Date: 12th June 2024.

Market News – Steady ahead of the Big Day!

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Economic Indicators & Central Banks:

* Asian stocks edged up, driven by the technology sector, while the US Dollar remained firm ahead of the US inflation report and Fed policy decision.
* China’s CPI gains held above zero in May while factory-gate prices remained stuck in deflation, signalling ongoing weak demand.
* UK GDP stagnated in April. Monthly GDP numbers came in a tad better than anticipated, with activity stagnating, rather than contracting -0.1% m/m, as Bloomberg consensus forecasts had predicted. The recovery remains uneven though.
* The FOMC began day 1 of its 2-day meeting with the decision and the new quarterly forecasts (SEP) at 21:00 GMT following by Chair Powell’s press conference at 21:30 GMT. The Fed is universally expected to maintain a steady rate stance, leaving all of the focus on the new forecasts, Chair Powell’s press conference, and the policy statement. It is widely expected that the “dovish” dot plot from March that showed three cuts (though it was a close call for two) will be revised toward a more hawkish stance.

Asian & European Open:

* Treasuries steadied after rising on a solid $39 billion sale, which reflected speculation that inflation reading will help make the case for the Fed to cut rates this year.
* The NASDAQ rebounded and advanced 0.88% into the close to another record at 17,343. Similarly the S&P500 rose 0.27% to 5375, also a new record (27th of the year).
* A surge in Apple shares (7%) supported. The Dow slumped -0.3%, hurt by financials and industrials that overshadowed a gain in IT.
* China Evergrande New Energy Vehicle Group plunged 20% after warning of losing assets.

Financial Markets Performance:

* The USDIndex had a good first half, rising to a high of 105.46 before fading to 105.24. However, it’s above the 105 level for a second straight session (first time since May 13,14) and the highest since early May.
* The EURUSD was down for a fourth session at 1.0737 amid political turmoil in Europe.
* OIL prices extended gains for a third session, with UKOIL futures up 0.5% to $82.36 a barrel and USOIL up 0.7% to $78.45 a barrel. Industry data pointed to shrinking US crude stockpiles ahead of a report from the IEA on the market outlook.
* Gold prices edged 0.1% lower to $2,313.72 per ounce.

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

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

Click HERE to access the full HFM Economic calendar.

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

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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

Date: 25th June 2024.

Kenya in Turmoil: Youth-Led Protests Shake Economy as Shilling Falls

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Impact on the Kenyan Shilling (KES)

Earlier today, lawmakers in Kenya passed the bill increasing taxes, which now awaits President William Ruto’s assent. The planned tax increases aim to generate an additional $2.3 billion in revenue in the upcoming fiscal year. Ruto intends to reduce the budget deficit from 5.7% of GDP in the current financial year to 3.3% of GDP in the next, as part of efforts to improve Kenya’s fiscal position and comply with an IMF program that requires Nairobi to increase revenue.

The recent youth-led protests against the Kenyan government’s proposed tax increases have had a notable impact on the Kenyan shilling (KES), which has depreciated against the US Dollar. The Central Bank of Kenya (CBK) previously reported that the shilling had appreciated against the Dollar more than almost any other currency in 2024. However, following the news of police and protester violence, the shilling slipped from trading at approximately $0.0077 to the Dollar.

Background on the Finance Bill

A finance bill is typically presented to parliament before the start of the financial year, which runs from July to June, outlining the government’s fiscal plans. In the 2024/25 bill, the Kenyan government aims to raise $2.7 billion in additional taxes to reduce the budget deficit and state borrowing. Kenya’s public debt currently stands at 68% of GDP, surpassing the 55% of GDP recommended by the World Bank and the International Monetary Fund.

Facing severe liquidity challenges and uncertainty about its ability to access capital from financial markets, Kenya has turned to the IMF, which has urged the government to meet revenue targets to secure further funding.

Protesters are demanding the government abandon the planned tax hikes, arguing that they will stifle the economy and increase the cost of living for Kenyans already struggling financially. This resistance is not unprecedented; last year, the government of President William Ruto, elected in 2022 on a promise to improve the lives of the poor, introduced a housing tax and raised the top personal income tax rate through the finance bill, triggering anger, street protests, and legal challenges.

Proposed Tax Measures

The proposed tax measures causing unrest include new levies on basic commodities such as bread, vegetable oil, and sugar, and a new motor vehicle circulation tax of 2.5% of a car’s value to be paid annually. An “eco levy” on most manufactured goods, including sanitary towels and diapers, is also proposed. Additionally, the bill seeks to increase existing taxes on financial transactions. The government argues that these tax measures are necessary to fund development programs and reduce public debt.
The government had earlier withdrawn several of the most controversial measures, such as a tax on bread and cooking oil, but this did not assuage people’s anger. The finance ministry has stated that these concessions would create a 200 billion Kenyan shilling ($1.56 billion) shortfall in the 2024/25 budget, necessitating spending cuts. Despite these concessions, protesters and opposition parties argue they are insufficient and call for the entire bill to be abandoned.

The Protests

President Ruto has acknowledged the youth-led protests and pledged to engage in dialogue to address their concerns, though the timing of such discussions remains unclear. It is also uncertain whether the protests will intensify if parliament passes the bill. The social media-driven protests lack clear leadership, but many young people have vowed to continue demonstrating. Some protesters cite the arrest of at least two activists since Ruto’s offer of talks as evidence of the government’s lack of goodwill.
The government claims that the withdrawal of some tax proposals demonstrates its willingness to compromise. Nevertheless, police have attempted to disperse predominantly young protesters chanting “Ruto must go!” amidst growing anger over the government’s plan to raise more than $2 billion in new taxes to address the country’s substantial budget deficit.
The demonstrations began a week ago in Nairobi and have since spread to other cities in the country of 54 million people. They are led mostly by young Kenyans, many of whom organized via social media and livestreamed demonstrations on TikTok, Instagram, and other platforms. The protesters are demanding that the government of Kenyan President William Ruto withdraw the bill that would introduce major tax increases, arguing that the measures are hurting ordinary Kenyans already grappling with rising prices for everyday essentials.
The human rights commission has reported that security forces have “abducted” prominent critics of the tax proposals, seizing many from their homes under cover of darkness. Treasury Secretary Njuguna Ndung’u has warned that failing to implement the tax increases could create a $1.5 billion hole in the budget. The government has indicated it would be forced to cut spending, including slashing support for a school food program and the loss-making flag carrier Kenya Airways if the bill fails.
Following initial protests last Tuesday, when the bill was tabled in parliament for debate, the government promised to withdraw planned taxes on bread, cooking oil, locally made diapers, and other products. However, by Thursday, the protests had spread to almost half of Kenya’s 47 counties. Protesters are calling for a “total shutdown” of the country and demanding that Ruto completely drop the finance bill.

Interest payments on Kenya’s debt consume nearly 38% of revenues, according to the World Bank. In January, the IMF provided Kenya with an additional $941 million loan as part of a $3.9 billion bailout that began in 2021.
Multilateral lenders are willing to continue extending credit to Kenya, provided it maintains fiscal consolidation and increases revenue collection.

What comes next?

With the bill now approved, the president has the option to either enact it within 14 days or return it to parliament with suggested amendments. The government might also consider alternative strategies to alleviate tensions, such as postponing the bill, though this is improbable.

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: 27th June 2024.

Market News – Asian Declines, Tech Sector Losses and Anticipation for PCE.

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Economic Indicators & Central Banks:

Several events are on the calendar which are keeping a cautious tone in the markets:

* Although tonight’s presidential debate is much anticipated, it’s unlikely to impact the markets as it won’t provide any real clues on fiscal or monetary policy.
* Asian shares decline, with US futures amid ongoing losses in the tech sector. Friday’s PCE chain price report has Treasury bulls sidelined for now and the run up in yields is tempering activity on Wall Street. Though expectations are for a benign report, upside surprises in Australia and Canadian CPI are generating some concerns.
* Chinese stocks are headed for a technical correction. The earlier rally that pushed Chinese equities into bull markets this year has been losing momentum due to ongoing concerns about an uneven economic recovery. Investors are now focusing on the Third Plenum, the July meeting historically known for significant economic policy announcements by the Communist Party.

Asian & European Open:

* Wall Street rallied with all three major indexes finishing in the green. A bounce in tech boosted the NASDAQ 0.49%, back to 17,805. The S&P500 was up 0.16% and the Dow edged up 0.04%.
* Micron Technology Inc.’s sales outlook fell short of the highest forecasts, denting giant tech companies in late Wall Street trading.
* Asian equities declined on Thursday, with Hong Kong experiencing the largest losses as Chinese tech companies and property developers listed in the city fell. Significant contributors to the drop included electric vehicle maker BYD, travel agency Trip.com, and Tencent.

Financial Markets Performance:

* The USDIndex was a big winner, climbing to a session peak of 106.130 before closing at 106.079, the highest since late April.
* A surge in USDJPY to 160.79, the highest since 1986, supported. Today the Yen recovered by 0.3% against the Dollar, to 160.29.
* Gold and USOIL prices declined, in part on the firmer Dollar. Bullion fell -0.49% to $2298 per ounce and USOIL slipped -0.2% to $80.36 per barrel.

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 July 2024.

French Elections Spark Risk Rally as Far-Right Falls Short!

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* Projections show France’s Far Right Party will lead the first round of parliamentary elections.
* The Euro is the day’s best performing currency, increasing in value by more than 0.40%.
European Indices soar! The Euro Stoxx 50 rises 1.85% and the DAX 1.00%.
* Investors turn their attention to today’s German Inflation data. Analysts expect the German Consumer Price Index to rise 0.2%.

FRA40 (CAC 40) – French Elections Trigger Volatility And “Bottom Fishing”!

By the market close on Friday, the French CAC was almost at its lowest level for 2024. Since Sunday’s elections, all European indices have risen and the French CAC trades 2.65%. Investors have bought the dip triggering a large price gap and a significantly higher price. Nonetheless, the price remains 7.00% lower than the index’s all-time high. The price is being influenced by three major factors; the upcoming earnings data, higher appetite towards stocks and of course the French elections.

Following an exceptionally high voter turnout, the National Rally is leading with 34% of the vote. The left-wing New Popular Front is in second place with 28%, and President Emmanuel Macron’s Ensemble Alliance has dropped to a disappointing third place with 20%, according to initial estimates. Although the National Rally seems poised to secure the most seats, France could be facing a hung parliament and increased political uncertainty. Even so, technical analysis signals a possible correction upwards, and the market is showing a clear “risk-on” sentiment. The higher risk appetite is due to the far right failing to win a majority.  Bottom fishing refer to investors buying the bottom!

The risk-on sentiment can be seen across the global stock market. All European and US indices are increasing on Monday. The Euro Stoxx 50 has risen 1.85%, the DAX 1.00%, the SNP500 0.35% and the NASDAQ 0.40%. Some Asian stocks also continue to rise. Lastly, the VIX index trades 1.59% lower which also indicates a higher risk appetite.

In terms of technical analysis, the CAC40 is attempting to establish itself above the 75-Bar EMA and above the 50.00 on the RSI. On smaller timeframes, the momentum is also forming bullish crossovers further indicating an increase. The only concern for investors is the resistance level at 7,729.48, which pressured the index last week. If the price forms a breakout above this level, the index will likely see buy signals strengthen. If the price retraces to 7,614.55, traders have the opportunity to trade the upcoming breakout. However, if the price falls below this level, the buy signal will no longer be valid for the time being.

EURUSD – Investors Turn Their Attention To The German Inflation Reading!

The EURUSD continues to trade higher with strong momentum and has broken through the most recent resistance levels. The Euro is the day’s best performing currency with the index trading 0.40% higher, while the US Dollar is the worst performing. The US Dollar Index is trading 0.35% lower today so far.

However, investors should be cautious about the price action seen so far as volatility can quickly change after today’s German inflation data. Analysts expect the German Consumer Price Index to read 0.2%, slightly higher than the previous month. If the inflation reading is lower, the Euro potentially can come under selling pressure. In June, the number of unemployed in Germany rose by 19,000, surpassing the forecast of 14,000, with the unemployment rate reaching 6.0% instead of the expected 5.9%. Experts highlight the weakness of the German labor market, noting that companies remain cautious about hiring new employees, which negatively impacts the country’s economy. However, today’s inflation data will be the main driver along with the French elections and a potential hung parliament.

Technical analysis points towards buyers controlling the market and the exchange rate yet to obtain an “overbought” price. Currently, the RSI trades at 73.00 which means the price can rise a further 0.20% becoming overbought. However, this would depend on momentum.

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.v

Date: 3rd July 2024.

NASDAQ Eyes All-Time High as Employment Data Eases Investor Concerns.

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* The JOLTS Job Openings comes in slightly higher than expectations improving investor sentiment.
* The NASDAQ rises 0.88% after the release of the latest US JOLTS Job Openings.
* Federal Reserve chairman advises inflationary data shows sign of inflation “cooling”. Reuter’s SmartEconomics predicts a Consumer Price Index reading of 0.1% for June.
* Investors turn their attention to the latest employment data and tonight’s FOMC Meeting Minutes.

USA100 – Employment Data Eases Concerns and Pushes The NASDAQ Close To An All-Time High!

The NASDAQ has risen 1.40% this week as market risk appetite improves, and institutions position themselves for the next earnings season. The NASDAQ has now formed a second higher high and a third higher low. For this reason, technical analysts are pointing towards a potential bullish trend, while economists also advise the NASDAQ is likely to perform well in the second half of the year.

The bulls quickly entered the market during yesterday’s trading session due to the positive employment data. Analysts thought the JOLTS Job Openings data would fall to the lowest since COVID lockdowns, but the figure read 180,000 more vacancies. Investors bought the news as the release confirms that the employment sector has become more “balanced”, remaining strong but simultaneously not strong enough to significantly increase salaries and inflation.

Another positive factor is the comments from the Federal Reserve’s Chairman. Mr Jerome Powell, after some persistently high inflation reports at the start of 2024, said that the data over the past 2 months “do suggest we are getting back on a disinflationary path.” However, economists are also noting that oil prices have risen by 8.40% in June 2024. According to economists, if prices remain around $85 per barrel, inflation potentially can become stickier.

However, even if inflation does become stickier, investors will soon start to turn their attention to the upcoming earnings season. Earnings season will start on Friday 12th July, but will gain momentum on the 17th! When monitoring individual components for the NASDAQ, in Tuesday’s session, 75% of the stocks rose in value and 83% of the most influential stocks rose.

The price of the NASDAQ is currently witnessing buy signals with the price trading comfortably above the 75-bar EMA and the Volume Weighted Average Price. Oscillators are also indicating buyers are controlling the market, but technical analysts are closely monitoring to ensure momentum continues. Breakout levels can be seen at $20,036.03 and $20,045.64. The NASDAQ’s all-time high is at $20,128.31.

EURUSD – The US Dollar Gains Momentum, Investors Focus On Upcoming Economic Data!

The price of the EURUSD during the Asian Session trades significantly lower which is primarily being driven by the US Dollar. However, the EURUSD quickly gains bullish momentum as the European session starts. Simultaneously, the Euro is increasing in value against most currencies and is only struggling against the AUD. US Dollar has largely been driven by positive economic data, but investors also should note dovish comments from the Fed can apply pressure.

The price of the US Dollar will mainly be influenced by three economic events. The ADP Non-Farm Employment Change, the ISM Services PMI and tonight’s FOMC Meeting Minutes. If the data reads higher than expectations, the price potentially can rise further.

Currently the EURUSD is trading within a small retracement upwards. Therefore, short term traders will closely monitor when momentum is regained, and a breakout is formed. The closest breakout level currently can be seen at 1.07354.

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: 5th July 2024.

NFP Is Here! How Will Today’s NFP Impact The NASDAQ

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* Labour win UK Elections, receiving an unconditional majority of seats in the House of Commons (410 out of 650).
* The British Pound and FTSE100 increase in value as Labour wins an outright majority.
* The Japanese Yen sharply increases in value as the US Dollar underperforms ahead of the US employment data.
* Investors turn their attention to today’s NFP release and Unemployment Data!

USA100

The NASDAQ quickly increases in value as the Asian Market opens and the US bank holiday ends. Investors now turn their attention to this afternoon’s employment data. This morning the price quickly rose 0.48%, continuing the trend of the past week.

The “bullish” momentum that accelerated throughout the week as positions in the US Dollar weakened is gradually slowing down ahead of today’s release of the June labor market report. This report could influence the US Federal Reserve’s decision on reducing borrowing costs by the end of the year. Earlier in the week, Fed Chair Jerome Powell delivered a speech, and the June meeting minutes were released. The market reacted with a higher risk appetite, even though officials reiterated the need for further evidence of inflation reduction to the target 2.0% before initiating a monetary easing program.

Investors also continue to position themselves for the upcoming earnings data and an interest rate cut in September 2024. An ideal NFP release for the stock market will be a slightly worser reading. For example, NFP to come in as expected but for the unemployment rate to rise to 4.1%. This afternoon’s employment data is likely to trigger significantly higher volatility. However, investors will also be concerned if the price of oil continues to rise as it has over the past 4 weeks. If the NFP data triggers higher oil prices, investors will be cautious that it does not apply upward pressure on US inflation. Analysts expect the NFP to add a further 191,000 employed individuals.

Currently the price is trading at an all-time high and is witnessing buy signals. The price forms a bullish crossover and trades significantly above most moving averages. However, the price is not yet thought to be overpriced based on the RSI. All global indices trade higher, which indicates a strong sentiment towards the equity markets.

Lastly, of the top 5 most influential stocks for the NASDAQ, 4 are trading higher in pre-trading hours. This includes Microsoft, Apple, Alphabet and Amazon. Currently, NVIDIA trades 0.15% lower.

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: 9th July 2024.

Market News – Stocks Under Pressure Ahead of Powell.

Trading Leveraged Products is risky

Economic Indicators & Central Banks:

* Trading was nondescript with the markets digesting recent data, including the jobs report, and events including the elections overseas.
* Asian stock markets were supported, however, the positive mood didn’t spill over into Europe, where indexes are mostly lower.
* US futures are finding some buyers but investors are cautious ahead of Powell’s testimony. Powell will be questioned on the prospects for rate cuts.
* Japan: the BoJ will speak face-to-face with market participants over the next couple of days as the bank tries to set a realistic pace for the planned reduction of bond purchases.
* China: investors continue to weigh the bank’s new liquidity operations. The bank is aiming to take greater control over short-term borrowing costs and investors seem to take it like a rate hike, which put pressure on bonds. Markets are also looking ahead to the biggest annual policy meeting, with hopes of additional stimulus measures.

Asian & European Open:

* Wall Street was mixed. Strength in big tech rallied the NASDAQ and S&P500, albeit marginally, with gains of 0.28% and 0.10%, respectively. But the gains were enough for more fresh highs, the 25th and 35th of the year.
* Nikkei and Sensex touched fresh all-time highs, after the S&P500 led the way.
Long bonds are also down in Europe and the US, after a drop in yields across key Asian markets.

Financial Markets Performance:

The USDIndex softened to a session nadir of 104.80 on broadbased weakness, and especially as GBP and EUR stabilized. But the buck rebounded confidently to 105.09.
Bitcoin steadied but remains below the key $59k level.
Oil remained relatively stable following a 2-day decline, as Hurricane Beryl appeared less likely to cause significant disruptions to Texas’ crude infrastructure. However it’s hovering at the key 81.60 level (repeated resistance in the mid of June).
Gold steadied after experiencing its largest drop in two weeks on Monday, while copper edged lower.

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 July 2024.

Stocks Rise as Analysts Predict Inflation Will Drop to a 5-Month Low.

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* NASDAQ’s most influential stocks witness significant gains on Wednesday including Apple +1.88%, Microsoft +1.46% and Alphabet +1.17%.
* Investors fix their attention on today’s US Inflation rate which analysts expect to fall from 3.3% to 3.1%. Markets predict US Core Inflation to remain at 3.4%.
* KeyBanc Capital Markets raised NVIDIA’s target price from $130 to $180, maintaining the overweight rating.
* Gold increases in value ahead of today’s inflation data and outperforms all currencies.

USA100 (NASDAQ) – Stocks Rise Ahead Of Today’s Inflation Reading!

The NASDAQ increases in value for a fourth consecutive day as investors price in a rate cut for September. On Wednesday, the price of the index rose 1.05%, but the bullish price movement will depend on today’s inflation reading. Investors are anticipating a decrease in inflation, but if this expectation is not met, it could result in downward pressure. However, if inflation does decline to 3.1% or lower shareholders are less likely to sell shares ahead of earnings season. As a result, the bullish trend is potentially likely to continue.

The September cut scenario has become the main outcome due to the rise in unemployment and the change in the tone of the Federal Reserve. Earlier this week the Fed Chairman said the employment sector is showing signs of weakening while yesterday the Fed Governor advised inflation will reach the target without the Unemployment Rate rising much further. The lower interest rates support the economy but also makes bonds and the US Dollar less attractive.

Only 25% of the NASDAQ’s 100 stocks declined on Wednesday which applied minimal pressure. The bullish price movement was largely driven by the top 8 most influential stocks which all rose in value. These 8 stocks make up 49.08% of the whole index. The only stocks which applied minor pressure were Netflix which fell 1.18% and Intuit, down 2.70%. The two stocks hold a weight of 3.08%.

One of the stocks which have significantly supported the NASDAQ in 2023 and 2024 so far is NVIDIA. According to leading analysts, the company’s quarterly report is set slightly later than its main competitors. This could provide an advantage and an opportunity to improve its performance. KeyBanc Capital Markets have raised the target price from $130 to $180. They attribute this to higher-than-expected demand for GB200 graphics processors, particularly the more expensive NVL72 configuration, which is gaining more interest compared to the previously popular NVL36. Wolfe Research LLC has also adjusted its price target from $125 to $150.

Currently the price is trading within a symmetrical triangle meaning the price shows a lower high but a higher low. Volatility is likely to remain minimal until the US Consumer Price Index. If the Consumer Price Index reads as expected and the price increases, traders should be cautious that profits are not hit, and the price retraces. In the medium to longer term, the price remains above the 75-Period EMA and 100-Period SMA. This indicates buyers are controlling the market. Based on price action, buy signals are likely to materialize again if the price rises above $20,697.40.
XAUUSD – Gold Gains Momentum, Capitalizing on the Weaker Dollar!

The price of Gold has benefited from the lower price of the US Dollar and the pricing of an interest rate cut by September. The commodity is forming higher highs and higher lows, which is a positive sign, but traders should note retracements are quick and large, meaning caution is wise.

Another positive sign is the price of Gold is currently performing better than all other currencies within the market. However, investors will largely be monitoring the US Dollar which is currently declining 0.08%.

A weaker US Dollar has the potential to support the price of gold; however, if inflation falls significantly below current expectations, it may undermine gold’s bullish price action. This is because gold is also used as a hedge against inflation. According to the Fibonacci retracement levels, buy signals will form if the price breaks above the $2,381.62 levels.

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.

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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: 15th July 2024.

US Stocks Surge Amid Banking Sector Concerns Over Consumer Demand!

Trading Leveraged Products is risky

Economic Indicators & Central Banks:

* US Banks beat earnings expectations but warn of financial stress amongst lower and middle-income consumers over the upcoming months.
* Producer Inflation unexpectedly remains high, but investors opt to take advantage of the lower price.
* Political experts advise Trump’s chances of winning this year’s elections are significantly higher after the recent assassination attempt.
* All currencies indexes decline as the US Dollar attempts to win back some lost ground.

USA100 – Large US Banks Voice Caution As Consumer Demand Falls!

The NASDAQ rose on Friday despite the US inflation data reading higher than what investors would have preferred. According to analysts, investors preferred to take advantage of the lower purchase price and Thursday’s 2.20% decline. Investors potentially may still look to increase exposure in stocks and indices to price in a rate cut and strong earnings data.

The Producer Price Index read 0.2% vs 0.1% expectation. Though investors were concerned that the Core Producer Price Index was more than double previous expectations. However, the positive news is that the US inflation rate fell from 3.3% to 3.0%, the lowest since June 2023. Today investors will focus on the release of the Empire State Manufacturing Index which could benefit from a slightly higher reading. In addition to this, the Fed Chairman will speak at 16:00 GMT which may also trigger volatility depending on comments.

None of the earnings reports released Friday were part of the NASDAQ index, but they surely grabbed investors’ attention. JP Morgan, CitiGroup and Wells Fargo all beat earnings and revenue expectations, however, all stocks depreciated in the session that followed. Particularly Wells Fargo which fell more 6.00%.

The main cause was the forward guidance given by all 3 banks regarding the economic conditions in the upcoming months ahead of the elections. Profits at Citi’s US consumer lending division, which encompasses credit cards, plummeted by 74% compared to last year. The bank’s chief financial officer, Mark Mason, noted that consumer spending is generally declining, with account balances now falling below pre-Covid levels. In addition to this, JP advises lower income consumers are likely to struggle over the next 3-4 months.

Nonetheless, in terms of technical analysis, the price of the NASDAQ is again trading above the 75-Period EMA and 100-Period SMA. In addition to this, the RSI trades above the 50.00 level which indicates buyers are regaining control of the market. Buy signals are likely to strengthen as the price crosses above the $20,471.10 and $20,552.77 levels.

EURUSD – The Dollar Gains As The Exchange Rate Rises To Previous Resistance Level!

The EURUSD currently trades with an extremely low spread and a bearish price gap. The US Dollar Index is currently trading 0.15% higher while the Euro Index is 0.16% lower. However, on the medium-term timeframe the Euro is witnessing significant gains against the Dollar after rising for 3 consecutive weeks. However, this has brought the exchange rate to the previous resistance level of the price range. Therefore, technical analysts are considering whether this may be the point where the EURUSD retraces lower.

Currently, the support and breakout level can be seen at 1.08823 and if the price falls below this level potentially can prompt a short-term sell signal. A short-term sell signal potentially can indicate a decline to the 1.08667 level. The Empire State Manufacturing Index this afternoon potentially can support momentum to form a breakout if the index reads higher than current expectations.

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: 17th July 2024.

Gold Hits New All-Time High as Investors Flee the Dollar!

Trading Leveraged Products is risky

* Gold reaches an all-time high as investors look to mitigate away from political risk and a potential economic slowdown.
* UK inflation remains unchanged whereas analysts previously expected a 0.1% decline.
* Economists contemplate whether the Bank of England will opt to adjust interest rates in August or wait for September’s meeting.
* All US indices increase in value bar the NASDAQ which fell 0.18%. The SNP500 rises 0.64% and the Dow Jones 1.85%.

XAUUSD – Gold Rises To All-Time High!

Gold rises to an all-time high after increasing in value by almost 2% on Tuesday. Investors are turning to Gold in an attempt to mitigate political risk, interest rate adjustments and also the possibility of weaker economic growth. Weaker economic growth has been mentioned by leading economists over the past week which is prompting higher gold demand.

However, the price of Gold did witness an overbought signal on the RSI for the first time this week at $2,472.85 and soon after fell 0.45%. Here we can see how the RSI assisted traders with determining that Gold may have stretched too far. Currently, as the price retraces lower, the price is no longer overbought and still continues to maintain buy signals on the 2-hour timeframe. Though investors will look for bullish momentum to build before speculating in favor for the trend. For example, if breakout signals can be seen at $2,470.95 and $2,472.70 or Fibonacci retracement signals a buy indication at $2,475.00.

A positive factor for Gold is the decline in the US Dollar which currently is trading 0.08% lower this morning. Though, investors would prefer the decline to gain momentum. In addition to this, the pricing of interest rate adjustments is also supporting the value of Gold. According to the CME Exchange, there is a 93% chance of a 25-basis point cut and a 7% chance of a 50-basis point cut for September.

A large portion of the demand for Gold in 2024 derives from China and is largely the reason why gold has surged more than 21% so far this year. China will suspend gold supplies, but experts believe the government will continue to import without reporting it. It may indicate an intention to purchase more gold than before, following the trend set by global central banks, which are actively replenishing their reserves. Thus, the National Bank of Poland increased gold volumes by 4.0 tons in June. Additionally, the National Bank of India purchased 9.0 tons, and now the country’s reserves amount to 841.0 tons. Regardless of this, lower interest rates can support Gold and short-term traders will focus on the trend and technical analysis.

GBPUSD – UK Inflation Remains Sticky!

The price of GBPUSD has increased in value after the UK inflation remained at 2.00% instead of declining to 1.9%. As a result, economists are contemplating whether the Bank of England will opt to adjust interest rates in August or wait for September’s meeting. Previously, investors were leaning more towards a cut in August. Currently investors monitoring price action are evaluating whether the price will rise above the most recent resistance level which has formed a double top.

The price of the US Dollar will also be detrimental to the price movement of the exchange. Currently, the US Dollar Index has fallen 0.12% so far this morning. Throughout the day the Building Permits and Industrial Production will influence the price of the US Dollar. The GBP will now turn its attention to the release of the UK’s Claimant Claims Change and Average Earnings Index.

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: 19th July 2024.

Global Stocks Tumble as Risk Appetite Plummets!

US ECONOMY

* The NASDAQ declines for a third straight day and fell to its lowest level for July.
* Netflix Quarterly Earnings Report unable to support US indices. The Dow Jones loses momentum after 6 straight bullish days.
* The US Dollar Index attempts to regain losses from earlier in the week and trades 0.65% higher than yesterdays
* The British Pound comes under pressure from the decline in Retail Sales. However, the New Zealand Dollar continues to be the worst performing currency.

GBPUSD

The British Pound against the US Dollar is losing momentum for two reasons. The first is that the exchange rate is largely being driven by the Dollar which has risen in value across the board. The US Dollar Index is attempting to regain loses from earlier in the week and trades 0.65% higher than yesterdays open. This is partially due to the lower price but also the lower investor sentiment as stocks falls over the past 3 trading days.

The second reason is the poor economic data from the UK which is likely to pressure the Bank of England to adjust interest rates at the next meeting. According to economists a 25-basis point cut at the next meeting is not yet certain. However, a cut will take place either on the 1st of August or September 19th unless something drastic changes. The poor data includes the number of new unemployed individuals which has considerably risen over the past 2 months. This morning, the UK government also confirmed Retail Sales has fallen 1.2% which is double the decline previously expected.

For the US, weekly employment data was released yesterday: the number of Unemployment claims rose by 243,000, exceeding both the forecast of 229,000 and the previous figure of 223,000. Additionally, the total number of citizens receiving government assistance increased from 1.847 million to 1.867 million, raising the likelihood of interest rate adjustments in September. According to most analysts, the rate cut for September is fully priced in at around 103.20 for as long as other central banks also adjust.

The US Federal Reserve’s Beige Book, published this week, indicates that economic activity is growing at a moderate pace, but businesses expect a slowdown over the next six months due to the US election campaign and consumers struggling with prices. However, the lower risk appetite is triggering higher demand for the Dollar over the past 48 hours. It’s vital investors continue to monitor the US Dollar Index while analysing the GBPUSD.

The price of the exchange is now trading below the 75-Period EMA and below the 50.00 on the RSI. This indicates low sentiment towards the Pound and bearish control for the time being. Fibonacci retracement levels indicate a sell signal will arise at the 1.29290 price whereas the breakout level indicates 1.29261. however, if the price rises above 1.29400 or the trendline, short-term sell signals become unlikely.

USA100

The price of the NASDAQ has now fallen for 3 consecutive days but did see less downward momentum compared to Wednesday’s collapse. The index has now fully corrected the gains for the first 2 weeks of the month and is trading close to the previous support level. However, as previously mentioned, due to the higher economic risk, investors will most likely need strong earnings data to be tempted to purchase the discount unless the price becomes even more favourable.

The price of Bond Yields has risen during this morning’s Asian session and the VIX is also trading slightly higher. The VIX this week has already added almost 10% which indicates a significant decline in risk appetite. In addition to this, the poor data from the rest of the world’s leading economies can also damage sentiment towards stocks. Currently the biggest indication for short term upward price movement is the lower price and potential upcoming earnings data.

Netflix has released their earnings report overnight. The company’s earnings read 2.40% higher than expectations at $4.88 and revenue was 3 million higher than expectations. However, the stock is yet to see any major volatility or support. Currently the stock trades 0.18% lower.

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: 23rd July 2024.

Market News – Asia stocks up; Yen Strengthens.

Economic Indicators & Central Banks:

* Markets paused after recent volatility and a tech selloff driven by high valuations and sector rotation.
* US election developments continue to dominate, with Kamala Harris securing enough pledged delegates for the Democratic presidential nomination, providing some political clarity.
* Asian stocks climbed, driven by gains in chipmakers following a Wall Street rebound ahead of major tech earnings reports.
* Treasury yields fell ahead of economic data releases and the Federal Reserve’s preferred inflation measure. Throughout July, speculation about a September rate cut boosted shorter-term bonds, narrowing their yield gap with longer-term securities.

Asian & European Open:

* US equity futures dipped, and Euro Stoxx 50 contracts rose in anticipation of earnings from Tesla Inc. and Alphabet Inc. later today.
* Nasdaq and S&P500 were both up more than 1%, reversing some of last week’s painful decline.
* The “Magnificent Seven” stocks rose over 2% on Monday, led by Tesla and Nvidia Corp.
* Toyota Motor Corp. plans to repurchase shares from major Japanese banks and insurers as part of a ¥1 trillion buyback plan.

Financial Markets Performance:

* The USDIndex remains in a ranging market, between 103.90-104.15.
* The Yen appreciated against the US Dollar, as traders adjusted their carry positions during the summer holiday season, with USDJPY breaching 156.20. Some Bank of Japan officials are open to raising rates at the July meeting, though weak consumer spending complicates the decision.
* Oil prices remained steady near a 6-week low as traders awaited new data on market balances and US stockpile forecasts.

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.