Archive for Financial News

26 Apr

Today, investors’ focus is on the PCE Price Index inflation report

By JustMarkets

As of Thursday’s close, the Dow Jones Industrial Average (US30) was down 0.98%, while the S&P 500 Index (US500) lost 0.46%. The NASDAQ Technology Index (US100) closed negative 0.64%. US stock indices closed modestly lower, led by technological stock weakness. Meta Platforms (META) fell more than 10% after forecasting second-quarter revenue below consensus and raising its full-year total expense estimate. IBM (IBM) also fell more than 8% after it reported weak first-quarter earnings from its consulting division. In addition, shares of Caterpillar (CAT) fell more than 6% after the company said it expects second-quarter sales to decline from a year ago. Stock losses also accelerated after bond yields jumped on signs of a strengthening labor market when weekly jobless claims unexpectedly fell to a 2-month low, a hawkish factor for Fed policy.

US weekly initial jobless claims unexpectedly fell by 5,000 to a 2-month low of 207,000, indicating a stronger labor market than expectations of a rise to 215,000. US Q1 GDP was revised downward to 1.6% (q/q annualized) from 3.4%, weaker than expectations of 2.5%, and Q1 personal consumption was revised downward to 2.5% from 3.3%, weaker than expectations of 3.0%.

Microsoft said Thursday that its profit rose by 20% for January-March. Based on licensing the Windows operating system, Microsoft’s personal computer business earned $15.6 billion in the quarter, up 17% from a year ago. Microsoft shares rose about 4% in trading. The company said it intends to spend even more in the coming months to build infrastructure to build and operate artificial intelligence systems.

The PCE inflation report will be released in the US today. The March Personal Consumption Goods Price Index is predicted to show a mixed picture of inflationary trends, which could strengthen the US Federal Reserve’s resolve to refrain from raising interest rates. Nearly all Fed officials who have spoken recently have reiterated that the Central Bank is not ready to cut rates. Analysts at BofA expect the Fed to start cutting rates in December at quarterly intervals. For gold and indices to continue to rise, it is now crucial for inflation to continue to decline, as rising oil prices could start a new spiral of inflation unwinding.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) decreased by 0.95%, France’s CAC 40 (FR40) closed down by 0.93%, Spain’s IBEX 35 (ES35) lost 0.40% cheaper, and the UK’s FTSE 100 (UK100) closed positive 0.48%. The GfK German Consumer Confidence Index for May rose by 3.1 to a 2-year high of 24.2, beating expectations of 26.0.

ECB Governing Council spokesman Muller said yesterday that he does not favor cutting interest rates for the second consecutive meeting after an expected first cut in June. His counterpart, ECB Governing Council spokesman Panetta, said ECB rate cuts need to be made soon because “unnecessary delays could leave the ECB uncomfortably close to the effective lower bound if stagflation takes root and inflation expectations fall below target.”

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) was down 2.16%, China’s FTSE China A50 (CHA50) was up 0.52% for the day, Hong Kong’s Hang Seng (HK50) was up 0.48%, and Australia’s ASX 200 (AU200) was not trading.

The Japanese yen fell to 156 per dollar, the first time since May 1990, as the Bank of Japan (BoJ) left interest rates unchanged despite pressure from the sharply declining currency. Meanwhile, the Central Bank revised its inflation forecasts and said the economy will likely continue growing healthy. Investors also reacted to data that Tokyo’s core inflation rate slowed to a two-year low of 1.6% in April. The yen has lost about 10% against the dollar this year as the Bank of Japan kept rates near zero despite interest rate hikes in other major economies, prompting traders to borrow yen and invest in higher-yielding currencies.

S&P 500 (US500) 5,048.42 −23.21 (−0.46%)

Dow Jones (US30) 38,085.80 −375.12 (−0.98%)

DAX (DE40) 17,917.28 −171.42 (−0.95%)

FTSE 100 (UK100) 8,078.86 +38.48 (+0.48%)

USD Index 105.57 −0.28 (−0.27%)

Important events today:
  • – Japan Tokyo Core CPI (m/m) at 02:30 (GMT+3);
  • – Australia Producer Price Index (q/q) at 04:30 (GMT+3);
  • – Japan BoJ Monetary Policy Statement at 06:00 (GMT+3);
  • – Japan BoJ Interest Rate Decision at 06:00 (GMT+3);
  • – Japan BoJ Outlook Report at 06:00 (GMT+3);
  • – Japan BoJ Press Conference at 09:30 (GMT+3);
  • – Switzerland SNB Chairman Thomas Jordan speaks at 11:00 (GMT+3);
  • – US PCE Price Index (m/m) at 15:30 (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
26 Apr

Gold price recovers amid uncertain US economic outlook

By RoboForex Analytical Department

The price of a troy ounce of gold climbed to 2330.00 USD on Friday. This surge was driven by investors’ ongoing evaluation of the potential direction of the US Federal Reserve’s monetary policy following mixed macroeconomic data.

The US GDP for Q1 did not meet expectations, marking the slowest recovery in two years. The economy expanded by only 1.6%, significantly lower than the forecasted 2.5%. In contrast, GDP growth in Q4 2023 reached 3.4%. The Fed’s consensus forecast for 2024 expects economic growth of 2.1%.

The underwhelming economic performance might prompt the Fed to consider a reduction in interest rates. However, a localised acceleration in consumer inflation suggests that monetary policy might remain restrictive for longer.

As long as interest rates remain high, gold’s appeal as an investment option is somewhat diminished since it does not generate its yield as bonds do. Nonetheless, in times of rising inflation, gold increasingly becomes a valuable hedge against currency devaluation.

Today, the stock exchange will focus on the March Core PCE figures. These data are expected to provide further insights into the Federal Reserve’s monetary policy outlook.

Technical analysis of XAU/USD

On the H4 chart of XAU/USD, a consolidation range has formed above 2346.00, with the ongoing development of the third wave of decline aiming for 2262.22. The local target for this wave at 2296.96 has been reached. Today, a corrective move towards 2346.00 is expected, followed by an anticipated further decline to 2262.22. This bearish scenario is supported technically by the MACD indicator, whose signal line is below zero and is trending downwards towards new lows.

On the H1 chart, the corrective movement towards 2346.00 (testing from below) is continuing. Once completed, a new downward wave towards 2277.00 is expected, potentially reaching 2262.22. This outlook is confirmed by the Stochastic oscillator, with its signal line currently above 80 but poised for a decline towards 20.

 

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 Metals
26 Apr

This “Bullish Buzz” Reaches Highest Level in 53 Years

Learn what the AIM Index reveals

By Elliott Wave International

Yes, there’s been a recent pickup in stock market volatility, but overall, bullish sentiment remains very much alive and well.

Indeed, here’s a Feb. 18 Yahoo! Finance headline:

A Bull Market is Here.

On April 9, a Fox Business headline reflects the views of a well-known investment manager:

Fed doesn’t matter in this bull market

An extreme in bullish sentiment also shows up in the Advisor and Investor Model, which is a very broad measure of market sentiment compiled by SentimenTrader.com. The model is also known as the AIM Index.

This chart and commentary from the April Elliott Wave Financial Forecast, a monthly publication which covers major U.S. financial markets, provide insight:

A Record-Long Bullish Buzz

The AIM Index constantly fluctuates between extremes; what’s unparalleled about it now is how long it’s been pinned to the top of its range. After hitting its highest possible reading of 1.0 on December 19, it stayed above .90 for the entirety of the first quarter for all but one week. This relentless bullish buzz is represented here by the index’s 20-week average. At 0.93, the April 2 reading is the highest in 53 years.

Yes, it’s possible that this dogged bullish sentiment could persist even longer. Yet, as you might imagine, Elliott Wave International considers extremes in market sentiment to be major red flags.

The April Elliott Wave Theorist, a monthly publication which analyzes major financial and cultural trends, reveals another cautionary sign via this chart and commentary:

Equal Optimism at Lower Prices

As many pundits are saying, the market is not beyond the valuation of 2021, so what’s the problem? But that was the year of the most overvalued U.S. stock market of all time, from which broad indexes such as the Russell 2000 have not recovered. That optimism has returned to an equivalent level is a big deal. …

This is an especially critical time to keep on top of the stock market’s Elliott wave pattern.

If you’re unfamiliar with Elliott wave analysis, read Frost & Prechter’s Elliott Wave Principle: Key to Market Behavior, which is the definitive text on the subject. Here’s a quote from the book:

[Ralph N.] Elliott recognized that not news, but something else forms the patterns evident in the market. Generally speaking, the important analytical question is not the news per se, but the importance the market places or appears to place on the news. In periods of increasing optimism, the market’s apparent reaction to an item of news is often different from what it would have been if the market were in a downtrend. It is easy to label the progression of Elliott waves on a historical price chart, but it is impossible to pick out, say, the occurrences of war, the most dramatic of human activities, on the basis of recorded stock market action. The psychology of the market in relation to the news, then, is sometimes useful, especially when the market acts contrarily to what one would “normally” expect.

If you’d like to read the entire online version of Elliott Wave Principle: Key to Market Behavior, you can get complimentary access by following this link: Elliott Wave Principle: Key to Market Behavior.

This article was syndicated by Elliott Wave International and was originally published under the headline This “Bullish Buzz” Reaches Highest Level in 53 Years. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Financial News Stock Market News
25 Apr

FastSpring and EBANX Forge Partnership to Expand Pix Payments for Digital Products in Brazil

Through the integration, the companies aim to provide the best payment experience to Brazilian clients through local payments via the fast-growing and highly adopted Pix
Curitiba, BRAZIL, April 25, 2024 – FastSpring, the leading merchant of record for global SaaS and software companies, and EBANX, a global technology company specializing in payments for rising markets, announce today a partnership to enhance users’ payment experience within FastSpring’s product suite in Latin America through local payment method Pix.
Pix, Brazil’s instant payment system introduced by the Central Bank of Brazil in 2020, has rapidly gained popularity among consumers as a preferred digital payment method. According to market data from EBANX’s annual study, Beyond Borders, Pix is projected to account for 40% of the total value of digital commerce in Brazil by 2026, tied with credit cards in market share. Furthermore, Pix is expected to comprise 20% of digital commerce transactions within Latin America by the same year.
As part of this partnership, FastSpring’s platform will integrate EBANX’s Pix payment processing capabilities, enabling global SaaS, software, video game, and digital product companies to offer Pix payments to Brazilian customers seamlessly. This partnership also allows Brazilian digital products companies to utilize FastSpring’s platform to power their global expansion while seamlessly maintaining Pix payments for their consumers at home. This integration marks FastSpring’s debut in accepting Pix payments and reinforces its commitment to providing localized payment solutions to its clients in the Latin American market.
“This partnership with EBANX allows FastSpring to leverage local payments, starting with the largest Latin American market, by delivering one of the country’s preferred payment methods,” stated Dan Garcia, Sr. Director of Payments, Risk, and Compliance at FastSpring. “The FastSpring platform enables sellers of digital goods to accept the most popular global payment methods. Adding Pix opens up the Brazilian market to new buyers who do not have internationally enabled cards. It’s a must-have payment method in Brazil. Our partnership with EBANX enables this code-free upgrade for  our customers.”
 
EBANX, known for its expertise in facilitating cross-border payments in Latin America, will serve as the exclusive partner processing Pix payments for FastSpring in Brazil. Through EBANX’s extensive regional knowledge and infrastructure, FastSpring aims to streamline payment processes and enhance the overall purchasing experience for its clients and their customers in Brazil.
“The collaboration between FastSpring and EBANX means a significant step forward in providing tailored payment solutions for digital product companies operating in Brazil,” commented Gregory Cornwell, Vice-President of Channels and Business Development at EBANX. “By integrating Pix payments into FastSpring’s platform, we are facilitating access to a key payment method in the Brazilian market, ultimately enabling businesses to expand their reach and drive growth.”
In addition to Pix, FastSpring’s platform offers a comprehensive suite of e-commerce solutions, including merchant of record services that handle tax calculation, collection, and remittance, thereby reducing operational complexities and costs for digital product companies expanding globally.
ABOUT FASTSPRING
FastSpring powers global payments for SaaS and software companies, video game publishers, and other digital goods businesses. As a merchant of record, FastSpring provides a fully managed payment solution including checkout, fraud mitigation, comprehensive sales tax and VAT compliance, and more. Founded in 2005, FastSpring is a privately owned company headquartered in California with offices in the UK, the Netherlands, and Canada.
For more information:
ABOUT EBANX
EBANX is the leading payment platform connecting global companies with customers from one of the fastest-growing digital markets in the world. The company was founded in 2012 in Brazil with the mission of giving people access to buy in international digital commerce. With powerful proprietary technology and infrastructure, combined with in-depth knowledge of the markets where it operates, EBANX enables global businesses to connect with hundreds of payment methods in different countries in Latin America, Africa, and Asia. EBANX goes beyond payments, increasing sales, and fostering seamless purchase experiences for businesses and clients.
For more information:
Finance Press Release Financial News
25 Apr

Target Thursdays: NAS100, Robusta Coffee, USDCHF

By ForexTime

  • NAS100 bulls pocket 4000 points!
  • FXTM’s Robusta Coffee hits record high
  • USDCHF secures all bearish targets

It has been an eventful week thanks to corporate earnings from the largest companies in the world.

And things could liven up further due to more earnings releases and high impact economic reports.

Here are how these discussed instruments performed this week:

 

    1) NAS100 bounces from 17,000 level

  • Where and when was Target Price (TP) published?

In our week ahead article published on Friday, 19th April:

We cautioned that more volatility could be on the horizon and highlighted that “should 17,000 prove to be reliable support, this may open a path back towards the 100-day SMA at 17,400….”

 

  • What happened since TP was published?

After testing the 17,000 level last Friday, the NAS100 rebounded earlier this week due to soft US data and optimism around tech earnings.

The Index rallied on Tuesday evening as Tesla stocks surged in pre-market after publishing its earnings. However, bears were back in action on Wednesday evening after Meta shares tumbled in after-hours trading.

Note: NAS100 could see more volatility due to earnings from Microsoft & Alphabet after US markets close on Thursday.

 

  • How much in potential profits?

A handsome 4000 points for traders who entered NAS100 from the 17,000 level.

 

    2) Robusta Coffee hits fresh all-time high

  • Where and when was Target Price (TP) published?

Earlier in the week, we discussed how fundamental forces were powering Robusta Coffee higher.

We identified how “prices seem to be in a range on the H1 charts with support around $4130 and resistance at $4280.”

 

  • What happened since TP was published?

Robusta Coffee soared to a new record high on Wednesday as crop concerns in Vietnam and Brazil fuelled concerns over tight global supplies.

Prices charged past the $4280 resistance level, punching above $4372.85 to create a fresh all-time high.

 

  • How much in potential profits?

Traders who took advantage of the breakout and exited at $4372.85 would have caught a 2% move to the upside.

    3) USDCHF secures all bearish targets

  • Where and when was Target Price (TP) published?

This technical scenario (USDCHF) is based on the FXTM Signals that are posted twice a day (before the London and New York sessions) for all FXTM clients to follow.

It can be found in the MyFXTM profile under Trading Services… FXTM Trading Signals.

 

  • What happened since TP was published?

The USDCHF slipped this morning as the Dollar weakened against most G10 currencies.

 

  • How much in potential profits?

USDCHF has hit all bearish targets.

Traders who entered at 0.91394 and exited at the final target level of 0.91265 would have gained 13 pips.

Feel like you missed out on these profits?

You can keep following our “Daily Market Analysis” for fresh trading ideas and opportunities across global financial markets.

Forex-Time-LogoArticle by ForexTime

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

Economics & Fundamentals Financial News
25 Apr

QCOM wants to create competition in the AI chip market. Hong Kong index hits five-month high

By JustMarkets

At Wednesday’s close, the Dow Jones Industrial Average (US30) was down 0.11%, while the S&P 500 Index (US500) was up 0.02%. The NASDAQ Technology Index (US100) closed positive 0.10%. The US stock indices traded mixed, with the S&P 500 (US500) and NASDAQ (US100) hitting weekly highs. Strengthening technology stocks provided support for the overall market. However, the broader market’s gains were limited as rising bond yields pressured equities. On the positive side, shares of Tesla (TSLA) rose more than 12% despite weaker-than-expected first-quarter earnings per share after the company said it would accelerate the launch of less expensive models as early as this year. Also on Wednesday, semiconductor stocks rose after Texas Instruments (TXM) reported better-than-expected first-quarter earnings and projected second-quarter profit above consensus.

On Wednesday, chip developer Qualcomm (QCOM) announced its latest chips designed to run Windows software on laptops. Qualcomm is thus entering the AI race and potentially competing with software developers such as Intel (INTC) and AMD (AMD). It introduced the Arm (ARM)-based Snapdragon X Plus chip for Windows laptops, having previously announced the more powerful Snapdragon X Elite chips for Windows. These chips will be available in mid-2024 and are designed to consider the latest lineup of chips from rival Intel’s Core Ultra and Apple’s (AAPL) M3.

Meta (META) achieved record first-quarter sales, showing strong growth in its advertising business thanks to new advances in artificial intelligence. The company announced a substantial increase in revenue to $36.5 billion, up 27% year-over-year, setting a new record for the January through March period and beating analysts’ expectations. However, the company provided a softer revenue outlook for the second quarter, forecasting between $36.5 billion and $39 billion, averaging 18% growth for the year – below analysts’ average forecast of $38.3 billion. This conservative outlook caused Meta’s shares to fall by — 11% in extended trading, reflecting investor concerns about the company’s ability to grow at the pace it has previously.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) fell 0.27%, France’s CAC 40 (FR40) closed down 0.17%, Spain’s IBEX 35 (ES35) lost 0.43%, and the UK’s FTSE 100 (UK100) closed positive 0.26%.

WTI crude oil futures faced downward pressure on Thursday as investors weighed the potential impact of a delayed US rate cut on the demand outlook. Traders were wary of the prospect of the Fed taking longer to raise rates amid a string of solid inflation and employment data. Markets now await Thursday’s US GDP data and the PCE Price Index report, which the Fed prefers to release on Friday, to determine the future outlook. However, official data showed that US crude inventories fell by 6.37 million barrels last week, contradicting expectations of a 1.6 million barrel increase. Meanwhile, supply concerns eased as tensions in the Middle East continued to reduce, and Iran and Israel signaled no further military action against each other.

Asian markets were predominantly rising yesterday. Japan’s Nikkei 225 (JP225) rose 2.42%, China’s FTSE China A50 (CHA50) gained 0.35% for the day, Hong Kong’s Hang Seng (HK50) added 2.21%, and Australia’s ASX 200 (AU200) closed at its opening price. The Hang Seng Index (HK50) hit its highest level in nearly five months as positive outlooks for Chinese and Hong Kong equities from central investment banks, including Goldman Sachs and UBS, continued to lift sentiment.

Malaysia’s annual inflation rate unexpectedly reached 1.8% in March 2024, unchanged for the second consecutive month but below market forecasts of 2%. The latest result remained at the highest level since October 2023.

The Japanese yen breached 155 per dollar on Thursday, falling to new 34-year lows as the Bank of Japan begins its two-day monetary policy meeting. The BoJ is expected to leave rates unchanged after exiting negative rates in March. Still, traders will watch for any hawkish signals as the yen weakens, breaking through a psychologically crucial level market previously thought would prompt Tokyo to act.

S&P 500 (US500) 5,071.63 +1.08 (+0.02%)

Dow Jones (US30) 38,460.92 −42.77 (−0.11%)

DAX (DE40) 18,088.70 −48.95 (−0.27%)

FTSE 100 (UK100) 8,040.38 −4.43 (−0.055%)

USD Index 105.83 +0.15 (+0.14%)

Important events today:
  • – Eurozone GfK German Consumer Climate (m/m) at 09:00 (GMT+3);
  • – US GDP (q/q) at 15:30 (GMT+3);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
  • – US Pending Home Sales (m/m) at 17:00 (GMT+3);
  • – Natural Gas Storage (w/w) at 17:30 (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
25 Apr

Japanese yen hits all-time low as BoJ meeting commences

By RoboForex Analytical Department

The USD/JPY pair reached an all-time high on Thursday, touching the 155.50 level. This development comes as the Bank of Japan (BoJ) starts its two-day monetary policy meeting with widespread expectations that the interest rate will remain unchanged at zero. Investors are keenly watching for any aggressive signals from the BoJ, as further declines in the yen could prompt Tokyo to intervene in the currency market. However, any such intervention is expected to provide only a short-term respite for the yen.

The primary driver behind the yen’s weakness remains the significant disparity in monetary policies between the Bank of Japan and the US Federal Reserve, particularly regarding interest rates. The current situation will likely persist if there is no shift in these policies.

Last week, BoJ Governor Kazuo Ueda indicated at the G-20 summit that the regulator might consider raising rates if the yen’s weakness leads to a sustained increase in import prices. The BoJ is closely monitoring inflation trends, and should the consumer price index approach the 2% target, the bank may adopt a more decisive stance.

The yen has been on a consistent downward trajectory since 13 March this year, showing few signs of interruption.

USD/JPY technical analysis

On the H4 chart, USD/JPY found support at 153.65, and the fifth wave of growth is unfolding. The pair is expected to reach 155.85 soon. Following this, a corrective move to at least 154.60 (testing from above) is anticipated, potentially followed by further growth towards 156.56. This target represents the primary objective of the growth wave. This bullish scenario is technically supported by the MACD oscillator, whose signal line is above zero and trending upwards.

On the H1 chart, USD/JPY has established support at 154.55, with the upward structure aiming for 155.85. Currently, the growth to 155.73 has been executed. A slight retracement to 155.20 (testing from above) may occur next. After reaching this level, the likelihood of an ascent to 155.85 will be reassessed. This technical outlook is confirmed by the Stochastic oscillator, whose signal line is currently above 80, poised for a drop to around 50.

 

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
24 Apr

TSLA shares rose on a weak report. Inflationary pressures are easing in Australia

By JustMarkets

At Monday’s close, the Dow Jones Industrial Average (US30) was up 0.69%, while the S&P 500 Index (US500) added 1.20%. The NASDAQ Technology Index (US100) closed positive 1.59% on Tuesday. The US stock indices closed moderately higher, with the Dow Jones Industrials Index rising to a one-week high. Better-than-expected first-quarter earnings results supported stocks. Stock indices continued to rise after a weaker-than-expected report on the S&P US manufacturing PMI for April, which led to lower bond yields.

Tesla’s (TSLA) first-quarter net income fell by 55%, but its share price rose in aftermarket trading Tuesday as the company said it would accelerate production of new, more affordable vehicles. The small models will include the Model 2, which is expected to cost about $25,000 and will use the basis of next-generation cars and some features of current models.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 1.55%, France’s CAC 40 (FR40) closed up 0.81%, Spain’s IBEX 35 (ES35) jumped by 1.70%, and the UK’s FTSE 100 (UK100) closed positive 0.26%.

The S&P Eurozone Manufacturing PMI for April unexpectedly declined 0.5 to 45.6, weaker than expectations of a rise to 46.5. However, the composite PMI for April rose by 1.1 to 51.4, exceeding expectations of 50.7 and showing the fastest growth rate in 11 months. ECB Vice President de Guindos said yesterday that if the situation develops in the same direction as in recent weeks, the ECB will ease the restrictive monetary policy regime in June. For his part, ECB Governing Council representative and Bundesbank President Nagel added that if the favorable inflation outlook from March is confirmed in the June forecast and incoming data support it, the ECB may consider lowering interest rates. Thus, most ECB representatives agree to a rate cut at the June 6 meeting. The probability of such a scenario is 86%.

WTI crude futures are holding above $83 per barrel after rising nearly 2% on Tuesday, helped by data showing an unexpected decline in US crude inventories last week, indicating steady demand. Latest data from the American Petroleum Institute showed that US crude inventories fell by 3.23 million barrels last week, reversing a 4.09 million barrel increase the previous week and defying market expectations for a 1.8 million barrel rise in inventories. The demand outlook was also boosted by cooling US business activity data, which supports the need for an interest rate cut by the Federal Reserve.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.30%, China’s FTSE China A50 (CHA50) was down 0.02% for the day, Hong Kong’s Hang Seng (HK50) was up 1.92% and Australia’s ASX 200 (AU200) was positive 0.45%.

The Australian dollar rose to $0.65, hitting its highest level in nearly two weeks, as stronger-than-expected domestic inflation data bolstered expectations that the Reserve Bank of Australia (RBA) will not cut interest rates anytime soon. The country’s Consumer Price Index fell to 3.6% in the first quarter from 4.1% in the previous quarter, slowing for the fifth consecutive quarter but above forecasts of 3.4%. Australia’s monthly consumer price index accelerated to 3.5% in March from 3.4% in February.

Hong Kong’s annual inflation rate eased to 2% in March from 2.1% in February. All sectors participated in the rally, including the technology sector, which climbed more than 2% after Nvidia recovered from a recent drop. Xiaomi Corp. shares rose by 2% on signs that an active electric car business could support the company’s earnings in the coming years.

In Asia, investors are eagerly awaiting the start of the Beijing Auto Show on Thursday, which could lift automakers’ share prices. At the event, BYD Co. will unveil its new all-electric Ocean-M car, which is expected to be a benchmark for future models.

S&P 500 (US500) 5,070.55 +59.95 (+1.20%)

Dow Jones (US30) 38,503.69 +263.71 (+0.69%)

DAX (DE40) 18,137.65 +276.85 (+1.55%)

FTSE 100 (UK100) 8,044.81 +20.94 (+0.26%)

USD Index 105.69 −0.39 (−0.36%)

Important events today:
  • – New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
  • – Australia Consumer Price Index (q/q) at 04:30 (GMT+3);
  • – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
  • – US Durable Goods Orders (m/m) at 15:30 (GMT+3);
  • – Canada Retail Sales (m/m) at 15:30 (GMT+3);
  • – US Crude Oil Reserves (w/w) at 17:30 (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
24 Apr

USDJPY: On intervention watch

By ForexTime 

  • Yen weakens to multi-year lows
  • Markets on intervention watch
  • BoJ decision & US data in focus
  • Major resistance at 161.8 golden Fib levels
  • Key levels of interest at 155.00, 154.20 & 21 day SMA

The Yen’s weakness to multi-year lows has left investors on high alert for possible currency intervention.

On Wednesday morning, USDJPY was a whisker away from the psychological 155 level as the dollar gained across the board. It’s worth noting that back in March, there was much discussion around Japanese authorities potentially intervening when the USDJPY pushed above 152. Since then, prices have jumped another 300 pips…

Just yesterday, the Japanese Finance Minister issued his strongest warning of the chance of intervention.

So essentially, more volatility could be on the horizon for the USDJPY – especially with the upcoming Bank of Japan rate decision and key US data on Friday.

Shedding more light on the above:

    1) Bank of Japan rate decision

No Changes to monetary policy are expected, so the focus will be directed towards the BoJ’s inflation projections for the next three years. Investors will also be watching how hawkish/dovish Governor Kazuo Ueda sounds.

  • Should the BoJ strike a dovish note, this is likely to weaken the Yen further.
  • A hawkish-sounding BoJ that hints at a potential hike in June could boost the Yen.

Traders are currently pricing in a 40% probability of a 10-basis point hike by June with this jumping to 97% by July.

Note: April’s Tokyo CPI data will also be published on Friday and could influence expectations around what actions the BoJ takes beyond April.

    2) US Q1 GDP & March PCE report

These incoming US data may impact bets around when the Fed will start cutting rates in 2024. Ultimately, if these reports support the case for “higher for longer” rates, the dollar may appreciate and vice versa.

Focusing on the technicals…

From an Elliot wave perspective, USDJPY is in the 3rd impulse wave from the March 11th low at 146.483 and has the 161.8 golden fib level as a measured move objective.

The Relative Strength Index (RSI), an indicator computed to highlight overbought zones a condition where the market is saturated with buyers-, shows that USDJPY is overbought. This could limit upside gains with the threat of potential currency intervention inviting bears back into the scene.

  • A solid breakout and daily close above 155.00 may open a path toward the 161.8 golden Fibonacci level at 157.44
  • Should prices remain capped below 155.00, this may trigger a selloff towards 154.20 and the 21-day SMA at 152.96

Bloomberg’s FX model forecasts a 77.5% chance that USDJPY will trade within the 151.99 – 157.32 range over the next one week.

Forex-Time-LogoArticle by ForexTime

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Financial News Forex and Currency News
24 Apr

Euro gains against the dollar amid mixed economic signals

By RoboForex Analytical Department

The EUR/USD pair rose to 1.0707 on Wednesday, driven by increased local risk appetite and the belief that the currency was significantly oversold against the US dollar. This resurgence indicates a temporary rebalancing in the currency market.

In the US, newly published statistics provide fodder for economic analysis. Sales of new homes in March showed a robust increase of 8.8% month-on-month, climbing to 693,000 from February’s 637,000, surpassing expectations. The year-on-year comparison also reflected strength with an 8.3% increase. Additionally, the weighted average price of a sold house in the US rose to USD 524.8 thousand from USD 488.6 thousand in February, pointing to a market that is still vibrant despite elevated interest rates.

These indicators are inherently pro-inflationary, suggesting that consumer behaviour has adapted well to elevated interest rates. Continued activity in the housing market is likely to sustain inflationary pressures in the US for an extended period. If interest rates were to be lowered, the attractiveness of buying property would increase further, prompting the Federal Reserve to keep higher rates to temper economic overheating.

Despite substantial efforts by the Fed to stabilise price pressures, the US economy shows a high degree of resilience to changed conditions. This adaptability is a mixed blessing, maintaining economic vitality but complicating inflation management.

As long as the Fed keeps interest rates at the current peak of 5.5% per annum, the US dollar will likely retain its strength. Any current weakening of the dollar is seen as a temporary adjustment rather than a trend reversal.

EUR/USD technical analysis

On the H4 chart, the EUR/USD pair formed a consolidation range around 1.0666. A correction to 1.0713 occurred after the market exited the range on the upside. The pair is expected to decline to 1.0660 for a retest from above before potentially developing another growth structure towards 1.0733. The movement from 1.0601 is considered a correction of the last decline wave. After completing this corrective phase, a new downward wave to 1.0585 may begin. This outlook is supported by the MACD indicator, where the signal line is below zero but ascending, while the histograms are at maximums, poised for a decline.

On the H1 chart, after fulfilling the local correction target at 1.0713, a decline to 1.0660 is anticipated. Subsequently, the development of a growth wave to 1.0733, the main correction target, may occur. The Stochastic oscillator, currently below 50, is expected to drop to 20, supporting the potential for further adjustments before any upward movements.

 

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.

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