Date: 19th February 2024.

Market Recap – China Back, US closed!

Economic Indicators & Central Banks:

* Chinese stocks climbed slightly as China returned from the long New Year holidays. Modest gains showed that investors are worried about the longterm outlook. Much of the economy’s sluggishness is a function of the collapse in the property sector as well as the bearish effects of the many regulatory restrictions in tech, problems that would not be helped much by easier policy.
* US markets are closed for the Presidents’ Day holiday.
* This week: Eyes on European inflation data, PMI data from EU, UK and US, RBA & FOMC Minutes, as well as earnings from Nvidia Corp. and BHP Group Ltd to help gauge the health of the global economy.

Market Trends:

* Nikkei (JPN225) holds near 1989 highs, pressured by Friday’s selloff but also due to decline in chip-related shares. Nintendo was the biggest percentage decliner though, slumping 5.8%. Chip-sector heavyweights Advantest and Tokyo Electron were the Nikkei’s biggest drags, shaving off 60 and 55 index points respectively with declines of 3.2% and 1.6%.
* European stock futures are in the red, US futures fractionally higher on what is likely to be a quiet day, as US markets are closed.
* S&P500(USA500) rose 0.1%, Nasdaq (USA100) rose 0.2%.

Financial Markets Performance:

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

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

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

Click HERE to access the full HFM Economic calendar.

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

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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

Date: 22nd February 2024.

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

AUDUSD – Economists Do Not Expect the RBA to Cut Until 2024’s Third Quarter.

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

AUDUSD – Technical Analysis

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

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

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

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

AUDUSD – Fundamental Analysis

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

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

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

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: 26th February 2024.

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

Economic Indicators & Central Banks:

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

NZDUSD – The New Zealand Dollar Declines Against All Currencies!

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

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

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

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

USOIL – Oil Declines on Fears of a Global Slowdown!

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

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

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

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

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

Click HERE to access the full HFM Economic calendar.

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

Click HERE to READ more Market news.

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: 28th February 2024.

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

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

NZDUSD

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

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

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

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

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

USA100

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

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

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

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: 1st March 2024.

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

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

EURUSD – The ECB Consider An Earlier Rate Cut!

The EURUSD exchange rate declined by 0.28% by the end of the day, but more than 0.55% from high to low. The exchange rate came under pressure from German inflation declining from 2.9% to 2.5%, the lowest since 2021. In addition to this, the US Dollar rose in value after a short-lived decline. The Dollar continues to be supported by high inflation data.

The Germany economy has been struggling from poor economic growth and political tensions. The German GDP has not recorded an increase in the past three quarters. Overall the Germany GDP Growth Rate has actually fallen by 0.6% over the past year. Due to poor economic data and inflation now being at an acceptable level, investors are contemplating whether the ECB will cut rates soon. France also made public their latest inflation reading which fell from 3.1% to 2.9%. The largest four EU economies are now all at an inflation rate below 3.00% and very close to their 2% target. Italy is currently below the 2% and is in desperate need of monetary expansion.

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

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

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

USA100 – Can The NASDAQ Maintain Momentum!

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

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

However, when monitoring momentum-based indicators, the USA100 is trading above trend-lines, regression channels and shows strong upward momentum. Therefore, traders will be monitoring how the asset may break out of previous significant price ranges.

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 March 2024.

Market Recap – Stocks in red, Crypto mania extends.

Economic Indicators & Central Banks:

* The markets have significantly pared back rate cut expectations and the front end underperformed in a bear flattener on the increased pessimism.
* Japan: Core inflation picked up speed in February, surpassing the central bank’s 2% target, suggesting that conditions for ending negative interest rates are aligning.
* Deflationary China set an ambitious growth target at 5%, 5.5% urban unemployment & 3% inflation: Premier Li also announced a budget deficit of 3% of GDP and $138.9bn in special government bonds. That added pressure on officials for more stimulus and policy support to fight the property crisis and deflation! At the same time Chinese PMI came in lower than forecasts.
* Bloomberg forecast puts growth at 4.6% this year, which flags the challenges China officials are facing against the background of a struggling property market.

Market Trends:

* Wall Street finished with small losses, albeit after last Friday’s rally that saw all-time highs on the NASDAQ and S&P500, with weakness in energy, consumer and tech stocks offsetting strength in utilities and real estate.
* The tech-heavy NASDAQ slipped -0.41%, while the Dow was off -0.25% and the S&P500 fell -0.12%.
* Apple Inc down more than 2% on receiving a $2 billion antitrust fine in Europe.
* Tesla’s stock declined by more than 7% as shipments from the electric-car manufacturer’s China facility reached a 14-month low in February, partly due to disruptions caused by the lunar new year festivities and intensified competition resulting from a price war.
* US and European stock futures are in the red, after a largely weaker session across Asia.

Financial Markets Performance:

* The USDIndex was fractionally lower at 103.85 in spite of the eroding Fed outlook as gains in EUR and GBP outweighed the buck’s strength versus the other G10 peers.
* Yen holds steady within its 3-week range, currently at 150.40.
* BTCUSD holds largely in green, spiking to $68,800 highs. Its up around 57% this year, benefiting from flows into exchange-traded funds launched in the United States.
* Gold surged to $2115 as markets look ahead to Fed Chair Powell’s congressional testimony.
* USOil prices have corrected lower despite the confirmation that OPEC+ output cuts will remain in place through the first half of the year. International oil companies in Iraq’s semi-autonomous region of Kurdistan denied reports that there is a deal that would allow oil exports through the Iraqi-Turkey pipeline to continue. Markets are also keeping a close eye on talks about a possible ceasefire between Hamas and Israel. A Hamas delegation arrived in Cairo for the talks, but an Israeli official told CNN that Israel decided not to send a delegation to Egypt because Hamas had not responded to two Israeli demands.

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

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

Click HERE to access the full HFM Economic calendar.

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

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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

Date: 7th March 2024.

Market Recap – Yen & Gold on a Ride; ECB Today.

Economic Indicators & Central Banks:

* Stock markets corrected across Asia. US futures are down, and European markets are also trading cautiously in early trade ahead of ECB.
* Ueda: Chance of reaching target getting higher little by little.
* BOJ board member Junko Nakagawa:  expressed confidence in Japan’s economy moving steadily towards achieving the central bank’s 2% inflation target sustainably.
* Reports suggest a BOJ board member could propose removing negative interest rates at the upcoming policy meeting.
* Yen is the biggest gainer so far, with Yen’s strength contrasting with its weakening trend over the past two years due to diverging interest rate policies.
* Overnight: Wall Street rebounded and Treasuries extended gains after some weaker employment data (ADP and JOLTS).
* Chair Powell in his Humphrey-Hawkins testimony repeated the FOMC anticipates cutting rates later this year. There was some angst he might tilt to a more hawkish stance. Powell emphasized the need for more data to ensure sustained progress toward the 2% inflation target.
* A significant haven bid came from renewed concerns over NY Community Bancorp. Reports the bank is seeking a cash injection have boosted fears as this was the way Silicon Valley Bank imploded (March 10, 2023). NYCB shares plunged to the lows of the day at $2.47, where trading has been halted.
* Today: The ECB is expected to stay firmly on hold, and even the doves seem to be resigned to wait until June for a cut. The stubbornly high services inflation and uncertainty about the current wage round means that rate cuts are not on the agenda yet.

Market Trends:

* Stocks recovered most of the selloff earlier in the week after all-time highs last week. The NASDAQ (US100) bounced 0.58%, back to 16,031, and the S&P500 (US500) rallied 0.5% to 5104.76, just shy of Friday’s historic peaks of 16,275 and 5137, respectively. The Dow (US30) advanced 0.2% to 38,661 but is off of the 39,135 top from February 23.
* Target was a big winner after an earnings beat, while the S&P 500 rose, driven also by strong performances from Nvidia and Meta Platforms.
* The Nikkei (JPN225) reached a record high briefly but closed down at 39,598.71.

Financial Markets Performance:

* The USDIndex is underwater at 103.12, still under the 104 level on expectations the FOMC will be cutting rates down the road.
* EUR and GBP held near 1-month highs against the Dollar. AUD and NZD climbed to multi-week highs.
* The Yen surged to a 1-month peak against the US Dollar fueled by speculation about the Bank of Japan ending negative interest rates soon. USDJPY is currently at 148.08, as Yen gained also against the EUR and GBP.
* Gold was up for a 7th day, rising to a new closing high of $2146.48 per ounce. Oil was up 1.25% to $79.13 per barrel.
* Bitcoin retreated slightly from a recent record high but maintained a significant year-to-date rally. Ether slipped after hitting a 2-year peak.

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 March 2024.

BoJ To Hike After Economic Growth! The NASDAQ Takes a Nosedive!

A Japanese flag flutters atop the Bank of Japan building in Tokyo, Japan, September 21, 2016. REUTERS/Toru Hanai/File Photo - RTX2UM36

* The US added 275,000 jobs in February 2024 beating expectations by 80,000.
* US Average Salary Growth slowed to the lowest growth since March 2022. The US Unemployment Rate rises back to 3.9% after 3 months of no movement.
* Japanese economists advise the Bank of Japan may opt to hike in their meeting towards the end of the month.
* US Stock Market unable to maintain bullish momentum and hold onto gains. Stocks traders watch this week’s CPI announcement with caution.

USDJPY – No Recession For Japan, When Will the BoJ Hike?

The new employment data for the US originally brought about a decline in the US Dollar, before correcting upwards. The first reaction to sell the Dollar was largely due to data indicating a rate cut by June. The salary growth fell to a level which the regulator is more comfortable with, and the unemployment rate rose to 3.9%. Previously economists were advising the Unemployment Rate will need to reach 4-4.5% to bring inflation down. According to the FedWatch Tool, 58% of traders believe the Fed will cut in June and 25% believe it could be in May.

The Japanese Yen on the other hand is not seeing major volatility within this morning’s Asian session. The Yen is trading slightly higher than the day’s market price, but investors will monitor any change in momentum. Previously, the preliminary economic growth data indicated that the Japanese economy has slipped into a recession. However, the GDP rate read 0.1% which confirms “no recession”. Therefore, economists are continuing to predict the Bank of Japan will keep interest rate hikes as an option for the next two meetings.

The market is implying a 53% chance the Bank of Japan will shift rates to zero at its meeting on March 19th.  However, some analysts still believe it might be at April’s meeting. However, the currency is likely to grow for as long as the Japanese economy does not fall into a “technical recession” and other competitors continue with rate cuts.

For this reason, investors are wondering why the USDJPY is not witnessing a large clear downward price movement? According to fundamental analysts, many investors are awaiting confirmation from the monthly inflation figures to determine when the Federal Reserve is likely to “pivot”. If the yearly inflation rate does not decline, the Fed may opt to push back rate hikes. In this case, the Dollar may remain stubborn. However, any fall in inflation can result in the Japanese Yen rising.

USA100 – Analysts Expect Inflation to Remain At 3.1%! What Does This Mean For the NASDAQ?

After rising to a new all time high, the NASDAQ took a nosedive falling 2.29%. From the top 10 most influential stocks, only Apple and Alphabet stocks managed to maintain their value. Broadcom (-6.99%), Costco (-7.64%) and NVIDIA (-5.99%) saw the largest decline. Even though the price was obtaining buy signals as the price was rising, there were also clear signs the price may collapse. For example, the price was “overbought” on many oscillators, and the RSI also formed a “divergence” signal.

The price of the USA100 will now primarily be dependent on tomorrow’s inflation data. The employment data was ideal for the USA100 as it indicates a resilient employment sector but possibly less upward pressure on inflation. Analysts expect monthly inflation to read 0.4% which will keep the inflation rate unchanged at 3.1%. According to analysts, the Core Consumer Price Index will rise 0.3%.

If inflation reads lower than expectations, even if slightly lower, the stock market could potentially rise, as interest rates become less attractive. However, if inflation rises, the stock market is likely to struggle as a “soft landing” becomes a lower possibility.

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

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

Click HERE to access the full HFM Economic calendar.

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

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

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

Date: 13th March 2024.

The Dow Jones Rises to Monthly Highs! Is Gold Retracing Or Correcting?

* The Dow Jones rises to a monthly high despite higher inflation data for February 2024.
* The Dow Jones’s best performing stock on Tuesday was 3M Co (+4.97), Intl Business Machines Corp (+3.16%) and Microsoft (+2.66%).
* US inflation rises from 3.1% to 3.2% and the Monthly Core CPI remains at recent highs for a second consecutive month.
* Gold forms its first bearish candlestick in March on the daily chart, but Dollar struggles to hold onto gains.

USA30 – Higher Inflation Fails To Keep the Dow Jones Down!

The USA30 did not see the highest gains and lags behind the SNP500 and NASDAQ which both rose more than 1.00%. However, the USA30 (Dow Jones), was the only US index which broke through resistance levels and rose to its highest level for March. The USA30 is now witnessing bullish signals from trend-lines, regression channels and oscillators. The price is trading above the 75-Bar EMA, above 60.00 on the RSI and above the VWAP. These factors indicate the asset has potential to further rise.

The only concern for technical analysts is entering too high and at a previous resistance level from February. Though fundamental analysts are more concerned about the higher-than-expected inflation data. The higher inflation data did not cause a decline in the price, as it normally would. However, it continues to be a concern for investors as it puts off a possible interest rate cut in May-June 2024. The US inflation rate rose from 3.1% to 3.2% and Core Inflation fell at a lower pace compared to previous predictions.

If we look at the top 15 influential stocks within the USA30, 8 of those stocks are declining. Also, the most volatile stocks in the pre-market hours are Travelers Cos Inc stocks which are declining more than 2%. This currently indicates a sideways price movement, but investors will need to continue monitoring as we come closer to the US Open. Other global indices are trading lower including the Nikkei225, DAX and CAC. However, US bond yields are trading 0.012% lower which is positive for the US stock market.

XAUUSD – Gold Forms Its First Retracement

Gold has formed its first retracement after the higher-than-expected inflation data. This ends a nine-day bullish trend where the commodity rose consecutively. However, traders should note the price is so far only forming a retracement and is yet to indicate a downward trend. Therefore, the price can potentially still be within a bullish trend. The retracement can provide investors the opportunity to enter at a more competitive entry level.

If the price breaks above the $2,161.53 mark, buy signals are likely to again materialize. The commodity formed a triple top at this level but is not showing any downward momentum. Therefore, above this level, investor sentiment can again rise. The Fibonacci levels indicate that a buy trade can potentially aim for levels between $2,169 and $2,175 in the short term.

The 30-Year Bond Yield Auction can influence the price movement of Gold as both are known as haven assets. However, tomorrow’s Producer Inflation and Retail Sales is likely to create higher volatility. Investors will also be keen to hear from members of the FOMC, but none are scheduled to speak throughout the day. Economists are now pricing in at least three 25 basis point interest rate cuts, the first of which could come in June. Previously investors were pricing in four cuts.

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: 15th March 2024.

BOJ Puts Rate Hikes On The Table After Historic Wage Agreement!

* Wage deals with Japan’s largest employers and unions have been agreed according to reports. Bloomberg confirms a 5% wage increase.
* Bank of Japan may hike interest rates as early as next week. Other economists believe the hike will come in April. Analysts expect the Bank of Japan’s interest rate to rise to 0.00%.
* Producer Inflation rates double that originally expected by analysts. Core Producer Inflation also continues to rise.
* 31% of the NASDAQ’s stocks decline as investors price in fewer rate hikes in 2024.

GBPJPY – BOJ Set to Hike for the First Time Since 2007 After Higher Salaries Agreed!

The GBPJPY fell up to 0.28% during this morning’s Asian session as unions and employers gave consent for a 5% wage increase. This gives enough room for the Bank of Japan to consider a rate increase to move out of negative interest rates. However, the Yen has fallen since against the currency market as a whole. Nonetheless, the hike and wage increase could support the Yen in the medium to long term.

Analysts advise the Bank of Japan is likely to increase rates either at next week’s bank meeting or in April, but no later. However, economists are yet to confirm how high rates may go. Analysts advise the bank will most likely opt to hike on two occasions by 0.10%. This would bring the Cash Rate to 0.10%, the highest since 2010.

The possibility of rate hikes is deemed to be positive for the Japanese Yen as well as the higher possibility of sticky inflation globally. The Japanese Industry Activity also rose 0.3%, more than previous expectations, which supports the Yen. However, investors should be cautious of volatility and ensure their entry is appropriate based on technical analysis. The price over the past 48 hours is moving within a sideways range but is showing more downward volatility.

UA Zensen, Japan’s largest industrial and trade union representing more than 1.8 million workers, announced that companies have agreed to the largest wage increase since 2013. Thus, this year for full-time workers it may increase by 5.9%, and for part-time workers by 6.5%.

When monitoring each currency individually, we can see the Pound is seeing a “mixed” performance. The Pound during this morning’s Asian session and European Cash Open has depreciated against the Euro and the Pound. The Japanese Yen declined throughout the first 3 days of the week but rose on Thursday.

Even though the price of the Pound has considerably risen against the Yen over the past 90 minutes, the Yen could see different signals rise throughout the day. For example, if the price declines below 188.949, Fibonacci levels and price action will signal a decline. With such a decline, the price will also again fall below the 75-Bar EMA and “Neutral” level on the RSI.

USA100 – Global Stocks Rise on Friday

The USA100 rose 0.19% as the European markets opened as did other indices such as the DAX, French CAC and even the NIKKEI225. The positive price movement from global equities is positive as it may indicate a higher risk appetite and investor sentiment. In addition to this, US Bond Yields are also trading lower this morning which is known to potentially support stocks. These are signs of a potential correction to the trend line at $18,090. However, this is something investors will need to keep monitoring through the day.

In terms of fundamental analysis, yesterday’s Producer Price data and Retail Sales have added pressure on equities. Most analysis now believe the Federal Reserve will only opt for 2-3 hikes in 2024. Most economists still believe the Fed will cut in June, but rate cuts thereafter will be less frequent. Some analysts advise if this continues, the index will struggle to renew highs from March 8th.

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: 20th March 2024.

Market Recap – All eyes on FED.

Economic Indicators & Central Banks:

* Treasury yields are sinking as bonds await the FOMC’s results. The market is recovering slightly from this month’s selloff that has taken rates to the highest levels since late November.
* Stock markets traded mixed overnight, while Bonds have been in demand as the FOMC announcement comes into view.
* German producer prices fell -4.1% y/y in February. PPI has bottomed out, but so far is still firmly in negative territory, largely thanks to a -10.1% y/y drop in energy prices. Developments are backing the ECB’s assessment that things are moving in the right direction. Services price inflation though, which is more driven by wage growth than goods prices, remains stubbornly high for now.
* UK inflation continues to decelerate adding support to the bond market.  The data confirms that inflation is moving in the right direction, but also that it remains far too high, which will justify a dovish hold from the BoE tomorrow.
* FOMC Checklist: The FOMC will issue its post-meeting statement today. Expectations are for no policy change at this meeting, but verbiage will be closely monitored for hints regarding the rate path in the remainder of 2024. The SEP was last updated in December, and is due for another update at this March meeting.

Market Trends:

* A mixed open on Wall Street with some weakness on profit taking after further AI inspired gains. The Dow climbed 0.83%, with the S&P500 (US500) advancing 0.56%, while the NASDAQ (US100) was up 0.39%.
* ASX paring some of Tuesday’s gains, while China bourses nudged higher.
* Nvidia (+1.07%) debuts next-generation Blackwell AI chip at GTC 2024.
* Microsoft hires DeepMind founder to lead new AI shift.
* Apple is in talks with Alphabet’s Google to potentially incorporate Google’s “Gemini” generative AI engine into its iPhones.

Financial Markets Performance:

* The USDIndex found a bid too after the BoJ’s dovish hike. It tested 104.06 but slid to 103.82 at the close.
* USDJPY is at 151.57 spiking to 4-month highs while EURJPY spiked to a 16-year peak after the Bank of Japan ended negative interest rates without clear guidance on further hikes.
* A stronger than expected German ZEW investor confidence reading failed to boost the Euro significantly. Cable is holding slightly below the 1.27 mark.
* Gold flattened for a 3rd day in a row and USOIL fell to $82.24 from $83.
* Bitcoin continued to pull back from its recent record high, falling over 5% at one point. Shares of crypto-linked companies Coinbase (COIN) and Marathon Digital (MARA) lost ground alongside the token.

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.