morning. However, investors should be cautious of upward price movements as the Bank of England were deemed to be more dovish than their global partners.

The Bank of England has a Monetary Policy Committee made up of 9 members. None of the nine members have ever voted for a rate cut in the past 4 years, until now. Only 2 members of the committee voted for a hike, which is lower than previous months. 6 voted for a pause and 1 voted for a rate cut. Additionally, the Governor of the central bank also said the regulator would consider a rate cut later in the year.

Lastly, investors will have their attention fixed on this afternoon’s upcoming economic releases across the Atlantic. If the US employment data and Consumer Sentiment read stronger than expectations, the Dollar can potentially attempt a correction.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 5th February 2024.

Market Recap – Dollar shines;Gold in free fall as US consistently defies recession fears.


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Economic Indicators & Central Banks:
 
  • An eyepopping January jobs report capped off a huge week of events that ended with fresh record highs on Wall Street – FOMC indicated it was done with tightening.
  • Dollar up as any hopes for a March rate cut were wiped out. Meanwhile, further evidence of the robust economy added to the growing optimism for 2024 after 2023 ended on a high note.
  • The China Securities Regulatory Commission has announced its commitment to intensifying the enforcement of measures targeting offenses like market manipulation and malicious short selling. Simultaneously, it aims to direct a greater influx of medium and long-term funds into the market.
  • Market sentiment was also negatively impacted by remarks from former President Donald Trump, who suggested the possibility of imposing tariffs exceeding 60% on imports of Chinese goods if he were to be re-elected.
  • German trade surplus widened, but exports plunged – Germany’s export oriented model is struggling with geopolitical tensions.
Market Trends:
 
  • Treasuries fell, extending Friday’s selloff.
  • Massive earnings beats from Meta (20%) and Amazon (+7.87%) saw the US major Indices surging by more than 1%, while Nvidia closed 4.74% higher.
  • Asian stocks were mostly lower as Chinese shares extended declines despite a series of stimulus measures and the securities regulator’s latest pledge to shore up the market. – the FED, China’s property sector & tepid investor sentiment are all pressuring the Chinese equity market.
  • European futures are also narrowly mixed, while US futures are posting broad losses.
  • Today: January PMI data for France, Germany, UK & Eurozone and US ISM Services.
Financial Markets Performance:
 
  • The USDIndex held gains, just a breath below 104, while EURUSD drifted below 1.0800. GBPUSD held in December’s range.
  • The Yen crept lower to trade above $148.
  • USOIL steadies above $72 as the US vowed more strikes against Iran’s forces while the Houthis promised to retaliate against bombardments over the weekend.
  • Gold weakened!
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 6th February 2024.

Market Recap – Stocks surge as hopes of rate cuts recede; USD, yields higher.


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Economic Indicators & Central Banks:
 
  • Treasury yields elevated and US government bonds remained in a selloff after Fed Chair Powell pointed to fewer interest rate cuts this year than markets had been projecting.
  • Strong ISM services index added to the selloff for Treasuries, as did the concession building ahead of this week’s $121 bln Treasuries auction.
  • RBA left its cash rate unchanged at 4.35% – 12-year high. Surprisingly the statement indicated that “a further increase in interest rates cannot be ruled out,” hence leaving a hawkish bias in place. – possibly this is more prudence and a cautious move in order to keep rate cut expectations from building. Forecasts show inflation will not be coming into the 2% to 3% target range until 2025, hence the hawkish slant, and will not hit the midpoint until 2026.
  • BOE’s Huw Pill said that he did not need to see underlying inflation actually hit the 2% target to begin lowering rates.
  • UK retail sales slowed in January.
  • An unexpected jump in German manufacturing orders at the start of the European session reduced the pressure on the ECB to cut rates. German manufacturing orders unexpectedly jumped 8.9% y/y. This was the strongest bounce since June 2020 – glimmers of hope but overall demand subdued!
Market Trends:
 
  • Chinese stocks rose after the announcement that China’s securities regulator will meet President Xi Jinping.
  • Equities declined in Japan, Australia and South Korea. Topix fell 0.8% in the early trade ahead of earnings releases from Toyota Motor and Mitsubishi Corporation. JPN225 (Nikkei) fell 0.5%.
  • US and European futures contracts showed modest gains this morning, extending the positive lead in Asia.
  • UBS Group AG said it will resume share buybacks this year, vowing to hand as much as $1 billion to shareholders in the second half.
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Financial Markets Performance:
 
  • The USDIndex rallied on the less dovish Fed outlook, rising to test 104.60 before dipping back to 104.15 today.
  • The AUDUSD rallied to 0.6520 as Aussie bond yields jumped with the benchmark rising over 7 bps to 4.166.
  • USOIL recovered modestly from its better than -7% plunge last week, rising to $73.28 per barrel before drifting down to $72.98.
  • Gold fell to an overnight nadir of $2014.95 per ounce thanks in part to the rise in bond yields, but inched up to finish at $2026.30, the weakest since January 26.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 7th February 2024.

Market Recap – Cautious Start!


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Economic Indicators & Central Banks:
 
  • Treasuries bounced back after the worst 2-day stretch since June 2022. Dip buying supported along with a solid 3-year note auction & comments from the more hawkish Fed President Mester who could see rate cuts later in the year.
  • China’s bourses initially rallied on stimulus hopes, but the pledge to do more and the attempt to fix the situation with a series of smaller changes hasn’t instilled lasting confidence. Stimulus hopes are priced in already and gains could fade, if there is no more decisive follow up.
  • This year’s near -9% plunge in the Shanghai Composite index to the lowest since 2019, and the better than –10% drop in the Hang Seng, have rattled the officials significantly, especially as the various measures to date, including curbs on short selling, along with rate cuts and liquidity injections by the PBoC have failed to provide much umph.
  • German industrial production corrected -1.6% m/m in December. A worse than expected result.
Market Trends:
 
  • The CSI 300 is still up 0.96%, but the Hang Seng is now down -0.2% on the day.
  • The Dow advanced 0.37%, with the S&P 500 0.23% higher, and the NASDAQ up 0.07%.
  • European and US futures are flat!
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Financial Markets Performance:
 
  • The USDIndex was firmer but off its best levels as the gain to a 104.604 intraday high elicited some profit taking as the markets weigh central bank policies.
  • The NZDUSD spiked to 0.6113, as government bond yields rose after the strong New Zealand jobs report, which indicated that the RBNZ could remain cautious about cutting interest rates. The Aussie Dollar strengthened as well.
  • USOIL prices are firmer at $73.42 per barrel. Gold is 0.53% higher at $2035.66 per ounce.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.vvvvvvvvvvvvvvvvvvvv

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Date: 8th February 2024.

Market Recap – S&P500 Breaks 5k; Gold & USD in a range!


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Economic Indicators & Central Banks:
 
  • Asian stock markets were mixed with mainland Chinese stocks swinging between gains and losses on the eve of the Lunar New Year holidays, while Treasuries stabilized.
  • China CPI tumbled to an -0.8% y/y pace in January, steeper than forecast, after falling at a -0.3% y/y clip in December. It is the fastest pace of decline since September 2009 and a fourth straight month in deflation.
  • Japanese bourses outperformed,after BoJ’s Uchida said it is hard to see a rapid lift-off in rates.
  • Treasuries bounced back after the worst 2-day stretch since June 2022.
  • Dovish Fed’s Kashkari currently sees two to three rate cuts would be appropriate this year, as things stand.
Market Trends:
 
  • The Nikkei rallied 2.1%, mainland China bourses and the Hang Seng corrected again.
  • European and US futures are higher despite a slight rise in yields.
  • The S&P 500 hit a new high at the close, breaking the 5,000 level , driven by confidence in the economy despite worries like Fed policy changes and market conditions. The market remains strong with good momentum, even in a slower season.
  • Ford Motor, Chipotle Mexican Grill and other big stocks climbed following their latest earnings reports.
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Financial Markets Performance:
 
  • The USDIndex is at 104.03, in a tight range as markets digest mixed Fed speeches and ahead of more economic data.
  • The USDJPY depreciated against the US Dollar, reaching 148.80, following comments from BoJ Deputy Governor Shinichi Uchida indicating that the central bank is unlikely to pursue aggressive interest rate hikes, even as it moves away from negative interest rates.
  • USOIL rose for the 3rd day in a row, above $74, driven by gains in financial markets and ongoing tensions in the Middle East. The rise in global stocks is boosting demand for oil, despite the Federal Reserve’s dismissal of immediate interest rate cuts.
  • Gold steady at $2030-2038.
  • Bitcoin rose 0.85% to $44,564.62.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 9th February 2024.

Market Recap – Yen, Oil & Bitcoin Hit Key Resistance Levels Ahead of US Inflation Week.


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Economic Indicators & Central Banks:
 
  • Markets are closed for the holiday in mainland China, Taiwan, South Korea, Indonesia, the Philippines and Vietnam.
  • Treasuries declined for a 2nd straight session & Wall Street closed with small gains, as the market continues to shed expectations on Fed rate cuts ahead. The catalyst for selloff was the declines in initial and continuing jobless claims, reversing some of the recent increases and indicating the job market remain solid.
  • Nikkei (JPN225) saw an uptick at Friday’s close, pulling back from a 34-year peak as investors are in a profit taking mode in this 3rd week of gains. It edged up by 0.09% to 36,897.42 after surging as high as 1.15% to 37,282.26, marking its highest level since February 1990.
  • German HICP inflation was confirmed at 3.1% y/y in the final reading for January. Inflation is still far above the ECB’s target, but on a clear downtrend, and for the doves at the ECB that is enough to start weighing rate cuts.
Market Trends:
 
  • European futures declined cautiously ahead of US inflation data, while Asia geared down for the Lunar New Year holiday.
  • Australian equities remained relatively stable, while Japanese stocks displayed mixed performance, partially supported by a weaker yen.
  • The Nikkei rallied 2.1%, mainland China bourses and the Hang Seng corrected again.
  • SoftBank Group surged by 8.72%, extending its upward trajectory for a 2nd day following the tech investment firm’s return to profitability after 5 quarters. The rally in SoftBank Group Corp. shares was propelled by a more-than-55% surge in Arm Holdings (Arm chip design unit), in which SoftBank holds a 90% stake, after the British tech company forecasted quarterly sales and profit surpassing Wall Street expectations.
  • Nissan plummeted by 12% after the company failed to meet profit estimates.
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Financial Markets Performance:
 
  • The USDIndex remained steady ahead of the annual revisions to monthly US inflation data, following last year’s revisions that raised doubts about the Federal Reserve’s progress in managing consumer prices.
  • The Yen stabilized after a 0.8% decline against the USD on Thursday, triggered by comments from a BoJ deputy governor hinting at the central bank’s continued accommodative policy stance. The USDJPY broke 149 and extended to 149.49.
  • NZDUSD climbed to 0.6133 along with New Zealand yields following ANZ Bank New Zealand Ltd.’s forecast of 2 more interest rate hikes by the RBNZ this year.
  • USOIL broke $76, eyes on $80 resistance level.
  • Bitcoin spiked to 1-month high above $46,000, with historical data indicating positive returns post-Lunar New Year holidays, averaging over 10% in 10-day returns since 2014.
  • Ether, Solana and Cardano also pushed upward.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 15th February 2024.

Inflation Expectations Were Too Optimistic. Investors Consider More Buys.


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  • UK inflation unexpectedly remains at 4.0% and Core Inflation data also read lower than expectations causing the Pound to decline.
  • US inflation declines but at a weaker pace compared to expectations. US inflation falls from 3.4% to 3.1% (previously expectations were for inflation to fall to 2.9%).
  • The best performing currency as we edge towards the European Cash Open is the Australian Dollar, followed by the Japanese Yen.
  • The NASDAQ witnesses its largest daily decline in February due to the inflation rate pushing back hopes of an early rate cut.
USA100 – Core Inflation a Concern for the Fed and Investors!

After the release of January’s inflation rate and core inflation data, the USA100 as well as all US indices fell rapidly. When evaluating each component within the NASDAQ, only 6% of the index were able to hold onto their value. All stocks which held more than a 0.50% weight in the index depreciated. The reason for the decline was not that the inflation rate is “too high” or that interest rates cuts are not likely. Instead, the decline is due to investors now believing a cut in March is indeed not possible.

According to analysts, the inflation rate does not indicate any danger to the US economy, nor does it indicate there is any reason for a large lasting decline in US stocks. However, the news can weaken demand in the short term. Again, economists advised the inflation rate is not high, but simply higher than the over-optimistic expectations, and that cuts are still likely in the second quarter of 2024.

The short-term price condition of the index will largely depend on upcoming earnings reports from Cisco and Applied Materials. The two stocks make up 2.70% of the index and if these earnings read higher than expectations, it can reassure investors amid concerns. Cisco has beat earnings per share expectations consecutively over the past 12 months as has Applied Materials.

Investors’ main concern yesterday was the Core Inflation data which continues to prove difficult to tackle. Core inflation does not include products related to food and the energy sector. The monthly Core Inflation Data read 0.4%, the highest since May 2023. But slightly easing concerns is inflation elsewhere falling; the UK inflation remains at 4.0%, Chinese inflation fell as did Swiss inflation. The Producer Price Index will now be vital for investors. If the PPI reads higher than expectations, investors’ concerns could grow and the USA100 could form a correction instead of a smaller retracement.

On the daily chart, a retracement would mean a further decline between 1.89% to 4.40%, whereas a full correction would mean a 6.30%-8.00% decline. Currently the two-hour chart indicates an upward price movement towards the 75-bar exponential moving average. However, investors should note this will largely depend on earnings data, the US Retail Sales and Friday’s PPI release.

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GBPUSD – The Pound Gives up Gains after Lower Inflation Data

The exchange rate continues to trade below major trendlines for a second day after stronger US inflation and weaker UK inflation. The possibility of the Bank of England opting for a rate cut first, or within the same month as the Federal Reserve grows. However, this will depend on upcoming data from the UK over the next 48-Hours.

The UK is scheduled to release their Monthly GDP and Retail Sales on Friday. If both read lower than expectations, the possibility of an earlier rate cut by the Bank of England rises. The UK’s Gross Domestic Product is believed to have declined by 0.2%, which would be the third decline in 6-months.

Technical analysis also indicates a downward trend. The price of the exchange trades below the 75-bar EMA and below the neutral on the RSI. On the 5 and 15-minute timeframes, the asset is also forming downward crossovers. These three factors indicate further bearish price movement and the Fibonacci indicates the price can fall down to 1.24990.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 16th February 2024.

Investors Continue to Buy Ahead of the US Producer Inflation Release!

 
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  • UK Retail Sales witnesses its strongest increase since May 2021, but economists advise the increase is simply correcting poor data from previous months.
  • The Pound gains against most currencies, but the currency market has their eyes fixed on the upcoming US Producer Price Index.
  • Applied Materials soars above earnings expectations. Earnings Per Share beat expectations by almost 12% and revenue by 3%. The stock rose 12% after market close.
  • Bitcoin again renews its recent highs rising another 2.15% on Thursday. Cryptocurrencies are also likely to witness strong influence this afternoon.
GBPUSD – UK Retail Sales Beat Expectations

The GBPUSD was trading lower throughout the trading session but quickly rose to the day’s open price after the UK’s Retail Sales Release. The Retail Sales read 3.4%, significantly higher than 1.5% which was expected and -3.2% from the previous month. However, economists are advising a strong increase is not as positive as it may seem considering previous months saw a decline of 3.9%. Nonetheless, investors are reacting positively, and the GBP is rising moderately against all currencies.

In terms of technical analysis, the exchange rate is seeing neither bullish nor bearish signals. The price is trading at most trend lines and is neutral on most oscillators. In order for traders to obtain a clear signal, the exchange rate must maintain momentum and show a clear direction. If the price breaks above 1.26056, which is also the resistance level of the day before, buy signals will materialize. If the afternoon’s Producer Price Release is lower than expectations, a bullish breakout is likely to take place.

The US will release the Producer Price Index, Core PPI and the Prelim Consumer Sentiment. The strongest price driver will be the PPI and Core PPI release. Analysts expect both to read 0.1%, which is only slightly higher than the previous month. However, the question is if the rate of increase will be higher than expectations. Another higher inflation reading will again support the Dollar, but pressure Gold and US Stocks.
 
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USA100 – Investors Await PPI Release and Attempt a Full Correction!

The USA100 saw a slight decline as we were approaching the US open due to weak Retail Sales, but again investors only used this to enter at a better entry level. The index ended the day 0.22% higher and is 0.85% lower than the previous high. Technical analysis currently points towards a full correction back up to $18,058, but this will largely depend on the Producer Price Index.

If the PPI reading is higher than 0.1%, the USA100 and the stocks market in general can witness another decline. The decline may simply be a retracement or a full correction back to 1.25341, but this would depend on how much higher the reading is. If the PPI and Core PPI reads 0.1% or lower, the bullish trend potentially can continue as per indications from Crossovers, VWAP, and Oscillators.

The index was supported by Applied Materials which released their quarterly earnings report. The company’s Earnings Per Share beat expectations by almost 12% and revenue by 3%. The stock rose more than 12% after the market close and can support the index if it continues to perform well in the upcoming days. The next major earnings report will be NVIDIA next Wednesday after market close.
 
Copy-of-TELEGRAM-MARKET-UPDATE-2024-02-16T110101.308-1024x577.png


Bitcoin – Net Inflows of Over $1 Billion this Past Week

The cryptocurrency market capitalization rose this week, but slightly fell this morning ahead of the PPI release. However, the general rise is positive for Bitcoin as is its higher market share which rose 0.29%. Investors should note the day’s inflation reading is likely to also affect Bitcoin in a similar way to the stock market.

The cryptocurrency market is being supported by the weaker monetary policy in China, one of its largest markets. However, the price action will depend on continued relaxation from across the globe. Another reason is demand for spot-Bitcoin ETFs which remains strong, with net inflows of over $1 billion over the past week. Technical analysts also note the importance of surpassing the $50,000 mark which is a strong psychological price/level.
 
Copy-of-TELEGRAM-MARKET-UPDATE-2024-02-16T110224.334-1024x577.png



Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 19th February 2024.

Market Recap – China Back, US closed!


daily-market-update-696x364.png
Economic Indicators & Central Banks:
 
  • Chinese stocks climbed slightly as China returned from the long New Year holidays. Modest gains showed that investors are worried about the longterm outlook. Much of the economy’s sluggishness is a function of the collapse in the property sector as well as the bearish effects of the many regulatory restrictions in tech, problems that would not be helped much by easier policy.
  • US markets are closed for the Presidents’ Day holiday.
  • This week: Eyes on European inflation data, PMI data from EU, UK and US, RBA & FOMC Minutes, as well as earnings from Nvidia Corp. and BHP Group Ltd to help gauge the health of the global economy.
Market Trends:
 
  • Nikkei (JPN225) holds near 1989 highs, pressured by Friday’s selloff but also due to decline in chip-related shares. Nintendo was the biggest percentage decliner though, slumping 5.8%. Chip-sector heavyweights Advantest and Tokyo Electron were the Nikkei’s biggest drags, shaving off 60 and 55 index points respectively with declines of 3.2% and 1.6%.
  • European stock futures are in the red, US futures fractionally higher on what is likely to be a quiet day, as US markets are closed.
  • S&P500(USA500) rose 0.1%, Nasdaq (USA100) rose 0.2%.
Copy-of-TELEGRAM-9.png

Financial Markets Performance:
 
  • The USDIndex’s gains faded after the hot inflation stats crushed expectations for quick and deep Fed rate cuts. Currently at 104.
  • The Yen is directionless, with USDJPY sideways close to 150 with volumes likely to be low through the day. The drag from higher US bond yields, particularly on tech stocks, is offsetting support from a weak yen.
  • USOIL pulled back from $78 highs on the ongoing Middle East tension. The IEA signaled last week that oil markets could be oversupplied all year, and China’s soft economy has raised questions about consumption. Still, attacks on shipping in the Red Sea and the Israel-Hamas war are keeping prices from falling too far.
  • Gold extends Friday’s gains, above $2020.
  • Bitcoin at $52514.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 20th February 2024.

Market Recap – US & European equities declined, mirroring the drop in Asian stocks.


china-696x364.jpg
Economic Indicators & Central Banks:
 
  • Futures for both US and European equities declined, mirroring the drop in Asian stocks, as an adjustment to China’s mortgage reference rate did little to alleviate worries surrounding the world’s 2nd largest economy.
  • China implemented a record rate cut, reducing the 5-year loan prime rate by 25 basis points to 3.95%, surpassing economists’ expectations of 5 to 15 bp cuts.
  • The RBA maintained its cautious stance, further suggesting that rate cuts were not imminent. Minutes from the central bank’s February meeting, released today, indicated that policymakers require additional time to ascertain if inflation is indeed decreasing before considering any potential interest rate hikes.
  • Market sentiment outside China weakened as expectations for US rate cuts dwindled following higher-than-expected producer and consumer prices.
  • Today: The Canadian inflation and European wages data, which are expected to influence market movements going forward.
Market Trends:
 
  • Nikkei (JPN225) retreated by 0.3% from its recent highs.
  • US Treasury yields edged up slightly, with S&P500 (USA500) futures and European futures both declining by 0.3%.
  • BHP Group, the world’s largest miner, reported $6.57 billion in underlying profits, less than consensus estimates, and stated demand from top customer China was healthy despite weakness in housing.
Copy-of-TELEGRAM-10.png

Financial Markets Performance:
 
  • The USDIndex strengthened broadly surpassing 150 Yen, amid expectations of sustained higher US interest rates, despite Japan’s recession and uncertainty over its monetary policy exit.
  • The Aussie, often viewed as a proxy for China’s economic health, remained largely unchanged, while iron ore futures, linked to Chinese construction demand, declined by 3%.
  • The Yuan initially dropped to its lowest level in 3 months but stabilized at 7.1981 in the Asia close.
  • Gold was little changed after edging higher Monday to trade around $2,020 per ounce.
  • The USOIL edged higher against the backdrop of ongoing tensions in the Red Sea, a vital trade route. It is retesting again the January’s high again.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 22nd February 2024.

In-Depth Analysis – AUDUSD – Investors Expect Fed to Cut First!


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AUDUSD – Economists Do Not Expect the RBA to Cut Until 2024’s Third Quarter.
 
  • The Aussie Dollar increases 0.67% and sees its strongest gain this week so far. The exchange rate trades at its highest price since February 2nd.
  • The FOMC’s Meeting Minutes indicate the Federal Reserve is not yet willing to cut interest rates. FOMC Members are cautious about cutting rates too fast.
  • Australia’s Wage Price Index for the latest quarter continues to read higher than where the RBA would like to see it.
  • The Reserve Bank of Australia advise the regulator would not consider cutting interest rates until the second half of 2024.
  • The Australian Economy weakens but not enough to pressure the RBA! Inflation remains moderately higher than the US!
AUDUSD – Technical Analysis

The AUDUSD is witnessing one of the lowest spreads amongst the major currency pairs and is seeing higher levels of volatility. The Australian Dollar has been rising against the USD for seven consecutive days, similar to the NZD and the Euro. However, the AUD is performing better than the GBP, JPY and CHF against the Dollar. However, investors should note that the bullish price movement is largely being driven by the weakness in the Dollar.

The US Dollar Index has fallen 0.50% this week and trades at a 3-week low. The Australian Dollar on the other hand is witnessing mainly bullish price movements depending on the currency pair. The Australian Dollar is increasing against the GBP, Euro, Yen, and the CHF but is declining against the NZD. So here we can see there are no major conflicts between the two individual currencies. However, investors will need to continue monitoring the US Dollar Index and price condition of the AUD against other major currencies.

The AUDUSD is trading above the 75-Bar Exponential Moving Average and above the “Neutral” level on the RSI as well as the Bollinger Bands. These three factors indicate a further bullish trend as the asset is yet to be read “overbought” on most oscillators. In addition to this, the asset has managed to break above the resistance level and the previous high, meaning the continuation of the traditional wave pattern.

The only negative indication when evaluating technical analysis is the measurements of the previous 4 impulse waves. The average bullish wave size is 0.87% and the largest has been 0.92%. The current impulse wave reads 0.87%. Therefore, if the pattern is to continue the price may retrace soon, even if it is going to continue rising thereafter. However, this cannot be known for sure.

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AUDUSD – Fundamental Analysis

In the Meeting Minutes, representatives stated more fear about the remaining risks of a premature decline in rates than about a persistent period of high interest rates. Against this background, markets are reconsidering the timing of a possible easing of the regulator’s position in May and June. According to the CME Groups FedWatch Tool, the likelihood of a May adjustment is currently anticipated at 30-35%. A strong possibility is considered anything above 70%.

Next week’s Core PCE Price Index will be key for the Dollar as this will be the last inflation reading for the month and short-term future. If the PCE Price Index is also higher, this means all 5 inflation readings beat expectations. As a result, the Dollar may rise. However, the Dollar’s issue is that the market’s risk profile is high, and many expect the Fed to cut first. Therefore, the Dollar may continue to struggle unless other central banks become more dovish.

Even though the Reserve Bank of Australia’s interest rate is lower than the Fed’s, analysts expect the Fed to cut first. Even though GDP Growth in Australia is weakening, the economy is still performing better than Europe and the UK. In addition to this, inflation is still above 4.00%, which is extremely high for the Aussie and the Unemployment Rate has risen to 4.1% which is still manageable according to analysts there. Therefore, most analysts believe the RBA will cut in the third quarter and after the Fed. Therefore, fundamental analysis is slightly in the Aussie’s favor here, but technical analysis will need to continue signalling a rise.

Copy-of-TELEGRAM-MARKET-UPDATE-2024-02-22T104844.176-1024x577.png


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 23rd February 2024.

Market Recap – Global Rally Pushing Valuations To Record Highs Across the US, Europe & Japan.


daily-market-update-696x364.png
Economic Indicators & Central Banks:
 
  • It was all about Nvidia. Nvidia got a $277 billion 1-day boost to its market capitalization yesterday – the biggest single-session increase in value ever!(the previous record was a $197 billion gain by Meta Platforms Inc.)
  • Treasuries continued to lose ground, hurt by the surge in risk appetite with yields cheapening to the highest levels since late last year.
  • The solid jobless claims report, which followed on the heels of the hawkish bent in the FOMC minutes, added to expectations the FOMC will leave rates in restrictive territory into June at least.
  • A weaker than expected S&P Global services headline saw rates dip briefly.
  • Japanese markets are closed for a public holiday.
  • Fed Governor Christopher Waller: ”interest rate cuts should be delayed at least two more months, but indications of healthy demand and concerns over supplies could boost prices in the coming days.”
  • Today: Germany IFO business climate & GDP, ECB publishes 1- and 3-Year inflation expectations survey.
Market Trends:
 
  • Massive global rally in risk that saw the NASDAQ(USA100) jump 2.96% to 16,041.6, falling just short of the historic peak of 16,057 from November 2021. The S&P500 (USA500) climbed 2.1% to 5100, and the Dow (USA30) was up 1.18% to 39,069, both marking new records.
  • Asian stock markets today continued to move higher, with the global rally pushing valuations to record highs across the US, Europe and Japan. The Nikkei jumped a further 2.2%.
Copy-of-TELEGRAM-1.png

Financial Markets Performance:
 
  • The USDIndex was little changed at 103.80, below 104 for the first time since February 2.
  • The Yen has performed the worst so far this year, experiencing a 6.3% decrease against the Dollar, as investors sought higher yields in other currencies, anticipating that Japan’s interest rates would remain close to zero for the foreseeable future.
  • The Yen weakened against the Euro, Sterling, and other currencies this week, marking its 4th consecutive weekly decline against the US Dollar.
  • USOil slipped to $77.85 per barrel after Fed speeches indicated delay to rate cuts.
  • Gold dipped to $2021 per ounce.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 26th February 2024.

Oil and the New Zealand Dollar Decline After Weak Economic Data!


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  • The New Zealand Dollar witnesses a quick decline as we approach this week’s central bank decision and press conference. The NZD falls 0.50% within the first three hours of trading.
  • Oil drops to the lowest price since February 15th after investors price in a delayed interest rate cut.
  • US Oil declines after the Energy Information Administration (EIA) recorded an increase in oil reserves of 3.5 million barrels. The higher level of supply can continue to pressure quotes if demand falls.
  • The US Dollar Index trades 0.12% lower during the Asian Session and so far, continues to maintain a “sell signal”.
NZDUSD – The New Zealand Dollar Declines Against All Currencies!

The day’s worst performing currency is the New Zealand Dollar which is declining against the whole currency market. Throughout the month of February, the NZD has been one of the best performing currencies, but as trading started this morning, a sizable decline was apparent. The NZDUSD is trading 0.50% lower, but the New Zealand Dollar is witnessing the strongest decline against the Pound. Against the Pound, the NZD fell 0.60% within this morning’s Asian Session.

The economy over the past 12 months within the country has seen a decline in GDP growth and Retail Sales while the Unemployment Rate has risen for four consecutive months. At the start of 2023, New Zealand had an unemployment rate of 3.4% while the latest reading was 4.00%. Economists are easily able to see how the restrictive monetary policy and weaker Chinese Market are weighing on the economy. Simultaneously, inflation remains stickier than elsewhere and considerably higher than elsewhere. These factors have resulted in economists potentially considering a more cautious tone towards the NZD.

Throughout the week, investors will mainly be keen to see what the Central Bank has to say regarding economic frailty and how this will affect monetary policy. For the current meeting, investors believe the policy will remain unchanged. However, if the economy continues to deteriorate in upcoming months, the RBNZ is likely to consider a cut sooner rather than later.

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In terms of technical analysis, the price is currently “neutral” but close to a sell signal. The sell signal has not yet materialized as the exchange rate has seen significant gains over the past 2 weeks. However, if the price falls below 0.61618, the exchange rate will renew “sell” signals. Ideally investors would also like to see strength in the Dollar and the US Dollar Index. This way, the exchange rate is not experiencing two declining currencies.

USOIL – Oil Declines on Fears of a Global Slowdown!

The commodity saw a strong and sudden decline on Friday measuring 2.25% which lasted throughout the whole day. The price this morning is again witnessing a lower price as investors continue to struggle to maintain demand while the global economy is in stagnation, supply remains high and tensions in the middle east have not continued to escalate.

On Friday, the Fed’s board member Mr Waller said the Central Bank might refrain from lowering interest rates for at least several more months. Investors fear that maintaining a tight policy could cause a slowdown in economic growth. Consequently, this could limit oil demand in one of the leading consumers. Some economists have also voiced concern that other central banks in weaker economies may also follow the Fed even though their economies are underperforming.

Copy-of-TELEGRAM-MARKET-UPDATE-2024-02-26T104050.577-1024x577.png

Technical analysis, even though not a price driving factor, can assist with understanding the price condition. After the strong decline on Friday, the price is trading below most Moving Averages such as the 75-Bar-EMA and below 50.00 on the RSI. In addition to this, most timeframes show a downward crossover and the price trades below the Volume Weighted Average Price. However, Oil prices are trading at a support level which can be seen on February 21st, 15th and 12th. Therefore, to maintain a “sell” signal, the commodity will need to see fundamental factors pressure quotes further. This is likely if US economic data is lower and US inflation is higher. The US will release their Core PCE Price Index on Thursday and Germany will release their Consumer Price Index the same day.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 27th February 2024.

Japanese Bond Yields Rise to an 11-Year High Pressuring the BOJ!

 
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  • Japan’s 2-Year Bond Yield rises to its highest level in more than 10 years. On Tuesday, Japan’s inflation rate declined from 2.3% to 2.0% which was slightly higher than expectations.
  • Japan’s bond yields rise as investors continue to speculate that Japan will move away from their ultra-expansionary monetary policy.
  • Investors consider whether higher bond yields will support the Yen in the month of March and if the NIKKEI225 will retrace back to the previous low.
  • The US Dollar Index declines for a second consecutive day. Dollar traders will focus on today’s US Durable Goods release as well as the Consumer Confidence Index.
USDJPY – The Yen Increases in Value Against All Currencies!

The US Dollar against the Japanese Yen has been one of the only currency pairs where the Dollar has been able to gain over the past week. Whereas the Dollar in general has been struggling against most major currencies. However, this morning the Yen has risen 0.28%. This is because Japanese Bond Yields have risen, and inflation reads slightly higher than previous expectations.

Over the past week, the major resistance level which can be seen has been at 150.280, which is close to the current price. If the price breaks below this level, sell signals will continue to emerge. If the price continues to decline and form a bearish breakout, the price will also trade below the 75-bar EMA and the 50.00 level on the RSI. This would further indicate a downward price movement in the short to medium term. On 30-Minute timeframe the exchange rate has formed a bearish crossover on the Stochastic Oscillator as well as the Moving Averages. Simultaneously, the oscillator is not yet indicating an oversold price. So why is the USDJPY declining?
 
Copy-of-TELEGRAM-MARKET-UPDATE-2024-02-27T112008.310-1024x577.png


Investors should take into consideration that the Dollar has been depreciating for over a week even though the USDJPY has risen. Therefore, investors are considering whether the exchange rate is overbought in the short term. The US Dollar Index also trades 0.14% lower this morning and the Yen is trading higher against all currencies. One of the reasons for the Yen increasing in value is the slightly higher inflation data.

Analysts advise the inflation rate in Japan is not high enough to support the Bank of Japan changing their policy. However, the fact the rate has not fallen as sharply as analysts previously thought supports the Yen. If the inflation rate remains stable above 2.00%, the regulator may consider switching to a more traditional monetary policy, in the second or third quarter of 2024. Also supporting the Japanese Yen are Japanese Bond Yields which are increasing to their highest level in over 11 years. The 2-Year Bond Yield has risen to 0.172% from 0.00% earlier this morning.
 
JPN225 – Will Higher Yields Halt the NIKKEI225’s Bullish Trend?

The JPN225 has risen by almost 18% in 2024 so far and has been one of the best performing indices globally. The JPN225 has also outperformed US equities. However, investors are taking into consideration whether the JPN225 may retrace as the Yen gains. If investors use the Fibonacci levels to assist with what a retracement may look like, the indicators point to the assets declining to 37,863 as a minimum or to 35,010 as a maximum.

Alternatively, investors can use price action which indicates any retracement will on average be an 8.00% decline. Now, the index is yet to obtain a strong sell signal from indicators, however, the price is forming lower lows and highs which is a negative. In addition to this, the price has also recently been overbought on the RSI and has formed divergence signals. Therefore, investors are taking into consideration a possible retracement as Japanese Bond Yields rise and the Bank of Japan considers higher interest rates.
 
Copy-of-TELEGRAM-MARKET-UPDATE-2024-02-27T104939.676-1024x577.png


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 28th February 2024.

RBNZ Says No More Hikes, NZD Crashes More Than 1%!


rbnz.png
  • The Reserve Bank of New Zealand takes a more dovish tone as the economy’s cracks start to show.
  • The New Zealand Dollar declines against all currencies. Against the Pound the NZD trades 0.83% lower and it has fallen more than 1.00% against the Dollar.
  • The US Dollar Index trades 0.20% higher as investors take a more cautious approach due to weaker economic data.
  • US Durable Goods Orders decline more than 6.00%, the largest contraction since May 2020.
NZDUSD

The New Zealand Dollar is witnessing the highest level of volatility during this morning’s Asian session. The lowest spreads and strongest price movement can be seen on the NZDUSD. The exchange rate is trading at its lowest price since February 16th after the NZD collapsed. Over the past 12 hours, the NZDUSD has fallen 1.11% primarily due to the dovish tone taken by the Reserve Bank of New Zealand and its Governor.

If we look at the 10 most traded currencies worldwide, New Zealand is the country witnessing the highest inflation and the weakest economic growth. The dovish tone taken by the RBNZ comes as a relief for locals and can support the economy. However, for the currency this simply adds more pressure. Economic weakness can primarily be seen in the New Zealand employment sector which has seen the unemployment rate rise from 3.2% to 4.00%. In addition to this, the Gross Domestic Product Growth Rate currently stands at -0.6%.

The RBNZ kept interest rates unchanged at 5.50%, but the main concern for investors were the comments made thereafter. The governor Mr Orr in his press conference said “there was very strong consensus that the official rate is sufficient”. As a result, the economy continues to remain unattractive due to weak data and potential for another hike is no longer possible. For this reason, demand has significantly fallen for the time being.

The Dollar on the other hand is seeing demand slightly rise due to poor economic data on Monday. The weaker data triggered a lower risk appetite within the market which supported the Dollar. Investors are now concerned whether the US’s GDP figure will indeed read +3.3% as per expectations considering certain data came in relatively weak. The Durable Goods Order fell 6.1%, Core Durable Goods fell -0.3% and the CB Consumer Confidence fell instead of remaining unchanged at 114.8. Throughout the remaining sessions, the price will continue to be influenced by the comments from the RBNZ, but also will depend on the Prelim GDP reading for the US this afternoon.

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In terms of technical analysis, almost all indicators point towards a downward price movement which is understandable considering the bearish momentum. However, all timeframes below the 4-hour chart are currently reading oversold on the RSI. Investors should also take this into account.

USA100

The NASDAQ was the best performing index on Monday, but there continues to be a lack of bullish signals in the short term. The USA100’s price continues to remain above the 75-bar moving average and above the neutral level on most oscillators. However, the price is not maintaining bullish momentum and is failing to form higher highs. The price also continues to trade at the previous resistance level and many economists advise the price is trading at where traders believe is appropriate, hence the lack of a trend.

When we monitor the top 20 most influential stocks, 11 of the 20 ended the day higher while 9 declined. This is also an indication of no major trend within the session. From these 20 stocks, Netflix saw the largest increase (+2.39%) and Adobe saw the largest decline (1.43%).

So far, Bond Yields trade lower, which is known to support the stock market, however, the Dollar also trades higher which indicates lower investor sentiment. The next price driver for the USA100 will be the US GDP reading. Ideally investors will want to see strong growth but not strong enough to stop the Fed from cutting rates soon. Some economists are advising a GDP reading of 3.3% or slightly lower will be ideal for the stock market.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 29th February 2024.

The Japanese Yen Soars After The BOJ Indicate Interest Rate Hikes!


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  • The Japanese Yen witnesses its strongest gains since December 2023. The USDJPY drops more than 0.70% within the first few hours of trading.
  • Japanese Yen is largely being driven by comments made by a key member of the Bank of Japan.
  • The Bank of Japan advise they are considering taking small steps away from negative interest rates.
  • US stocks decline away from the latest resistance level and trade 0.87% lower by end of day.
USDJPY –Bank of Japan Considering Steps Towards Higher Interest Rates

Many investors are looking to take advantage of the first clear indication that the Bank of Japan will look to take a more traditional stance on its policy. In other words, move away from negative interest rates. The Bank of Japan moved to negative interest rates in 2016 and since then the Yen has declined by 25% against the US Dollar and 40% against the Swiss Franc. The exchange rate is now trading at strong resistance levels from November 2023 and October 2022. However, the question now is if investors will continue investing in the Japanese Yen in the longer term?

The Yen’s advantages are its safe haven status and ability to mitigate risk away from the Dollar. Investors also note its current price is at an extremely “cheap” level compared to other options. For this reason, economists are evaluating whether investors will look to buy the Yen for the long-term considering the Bank of Japan may soon exit negative rates.

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A key member of the Board of the Bank of Japan, Mr Takata, said to journalists, “It’s necessary to consider taking a nimble and flexible response, including on how to exit, or shift gear from the current extremely accommodative monetary policy”. Based on this, investors should not believe the BoJ will suddenly go on a hiking rampage or start hiking imminently. However, Mr Takata gave the first clear signal that the regulator will start hiking in 2024 to at least move away from negative rates.

Due to this the Japanese Yen rises against all currencies this morning and Japan’s 2-Year Bond Yield again renews its highs. The 2-Year Bond Yield now trades at 0.185% which is its highest level since 2011. The higher bonds yields can also support the currency and global interest in Japan’s Financial Service Market.

In addition to this, the Yen has also obtained further support from economic data this morning. Japan’s Retail Sales figure read 2.3%, higher than the 2.00% prediction. In addition to this, the Core CPI remained at 2.6%, again higher than expectations.

In terms of the US Dollar, the currency came under strain during the US Trading Session but kept to its previous price range. The currency came under slight pressure due to the Gross Domestic Product underachieving. The GDP data read 3.2% versus the 3.3% expected, however, investors should note the growth rate remains competitive. Investors are now mainly focusing on the PCE Price Index, which is a favourite of the Federal Open Market Committee. If the Index reads higher than 0.4%, rate cuts will start to feel like a far distance away. As a result, the Dollar potentially can rise, and stocks could possibly decline in the short to medium term.

USA100 – All Eyes On Today’s PCE Core Price Index

The NASDAQ continues to struggle for a fourth day as investors remain unsure on the future path of interest rates. In addition to this, investors should also note the weakness may partially be related to the end of the earnings season and due to its current high price.

The day’s price movement is likely to largely be dependent on today’s PCE Core Price Index. Analysts expect the index to read 0.4% which would be the highest since May 2023. If the index reads higher the USA100 can potentially experience significant pressure as interest rate cuts will seem a distant dream. However, if the data is lower, investors will be relieved and may re-enter at the current lower price.

Technical indicators’ signals are currently at the “neutral” level but are close to signalling a sell if the price continues to decline below $17,810. Lastly, investors will also be monitoring the performance of individual stocks within the NASDAQ. Of the top 30 influential stocks, only 3 rose in value on Wednesday indicating a clear downward trend for the day.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 1st March 2024.

Stocks Rise To A New All-Time High! ECB Considers An Earlier Pivot.

 
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  • The US Core PCE Price index read 0.4% in line with analysts’ expectations. January’s Core PCE Price Index was the highest reading since May 2023.
  • The US Dollar Index ended the day higher but did come under pressure at times from the inflation reading.
  • The NASDAQ again renews its all-time highs after rising 0.95% on Thursday and a further 0.47% in Friday’s Asian Session.
  • German inflation declines to 2.6% in February putting more pressure on the European Central Bank to consider a “pivot”.
EURUSD – The ECB Consider An Earlier Rate Cut!

The EURUSD exchange rate declined by 0.28% by the end of the day, but more than 0.55% from high to low. The exchange rate came under pressure from German inflation declining from 2.9% to 2.5%, the lowest since 2021. In addition to this, the US Dollar rose in value after a short-lived decline. The Dollar continues to be supported by high inflation data.
 
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The Germany economy has been struggling from poor economic growth and political tensions. The German GDP has not recorded an increase in the past three quarters. Overall the Germany GDP Growth Rate has actually fallen by 0.6% over the past year. Due to poor economic data and inflation now being at an acceptable level, investors are contemplating whether the ECB will cut rates soon. France also made public their latest inflation reading which fell from 3.1% to 2.9%. The largest four EU economies are now all at an inflation rate below 3.00% and very close to their 2% target. Italy is currently below the 2% and is in desperate need of monetary expansion.

Price growth in the Eurozone continues to slow down, which gives the ECB more reasons to consider cutting rates sooner rather than later. In this regard, it is worth noting the results of the latest survey of leading economists conducted by Reuters. According to the report, most economists believe that the regulator will reduce the deposits interest rate for the first time in June by 25.0 basis points, but some experts expect that the ECB will ease monetary policy in April.

The US Dollar Index is trading higher, but its growth seems uncertain. Interest rate cuts are also likely for the Federal Reserve; however, higher inflation data has pushed back the potential date. According to most analysts, a pivot is not likely until the summer months, and it would continue to depend on upcoming inflation.

US economic data has noticeably weakened, which will catch the Fed’s attention. The initial jobless claims for the week of February 23 rose from 1.86M to 1.905M compared to 1.874M expected. In addition, the dynamics of pending housing sales in January decreased by 4.9% after increasing by 5.7% earlier, falling short of forecasts of 1.0%. Though investors must note that if the employment sector remains strong, the pressure on the Federal Reserve will remain minimal.

USA100 – Can The NASDAQ Maintain Momentum!

The USA100 is now trading at its all-time highs after receiving a push from the Core PCE Price Index being unable to rise above expectations. However, technical analysts warn the asset can potentially retrace before continuing an upward trend.

When measuring previous impulse waves and the size of swings before retracing, the asset is now at a level which may indicate a pullback. Investors also note that 34% of the NASDAQ’s individual stocks ended the day lower, which does show signs of some weakness in the market. Lastly, the 10-Year Bond Yields have risen by 0.020% and the US Dollar trades slightly higher. These two factors are also known to pressure the stock market.

However, when monitoring momentum-based indicators, the USA100 is trading above trend-lines, regression channels and shows strong upward momentum. Therefore, traders will be monitoring how the asset may break out of previous significant price ranges.
 
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 4th March 2024.

Market Recap – March like the proverbial lion.

 
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Economic Indicators & Central Banks:
 
  • March came in like the proverbial lion with the NASDAQ composite and the S&P 500 roaring to new all time highs.
  • This morning, Asian stock markets were initially boosted by a broader tech rally. Top chipmaker Taiwan Semiconductor Manufacturing Co saw its highest ever level – the company is the main supplier to Apple Inc. and Nvidia Corp. and is considered a key beneficiary of the ongoing AI boom.
  • Bonds & US Treasury yields are under pressure at the start of a busy week that includes the ECB decision, Fed Chair Powell’s congressional testimony and China’s National People’s Congress.
  • Fedspeak so far were supportive. There had been growing chatter in recent sessions that the strength in the economy could prevent the FOMC from trimming rates at all this year.
  • Swiss CPI fell to 1.2% y/y in February, which is further proof that the SNB has brought inflation under control.
  • Turkey’s annual CPI swung to a 15-month high, close to 70%.
  • OPEC+ output cuts to remain in place until the middle of the year.
  • Today: ECB Governing Council member Robert Holzmann & Fed’s Patrick Harker speeches.
Market Trends:
 
  • European futures and Asian stocks higher, with key upcoming events such as Fed Chair Powell’s congressional testimony and China’s National People’s Congress adding to market anticipation.
  • The renewed strength in the tech sector resonated across Asia, with Taiwan Semiconductor Manufacturing Co., the world’s leading chipmaker, reaching its all-time high.
  • AI and Nvidia continued to underpin investor enthusiasm, boosting the NASDAQ by 1.14% to 16,275, finally besting the 16,057 historic peak from November 2021.
  • The S&P500 advanced 0.80% to 5137, also a new high, marking its 15th record of the year, and it has gained in 16 out of the last 18 sessions, the best showing since 1971.
  • Nikkei (JPN225) surpassed the 40,000 mark for the first time.
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Financial Markets Performance:
 
  • The USDIndex remains under pressure, falling to 103.67 but drifting within a tight range on pressure by lower Treasury yields, as traders waited for crucial economic data for fresh clues on the timing of Federal Reserve interest rate cuts.
  • BTCUSD surged, briefly surpassing the $64,000 threshold. Market participants are speculating that the cryptocurrency is poised to exceed its previous record high of nearly $69,000, achieved during the Covid-19 pandemic.
  • Gold remains in the green, edging up fractionally to $2084 per ounce.
  • USOil is below $80 per barrel after OPEC+ members confirmed that output cuts will be extended through to the middle of the year. The decision was widely expected, but still supported the recent uptrend in prices.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
 This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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    • Date: 12th April 2024. Producer Inflation On The Rise, But Will Earnings Hold Demand Steady?     Producer inflation rose slightly less than previous expectations, but the annual figure continues to rise. The annual PPI rose to 2.1% and the Core PPI rose to 2.4%. The NASDAQ and SNP500 end the day higher, but the Dow Jones continues to struggle. This morning earnings kick off with the banking sector including JP Morgan, BlackRock and Wells Fargo. All 3 stocks trade higher during pre-trading hours. The Euro trades lower against all currencies despite the ECB’s attempt to establish a hawkish tone. USA100 – The NASDAQ Climbs Higher, But Is the Growth Sustainable? The NASDAQ was the only index which did not witness a significant decline at the opening of the US session. In addition to this, the USA100 is the only index which is witnessing indications of a bullish market. The price has crossed onto a higher high breaking the resistance level at $18,269. 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Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
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