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HFMarkets (hfm.com): Market analysis services.

Date: 13th September 2024.

Market Update – Gold reached new record high; USD plummets; Oil 2% higher.


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Asia & European Sessions:

  • Trading remained choppy as the markets continued to assess data and Fed rate cut risks amid uncertainties over the economy.
  • US data points released on Thursday were in line with a 25 bps cut from the FOMC next week, with Chair Powell likely to again stress the path remains data dependent. The increase in unemployment claims and a slight rise in August’s producer price index left room for the Fed to consider more aggressive cuts. However, the components relevant to the Fed’s preferred inflation measure remained subdued.
  • The ECB cut rates -25 bps as widely expected. While the general expectation is for another -25 bp easing to help sustain a soft landing, there is still an undercurrent for a -50 bp cut next week.
  • A WSJ article noting that Fed policymakers are debating -25 bps versus -50 bps helped give Treasuries a boost late in the day after hotter than expected PPI weighed early on. A small rise in jobless claims also provided some support.
  • Gold reached a record high, about 25% up this year, driven by the Fed’s moves towards monetary easing. Investors also scaled back expectations of another ECB rate cut next month, after the ECB lowered rates on Thursday. Additionally, central bank purchases, heightened demand for safe-haven assets due to conflicts in the Middle East and Ukraine, and growing interest from retail investors have fueled the metal’s rally.
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Financial Markets Performance:

  • The USDIndex dropped to 100.64 and is weaker against its G10 peers, with the exception of CHF and CAD.
  • Yen retested once again December’s highs, at 140.63 level.
  • Wall Street rallied after a mixed start, with the NASDAQ advancing another 1%, while the S&P500 was up 0.75%, and the Dow was 0.58% higher.
  • Gold prices marked new record highs to $2570 per ounce as shorts cover.
  • Crude oil prices are up 1.05% at $68.68 per barrel due to dollar weakness, risk -on tone and disruption in crude production. Hurricane Francine’s landfall in southern Louisiana on Wednesday led to the shutdown of offshore platforms in the Gulf of Mexico and disrupted refinery operations. The overall bearish tone remains intact, though, and the IEA’s monthly report only added to fears that a slowdown in demand will lead to a supply overhang and continue to weigh on prices.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

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


Click HERE to access the full HFM Economic calendar.

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

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer:
This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
 
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Date: 16th September 2024.

Gold and Yen Surge as Safe Haven Demand Increases.


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  • Former US President Trump survives another assassination attempt.
  • The Japanese Yen remains the best performing currency of the month adding 4.85%. Demand for safe Haven assets such as the Yen and Gold rise.
  • Gold continues to increase as global banks downgrade China’s growth forecasts due to poor economic data. Gold rose to an all-time high on Monday.
  • Economists advise the Federal Reserve will cut interest rates by 0.25% at this week’s meeting.
USDJPY – The Exchange Rate Declines For 5 Consecutive Days

The US Dollar index trades 0.24% lower and the Japanese Yen Index 0.47% higher during this morning’s Asian session. The exchange rate is currently trading at its lowest point since July 2023 and has fallen for 5 consecutive days. However, investors should also note that the exchange rate is known to see a change in volatility as the European session opens at 07:00 GMT.

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USDJPY on a 5-Minute Chart Showing Latest Bearish Crossover.

The USDJPY is under pressure for 3 reasons; investors are pricing in a 0.25% rate cut for September, the Bank of Japan may hike again in 2024, and investors are taking advantage of the devalued Yen. According to economists, the Federal Reserve will cut interest rates by 0.25% on Wednesday evening and by the end of the year the Funds Rate will fall to 4.75%. Investors will be scrutinizing the Fed chairman’s comments on how the Fund Rate may end the year.

Investors cannot be certain of the intrinsic value of the exchange rate based on a Federal Fund Rate of 4.75%. Other factors will come into play including whether the Bank of Japan will decide to increase rates by another 0.15%. However, what can be certain is the previous support levels which can be seen at 140.090 and 129.470.

In anticipation of the Bank of Japan’s meeting this Friday, investors are closely watching statements from financial authorities for any hints about upcoming monetary policy actions. Last week, board member Mr Nakagawa said that current interest rates remain low, and there is still room to tighten policy if economic and inflation trends align with forecasts.

Board member Naoki Tamura suggests that the rate should be raised to at least 1.0%. However, economists have not backed up this forward guidance and advise this would be a step too far for the near-term future. It has been almost 30 years since the Bank of Japan held its interest rate at 1.00%.

Gold – Safe Haven Demand Surges As Global Banks Cut Interest Rates!

Gold is significantly rising in value as the Federal Reserve’s rate cut is imminent and as other global central banks continue to cut. The European Central Bank is the latest regulator to cut interest rates from 4.25% to 3.65%. On Wednesday, analysts expect the Fed to adjust rates to 5.25%. Demand for Gold is rising due to lower global interest rates, but also the decline in the US Dollar. The US Dollar index trades 0.24% lower and Gold would benefit from a weaker Dollar.

The easing of monetary policy is evident in bond yields, with borrowing costs reduced by more than 25 basis points from July to September. Following the release of this data, analysts have made substantial adjustments to their forecasts. As of today, the Chicago Mercantile Exchange (CME) FedWatch Tool shows the probability of a rate change by this amount at 59.0%, down from 85.0% yesterday.

Another reason for the higher demand is the latest reports that China’s economy is not likely to reach previous growth expectations. Data released by the National Bureau of Statistics on Saturday revealed a slowdown in industrial production, retail sales, and real estate activity this month compared to July.

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XAUUSD (Gold) on a 2-Hour Chart With Fibonacci Retracement Levels.

In terms of technical analysis, Gold is trading above the trend-line including the 75-Period EMA and 100-Period SMA. The asset is also trading higher than the Volume-weighted average price and above the 50.00 level on the RSI. For this reason, indications point towards buyer holding control and the likelihood of a continued upward trend to remain. Though investors should note that in a short period of time, Gold has risen more than 3.00% which could prompt investors to quickly cash in earned profits.

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

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


Click HERE to access the full HFM Economic calendar.

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

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
 
Date: 17th September 2024.

US Market Awaits Fed: Will a 0.25% Cut Cause a Drop?


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  • European indices including the Euro Stoxx 50 and the DAX continue to trade higher.
  • The European Central Bank’s latest cut continues to benefit European stocks.
  • US Stocks “mixed” with the Dow Jones rising 0.55%, the SNP500 0.14% ending the day 0.47% lower.
  • The Dow Jones was the best performing US index, largely driven upwards by the performance of Goldman Sachs, JP Morgan and Visa stocks.
Dow Jones Leads, Outshining NASDAQ and S&P 500!

On Monday, 84% of the Dow Jones’ stocks rose in value with Intel, Cisco Systems and Travelers Cos being the best performing. The index also rose to its highest ever value, so far adding 10.36% this year. Why is the Dow Jones performing better than the NASDAQ and the SNP500?

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The stock market in general is known to benefit from interest rate reductions which will take place tomorrow evening. According to the CME FedWatch tool, there is a 67% chance of the Fed increasing 50 basis points, not 25. However, most economists believe the central bank will opt for 3 consecutive 25 basis point cuts for the rest of the year. For this reason, there is a risk of misjudging the Fed, the monetary policy and how to price the stock market. As a result, investors are turning to the Dow Jones which is exposed to fewer stocks, witnessing higher exposure to the banking sector and to defensive stocks such as Procter and Gamble. On Monday, Procter and Gamble rose 1.82%.

According to experts, if the Federal Reserve does adjust the Federal Fund Rate by 0.50%, all indices are likely to increase in value. Whereas, if the Fed cuts only 0.25%, investors will want to be exposed to a more balanced index such as the Dow Jones. Investors will want to be prepared and plan for volatility in both directions.

When monitoring the VIX and Bond Yields, certain signals are indicating some short-term weakness. The VIX is currently trading almost 1.00% higher and bond yields have added 0.005%. This does not necessarily indicate a decline but possibly some weakness before the upcoming interest rate decision. However, if the VIX declines and yields do not rise further, the Dow may again witness positive price movements.

Technical analysis currently signals that buyers are controlling the market with the Dow Jones trading above the trend-line, price sentiment line and above the VWAP. The 75-period EMA and 100-Period SMA have also crossed upwards on the 2-hour chart. The only concern for investors is that the price has risen for 4 consecutive days potentially triggering a more cautious view.

Lastly, the performance of the Dow Jones within the US session will depend on today’s Retail Sales release. The US Retail Sales is likely to decline 0.2% after rising 1.00% in the previous month. Analysts expect Core Retail Sales to read 0.2%. A higher Retail Sales figure is likely to support the stock market in the short-term.

DAX on the Rise: Can the Momentum Keep Going?

The German DAX has risen for 4 consecutive days as has the Dow Jones. However, the price has fallen as the EU Cash Open edges nearer (0.10%). The index is not trading at an all-time high but is trading at an area where the index has previously found resistance on two occasions.

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The European Central Bank’s decision to cut interest rates more than what analysts were previously expecting supports the index. The monetary policy adjustment also stopped the downward trend seen so far this month. The question is now whether the DAX will continue to rise accordingly. According to economists, three factors will be necessary for continued growth; for both the ECB and Fed to continue cutting rates in 2024, positive EU data and positive earnings data.

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

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


Click HERE to access the full HFM Economic calendar.

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

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
 
Date: 18th September 2024.

What Does Tonight’s Fed Rate Cut Mean For Gold and the Yen?


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  • The UK’s inflation remains at 2.2% as per previous expectations. The Pound remains slightly weaker on Wednesday.
  • Gold retraces as traders increase the possibility of a 0.25% rate cut after yesterday’s Retail Sales.
  • Gold positions break the previous annual record of 242.314K indicating the high demand. JP Morgan advises the largest risk to the global economy remains the tensions within the Middle-East and this can also impact Gold.
  • US Retail Sales unexpectedly rose 0.1%, higher than the previous expectation of -0.2%.
XAUUSD – Gold Retraces As Economists Stick To Their 0.25% Rate Cut Prediction!

The price of Gold on Tuesday fell 0.50% moving back to the trend-line (75-Period EMA) and then retraced upwards overnight. However, the price is now actively declining as we approach the opening of the European Cash Open. Previously the price of Gold significantly rose due to the expectations of the Federal Reserve adjusting interest rates. However, the pricing changes depending on a 0.25% and 0.50% interest rate cut. According to experts, 0.25% could apply some short-term pressure on Gold unless the Fed also adds dovish comments for the upcoming months.

The reason why a 0.25% cut could potentially be negative is because investors have partially priced Gold based on a 0.50% cut, not 0.25%. Therefore, the price movement is largely dependent on tonight’s Federal Reserve rate decision and press conference. During the press conference, investors will be expecting guidance from the chairman, Mr Powell, regarding potential future rate cuts. According to Bloomberg, traders have significantly increased the likelihood of a 0.50% rate cut. However, Bloomberg surveyed 115 US economists, of which 104 advised the Fed would opt for 0.25%.

Leading trading platforms confirm the surge of new investors in gold. According to the US Commodity Futures Trading Commission, long positions in contracts have reached 246.214K, surpassing the previous annual record of 242.314K. Seller positions in this category remain low, totaling just 19.505K transactions. A similar trend is seen at the CME Group, where the average daily trading volume for gold contracts over the past week was 376.2K, far exceeding August’s average of 134.0K.

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In terms of technical analysis, the medium-term picture remains neutral. This is due to the RSI trading at the neutral level, and the price trading above the trend-line and the 100-Period SMA, but retracing downwards. Therefore, the overall scenario remains neutral. However, if the price rises above $2,576.00, buy signals are likely to strengthen.

GBPJPY – UK Inflation Holds at 2.2%, Yen Struggles to Gain Momentum Outside Asia!

The price of the GBPJPY trades considerably lower on Wednesday due to the higher value of the Japanese Yen. So far the Japanese Yen is the day’s best performing index and was trading 0.32% higher against the currency market. However, technical analysts have noted that the Yen’s performance becomes poorer within the European session. As the European session edges closer the Japanese Yen Index has fallen 0.06%. The price movement of the Japanese Yen will largely depend on the Fed’s rate decision due to recent correlations.

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The Great British Pound Index trades 0.06% lower but is slightly improving since the release of the latest UK inflation date. The UK’s inflation remains at 2.2% as per previous expectations. The Bank of England’s rate decision and press conference will take place tomorrow. Analysts advise the BoE is likely to keep interest rates at 5.00% which is positive for the British Pound.

According to Bloomberg, if the Fed opts to cut interest rates by 0.50%, the Bank of Japan may choose not to increase interest rates again this year. Economists added that the Bank of Japan would prefer for the Yen to gradually decline back to 135.00. Therefore, a 0.50% rate cut could turn negative for the GBPJPY, however, the price movement would need to confirm this.

The GBPJPY is trading at the 55.00 level on the RSI, above the 75-Period EMA and 100-Period SMA. On the 5-Minute chart, the GBPJPY is also close to crossing above the 250-Period SMA. Therefore, most indicators are indicating upward price movement. Nonetheless, this will depend largely on the upcoming monetary policy developments.

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 September 2024.

Bigger Interest Rate Cuts Spark Surge In Demand For The NASDAQ!


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  • Stocks rally after the Federal Reserve chooses to “go-large” with a 0.50% interest rate cut.
  • The NASDAQ rises more than 2.50% and the Dow Jones 1.26%. The Dow Jones trades at an all-time high.
  • UK Retail Sales rose significantly above expectations. The Great British Pound Index rises 0.35% and is the best performing index after the Japanese Yen.
  • Gold attempts to break an all-time high as analysts expect the Federal Reserve to cut a further 0.50% by the end of the year.
NASDAQ – Larger Interest Rate Cuts Prompt Higher Demand

The NASDAQ saw a clear bullish trend with the index rising for 5 consecutive hours as the US Session opened. The higher demand is a clear result of the Federal Reserve’s decision to cut interest rates 0.50% and not 0.25%.

The US Federal Reserve announced a 50 basis point reduction in the interest rate, lowering it from 5.25–5.50% to 4.75–5.00%. In his remarks, Fed Chairman, Jerome Powell, highlighted that the target inflation rate of 2% had been achieved but suggested further decreases could follow. The updated economic forecast projects consumer price growth at 2.3% by the end of the year, down from the previous estimate of 2.6%. Furthermore, economic growth is now forecasted at 2%, compared to the 2.1% predicted in July.

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As a result, the Fed expects the key rate to drop to 4.50% this year and reach 3.40% by the end of 2025. Therefore, investors are changing their view as to the “intrinsic value” of the NASDAQ and the stock market in general. The NASDAQ on Thursday was the best performing index largely due to its exposure to growth stocks. Of the NASDAQ’s individual stocks, 85% rose in value on Thursday and none of the top ten influential stocks depreciated.

When monitoring other areas of the market, such as bond yields, indications still remain that buyers will control the NASDAQ. The US 10-Year Treasury Yields has fallen 0.024% during this morning’s asian session. Lower bond yields are known to be positive for the NASDAQ, and investors will continue monitoring the decline in yields throughout the day. The VIX index this morning is trading 0.15% higher; ideally buyers and shareholders would wish for the VIX to decline into a minus figure. Yesterday’s stronger employment data also continues to support the NASDAQ and stocks in general.

Technical analysis continues to indicate bullish price movement due to the upward momentum and volatility. However, as the NASDAQ is currently retracing, upward momentum will need to be regained in order for a buy signal to materialize. When attaching the Fibonnaci retracement levels onto the retracement, a potential buy signal can be seen at $19,920. However, investors are also concerned the price is trading at the resistance level from August 22nd.

GBPUSD – UK Retail Sales Significantly Higher Than Expectations!

The GBPUSD rose to its highest level since February 2022 after rising 0.38% during this morning’s Asian Session. The bullish price movement is related to both the US Dollar’s decline but also the bullish price movement the Pound has seen against the whole currency market. Currently, the GBP is the best performing currency of 2024 so far but also of the day. So far in 2024, the British Pound has risen 4.42%.

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The Pound’s upward momentum is largely due to the Bank of England’s decision to keep its interest rate at 5.00%, whereas other global regulators had opted to cut interest rates. In addition to this, the UK’s Retail Sales figure for August read 1.0%, significantly higher than the previous expectations of 0.2%.

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

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


Click HERE to access the full HFM Economic calendar.

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

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer:
This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
 
Date: 23rd September 2024.

Market Update – Gold at record highs; Stocks climb amid Chinese stimulus bets.


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Asia & European Sessions:

  • Asian markets were mostly positive on Monday, buoyed by last week’s interest rate decisions from central banks in the US, Japan, China, and the UK.
  • PBOC reduced its 14-day reverse repurchase rate to 1.85% from 1.95%, following a decision to keep key lending rates unchanged the previous week. China’s decision to hold an unusual economic briefing involving three top financial regulators and its cut to a key short-term policy rate heightened speculation about forthcoming stimulus efforts.
  • Chinese stocks rose after the bank’s announcement.
  • Japan’s stock markets were closed due to a public holiday.
  • Attention remained on the BoJ which also stayed put (0.25%) & Ueda suggested that the central bank is cautious on further tightening amid ongoing uncertainty. This decision led to a drop in the Yen.
  • Australia’s ASX 200 dipped 0.5% to 8,170.50 as the RBA prepared for a 2-day policy meeting. The NASDAQ and S&P500 stumbled on Friday to 17,948 and 5702. The Dow edged up 0.1%, reaching a new record high of 42,579.
  • This week: key US economic data is expected, including reports on business activity, consumer spending, and a final revision of the economy’s growth during the spring.
The Fed’s decision to cut its key interest rate last week for the first time in over 4 years, with further cuts expected, signaled a shift from its previous high-rate stance aimed at curbing inflation. While inflation has eased, concerns remain about the slowing pace of job growth due to the weight of higher interest rates. Some critics argue that the Fed may have delayed rate cuts too long, potentially harming the economy.
Financial Markets Performance:
  • Gold surged to a record high, reaching $2,631.13, as traders anticipated more rate cuts by the Fed following its recent 50 bps reduction. Bullion’s momentum was further supported by concerns over rising tensions in the Middle East, with investors turning to gold as a safe-haven asset. Despite this rally, gold may be overbought, with its RSI nearing 70, a signal of possible short-term overextension.
  • Meanwhile, silver, palladium, and platinum posted losses.
  • USOIL rose to $71.59 per barrel, while UKOIL gained 52 cents, reaching $75.01 per barrel. Currently they have both seen a pullback slightly into EU open.
  • Yen slid from last week’s high of around 140 per US dollar to 144.36 yen by today.
  • The USDIndex steadied to 100.50 area.
  • The Euro inched higher to 1.1164 but currently is steady after Germany’s Social Democrats narrowly defeated the far-right Alternative for Germany party, maintaining control of the eastern state of Brandenburg. Meanwhile, French Prime Minister Michel Barnier signaled potential tax increases on large corporations and the wealthy to address the country’s growing budget deficit.
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
Andria Pichidi
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: 24th September 2024.

Market Update – Risk-on Mood due to stimulus measures; Commodities climb.


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Asia & European Sessions:

  • More new highs were set on Wall Street today as the Fed’s jumbo rate cut continues to reverberate. Fedspeakers indicated more cuts are in the future.
  • European stocks are poised for a positive open, following a rally in Asian markets driven by China’s latest economic stimulus efforts aimed at stabilizing its stock market.
  • China’s plan to inject 800 billion yuan ($114 billion) in liquidity support for its stock market alongside measures allowing brokerages to access central bank funds to buy equities, boosted investors’ confidence. These moves are part of a broader stimulus package that includes cuts to short-term interest rates and reduced borrowing costs on up to $5.3 trillion in mortgages.
  • While the market responded positively to these policies, analysts warn that the rally could be short-lived, as underlying issues like deflation remain unresolved.
  • The RBA held its cash rate at 4.35% for the 7th consecutive meeting, while leaving future policy options open.
  • Euro Stoxx 50 futures rose 0.5%, as the MSCI Asia Pacific Index marked its fourth consecutive daily gain. Hong Kong stocks surged over 4%.
  • US Stock market remains positive, with the S&P rallying another 0.28% to 5719 while the Dow was up 0.15% to 42,125. This is the 40th new record this year on the former and the 30th for the latter. The NASDAQ rose 0.14% to 17,974.
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Financial Markets Performance:
  • The USDIndex was up slightly to 100.898, but failed to hold the test of 101.229.
  • Gold managed another fresh peak too, rising 0.18% to $2640 per ounce, supported by rising geopolitical risks, central bank buying, and expectations for further declines in interest rates.
  • USOil prices recovered yesterday’s losses amid rising tensions in the Middle East after Israeli airstrikes in Lebanon.
  • Μost Asian currencies strengthened against the US Dollar, with the Aussie rising against US dollar, i.e. AUDUSD falling to 0.6820, and the yield on 3-year bonds fluctuated.
  • USDJPY retests 144.70 (top of falling triangle).
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
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: 03rd October 2024.

Dovish ECB Comments Send Euro Downward as Investors Eye US Jobs Data


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  • US employment data indicates a resilient employment sector ahead of tomorrow’s NFP data.
  • Latvia’s governor, Mr Kazaks, says that officials have sufficient grounds to support further interest rate cuts at the October meeting
  • Investors continue to predict a cautious 0.25% cut due to strong employment data.
  • The US Dollar continues to be the week’s best performing currency due to a more hawkish approach and a lower risk appetite.
EURUSD – Investors Ditch the Euro For the US Dollar!

The market continues to drive the EURUSD lower due to expectations of the more competitive US market and monetary policy. In addition to this, investors are increasing exposure to the US Dollar due to a lower risk appetite while the Middle East conflict escalates. Yesterday’s Live Trading Session (Click Here) pointed out the sell indications between 1.10735 and 1.10684, of which now the price is trading 0.45% lower.

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However, as the price is now extremely close to the previous support levels from September 3rd and 11th, Investors should be cautious of buyers re-entering the market at these levels. The support levels can be seen between 1.10256 and 1.10050. In order to break these levels, investors may require further drivers such as tomorrow’s US Employment Change and Unemployment Rate.

Analysts also expect the NFP Employment Change to add 144,000, very similar figures to the previous month. Though some economists now believe this data could beat expectations due to stronger employment data as NFP Friday approaches. Tomorrow’s employment data will trigger significantly higher volatility for the EURUSD.

The Institution For Supply Management (ISM) will publish their second PMI report of the week this afternoon. The Manufacturing PMI read lower than expectations, however, the market gave higher importance to the employment data. Yesterday’s ADP NFP Employment Change read 143,000 which is 19,000 more than the previous prediction. The higher ADP data was driven by leisure and entertainment (34K), construction (26K), and education and healthcare (24K). Today investors will turn their attention mainly to the US Services PMI as well as the Weekly Unemployment Claims.

Meanwhile, ECB Vice President Luis de Guindos mentioned that short-term economic growth in the region could be slower than anticipated. However, he expects future recovery to gain momentum, driven by rising real household incomes and easing monetary policy. Latvia’s central bank governor, Martins Kazaks, added that officials have sufficient grounds to support further interest rate adjustments at the October meeting, citing slow wage growth, declining corporate profits, and weak economic recovery across much of Europe. The ECB’s dovish comments also continue to pressure the EURUSD.

Economists currently advise the European economy will not be able to see higher growth unless the ECB opts to cut interest rates to no more than 2%. For this reason, the Euro has been the worst performing currency of the past month only behind the Japanese Yen. Market participants expect the Federal Reserve to cut 0.25% in November and 0.25% in December.

The price movement of the exchange rate will largely be driven by the price movement of the US Dollar and US news. Therefore, the US Dollar Index will be key. If the ISM Services PMI and Weekly Unemployment Claims are lower than expectations, the EURUSD may be at a good level to retrace back upwards. This is due to the price being at a support level and having already fallen 1.65%. However, even with a retracement upwards, the EURUSD on the 2-Hour Chart remains below the trend-line and below the neutral level on most oscillators.

If the price remains below 1.10427, any short-term upward price movement will form nothing more than a retracement. As a result, medium-term buy signals potentially remain intact for the EURUSD.

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
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: 04th October 2024.

Investors Increase Jobs Data Expectations As The Dollar Strengthens!


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  • The US Dollar increases in value for a fourth consecutive day as the NFP release edges closer.
  • US economic data continues to support a soft landing and gradual interest rate cuts.
  • US ISM Services PMI beat expectations and rose to an 18-month high.
  • Oil prices rise to a 30-day high as Israel confirms the IDF will retaliate against Iran’s latest strikes.
NZDUSD – Markets Expect The RBNZ To Cut, USD Depends On Jobs Data!

The NZDUSD continues to trade downwards for a third day and has done so while only forming one minor retracement. Traders now question how far the exchange rate can fall?

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Price action is currently indicating that the market is attempting to drive the exchange rate lower as the Federal Reserve dials down its dovish tone. So far, the price potential looks on track to decline closer to the previous support levels. The closest support level can be seen at 0.61514 and then 0.61234. However, if it is able to do so will depend on the upcoming economic data, particularly this afternoon’s US employment data.

The market has raised their NFP Employment Change expectations to 150,000 for September. However, participants continue to predict no change for the Unemployment Rate. If the NFP rises above the expected figure while the Unemployment Rate remains the same or falls, the data would potentially support the USD further. In addition to this, the next Federal Reserve rate decision in November will most definitely be a 25-basis point cut. This would be key for the NZDUSD to continue its bearish trend back to the 0.61234 level.

On the other hand, investors also should note that the RBNZ will also confirm their rate decision on Wednesday 9th. Therefore, can the price action change as we approach the weekend and next week’s rate decision? This is something investors will need to monitor. Though, so far the worst performing currency of the week continues to be the New Zealand Dollar along with the Japanese Yen.

House prices in New Zealand fell for the seventh consecutive month, though at a slower rate, dropping by just 0.5% following a decrease in borrowing costs, according to economists at CoreLogic NZ. This trend highlights a reduction in purchasing power amid a slowing economy, as rising unemployment starts to impact household incomes. The outlook could shift if monetary authorities maintain their dovish approach at their upcoming meeting on October 9th. Notably, this stance has already helped bring the average two-year mortgage rate below 6.0%.

If the above data does prompt the Reserve Bank of New Zealand to cut interest rates, the NZD could witness stronger pressure. The Official Cash Rate is currently at 5.25% and analysts expect the Central Bank to cut a further 0.50% to 4.75%.

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When evaluating the price movement on the two hour timeframe, the NZDUSD is finding support at the same price but the resistance is not yet clear. This also indicates that sellers remain considerably active. The support level can be seen at 0.62066 and the price has crossed downwards which indicates a sell signal. Though some traders may wish for the support level to be broken before speculating downward price movement.

Furthermore, on the 5-Minute Chart the NZDUSD trades below the 200-bar SMA and on the 2-Hour Chart below the 75-bar EMA. This indicates the trend could potentially continue but traders will need to be cautious about volatility and timing.

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
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: 07th October 2024.

Oil bets most Bullish in 2 Years, Stocks pared some gains.


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The September NFP report was a blowout by almost every measure. It quickly knocked out lingering fears of a recession this year or early next, but also knocked out expectations for another jumbo -50 bp rate cut this year. So, what’s the market signaling right now? ‘Goldilocks’ scenario?

Asia & European Sessions:

  • Equity markets have moved broadly higher across Asia, and European markets are also finding buyers in early trade. Recent US data have boosted growth optimism, and Chinese officials seem more committed to growth boosting stimulus measures.
  • Japanese stocks closed higher on Monday, with the Nikkei rising by 2.05%, driven by gains in the Mining, Chemical, Petroleum & Plastic, and Power sectors.
  • European equities continue to benefit from a positive US jobs report. The DAX and FTSE 100 have already started to pare opening gains and the DAX is down -0.1%, while the FTSE 100 up a mere 0.04%.
  • Data:German manufacturing orders plunged -3.8% m/m in August & U.K. house prices rose 0.3% m/m in September, according to the Halifax index. German data added to signs that the German economy will contract again this year.
  • This Week: The inflation data are in view and will have a little more importance as the jobs report has extinguished fears of a recession and boosted the potential for a pick up in price pressures ahead. We expect gains of 0.1% and 0.2% for headline and core CPI for September (Thursday). Increases of 0.1% and 0.2% are projected for September PPI (Friday). Along with the data, there is a host of Fedspeakers through the week and the FOMC minutes (Wednesday). Supply is also on tap with the Treasury selling $119 bln in 3-, 10-, and 30-year maturities.
  • Earnings season looms: JPMorgan Chase is scheduled to report on Friday, with PepsiCo in the spotlight tomorrow and Delta Air Lines on Thursday.
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Financial Markets Performance:

  • The USDIndex traded within Friday’s range so far today and is at 102.32.
  • The USDJPY surged to test 149.00 immediately after the data before drifting down to 148.80. Still, this is the strongest since July and early August were the pair hit a multidecade peak at 161.69 on July 3. Currebntly is at 148.13
  • According to Bloomberg, Oil futures posted their largest gain in more than a year last week. USOILhas lifted to $74.63 per barrel as markets watch developments in the Middle East. Gold meanwhile is at USD 2649.19 per ounce.
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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

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


Click HERE to access the full HFM Economic calendar.

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

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

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