InvestMacro

By ForexTime

Article by ForexTime

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

By JustMarkets

At Monday’s close, the Dow Jones Index (US30) added 0.17%, while the S&P 500 Index (US500) was down 0.21%. The NASDAQ Technology Index (US100) closed negative 0.12% yesterday. The Fed’s hawkish comments on Tuesday pushed 10-year T-note yields to a 5-month high and negatively impacted equities. The US Fed Chairman Jerome Powell said yesterday that given the strength of the labor market and progress on inflation so far, it is appropriate to give restrictive policy additional time to work. In addition, Fed Vice Chairman Jefferson added that if incoming data indicate that inflation is more resilient, it would be appropriate to maintain the current restrictive policy for a longer period. Currently, markets expect only 40 basis points of easing from the Fed this year, down significantly from 160 basis points at the beginning of the year. Markets are pricing in the chances of a rate cut of 25 bps. Up to 3% will be at the next FOMC meeting on May 1, and 20% will be at the June 12 meeting.

Geopolitical risks in the Middle East continue to weigh on equities amid concerns that Israel will retaliate after Iran fired a barrage of rockets and drones at Israel over the weekend. Israel’s military cabinet postponed a meeting scheduled for Tuesday to decide on retaliatory measures.

The International Monetary Fund raised its 2024 global GDP forecast to 3.2% from its January forecast of 3.1%.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) fell by 1.44%, France’s CAC 40 (FR40) closed down 1.40%, Spain’s IBEX 35 (ES35) lost 1.50%, and the UK’s FTSE 100 (UK100) closed negative 1.82% on Tuesday.

German economic growth expectations in the ZEW survey rose by 11.2 to a two-year high 42.9, beating expectations of 35.5. ECB President Lagarde said yesterday that unless there are major shocks to developments, the ECB is approaching a point where the bank will have to moderate its restrictive monetary policy. Lagarde also added that this will likely happen in a fairly short period. ECB Governing Council representative Makhlouf provided more specificity, saying that the ECB could cut interest rates at its next meeting in June if the upward trend in inflation continues. Swaps put the odds of a 25 bps ECB rate cut at its next meeting on June 6 at 87%.

WTI crude futures fell as low as $85 a barrel on Wednesday, declining for the third consecutive session. Economic uncertainty in China, a major oil importer, and a delayed US interest rate cut weighed on the demand outlook. However, given tensions in the Middle East and considering OPEC+ production cuts, the overall fundamental backdrop points to further gains in oil prices.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) was down 1.94%, China’s FTSE China A50 (CHA50) lost 0.40%, Hong Kong’s Hang Seng (HK50) decreased by 2.12% and Australia’s ASX 200 (AU200) was negative 1.81%.

The New Zealand dollar rose to $0.59 after data showed that the country’s inflation rate eased to 4% y/y in the first quarter, the lowest since June 2021. The reading matched economists’ expectations but exceeded the Reserve Bank of New Zealand’s (RBNZ) forecast of 3.8% y/y. Earlier this month, the RBNZ kept the rate unchanged for the sixth consecutive meeting as policymakers sought to further ease capacity and inflation pressures despite data pointing to weakening economic activity.

Japan posted a trade deficit for the third consecutive fiscal year as the cost of energy and other imported goods rose and the yen remained weak.

Westpac forecasts Australian GDP growth to remain modest at 1.6% in 2024, down from a soft 1.5% a year earlier. This is well below Australia’s “trend” growth rate of around 2.5%.

S&P 500 (US500) 5,061.82 −61.59 (−1.20%)

Dow Jones (US30) 37,735.11 −248.13 (−0.65%)

DAX (DE40) 18,026.58 +96.26 (+0.54%)

FTSE 100 (UK100) 7,965.53 −30.05 (−0.38%)

USD Index 106.35 +0.14 (+0.13%)

• – New Zealand Consumer Price Index (q/q) at 01:45 (GMT+3);
• – Japan Trade Balance (m/m) at 02:50 (GMT+3);
• – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
• – UK Producer Price Index (m/m) at 09:00 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – UK BoE Gov Bailey Speaks at 19:00 (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.

By JustMarkets

At Monday’s close, the Dow Jones (US30) Index decreased by 0.65%, while the S&P 500 (US500) Index was down 1.20%. The NASDAQ Technology Index (US100) closed yesterday negative at 1.79%. The US dollar initially declined on Monday amid lower liquidity demand, as stocks rose after geopolitical concerns eased amid hopes that diplomatic efforts would curb the conflict between Iran and Israel. However, the US dollar jumped sharply in the US session after March, and US retail sales rose more than expected, a hawkish factor for Fed policy. In addition, the inability of equities to hold on to the early rally caused additional liquidity demand for the dollar. That said, last night, Israel’s defense minister said that Israel has no choice but to retaliate against Iran for its drone missile attack on Israel over the weekend.

Salesforce (CRM) shares fell more than 7%. They topped the list of losers in the S&P 500 and Dow Jones Industrials following a Bloomberg report that the company is interested in acquiring Informatica, which analysts say could attract regulatory attention. Atlassian (TEAM) slid more than 7% and topped the list of losers in the Nasdaq 100 after Mizuho Securities cut its price target on the company’s shares to $240 from $265. Tesla (TSLA) closed down more than 5%, topping the Nasdaq 100 losers list, after CEO Musk said the company will cut its global workforce by more than 10% as demand for electric vehicles slows.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 0.54% (up -1.28% on the week), France’s CAC 40 (FR40) closed higher by 0.43%, Spain’s IBEX 35 (ES35) closed at its opening price, and the UK’s FTSE 100 (UK100) closed negative 0.38% on Monday. European stock markets opened lower on Tuesday as strong US retail sales data reinforced expectations that the Federal Reserve will postpone interest rate cuts. Investors are also keeping a close eye on developments in the Middle East amid concerns that an Iranian attack on Israel over the weekend could lead to a wider conflict in the region.

The latest data showed an unexpected increase in the UK unemployment rate to 4.2%, exceeding expectations of 4.0%, while wage growth slowed gradually. Traders adjusted their forecasts for the Bank of England and the Federal Reserve to cut interest rates this year, driven by strong US inflation figures. The Bank of England rate is expected to fall to 4.75% by the end of 2024 from the current 5.25%, a significant change from the previous forecast that suggested a rate cut to 4.5% by December.

WTI crude oil prices rose to around $86 a barrel on Tuesday, reversing losses from the previous session as investors await Israel’s response. Israel’s military chief said his country would respond to the attack, with reports suggesting they were targeting key targets in Iran. Iran is a leading OPEC member, producing more than 3 million barrels of crude oil daily.

Asian markets were predominantly down. Japan’s Nikkei 225 (JP225) was down 0.65% yesterday, China’s FTSE China A50 (CHA50) was up 2.7%, Hong Kong’s Hang Seng (HK50) lost 0.99% yesterday, and Australia’s ASX 200 (AU200) was negative 0.75%.

Asian stocks fell sharply on Tuesday, following an overnight decline on Wall Street amid lingering concerns over geopolitical tensions in the Middle East and a longer-term interest rate hike in the US. However, losses in Chinese stocks were slightly less than their peers as gross domestic product (GDP) data showed the country’s economy grew more than expected in the first quarter. China’s economy grew 5.3% y/y in the first quarter of 2024, exceeding market forecasts of 5.0% and following 5.2% growth in the previous period. This was the sharpest annual growth since Q2 2023, helped by continued supportive measures from Beijing, while the Lunar New Year festival also boosted consumer spending. Fixed asset investment rose by 4.5% in the first three months of the year, the highest in three years and above the consensus forecast of 4.3%. Meanwhile, March data showed that industrial production and retail sales rose less than expected, underscoring the need for further policy easing for the economy. At the same time, the unemployment rate came in at 5.2% in March, remaining near February’s 7-month high of 5.3%.

S&P 500 (US500) 5,061.82 −61.59 (−1.20%)

Dow Jones (US30) 37,735.11 −248.13 (−0.65%)

DAX (DE40) 18,026.58 +96.26 (+0.54%)

FTSE 100 (UK100) 7,965.53 −30.05 (−0.38%)

USD Index 106.35 +0.14 (+0.13%)

• – China GDP (q/q) at 05:00 (GMT+3);
• – China Industrial Production (y/y) at 05:00 (GMT+3);
• – China Unemployment Rate (m/m) at 05:00 (GMT+3);
• – China Retail Sales (m/m) at 05:00 (GMT+3);
• – UK Average Earnings Index (m/m) at 09:00 (GMT+3);
• – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
• – German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone Trade Balance (m/m) at 12:00 (GMT+3);
• – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US Building Permits (m/m) at 15:30 (GMT+3);
• – US Industrial Production (m/m) at 16:15 (GMT+3);
• – UK BoE Gov Bailey Speaks at 20:00 (GMT+3);
• – Canada BoC Gov Macklem Speaks at 20:15 (GMT+3);
• – US Fed Chair Powell Speaks at 20:15 (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.

By JustMarkets

On Friday, the Dow Jones (US30) was down 1.24% (for the week -2.40%), while the S&P 500 (US500) decreased by 1.46% (for the week -1.69%). The NASDAQ Technology Index  (US100) closed Friday negative 1.62% (for the week -0.68%). Stock indices declined sharply on Friday, with the S&P 500 (US500) falling to a 4-week low and the Dow Jones (US30) falling to a 2-month low. Heightened geopolitical tensions heightened risk aversion and triggered the liquidation of long positions in equities on Friday.

Following last week’s alleged Israeli strike on senior Iranian military commanders in a Syrian compound, market participants were spooked as a flurry of reports emerged towards the end of the week that a potential Iranian retaliatory strike on Israel could be “imminent”. These Friday headlines quickly brought geopolitical concerns to the forefront and sparked a bout of risk aversion before the weekend. The Iranian attack did occur on Saturday in the form of drones and rockets launched toward Israel. Israel was able to repel the attack and did not announce an immediate intention to retaliate, while the US has said it wants to avoid a wider war in the Middle East.

Chipmakers were under additional pressure on Friday after it was revealed that the Chinese government has required telecom operators to replace foreign chips in their backbone networks by 2027. As a result, shares of ON Semiconductor (ON) closed down more than 5% and topped the NASDAQ (US100) losers list. Intel (INTC) shares were also down more than 5%, while Advanced Micro Devices (AMD), Micron Technology (MU), NXP Semiconductors NV (NXPI), and Microchip Technology (MCHP) were down more than 4%.

Bank earnings results for the first quarter were mixed on Friday. JPMorgan Chase (JPM) closed down more than 6% after managed net interest income for the first quarter came in below consensus, and full-year net interest income guidance came in below estimates. However, Wells Fargo & Co. (WFC) reported first-quarter earnings above consensus, and Citigroup (C) reported better-than-expected first-quarter FICC sales and trading revenue.

The bitcoin price fell more than 5% to below $64,000 on Sunday, extending Saturday’s 7% drop. Investors moved away from risky assets amid escalating tensions in the Middle East after Iran struck Israel.

Equity markets in Europe traded flat on Friday. The German DAX (DE40) was down 0.13% (for the week -1.28%), the French CAC 40 (FR40) closed down 0.16% (for the week -0.49%), the Spanish IBEX 35 (ES35) was up 0.34% (for the week -1.64%), the British FTSE 100 (UK100) closed positive 0.91% (for the week +1.07%).

ECB officials once again spoke with one voice about a rate cut in June. On Friday, ECB Governing Council representative Stournaras said that the ECB should not be afraid to change its cautious stance on interest rates away from that of the Federal Reserve and “now is the time to diverge”. His colleague, ECB Governing Council spokesman Kazaks, said: “If nothing changes, June will be the month when we see the first-rate cut by the ECB”. ECB Governing Council spokesman Muller said: “Persistently slower overall price growth in the Eurozone raises the likelihood of an ECB rate cut in June”.

WTI crude oil prices hit a six-month high on Friday, but prices fell back to $85 a barrel at the open on Monday as Israel successfully defended itself against a massive Iranian air attack over the weekend. However, oil volatility will remain elevated in the coming days as investors prepare for the Israeli government’s response to the attack. A full-scale war with Iran could further disrupt oil supplies, leading to further gains for the black gold.

Asian markets were predominantly up last week. Japan’s Nikkei 225 (JP225) rose by 0.30%, China’s FTSE China A50 (CHA50) declined 1.86%, Hong Kong’s Hang Seng (HK50) gained 0.43% for the week, and Australia’s ASX 200 (AU200) was positive 0.19%.

Chinese trade news on Friday was weaker than expected, negatively affecting global growth prospects. China’s March exports fell by 7.5% y/y, weaker than expectations of 1.9% y/y and the largest decline in 7 months. Imports in March unexpectedly fell by 1.9% y/y vs. expectations of 1.0% y/y growth. On April 15, the People’s Bank of China (PBOC) kept the rate on CNY100 bln one-year loans to some financial institutions under the medium-term lending facility (MLF) program at 2.5% amid efforts to ensure RMB stability.

S&P 500 (US500) 5,123.41 −75.65 (−1.46%)

Dow Jones (US30) 37,983.24 −475.84 (−1.24%)

DAX (DE40) 17,930.32 −24.16 (−0.13%)

FTSE 100 (UK100) 7,995.58 +71.78 (+0.91%)

USD Index 106.01 +0.73 (+0.69%)

• – Switzerland Producer Price Index (m/m) at 09:30 (GMT+3);
• – Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
• – US Retail Sales (m/m) at 15:30 (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.