Archive for Financial News – Page 146

13 Mar

ECB intends to cut rates this spring. The US stock indices grow despite inflation growth

By JustMarkets

At Tuesday’s stock market close, the Dow Jones Index (US30) rose by 0.61%. The S&P 500 Index (US500) was up 0.61%. The NASDAQ Technology Index (US100) closed positive 1.54%. Despite a slight rise in inflation, stock indices refuse to fall. The bullish consensus in the market is so strong that it is almost unrealistic to turn this train around without a significant negative trigger. It is probably not worth waiting for any changes in the market until the quarterly expiration this Friday.

The market focus will shift to the Fed meeting next week on March 20. If the market does not hear any negative signals from Mr. Powell, the best strategy for the coming months will be to follow the bullish trend and buy risky assets. Currently, markets are pricing the odds of a 25 bps rate cut at 1% for next week’s FOMC meeting on March 20, 15% for the next meeting on May 1, and 78% for the subsequent meeting on June 12.

Shares of Oracle (ORCL) jumped by 11.88% on Tuesday after its earnings report beat market expectations on Monday, thanks to a surge in orders for cloud services. The company said that demand for Gen2 AI infrastructure is significantly outstripping supply. Boeing (BA) fell another 4.17% following news that officials in Chile have launched an investigation into a flight traveling from Auckland to Sydney where a violent air shake was reported, resulting in the hospitalization of 10 people and injuries to 50 people. In addition, the CEO of United Airlines told Boeing that it no longer wants to deliver Boeing 737 Max 10 airplanes because of delays in certification.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 1.23%, France’s CAC 40 (FR40) gained 0.84%, Spain’s IBEX 35 (ES35) added 0.61%, and the UK’s FTSE 100 (UK100) closed positive 1.02%.

There is broad agreement at the European Central Bank to start cutting interest rates in the spring as the fight against inflation is won, according to Governing Council spokesman Francois Villeroy de Galhau. The risk of waiting too long before easing monetary policy and unnecessarily hurting the economy is now equal to the risk of acting too soon and letting inflation recover. Policymakers can act independently of their counterparts at the Federal Reserve and will have ample room to adjust the pace of easing as needed once the process begins, the policymaker said.

WTI crude prices rose to around $78 a barrel on Wednesday, pulling back from two-week lows amid a favorable outlook for global demand. In its monthly report, OPEC said global oil demand is expected to grow by 2.25 million bpd in 2024 and 1.85 million bpd in 2025, unchanged from previous estimates. The group also raised its economic growth forecast for the current year, indicating room for improvement. In addition, industry data showed that US crude inventories unexpectedly fell by 5.521 million barrels last week, indicating healthy demand in the world’s largest oil consumer.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.06% on the day, China’s FTSE China A50 (CHA50) was up 0.89%, Hong Kong’s Hang Seng (HK50) added 3.05% on Tuesday, and Australia’s ASX 200 (AU200) was positive 0.11%.

Bank of Japan Governor Kazuo Ueda gave a slightly gloomier assessment of the economy ahead of the central bank’s policy meeting next week. Ueda told parliament that Japan’s economy is recovering at a moderate pace, although there is weakness in some data. He added that there are various ways to raise the cost of short-term borrowing if the central bank decides to end negative interest rates, but offered few clues. There has been increasing speculation recently that the Bank of Japan could start raising interest rates this month because of rising wages, high inflation, and a robust economy.

S&P 500 (US500) 5,175.27 +57.33 (+1.12%)

Dow Jones (US30) 39,005.49 +235.83 (+0.61%)

DAX (DE40) 17,965.11 +218.84 (+1.23%)

FTSE 100 (UK100) 7,747.81 +78.58 (+1.02%)

USD Index 102.93 +0.06 (+0.06%)

Important events today:
  • – UK GDP (q/q) at 09:00 (GMT+2);
  • – UK Industrial Production (m/m) at 09:00 (GMT+2);
  • – UK Manufacturing Production (m/m) at 09:00 (GMT+2);
  • – UK Trade Balance (m/m) at 09:00 (GMT+2);
  • – Eurozone Industrial Production (m/m) at 12:00 (GMT+2);
  • – US Crude Oil Reserves (w/w) at 16:30 (GMT+2).

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
13 Mar

XAGUSD: Bulls down but not out

By ForexTime

  • H4/D1 upside momentum still in play
  • Prices above 50 EMA & MACD bullish
  • CCI indicator hints possible oversold situation
  • 4 potential targets on H4 timeframe
  • Bullish scenario void below 23.943

After closing over 1% lower in the previous session, Silver kicked off Wednesday on a positive note with bulls not going down without a fight!

The precious metal initially found itself under fresh selling pressure on Tuesday after hotter-than-expected US inflation data dampened hopes around the Fed cutting interest rates in the coming months. It is worth noting that silver often follows gold’s direction, with interest rate bets impacting appetite for non-yielding assets like silver.

Last Friday, traders fully priced in a Fed rate cut by June following the mixed US jobs report.

These odds have now dropped to 75% following the sticky inflation data for February.

Rate cut bets could fall even further if more incoming US data this week support the argument around US rates remaining higher for longer.

Given silver’s zero-yielding nature, such a development may create headwinds down the road for bulls.

Nevertheless, silver is currently in a daily uptrend after breaking out of a ranging period where the price oscillated around a weekly support level at 22.433.

The current price action confirms that a correction wave is presently in progress.

While the current larger economic scenarios may impact the metal’s trajectory, the bullish momentum might not be over yet with prices potentially hitting the next weekly resistance level at 25.919.

On the 4-hour chart an uptrend is also in progress. The consecutively higher top and bottom can clearly be seen, but there has been a flatting of the market structure, signifying a slowdown in momentum. 

The price is however still above the 50 Exponential Moving Average and the longer price cycle Moving Average Convergence Divergence (MACD) Oscillators confirms the bullish sentiment by being above the zero base line. The Commodity Channel Index (CCI) gives a hint of a possible oversold situation with the potential of an increase in demand on the horizon.

If the price reaches the 24.676 level, a long scenario becomes feasible.

Attaching a modified Fibonacci tool to the trigger level at 24.676 and dragging it to just below the last bottom at 23.943, four conservative targets can be established:

  • Target 1: at 24.969

  • Target 2: at 25.116

  • Target 3: at 25.409

  • Target 4: at 25.776

If the price breaks past 23.943, this opportunity becomes invalid.

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 Metals
13 Mar

US Dollar Strengthens Amid Inflation Data

By RoboForex Analytical Department

As of Wednesday, the EUR/USD pair is hovering near 1.0925 after experiencing a volatile session, with expectations for a more subdued week ahead.

Recent statistical data highlighted higher-than-expected inflation in the US for February, prompting adjustments to predictions about the easing of monetary policy by the Federal Reserve in June.

The Consumer Price Index (CPI) rose by 0.4% month-on-month last month, aligning with expectations. Year-on-year, the indicator expanded to 3.2% from 3.1%. Core inflation in the US increased by 0.4% month-on-month, surpassing the forecast of 0.3%. From year to year, the indicator rose to 3.8% from the previous 3.7%.

While these figures did not come as a “surprise,” they reaffirmed that inflation is more persistent than previously thought. Specific details of the reports offer local hope for improvement, although it is clear overall that the situation could be more comfortable for the Fed to make significant decisions.

The market interpreted these developments favourably for the US dollar, shifting investor preferences towards it.

Market focus is squarely on the Fed’s June meeting, with the March and May sessions attracting less interest. The Fed will likely require more statistical information by then.

As indicated by public data, investor expectations suggest a 69% chance of a rate cut in June, down from 71% earlier in the week.

In what would be the most optimistic forecast, the Fed will probably manage to cut rates only three times this year.

Technical Analysis of EUR/USD

On the H4 chart, EUR/USD is forming the first wave of decline towards 1.0777. The first structure of this wave and its correction have been completed. Today, we will consider the likelihood of breaking the minimum of the first structure and continuing the development of the wave to the local target level of 1.0815. The MACD indicator confirms this scenario, with its signal line above zero and a sharply decreasing histogram, indicating the continuation of the downtrend.

On the H1 chart, EUR/USD has formed the first wave of a decline structure to 1.0900 and a correction to 1.0939. The market has essentially delineated a consolidation range around the level of 1.0939. Today, a decline to the lower boundary of this range is expected. With a breach of 1.0900, a further decline to 1.0880 is anticipated, with the trend potentially continuing to 1.0815. The Stochastic oscillator confirms this scenario, with its signal line below the 50 mark, expecting a continuation of the 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 Forex and Currency News
12 Mar

Commercial Property Prices: Why the Decline May Have Just Started

This index has already retreated 20% since May 2022

By Elliott Wave International

The major bust in property prices 15 to 20 years ago started with the residential real estate market.

This time, the commercial real estate market may have taken the lead. Here are some recent headlines:

  • [“Shark Tank Star”] Says a Coming Real Estate Collapse Will Lead to ‘Chaos’ — Yahoo Finance, Jan. 30
  • Commercial Property Losses Hammer Banks on Three Continents (Wall Street Journal, Feb. 1)
  • Bracing for the commercial real estate ‘reckoning’ — Reuters, Feb. 2

As rough as it’s already been for the commercial real estate market, it appears that “reckoning” is only in its early stages.

Keep in mind, as you review this chart and commentary from the February Elliott Wave Financial Forecast, that progress in a market takes the form of five waves. Once those five waves are complete, a correction is due (Note: The Elliott Wave Financial Forecast is a monthly publication which covers major U.S. financial markets):

This chart of the Green Street Commercial Property Index shows the latest decline, a 20% retreat from May 2022. In terms of time, the 20-month plunge is already close to the 22-month decline from September 2007 to June 2009. … [T]he crumbling demand for commercial space, not to mention the five-wave form of its rise from 1998, suggests that further declines are “baked in.”

The U.S. commercial real estate market is valued at $20 trillion, according to Bloomberg, so the developing crisis is not a minor ordeal.

Part of the reason the full brunt of the crisis has been delayed is that many loans have been granted extensions.

When those mature loans are refinanced, some borrowers could see their interest rates skyrocket. This could set off a wave of defaults.

Business Insider recently quoted an economist who specializes in the property sector (Jan. 23):

“[B]uilding owners are looking to ‘extend and pretend’ but that strategy can’t last forever as there’s still a $2.2 trillion mountain of commercial real estate debt that will mature by 2027.”

Some building owners have already experienced a lot of financial pain. For example, Aon Center — the third-tallest tower in Los Angeles — sold for $147.8 million. That’s 45% less than its 2014 purchase price.

This is just one example of what’s going on in commercial real estate.

Also know that the property and stock markets tend to be correlated.

If you would like to ascertain the trend of the stock market via Elliott wave analysis, you may want to read the Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

In markets, progress ultimately takes the form of five waves of a specific structure. Three of these waves, which are labeled 1, 3 and 5, actually effect the directional movement. They are separated by two countertrend interruptions, which are labeled 2 and 4, as shown in Figure 1-1. The two interruptions are apparently a requisite for overall directional movement to occur.

[R.N.] Elliott noted three consistent aspects of the five-wave form. They are: Wave 2 never moves beyond the start of wave 1; wave 3 is never the shortest wave; wave 4 never enters the price territory of wave 1.

Get more insights into the Wave Principle by reading the entire online version of the book for free.

Just follow the link and you can have the Wall Street bestseller on your computer screen in moments: Elliott Wave Principle: Key to Market Behavior — get free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Commercial Property Prices: Why the Decline May Have Just Started. 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 Real Estate
12 Mar

Natural gas prices are falling again. Chinese indices are growing amid support from the Central Bank

By JustMarkets

The Dow Jones Index (US30) was up 0.12% at Monday’s stock market close. The S&P 500 Index (US500) was down 0.11%. The NASDAQ Technology Index (US100) closed negative 0.41%. Stocks traded slightly lower on Monday amid rising 10-year T-note yields and caution ahead of Tuesday’s US Consumer Price Index report. On an annualized basis, overall inflation is expected to fall to 3.1% from 3.2%. Core inflation (excluding food and energy prices) will fall from 3.9% to 3.8% y/y. In monthly terms, inflationary pressures are expected to rise by 0.3%. If the data comes out in line with consensus, it would indicate that underlying inflationary trends are not intensifying. However, a stronger-than-expected CPI report would dampen hopes of a near-term Fed rate cut, which could put additional pressure on the indices.

Shares of Nvidia (NVDA) are down 1.98% on Monday, adding to last Friday’s 5.47% selloff. Nvidia shares suffered profit-taking last Friday after initially hitting a record high and rising more than 17% over the previous six sessions. Boeing (BA) is down 3.0% after news that the US Department of Justice has opened a criminal investigation into the recent airborne door explosion on an Alaskan Airlines flight. Moderna (MRNA) was Monday’s best-performing stock of the NASDAQ benchmark (US100), adding 8.69%. The biotech company rose following news that it is partnering with Merck to begin a mid-stage study to test its experimental cancer vaccine on patients with skin cancer.

Bitcoin (BTCUSD) gained more than 4% on Monday and set a new record high, adding to last week’s 9.3% rally. Cryptocurrencies continue to rise because of the US Securities and Exchange Commission’s recent decision to allow spot bitcoin ETFs. However, shares of Coinbase (COIN) are down 0.93% on Monday, giving up an early rally of more than 4%.

Equity markets in Europe traded flat yesterday. Germany’s DAX (DE40) fell by 0.38%, France’s CAC 40 (FR40) lost 0.11%, Spain’s IBEX 35 (ES35) rose by 0.19%, and the UK’s FTSE 100 (UK100) closed positive 0.12%.

Shares of Austria’s Raiffeisen Bank closed 7.4% lower amid concerns over possible US sanctions over its relationship with Russia.

WTI crude oil prices climbed above $78 a barrel on Tuesday, recovering some of the losses of recent sessions. This week, markets await monthly reports from OPEC, the IEA, and the US EIA to assess the outlook for global demand. Investors continue to weigh conflicting supply and demand factors, as OPEC+ production cuts and tensions in the Middle East are offset by rising non-OPEC supply and signs of weak demand from major oil importer China. Data released last week showed that China’s oil imports fell about 5.7% to 10.8 million bpd in the first two months of the year, down from 11.44 million bpd in December.

The US natural gas price fell below $1.77 per Mmbbl to a two-week low, driven by reduced gas supplies to LNG export facilities and expectations of weaker demand due to milder weather in the next two weeks. Freeport LNG saw a nearly 50 percent drop in raw gas receipts last week due to the shutdown of one of its three processing lines. On the other hand, energy companies such as EQT and Chesapeake Energy cut gas production last month due to lower gas prices in February. Meanwhile, according to the latest EIA data, gas inventories as of March 1 are about 30.9% above normal levels.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down 2.19% on the day, China’s FTSE China A50 (CHA50) was up 1.78%, Hong Kong’s Hang Seng (HK50) added 1.43% on Monday, and Australia’s ASX 200 (AU200) was negative 1.82%.

Hong Kong stocks climbed 1.2% in Tuesday morning trading to a two-week peak 16.735, maintaining bullish momentum for the third consecutive session amid gains in most sectors, especially healthcare, real estate, and consumer discretionary. Investors were scrambling to look for more catalysts after the close of China’s annual plenary meeting on Monday. During the event, Beijing set its 2024 GDP growth target at around 5.0% and planned to issue special bonds for large projects. At the same time, China’s central bank pledged to keep prices stable and said it may cut the refinancing rate further this year.

Japan’s business activity index for large manufacturing companies fell sharply to 6.7% in the first quarter of 2024 from 5.7% in the previous quarter, posting its lowest reading in a year and defying expectations for an improvement to 6.2%. The survey came amid official data that Japan’s economy fell into a technical recession in the fourth quarter of last year but was later revised to show a return to growth.

NAB Australia’s business confidence index fell to 0 in February 2024 from 1 in January. The reading was below the long-term average, with the retail sector among the top risk factors amid high borrowing costs and rising inflation.

S&P 500 (US500) 5,117.94 −5.75 (−0.11%)

Dow Jones (US30) 38,769.66 +46.97 (+0.12%)

DAX (DE40) 17,746.27 −68.24 (−0.38%)

FTSE 100 (UK100) 7,669.23 +9.49 (+0.12%)

USD Index 102.85 +0.14 (+0.13%)

Important events today:
  • – Japan Producer Price Index (m/m) at 01:50 (GMT+2);
  • – UK Average Earnings Index (m/m) at 09:00 (GMT+2);
  • – UK Claimant Count Change (m/m) at 09:00 (GMT+2);
  • – UK Unemployment Rate (m/m) at 09:00 (GMT+2);
  • – German Consumer Price Index (m/m) at 09:00 (GMT+2);
  • – US Consumer Price Index (m/m) at 14:30 (GMT+2).

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
11 Mar

The US labor market is cooling. ECB officials talked about cutting rates in the spring

By JustMarkets

At Friday’s stock market close, the Dow Jones Index (US30) decreased by 0.18% (for the week -0.63%). The S&P 500 Index (US500) was down 0.65% (for the week -0.14%). The NASDAQ Technology Index (US100) closed negative 1.16% (for the week -1.10%).

Although the US economy added 275K jobs, unemployment jumped to 3.9%, and wage growth slowed. The data indicates that the labor market has begun to cool down. Investors’ first reaction to the report was a rise in risk assets and a fall in the dollar. Market expectations for the first rate cut in June were confirmed and strengthened. But since this is not a new scenario and such a consensus has been priced in over the past month, the positivity was not enough for long, and investors sold off all the growth by the end of Friday. Current market conditions suggest index weakness will continue this week as investors take profits after the recent market rally. That said, this week promises to be even more volatile with the release of inflation data on Tuesday, March 12, and the quarterly derivatives expiration on Friday. Usually, these periods are when new trends are born, or old trends are reversed.

Also on Friday, shares of Nvidia (NVDA) fell more than 5%, its worst single-day performance since late May. But the stock ended the week up more than 6% amid a rally that has boosted its market value by more than $1 trillion this year.

Bitcoin hit a new all-time high above $70,000, helped by investor demand for new US spot bitcoin ETFs launched this year and expectations of lower global interest rates. Billions of dollars have poured into ETFs over the past few weeks. Also, let’s not forget the bitcoin “halving” that will take place in April 2024. In addition, the market has received support ahead of an expected upgrade to the Ethereum blockchain platform. Bitcoin’s previous boom in 2021 was followed by a “crypto winter” when bankruptcies and collapses of major cryptocurrency companies left millions of investors destitute, prompting regulators to step up regulation.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) was down 0.16% (for the week +0.40%), France’s CAC 40 (FR40) added 0.15% (for the week +1.18%) on Friday, Spain’s IBEX 35 (ES35) was down 0.13% (for the week +2.34%), and the UK’s FTSE 100 (UK100) closed negative 0.43% (for the week -0.30%).

Nagel, representative of the ECB Governing Council and President of the Bundesbank, said on Friday that an interest rate cut before the summer is increasingly likely. His colleague, ECB Governing Council representative Villeroy de Gallo, added that the first rate cut is very likely to come in the spring.

Oil prices closed 1% lower on Friday as markets remain wary of weak demand from China, even as the OPEC+ producer group extended supply cuts. Both benchmarks fell for the week, with Brent down 1.8% and WTI crude prices decreased by 2.5%. Currently, traders in the energy market are focusing on the timing of possible rate cuts by the Fed and ECB. Lower interest rates may increase demand for oil by accelerating economic growth.

Asian markets traded yesterday without any unified dynamics. Japan’s Nikkei 225 (JP225) was down 1.28% for the week, China’s FTSE China A50 (CHA50) lost 0.28% for the 5 trading days, Hong Kong’s Hang Seng (HK50) was down 1.66% for the week, and Australia’s ASX 200 (AU200) was positive 1.31%.

Japan’s economy returned to growth in the fourth quarter of 2023, averting a technical recession. Revised data showed that the country’s GDP grew by 0.4% and 0.1% year-on-year and 0.1% quarter-on-quarter, respectively, reversing preliminary contraction figures of 0.4% and 0.1% for the period. The latest data reinforced speculation that the Bank of Japan may start raising interest rates in April.

Chinese consumer prices rose by 0.7% year over year in February 2024, above market forecasts of 0.3%, and a turnaround from the sharpest 0.8% drop in 14 years in January. The latest result was the first consumer inflation since August last year, reaching the highest level in 11 months. But despite the rise in consumer prices, producer prices remain in deflation.

S&P 500 (US500) 5,123.69  −33.67 (−0.65%)

Dow Jones (US30) 38,722.69 −68.66 −0.18%)

DAX (DE40) 17,814.51 −28.34 (−0.16%)

FTSE 100 (UK100) 7,659.74 −32.72 (−0.43%)

USD Index 102.74 −0.08 (−0.08%)

Important events today:
  • – Japan GDP (q/q) at 01:50 (GMT+2).

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
11 Mar

Japanese Yen Surges to Monthly High as Economy Shows Signs of Growth

By RoboForex Analytical Department

The Japanese yen strengthened against the US dollar on Monday, reaching a month-long peak following the release of statistics indicating Japan’s return to economic growth in Q4 2023. This development effectively ends the previously declared technical recession.

Japan’s GDP experienced a quarterly increase of 0.1% and an annual growth of 0.4%. These figures revise earlier estimates, suggesting 0.1% and 0.4% declines, respectively. In comparison, the Japanese economy contracted by 0.8% quarterly and 3.3% annually in Q3 2023.

The positive economic data have fuelled market speculation about a potential interest rate hike by the Bank of Japan, with some economists and traders anticipating such a move as soon as March.

Bank of Japan board member Junko Nakagawa recently commented on the visible prospects for achieving inflation targets and a positive wage cycle, further supporting the yen.

The Japanese currency is currently benefitting from the weakening US dollar and a drop in US government bond yields amid the Federal Reserve’s dovish rhetoric.

Technical Analysis of USD/JPY

On the H4 USD/JPY chart, a correction wave to the 146.48 level has been completed (tested from above). The market is now forming a consolidation range above this level, expecting to break upwards and initiate the fifth growth wave towards 152.72. The MACD oscillator supports this scenario, with its signal line trading below zero at minimums and poised for growth.

On the H1 USD/JPY chart, a correction wave to 146.48 has finished. A growth impulse to 147.26 and its correction to 146.55 have been executed, essentially setting the consolidation range boundaries. With an upward breakout, growth towards the 148.00 level is anticipated. This target is the first in the growth wave. The Stochastic oscillator confirms this scenario, with its signal line above the 50 mark and strictly heading towards 80.

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
08 Mar

Week Ahead: USDInd primed for data heavy week

By ForexTime 

  • Data packed week could rock USD
  • Watch out for US CPI report
  • USDInd bearish on D1 but RSI oversold
  • Key level of interest at 102.80

Even as markets brace for potential volatility ahead of the US jobs report this afternoon (Friday 8th March), investors are mindful of the string of key data releases in the week ahead.

Top-tier economic reports from across the globe and political developments in the United States will be in focus. However, watch out for the US CPI report which could be the main market mover:

Saturday, 9th March

  • CNH: China aggregate financing, PPI, CPI, new yuan loans

Sunday, 10th March

  • Daylight Savings Time in the US begins
  • Ramadan holiday starts at sundown for Muslims worldwide

Monday, 11th March  

  • JPY: Japan GDP
  • US budget proposal from President Joe Biden

Tuesday, 12th March

  • AUD: Australia business confidence
  • EUR: Germany CPI
  • JPY: Japan PPI
  • GBP: UK jobless claims, unemployment
  • USD: US February CPI report

Wednesday, 13th March

  • EUR: Eurozone industrial production
  • NZD: New Zealand food prices
  • GBP: UK industrial production
  • GER40: Volkswagen, Adidas earnings

Thursday, 14th March

  • USD: US PPI, retail sales, initial jobless claims

Friday, 15th March

  • NZD: New Zealand PMI
  • USD: US industrial production, University of Michigan consumer sentiment

The scheduled data releases could present fresh trading opportunities across financial markets.

But our attention falls on the USDInd which tumbled this week following dovish comments by Fed Chair Jerome Powell.

The USD Index tracks how the dollar is performing against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.

The USDInd could be set for more action and here are 3 reasons why:

  1. US February CPI report

The February US Consumer Price Index (CPI) report published on Tuesday may influence bets around when the Fed will start cutting rates.

Markets are forecasting: 

  • CPI year-on-year (February 2024 vs. February 2023) to remain unchanged at 3.1%.
  • Core CPI year-on-year to cool 3.7% from 3.9% in the prior month.
  • CPI month-on-month (February 2024 vs January 2024) to rise 0.4% from 0.3%.
  • Core CPI month-on-month to cool 0.3% from 0.4% in the prior month.

Although headline inflation is expected to remain unchanged at 3.1%, the annual core is expected to have cooled to 3.7% – its lowest level since April 2021. Ultimately, further evidence of disinflation may fuel expectations around the Fed cutting interest rates.

  • A softer-than-expected US CPI report may send the USDInd lower.
  • Should inflation remain sticky, the USDInd has the potential to push higher.

 

  1. Key US data

Looking beyond the US CPI report, it would be wise to keep a close eye on other important data points including PPI, retail sales and industrial production among other  releases. These reports may provide fresh insight into the health of the US economy and additional clues on the Fed’s next move.

Traders are currently pricing in a 28% probability of a 25 basis point cut in May with this jumping to 96% by June 2024.

Note: These odds are likely to not only be influenced by the US jobs report, but incoming US inflation data along with other key releases next week.

  • Should overall US economic data support the case for lower US interest rates, this may drag the USDInd lower.
  • However, if overall data exceeds forecasts and supports the argument around US rates remaining higher for longer, this could boost the USDInd.

 

  1. Technical forces

The USDInd is under pressure on the daily charts with prices trading below the 50, 100 and 200-day SMA. Although bears seem to be gaining momentum, the Relative Strength Index (RSI) signals that prices are heavily oversold.

  • A solid daily close below the 102.80 level may trigger a decline towards 102.00 and 101.35.  
  • Should prices push back above the 50-day SMA, this may encourage a move towards the 200-day SMA at 103.75 and 104.30.

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 Forex and Currency News
08 Mar

ECB kept interest rates unchanged and delayed the first cut until the summer. Increased tension in the Middle East supports oil growth

By JustMarkets

At Thursday’s stock market close, the Dow Jones Index (US30) was up 0.34%, the S&P 500 Index (US500) added 1.03%, and the NASDAQ Technology Index (US100) closed positive 1.51%. Meanwhile, the S&P 500 (US500) and NASDAQ (US100) indices rose to new record highs. Stocks rose Thursday on speculation that the Fed and ECB will begin cutting interest rates as early as June.

Speaking in front of the US Senate on Thursday, Fed Chairman Jerome Powell indicated the central bank could move closer to revising its restrictive policy if signs of moderate inflation prove sustainable. Recent data also showed that weekly US jobless claims were slightly higher than expected, and Q4 labor costs were revised downward. The US trade deficit for January widened to $67.4 billion, exceeding expectations of $63.3 billion and becoming the most significant deficit in 9 months, a negative for Q1 GDP. Investors are now awaiting Friday’s release of the much-anticipated February employment report for more information on the state of the US labor market.

The monthly Nonfarm payrolls labor market report will be released in the US today. The economy is expected to add 190,000 jobs in February after adding 353,000 in January. The unemployment rate will likely remain at 3.7%, and wage growth will slow from 4.5% to 4.3% year-over-year. If the data comes out in line with economists’ forecasts, it would indicate a slight cooling of the labor market, increasing the likelihood of an FOMC rate cut in April. The USD index will be under pressure in such a scenario, and risk assets (EUR, GBP, indices) will be supported. On the contrary, if the labor market data comes out better than expected, it will indicate the stability of the labor market and will postpone the first rate cut to a later date. In such a scenario, the dollar index could gain significant support, negatively impacting risk assets, indices, and gold.

Equity markets in Europe rallied yesterday. Germany’s DAX (DE40) rose 0.71%, France’s CAC 40 (FR40) gained 0.77%, Spain’s IBEX 35 (ES35) added 1.20% on Thursday, and the UK’s FTSE 100 (UK100) closed positive 0.17%.

The ECB, as expected, left the deposit rate unchanged at 4.5% and said that keeping borrowing costs at this level for “quite some time” would make a “significant contribution” to bringing consumer price growth back to the 2% target. The ECB lowered its 2024 eurozone GDP forecast to 0.6% from its December forecast of 0.8% and cut its 2024 eurozone inflation forecast to 2.3% from its December forecast of 2.7%. ECB President Lagarde said the eurozone economy remains weak, and wage growth is slowing. She added that consumer price growth is slowing, but she and her colleagues are not convinced that monetary easing can begin now. Swaps put the odds of a 25 bps ECB rate cut at 14% at the next meeting on April 11 and 93% at the meeting on June 6.

WTI crude prices rose above $79 a barrel on Friday, rebounding from the previous session’s losses, as heightened tensions in the Middle East continue to raise supply concerns and a Houthi attack on a commercial ship in the Red Sea this week left people dead.

Natural gas prices (XNG) fell sharply on Thursday amid ample US gas inventories. The EIA’s weekly natural gas inventory data showed a 40 billion cubic foot fall on Thursday, which was in line with expectations. However, it was far less than the five-year average for this time of year of 93 billion cubic feet. This kept US natural gas inventories at 30.9% above the five-year average.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down 1.23%, China’s FTSE China A50 (CHA50) lost 0.23%, Hong Kong’s Hang Seng (HK50) decreased by 1.27% on the day, and Australia’s ASX 200 (AU200) was positive 0.39% on Thursday.

Australia’s economy grew less than expected in the fourth quarter, supporting bets that the Reserve Bank of Australia (RBA) may start cutting rates this year. After weak GDP data, the Commonwealth Bank of Australia reiterated its forecast for an overall rate cut of 75 basis points this year.

S&P 500 (US500) 5,157.36  +52.60 (+1.03%)

Dow Jones (US30) 38,791.35 +130.30 (+0.34%)

DAX (DE40)  17,842.85 +126.14 (+0.71%)

FTSE 100 (UK100) 7,692.46 +13.15 (+0.17%)

USD Index 102.81 −0.56 (−0.54%)

Important events today:
  • – German Industrial Production (m/m) at 09:00 (GMT+2);
  • – German Producer Price Index (m/m) at 09:00 (GMT+2);
  • – Eurozone GDP (q/q) at 12:00 (GMT+2);
  • – US FOMC Member Williams Speaks (m/m) at 14:00 (GMT+2);
  • – US Nonfarm Payrolls (m/m) at 15:30 (GMT+2);
  • – US Unemployment Rate (m/m) at 15:30 (GMT+2);
  • – Canada Unemployment Rate (m/m) at 15:30 (GMT+2).

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
07 Mar

Gold Reaches Unprecedented High Amid Economic Uncertainties

By RoboForex Analytical Department

Gold trading reached a significant milestone on Thursday, with prices hitting an all-time high of $2150.00 per Troy ounce. This remarkable surge was propelled by a confluence of factors. These include the decline in US government bond yields, the weakening US dollar, and speculation about a potential interest rate cut by the US Federal Reserve in response to emerging economic challenges.

The expectation of monetary policy easing stems from the Federal Reserve’s ongoing evaluation of the economy’s condition, highlighted by Federal Reserve Chair Jerome Powell’s hint at potential policy adjustments in 2024. The timing of such interventions is critical to achieving a balanced approach without precipitating or lagging behind the economy’s actual needs.

Recent labour market data, including ADP’s February employment growth figures, fell short of expectations, shifting focus to forthcoming reports on unemployment rates, Non-Farm Payroll (NFP) statistics, and average earnings. These reports are critical for assessing the employment market’s condition and will significantly influence the Fed’s decision-making process.

Gold’s rally is further supported by its inverse relationship with the US dollar, gaining momentum from the currency’s current weakness. Moreover, the surge in physical demand for gold from global central banks in January, which saw purchases double compared to December, underscores the metal’s appeal as a hedge against geopolitical risks and potential economic downturns.

Technical analysis of gold (XAU/USD)

The H4 chart analysis of XAU/USD reveals the progression of the fifth growth wave, with a pivotal correction to 2124.00 following the achievement of a local target at 2141.90. Today’s trading has seen the market surpassing the peak of this wave, establishing a consolidation range above the 2153.00 level. A breakout above this consolidation could signal further growth towards 2180.80, which was identified as the initial target. This bullish scenario is supported by the MACD indicator, which remains above zero, indicating sustained upward momentum.

On the H1 chart, gold prices have consolidated around the 2152.00 mark. An upward move from this consolidation phase is expected to initiate a growth wave towards 2160.60. Subsequent correction to 2152.00 and a potential rise to 2180.00 are anticipated. The Stochastic oscillator supports this outlook, suggesting a brief retreat to 50 before rallying back to 80, reflecting continued bullish sentiment in the market.

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
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