HFMarkets (hfm.com): Market analysis services.

Date: 21st November 2023.

NASDAQ: Upcoming NVIDIA Earnings


The US100 declined during this morning’s futures market and also ended Friday’s session lower. However, the instrument is not witnessing any significant downward pressure or momentum, but continues to honor the established price range. According to the Chicago Exchange the possibilities of another rate hike over the next year are virtually zero and 30% of experts believe the Federal Reserve will cut the Federal Fund Rate by 25 basis points in the first quarter of 2024. With the hiking cycle at an end, the market could experience ideal market conditions for a bullish market.

Another positive factor for the US100 and the stocks market in general is the decline in the Dollar and Bond yields. The US Dollar Index has declined by 3.20% this month and continued to decline further this morning. In addition to this, the US 10-Year Bond yield has dropped to its lowest since September 2023. If the Dollar and Bond yields continue to decline throughout the day, the possibility of investor sentiment increasing grows. As a result, the US100 could potentially rise and break the $15,871 resistance level.

Both Asian and European stocks traded higher at the futures market open. Again, if European and Asian investors show a high-risk appetite, something similar may be witnessed in the US.



Over the next two days, the price of the US100 is likely to be influenced by two major events: the Federal Reserve Meeting Minutes and NVIDIA’s third quarterly earnings report of 2023. NVIDIA is the 5th most influential stock within the US100 and holds a weight of 4.58%. The company is again expected to make higher earnings and revenue compared to the previous quarters. The US100 will find significant support, if the earnings per share and revenue is higher than expected.

NVIDIA stocks have increased by 19% over the past month and 2% in the past week. The price movement indicates shareholders are confident ahead of the quarterly earnings release.

Currently the US100 remains above major trend lines and the Volume-Weighted Average Price. However, the instrument is trading within a retracement. Therefore, investors will be keen to see it reach $15,831 which will be enough momentum to obtain a potential buy signal on short-term charts.

GBPUSD
The Bank of England Deputy Governor Dave Ramsden advised markets that the central bank will keep interest rates high for at least 6 months to bring inflation back to its 2.0% target over the medium term. Analysts predict that the central bank will begin reducing borrowing costs in May or June 2024, with three 25 basis point adjustments planned by the end of next year, but for now its pressure on mortgage holders will continue. Currently, it is believed the Fed will cut before the BOE, which could support the Cable. According to a survey by consulting company Savanta, 58% of respondents have late payments now versus 49% the same month last year.



The latest wave on the GBPUSD is a correcting wave aiming for the previous high at 1.24638. However, investors will be monitoring if the exchange rate finds support at this level similar to previous price action patterns.

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.

 

Date: 21st November 2023.

NASDAQ Break Resistance to New 23-Month High.


The US100 broke through a major resistance level, rising to the highest level since January 2022. The instrument rose by 1.20% on Monday forming its fourth consecutive bullish candlestick on a weekly chart. The technology sector in particular witnessed a surge in demand due to its exposure to “growth stocks” which are benefiting from the end to the hiking cycle. In addition to this, the US100 is already pricing in a rate cut as early as March.

The 10 top stocks holding the highest “weight” within the index all rose in value on Monday and from the top 20 stocks only PepsiCo saw a slight decline (-0.14%). From the US100’s components 90% of the stocks ended the day higher. NVIDIA was the best-performing component, rising 2.26% as investors await the release of the third quarter earnings report scheduled for this evening. Analysts expect NVIDIA’s earnings per share to rise 20% compared to the previous quarter. Additionally, the company quarterly revenue is believed to have risen 16%. During this morning’s pre-market hours, the stocks have risen a further 0.30%.

The 10-year bond yields are trading 0.027% lower during this morning’s Asian session and the US Dollar Index is down 0.15%. Both bond yields and the weaker Dollar could potentially prompt investors to increase exposure in the stock market. However, traders should keep in mind investors may look to buy at the discounted price. This could potentially pressure the NASDAQ in the short-term.

Nonetheless, a key influential factor will be tonight’s Federal Reserve Meeting Minutes. The event is still likely to trigger volatility regardless of the fact that the Meeting Minutes is a “lagging” indicator. If the market senses a tone of dovishness or caution, traders will deem the meeting as indicating a potential cut. This is because inflation has declined by 0.5% since the meeting. Indication of a rate cut in the first quarter of 2024 could indicate the continuation of the bullish trend.

A concern for investors was the mini-crisis related to Sam Altman’s sacking as CEO of OpenAI on November 17th. However, Microsoft seems to be emerging as the victor as Mr Altman potentially may join as a Chief Executive of the new research lab. Microsoft stocks, which hold more than 10% of the NASDAQ, rose by 2.05% on Monday and a further 0.28% in pre-market open hours.



GBPUSD
The Bank of England’s Governor yesterday evening advised markets that the regulator may again consider another interest rate hike. According to Bloomberg, almost all analysts are not taking the comment seriously, but see it as an indication that a rate cut in the UK may be further away than originally thought.

The Cable rose by 0.43% on Monday and is trading 0.30% higher during this morning’s Asian session. Early this afternoon the Governor of the Bank of England will again speak, but this time testifying in parliament. Investors will be closely scrutinizing comments looking for confirmation of yesterday’s point of view. The US Dollar Index is again declining this morning; however, investors will also be monitoring the Dollar’s reaction after this evening’s meeting minutes. The Pound on the other hand is experiencing “mixed” price movement against other currencies.



Gold
The price of Gold ended the day slightly lower on Monday but saw a surge in buyers towards the end of the day’s sessions. This morning the price of Gold has risen a whopping 0.81% but has risen to a previous resistance level and price range. Therefore, investors will be monitoring if the asset forms a breakout and continues its bullish trend or if the asset moves into a strong price range which remains intact in the medium term.

According to the report of the US CFTC, last week the number of net speculative positions dropped to 155.4 thousand from 166.2 thousand a week earlier. Sellers are actively exiting the asset. Last week, buyers increased the number of contracts by 2.338 thousand, while the sellers closed 6.150 thousand contracts. This is signaling an increase in the upward dynamics but traders question whether Gold can maintain its momentum above $2,000.

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 Eftymiou
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.

 

Date: 22nd November 2023.

Market Changes Stance After FOMC Meeting Minutes.


EURUSD – Dollar Climbs After FOMC Meeting Minutes

The EURUSD ended the day lower for the first time after climbing for 3 consecutive days. The minutes of the November meeting of the US Federal Reserve supported the Dollar but also had factors which concerned Dollar buyers. Certain members of the Fed’s Committee stated they expect the rate to remain at a high level for “quite a long time”, while others would not give a clear indication of a cut and that rates would remain higher for longer. However, some economists view this as dovish considering inflation has now declined. In addition, the regulator does not exclude the possibility of further tightening of monetary conditions if the rate of decline in inflation continues to slow down. This is where the Dollar can potentially benefit. The question is whether the Fed will consider one last 0.25% hike if inflation refuses to drop below 3%.

Economists’ views have already slightly shifted since the Fed’s Meeting Minutes. According to the Chicago exchange there is now a 5% possibility of a hike in the next 3 months. Previously, the only possibility was a pause for the near-term future.

The US Dollar Index is trading 0.17% higher this morning and is increasing in value against all major currencies. However, the Euro is also increasing in value against all major competitors. Therefore, investors should be cautious about an attempted correction back to 1.09225 and 1.09607. The Euro is being supported by the European Central Bank’s stance on keeping interest rates high for “several more quarters”. The Governor of the Bank of France, François Villeroy de Galhau, said that interest rates in the eurozone had reached a plateau, where they were likely to remain. However, if the possibilities of another hike from the Fed rise, the Euro may struggle to hold onto gains.

If the price declines below 1.08995, sell signals are likely to materialize. Whereas, if the price increases above 1.09225, buy signals will gain momentum again. If the exchange rate had fallen a further 0.25%, the instrument would have broken recent support barriers.



This afternoon investors will be monitoring 3 economic events: The US Unemployment Claims, Durable Goods Orders and Revised Consumer Sentiment. If the Unemployment claims remain stable or lower than expected, while the Goods Orders and UoM Sentiment remain higher, the Dollar could potentially gain momentum.

US100 – NASDAQ Continues Bullish Trend Pattern

The US100 declined 0.75% during yesterday’s trading session but continues to follow the traditional upward trend pattern. Currently the asset is trading above the 60-candlestick trend line and is hovering above neutral on Oscillators. Therefore, a further impulse wave is still possible. However, of the top 5 stocks holding the highest weight within the index, only 1 stock is trading higher during this morning’s pre-market hours (Microsoft +0.12%). Though investors will monitor if this changes when the US open nears.

According to market analysts, there is now a slightly higher possibility of one last interest rate hike, however, the possibility is very slim. According to Bloomberg, if inflation does not rise in December and unemployment remains around the 4% mark, a pause will remain almost a certain outcome. The bond market this morning is significantly declining, dropping 0.022%, which is positive for the US100. Both German and French indices are trading higher in the European market open which is also another positive indication for the US100.

NVIDIA’s Quarterly Earnings Report was significantly higher than expected which is positive “fundamentally”, but so far has not pushed the stock higher. The company’s Earnings Per Share were 19% higher and Revenue rose 25% from the previous quarter. However, the stock has dropped 1.74% in after hours trading. Investors will monitor if demand grows once today’s session opens.




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 Eftymiou
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.

 

Date: 23rd November 2023.

McDonald’s Looks to Double Chinese Presence Boosting the US30!


US30

The best performing index on Wednesday was the US30 which rose to its highest price since August but is not yet at its peak like the US100. Due to it not breaking previous resistance points and trading at an all-time high, investors may be more comfortable investing in the US30 which is at a lower risk of being overbought.

The US30 was particularly supported by Goldman Sachs and McDonald’s stocks. Goldman Sachs rose 1.26% with investors continuing to purchase the discounted price as the investment banks recover from the 2021-2022 mini-crisis. Investors are also heavily purchasing McDonald’s stocks for similar reasons. McDonald’s stocks dropped 14% in August-October giving investors the opportunity to invest at a more competitive price.

Investors are particularly investing in McDonald’s as the company attempts to enter and control the Chinese Market, similar to Apple in the past. This week the company bought the shares in Chinese company Carlyle Group, bringing its total ownership to 48.0%. The Fund is a joint venture with CITIC Group Corporation Ltd., which owns 52.0% of the shares. The deal is a continuation of the plan to actively capture the Chinese market and increase the number of restaurants in the country. Over the past 5 years, the number of McDonald’s restaurants in China has doubled to 5,500 and it has become its second-largest market. The Board of Directors advises the company to aim to have more than 10,000 restaurants over the next 5 years.

McDonalds is the fifth most influential stock within the US30 and at times has been known as a defensive stock. The company has proven to thrive even during adverse market conditions and recessions.

Bond Yields and the US Dollar Index are trading lower this morning which is also deemed as a positive factor for the US30 and US equities. Investors will be monitoring the price performance of European indices once the European market opens in order to gauge global investor sentiment. However, investors should note that volumes and volatility remain low due to the US bank holiday.



The US30 is trading within the “trend-zone” of regression channels and continues to form higher highs and higher lows. Therefore, the assets continue to formally trade within a bullish trend. If the instrument breaks above $35,333, buy signals are likely to materialize again.

EURGBP

The Euro has increased in value against all major currencies since the second half of yesterday. However, the price will be largely dependent on today’s Purchasing Managers Index, which is one of the most popular and one of the few “leading indicators”. Leading indicators are based on future conditions rather than previous data such as CPI, NFP and other government statistics.

Both French and German PMIs are expected to increase in value compared to the previous month but still remain within the “economic contraction” zone. However, should the two leading EU economies fail to surpass expectations, the Euro may be unable to hold onto gains. The UK will also release its Services and Manufacturing sector PMI 1 hour after their European partners. The UK’s data will similarly influence the price movement of the EURGBP.



Medium-term technical analysis leans more towards a decline in the Euro against the Pound. However, the price will need to decline below 0.87167, for short-term signals to point towards an imminent decline.
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.

 

Date: 27th November 2023.

Month-end cautious approach.



A wait-and-see stance is all but assured at the last policy meetings of 2023 for the key central banks, the FOMC, ECB, BoE, BoC, and BoJ. Disinflationary trends in the West have afforded central bankers the opportunity to move to the sidelines to observe. But we and they will have to monitor the data into the new year to assess the length of the “higher” stance, or to determine whether the next action will be up or down.




Meanwhile this week, the month’s end and the anticipation of key data releases, have generated some caution, with futures markets slightly lower globally.

Key Events of the Week: US and EU inflation data, Powell event, official China PMI & delayed Opec+ meeting. Meanwhile, ECB President Lagarde speaks at the EU Parliament later today.

• PBOC announced it would encourage financial institutions to support private companies, including tolerance for non-performing loans.
• Global stocks on 4-week rally: US500 futures eased 0.2% & US100 lost 0.4%. The US500 rallied for 4 weeks straight and is up 8.7% on the month so far, which would be its best performance since mid-2022.
• Approximately 55% of the S&P 500’s component shares are trading above their 200-DMA the highest share in nearly two months, according to LPL Financial.
• Asian shares slipped today, ahead of potentially market-moving inflation data from the US & EU and the OPEC+ meeting,prompting them to sell stocks to lock in profits. JPN225 fell 0.53% to close at 33,447.67. CSI300 fell another 0.8% and have missed out on all the global cheer with the market down 1.8% in November so far.
• Reuters: Morgan Stanley bought $300 million worth of protection against losses on some of its loans from Blackstone Group and other investors. The deal is one of several such credit risk transfer transactions that US banks are considering in the aftermath of a March crisis in the sector and as regulators look to increase capital they have to hold, bankers, lawyers and investors said.
• Treasury yields are slightly higher, but that hasn’t helped the US Dollar.
• USDIndex is at 2-month low, i.e. 103.30, EURUSD is up at 1.0952, not far from 4-month high of 1.0965 – Markets priced in 80 basis points of US easing next year, and around 82 basis points for the ECB.
• USDJPY pulled back to 148.77 due to the soft Dollar against a broadly firmer Yen.
• USOIL under pressure at $75 area & UKOIL fell to $80 ahead of Thursday’s meeting, as uncertainty regarding Opec outlook and failure to easy market worries of a deeper supply weighs on the energy markets.
• Reports suggest African oil producers are seeking higher caps for 2024, while Saudi Arabia may extend its additional 1 million bpd voluntary production cut, which is due to expire at the end of December.
• Key Mover: Gold climbs to 6-month high in choppy trade, hit $2,017.82. Spot gold may extend gains into $2,027-$2,030.

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.

 

Date: 28th November 2023.

Market Recap: Bonds up; Stocks weaker; DXY set for the worst month in a year.


Trading Leveraged Products is risky
Market Trends:

• Asian stocks fell in response to declines in US and European markets, triggered by hawkish signals from central banks on interest rates.
• Bonds extended gains amid growing conviction that central banks in Europe and the US have concluded rate hikes, with expectations of potential rate cuts next year.
• The US Dollar hovered near three-month lows as investors believed the Federal Reserve had completed its rate-hike cycle, with attention focused on an upcoming crucial inflation report.

Central Bank Developments:

• ECB President Lagarde noted that the central bank’s efforts to control price growth are ongoing, citing strong wage growth and an uncertain outlook despite easing inflation pressures in the eurozone.
• CME’s FedWatch indicated a 95% likelihood that the US central bank will maintain unchanged interest rates next month, but there is a growing possibility of a rate cut gaining traction in mid-2024.

Global Economic Indicators:

• Australia experienced an unexpected decline in retail sales for October, with consumers cutting spending on everything except food.
• Germany saw a slight improvement in consumer sentiment as the Christmas month approached, but it remained at a very low level, attributed to high inflation, indicating no signs of a sustainable recovery in Europe’s largest economy.

Financial Markets Performance:

• Weaker-than-expected home sales and the Dallas Fed manufacturing index weighed on Treasury yields, with the 10-year yield at 4.396%.
• JPN225 closed 0.12% lower at 33,408.39, despite being up 8% for the month, failing to surpass its highest closing level in three decades reached on July 3 in recent attempts.
• JPY gained momentum as the USDIndex hit a three-month low on weaker-than-expected data, while EURUSD dipped to 1.0937, breaching the bottom of a one-week channel with the next support at 1.0925.
• AUD rose to 0.6630, reaching a four-month high, while NZD touched a seven-week high of 0.6114.
• USOIL eased 0.13% to $74.74, and UKOIL dropped below $80 as oil prices fluctuated ahead of an OPEC+ meeting later in the week.
• Gold reached $2,013.80, hitting a fresh six-month peak of $2,017.89 earlier in the session.

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.

 

Date: 29th November 2023.

Market Recap: Dollar slumped; Gold & Oil supported on rising Fed rate cut bets.


Economic Indicators & Central Banks :

• US consumer confidence improved better than expected, but it follows big downward revisions to October. The consumer confidence rise joins a Michigan sentiment decline to a 6-month low. All the surveys face headwinds from elevated mortgage rates, tight credit conditions, and fears about developments in the Middle East.
• Fed’s Waller (the most hawkish Fed) & Goolsbee are “increasingly confident” that policy is well positioned to slow the economy and get inflation back to 2%. BUT Fed Governor Bowman reiterated she favors more rate hikes if the progress on inflation stalls.
• The RBNZ warned this morning that further policy tightening might be needed if price pressures did not ease.
• German import prices unexpectedly rose 0.3% m/m in October. However, annual import price inflation seems to have bottomed out in August and the trend of ever deeper deflation has been reversed now.

Market Trends

• Fed funds futures rallied on the dovish read. Implied rates popped to suggest about a 70% chance for a rate cut as soon as the May 1 policy meeting, versus about a 55% risk a week ago. However, a significant downturn in growth could spark the more aggressive easing posture as the market is reflecting.
• Treasury bulls took less than hawkish Fedspeak and ran with it. Short term bond yields dropped sharply, to the lowest since July and August.
• Stocks in Asia and US are fractionally higher after a mixed trade most of the session, as Treasury yields and USD hit multi-month lows. JPN225 fell at 33,321 as investors continue their pause in buying.

Financial Markets Performance:

• The US Dollar bears chased the Buck lower. USDIndex fell to 102.36, the weakest since August. – Its worst monthly performance in a year!
• EURUSD broke 61.8% Fib level on July-September downleg, breaching 1.1016. Cable is at 1.2730.
• USDZAR extended to 18.51 lows, JPY jumped to its strongest point since mid-September at 146.66. The NZD surged more than 1% to July’s high of 0.6207.
• USOIL & Gold climbed to $77 from $74 lows, and to $2051.93 per ounce, the highest since May, respectively. The weaker US Dollar, global uncertainties, and rising Fed rate cut bets supported Gold and Oil.

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.

 

Date: 30th November 2023.

Market Recap: Stocks loosing their steam; Oil rallies ahead of OPEC+.


Economic Indicators & Central Banks :

• The US GDP report implied a Q3 productivity growth boost to a robust 5.1% from 4.7%, after an unrevised 3.6% Q2 clip. There was a Q3 growth rate trimming for the hours-worked index to 1.0% from 1.1% due to weakness in the hours-worked data in the last employment report.
• Fed rate cut bets deepened thanks to the lack of pushback from most Fed officials, and expectations for this pivot continued to drive the markets. There was no impact from the 5.2% GDP print.
• China’s manufacturing sector contracting for a 2nd consecutive month in November and performing worse than forecast indicates weakening momentum despite increasing government efforts to boost growth.
• EU: French inflation dropped sharply & German retail sales bounced in October. It was the first real improvement since May, which is likely also related to the moderation in inflation.

Market Trends

• Treasury yields richened further, and especially at the front end. Fed funds futures brought forward an easing in the policy rate to May from June. The curve dis-inverted to -38 bps on the bull steepener.
• Bonds are set to post the best month ever. Concurrently, the rate cut frenzy has boosted EGBs too, sending the global index to its best since 2008 the financial crisis.
• Stocks traded cautiously and lost steam into the close, as several Big Tech companies offset gains. The US30 gained 0.04%, while the US100 dropped -0.16%, with the US500 off -0.09%. Asian stocks were mixed as well, with CSI300 adding 0.5%.
• Meta fell 2%, Alphabet gave up 1.6% and Microsoft dropped 1%. General Motors surged 9.4% after the company announced a big stock buyback.
• The VIX was up 2.2% to 12.97, recovering from the 12.46 low from last week that had not been challenged since January 2020.

Financial Markets Performance:

• The US Dollar steadied at 102.80, with a 102 handle for a 3rd straight day. It’s slumped from the October 3 peak of 107.00.
• EURUSD reversed below 61.8% Fib level on July-September downleg, at 1.0945. It remains well above 1.09.
• USDJPY retests a potential break of its 146.70 low for a 2nd day in a row, USDCAD extends below 1.36 confirming an ascending head and shoulders formation in the daily chart.
• Gold edged up 0.16% to $2044.18 per ounce.
• USOIL climbed 2% to $78.79 per barrel ahead of the OPEC+ meeting. The delayed meeting of the expanded OPEC+ group will be held online.
• Bitcoin still hovering near the $38,000-mark.

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.

 

Date: 1st December 2023.

Market Recap: A November to remember!


A November to remember. The markets were all over the place to end the month. While the FOMC is still the focal point, repositioning after some big moves on the month and positioning into year-end were the main drivers. The FOMC has reached peak rates, according to Fed funds futures, and rate cuts are the next action, now fully priced for May.

Economic Indicators & Central Banks:

• PCE: Data has been mixed but generally reflect progress on the FOMC’s inflation goal and has convinced markets that rate cuts are underway — core PCE fell to 3.5% y/y from 3.7% y/y previously, but is still well above the 2% target. US pending home sales declined.
• OPEC+ announced an additional 1 mln barrels in cuts. The cuts will be announced individually by members, according to delegates. The Saudi Arabia is expected to extend its down voluntary cut of 1 million barrels.

Market Trends:

• Best month in 40 years! Treasuries rallied on FOMC expectations. But profit taking ahead of comments from Chair Powell today unwound some of the froth. The curve steepened to -36 bps versus -50 bps Monday.
• Stocks: Wall Street befittingly finished mixed. The US30 rallied 8.9% with the US100 up 10.7%. For the month the US30 was up 8.8%, its second best November since 1980, according to Bloomberg.
• For the S&P, 10 of the 11 sectors are higher on the month.
• Asia Stock markets were under pressure overnight, with the Hang Seng underperforming, despite a better than expected China Caixin manufacturing PMI that managed to lift above the 50 point no change mark again.

Financial Markets Performance:

• The USDIndex finished at 103.40 recovering from the slide to the 102.36 the prior two days after weaker than expected European and Chinese data.
• EURUSD broke below 1.09, indicating a possible reversal of the 2-month rally, however 1.0830-1.0860 remains the key support area.
• USDJPY rebounds to 148.30, USDCAD dips further into 1-year triangle with immediate support at 1.35, while GBPUSD settles above 1.26 despite US Dollar appreciation.
• Gold slipped about -0.4% to the $2036 area on the rise in yields and some fading of haven trades.
• USOIL slumped 2.9% to $75.59 after spiking 2.2% to $79.60 after OPEC+ announced a further production cut.
• Key Mover: EURCHF down by 1.26%. Next Support levels: 0.95, 0.9440 and 0.9375.

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.

 

Date: 4th December 2023.

Market Recap: Cryptos Rise; Oil & Gold Down; Stocks Steady.


The holidays got a little cheerier amid signs that the major central banks have come to the end of their aggressive tightening postures. Despite protestations from policymakers to the contrary, the markets are now building in the start of rate cuts in 1H 2024. Those hopes underpinned one of the best November’s on record for bonds and stocks, and helped boost gold to a new record high!

Economic Indicators & Central Banks:

• The market sentiment remains uncertain, as Chair Powell did not offer much pushback to expectations that rate cuts are the next move on the agenda or that there was a massive easing in financial conditions in November.
• The US November payrolls report on Friday is crucial for market expectations of rate cuts.
• Analysts anticipate a soft landing for the US economy, with positive but below-potential growth in the next six quarters.
• BofA notes a positive outlook for emerging markets, which are experiencing historically positive returns after the last Fed hike.

Market Trends:

• Fed Chair Powell reminded investors the bank is not in a hurry to cut rates and yields are off Friday’s lows.
• Treasuries and Gold declined from session highs. Yields rose across various tenors in Treasuries, with the 10-year trading around 4.23%.
• Asian shares showed mixed results, with gains in Australian and Korean stocks, while Japanese equities fell. JPN225 closed down 0.6% at 33,231.27 after earlier sliding as much as 1.22%. European and US stock futures remained stable.

Financial Markets Performance:

• The USDIndex nudged higher with Treasury yields and is at 103.43.
• EURUSD broke below 1.09, indicating a possible reversal of the 2-month rally, however 1.0820-1.0865 remains the key support area.
• USDJPY dipped to 146.22, reaching a nearly 3-month high against the US Dollar. Currently though, it has reverted some gains, as speculation about an eventual unwinding of the Bank of Japan’s policies added pressure on the Yen.
• Gold down from all-time highs above $2,100, benefiting from lower yields.
• Oil prices faced challenges due to doubts about OPEC+ maintaining output cuts, high US production, and increasing rig counts. UKOIL eased to $78.37 a barrel, while USOIL fell to $73.63. Geopolitical tensions in the Middle East added to market considerations.
• Bitcoin surpassed $41,000, reaching its highest level since April 2022. Bitcoin’s rebound continued, reaching $41,746, with expectations of interest-rate cuts and potential ETF approvals. Smaller tokens like Ether and Dogecoin also experienced gains.
• Key Mover: EURJPY down by 1.92%. Next Support levels: 159 and 158.50.

This week:

• Investors are closely watching economic indicators, including Australian growth, Chinese inflation, and US non-farm payrolls data.
• The Reserve Bank of Australia is expected to maintain a hawkish stance.

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.

 

Date: 5th December 2023.

Market Recap: Fears of overbought condition prevail!


Trading Leveraged Products is risky

The markets giveth and the market taketh away. Red proliferated the screens as profit taking unwound some of Friday’s aggressive rallies. There were no real catalysts to the move, just fears that markets were overbought and rate cut bets too optimistic.

Economic Indicators & Central Banks:

• RBA held the cash rate steady at 4.35% at the final meeting of the year. The board, flagged, however, that progress in bringing inflation back to target was slower than anticipated. They noted uncertainty over the global outlook due to the Chinese economy and overseas conflicts.
• Aussie: Markets are still pricing in some risk of further tightening from the RBA, and the inflation numbers for the last quarter of the year will likely be decisive for the February 6 meeting.
• China: Services PMI expanded at a quicker pace in November, which was the highest in three months, as demand strengthened in Asia’s largest economy.

Market Trends:

• Treasury yields closed just off session highs.
• Asia stock markets sold off, following on from a weaker close on Wall Street. China bourses underperformed, despite a stronger Services PMI.
• Stocks: Wall Street was underwater from the get-go and closed with modest declines. The US100 slumped -0.84% on weakness in big tech, including Meta on news CEO Zuckerberg was selling shares. Microsoft, Alphabet, and Nvidia also declined. Alaska Air dropped after announcing its acquisition of Hawaiian Air. US500 was off -0.54% and the US30 was down -0.11%.

Financial Markets Performance:

• The USDIndex was one of the few gainers on the day, rebounding to 103.642 (intraday peak of 103.852) following Friday’s drop to 103.268.
• EURUSD declined to 1.08, indicating apotential retest of 1.0760, as the buck is firmer versus all its G10 peers as rate cut speculation is keeping a lid on EUR and GBP.
• USDJPY steady above 146.50.
• Gold has corrected somewhat as the US Dollar found a footing and Treasury yields lifted. It is currently steady at $2030 – $2040 area.
• Oil remained under pressure as USOIL is currently trading below $74 as markets remain distinctly unimpressed by the voluntary output cuts announced by OPEC+. With growth data suggesting subdued demand that is leaving fears of a sizeable supply overhang through 2024 on the table.
• Bitcoin extended higher and breached $42,337 for the first time since early 2022 (roughly 153% higher this year).
• Key Mover: Copper (-0.95%), with next Support at 3.75.

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.

 

Date: 6th December 2023.

Market Recap: The wait is on for Friday’s jobs report!

Economic Indicators & Central Banks:

• Treasury yields extended lower after the larger than expected decline in job openings. The data added to beliefs that the labor market is cooling and that the FOMC is done hiking, with the next move a cut in the coming months.
• Fed funds futures are reflecting about a 65% bet for a 25 bp March cut, with May fully priced in and then some.
• German manufacturing orders plunged. Orders corrected -4.6% in the three months to October, which is flagging recession risks and ongoing weakness even going into 2024.

Market Trends:

• Asian stock markets rallied, with Japanese markets leading the way. Futures are also higher across Europe and the US as markets buy in to hopes that major central banks have reached peak rates and will start to cut interest rates next year.
• GER40 is at all-time highs supported by slowing inflation and the prospect of lower interest rates next year boosting the country’s biggest stocks. It gained 8.8 % over the past month during a stock market rally on both sides of the Atlantic underpinned by growing hopes that major central banks have finished raising rates.

Financial Markets Performance:

• The USDIndex is to the upside for a 5th day, retesting the 104 level, as it found relative firmness as the markets priced in a more aggressive easing stance from the ECB than the Fed.
• EURUSD below 1.08, extending its 1-week dip, post a sharp correction in German manufacturing orders that added to concerns that growth is faltering. This is coupled with weaker than expected inflation data for November that will add to pressure on the ECB ahead of next week’s council meeting.
• Gold & Oil: The strength in the US Dollar weighed on commodities with USOIL dropping -0.88% to $72.10 and Gold falling -0.48% lower to $2009.97. Profit taking has knocked bullion from the record high of $2072.22 on December 1.
• Bitcoin hit 2022 highs at 44429. Currently it is traded at 43395 in an overbought condition, indicating a near term consolidation.

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.

 

Date: 7th December 2023.

Oil Hits Lowest Levels Since June 2023, Moody Downward China


Crude Oil – Oil Declines for a Seventh Consecutive Week
The price of Crude Oil has declined to its lowest level since June 2023, marking an almost six-month low. The price of Oil has now declined for a seventh consecutive week. Economists note the decline is also improving the prospects of the stock market. Stocks are taking advantage of the lower oil prices which may trigger lower inflation and a softer monetary policy. This week alone the price has declined by 6.5%, but what is driving the bearish trend?
The main two reasons the market is witnessing a lack of demand in the oil market is China’s latest poor economic data and the latest OPEC meeting. China’s manufacturing and services PMI read significantly lower than expectations and this week Japan also announced weaker data. China is the largest importer of Oil while Japan is the fourth largest. Therefore, poor economic data in these regions are likely to trigger downward pressure for Crude Oil.
To make matters worse for the Oil market, Moody, the credit rating industry, lowered the economic outlook for China from “stable” to “negative”. Since the downgrade, economists have advised the Chinese economy is not likely to witness a recession, but more likely stagnation. OPEC, on the other hand, were unable to come to an agreement on the production levels. Again, this had a negative effect on Crude Oil prices. Lastly, yesterday’s report from the American Petroleum Institute showed inventories rose by 9.594M barrels instead of a decline of 2.267M barrels. The inventories show higher than expected supply.

In terms of technical analysis, the price of Oil is trading within a downward trend and is currently hovering within a retracement. The retracement is currently measuring 1% in line with previous pullbacks and is currently showing no major upward momentum. Therefore, most indicators continue to signal a downward trend. If the price breaks below $69.69 and $69.59, sell signals will again potentially become active.
USA100 – Only 20% of Stocks Held onto Gains!
The USA100 fell by 0.57% during yesterday’s session and was the weakest of the top 3 most popular US indices. When looking at the NASADAQ’s top ten most influential stocks, only 1 stock stayed in the “green”, this was Tesla which only slightly rose by 0.27%. Out of the top 20 most influential stocks, only 20% retained their value. The stock which saw the largest decline was NVIDIA which dropped 2.28%.
However, fundamental factors continue to point towards a positive outlook for the US tech sector. This morning the US Dollar Index is declining, 52% of market participants believe the Fed will cut rates in March 2024 and most of the components witnessed positive earnings data. The only slight concern for investors is bond yields which have risen over the past 24 hours. However, bond yields continue to remain significantly lower than in the previous months, which is positive for the stock market.

Technical analysts have pointed out that the index is not within a short-term downward trend and each time the USA100 declines, buyers re-enter the following day to take advantage of the lower price. Investors will again be monitoring if the index rebounds today. The stronger performer in the pre-market hours is Alphabet which has risen 0.82%. Alphabet stocks make up almost 6% of the overall index. Investors are currently balancing the negative effect of a weaker Chinese economy and the positive effect of a rate cut as early as March 2024. If the price increases above $15,873, the USA100 will again experience buy signals. Buy signals can be seen from the regression channel and crossovers.

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.

 

Date: 8th December 2023.

Central Banks’ Divergent Paths: ECB Signals Caution, BoE Stays the Course


As the European Central Bank (ECB) and the Bank of England (BoE) gear up for their upcoming meetings, market participants eagerly await signals that will shape the economic landscape in 2024. While both banks are expected to maintain interest rates, their perspectives on future policy directions diverge.

This article explores the nuanced positions of the ECB and BoE, shedding light on their contrasting views on inflation, rate hikes, and the path forward.

ECB’s Shifting Stance:
The ECB meeting is poised to capture attention not for an anticipated rate adjustment but for the nuanced signals regarding the outlook for 2024. In the aftermath of November’s meeting, where a tightening bias persisted, recent developments, notably the unexpected drop in inflation, have prompted a shift in tone.

Isabel Schnabel’s Reuters Interview:
Executive Board member Isabel Schnabel’s recent Reuters interview marked a departure from previous sentiments. While she emphasized the need for caution, Schnabel hinted that the ECB is prepared to confirm that interest rates have peaked. Contrary to market optimism anticipating rate cuts as early as March, Schnabel underscored the central bank’s patience, emphasizing the necessity of further progress in underlying inflation.

Monetary Policy Transmission Confidence:
Despite concerns about a potential credit crunch, Schnabel expressed confidence in the effectiveness of monetary policy transmission. While acknowledging signs of labor market softening, she dismissed fears of a severe and prolonged recession, aligning with the ECB’s cautious stance. The central bank seems poised to confirm the unlikelihood of further rate hikes but remains hesitant to entertain the idea of rate cuts in the near term.



ECB’s Path to Rate Cuts:
The timing of potential rate cuts in 2024 remains a pivotal question. Market expectations for an easing bias in March, paving the way for a second-quarter cut, appear optimistic. ECB President Lagarde, expected to be more vague on the topic, may find it challenging to temper easing expectations.

PEPP Reinvestment Discussion:
The discussion around the future of the Pandemic Emergency Purchase Program (PEPP) reinvestments adds complexity. While some suggest an early end to re-investments as a prerequisite for rate cuts, details may not emerge until early 2024. Lagarde’s confirmation of a gradual reduction could set the stage for rate cuts in the second quarter.

EURUSD has been under pressure since the lower than anticipated inflation report last week and is currently struggling to hold the 1.08 mark. The Fed may be leading the way on rate cuts next year, but markets expect that the ECB won’t be far behind. The US economy may be better equipped to deal with the marked tightening of financing conditions that is increasingly hitting the real economy.

BoE’s Steady Outlook:
In contrast, the BoE’s upcoming announcement may lack the excitement of policy shifts. With no updated forecasts and data aligning with November’s assumptions, the focus turns to the hawks within the bank. Despite concerns voiced by some, including BoE’s Greene, about the risks of doing too little, Governor Bailey maintains a steadfast position against early rate cuts.



Bailey’s Commitment to Inflation Target:
Bailey’s emphasis on completing the journey to the 2% inflation target and the potential sluggishness of that process reinforces the BoE’s commitment to a “higher for longer” approach. Deputy Governor Ramsden underscores the need for sustained restrictive policy to combat inflation effectively, signaling a likelihood of the BoE remaining on hold through the first half of 2024.

As the ECB signals caution and the BoE maintains a steady course, the central banks’ divergent paths reveal nuanced approaches to economic challenges.

Investors will closely monitor the upcoming meetings for insights into future policies, with the timing of potential rate cuts and the fate of PEPP reinvestments hanging in the balance. The evolving economic landscape will undoubtedly shape the trajectory of monetary policies in the months to come.
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.

 

Date: 11th December 2023.
US Economy Remains Strong, But All Eyes on Tomorrow’s Inflation!


December has not failed to surprise investors with the US employment sector outperforming expectations and sending stocks soaring. Additionally, across the Pacific the World’s second largest economy also made public interesting inflation data which is in the spotlight just as much as the US NFP. Both Chinese Consumer and Producer inflation fell below expectations. Consumer prices declined at their fastest pace in more than 3 years. China is now witnessing deflation measuring -0.5% which has not been seen since the banking crisis if we exclude COVID-19.

Last week, Moody’s downgraded China’s credit rating. Moody’s advises the costs of supporting failing local governments, state-owned companies and controlling the property crisis would pressure the economy. But the question is, what does this mean for the US and US Indices?

USA100 – Inflation To Be The Next Price Driver

The USA100 rose during the US trading session by 0.40% on Friday and by the close of day was almost 0.50% higher. The first reaction to the Non-Farm-Payroll data was negative and the instrument fell 0.38% before buyers re-entered the market. During this morning’s Asian session, the index is trading 0.10% lower but is so far forming nothing more than a retracement. Let’s discuss what the employment data means for the index as well as weak Chinese inflation.

The NFP confirms the US has 199,000 more employed individuals compared to the previous month, which is 15,000 higher than expected. However, the main shocks came from the Average Hourly Earnings and the Unemployment Rate. The Unemployment Rate declined from 3.9% to 3.7% which is considerably low considering the restrictive monetary policy. The Hourly Earnings doubled from 0.2% to 0.4%. The employment data has both positives and negatives for the stock market. However, in the past 2 years, higher employment data has meant a poorer stock market, which was not the case on Friday.

The better-than-expected employment data indicates an imbalance within the employment sector which triggered higher wages. These factors can contribute to higher consumer demand, higher investor demand, and a better performing economy. All these factors are positive for the stock market in general. However, there is a negative side also. The positive data has lowered the possibility of a nearer interest rate cut. Previously, market participants predicted a “cut” to come as early as March, but the employment data again points to “higher for longer”. The CME FedWatch Tool now has virtually no possibility of a cut in December, January and February, and now indicates a “pivot” in May 2024.

The question is, is the USA100 overpriced considering the new reality? This is something which will become clearer during Wednesday evening’s Federal Reserve Rate Decision and Press Conference. If the Fed President, Jerome Powell, suddenly becomes more hawkish and pushes a pivot further in the future, stocks can correct. Technical analysts also advise the stock market may fall into a wider price range until further clarity from the Fed.

Copy-of-TELEGRAM-MARKET-UPDATE-23.png
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.

 

Date 12th December 2023.

Global Stocks Rise Ahead of Today’s US Inflation Announcement!


The USA100 is increasing in value for a seventh consecutive week and continues to renew its highs for 2023! The USA100 is only 0.65% lower from fully regaining all of the “lost ground” from 2022. The asset saw a sharp decline after the Ukraine-Russia conflict and the largest rate hiking cycle seen since 2004. However, all eyes are on today’s US inflation and tomorrow’s Central Bank press conference. Therefore, analysts do not expect volatility to cool off any time soon!

USA100

From the 100 stocks in the USA100, only 11 ended the day lower, while 89 stocks were in the green throughout the day. Broadcom, which is the seventh most influential stock, witnessed the largest gain, increasing by 9.00%. Broadcom continues to be one of the best performing stocks due to the latest company earnings which beat expectations. Additionally, the stock is supported by the company advising revenue from AI would double to $8 billion in 2024. The board of directors also advised the growth in AI would counterbalance the current challenges in the semiconductor market.

However, even though the majority of stocks within the USA100 rose in value on Monday, the top five most influential stocks declined. This includes Apple, Microsoft, Alphabet, Amazon, and NVIDIA. Of these stocks, the stocks which saw the largest decline was NVIDIA, dropping 1.85%. However, investors should note that Asian and European stocks are higher this morning, which continues to point to positive investor sentiment towards the asset class.

Today’s price movement will largely depend on the US inflation data. On Monday, investors priced in a weaker than expected Consumer Price Index. This is most probably due to deflation in China and lower producer prices which can also influence global inflation. This is due to the nature of the Chinese economy. For the USA100 to potentially continue its upward trend to previous highs, the CPI will need to read 3.00%. However, to see a stronger trend, investors will need clarity that a rate cut is likely by March 2024. For such an outcome, market participants may need to see a sharper decline in inflation such as a decline from 3.2% to 2.9%.



USDCHF

The USDCHF is trading higher since the opening of the European session, but remains lower than the open price. The Dollar Index is trading 0.22% lower and bond yields are 0.044% lower, which indicates the USDCHF may also come under further pressure. However, the price of the Dollar will largely be determined by today’s consumer inflation. In addition to this, tomorrow’s producer inflation and the Fed’s press conference will also create volatility.



The US Federal Reserve meeting will take place on Wednesday, and now, analysts are almost confident that the current interest rate will remain at 5.50%. However, investors and market participants continue to price in an earlier “pivot”. The central bank may again point out the possibility of maintaining high borrowing costs for a long time. Experts have revised their forecasts regarding the timing of an interest rate cut and are predicting May 2024, although previously, most estimated easing would begin in the first quarter.

Representatives of the Swiss National Bank will be convening a meeting on Thursday, and traders expect interest rates to remain at 1.70%. The head of the SNB, Mr Jordan, may indicate abandoning further tightening of monetary conditions which may pressure the Swiss Franc.

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.

 

Date 13th December 2023.

The UK Economy Unexpectedly Contracts! US Inflation Remains Stubborn.


The USA100 continues to be the best performing index, increasing by 0.90% and more than 50% in 2023 in total. The main price driver was the US inflation data which more or less read as per expectations. The US inflation rate has declined from 3.2% to 3.1% but the core inflation rate remains stubbornly high. Core Inflation has remained at 4.00% for a second consecutive month. According to analysts, inflation is not low enough to prompt a pivot in the first quarter of 2024. However, investors are increasing exposure to the stock market as a “soft landing” becomes more likely.

US30 Remains in the “Trend Zone” of Technical Analysis!

Even though the best-performing asset by far is the USA100, the asset experiencing the best performance in terms of components is the US30. The USA100 saw 68% of its stocks increase in value whereas 73% of the US30 appreciated. Investors should also note that of the top 20 influential assets within the US30, only 1 stock declined. Chevron fell by 1.28%, and the best performing stock was Salesforce, rising 1.73%. In comparison, of the top 20 influential stocks within the USA100, 5 stocks declined.

As mentioned above, inflation read as most analysts were expecting, however it did not show any real signs of easing significantly over the next 2-3 months. The Federal Reserve policy makers will be able to discuss monetary policy issues tonight at 18:00 GMT. Journalists will without doubt ask Chairman Jerome Powell if he believes interest rates will be cut in the first half of the year. Without a dovish tone or a clear indication of a cut, the stock market may struggle to maintain momentum. However, most buyers are now investing, not due to a dovish policy, but due to the resilient economy and the likelihood of a soft landing.

One of the few stocks within the Dow Jones which have struggled is Procter and Gamble (holds a weight of 2.64%). Analysts expect the company’s revenue and earnings per share to remain stable, but shareholders have taken badly to the company decision to withdraw from certain countries where the Dollar is now too expensive. For example, the products will be withdrawn from Nigeria and Argentina. Furthermore, Berkshire Hathaway has also advised they have recently sold their shares in the company. Warren Buffet explained that the consumer goods market is recovering too slowly after the pandemic.



In terms of Technical Analysis, the price of the US30 is forming a downward facing retracement but is not showing any signs of strong momentum. Due to the weak momentum, and also bullish impulse waves forming, the instrument continues to remain in bullish territory. The price also continues to trade within the upper side of the Bollinger Bands and Regression Channels, again indicating bullish price movement. However, some traders may be concerned about the high price. These individuals may wait for a lower price or a larger retracement before speculating an increase.

The price throughout the day will be influenced by the Producer Price Index, which looks at inflation at the producer level. If the PPI reads lower than expected (0.2%), the Dow Jones could obtain short-term support. However, the main event will be tonight’s Federal Reserve Press Conference.

GBPUSD – The UK Economy Unexpectedly Contracts!

The price of the GBPUSD came under pressure this morning from the UK’s latest Gross Domestic Product. The UK’s GDP was expected to decline from 0.2% to -0.1%. However, the figure fell to -0.3%, the lowest since September 2023, sparking some doubt as to whether the BoE can hold rates “higher for longer”.

November’s poor GDP figures will not be enough to worry the Bank of England, however, December and January’s GDP figure will now become more vital! If next month’s data also disappoints, investors may start to price in a weaker monetary policy.

The US Dollar Index this morning is slightly higher but has not crossed above yesterday’s highs. However, the Pound is declining against all its main competitors. If the US Producer Price Index reads higher than expected, the Dollar could receive some much-needed support. In this case, the GBPUSD may decline further and break below the support level at 1.25130. In terms of technical analysis, the GBPUSD is trading below the 75-bar exponential moving average and at 42.00% on the RSI. Both indicate sellers are controlling the price movement and a downward trend remains a possibility.




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.

 

Date: 14th December 2023.

Fed Expect Interest Rates to Fall to 4.60% in 2024, Buyers Pounce!

• Fed Expects Interest Rates to Fall to 4.60% in 2024, Buyers Pounce!
• The Federal Reserve gives its first clear signal that rates will be cut in 2024!
• Analysts expect the Federal Fund Rate to decline to 4.50%.
• The USA100 is close to breaking its all-time highs after rising a further 1.65% since the Fed’s rate decision.
• The Dollar declined to a 19-week low against the Japanese Yen.

USA100 Close to Reaching All-Time Highs!

The USA100 rose in value for a sixth consecutive day and if the volatility levels continue, the asset will be on track to complete its strongest week of the year. Investors heavily exposed their portfolios to the US stock market and particularly the tech sector. Investors show a clear “risk-on” appetite which can also be seen in bond yields which again collapsed. In addition to this, other safe haven assets, such as the Dollar, fell a whole 1%. The cheaper Dollar and lower bond yields are likely to support the US stock market if they follow the market’s traditional “domino effect”.

The Fed President speech made it clear that the monetary policy will be set to ensure employment remains high and that prices remain stable. The president stressed the importance of keeping inflation stable and not necessarily applying further downward pressure. The press conference reassured many investors and improved investor sentiment. The Federal Open Market Committee’s new forecast points to interest rates declining to 4.60% in 2024, 3.60% in 2025 and 2.90% in 2026. As a result, the cost of debt will decline and consumer demand may rise, supporting companies within the USA100.

In addition to the Fed’s forward guidance, the latest Producer Price Index is also supporting stocks. Producer inflation read 0.00%, which is lower than the previous 0.2% expectation. As a result, investors continue to predict that inflation will remain controlled and potentially decline further in the next 2 months. For inflation to remain stable, investors will also be monitoring oil prices aiming for crude oil to mainly trade below $70 per barrel.



In terms of technical analysis, the price of the USA100 remains within the bullish trend zone of the regression channel. In addition to this, the price trades above the price sentiment line and the trend-based moving average. For this reason, technical analysis indicates an upward trend going forward similar to fundamental analysis. However, most Oscillators indicate the price is “overbought”. Therefore, it is important to consider the appropriate price to speculate the upward price movement.

Lastly, the monetary policy of the Swiss National Bank, European Central Bank and Bank of England will influence the USA100. Buyers and bulls will ideally be hoping for a similar dovish tone. In addition to this, investors will be hoping for higher-than-expected US Retail Sales.

USDJPY – Japanese Yen Takes Advantage of Dollar Weakness

Investors looking to avoid “news risk” may look to the Japanese Yen which is not expecting any major news during this morning’s European and Asian session. The Japanese Yen is increasing in value against all major currencies including the US Dollar, Euro and Pound during this morning’s session. The exchange rate has also declined for three consecutive days and the Dollar Index is trading 0.19% lower this morning.

This week, Japan has released various data regarding the economy and confidence which have read stronger than expected. Thus, the confidence of national business has almost reached two-year highs, which, according to experts, confirms the stability of the country’s economy in the context of the global crisis and gives the regulator grounds to reduce incentives and move to a tighter monetary policy.

The USDJPY is not oversold, similar to other currency pairs, which still gives an opportunity for traders to speculate. Sell signals are likely to arise from technical analysis if the price declines below 141.285.




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

 

Date: 18th December 2023.

Market Recap: Focal BoJ ahead & the very last key US data

Markets are starting to wind down for the year. The four major central bank, the FOMC, ECB, BoE, and SNB all left policy rates unchanged, and most dialed back their hawkish biases. But while officials tried to jawbone and push back that early rate cuts are not on the table, the markets quickly equated the steady stance and shift in bias to pricing in rate cuts sooner than later. Indeed the markets ran with expectations for easing as soon as the first half of the year, if not March for the FOMC.

Economic Indicators & Central Banks:

• FED: Fed’s Bostic sees two 25 bp cuts in 2024, but said it’s not an “imminent thing,” in a Reuters interview. New York Fed President Williams said its too early to begin thinking about cuts. Still, U.S. futures are already finding buyers again after a mixed close on Wall Street Friday.
• Japan: The BoJ is the focal point this week as it’s the last major bank to meet. Risks for no action have picked up as data have failed to give Governor Ueda the confidence needed to exit negative rates or YCC at this point.
• China’s PBOC resumes 14-day cash injections. The move likely designed to smooth liquidity conditions over the year-end. Borrowing costs were held unchanged at 1.8% and 1.95% respectively.

Market Trends:

• Treasury yields slightly higher however the 2-year still closed the week with 28 bp drop, marking the lowest closing since mid-May. The 10-year notes stood at 3.91%.
• Asian stock markets declined, and European futures are also in the red, after Fed comments on Friday tried to push back against excessive rate cut speculation.
• Stocks: The JPN225 slumped 0.7% on weakness in Yen. The US500 futures inched up 0.3%, while US100 added 0.2%, EU50 futures slipped 0.3% and UK100 at 0.1%.

Financial Markets Performance:

• The USDIndex at 102.00 after drifting to 101.43.
• EURUSD corrected to 1.0920 after a solid weekly gain If Eurozone activity fails to stabilize, Lagarde will be under pressure to change her tune and prepare for rate cuts earlier rather than later.
• GBPUSD moves sideways today and is at 1.2685, while USDJPY corrected again and is trading at 142.55 (38.2% Fib from 2023 upleg).
• Gold turned above $2000 as drop in the US dollar, yields and the Fed’s dovish pivot have helped to boost demand for the precious metal.
• Oil steadied above $72 after 5-month low last week amid worries supply will continue to outstrip demand. The weaker USD and dovish Fed comments helped to boost sentiment. The IEA said in its monthly report that it expects global oil consumption to rise by 1.1 million barrels a day in 2024, which means it has revised its demand forecast higher. That added further support and helped oil prices to at least stabilize over the second half of this week. Lower exports from Russia and attacks by the Houthis on ships in the Red Sea offered some support as well.
• Bitcoin holds above 40K for 11 day’s in a row, with increasing bullish bias.
• Key Mover: Goldman has raised year-end 2024 S&P 500 index target from 4700 to 5100, representing 8% upside from the current level. Decelerating inflation and Fed easing will keep real yields low and support a P/E multiple >19x.

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.

 

Date: 3rd January 2024.

Market Recap: Stocks, Bonds open 2024 in the red!


Economic Indicators & Central Banks:

• Data in the US included stronger than expected construction spending and weaker than forecast S&P Global manufacturing PMI.
• Fed funds futures have slipped to kick off 2024 as some of the aggressive rate cut bets are trimmed. However, the market is still pricing in close to 6 quarter point cuts. No action is expected for the first FOMC meeting on January 31.

Market Trends:

• Treasuries and Wall Street opened 2024 in the red and it basically went downhill from there. Treasury yields climbed 5- to 8- bps, led by the front end.
• A heavy corporate calendar exacerbated the losses from spillover from losses in European bonds, profit taking on the late 2023 rally, and from trimming of Fed rate cut bets.
• Stocks: The US100 dropped -1.63% paring some losses as the indexes finished off their lows. The US500 was -0.57% in the red, while the US30 was fractionally higher.
• Moderna shares surged 15.5% after investment bank Oppenheimer upgraded its stock.
• Apple lost 3.6%, its worst day in 5 months after Barclays downgraded its shares, Nvidia and Meta Platforms both fell more than 2%. Lack of new features and Iphone upgrades affected Apple stocks.

Financial Markets Performance:

• The USDIndexretested 102. The buck is on course for a 3rd straight daily rise, with technical factors as well as risk aversion likely to add support.
• EURUSD has dropped sharply to 1.0937 and GBPUSD dropped to 1.2610. USDJPY nudged up to 142.43 in thin trade, as Japanese markets remain closed.
• Gold declined to $2058 from the $2062.98 close on December 29. Global risks and the weaker US Dollar supported gold prices into year-end and an all-time closing high of $2077.49 on December 27.
• Bitcoin extended above 45K supported by statements that Blackrock & JPMorgan anticipate an imminent spot Bitcoin ETF approval and Goldman Sachs issuing huge 2024 Crypto Prediction.
• Today: Germany unemployment, US FOMC minutes, ISM Manufacturing and US Job openings.
• Key Mover: Oil prices slumped to $70.30 after an intraday peak of $73.64 amid concerns over events on the Red Sea. The escalating tensions in the Middle East are fueling concern that supply may be disrupted.

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.