Archive for Financial News – Page 210

27 Apr

Gold returned to growth amid rising recession fears. Tech companies reports beat forecasts

By JustMarkets

Stronger-than-expected reports from tech companies Microsoft (MSFT) and Google Alphabet (GOOGL) helped improve investor sentiment in the tech sector. But weak economic data exacerbated recession fears in the world’s largest economy as rising recession risks threaten consumer spending. At the close of the stock market on Wednesday, the Dow Jones Index (US30) decreased by 0.68%, and the S&P 500 Index (US500) fell by 0.38%. The NASDAQ Technology Index (US100) gained 0.47% yesterday.

Shares of Activision Blizzard (ATVI), the largest video game maker, plummeted more than 10% after the UK Competition and Markets Authority (CMA) blocked the acquisition of Activision Blizzard by Microsoft Corporation (MSFT). The regulator fears that the deal could lead to a significant decrease in competition in the markets for game consoles, subscriptions, and cloud computing.

Alphabet (GOOGL) Inc. reported better-than-expected first-quarter results and a $70 billion stock buyback plan. Microsoft Corporation (MSFT) gained 7% after posting quarterly results that beat Wall Street estimates as its Azure cloud business performed better than expected. According to Refinitiv IBES, of 163 S&P 500 companies that reported first-quarter earnings, 79.8% beat analysts’ expectations.

Stock markets in Europe were mostly down Wednesday. German DAX (DE30) decreased by 0.48%, and French CAC 40 (FR40) lost 0.86%, Spanish IBEX35 (ES35) closed at the opening price, British FTSE100 (UK100) closed negative 0.49% yesterday.

The German government raised this year’s economic growth forecast to 0.4% from the previous forecast of 0.2%. Current economic indicators like industrial production, new orders, and business climate point to an economic recovery. Economists expect stagnation in the first quarter, followed by an acceleration in growth. For 2024, the government slightly lowered its growth forecast to plus 1.6% from plus 1.8%. Inflation forecasts have also been adjusted downward to 5.9% for 2023 and 2.7% for 2024. The government expects the unemployment rate to be 5.4% in 2023 and 5.2% in 2024, after 5.3% in 2022.

The US crude oil inventories fell last week by 5.1 million barrels to 460.9 million barrels. But oil continued its downward movement yesterday as recession fears outweighed the US inventory decline. Investors also expressed concern that potential interest rate hikes by central banks may slow economic growth and reduce energy demand in the United States, United Kingdom and the European Union.

Gold and silver prices are rising as US recession fears continue to rise. The US 2-10-year bond yield spreads remain heavily inverted, while US Treasury yields fell sharply yesterday as traders continue to count on a US rate cut later this year.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.71%, China’s FTSE China A50 (CHA50) was down by 0.03% for the day, Hong Kong’s Hang Seng (HK50) ended the day up 0.71%, India’s NIFTY 50 (IND50) added 0.25%, and Australia’s S&P/ASX 200 (AU200) closed negative by 0.08% for the day.

Last month the yuan became the most widely used currency for cross-border transactions in China, overtaking the dollar for the first time. Cross-border payments and receipts in yuan rose to a record $549.9 billion in March from $434.5 billion a month earlier. China has long promoted the use of the yuan to settle cross-border transactions as part of efforts to internationalize the use of its currency. The use of the yuan in global trade finance remains low, although it is showing strong growth. SWIFT data showed that the share of the yuan in global foreign exchange trade finance transactions rose to 4.5% in March, while the dollar accounted for 83.71%.

S&P 500 (F) (US500) 4,055.96 −15.67 (−0.38%)

Dow Jones (US30)33,301.87 −228.96 (−0.68%)

DAX (DE40) 15,795.73 −76.40 (−0.48%)

FTSE 100 (UK100) 7,852.64 −38.49 (−0.49%)

USD Index 101.86 +0.51 +0.50%

Important events for today:
  • – 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
26 Apr
trading

Corporate Bonds: “The Next Shoe to Drop”

“The neckline has been broken over the last few days”

By Elliott Wave International

A “calamity” is likely ahead for corporate bonds, says our head of global research, Murray Gunn.

Some of Murray’s analysis involves the head and shoulders, a classic technical chart pattern. In case you’re unfamiliar with it, here’s an illustration along with an explanation from one of our past publications:

A head-and-shoulders is a reversal pattern that consists of three price extremes. Market technicians refer to [them] as the left shoulder, head, and right shoulder. …it takes a break of the neckline to confirm a reversal… [and it’s] not just a bearish reversal formation. Inverted head-and-shoulders mark bottoms.

With that in mind, here’s a chart and commentary which Murray provided for the April Global Market Perspective, a monthly Elliott Wave International publication which covers 50-plus financial markets:

The chart … shows the relative performance of corporate bonds, as proxied by the iShares iBoxx $ Investment Grade Corporate Bond ETF (ticker LQD) versus the iShares 7-10 Year Treasury Bond ETF (ticker IEF). A distinct Head and Shoulders pattern exists where the neckline has been broken over the last few days. The corporate bond market has held in reasonably well over the last year, but we fully expect this sector to be the next shoe to drop.

Don’t count on the ratings services to provide timely warnings. In the past, downgraded ratings have sometimes come only after most if not all the damage was done.

Remember Enron? The company still had an “investment grade” rating just four days before it collapsed. Ratings services also missed the 1995 debacle at Barings Bank. Olympia and York of Canada is another historical example: the largest real estate developer in the world at the time had a AA rating on its debt in 1991. Less than a year later, it went bankrupt.

Getting back to the present, Murray Gunn also notes:

When … corporate loans are re-set this year, there are going to be a few deep breaths being taken, and more than a fair share of tightened sphincters!

And, speaking of chart patterns of financial markets, another way to monitor the bond market is to use Elliott wave analysis.

If you’d like to delve into the details of this method of analysis, read Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

If indeed markets are patterned, and if those patterns have a recognizable geometry, then regardless of the variations allowed, certain price and time relationships are likely to recur. In fact, experience shows that they do.

It is our practice to try to determine in advance where the next move will likely take the market. One advantage of setting a target is that it gives a sort of backdrop against which to monitor the market’s actual path. This way, you are alerted quickly when something is wrong and can shift your interpretation to a more appropriate one if the market does not do what you expect. The second advantage of choosing a target well in advance is that it prepares you psychologically for buying when others are selling out in despair, and selling when others are buying confidently in a euphoric environment.

If you’d like to read the entire online version of Elliott Wave Principle: Key to Market Behavior, you may do so for free once you become a member of Club EWI, the world’s largest Elliott wave educational community. A Club EWI membership is also free.

Join now by following this link: 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 Corporate Bonds: “The Next Shoe to Drop”. 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.

Bonds Financial News
26 Apr

Calm before storm: Is a 10% market correction on the horizon?

By George Prior 

Investors should brace for a 10% market correction over the next few weeks, warns the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The warning from deVere Group’s Nigel Green comes as major central banks continue their battle to try and tame inflation and differing signals from stock and bond markets.

He says: “We expect the US Federal Reserve will raise interest rates once again at its upcoming May meeting; the Bank of England’s chief economist has hinted at a further interest rate rise next month; and a half-point interest rate increase can’t be ruled out for the European Central Bank’s meeting next week according to Executive Board member Isabel Schnabel.

“This is likely to cause jitters in the market as some investors, concerned about short-term profits, will move into panic-selling mode.

“Furthermore, they will have legitimate concerns that further rate hikes now – when monetary policy time lags are notoriously long – could steer economies into a recession.

“The time lag in monetary policies is very high. Economists estimate interest rate changes take up to 18 months to have the full effect. This means monetary policymakers need to try and predict the state of the economy for up to 18 months ahead.

“With inflation seemingly having peaked, central banks are slowly winning the battle and officials now need to take their foot of the brake.”

Stock markets are currently calm and enjoying a month-long rally. This suggests that confidence in the outlook for profits and dividends growth is returning. And yet core major bond markets continue to be marked by inverted yield curves, which suggest recession is ahead.

“We’ve seen solid gains on all the major stock markets, over the last month. Fear of a further crisis in the financial system has subsided, and investor risk appetite has returned,” notes Nigel Green.

“In addition, stock market volatility has fallen, with the VIX index of implied volatility on the S&P500 at 17.8, near an 18-month low.

“Investors appear to be seeing beyond the current interest rate cycle, and its likely impact on company earnings, and looking ahead to the next upswing in the economic cycle.”

He continues: “In contrast, the bond market is very much focused on the interest rate cycle, with yield curves inverted in the US, UK and Eurozone. Longer term lending rates are below the overnight rates set by central banks.

“This reflects fear that the final rounds of interest rate hikes, from the major central banks this spring and summer, may tip economies into recession.

“The IMF, never an organisation to be glass half full, recently supplied a number of arguments as to why recession might occur. They included reduced real wages (because of inflation), low investment spending, and the need for governments to repair their finances after Covid-era deficits.”

The deVere group CEO goes on to add: “This huge disconnect between stocks and bonds suggests that investors should brace themselves for significant volatility in global financial markets over the next few weeks. We could see a 10% correction.”

He concludes: “We expect that we’re currently in the ‘calm before the storm’ phase.

“That said, a market correction is a natural part of the market cycle and can present major buying opportunities for long-term investors who are willing to weather short-term volatility.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Financial News Stock Market News
26 Apr

Nasdaq bears making a comeback?

By ForexTime

The Nasdaq 100 on the daily timeframe was in an uptrend that continued until a last higher top formed at 13242.2 on 4 April. Bears then saw an opportunity and started testing a weekly support level.

Bulls could not hold their own and bears broke through the weekly support now turned resistance level. The 15 and 34 Simple Moving Averages (SMA) and the Momentum Oscillator changed course to the downside as well, confirming the possible change in market momentum.  

A possible critical support level formed when a lower bottom was recorded on 25 April at 12723.6. The bulls might try to drive the price back through the weekly resistance level in a bid to gain supremacy again but that remains to be seen.

If the Nasdaq 100 breaks through the critical support level at 12723.6, three possible price targets can be calculated from there. Attaching the Fibonacci tool to the lower bottom at 12723.6 and dragging it to a lower top that formed on 18 April at 13207.2, the following targets can be determined. The first target may be estimated at 12424.7 (161.8%). The second price target might be expected at 11941.1 (261.8%) and if bears manage to break through a weekly support level, then the third and final target might be estimated at 11158.7 (423.6%).

If the resistance level at 13207.2 is broken, the current scenario is no longer reasonable and must be reassessed.

As long as the bears continue to direct the market, the outlook for the Nasdaq 100 market on the D1 time frame will remain to the downside.

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
26 Apr

Weak consumer confidence reports and declining manufacturing data put negative pressure on stock markets

By ForexTime

The US stock indices fell yesterday amid disappointing consumer confidence data and weak company reports. The Conference Board survey showed that consumer confidence fell to a nine-month low. It should be noted that household consumption is the main driver of US gross domestic product. The US Federal Reserve Richmond’s Manufacturing Index also fell to minus 10 in April, the fourth consecutive month of decline. As the stock market closed on Tuesday, the Dow Jones Index (US30) decreased by 1.10%, and the S&P 500 Index (US500) lost 1.58%. The NASDAQ Technology Index (US100) fell by 1.98% yesterday.

Investor nervousness in the banking sector returned after First Republic Bank (FRC) fell nearly 40%, to a record low, following the release of mixed first-quarter results, which showed deposit levels down $104 billion from a year ago, much more than expected. Meanwhile, United Parcel Service Inc (UPS) reported first-quarter results that fell short of forecasts, and the courier company warned that sales would remain under pressure. The company’s stock was down more than 9%. Shares of PepsiCo Inc (PEP) were up more than 2%. Its quarterly results beat estimates on both the top and bottom lines. Energy stocks, in general, were the biggest drag on the stock market. The energy sector came under pressure from falling oil prices amid concerns about the impact of a potential slowdown in global growth on demand.

Equity markets in Europe were mostly down on Tuesday. German DAX (DE30) gained 0.05%, French CAC40 (FR 40) decreased by 0.56%, Spanish IBEX35 (ES35) fell by 1.18%, and British FTSE100 (UK100) closed down by 0.27% yesterday.

The ECB started cutting its balance sheet in March and is likely to accelerate the pace of so-called quantitative tightening (QT) in July. The ECB holds 4.9 trillion euros in securities for monetary policy purposes, and that amount is expected to shrink by 200 billion euros by the end of 2023.

The Confederation of British Industry’s (CBI) monthly industrial orders indicator remained at minus 20 in April, unchanged from its March value. According to the survey, British factory orders and output declined due to higher inventories of finished goods, highlighting the manufacturing sector’s recent weak performance and pointing to easing inflationary pressures.

A review of more aggressive Fed policy and concerns about a global economic slowdown is forcing investors to buy safe-haven assets such as the dollar and the yen, which negatively affects oil prices. A stronger dollar makes oil more expensive for foreign currency holders. Oil was down by 2% over yesterday. Oil prices are now back in their range where they were trading before the OPEC+ decision to cut production.

Asian markets traded yesterday without a single dynamic. Japan’s Nikkei 225 (JP225) gained 0.09%, China’s FTSE China A50 (CHA50) added 0.43% for the day, Hong Kong’s Hang Seng (HK50) ended the day down by 1.71%, India’s NIFTY 50 (IND50) gained 0.15%, and Australia’s S&P/ASX 200 (AU200) was not trading yesterday due to the holiday.

Japan raised its official import rate for the first time in nine months as a double-digit yen depreciation from a year ago increased the cost of imported goods. Trade data released last week showed that the high cost of coal and petroleum products combined with a 16.5% yen drop from a year ago increased imports by 7.3% in March, pushing Japan’s trade deficit in fiscal 2022 to a record high.

In Australia, the consumer price level rose by 1.4% in the last quarter, but year-over-year inflation declined from 6.8% to 6.3%. The quarterly rise in inflation was largely due to higher spending on health care, education, fuel, and increased spending on recreation. The RBA warned at its last meeting that any signs of tight inflation could lead to further rate hikes.

S&P 500 (F) (US500) 4,071.71 −65.33 (−1.58%)

Dow Jones (US30)33,531.72 −343.68 (−1.01%)

DAX (DE40) 15,872.13 +8.18 (+0.052%)

FTSE 100 (UK100) 7,891.13 −21.07 (−0.27%)

USD Index 101.86 +0.51 +0.50%

Important events for today:
  • – US Building Permits (m/m) at 15:00 (GMT+3);
  • – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
  • – US New Home Sales (m/m) at 17:00 (GMT+3).
  • – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
  • – US New Home Sales (m/m) at 17:00 (GMT+3).

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

Big tech earnings: tech surprisingly robust – here’s why

By George Prior

The Big Tech titans are reporting earnings this week and the sector remains “surprisingly robust” for three key reasons, affirms the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The analysis from deVere Group’s Nigel Green comes as Microsoft and Alphabet (parent company of Google) report on Tuesday, Meta (parent company of Facebook, Instagram and Whatsapp) report Wednesday, and Amazon on Thursday.

He says: “Five tech companies have made up two-thirds of the S&P 500’s gains this year, so global investors are watching carefully the earnings reports of Big Tech this week.

“Of course, not all the titans will have performed to the same level, however, in general terms, tech remains surprisingly robust.

“Despite the sharp rise in the cost of capital over the last year, tech and other growth sectors have shared in the broader stock market gains since the start of the year.

“This is surprising to many market analysts.

“A rise in interest rates is often associated with weakness in growth stocks, as investors favour money market funds and other products that benefit from rate hikes.

“While some of the not-yet-profitable tech companies have been hit by this effect, in aggregate the quoted tech sector looks resilient.”

A combination of factors is probably at work, according to the deVere CEO.

“First, the largest US tech stocks sit on large cash piles, reducing their need to borrow money to fund investment and growth.

“Second, falls in bond yields over the last six weeks, triggered by the Silicon Valley Bank crisis, have helped reduce funding costs for smaller growth companies.

“Third, in an era of weaker long-term GDP growth, investors may be searching out -and willing to pay a premium for- the sectors that will show earnings growth.”

Indeed, investor confidence in the sector remains strong.

Despite last year’s share price falls, the trailing price-earnings ratio on the NASDAQ index of US tech stocks is currently 25 times. This is down from the pandemic-era peak of 29 at the end of 2021, but it is still well above the 21 times at the end of March 2020.

On Monday, Nigel Green said in a media statement that investors around the world will be looking for three main factors from the tech giants this reporting season.

“Guidance will be critical as indicators show the economy is headed for a downturn and investors will be eager to know which companies are best-positioned to manage this.”
Guidance helps evaluate a company’s past performance in light of its future prospects.

“Cost-cutting measures and their efficacy will be poured over too. Have the recent mass lay-offs, following the mass hiring spree during and post Covid had an impact on the bottom line?”

“Plus, the AI (artificial intelligence) race will be closely monitored by investors.”

He concludes: “The total market cap of the top six tech companies in the US is an estimated $7 trillion. It’s a hugely critical sector and, as such, it’s surprising robustness will cheer markets and global investors.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

Financial News Stock Market News
25 Apr

Investors await reports from major technology companies

By JustMarkets

At Monday’s close, the Dow Jones Index (US30) increased by 0.20%, and the S&P 500 (US500) added 0.09%. The NASDAQ Technology Index (US100) fell by 0.29% yesterday. A Federal Reserve Bank of Chicago survey showed that the index, used to estimate economic conditions, declined by 29 points between March and April. This indicates that most respondents are pessimistic about the future. More than half – about 65% – said they expect economic activity to decline over the next 12 months.

Shares of Tesla Inc fell by 2% after the automaker raised its 2023 capital spending forecast to boost production. Microsoft Corp (MSFT), Alphabet (GOOGL) Inc, Amazon.com Inc (AMZN) and Meta Platforms Inc (META) will report this week. The rally in these stocks has supported Wall Street this year, so investors are concerned about whether growth can continue given the gloomy economic outlook. Traders are concerned that the rally could end as earnings begin to reflect the growing impact of high-interest rates and tightening economic conditions.

Stock markets in Europe were mostly down on Monday. Germany’s DAX (DE30) lost 0.11%, France’s CAC 40 (FR40) fell by 0.04%, Spain’s IBEX35 (ES35) decreased by 0.10%, Britain’s FTSE100 (UK100) closed negative by 0.02% on Monday.

Germany, the largest economy in the Eurozone, managed to avoid a recession this winter. Business sentiment is improving, but manufacturing activity is still stagnant. This is a green flag for the ECB because the better the economy feels, the bolder the monetary policy can be tightened. ECB spokeswoman Schnabel said yesterday that a 50 bp rate hike at the May meeting is still an option. The deciding factor will be Eurozone GDP data this week and inflation data ahead of the May meeting.

UK property owners are becoming more cautious about raising prices. Rightmove stated that real estate sales have returned to pre-pandemic levels. March data showed that the number of homes for sale increased for the second month, and the average time to find a buyer for the property was reduced to 55 days.

The UK oil and gas industry is preparing for a new strike after the British Labor Union announced that more than a thousand workers would begin a two-day strike over wage problems. The 1,300 workers are expected to go on a 48-hour strike beginning Monday. This could disrupt oil and gas production for companies such as BP, CNRI, EnQuest, Harbour, Ithaca, Shell, TAQA and TotalEnergies.

Orders in China for overseas travel during the upcoming May Day holiday indicate a continued recovery in travel to Asian countries. This has increased the optimism of oil traders, who expect an increase in oil demand in Asia’s largest economy.

According to a leading defense think tank, global military spending hit a record high of $2.24 trillion in 2022 as Russia’s invasion of Ukraine triggered a surge in military spending in Europe and the United States. The largest increase in military spending was seen in Europe (+13%). Finland’s military spending increased by 36% and Lithuania’s by 27%. In April, Finland, whose border with Russia is about 1340 km long, became the 31st member of NATO. Sweden, which has avoided military alliances for more than 200 years, also wants to join NATO.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 0.10%, China’s FTSE China A50 (CHA50) decreased by 1.17% for the day, Hong Kong’s Hang Seng (HK50) ended the day down by 0.58%, India’s NIFTY 50 (IND50) gained 0.68%, and Australia’s S&P/ASX 200 (AU200) closed negative by 0.11%. Losses in US technology stocks spread to the Asian market, as most regional tech stocks are dependent on large US companies.

Bank of Japan Governor Kazuo Ueda said yesterday that the Bank of Japan should maintain monetary easing as trend inflation is still below 2%, and consumer inflation is likely to approach its peak and slow down in the coming months. It is becoming clear that the Bank of Japan will not change the monetary policy setting at its first meeting under the new governor.

S&P 500 (F) (US500) 4,133.52 +3.73 (+0.090%)

Dow Jones (US30)33,875.40 +66.44 (+0.20%)

DAX (DE40) 15,863.95 −17.71 (−0.11%)

FTSE 100 (UK100) 7,912.20 −1.93 (−0.024%)

USD Index 101.38 −0.45 −0.44%

Important events for today:
  • – US Building Permits (m/m) at 15:00 (GMT+3);
  • – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
  • – US New Home Sales (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
25 Apr

Caution Prevails Ahead Of Big Tech Earnings

By ForexTime 

Most Asian equities flashed red on Tuesday, pressured by losses in Chinese shares as investors evaluated China’s re-opening story in the face of negative economic and geopolitical forces. European futures are pointing to a mixed open with market players guarded ahead of another event-heavy week for financial markets. Some of the largest companies in the world including the four Big Tech titans (Microsoft, Alphabet, Meta and Amazon) will be reporting their results this week. If the corporate earnings paint an overall encouraging picture, this could boost risk sentiment and support equity bulls.  However, a set of disappointing results is likely to enforce renewed pressure on stock markets with the S&P500 and Nasdaq feeling the brunt.

In the currency space, the dollar attempted to stabilise during early trade after slipping in the previous session as more signs of slowing US economic growth cooled Fed hike bets. With markets now pricing in the peak for US interest rates in June, dollar bulls could be running on fumes. Gold drew strength from falling Treasury yields while oil prices steadied after two days of gains.

Dollar bears to hijack the scene?

Repeated signs of cooling price pressures and disappointing US economic data could add more fuel to expectations around the Fed pausing rate hikes and eventually cutting down the road. On Monday, softer US manufacturing data strengthened the argument for the Fed to pause. There are more major releases from the US economy this week including April consumer confidence data, Q1 GDP figures, and most importantly the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditure.

US economic growth in the first quarter is expected to moderate from the 2.6% in the previous quarter while persistent price pressures may be present in Friday’s core PCE report. Ultimately, if the data supports expectations around the Fed taking a pause from rate hikes after May, this may drag the dollar lower.

Looking at the technical picture, the Dollar Index remains under pressure on the daily charts. Weakness below 102.00 could trigger a decline towards 100.79 and 100.00, a level not seen since April 2022.

Commodity Spotlight – Gold

Gold briefly punched above the psychological $2000 level during early trade this morning as falling Treasury yields and dollar weakness sweetened appetite for the precious metal.

Nevertheless, it still remains trapped within a sticky range thanks to the ongoing uncertainty over the Fed’s next move beyond May. With markets now expecting US rates to peak in the summer and a rate cut by December, gold has the thumbs up to push higher in the longer term. Meanwhile, volatility could be the name of the game due to shifting expectations around future Fed policy moves.

Turning to the technicals, price action suggests that a fresh catalyst is needed to trigger a bullish or bearish breakout. A strong move above $2000 may inspire a push towards $2025 and $2048. If prices remain below $2000, gold could test $1950 and $1900.

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
24 Apr

US Dollar is Under Pressure Due to the Fed

By RoboForex Analytical Department

EUR/USD started the final week of April with stable moves near 1.0980.

In the near term, the market’s focus was on the upcoming US Federal Reserve System meeting, which will end on 3 May. Monetary policymakers are expected to further raise interest rates by 25 base points, although the focus will be on the future rate trajectory.

Investors believe the rate will remain unchanged until July and will drop by the end of the year. However, the state of the US economy might hinder this prediction. The latest statistics have shown that some sectors of the economy remain resilient, and inflation is declining.

The changes in the interest rate by the end of the year might turn out different from market expectations. At the same time, the market moods are quite vigorous.

On the H4 chart, the EUR/USD pair has corrected to 1.0995. The market is now forming a consolidation range under this level. The price is expected to break the range downwards and form a descending wave structure to 1.0886. Technically, this scenario is confirmed by the MACD: its signal line is above zero, directed strictly downwards to renew the lows.

On the H1 chart, the EUR/USD pair continues developing a consolidation range around the level of 1.0980. An exit from the range downwards is expected, followed by a descending wave structure to 1.0940. The target is the first one. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is under 20, with growth to 50 expected, followed by a decline to the new lows of the indicator.

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

Murrey Math Lines 24.04.2023 (EURUSD, GBPUSD)

By RoboForex.com

Brent

On H4, EURUSD quotes are above the 200-day Moving Average, which reveals the prevalence of an uptrend. The RSI is testing the support line. In this situation, the price could break 2/8 (1.0986) and grow to the resistance at 3/8 (1.1108). The scenario can be canceled by a downward breakout of 1/8 (1.0864), which might lead to a trend reversal and falling to the support at 0/8 (1.0742).

Brent_H4
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

On M15, growth can be additionally supported by a breakout of the upper line of the VoltyChannel indicator.

Brent_M15
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

GBPUSD, “Great Britain Pound vs US Dollar”

On the GBPUSD chart, the situation is similar. On H4, the quotes are above the 200-day Moving Average, which reveals the prevalence of an uptrend, and the RSI is testing the support line. In this situation, the quotes could rise above 6/8 (1.2451) and reach the resistance at 7/8 (1.2573). The scenario can be canceled by a downward breakout of 5/8 (1.2329), which could also lead to a trend reversal and make the pair drop to the support at 4/8 (1.2207).

S&P500_H4
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

On M15, a new breakout of the upper line of VoltyChannel will increase the probability of price growth to 7/8 (1.2573) on H4.

S&P500_M15

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

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