Author Archive for InvestMacro – Page 2

15 May

Euro climbs to five-week high ahead of US CPI data

By RoboForex Analytical Department

The EUR/USD pair reached a five-week high at 1.0822, buoyed by positive market sentiment ahead of today’s crucial US Consumer Price Index (CPI) data release. The report is expected to show a 0.3% month-on-month increase in inflation for April, a slight decrease from the 0.4% rise in March.

Federal Reserve Chair Jerome Powell recently provided a confident assessment of the US economy, predicting above-trend GDP growth and a decline in inflation. Despite some recent data that has slightly challenged this optimism, Powell’s outlook remains resilient. This year’s unexpected surge in US consumer prices has led to a revision in the Fed’s interest rate cut forecasts, with the market now anticipating a 45-basis point reduction by the end of 2024.

Investor expectations have significantly shifted throughout the year. They anticipated six rate cuts at the beginning of 2024, but now they only foresee a maximum of one by May. The Fed’s future decisions depend heavily on ongoing price trends and inflation forecasts.

EUR/USD technical analysis

On the H4 chart, the EUR/USD has formed a consolidation range around 1.0785. With an upward exit from this range, a continuation of the correction is expected. The growth to 1.0827 has already been achieved, and a retraction to 1.0805 (testing from above) is anticipated today. Subsequent developments may lead to an increase towards 1.0844. This growth pattern from the level of 1.0601 is viewed as a correction to the last decline wave. Following its completion, a new wave of decline to 1.0600 is expected. This scenario is technically supported by the MACD indicator, with its signal line above zero and directed upwards, although histograms are at maximums and preparing for a decline.

On the H1 chart, after reaching 1.0805, a consolidation range was established above this level. Following an upward breakout, the price moved to 1.0827. Once this level is tested, a potential decline to 1.0805 (testing from above) could occur, leading to further growth towards 1.0844. The Stochastic oscillator confirms this technical outlook, with its signal line currently above 80. A decline to 50 followed by a rebound to 80 is expected, then a potential drop to 20, indicating upcoming fluctuations.

 

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News
14 May

Sports gambling creates a windfall, but raises questions of integrity – here are three lessons from historic sports-betting scandals

By Jared Bahir Browsh, University of Colorado Boulder 

Sports betting is having a big moment across the United States. While gambling on sports has been legal for decades in countries such as the U.K., it wasn’t until 2018 that the U.S. Supreme Court ruled that states could legalize sports betting. Before then, sports betting had been permitted only in Nevada.

After the Supreme Court decision, the floodgates opened. Many states were happy to legalize sports gambling, enticed by the opportunity for more tax revenue. As of May 2024, sports gambling is legal in 38 states and Washington, D.C. Americans wagered nearly US$120 billion on sports in 2023 alone.

Until about 10 years ago, sports leagues in North America were apprehensive about – if not totally against – legalizing sports betting. The long history of sports gambling scandals in the U.S. led many to worry that legalizing sports betting would tarnish their sports’ credibility and image. The NCAA was one of many governing bodies that objected to legalizing sports gambling nationwide.

But now that the Supreme Court has blessed it, sports leagues have embraced gambling, forming partnerships with brands like Caesars Entertainment. The sportsbooks and platforms have integrity monitors to track potential inconsistencies. Still, a number of scandals involving athletes and the people around them have emerged since the Supreme Court ruling.

As a professor of critical sports studies, I teach students about the history of sports betting scandals. And I think they offer lessons for the present day.

Disgruntled players and pay disputes lead to temptation

The Black Sox Scandal of 1919 helped to further organize baseball, leading to the creation of the position of commissioner of baseball, which was first assumed by former judge and known racist Kennesaw Mountain Landis. Along with maintaining the color line, arguably his most notable action was banning, for life, the players on the Chicago White Sox involved in the fixing of the 1919 World Series.

Early professional baseball regulations explicitly banned gambling, but the money was too tempting for many players to ignore – and that included members of the 1919 White Sox. The players hated the team’s owner, Charles Comiskey, and felt that they were underpaid. But they were unable to change teams due to the reserve clause in their contracts, which gave owners exclusive rights to their players in perpetuity.

A faction of the team agreed to throw the World Series. Those players were ultimately indicted by a grand jury and went to trial. They were acquitted of criminal charges, but Landis suspended all of the players connected to the fix – including superstar “Shoeless” Joe Jackson, who admitted taking money from a teammate but maintained he was innocent of game fixing.

This was the the most notable of several attempts to fix baseball games early in the 20th century, as the game grew in popularity and a number of people associated with baseball, including players, managers and even umpires, looked to cash in.

Addiction isn’t limited to substances

Athlete salaries have soared in recent decades. However, this money hasn’t shielded players and others involved in sports from the grips of gambling addiction.

There are no rules banning athletes from sitting at a blackjack table or even gambling on other sports. Numerous players have wagered millions of dollars, with some athletes building up massive debts due to addiction.

These debts can lead to such desperation that athletes decide to risk their careers. Baseball legend and admitted compulsive gambler Pete Rose continues to sit outside the Hall of Fame because he bet on baseball games.

The most substantial gambling scandal in modern sports came in the NBA during the 2000s, involving referee Tim Donaghy. He admitted to providing information on NBA games, including those he officiated, which allegedly influenced his calls. Donaghy served time in prison as a result. So it isn’t just players who get in trouble.

Unpaid student-athletes are especially vulnerable to improprieties – and harassment

There have been several major point-shaving scandals in college basketball history, most famously at the City College of New York in the 1950s and at Boston College in the late 1970s – the latter of which involved Henry Hill, the subject of the blockbuster film “Goodfellas.”

The increasing use of prop, or proposition, bets, which focus on a specific outcome within a game rather than the overall result, has created a new point of vulnerability for student-athletes. While influencing an entire team is hard, history shows that individual players are more susceptible to pressure. A point guard or quarterback can slow down the game and reduce the margin of victory.

And while today’s unpaid student-athletes have the same financial incentives to cheat as earlier generations did, they face a new pressure: They’re often surrounded by gamblers on campus and on social media. Betting is pervasive not only at large universities but at smaller schools, too. According to NCAA surveys, 1 in 3 student-athletes have faced harassment from gamblers, ranging from derogatory comments to death threats.

New regulations and oversight measures could help

The sportsbooks have very little incentive to address potential violations, so it’s up to organizations that oversee sports to ensure the integrity of their games.

NCAA President Charlie Baker’s suggestion to ban prop bets is a good first step: The more individual players and gameplay are isolated, the easier it is for improprieties to occur.

Providing more guidance for players – and different types of punishments for different transgressions – could also be useful. Gambling violations that don’t affect competition outcomes should be treated differently from ones that do. The NCAA already does this by meting out lighter penalties for student-athletes who wager on other teams and sports as opposed to their own.

Providing treatment for players and others suffering from gambling addiction would be helpful as well, and there’s some evidence that open discussions of gambling addiction in European soccer have had a positive impact.

NBA Commissioner Adam Silver has suggested implementing federal oversight to eliminate the uncertainty of state-by-state regulations. Although scandals are still likely to occur, gambling commissions like the one in the U.K. can provide a framework for federal licensing and oversight.

The suddenness of states adopting sports betting has led to a windfall of profit for gambling companies and tax revenue for the states. But it may also endanger the integrity of sports. As policymakers mull how to address the issue, they might be wise to learn from history.The Conversation

About the Author:

Jared Bahir Browsh, Assistant Teaching Professor of Critical Sports Studies, University of Colorado Boulder

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Opinions Stock Market News
14 May

FXTM’s Soybean: On breakout watch

By ForexTime 

  • Soybean ↑ 5% month-to-date
  • Influenced by various fundamentals
  • Trapped in range on W1 timeframe
  • Breakout on the horizon?
  • Key levels at 1211, 1188, 1170

After bouncing within a weekly range since mid-January, FXTM’s new Soybean commodity could be on the brink of a major breakout!

Prices are flirting around the 1200 weekly resistance level as bulls and bears wait for a fresh directional catalyst.

Note: Soybean is priced per bushel. One bushel is equivalent to 60 pounds.

Before we break down the fundamentals, here are some fun facts about soybean:

  • Ancient crop that originates from China
  • More than 2500 varieties
  • Brazil is the biggest producer & exporter
  • China is the biggest importer
  • Gained over 5% month-to-date

What is Soybean?

Soybeans are simply the edible beans of the soya plant.

They come in many different shapes and sizes boasting various uses.

Humans and animals can consume this bean, also used for industrial and consumer products!

Note: Soya oil is extracted from Soybean. Soybean meal is the by-product of the extraction process.

Both can be traded along with Soybean on the CBOT (Chicago Board of Trade).

What does FXTM’s Soybean track?

FXTM’s Soybean tracks the CME Group’s Soybean futures, providing access to one of the world’s most widely grown crops.

The lowdown…

Soybean prices have been shaky in 2024, shedding almost 7% year-to-date.

A combination of rising global stockpiles and uncertainty over China’s demand has pressured the commodity.

Back in March, reports showed that China imported 13.04 million metric tons of soybeans for the first two months of 2024 – the lowest in 5 years.

Considering how China accounts for roughly 60% of global imports, it plays a key role in Soybeans outlook.

The bigger picture…

Brazil, the United States, and Argentina account for roughly 80% of total Soybean production.

Developments in these regions along with demand from China are likely to heavily influence the outlook for 2024.

There have been reports of severe weather conditions in Brazil threatening supplies of key agricultural commodities including soybeans. These concerns were reflected in the latest USDA report published last Friday which lowered estimates for Brazil’s production.

However, U.S. farmers are expected to produce near-record amounts of Soybean this year – adding to the rising global inventories.

What does this mean?

The various fundamental forces pulling and tugging at Soybeans could translate to fresh volatility.

Where there is volatility, this presents fresh opportunity.

Technical outlook…

Soybean prices remain in a wide range on the weekly charts with key support found around 1130 and resistance at 1200.

Zooming into the H1 timeframe, another range is in play with support at 1188 and resistance at 1211. Prices are trading below the 100 and 50 SMA and currently testing the 200 SMA.

  • A solid H1 close below 1188 could inspire a decline towards 1170.

  • Should prices push back above the 50 SMA, this could open a path back to 1211.

  • A break above 1211 may see prices test 1220 and 1235.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Opinions Soft Commodities
14 May

Australia will release its annual budget today. Rising inflation expectations hurt US stock indices

By JustMarkets

At the end of Monday, the Dow Jones Index (US30) decreased by 0.21%, while the S&P 500 Index (US500) fell by 0.02%. The NASDAQ Technology Index (US100) closed positive 0.29%. Rising inflation expectations weighed on stocks after the New York Fed’s 1-year inflation expectation rose by 26 bps to a 5-month high of 3.26% from 3.00% in March. Stocks were also impacted by hawkish comments from Fed Vice Chairman Jefferson when he said it was appropriate for the Fed to keep interest rates in a restrictive range.

Apple (AAPL) closed higher by more than 2% after it was reported that the company is close to an agreement to use OpenAI technology in Apple’s upcoming iOS 18 mobile operating system.

Intel (INTC) shares rose more than 2% and led the Dow Jones Industrials Index after the Wall Street Journal reported that the company is negotiating a deal that would see Apollo Global Management provide more than $11 billion to build a chip factory in Ireland.

Equity markets in Europe mostly fell on Monday. Germany’s DAX (DE40) fell by 0.16%, France’s CAC 40 (FR40) closed down 0.12%, Spain’s IBEX 35 (ES35) Index rose by 0.42%, and the UK’s FTSE 100 (UK100) closed negative 0.22%.

The CAC 40 Index (FR40) closed at 8,209 on Monday, breaking its 6-day winning streak and retreating from a record high of 8,219. On the corporate front, Airbus saw the biggest drop in shares, with its stock down 1.4%.

WTI crude oil prices held above $79 a barrel on Tuesday after rising more than 1% in the previous session, helped by concerns over possible supply disruptions in Canada. Markets feared that Canada’s wildfire season could affect the country’s 3.3 million barrels per day production capacity. In the Middle East, Iraq’s oil minister said over the weekend that the country would abide by OPEC+ policy on production cuts due at the upcoming June 1 meeting, reversing his previous statement that Iraq would not agree to any new production cuts.

Asian markets experienced both ups and downs yesterday. Japan’s Nikkei 225 (JP225) was down 0.13%, China’s FTSE China A50 (CHA50) lost 0.42%, Hong Kong’s Hang Seng (HK50) was up 0.80%, and Australia’s ASX 200 (AU200) was positive 0.01%.

Australia will release its budget today. The government is expected to announce another annual budget surplus thanks to strong employment figures. At the same time, traders will focus on the details of the planned cost of living cuts that are said to reduce consumer inflation temporarily. Treasurer Jim Chalmers said he expects the current core inflation rate of 3.6% to return to the Reserve Bank of Australia’s (RBA) target of 2–3% by the end of the year. If this scenario works out, the Central Bank will likely cut interest rates sooner than markets expect.

Ahead of the PBOC’s upcoming medium-term interest rate decision, the offshore yuan exchange rate is holding at 7.24 per dollar, the lowest in two weeks. Expectations are leaning towards the PBOC keeping the medium-term interest rate unchanged at 2.5% at tomorrow’s meeting — the rate has been unchanged since August 2023, when 15 basis points cut it.

S&P 500 (US500) 5,221.42 −1.26 (−0.024%)

Dow Jones (US30) 39,431.51 −81.33 (−0.21%)

DAX (DE40) 18,742.22 −30.63 (−0.16%)

FTSE 100 (UK100) 8,414.99 −18.77 (−0.22%)

USD Index 105.22 −0.09 (-0.09%)

Important events today:
  • – UK Average Earnings Index (m/m) at 09:00 (GMT+3);
  • – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
  • – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
  • – German Consumer Price Index (m/m) at 09:00 (GMT+3);
  • – Switzerland Producer Price Index (m/m) at 09:30 (GMT+3);
  • – German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
  • – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
  • – US Producer Price Index (m/m) at 15:30 (GMT+3);
  • – US Fed Chair Powell Speaks at 17:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
14 May

JPY declines again

By RoboForex Analytical Department

The Japanese yen is declining against the US dollar for the seventh consecutive session. The USD/JPY pair is approaching the 156.40 mark.

Japan’s government is poised for close cooperation with the Bank of Japan on currency market issues. This is needed to avoid disagreements on the goals of the policies they pursue, stated Shunichi Suzuki, the minister of finance, today. He noted that the Ministry of Finance is closely monitoring the currency and taking all possible measures. It is important to the authorities that the yen’s exchange rate remains stable and reflects fundamental indicators.

However, Suzuki did not communicate any specific exchange rate values. He also hardly said anything about financial interventions conducted in late April and early May to support the yen.

After falling earlier to 160.00 per US dollar, the yen has steadily risen. However, it expectedly came under pressure again now. Currency interventions have an intermittent impact and cannot create conditions for a fundamental change in the currency market environment.

The Japanese authorities are also concerned about the interest rate issue. Although no significant changes in the monetary policy structure are expected now, the market closely monitors this issue.

USD/JPY Technical Analysis

The USD/JPY pair has completed a corrective wave on the H4 chart, reaching 156.16. Today, a consolidation range is forming around this level. The price is expected to break below it and continue the third decline wave, aiming for 151.40. After the price reaches this level, a correction towards 154.00 could start, followed by a decline to 149.00. Technically, this scenario is confirmed by the MACD oscillator, with its signal line above the zero level, poised to decline to new lows.

On the H1 chart, the USD/JPY pair has completed a growth wave at 156.16, with a narrow consolidation range formed around this level. Today, the price attempts to break above it, aiming for 156.66. The range extension towards 156.81 is not ruled out. It is worth noting that all growth structures are only perceived as the extension of this wave, with the market able to continue a downtrend at any moment. Technically, this scenario is confirmed by the Stochastic oscillator, with its signal line above 80, poised to move to new lows.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News
13 May

Trade of the Week: CHINAH to extend lead as Asia’s winner?

By ForexTime 

  • CHINAH overtakes JP225 in year-to-date gains
  • Earnings from Tencent, Meituan, Alibaba etc. may cause CHINAH to climb/fall
  • Traders also watching China rate decision and US CPI
  • CHINAH at risk of technical pullback, despite bullish “golden cross”
  • CHINAH forecasted to climb another 15.3% over next 12 months

 

There’s a new winner among FXTM’s Asian stock indices!

The CHINAH stock index has now overtaken the JP225 index, with the latter previously holding the most year-to-date gains among major stock indices worldwide throughout Q1 (January-March) 2024.

However, CHINAH has been on a tear, climbing as much as 19.75% since that mid-April trough.

NOTE: FXTM’s CHINAH stock index mirrors the performance of the underlying Hang Seng China Enterprises index.
It tracks 50 of the largest and most liquid stocks from Mainland China that are listed in Hong Kong.

 

Following the surge in recent weeks, CHINAH is now trading at its highest levels since August 2023.

 

For reference, here’s the current year-to-date standings among FXTM’s Asian stock indices:

  • CHINAH: +17.2%
  • JP225: +14.1%
  • TWN: +13.1%
  • HK50: +12.1%
  • CN50: +9.9%
  • SG20: +6.7%

 

 

Why are China’s stock markets climbing?

Chinese stocks have been boosted by hopes that the government is stepping in to support the economy.

Much has already been made about how China, the world’s second-largest economy, have faltered in its post-pandemic recovery, lagging behind other major economies.

China’s sluggish economic performance in turn weighed down its stock markets, with the Hang Seng China Enterprises index posting 4 consecutive years of declines!

But now, with Beijing’s boosters on the way, such optimism is in turn fuelling a recovery in Chinese stock indices.

Just today (Monday, May 13th), China’s Ministry of Finance announced the sale of about 1 trillion yuan (about US$138 billion) in government bonds, beginning this Friday (May 17th) through November.

The 1 trillion yuan raised from this bond sales – only the 4th of its kind in 26 years – will be used to support China’s economic growth.

The news is sending CHINAH 0.6% higher today!

 

 

What could move CHINAH higher/lower this week?

 

1) Chinese stocks’ earnings: May 14th – 16th

8 of the CHINAH stock index’s 50 members are due to report their respective quarterly earnings this week.

This lineup includes 3 of the 4 biggest members of the Hang Seng China Enterprises index, namely Tencent, Meituan, and Alibaba.

These 8 reporting companies combined account for 30% of the entire CHINAH stock index!

Hence, the market’s overall reaction to these upcoming earnings announcements, either positive or negative, could move the broader stock index up/down as well.

 

 

2) China policy rate: Wednesday, May 15th

The People’s Bank of China (PBoC) is expected to maintain its one-year medium-term lending facility (MLF) rate unchanged at 2.5%.

Although the Chinese economy could do with even more support, from both the government (fiscal policy) as well as the central bank (monetary policy), the PBoC may want to hold off on lowering this rate so as not to further weaken the Chinese Yuan currency.

In the unlikely event of a surprise rate cut by the PBoC this week, that’s likely to jolt the CHINAH stock index even higher!

 

 

3) US April consumer price index (CPI): Wednesday, May 15th

The consumer price index (CPI) is a widely used gauge to measure a country’s inflation rate.

The US CPI is one of the most closely-watched economic data that could rock financial assets around the world, including FX markets, gold, and stock indexes!

After all, the world’s most-important central bank, the US Federal Reserve, currently finds itself in an ongoing battle in slowing down still-stubborn inflation in the world’s largest economy.

 

Here are the forecasts from economists for this week’s US CPI prints

  • CPI month-on-month (April 2024 vs. March 2024): 0.4%
    If so, that would match March’s 0.4% month-on-month figure
  • CPI year-on-year (April 2024 vs. April 2023): 3.4%
    If so, that would be slightly lower than March’s 3.5% year-on-year figure
  • Core CPI (excluding food and energy prices) month-on-month: 0.3%
    If so, that would be slightly lower than March’s 0.4% month-on-month figure
  • Core CPI year-on-year: 3.6%
    If so, that would be lower than March’s 3.8% year-on-year figure

Higher-than-expected CPI figures may drag down stock indexes around the world, including the CHINAH (and vice versa).

 

 

Key levels this week

POTENTIAL RESISTANCE:

  • 6877: cycle high from mid-June 2023
  • 7000: psychologically-important level

 

POTENTIAL SUPPORT:

  • 6417.9: May 8th intraday low (recent technical pullback)
  • 6200: psychological round number; April 30th closing price; 21-day simple moving average

 

 

Beware of potential technical pullback

Note that the 14-day relative strength index (RSI) is already above the 70 level which marks “overbought” territory.

Hence, from a technical perspective, a slight pullback may be in order.

However, once CHINAH can clear some of the froth from its recent ascent, this stock index may well resume its uptrend, provided that this week’s fundamental events do support the upside scenario.

 

 

“Golden cross” offers technical bullish signal?

Looking at first chart above, the CHINAH recently formed a “golden cross”.

A “golden cross” is a technical pattern when an asset’s 50-day simple moving average (SMA) crosses above its 200-day counterpart.

A “golden cross” is often used as a technical sign that the asset’s prices can climb further: a “bullish” signal.

 

However, recent “golden crosses” had produced mixed results:

  • Late January 2023

The last time that the Hang Seng China Enterprises index formed a “golden cross”, it didn’t go as planned.

This stock index fell by 36.4% in the 12 months (January 2023 until January 2024) after the last “golden cross” was formed.

 

  • Late-November 2020

Still, the “golden cross” prior did adhere to the textbook scenario.

The Hang Seng China Enterprises index soared by 16.2% between November 2020 through February 2021.

 

 

How much higher can CHINAH go?

Analysts forecast that the Hang Seng China Enterprises index can climb by a further 15.3% and flirt with the 7800 level in 12 months from now (by May 2025).

If so, that would restore the CHINAH stock index back to its end-June 2022 peak!

 

However, the road back to such heights will be measured one step at a time.

This week’s events may well determine whether CHINA is firmly on the path upwards.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Financial News Stock Market News
13 May

The German index has hit an all-time high. China sees rising consumer inflation

By JustMarkets

On Friday, the Dow Jones (US30) Index gained 0.32% (for the week +1.94%), while the S&P 500 (US500) Index gained 0.16% (for the week +1.56%). The NASDAQ Technology Index (US100) closed negative 0.03% (for the week +0.82%).

On Friday, several FOMC officials gave their comments on plans. Fed Chair Michelle Bowman said that the Fed needs to maintain confidence in inflation by moving cautiously and deliberately toward our 2% target. She said the Fed needs to keep rates unchanged for a while longer. In addition, Atlanta Fed President Raphael Bostic told Reuters in an interview that he expects only one 25 bps rate cut this year, which will come at the end of the year. Dallas Fed President Lorie Logan said it was too early to consider a rate cut. Minneapolis Fed President Neel Kashkari said the Fed is waiting to see if inflation slows. He also said he did not rule out the need for another rate hike, although he noted that the bar would be high for such a decision. Chicago Fed President Austan Goolsbee, who takes a less hawkish view, said there is little evidence that inflation has stalled at 3%.

The University of Michigan’s preliminary May Consumer Sentiment Index fell 9.8 points to a 6-month low of 67.4, weaker than market expectations. At the same time, US consumers’ inflation expectations rose. The expected inflation indicator from the University of Michigan for May rose by 0.3 points to 3.5% from April’s 3.2% and was stronger than expectations of an unchanged 3.2%. In addition, the May 5–10-year inflation expectations indicator rose to 3.1% from April’s 3.0%.

Equity markets in Europe were mostly up on Friday. The German DAX (DE40) rose by 0.46% (for the week +4.29%), the French CAC 40 (FR40) closed Friday up 0.38% (for the week +3.05%), the Spanish IBEX 35 (ES35) added 0.50% (for the week +2.09%), the British FTSE 100 (UK100) closed positive 0.63% (for the week +3.20%).

The DAX (DE40) index gained nearly 0.5% on Friday to close at a record high of 18,773, extending its weekly gain to 4.3% as investors remain optimistic that major central banks will soon begin cutting interest rates. Minutes from the ECB’s latest meeting coincided with the current view that the Central Bank should cut rates in June as the cycle’s governor agreed that inflation is approaching the target faster. Positive corporate developments also boosted sentiment. Siemens shares jumped by 2.3%, closing at an all-time high among the leaders.

WTI crude oil prices fell below $78 a barrel on Monday, extending losses from the previous session as uncertainty over demand pressured the market. Oil prices fell more than 1% on Friday as US Federal Reserve officials signaled that interest rates could remain elevated for a long time, dampening growth and fuel demand in the world’s top oil consumer. Meanwhile, investors are looking ahead to the upcoming OPEC meeting in early June, where the group is expected to extend supply cuts for the year’s second half.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) rose by 0.59%, China’s FTSE China A50 (CHA50) lost 0.32% for the week, Hong Kong’s Hang Seng (HK50) gained 2.57% for the week, and Australia’s ASX 200 (AU200) was positive 1.57%.

China’s annualized inflation rate for April 2024 rose to 0.3% compared to market estimates and March’s 0.1%. This was the third consecutive month of rising consumer inflation amid a continued recovery in domestic demand despite a fragile economic recovery. On the other hand, producer prices in China fell to 2.5% y/y in April 2024, compared to market forecasts of a 2.3% y/y drop following a 2.8% y/y decline in March. The figure marked the 19th consecutive month of factory price declines, underscoring continued economic uncertainty despite numerous support measures from the government. The offshore yuan depreciated around 7.24 per dollar, reacting to key economic data from China.

The NAB Australia Business Confidence Index for April 2024 stood at 1, unchanged for the second consecutive month and below its long-term average. Weak sentiment in retail, wholesale trade, and mining offset leisure and personal services, construction, and manufacturing improvements.

S&P 500 (US500) 5,222.68 +8.60 (+0.16%)

Dow Jones (US30) 39,512.84 +125.08 (+0.32%)

DAX (DE40) 18,772.85 +86.25 (+0.46%)

FTSE 100 (UK100) 8,433.76 +52.41 (+0.63%)

USD Index 105.31 +0.09 (+0.09%)

Important events today:
  • – Australia NAB Business Confidence (m/m) at 04:30 (GMT+3);
  • – New Zealand Inflation Expectations (m/m) at 06:00 (GMT+3);
  • – Canada Building Permits (m/m) at 15:30 (GMT+3);
  • – US FOMC Member Mester Speaks at 16:00 (GMT+3);
  • – Switzerland SNB Chairman Thomas Jordan speaks at 19:45 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Financial News Stock Market News
13 May

Brent crude oil faces downward pressure amid demand uncertainties

By RoboForex Analytical Department

The price of Brent crude oil is currently experiencing a downturn, trading around 82.55 USD per barrel this Monday. The primary concern affecting the market today is the uncertainty surrounding demand levels, exerting significant pressure on the commodity.

Recent statements from representatives of the US Federal Reserve have led to expectations that interest rates may remain elevated for an extended period. This prospect of sustained high rates is likely to dampen economic growth, which could, in turn, negatively impact fuel demand from American consumers. The likelihood that the Fed will maintain current lending rates throughout the year is considered relatively high.

Additionally, data released on Friday showed a marked decline in US consumer confidence, reinforcing concerns that the economy might be losing its growth momentum. As we approach the summer season, traditionally a peak period for fuel consumption, the latest reports indicate rising stocks of petrol and distillates in the US. However, demand appears lacklustre, contradicting typical seasonal trends.

The next OPEC meeting is scheduled for early June. The group is expected to extend its production quotas into the second half of the year, a decision that could further impact oil price movements.

Brent technical analysis

The Brent H4 chart’s initial growth impulse to 84.24 has been completed, and the subsequent correction wave nearing 82.02 is almost finished. We anticipate the formation of a consolidation range above this level. If the price breaks upwards from this range, a growth to the level of 85.00 is expected, potentially extending to 88.00. This bullish scenario is technically supported by the MACD indicator, whose signal line is below zero but pointing upwards from the lows.

On the H1 chart, after completing the growth structure to 84.24, the market has finalised its correction at 82.02. A consolidation range above this level is expected to form. A breakout upwards from this range could initiate a new growth wave towards 85.00. The Stochastic oscillator corroborates this potential upward movement, with its signal line currently above 20 and aiming towards 80, suggesting a bullish momentum could be building.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Energy Financial News
10 May

Natural gas prices are rising amid falling inventories. The Bank of England expectedly kept the rate

By JustMarkets

Yesterday, the Dow Jones Index (US30) gained 0.85%, the S&P 500 Index (US500) added 0.51%, and the NASDAQ Technology Index (US100) closed positive 0.27%. Stock index prices found support on Thursday as bond yields fell after US weekly jobless claims rose more than expected to an 8-month high, boosting hopes that the Federal Reserve will soon cut interest rates earlier.

US weekly jobless claims rose 22,000 to an 8.5-month high of 231,000, indicating a weak labor market compared to expectations of 212,000. On Thursday, hawkish comments from San Francisco Fed President Daly had a slightly negative impact on equities towards the end of the day when she stated that interest rates are currently holding back the economy. Still, inflation may take “more time” to return to the Fed’s target level.

Equinix (EQIX) climbed more than 11% and topped the list of top gainers in the S&P 500 after reporting adjusted first-quarter earnings of $992 million, above the consensus forecast of $976.9 million. Airbnb (ABNB) was down more than 6% and topped the list of Nasdaq 100 losers after reporting second-quarter revenue of $2.68, weaker than the consensus forecast of $2.74 billion.

First-quarter earnings results were mostly better than expected, which is favorable for the stock. First-quarter earnings are expected to grow 6.5% YoY, well above the 3.8% forecast.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 1.02%, France’s CAC 40 (FR40) closed higher by 0.69%, Spain’s IBEX 35 (ES35) fell by 0.92%, and the UK’s FTSE 100 (UK100) gained 0.33%.

As expected, the Bank of England (BOE) kept its key rate unchanged at 5.25% for the sixth consecutive meeting and said the risks of continued inflation are diminishing. BOE Governor Bailey said, “It’s likely that we will need to cut the bank rate over the coming quarters and make monetary policy less restrictive over the forecast period, possibly more so than currently priced into market rates.” He added that a change in the bank rate in June “is neither ruled out nor a fait accompli.”

Precious metals prices closed higher on Thursday, with gold hitting a 1-week high and silver hitting a 2-week high. Silver prices rose on Thursday, which was a sign of stronger demand for industrial metals in China. The Chinese trade news showed that China’s exports and imports rose more than expected.

WTI crude futures climbed to $80 a barrel on Friday, rising for the third consecutive session and posting a strong weekly gain amid an improving global demand outlook and ongoing hostilities in the Middle East, which helped boost oil prices. On Thursday, data showed that China’s crude oil imports rose in April, with strong trade figures in the world’s largest crude importer signaling improving demand.

The US natural gas (XNG) prices rose more than 5% on Thursday to surpass $2.3 MMBtu, the highest in nearly four months. The rise was helped by a smaller-than-expected increase in gas in storage, reinforcing expectations of strong demand over the next two weeks and production cuts. The US inventories added 79 billion cubic feet (bcf) of gas to storage last week, while the market had expected an increase of 87 bcf.

Asian markets were mixed on Thursday. Japan’s Nikkei 225 (JP225) closed negative 0.34% yesterday, China’s FTSE China A50 (CHA50) was up 0.30% for the day, Hong Kong’s Hang Seng (HK50) was up 1.22% for the day, and Australia’s ASX 200 (AU200) was negative 1.06%.

Malaysia’s unemployment rate fell to 3.3% in March 2024 from 3.5% in the corresponding month last year, returning to pre-pandemic levels for the fifth consecutive month. The number of unemployed fell 3.8% year-on-year to 566.6k, while employment rose 1.9% to a record high of 16.53 million.

In New Zealand, the RBNZ is expected to keep the interest rate at 5.5% at its meeting later this month. This stance aligns with the OECD’s recent call for the central bank to maintain a restrictive policy until there are clearer signs that inflation is moving towards the target. In addition, the country’s manufacturing sector showed tentative signs of recovery in April despite the protracted economic downturn.

S&P 500 (US500) 5,214.08 +26.41 (+0.51%)

Dow Jones (US30) 39,387.76 +331.37 (+0.85%)

DAX (DE40) 18,686.60 +188.22 (+1.02%)

FTSE 100 (UK100) 8,381.35 +27.30 (+0.33%)

USD Index 105.23 -0.32 (-0.30%)

Important events today:
  • – UK GDP (m/m) at 09:00 (GMT+3);
  • – UK Industrial Production (m/m) at 09:00 (GMT+3);
  • – UK Manufacturing Production (m/m) at 09:00 (GMT+3);
  • – UK Trade Balance (m/m) at 09:00 (GMT+3);
  • – Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (GMT+3);
  • – Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
  • – US FOMC Member Bowman Speaks at 16:00 (GMT+3);
  • – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
10 May

Week Ahead: USDInd set for volatile week?

By ForexTime 

  • USDInd ↑ almost 4% year-to-date
  • Key US CPI report under spotlight
  • Watch out for Fed speeches
  • Trading within range on D1 charts
  • Levels of interest – 106.50, 105.60 & 105.00

The week ahead is jampacked with top-tier data and speeches by numerous policymakers.

But the spotlight shines on the incoming US inflation data which may rock FXTM’s USDInd:

Saturday, 11th May

  • CN50: China CPI, PPI

Monday, 13th May

  • AU200: Australia business confidence
  • NZD: New Zealand food prices, inflation expectations
  • USDInd: Fed speech
  • CHF: SNB President Thomas Jordan speech

Tuesday, 14th May

  • JP225: Japan PPI
  • GER40: Germany CPI, ZEW survey expectations
  • UK100: UK jobless claims, unemployment, BoE Economist Huw Pill speech
  • USDInd: US PPI, Fed Chair Jerome Powell speech

Wednesday, 15th May

  • CAD: Canada housing starts, existing home sales
  • CN50: China rate decision
  • EU50: Eurozone industrial production, GDP
  • USDInd: US CPI, retail sales, empire manufacturing, Fed speech

Thursday, 16th May

  • AU200: Australia unemployment
  • JP225: Japan GDP, industrial production
  • EUR: ECB publishes financial stability review
  • USDInd: Initial jobless claims, industrial production, Fed speech

Friday, 17th May

  • CN50: China property prices, retail sales, industrial production
  • HK50: Hong Kong GDP
  • EU50: Eurozone CPI
  • SG20: Singapore trade

The USDInd has been trapped within a range since mid-April with major resistance at 106.50 and support around 105.00.

Note: FXTM’s USDInd tracks how the dollar is performing against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.

Digger deeper, the dollar has appreciated against every single G10 currency year-to-date.

Dollar bulls have been supported by cooling Fed cut bets in the face of sticky inflation and strong data.

With all the above said, here are 3 reasons why the USDInd could see significant moves:

    1) US April CPI report

The April Consumer Price Index (CPI) published on Wednesday may influence expectations around what the Fed does in the second half of 2024.  

Markets are forecasting:

  • CPI year-on-year (April 2023 vs. April 2024) to cool 3.4% from 3.5% in the prior month.
  • Core CPI year-on-year to cool to 3.6% to 3.8%.
  • CPI month-on-month (April 2024 vs March 2024) to remain unchanged at 0.4%.
  • Core CPI month-on-month to cool to 0.3% to 0.4%.

Headline inflation and the annual core inflation figures are expected to have ticked lower in April. But this is still some distance away from the Fed’s 2% target.

Nevertheless, further evidence of cooling prices may stimulate expectations around the Fed cutting interest rates in the second half of the year.

Traders are currently pricing in a 36% probability of a 25-basis point Fed cut by July with this jumping to 90% by September.

  • A softer-than-expected US CPI report could send the USDInd lower as Fed cut bets jump.
  • Should the inflation report print above market forecasts, this could boost the USDInd.

 

    2) Fed speeches + US data

A string of speeches from numerous Fed officials including Jerome Powell could pump the USDInd with fresh volatility. Given the recent mixed signals from US policymakers on the path of rates, the incoming speeches may provide investors with fresh clarity on what to expect from the Fed.

Much attention will also be directed towards the latest US retail sales, Producer Prices Index (PPI), and initial jobless claims to gauge the health of the US economy.

  • The USDInd could push higher if Fed officials strike a hawkish note and overall data supports the “higher for longer” narrative for rates.
  • If economic data disappoints and Fed officials sound more dovish, the USDInd may trade lower.

 

    3) Technical forces 

The USDInd is trading within a range on the daily charts with prices hovering near the 105.00 level. Still, the candlesticks are trading above the 50, 100, and 200-day SMA while the MACD trades above zero.

  • A solid breakdown and daily close below 105.00 could encourage a decline toward the 50-day SMA and 200-day SMA.
  • Should 105.00 prove to be reliable support, this could trigger a rebound to 105.60 and 106.50.

 

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

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