Date : 11th February 2022.

Market Update – February 11 – USD on bid as equities crushed.

Trading Leveraged Products is risky

The markets were crushed, and especially bonds, as a hotter than expected CPI and hawkish comments from Bullard weighed heavily on the markets. The 7.5% y/y pace of CPI, a 40-year high, boosted concerns that the FOMC will have to take a more aggressive stance on rate hikes and tightening down the road. But the nail in the coffin were comments from the Fed hawk Bullard who said he now advocated for a half point rate increase in March and 100 bps of tightening over the first half of the year. The UK economy grew by 7.5% last year despite Omicron causing slowdown. Treasury yields soared with the 10-year cheapening through the 2.0% level for the first time since July 31, 2019. Wall Street was hammered too and the major indexes plunged on the day.

* USD (USDIndex rallied to 96.00).
* US Yields sharply higher, spiked further, leaving the 2-year rate up 25 bps to 1.579% – biggest single daily move since June 2009 and the great financial crash. The 10-year was up 10 bps at 2.029%, closing with a 2% handle for the first time since July 31, 2019.
* Equities were led by the -2.10% drop in the USA100, while the USA500 was -1.81% lower, with the USA30 down -1.47%. Tech stocks have been hit by the prospect of accelerated Fed hikes and GER30 and UK100 are currently down -1.3% and -1.0%.
* Earnings: Affirm stock dropped 21%. Twitter unchanged, as Twitter’s mixed fourth quarter shows its challenges ahead, PepsiCo down by 2.1%, beat earnings but warns on costs while full-year outlook fell short. Disney 3.50% up, shows rebound in Disney+ & Parks businesses.
* USOil – at $88.00 following a spike at 90.60.
* Gold – down to $1820.90.
* Bitcoin settled to $43,000 – 44,000 area.
* FX markets – USD on bid as yields spiked and USDJPY jumped to 116.32, although the Yen strengthened against most other currencies as risk appetite waned. AUD and NZD drifted. EURUSD declined to 1.1370 & Cable down to 1.3512.

European Open – The March 10-year Bund future is down -23 ticks, but the 30-year future has rallied and US futures have found a footing. So there are some signs of stabilisation at least at the long end. EGBs sold off yesterday in the wake of the higher than expected inflation print, and while the UK curve shifted higher across the board, thanks to Lane’s dovish comments on the policy outlook, the short end outperformed in the Eurozone and the curve steepened as the long end sold off, with Italian BTPs once again hit most.

Today – Today’s calendar is light, with just the preliminary University of Michigan consumer sentiment index due. Today’s earnings calendar features reports from Enbridge, Dominion Energy, Magna International, and Fortis.

Biggest FX Mover @ (07:30 GMT) AUDUSD (-0.58%) – Dipped to 0.7110 on USD strength. Fast MAs currently flat, as MACD signal line & histogram extend southwards and RSI at 36, indicating near term consolidation and overall pressure.

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 HotForex 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
HotForex

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 February 2022.

Market Update – February 15 – Markets Await the Diplomats.

Trading Leveraged Products is risky

Stock markets ended flat into close, with Ukraine jitters easing a tad. USD & JPY remained bid, Gold has hit an 8-month high and Oil holds at $93.00. 2yr-10yr Yields at their narrowest since Feb 2019 but have cooled overnight. No leaks from closed door FED meeting, Bullard reemphasized his 100bps by July.  Asia stocks lower too. Ukraine had no response from Russia although Lavrov & Putin agreed to more diplomacy with the West. Scholz in Moscow today. UK Foreign Sec, Truss “Invasion highly likely but not inevitable”. Iron Ore futures slumped over 10% amid the continued crackdown on prices by China hitting AUD.

* USD (USDIndex 96.15) stronger USD weaker EUR on unrest on its border and possible energy shortages.
* US Yields 10-yr closed Friday at 1.996 cooled to 1.97%, 2-yrs remain elevated.   
* Equities – USA500 -16pts (-0.39%) 4401 -(TSLA +1.83%) Musk gave $5.7bln shares to a charity in Nov. US500 FUTS now 4396.
* USOil – Futures spiked to $93.80, trades at $92.70 now.
* Gold – Rallied (8-mth highs) to $1879 back to $1878 now.   
* Bitcoin remains in the $45,000 to $42,000 range.
* FX markets – EURUSD down to 1.1324 USDJPY down to 115.29 & Cable to 1.3540.

Overnight- AUD RBA Mins, no surprises, analysts bring forward rate hikes to possibly August form year end. JPY GDP missed (1.3% vs 1.5% & previous quarter revised lower to -0.9%), GBP Earnings beat at 4.3% vs 3.8%, but inflation impacted real wages -0.8%. Tightening labour market too. – Unemployment steady at 4.1%.

European Open – The 10-year Bund future is up 68 ticks, outperforming versus Treasury futures, which are also slightly higher though. Markets are now increasingly worried that the Fed will act too aggressively on rates and stifle the recovery in the process. ECB’s Lagarde yesterday was eager to keep rate hike speculation at bay and even if the ECB pivots, a rate hike before the last quarter of the year, doesn’t really seem to be on the cards.  Ukraine jitters have eased somewhat, but continue to cloud over sentiment and DAX and FTSE 100 futures are down -0.3% and -0.2% respectively.

Today – EZ GDP, German ZEW, US Empire State Manu. PPI Final Demand, German-Russian meeting, Earnings Glencore, Restaurant Brands, ViacomCBS.

Biggest FX Mover @ (07:30 GMT) AUDJPY (-0.36%) From 84.00 highs on Thursday to 81.50 yesterday & back to 82.00 now. MAs aligned lower, MACD signal line & histogram remains below 0 line, RSI 43.50, H1 ATR 0.185 Daily ATR 0.878.

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 HotForex 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
HotForex

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 February 2022.

Market Update – February 17 – Risks raised – Russia reports being fired on.

Trading Leveraged Products is risky

US Stock markets flat into close (US500 +3 pts) after a weak day, no surprises in FED minutes (Jan 25/26) no talk of 50bps rate rises but a lot has happened in 3 weeks.  USD & JPY bid on more jitters regarding Ukraine. Gold rallied back to $1875, Oil – very volatile after inventories, contract expiry & news from Iran. Yields widened again but remain elevated. Asian markets also slipped Nikkei (-0.83%) but have cooled into close. US & UK  – “Russian troop withdrawal claims “false”. Ukraine denies any missiles from Donbass were fired.

* USD (USDIndex 95.85) cools from spike to 96.00 earlier.
* US Yields 10-yr closed 2.045 trades at down now 1.998%, 2-yrs remain elevated.   
* Equities – USA500 +3.94 pts (+1.58%) 4475 -(NVDA beat,) FB -2.02%  US500 FUTS cooler now at 4455.
* USOil – Topped at $93.00, after inventories, collapsed to $88.00 after contract expiry and positive nuclear deal headlines from both the US and Iran. Trades at $90.80 now.
* Gold – Rallied $1850 support to $1875 now.   
* Bitcoin remains in the $45,000 to $42,000 range.
* FX markets – EURUSD down to 1.1364 USDJPY down  to 115.25 & Cable to 1.3585, from a test of 1.3600 after hot inflation yesterday.

Overnight- JPY machinery orders much better than expected, Trade balance slipped significantly. AUD Job creation better than expected and Unemployment steady at -4.2%.

European Open – The March 10-year Bund future is up 32 ticks, U.S. futures are also moving higher.  Investors are keeping a weary eye on central banks, which are trapped between fears of out of control inflation and concern that hasty and aggressive central bank action could hit the recovery. DAX and FTSE 100 futures are down -0.75 and -0.4% respectively.

Today – US Initial Claims, CBRT Policy Announcement, ECB’s Lane, Schnabel, de Cos, Fed’s Bullard & Mester Earnings Standard Chartered (beat); Airbus (beat), Orange, Commerzbank, Walmart

Biggest FX Mover @ (07:30 GMT) NZDCAD (+0.43%) Rallied from lows of  0.8400 yesterday to  0.8510 now. MAs aligned higher, MACD signal line & histogram significantly above 0 line, RSI 68.25 & rising, H1 ATR 0.0015 Daily ATR 0.0060.

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 HotForex 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.

Stuart Cowell
Head Market Analyst
HotForex

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 February 2022.

UK: Data adding to arguments for swift action.

The markets are closed today for Presidents’ Day. Canada is also closed. Bonds held a haven bid Friday as the threat of a war in the Ukraine intensified.

Bond yields have moved higher on strong data and headlines of a possible Biden-Putin summit, but doubts have already started to emerge, leaving 10-year rates off earlier highs and GER30 and UK100 up 0.3% and down -0.1% respectively. The 10-year Bund yield is up 1.9 bp at 0.21%, the Gilt rate up 1.7 bp at 1.39%.  PMI reports for the Eurozone and the UK highlighted a strong and swift rebound from Omicron, but also rising price pressures and in the UK wage increases and staff shortages.

UK Composite Output PMI at 8-months high in February. The overall reading rose to 60.2 from 54.2 in January, thanks to a huge improvement in services sector activity. The services PMI came in at 60.8, up from 54.1 in the previous month, but while the manufacturing output index jumped to a 7 month high of 56.7, the manufacturing PMI held steady at 57.3 Coupled with German PPI inflation rising to a whopping 25%, the data added to arguments for swift action from both the BoE and the ECB.

There were source stories last week effectively confirming that the ECB is likely to end net asset purchases in September and pave the way for a rate hike in the last quarter of the year. At the BoE there were already a number of people arguing in favour of a 50 bp move at the last meeting, and the data clearly suggests that additional steps will be necessary to keep inflation from taking to firm a hold.

That UK inflation failed to drop back as expected at the start of the year and the squeeze in the cost of living is increasingly getting popular attention. The RPI that officials wanted to drop altogether is back in focus and hit a whopping 7.8% in January. Coupled with tax hikes, the pressure on households is increasing, especially as there is little consumers can do in the middle of the winter to escape the jump in energy costs. Against the background of a tightening labour market, pressure on the BoE is building, although the top brass at the central bank is likely to continue to argue in favour of gradual moves.

The stats office’s preferred target is the CPIH, which stood at 4.9% y/y in January, up from 4.8% in the previous month. The measures dominate the official press release, but remains little used in real life. The narrower CPI hit a 30 year high of 5.5% at the start of the year, the core reading lifted to 4.4% from 4.2% and the Retail Price Index (RPI) which was the main and indeed only measure until 2011, jumped to 7.8%. Energy prices remain the main driving factor and with the government set to lift the price cap on energy in April, the chances are that more is to come, with even the BoE suggesting that CPI could hit 7% in April.

For consumers the multitude of inflation measures is confusing and the older RPI remains firmly lodged in the minds of many. Indeed, union negotiators continue to consider it the best available measure of inflation. That means the 7.8% measure, rather than the much lower CPIH will be the focus in official wage negotiations. Unions may no longer be as powerful as they once were, but given that across the UK the labour market looks increasingly tight with many companies struggling to find skilled staff, they will certainly be in a good negotiating position this year. Reports suggest that pay bargaining across major private and public sector employers was relatively low through much of last year, likely also owing to the crisis situation. With the recovery expected to continue this year and unions focusing on the much higher RPI reading, wage talks are likely to be much tougher this year.

Indeed, there are already reports that companies are forced to up wages just to keep staff and latest labour market data not just confirmed that jobless claims continue to decline, but also reported an unexpected rise in average weekly earnings growth.

But with demand coming back companies are also more likely to pass on the sharp increase in cost pressures. If the jump in energy prices were not enough, the FT warned that beer prices are also set to rise sharply, with prices of malting barley nearly doubling last year. Long term supply contracts mean higher costs are only now being passed on to consumers. With struggling consumers told to wrap up warm and use hot water bottles to keep a lid on energy prices and a rise in beer prices underway, BoE Bailey’s calls for wage restraint didn’t go down well.

Indeed, more than anything communication will be key as central banks navigate a very difficult situation. Bailey may have been clumsy in his remarks, but he and his chief economist Pill clearly are aware that cautious moves are required in order not to stifle growth as the economy navigates the recovery from the pandemic.  The two were among those arguing against a large 50 bp move at the last meeting.

Indeed, delivering not just successive, but unusually aggressive rate hikes at this point would likely see markets running too far ahead with the tightening story, which could see a jump in rates that in turn could weigh on the recovery.

The BoE’s monetary policy report already suggested that markets are too pessimistic on the medium term outlook and if the bank were to deliver a 50 bp hike in March, while inflation rates continue to rise, markets would very likely be pushing for even more with the next pick up in headline inflation. Measured action then will likely remain the order of the day for now, especially as easing supply chain pressures should also help to limit the rise in cost pressures going forward.

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 HotForex 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
HotForex

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 February 2022.

Market Update – February 23 – Oil, Gold & Bonds Ebb; Kiwi Jumps.

Trading Leveraged Products is risky

Stocks stabilised and indexes came up from yesterday’s lows, as markets digest the still fluid developments in Ukraine and the standoff between the West and Russia. Haven demand eased and yields backed up. President Biden announced sanctions on Russia, including financial restrictions. Earlier Germany halted Nord Stream 2. UK will stop Russia selling sovereign debt in London. The RBNZ lifted its policy rate by 25 bp to 1.00%, adding to signs that central banks are moving out of crisis mode and are set on policy normalisation. Governor Bowman opened the door for a 50 bp liftoff next month. Gold below $1900, Oil settled at $90.50. Treasury yields cheapened with the front end underperforming on worries over aggressive rate hikes to help contain inflation.

* USD down (USDIndex 95.11) as risk appetite has stabilised.
* US Yields 10-year yield richened to 1.844% overnight before climbing to 1.958% then settling at 1.925%.
* Equities – GER30 and UK100 futures are up 0.6% and 0.1% respectively, while a 0.7% rise in the USA100 is leading US futures higher.
* USOil – Steady at $90.50 as neither sanction appears as harsh as it could have been.
* Gold – dipped as haven demand ebbed – below $1900.   
* Bitcoin broke higher to trade at $38,388.
* FX markets – NZDUSD jumped to 0.6776, EURUSD at 1.1340, USDJPY steady at 115.00. Cable breaches 1.3600.

European Open – German consumer confidence unexpectedly dropped to -8.1 in the advance reading for March. The March 10-year Bund future is down -4 ticks, Treasury futures are outperforming slightly, although the German 30-year future also seems to be benefiting from the prospect of reduced ECB support as surveys signal a swift rebound from the latest virus wave, but also mounting inflation pressures. Risk appetite has stabilised somewhat, although markets will keep a wary eye on Ukraine and the standoff between the West and Russia. For now though the focus seems back on central banks and the Fed’s tightening schedule.

Today – Today’s local calendar includes the final Eurozone HICP number, which will highlight once again that inflation is staying higher for much longer than initially expected. That in turn is putting pressure on the ECB to rein in stimulus. The UK has the latest retailing survey, which should register the easing of virus restrictions.

Biggest FX Mover @ (07:30 GMT) NZDJPY (+0.74%) Spiked to 78 highs earlier. MAs now aligned higher, MACD signal line & histogram significantly above 0 line, RSI 72.66 & rising. H1 ATR 0.155, Daily ATR 0.781.

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 HotForex 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
HotForex

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 February 2022.

Market Update – February 25 – Volatility was the only real winner!

Trading Leveraged Products is risky

Stock market sentiment started to stabilise overnight after Wall Street closed up from session lows. US futures are in the red though, led by a 0.8% drop in the USA100, and as officials in Europe and the US announce stiff sanctions for Russia, traders are also mulling what that means for Europe. Higher energy prices clearly are one thing and Brent is still holding above the $100 per barrel mark this morning. Russia’s oil exports seem to have been spared for now, while allies blocking access of the Swift payment system is also a possibility should a further escalation of sanctions become necessary.

* USD settled lower below 97.00 (USDIndex 96.86).
* China’s PBOC made a large liquidity injection. China’s central bank injected net 290 billion yuan via seven-day reverse repo operations today. That is the largest amount since September 2020 and according to the PBOC is designed to keep liquidity stable over the month end. The wild ride in global stock markets may have contributed to the move as external pressures, including the rise in oil prices, will add to existing problems, including the slump in the property markets and Covid related restrictions. The combination will likely keep the PBOC on an easing path.
* The VIX slid back to the 28.50 region after spiking to 37.79.
* US Yields – 10-year is down -0.3 bp at 1.96%, while the 10-year JGB rate has lifted 2.0 bp to 0.203% and yields are also higher in Australia and New Zealand.
* Equities – GER30 and UK100 futures are currently up 1.65% and 1.2%. JPN225 gained nearly 2% and the CSI 300 is currently up 0.8%. USA100 round tripped, bouncing 3.35% higher after tumbling -3.4%, while USA500 recovered to post a 1.59% gain from a -2.6% drop, with USA30 rising 0.28% versus a -2.6% morning drop.
* USOil –  fell back to $89.60 lows after hitting 7-year highs of $100.50 ahead of the open. Currently at $93.70.
* Gold – tumbled from a $1974 high down to the $1885 area.   
* Bitcoin back above PP at  $37,700.
* FX markets – EURUSD at 1.1210 from 1.1110 low, USDJPY back above 115.15, Cable breached 1.3438.

European Open – Europe’s reliance on Russian oil and gas comes at a price and will be something officials need to address urgently, although there is of course no quick solution, which means consumers will feel the pain of even higher energy costs. The jump in the cost of living is already depressing consumer confidence, and after the disappointing German GfK consumer confidence reading earlier in the week, the UK’s numbers overnight looked equally depressing. The pressure on central bank to step in will remain then, even against the background of the crisis in Ukraine.

DATA: German Q4 GDP revised up markedly – to -0.3% q/q from -0.7% q/q reported initially. German import price inflation hit 26.9% y/y in January, another higher than expected number that is likely to explode in coming months when the jump in oil prices is reflected, as it seems extremely unlikely that oil prices will go down very quickly in light of Russia’s invasion of Ukraine. European gas prices exploded yesterday and are also likely to remain very high, which means more pain for consumers ahead, as the cost of living explodes.

Today – Today’s data calendar includes detailed German GDP, preliminary French inflation numbers, the Eurozone ESI confidence reading, US PCE, Durable Goods and Michigan index. EU and ECB officials are set to hold a presser today, likely detailing some sanctions against Russia and their implementation.

Biggest FX Mover @ (07:30 GMT) USDCZK (+1.18%) spiked to 22.30 from 21.99 on EU open. MAs bulishly crossed, MACD signal line & histogram remain close to 0 line, RSI 64 & rising. H1 ATR 0.0622, Daily ATR 0.2683.

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 HotForex 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
HotForex

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 March 2022.

Market Update – March 1 – Calmer Markets For Now.

Trading Leveraged Products is risky

Risk Off mood cools, at least for now, with stock markets mixed, the USD, Commodities and Treasuries hold their bid. More Western companies pull investments from Russia, Visa & Mastercard block financial transactions, Monaco and London block more accounts. Oil futures rally again, Gold holds up and Yields remain pressured. Overnight Asian markets moved higher, JPY Manu. PMI miss, CNY PMI’s beat (51.6 vs 50.6). RBA keeps interest rates unchanged amid new uncertainty. Ukraine applies for EU membership as a 65km convoy of Russian armour heads towards Kyiv.

February Review – S&P500 fell -3.1%, DJIA30 lost -3.5%, & the NASDAQ shed -3.4%.  Year to date the S&P500 is down -8.2% with January & February being the biggest two-month drop since March 2020 and the onset of the pandemic.

* USD (USDIndex 96.65). Traded below 97.00 most of yesterday. 96.50 next support.
* US Yields 10-yr lower again closed at 1.839 Monday, 3 ticks higher to 1.86% now.
* Equities – USA500 -10.70pts (-0.24%) 4373.  (TSLA +7.48%, Zoom +5.81%, BP -4.95%, Total -7.62%)  US500 FUTS recovering to 4386 now. 
* USOil – Support at $93.00, yesterday, back to  $95.00 now. 
* Gold – Holds over psychological $1900 now, trades at $1908.     
* Bitcoin rallied over key 40 & 42K levels to trade at $43,400.
* FX markets – EURUSD back to 1.1225, from 1.1125 lows yesterday, USDJPY holds 115.00 and Cable recovers 1.3400 to trade at 1.3420 now.   

European Open – The March 10-year Bund future is up 37 ticks at 167.41, outperforming versus Treasuries, which are down on the day. Europe’s geographical proximity to Ukraine and reliance on Russian oil and gas has left European markets more vulnerable to the fallout from the Ukraine war with DAX and FTSE 100 futures down -0.4%. Developments in Ukraine will continue to overshadow the markets going forward.

Today – EU, UK & US Final PMIs, German CPI & Retail Sales, US ISM Manufacturing PMI & Construction Spending, Speeches from Fed’s Bostic & Mester, ECB’s Lagarde, BoE’s Saunders & President Biden’s State of the Union Address. Earnings Target, AMC, HP & Salesforce.

Biggest FX Mover @ (07:30 GMT) AUDJPY (+0.33%) The cooling of the risk off mood and RBA helped the pair recover. A breach of 83.00 lower earlier to 83.75 now.  MAs  aligned higher, MACD signal line & histogram above 0 line, RSI 65.80 & rising, OB zone, H1 ATR 0.139, Daily ATR 0.9450.

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 HotForex 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.

Stuart Cowell
Head Market Analyst
HotForex

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 March 2022.

Market Update – March 3 – War stokes stagflation fears.

Trading Leveraged Products is risky

Stock markets mostly moved higher across Asia, but GER30 and UK100 futures are down -0.14% and US futures narrowly mixed, with the USA100 underperforming, against the background of the Ukraine war. Yields jumped higher yesterday and Bund futures are little changed this morning, as are Treasury futures, while in cash markets the US 10-year rate has corrected somewhat. Aluminium hits record top; Oil, wheat at multi-year highs on supply woes.  Longer-term Black Sea supply curbs lift wheat to 14-year high – Brent hit $118/barrel & Gold hit $1950/ounce. Russia is a top supplier in oil, gas, metals and grain, and Russia and Ukraine also account  for 19% of corn exports and 80% of exports of sunflower oil, which competes with soybean oil and palm oil.

Reuters: The United States is preparing a sanctions package targeting more Russian oligarchs as well as their companies and assets, as Washington steps up pressure on Russian President Vladimir Putin.

New talks between Ukraine and Russia are reportedly slated for today. US “hugely important” delivery of Stinger missiles to Ukraine hailed “game-changer” – Fake News? Political propaganda? Who knows.

Overnight – Powell signalled a less aggressive pace of interest rate hikes than investors had feared. BoE’s Cunliffe and Tenreyro suggested that the war in Ukraine will change the outlook” – suggested the bank remains on course to deliver further rate hikes. The banks could remain on course to remove stimulus, but will move cautiously and maintain the flexibility to step in again if necessary. BoE’s Tenreyro says Ukraine war leaves “upside surprise” on inflation, but also delivered a trade shock. China Services PMIs down; Japan consumer confidence down. ADP data showed a stronger than expected 475k jump in private payrolls in February and a hefty upward revision in January to 509k from -301k.

* USD – USDIndex at 97.50
* US Yields 10-yr lower now, was over 13 bps higher testing 1.87%.
* Equities – Nikkei lifted 0.7%, USA500 jumped 1.86% – Energy was the best performing subsector on Nikkei (+3.2%), financials jumped 3.17%.
* USOil – Rallied to $112.00; Brent hit $118/barrel.
* Gold – steady as risk appetite improved, trades at $1926; Copper at 4.76 ; Palladium at 2,721.
* FX markets – EURUSD at 21-month low at 1.1055, USDJPY up at 115.72 and Cable down to 1.3390 now from 1.3416. USDCAD breaks  below 200-Day SMA (Bank of Canada raised rates 0.25%).  AUDUSD breaches and breaks 200-week SMA at 0.7320.

Today – Today’s data releases will continue to take a backseat , but include final services PMIs for the Eurozone and the UK. The account of the ECB’s last policy meeting is also due, but the highlights will be in the US session with Jobless claims, ISM Services, Markit PMI, Fed Chair Powell testimony  and BoC Macklem speech.

Biggest FX Mover @ (07:30 GMT) UKOIL (+4.83%) Spiked to 119.78. MAs aligned higher, MACD signal line & histogram extend higher, RSI 70 & rising with all suggesting further steam to the upside. H1 ATR 1.79, Daily ATR 5.07.

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 HotForex 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.

Stuart Cowell
Head Market Analyst
HotForex

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 March 2022.

Market Update – March 8 – Commodities Parabolic Rally Continues.

Trading Leveraged Products is risky

Instability from the war and uncertainties over global impacts made pricing extremely difficult, especially considering the extent of the moves over the last couple of weeks.

Markets are positioning for a series of rate hikes to deal with the spike in commodity prices, while in the Eurozone there is lingering speculation that the war in Ukraine and stagflation risks will prevent the ECB from a commitment to a phasing out of net asset purchases. Bonds as well as stock markets remained under pressure, as the Ukraine war is fuelling stagflation fears. The June 10-year Bund future is up 6 ticks, outperforming versus Treasury futures, which are firmly in the red once again, while the US cash rate has lifted 1.0 bp to 1.78%. The JPN225 is down -1.7%, with hefty losses of -3.62% on the USA100, -2.95% on the USA500, and -2.37% on the USA30. Oil is still trading at $120.00 after the wider jump to $126.30 – commodity prices will not just push up cost of living expenses but also weigh on production in sectors reliant on ready and cheap energy supplies.

* USD (USDIndex 99.31). Steady at 6-year highs.
* US Yields 10-yr up 1.2 bp at 1.785% – The JGB rate is up 1.0 bp at 0.150%.
* Equities – USA500 FUTS down at 4168 now. 
* USOil – Rallied to $126.30 yesterday, $119.70 now. – The prospect of a ban on oil imports from Russia triggered investor fears over inflation and slowing economic growth.
* Gold – Rallied to $2020 earlier, $2018.30 now.
* Bitcoin trades at $38,350.
* Nickel at new record highs – more than doubled today to cross the $100,000-a-tonne level for the first time ever, as tension in eastern Europe showed no signs of cooling and growing sanctions against Russia fuelled fears of a disruption in supply. – Russia supplies the world with about 10% of its nickel needs, mainly for use in stainless steel and electric vehicle batteries.
* Palladium surged to a new peak too. Wheat has paced the rise in key commodities since the invasion, having soared 52%. It surged 5.4% to a new high of $13.63 a bushel but finished down -7% at $12.02.
* FX markets – EURUSD at 22-month low at 1.0847, USDJPY holds 115.50 and Cable down to 1.3080 now.

Overnight – Japan reported its biggest current account deficit since 2014 in January. President Joe Biden’s administration is willing to move ahead with a US ban on Russian oil imports even if European allies do not, Reuters reported on Monday, citing people familiar with the matter. Crude has already hit 14-year highs and Russia warned that prices could surge to $300 a barrel and it might close the main gas pipeline to Germany if the West halts oil imports over the invasion of Ukraine. Germany has rejected plans to ban energy imports. The biggest buyer of Russian crude oil is accelerating plans to expand its use of alternative energy sources but cannot halt imports of Russian energy overnight, German Chancellor Olaf Scholz said on Monday.

Today – EU Q4 GDP, US Trade, Wholesale Trade, and the NFIB Small Business Optimism Index and Japanese Q4 GDP.

Biggest FX Mover @ (07:30 GMT) Palladium (+7.52%) Spiked to 3200 again recovering from 2810 lows last night. Currently MAs flattened, MACD signal line & histogram steady at 0 line, RSI 57 but pointing lower, all implying a short term potential correction lower. H1 ATR 56.87, Daily ATR 215.19.

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 HotForex 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
HotForex

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 March 2022.

Market Update – March 11.

Trading Leveraged Products is risky

US CPI is at a fresh 40-year peak, and there was a hawkish slant from the ECB for which the markets were not fully prepared. Risk off prevails with Asian stocks mostly sold off, after a largely weaker close on Wall Street. Japanese indexes underperformed and the Nikkei lost -2.1%, while the ASX was down -0.9% at the close. The Hang Seng corrected -1.6%, weighed down by tech stocks after the US flagged five Chinese firms that could be delisted. Oil dived to 101.25 amid escalating bans on Russian oil. President Biden will call for an end to normal trade relations with Russia. US & G7 allies to move today to strip Russia of ‘most favored nation’ status.

* USD (USDIndex 98.63) steady below 99.40 highs.
* US Yields 10-yr cheapened 6 bps to the 2.00% area. The 2-year rate was at 1.715%. The wi 30-year tested 2.40% prior to the sale but closed around 2.38%. 
* Equities – USA100 closed with a -0.95% decline, while the USA500 and Dow were down -0.43% and -0.34%, respectively.
* USOil – dipped to $101.25 but up to $105.09 now. Set for its biggest weekly drop since November.
* Gold – lower as US Treasury yields gained overnight on red-hot inflation data. Currently at $1990.
* FX markets – EURUSD back below 1.1000, USDJPY at 5-year tops at 116.79 and Cable languishes at 1.3093 near a 16-month low.

European Open – Eurozone bond yields spiked and spreads widened in the wake of the ECB announcement yesterday, which confirmed the ECB’s path to policy normalisation. Net asset purchases are set to be scaled back through the second quarter and likely to end in Q3, and while that paves the way for rate hikes in Q4, the ECB made it clear that rate moves will depend on geopolitical developments. The Ukraine war has left the growth outlook with clear risks to the downside and the inflation outlook with considerable upside risks, which complicates the matter, but it is clear that for now the ECB remains determined to phase out stimulus as inflation is unlikely to undershoot the target in the medium term.

Overnight – Japanese real spending dropped -1.2% in January, following the 0.2% bounce in December. German February HICP inflation was confirmed at 5.5% y/y, rising from 5.1% y/y in the previous month. UK monthly GDP was stronger than anticipated. The economy expanded 0.8% m/m in January.

Today – With the focus firmly on the Ukraine war, data releases continue to take a back seat, but for what it is worth, today brings Canadian Labor data.

Biggest FX Mover @ (07:30 GMT) USDJPY (+0.51%) Rallied to January 2017 highs at 116.79. MAs pointing right, MACD signal line & histogram hold well above 0 line, RSI 76 & flat, all implying near term consolidation but overall strong positive bias.

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 HotForex 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
HotForex

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 March 2022.

Market Update – March 15.

Trading Leveraged Products is risky

Markets are pricing in aggressive Fed moves and while the Treasury rate managed to correct slightly from yesterday’s highs, rates across Asia moved higher, with Japan’s up 1.6 bp and China’s 3.9 bp, while Australia’s was up 6.5 bp.. Stock markets meanwhile were mostly lower after a largely weaker close on Wall Street. Bond markets were under pressure across the Asia Pacific region with inflation risks and the Fed outlook in focus. China’s PBOC failed to cut the MLF interest rate as many had expected and the RBA minutes also flagged heightened uncertainty on the inflation outlook, even as the bank vowed to remain patient on rates for now. Growth data out of China may have been stronger than anticipated, but the country’s Covid policy, which has now shut down the important tech hub of Shenzhen, has investors spooked.

* USD (USDIndex under the 99 mark).
* US Yields US 10-year rate has corrected -1.2 bp to 2.12%.
* Equities – Hang Seng and CSI 300 lost a further -5.7% and -4.2% respectively. The ASX was down -0.7% at the close. The USA100 slumped -2.04%, with the USA500 falling -0.74%, and the USA30 unchanged.
* USOil – shed to $95.13 as ceasefire talks between Russia and Ukraine eased fears of further supply disruptions and surging COVID-19 cases in China fuelled concerns about slower demand.
* Gold – lower at $1929 on higher yields ahead of Fed meeting.
* FX markets – USDJPY continues to rise and is now at 118.35. AUD and NZD underperformed. EURUSD retests 1.1020, GBPUSD holds below 1.3050.

European Open: The June 10-year Bund future is up 11 ticks, Treasury futures are also finding buyers. Some consolidation then after the sharp sell off in EGBs yesterday, with safe haven flows picking up again, and GER30 and FTSE 100 futures posting losses of -0.8% and -0.94% respectively. Concern that overly aggressive central bank moves could stifle growth has picked up again and hopes of a quick breakthrough in Ukraine-Russian peace talks were also disappointed yesterday. There was some positive noise on talks between the US and China, but at the same time there are some suggestions China is indeed mulling economic and military assistance to Russia.

Today – For data German ZEW and US February PPI are due.

Biggest FX Mover @ (07:30 GMT) USOIL (-5.82%) Dipped to 95.13. MAs pointing down, MACD signal line & histogram extend below 0, RSI 30 & falling, all implying negative bias.

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 HotForex 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
HotForex

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 March 2022.

Market Update – March 17 – Hawkish & Faster Moving FED.

Trading Leveraged Products is risky

The FOMC raised rates as expected by 25bps AND also announced a further six hikes in 2022 and four in 2023 (which was not necessarily expected). Chair Powell’s press conference soothed the initial hawkish reaction. US stocks leapt higher (NASDAQ +3.77%) USD cooled and Yields moved up. Canada Inflation was hotter than expected, US Retail Sales softer and NZD GDP missed significantly. Overnight AUD Jobs & CHF trade balance both beat significantly.  Asian stocks rallied (Nikkei +3%)  led by China’s continued bounce back. Biden called Putin a “war criminal”, Russia & Ukraine still talking, China & Israel tout mediator credentials.

BoE Preview: Recent comments suggest that the central bank remains on course to lift the Bank Rate by another 25 bp to 0.75%. The latest BoE survey flagged upside surprises on wage growth and with energy bills going through the roof second round effects from the inflation overshoot are already materialising. Against that background, this is unlikely to be the latest rate hike – at least in the central scenario. Like the ECB, the BoE will have to keep some degree of flexibility on policy options as stagflation risks are mounting, but with the Fed flagging a series of rate hikes this year, and even the ECB on course to normalise policy, the BoE has more cover to continue to tighten policy.

* USD (USDIndex 98.28). Tested 99.00 briefly on FED down after Powell.   
* US Yields 10-yr up to 2.188% on close – down to 2.15% now.
* Equities – USA500 +95.41 (+2.24%) 4357. US500 FUTS flat at 4347 now.  Tech rallied FB +6%, NFLX & TSLA +4.78%, Starbucks + 5.16%.
* USOil – Found support at $93.00 yesterday. $96.40 now. 
* Gold – Down to test $1900 yesterday,  trades at $1934 now.     
* Bitcoin tested over $41,000 yesterday, trades at $40,600 now.
* FX markets – EURUSD back to 1.1035, USDJPY holds over 118.00 & 5-year highs at 118.75 and Cable tested to the key 1.3000 yesterday, back to 1.3050 now.1

European Open: The June 10-year Bund future is up 26 ticks, U.S. futures are also backing up from yesterday’s lows.  Yields have started to move up from overnight lows, but for now it seems bonds are set for a positive start, despite the Fed decision yesterday. Still, markets were pretty much prepared and took solace in the Fed’s apparent confidence that the economy can withstand the withdrawal of support. Coupled with China’s promise to support markets and the economy that is bolstering stock markets confidence, with DAX and FTSE 100 futures up 0.4% and 0.2% at the moment.  There doesn’t seem to be  progress in Russia-Ukraine talks though, which will likely keep a lid on indexes, that already jumped higher yesterday. Investors may also be cautious ahead of today’s BoE announcement.

Today – EZ CPI, US Weekly Claims, Ind. Prod., Japanese CPI, BoE & CBRT Policy Announcements, Speeches from ECB’s Lagarde, Lane & Schnabel.

Biggest FX Mover @ (07:30 GMT) AUDCHF (+0.43%) Rally continues big move yesterday to from .0.6730 lows Tuesday to over 0.6885 now. MAs aligned higher, MACD signal line & histogram hold over 0 line, RSI 69 & rising, H1 ATR 0.00162, Daily ATR 0.0071.

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 HotForex 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.

Stuart Cowell
Head Market Analyst
HotForex

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.