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
25 Apr

Global shipping is under pressure to stop its heavy fuel oil use fast – that’s not simple, but changes are coming

By Don Maier, University of Tennessee 

Most of the clothing and gadgets you buy in stores today were once in shipping containers, sailing across the ocean. Ships carry over 80% of the world’s traded goods. But they have a problem – the majority of them burn heavy sulfur fuel oil, which is a driver of climate change.

While cargo ships’ engines have become more efficient over time, the industry is under growing pressure to eliminate its carbon footprint.

The European Union Parliament this year voted to require an 80% drop in shipping fuels’ greenhouse gas intensity by 2050 and to require shipping lines to pay for the greenhouse gases their ships release. The International Maritime Organization, the United Nations agency that regulates international shipping, also plans to strengthen its climate strategy this summer. The IMO’s current goal is to cut shipping emissions 50% by 2050. President Joe Biden said on April 20, 2023, that the U.S. would push for a new international goal of zero emissions by 2050 instead.

We asked maritime industry researcher Don Maier if the industry can meet those tougher targets.

Why is it so hard for shipping to transition away from fossil fuels?

Economics and the lifespan of ships are two primary reasons.

Most of the big shippers’ fleets are less than 20 years old, but even the newer builds don’t necessarily have the most advanced technology. It takes roughly a year and a half to come out with a new build of a ship, and it will still be based on technology from a few years ago. So, most of the engines still run on fossil fuel oil.

If companies do buy ships that run on alternative fuels, such as hydrogen, methanol and ammonia, they run into another challenge: There are only a few ports so far with the infrastructure to provide those fuels. Without a way to refuel at all the ports that a ship might use, companies will lose their return on investment, so they will keep using the same technology instead.

It isn’t necessarily that the maritime industry doesn’t want to go the direction of cleaner fuels. But their assets – their fleets – were purchased with a long lifespan in mind, and alternative fuels aren’t yet widely available.

Ships are being built that can run on liquefied natural gas (LNG) and methanol, and even hydrogen is coming online. Often these are dual-fuel – ships that can run on either alternative fuels or fossil fuels. But so far, not enough of this type of ship is being ordered for the costs to make financial sense for most builders or buyers.

The costs of alternative fuels, like methanol and hydrogen fuels made with renewable energy (as opposed to being made with natural gas), are also still significantly higher than fuel oil or LNG. But the good news is those costs are starting to decline. As production ramps up, emissions will drop further.

Can tougher regulations and carbon pricing effectively push the industry to change?

A little bit of pressure on the industry can be helpful, but too much, too fast can really make things more disruptive.

Like most industries, shipping lines want standardized rules they can count on not to change next year. Some of these companies have invested millions of dollars in new ships in recent years, and they’re now being told that those ships might not meet the new standards – even though the ships may be almost brand new.

Another concern with the EU’s moves is whether it has a grasp on all the “what if” scenarios. For example, if the EU has stricter rules than other countries, that affects which ships companies can use on European routes. Any vessels that they put on routes to Europe will have to meet those emissions standards. If there’s a greater demand for products in Europe, they may have fewer vessels they could use.

Press the play button or zoom out and use the filters to see where different ship types travel. Created by London-based data visualization studio Kiln and the UCL Energy Institute

I do think the change will be coming soon in the industry, but changes have to make financial sense to the shipping lines and their customers, too.

Economists have estimated that the cost of cutting emissions 50% by 2050 are anywhere from US$1 trillion to, more realistically, over $3 trillion, and full decarbonization would be even higher. Many of those costs will be passed down to charterers, shippers and eventually consumers – meaning you and me.

Are there ways companies can cut emissions now while preparing to upgrade their fleets?

There are a number of options ship companies are using now to lower emissions.

One that has been used for at least 10 years is putting higher quality paint on the hulls, which reduces the friction between the hull and the water. With less friction, the engine isn’t working as hard, which reduces emissions.

Another is slow speed. If ships run at a higher speed, their engines work harder, which means they use more fuel and release more emissions. So shippers will use slow steaming. Most of the time, ships will go slow when they’re close to shore to reduce emissions that cause smog in port cities like Los Angeles. On the open ocean, they will go back to normal speed.

Another option common in the U.S. and Europe is shutting down the ship’s engines while in port and plugging into the port’s electricity. It’s called “cold ironing.” It avoids burning more of the ship’s fuel, which affects air quality. The Ports of Los Angeles and Long Beach, where smog from idling ships has been a health concern, have been a big driver of electrification. It’s also less expensive for shipping companies than burning their fuel while in port.

As simple as those may sound, they have made huge improvements in terms of emissions, but they aren’t enough on their own.

Will a higher goal set by the IMO be enough to pressure the industry to change?

I used to work in shipping, and I know the maritime industry is a very old-school industry from centuries ago. But the industry has invested millions in new ships with the most effective technology available in recent years.

When the IMO began requiring all ships using heavy fuel in global trade to shift to low-sulfur fuel, the industry pivoted to meet the rule, even though retrofits were costly and time consuming. Many shipping lines complied by installing “scrubbers” that essentially filter the ship’s engine, and new ships were built to run on the low-sulfur fuel oil.

Now, the industry is being told the standards are changing again.

All industries want consistency so they can be confident investing in a new technology. The shipping lines will follow what the IMO says. They will push back, but they will still do it. That’s in part because the IMO supports the maritime industry, too.The Conversation

About the Author:

Don Maier, Associate Professor of Business, University of Tennessee

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

 

Economics & Fundamentals Opinions
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.

Financial News Forex and Currency News
24 Apr

Big Tech earnings out this week – what investors are looking for

By George Prior 

With Microsoft, Alphabet, Amazon and Meta all reporting their earnings this week, investors around the world are switching their attention from banks to Big Tech, says the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The comments from Nigel Green, chief executive and founder of deVere Group, come as US stock futures dropped slightly on Sunday night, and European markets are expected to open flat, as investors prepare for corporate earnings reports from mega-cap tech titans.

He says: “Many of the tech giants spent 2022 ‘cleaning house’ and getting rid of factors weighing on earnings, so we expect to see some positive reports this week.

“The earnings will highlight which companies have been able to maintain margin. In this environment of higher rates for longer than had previously been anticipated, some companies have found it difficult to maintain margin, others have done well.

“But due to the difficult work done last year, Big Tech is likely to provide some decent earnings.”

There are three main factors that investors will be looking for, says Nigel Green.

“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.”

Only two months after its launch in late November, ChatGPT had 100 million monthly active users in January. To put this into context, it took Instagram two and a half years to get to 100 million.

“Therefore, the pressure is on for all tech titans to ramp up their AI divisions.”

This week is a big week and the halfway point in earnings season.

The deVere CEO concludes: “Just five tech companies have made up two-thirds of the S&P 500’s gains this year.  Needless to say, all eyes are on Big Tech earnings this week.”

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
24 Apr

Stock indices remain under pressure from high rates

By JustMarkets

At the close of the stock market on Friday, the Dow Jones Index (US30) gained 0.06% (-0.32% for the week), while the S&P 500 (US500) added 0.09% (-0.25% for the week). The Technology Index NASDAQ (US100) gained 0.11% on Friday (-0.30% for the week). Stock indices remain under pressure from high rates. The US Federal Reserve is 90% likely to raise interest rates by 0.25% at its May meeting. As of April 21, 18% of companies in the S&P 500 Index reported actual results for Q1 2023, of which 63% reported actual earnings above estimates. Many important US macro statistics will be released this week, and the tech giants (AAPL, MSFT, GOOGL, AMZN, META) will also report, which will be a key test for the stock market. Investors have gravitated toward tech stocks this year, believing that the Fed will soon stop raising interest rates and that the sector will remain resilient as growth slows. Reports will show if this is true.

Ray Dalio, a founder of Bridgewater Associates, warned of the risk of rising debt burdens and rising interest rates, putting the economy on the verge of a recession that will make things much more difficult in the next year or two. According to Dalio, debts will grow so much that central banks will have to buy them out.

Stock markets in Europe were mostly up on Friday. German DAX (DE30) gained 0.54% (+0.27% for the week), French CAC 40 (FR40) gained 0.51% on Friday (+0.55% for the week), Spanish IBEX 35 Index (ES35) decreased by 0.37% (+0.30% for the week), British FTSE 100 (UK100) was up by 0.15% (+0.54% for the week).

Most ECB Governing Council officials remain concerned about the risks of rising inflation and intend to raise rates further. Concerns about the banking sector have forced the ECB to adopt a more cautious tone in its communications, but recently those concerns seem to have receded. Another rate hike at the May meeting looks like a done deal, but the size of the move remains an open question. Market pricing is leaning toward a 25 basis point rate hike. But another inflation report and GDP data will be released before the May meeting. Also, some prominent European banks are due to report earnings this week, including UBS, Deutsche Bank, Santander, and Barclays. The first quarter has been very turbulent for banks after the collapse of two regional US lenders last month and the dramatic takeover of Credit Suisse by rival UBS. As a result, the value of European banks fell by nearly $180 billion at one point. The sector has since recovered, but its value is still $70 billion less than before the collapse.

UK consumer confidence rose from 49 to 30. The latest report showed that investors should not expect a quick recovery in retail activity, but given other economic data (labor market, inflation, GDP, manufacturing activity), the UK economy is likely to avoid a technical recession in the first half of the year. The Bank of England is preparing for another 25 basis point rate hike.

Oil prices fell about 5.5% last week, the worst five-day decline since mid-March. But analysts still believe oil prices will rebound ahead of the summer as demand rises and supply may fall short, given that crude inventories are low and OPEC+ announced a surprise cut last month amid waning global growth prospects. If WTI crude oil prices fall to $75 or below again, it could cause OPEC+ to be unhappy again. The need for oil at or above $80 is crucial to OPEC+.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) added 0.09% for the week, China’s FTSE China A50 (CHA50) decreased by 0.41% for the week, Hong Kong’s Hang Seng (HK50) was down by 1.47% for the week, India’s NIFTY 50 (IND50) lost 0.05%, and Australia’s S&P/ASX 200 (AU200) fell by 0.42% for the week.

In 2023, China and other emerging markets in Asia saw the biggest drop in export growth due to weakening global demand. When economies reopened, trade growth began to slow. The pandemic led to a skew in consumption of goods, which has now shifted toward demand for services.

The new governor of the Bank of Japan, Kazuo Ueda, will hold his first monetary policy meeting on Friday, and while analysts do not expect any changes to the central bank’s ultra-blunt monetary policy, traders should be prepared for surprises. Inflation in Japan is ahead of estimates, but Ueda’s comments in recent weeks suggest that stimulus parameters remain appropriate for now.

The G7 countries are considering an almost total ban on exports to Russia. Former Russian President Dmitry Medvedev said Sunday that if the G7 decided to ban exports to Russia, Moscow would respond by canceling the Black Sea Grain deal, which allows the export of vital grain from Ukraine.

In the commodities market, futures on platinum (+8.28%), palladium (+7.06%), and natural gas (+5.01%) showed the biggest gains last week. Futures on gasoline futures (-8.21%), corn (-7.77%), lumber (-6.8%), WTI oil (-5.54%), Brent oil (-5.28%), soybeans (-3.57%), cotton (-3.29%) and copper (-2.97%) showed the biggest drop.

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

Dow Jones (US30)33,808.96 +22.34 (+0.066%)

DAX (DE40) 15,881.66 +85.69 (+0.54%)

FTSE 100 (UK100) 7,914.13 +11.52 (+0.15%)

USD Index 101.72 -0.12 (-0.11%)

Important events for today:
  • – Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
  • – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
  • – Canada Wholesale 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.

Financial News Stock Market News
24 Apr

Trade Of The Week: USDJPY Primed For Heavy Event Week

By ForexTime 

Watch this space as the USDJPY could end April with a bang!

Later this week, investors will be served a super combo of top-tier economic data combined with the Bank of Japan (BoJ) rate decision. With so much going on over the next few days, it may be wise to fasten your seatbelts as volatility could be on the horizon.

It has been a rough month for the Japanese Yen. The currency was an easy target for other G10 counterparts as the BoJ continued its ultra-low interest rates as expectations grew over the Fed raising rates in May. Easing fears over a global banking crisis has also contributed to the Yen’s woes with the improving sentiment directing investors toward riskier assets.

Looking at the technicals, the USDJPY was trapped within a range last week with support at 133.70 and resistance at 135.00. Prices are trading above the 50 and 100-day SMA while the MACD trades to the upside. However, the currency pair seems to be slowly approaching overbought conditions.

The USDJPY could be gearing up for a major move and here are 3 reasons why…

  1. Bank of Japan rate decision

The Bank of Japan’s first policy meeting under Governor Zauo Ueda will be the main risk event for the Yen on Friday.

Despite Japan’s consumer inflation holding above the central’s target, the BoJ is widely expected to maintain rates at -0.1% and keep its yield-curve control settings unchanged. Policymakers may be reluctant to act too soon given Japan’s fragile recovery and lingering uncertainty over the banking crisis overseas. However, any signal from Ueda that the central bank could turn neutral on the forward guidance could sow the seeds for tighter policy – ultimately boosting the Yen.

It will be wise to also keep a close eye on Japan’s latest CPI, Industrial production, retail sales, and unemployment figures which could provide fresh insight into the health of the economy. A hot inflation print coupled with strong data may fuel speculation around the BoJ pivoting down the line. Alternatively, a soft inflation report and disappointing data could strengthen the argument around extended periods of ultra-loose monetary policy.

  1. Earnings + key US economic reports

Some of the largest companies in the world will be reporting their earnings this week which could trigger significant volatility across financial markets. If the earnings paint an overall positive picture, this could boost risk appetite at the expense of safe havens like the Yen. However, a set of disappointing earnings could rekindle risk aversion, boosting attraction for the Yen and other safe-haven destinations.

There are some major releases from the US economy ranging from the April consumer confidence data, Q1 GDP figures, and the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditure. First quarter US GDP is expected to moderate from the 2.6% in the previous quarter while persistent price pressures may be evident in Friday’s core PCE data which should highlight why policymakers remain concerned. Ultimately, if the data supports bets around the Fed keeping interest rates higher for longer, this may propel the USDJPY higher.

  1. Bulls and bears engaged in tug of war

Taking a look at the technical picture, there seems to be a tussle between bulls and bears on the daily timeframe with a potent fundamental spark needed to shift the balance of power in one direction. A solid breakout and daily close above 135.00 could encourage a move towards levels not seen since early March at 137.00 – a level where the 200-day Simple Moving Average (SMA) resides. Should prices slip below 133.70, the USDJPY could decline towards 132.90 and 131.20, respectively.

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Financial News Forex and Currency News
23 Apr

Currency Speculators trim US Dollar Index bets to lowest level in 93-weeks

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday April 18th and shows a quick view of how large market participants (for-profit speculators and commercial traders) were positioned in the futures markets. All currency positions are in direct relation to the US dollar where, for example, a bet for the euro is a bet that the euro will rise versus the dollar while a bet against the euro will be a bet that the euro will decline versus the dollar.

Weekly Speculator Changes led by Canadian Dollar & British Pound

The COT currency market speculator bets were higher this week as eight out of the eleven currency markets we cover had higher positioning while the other three markets had lower speculator contracts.

Leading the gains for the currency markets was the Canadian Dollar (10,346 contracts) with the British Pound (3,700 contracts), the Swiss Franc (2,014 contracts), the EuroFX (1,023 contracts), Brazilian Real (651 contracts), Bitcoin (633 contracts), New Zealand Dollar (577 contracts) and the Japanese Yen (338 contracts) also recording positive weeks.

The currencies seeing declines in speculator bets on the week were the Mexican Peso (-4,306 contracts) with the Australian Dollar (-4,419 contracts) and the US Dollar Index (-2,751 contracts) also seeing lower bets on the week.

Speculators reduce US Dollar Index bets to lowest level in 93-weeks

Highlighting the COT currency’s data this week is the increased bearishness of the speculator’s positioning in the US Dollar Index.

Large speculative US Dollar Index positions fell this week for a second consecutive week and for the third time in the past four weeks. Speculators have now subtracted a total of -3,631 net contracts from the overall position over the last four weeks. This bearishness has pushed the US Dollar Index speculator net position (currently at +10,513 contracts) to the lowest level of the past 93 weeks, dating back to July 6th of 2021.

Overall, the US Dollar speculator position has been in bullish territory dating back to June 29th of 2021 with the most bullish point of the cycle taking place on June 21st of 2022 with a high of +45,010 contracts. Since then, speculator positions have slowly eroded and have now been under the +20,000 net contract level for the past 18 weeks in a row.

The US Dollar Index futures price has been on the defensive as well with this week being the first weekly advance over the past eight weeks. The front-month futures price closed this week around 101.50 and is down around 4 percent since February while also being down over 10 percent since October.

Data Snapshot of Forex Market Traders | Columns Legend
Apr-18-2023OIOI-IndexSpec-NetSpec-IndexCom-NetCOM-IndexSmalls-NetSmalls-Index
USD Index34,8653410,51342-11,955571,44232
EUR766,37480164,36182-213,2851848,92457
GBP224,536521,30270-7,995296,69371
JPY177,50733-56,8693461,64566-4,77644
CHF40,87038-4,720423,386511,33462
CAD148,63829-46,2331142,194854,03932
AUD159,70857-42,3564650,55757-8,20132
NZD33,37716-3,904433,7175518754
MXN267,6986156,17191-60,884104,71385
RUB20,93047,54331-7,15069-39324
BRL51,8834213,59653-14,778461,18253
Bitcoin15,38576-48968-176066528

 

Strength Scores led by Mexican Peso & EuroFX

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that the Mexican Peso (91 percent) and the EuroFX (82 percent) lead the currency markets this week. The British Pound (70 percent), Bitcoin (68 percent) and the Brazilian Real (53 percent) come in as the next highest in the weekly strength scores.

On the downside, the Canadian Dollar (11 percent) comes in at the lowest strength levels currently and is in Extreme-Bearish territory (below 20 percent).

Strength Statistics:
US Dollar Index (42.5 percent) vs US Dollar Index previous week (47.1 percent)
EuroFX (81.7 percent) vs EuroFX previous week (81.3 percent)
British Pound Sterling (70.1 percent) vs British Pound Sterling previous week (67.0 percent)
Japanese Yen (33.9 percent) vs Japanese Yen previous week (33.6 percent)
Swiss Franc (42.1 percent) vs Swiss Franc previous week (36.8 percent)
Canadian Dollar (11.4 percent) vs Canadian Dollar previous week (1.8 percent)
Australian Dollar (45.6 percent) vs Australian Dollar previous week (49.7 percent)
New Zealand Dollar (43.0 percent) vs New Zealand Dollar previous week (41.4 percent)
Mexican Peso (91.1 percent) vs Mexican Peso previous week (94.4 percent)
Brazilian Real (53.1 percent) vs Brazilian Real previous week (52.3 percent)
Bitcoin (68.4 percent) vs Bitcoin previous week (57.4 percent)

 

Mexican Peso & British Pound top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that the Mexican Peso (66 percent) and the British Pound (16 percent) lead the past six weeks trends for the currencies. The Japanese Yen (11 percent), the EuroFX (6 percent) and the Swiss Franc (-2 percent) are the next highest positive movers in the latest trends data.

The New Zealand Dollar (-26 percent) leads the downside trend scores currently with the Brazilian Real (-21 percent), Australian Dollar (-16 percent) and the Canadian Dollar (-16 percent) following next with lower trend scores.

Strength Trend Statistics:
US Dollar Index (-3.4 percent) vs US Dollar Index previous week (2.3 percent)
EuroFX (6.1 percent) vs EuroFX previous week (0.4 percent)
British Pound Sterling (16.1 percent) vs British Pound Sterling previous week (18.3 percent)
Japanese Yen (11.4 percent) vs Japanese Yen previous week (0.9 percent)
Swiss Franc (-2.0 percent) vs Swiss Franc previous week (-4.8 percent)
Canadian Dollar (-15.9 percent) vs Canadian Dollar previous week (-19.1 percent)
Australian Dollar (-16.3 percent) vs Australian Dollar previous week (-12.8 percent)
New Zealand Dollar (-25.8 percent) vs New Zealand Dollar previous week (-31.4 percent)
Mexican Peso (66.2 percent) vs Mexican Peso previous week (72.5 percent)
Brazilian Real (-21.0 percent) vs Brazilian Real previous week (-24.0 percent)
Bitcoin (-9.2 percent) vs Bitcoin previous week (-9.1 percent)

Individual COT Forex Markets:

US Dollar Index Futures:

US Dollar Index Forex Futures COT ChartThe US Dollar Index large speculator standing this week reached a net position of 10,513 contracts in the data reported through Tuesday. This was a weekly decrease of -2,751 contracts from the previous week which had a total of 13,264 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.5 percent. The commercials are Bullish with a score of 56.8 percent and the small traders (not shown in chart) are Bearish with a score of 32.3 percent.

US DOLLAR INDEX StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:72.39.714.2
– Percent of Open Interest Shorts:42.144.010.0
– Net Position:10,513-11,9551,442
– Gross Longs:25,1923,3714,940
– Gross Shorts:14,67915,3263,498
– Long to Short Ratio:1.7 to 10.2 to 11.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):42.556.832.3
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-3.45.8-17.9

 

Euro Currency Futures:

Euro Currency Futures COT ChartThe Euro Currency large speculator standing this week reached a net position of 164,361 contracts in the data reported through Tuesday. This was a weekly rise of 1,023 contracts from the previous week which had a total of 163,338 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 81.7 percent. The commercials are Bearish-Extreme with a score of 18.4 percent and the small traders (not shown in chart) are Bullish with a score of 57.0 percent.

EURO Currency StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:31.654.511.8
– Percent of Open Interest Shorts:10.282.35.4
– Net Position:164,361-213,28548,924
– Gross Longs:242,369417,58690,436
– Gross Shorts:78,008630,87141,512
– Long to Short Ratio:3.1 to 10.7 to 12.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):81.718.457.0
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:6.1-3.6-8.4

 

British Pound Sterling Futures:

British Pound Sterling Futures COT ChartThe British Pound Sterling large speculator standing this week reached a net position of 1,302 contracts in the data reported through Tuesday. This was a weekly rise of 3,700 contracts from the previous week which had a total of -2,398 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 70.1 percent. The commercials are Bearish with a score of 28.7 percent and the small traders (not shown in chart) are Bullish with a score of 71.1 percent.

BRITISH POUND StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:24.056.913.7
– Percent of Open Interest Shorts:23.460.410.7
– Net Position:1,302-7,9956,693
– Gross Longs:53,834127,73130,745
– Gross Shorts:52,532135,72624,052
– Long to Short Ratio:1.0 to 10.9 to 11.3 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):70.128.771.1
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:16.1-28.545.5

 

Japanese Yen Futures:

Japanese Yen Forex Futures COT ChartThe Japanese Yen large speculator standing this week reached a net position of -56,869 contracts in the data reported through Tuesday. This was a weekly lift of 338 contracts from the previous week which had a total of -57,207 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 33.9 percent. The commercials are Bullish with a score of 65.7 percent and the small traders (not shown in chart) are Bearish with a score of 43.7 percent.

JAPANESE YEN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:8.874.815.3
– Percent of Open Interest Shorts:40.940.118.0
– Net Position:-56,86961,645-4,776
– Gross Longs:15,661132,74727,108
– Gross Shorts:72,53071,10231,884
– Long to Short Ratio:0.2 to 11.9 to 10.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):33.965.743.7
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:11.4-13.619.3

 

Swiss Franc Futures:

Swiss Franc Forex Futures COT ChartThe Swiss Franc large speculator standing this week reached a net position of -4,720 contracts in the data reported through Tuesday. This was a weekly advance of 2,014 contracts from the previous week which had a total of -6,734 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 42.1 percent. The commercials are Bullish with a score of 50.6 percent and the small traders (not shown in chart) are Bullish with a score of 62.0 percent.

SWISS FRANC StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:13.144.437.2
– Percent of Open Interest Shorts:24.636.133.9
– Net Position:-4,7203,3861,334
– Gross Longs:5,34718,13815,185
– Gross Shorts:10,06714,75213,851
– Long to Short Ratio:0.5 to 11.2 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):42.150.662.0
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-2.0-18.941.4

 

Canadian Dollar Futures:

Canadian Dollar Forex Futures COT ChartThe Canadian Dollar large speculator standing this week reached a net position of -46,233 contracts in the data reported through Tuesday. This was a weekly rise of 10,346 contracts from the previous week which had a total of -56,579 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 11.4 percent. The commercials are Bullish-Extreme with a score of 84.9 percent and the small traders (not shown in chart) are Bearish with a score of 31.8 percent.

CANADIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:12.064.921.9
– Percent of Open Interest Shorts:43.136.519.2
– Net Position:-46,23342,1944,039
– Gross Longs:17,80696,42132,592
– Gross Shorts:64,03954,22728,553
– Long to Short Ratio:0.3 to 11.8 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):11.484.931.8
– Strength Index Reading (3 Year Range):Bearish-ExtremeBullish-ExtremeBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-15.91.931.8

 

Australian Dollar Futures:

Australian Dollar Forex Futures COT ChartThe Australian Dollar large speculator standing this week reached a net position of -42,356 contracts in the data reported through Tuesday. This was a weekly decline of -4,419 contracts from the previous week which had a total of -37,937 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.6 percent. The commercials are Bullish with a score of 56.6 percent and the small traders (not shown in chart) are Bearish with a score of 32.4 percent.

AUSTRALIAN DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:27.955.512.8
– Percent of Open Interest Shorts:54.523.818.0
– Net Position:-42,35650,557-8,201
– Gross Longs:44,61088,62820,500
– Gross Shorts:86,96638,07128,701
– Long to Short Ratio:0.5 to 12.3 to 10.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):45.656.632.4
– Strength Index Reading (3 Year Range):BearishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-16.310.97.3

 

New Zealand Dollar Futures:

New Zealand Dollar Forex Futures COT ChartThe New Zealand Dollar large speculator standing this week reached a net position of -3,904 contracts in the data reported through Tuesday. This was a weekly lift of 577 contracts from the previous week which had a total of -4,481 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 43.0 percent. The commercials are Bullish with a score of 55.3 percent and the small traders (not shown in chart) are Bullish with a score of 53.8 percent.

NEW ZEALAND DOLLAR StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:32.655.311.3
– Percent of Open Interest Shorts:44.344.210.7
– Net Position:-3,9043,717187
– Gross Longs:10,87618,4743,757
– Gross Shorts:14,78014,7573,570
– Long to Short Ratio:0.7 to 11.3 to 11.1 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):43.055.353.8
– Strength Index Reading (3 Year Range):BearishBullishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-25.817.723.3

 

Mexican Peso Futures:

Mexican Peso Futures COT ChartThe Mexican Peso large speculator standing this week reached a net position of 56,171 contracts in the data reported through Tuesday. This was a weekly decline of -4,306 contracts from the previous week which had a total of 60,477 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 91.1 percent. The commercials are Bearish-Extreme with a score of 9.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 85.5 percent.

MEXICAN PESO StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:52.045.02.7
– Percent of Open Interest Shorts:31.067.71.0
– Net Position:56,171-60,8844,713
– Gross Longs:139,289120,3717,352
– Gross Shorts:83,118181,2552,639
– Long to Short Ratio:1.7 to 10.7 to 12.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):91.19.885.5
– Strength Index Reading (3 Year Range):Bullish-ExtremeBearish-ExtremeBullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:66.2-61.5-8.5

 

Brazilian Real Futures:

Brazil Real Futures COT ChartThe Brazilian Real large speculator standing this week reached a net position of 13,596 contracts in the data reported through Tuesday. This was a weekly gain of 651 contracts from the previous week which had a total of 12,945 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 53.1 percent. The commercials are Bearish with a score of 46.5 percent and the small traders (not shown in chart) are Bullish with a score of 53.4 percent.

BRAZIL REAL StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:73.218.18.7
– Percent of Open Interest Shorts:47.046.56.4
– Net Position:13,596-14,7781,182
– Gross Longs:37,9919,3654,527
– Gross Shorts:24,39524,1433,345
– Long to Short Ratio:1.6 to 10.4 to 11.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):53.146.553.4
– Strength Index Reading (3 Year Range):BullishBearishBullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-21.022.7-15.4

 

Bitcoin Futures:

Bitcoin Crypto Futures COT ChartThe Bitcoin large speculator standing this week reached a net position of -489 contracts in the data reported through Tuesday. This was a weekly lift of 633 contracts from the previous week which had a total of -1,122 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.4 percent. The commercials are Bullish with a score of 51.2 percent and the small traders (not shown in chart) are Bearish with a score of 28.1 percent.

BITCOIN StatisticsSPECULATORSCOMMERCIALSSMALL TRADERS
– Percent of Open Interest Longs:75.63.48.9
– Percent of Open Interest Shorts:78.84.54.6
– Net Position:-489-176665
– Gross Longs:11,6295171,368
– Gross Shorts:12,118693703
– Long to Short Ratio:1.0 to 10.7 to 11.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):68.451.228.1
– Strength Index Reading (3 Year Range):BullishBullishBearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:-9.2-1.112.6

 

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

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