InvestMacro

The Analytical Overview of the Main Currency Pairs on 2023.02.16

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.0736
Prev Close: 1.0686
% chg. over the last day: -0.47 %

ECB head Christine Lagarde said yesterday that she would vote for a 0.5% rate hike at the next ECB meeting. The medium-term outlook for the euro remains bullish, but the EUR/USD is pulling lower amid a temporary rise in the dollar index. The dollar index is rising on the back of strong US economic data (labor market, GDP, industrial production), which opens up more room for the Fed to raise rates.

Trading recommendations

Support levels: 1.0696, 1.0651, 1.0597
Resistance levels: 1.0839, 1.0906, 1.0926, 1.0967, 1.1017, 1.1077

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price forms a wide corridor, inside which there is a downward channel. The MACD indicator has become inactive again. Under such market conditions, buy trades are best considered on the lower time frames from the support level of 1.0696 or after the impulse breakout from the descending channel. Sell deals can be considered from the resistance level of 1.0839, but it is better with confirmation in the form of a reverse initiative on the lower time frames.

Alternative scenario: if the price breaks down through the resistance level of 1.0926 and fixes above it, the uptrend will likely resume.

News feed for 2023.02.16:

– US Building Permits (m/m) at 15:30 (GMT+2);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
– US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+2);
– US Producer Price Index (m/m) at 15:30 (GMT+2);
– US FOMC Member Mester Speaks at 15:45 (GMT+2);
– US FOMC Member Bullard Speaks at 20:30 (GMT+2).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2169
Prev Close: 1.2032
% chg. over the last day: -1.14 %

The UK Consumer Price Index (CPI) fell from 10.5% to 10.1% (forecast 10.3%) in annual terms. Core inflation fell even more, from 6.3% to 5.8% (forecast 6.2%). Such data on the back of a strong labor market may provide the Bank of England with at least another 0.25% rate hike at its next meeting. The report indicates that the January 2023 decline mainly reflects price changes in the transportation segment. There was also a downward effect in the services sector. Since there is no mention of energy, the peak of UK inflation has likely passed. But since inflation remains extremely high and much higher than in other economies, the British pound reacted very negatively to the data.

Trading recommendations

Support levels: 1.2000, 1.1930
Resistance levels: 1.2055, 1.2117, 1.2188, 1.2311, 1.2416

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. At the moment, the price is trading below the moving averages, and sellers’ pressure remains intraday. The MACD indicator has become negative, with no signs of divergence. Under such market conditions, it is better to look for buy trades on intraday time frames from the support level of 1.2200, but with a confirmation in the form of a false breakdown. Sell deals are best to look for from the resistance level of 1.2055 or 1.2117, but also better with a confirmation in the form of a reverse initiative on the lower time frames.

Alternative scenario: if the price breaks out through the 1.2416 resistance level and fixes above it, the uptrend will likely resume.

There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 133.10
Prev Close: 134.16
% chg. over the last day: +0.80 %

Kazuo Ueda, nominated by the Japanese government as the next governor of the Bank of Japan (BoJ), will inherit a number of difficult challenges when he replaces the current governor Haruhiko Kuroda on April 8. Annualized inflation in Japan reached 4% in December, the highest level since January 1991, while GDP in the fourth quarter did not meet expectations of a 2% rise on an annualized basis and grew by a modest 0.6%. The new Central Bank Governor will have to decide when and by how much the Bank of Japan should start cutting back on its ultra-soft monetary policy in order to restrain inflation while allowing a sufficient reserve of the money supply to allow the economy to grow. It is unlikely that the new BOJ Governor will make any harsh statements on his first day in office, but there is a high probability that the BOJ will abandon its soft policy this year.

Trading recommendations

Support levels: 133.47, 132.95, 131.43, 129.68, 129.98, 129.19, 129.04, 128.16
Resistance levels: 134.65

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is traded above the moving averages while not falling below dynamic lines, supporting the upward movement. The MACD indicator is in the positive zone, but there are signs of divergence already on several timeframes. Buying pressure is present, but it is limited. It is best to look for buy trades from the support level of 133.47 or 132.95, but only with confirmation on the lower time frames. Sell deals can be sought after an impulse return of the price below the level of 132.95 or from 134.65, but with additional confirmation.

Alternative scenario: if the price fixes below the 131.43 support level, the downtrend will be resumed with a high probability.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3336
Prev Close: 1.3392
% chg. over the last day: +0.42 %

The International Energy Agency (IEA) raised its 2023 oil demand forecast by 500,000 BPD to nearly 102 million BPD. The agency also warned that an alliance of OPEC+ producers might try to cut production to support oil prices. What does this mean for USD/CAD quotes? With the Bank of Canada and the US Federal Reserve holding rates almost at the same level, only oil prices will be the imbalance in pricing. And since the Canadian dollar is a commodity currency, rising oil prices will strengthen the Canadian (USD/CAD decline).

Trading recommendations

Support levels: 1.3347, 1.3295, 1.3212
Resistance levels: 1.3390, 1.3472, 1.3496, 1.3520, 1.3554, 1.3595

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading above the moving averages again. The MACD indicator has become positive, but there is some seller pressure inside the day. Buy trades can be considered from the support of 1.3347, but with additional confirmation on the lower time frames. Sell deals should be considered from the resistance level of 1.3390 but on the condition of a reverse reaction. Also, sales can be looked for after a false breakout of the 1.3439 resistance level.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3263, the downtrend will likely resume.

There is no news feed for today.

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 Forex and Currency News

16 Feb

The RBNZ is planning further interest rate hikes. Gold under pressure from rising government bond yields

By JustMarkets

The US dollar continued rising after strong retail sales data, which, together with CPI data, opened the door to further rate hikes by the US Central Bank. But stock indices rose along with the dollar yesterday, which is rare since, most of the time, these instruments are inversely correlated. As the stock market closed, the Dow Jones Index (US30) increased by 0.11, and the S&P 500 Index (US500) added 0.28%. The Technology Index NASDAQ (US100) gained 0.92%.

According to the US Commerce Department, retail sales rose by 3% in January from the previous month, the largest increase in nearly two years. This is a clear sign that household spending remains strong despite the central bank’s tough tightening campaign to slow demand. With a strong labor market, increased wage pressures, and solid consumer spending, the stars may align for further FOMC hikes and higher interest rates over the longer term. This scenario could worsen sentiment and create headwinds for stocks, especially in the technology sector. Nevertheless, the probability of a soft landing on the economy remains high.

Shares of Analog Devices (ADI) jumped by 7% to a 52-week high yesterday after posting quarterly results that beat Wall Street estimates. Roblox (RBLX) rose by 26% as it reported better-than-expected fourth-quarter results, helped by a jump in video game orders. Airbnb (ABNB) also provided an upbeat outlook after the company’s quarterly results beat analysts’ estimates.

Equity markets in Europe were mostly up on Tuesday. German DAX (DE30) gained 0.82%, French CAC 40 (FR40) jumped by 1.21%, Spanish IBEX 35 (ES35) added 0.42%, and British FTSE 100 (UK100) closed up by 0.55% on Wednesday.

The US crude oil inventories increased by 16.3 million barrels last week to 471.4 million barrels, well above the estimates of 1.2 million barrels. Despite the increase in inventories, black gold prices still rose yesterday as the International Energy Agency (IEA) raised its forecast for oil demand in 2023 by 500,000 BPD to nearly 102 million BPD. The IEA also warned that an alliance of OPEC+ producers might try to cut production to support oil prices.

It was originally intended that gold would exceed $2,000 per ounce in the first quarter of this year, repeating the rally seen in April 2022. But this did not happen, as a strong US labor market and GDP growth have increased the likelihood of a longer tightening cycle, fueling the dollar and government bonds. Gold and silver are inversely correlated to the dollar and government bond yields, so “precious metals” are now under pressure.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) declined by 0.37%, China’s FTSE China A50 (CHA50) fell by 0.77%, Hong Kong’s Hang Seng (HK50) ended the day down by 1.43%, India’s NIFTY 50 (IND50) added 0.48%, while Australia’s S&P/ASX 200 (AU200) ended the day down by 1.06%.

Japan’s trade deficit widened to a record high in January amid a global slowdown. Export growth slowed sharply to 3.5%, with equipment for the production of microchips being one of the largest breaks, signaling weakening global demand in the technology sector. Imports continued to show double-digit growth, rising to 17.8% from a year earlier, as expensive energy supplies continued to drive up import costs. China’s change in virus policies has also hit Japan’s exports, as the number of Covid cases rose sharply after the Covid-Zero policy was canceled, causing disruptions across the country. Shipments to China and other Asian countries account for more than 50% of Japan’s total exports.

The Reserve Bank of New Zealand is forecast to raise interest rates another 0.5% to 4.75% next week. While still a significant increase, it is less than the 75 basis point increase the RBNZ had planned in its November monetary policy statement. The main reason for the rate hike is ongoing inflationary pressures. The rate is expected to peak at 5.25%, and rate cuts will not begin until 2024.

Australian labor market data has disappointed economists. The unemployment rate rose from 3.5% to 3.7%, while the number of jobs decreased by 11.5K. Australia’s economic data raise the question of how long the RBA will be able to remain hawkish.

S&P 500 (F) (US500) 4,147.60 +11.47 (+0.28%)

Dow Jones (US30)34,128.05 +38.78 (+0.11%)

DAX (DE40) 15,506.34 +125.78 (+0.82%)

FTSE 100 (UK100) 7,997.83 +43.98 (+0.55%)

USD Index 103.84 +0.61 (+0.59%)

Important events for today:

– Australia Unemployment Rate (m/m) at 02:30 (GMT+2);
– US Building Permits (m/m) at 15:30 (GMT+2);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
– US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+2);
– US Producer Price Index (m/m) at 15:30 (GMT+2);
– US FOMC Member Mester Speaks at 15:45 (GMT+2);
– US Natural Gas Storage (w/w) at 17:30 (GMT+2);
– US FOMC Member Bullard Speaks at 20:30 (GMT+2).

By JustMarkets

Economics & Fundamentals Financial News

15 Feb

Inflation here to stay: Where should you invest?

By George Prior

Inflation is cooling gradually but remains stubbornly high in most major developed economies, including the UK and U.S., despite the efforts of central banks.

This week, official data shows that U.S. Consumer Price Inflation – CPI – is 6.4%, slightly higher than was expected, but down from a 40-year high of 9.1% in June 2022. On Wednesday, the UK inflation rate was revealed to have fallen for the third month in a row in January to hit 10.1%, below economists’ expectations, but still five times higher than the Bank of England’s target.

Markets are now betting on a longer period of higher interest rates as they begin to take heed of the message from central bank officials, including those from the U.S. Federal Reserve, Bank of England and European Central Bank, that there’s still a way to go to cool inflation in the face of robust labour markets and wage growth.

Continuing hot inflation, agree experts, can impact an individual’s investments, leaving investors asking: where do I invest in an ongoing high inflation environment?

“Stubborn inflation affects stock markets because central banks, including the Fed, BoE and ECB, will have to continue to step in and raise interest rates. This means people adjust and rein-in their spending, it cools the economy and companies can struggle to make profits,” says Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations.

He continues: “Stock markets are correlated to the profits of the companies within that particular index.

“In this environment of higher rates for longer than had previously been anticipated, some companies are going to find it difficult to maintain margin and, as we’re now seeing, are failing to report earnings as had been expected.

“In other words, if costs are going up firms can’t maintain margin, so that company is unlikely to be a good investment until things change.”

The deVere Group CEO identifies four key sectors that he expects to be “resilient in this current environment.”

He explains: “We’re looking at sectors that can maintain margin, despite inflation and interest rate hikes.

“These include healthcare, luxury goods, energy and agriculture.

“Healthcare is a robust sector as people will always need to stay healthy – this has come into focus more than ever since the pandemic. Also, despite wider market volatility, there’s strong earnings potential due to ageing populations and other demographic changes. Plus, healthcare is becoming increasingly tech-driven, which offers fresh opportunities.”

He goes on to say: “Luxury goods can maintain margin due to the inherent aspirational ‘elite and exclusive’ aspect of the sector.

“We’ll look at energy because there’s a shortage of energy in the world right now.

“Agriculture is another one as populations in emerging markets around the world are eating more meat. As they eat more meat, there needs to be more grain produced.”

In this, and all environments, there remains one clear way for investors to maximise returns relative to risk: the time-honoured practice of portfolio diversification. A considered mix of asset classes, sectors, regions and currencies offers you protection from shocks.

A good fund manager will help you sidestep potential risks and benefit from key opportunities.

“Inflation is going to be an issue for investors for a while yet,” concludes Nigel Green.

“However, these can also be times of opportunity if you stay fully and wisely invested.”

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

Economics & Fundamentals Opinions

15 Feb

The cryptocurrency market digest (BTC, BLUR). Overview for 15.02.2023

By RoboForex.com

The BTC found a foothold and recovered. The quote on Wednesday is 22,127 USD. The fact that the BTC has out falling on halt is good news. The market did not reach the support level of 21,500 USD, after all. This means, sliding down to 20,500 USD is postponed. To go on growing, the BTC needs to secure above 22,450-22,500 USD. The growth to 23,000 and 25,000 USD will become quite realistic.

Capitalisation of the crypto market has returned to 1.025 trillion USD. The BTC takes up 41.6% of the market and the ETH – 18.5%.

Companies got class action after FTX ads

Venture business faced a class action from its clients after a series of ads about the FTX exchange. Earlier, the exchange crashed. Now such companies as Paradigm, Sequoia and Thoma Bravo will have to answer for money withdrawal at the collapse of the exchange.

BLUR dropped by 85%

The BLUR price lost 85% overnight. The trading day was volatile: the coin had just been released to the exchange with capitalisation of 772 million USD. The price was initially 5 USD but then dropped to 0.78 USD.

Binance: stablecoins need to be bound not only to USD

At a question-answer Twitter session, the head of the Binance exchange mentioned that stablecoins need to be bound to more currencies than the USD. This will reverse the course of the crusade against stablecoins and will increase rivalry with other coins bound to fiat currencies. The market will only win.

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.

Cryptocurrencies Financial News

15 Feb

Solid US CPI sees rates move higher

By ForexTime

The latest US CPI data showed us that the headline rate for prices rose 6.4% in January – a small slowdown from the prior month but higher than economists had predicted. The core annual figure also came in mildly stronger than expected but still lower compared to the prior readings, while the monthly prints hit the consensus estimates.

However, a core reading of 0.4% is still too strong for the Fed whose inflation target is 2%.

Economists believe an increase of around 0.17% is needed over time to hit this key objective.

A bumper US jobs report had stoked fears of stronger-than-expected numbers all round. So the data does suggest a slowing at least in the falling price pressures that we have seen over the past few months from last year’s high above 9%.

The “super core” number which excludes housing and is Powell’s key variable, remains uncomfortably high and is consistent with another couple of smaller rate hikes. Concerns about the tight labour market may also linger while the new seasonal adjustment is likely to be modestly inflationary.

DXY still stuck in a range

In which light, after some initial selling in the greenback immediately after the data, USD clawed back all its intraday losses and finished marginally in the green on the day.

Importantly, US Treasury yields also rebounded strongly from their initial move with the 10-year hitting levels not seen since the start of the year close to 3.80%.

Money markets have pushed the Fed funds terminal rate higher by a few basis points and it now stands around 5.27% in July.
There is now less than a 25bp rate cut priced in by the end of the year.

The dollar index, measured against six of its major trading partners, has rebounded this month after dropping to a multi-month low at 100.82 at the start of February.

The scarcely believable headline NFP print at the start of the month encouraged more buying, but prices have hit a long-term resistance zone between 103 and 104. This includes the pandemic spike high at 102.99 and the top from January 2017 at 103.82, as well as the 50-day simple moving average at 103.22.

The index dipped intraday yesterday and made an intraday low at 102.58 but buyers quickly stepped in. The longer prices track sideways, the stronger the breakout and range expansion will be.

Article 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

15 Feb

The Analytical Overview of the Main Currency Pairs on 2023.02.15

By JustMarkets

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.0718
Prev Close: 1.0735
% chg. over the last day: +0.16 %

The US inflation rate declined from 6.5% to 6.4% (forecast 6.2%) annually, while core inflation, which excludes food and energy prices, also declined from 5.7% to 5.6% (forecast 5.5%). Although inflationary pressures are easing, the fall in inflation is not happening as quickly as the US Federal Reserve had predicted. This factor increases the likelihood that the US Fed will hold one or two more interest rate hikes before pausing. Therefore, in the short term, the dollar has fundamental reasons to strengthen. On the other hand, the ECB is now acting more aggressively than the US Fed, and the narrowing of the interest rate differential should play in favor of a stronger euro in the medium term.

Trading recommendations

Support levels: 1.0686, 1.0597
Resistance levels: 1.0838, 1.0906, 1.0926, 1.0967, 1.1017, 1.1077

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is forming a wide corridor. Yesterday, the liquidity above the level of 1.0791 was tested, after which the price returned to the balance. The MACD indicator became inactive. Under such market conditions, buy trades are best considered on the lower time frames from the support level of 1.0686. Sell deals can be considered from the resistance level of 1.0839, but it is better with confirmation in the form of reverse initiative on the lower time frames.

Alternative scenario: if the price breaks down through the resistance level of 1.0926 and fixes above it, the uptrend will likely resume.

News feed for 2023.02.15:

– Spanish Consumer Price Index (m/m) at 10:00 (GMT+2);
– Eurozone Industrial Production (m/m) at 12:00 (GMT+2);
– US Retail Sales (m/m) at 15:30 (GMT+2);
– US NY Empire State Manufacturing Index (m/m) at 15:30 (GMT+2);
– Eurozone ECB President Lagarde Speaks at 16:00 (GMT+2);
– US Industrial Production (m/m) at 16:15 (GMT+2).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2132
Prev Close: 1.2174
% chg. over the last day: +0.35 %

The GBP/USD quotes strengthened on Tuesday after UK employment figures beat estimates. The unemployment rate remained at 3.7% while the economy added 74K jobs last month, with expectations of 40K. But the potential for growth in quotes was limited by stronger-than-expected January US consumer price indices that resulted in an increase in Treasury bond yields. Expectations for the Fed’s final rate could rise slightly, which would create a favorable environment for the US dollar, and threaten the pound’s recovery, especially if the rate differential widens.

Trading recommendations

Support levels: 1.2082, 1.2000, 1.1930
Resistance levels: 1.2188, 1.2311, 1.2416

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. At the moment, the price is trading above the moving averages, and there is a slight buying pressure inside the day. The MACD indicator has become inactive. Under such market conditions, buy trades are better to look for on intraday time frames from the support level of 1.2200, but with confirmation in the form of initiative and short targets. Sell trades are best sought after a pullback from the resistance level of 1.2188 but are also better with confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks out through the 1.2416 resistance level and fixes above it, the uptrend will likely resume.

News feed for 2023.02.15:

– UK Consumer Price Index (m/m) at 09:00 (GMT+2);
– UK Producer Price Index (m/m) at 09:00 (GMT+2).

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 132.40
Prev Close: 133.08
% chg. over the last day: +0.87 %

The Japanese government on Tuesday introduced Kazuo Ueda as a candidate for the next governor of the Bank of Japan, suggesting the academic and former Bank of Japan policymaker will replace Haruhiko Kuroda. The new leadership is said to be attuned to the complex challenges facing the central bank, from addressing the side effects of years of monetary policy easing that has distorted bond markets and widened the Bank of Japan’s balance sheet. Ueda’s nomination, along with those of two deputy governors, Ryozo Himino, a former Financial Services Agency commissioner, and Shinichi Uchida, the Central Bank’s executive director, is expected to be approved by mid-March. Given that Ueda will not dramatically change monetary policy, the Japanese yen continued its decline.

Trading recommendations

Support levels: 131.43, 129.68, 129.98, 129.19, 129.04, 128.16
Resistance levels: 133.47, 134.65

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is forming a wide-volatile corridor. The MACD indicator is in the positive zone, but there are signs of divergence. Buying pressure is present, but it is limited. It is better to look for buy deals from the support level of 131.43, but only with confirmation on the lower time frames. Sell deals can be sought after an impulse return of the price to the balance below the level of 132.89.

Alternative scenario: If the price fixes below the support level of 128.16, the downtrend will be renewed with a high probability.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3331
Prev Close: 1.3335
% chg. over the last day: +0.03 %

The Canadian dollar is a commodity currency, so it highly depends on instruments such as the dollar index and oil. A decline in oil prices on the back of rising inventories and a strengthening dollar index are negative factors for the Canadian currency. Higher than expected US inflation data added to fears of more hawkish actions by the Federal Reserve, which caused the dollar to rise. At the moment, the interest rate differential between the US Fed and the Bank of Canada is only 0.25%, so any rise in oil prices would help to strengthen the Canadian economy.

Trading recommendations

Support levels: 1.3333, 1.3295, 1.3212
Resistance levels: 1.3416, 1.3496, 1.3520, 1.3554, 1.3595

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price corrected up to the priority change level, after which there was a sharp rebound. The MACD indicator became positive, and buyers would dominate during the day. Buy trades can be considered from the support at 1.3333, but with additional confirmation on the lower time frames, as the level has already been tested. Sell deals should be considered from the resistance level of 1.3416 but on the condition of a reverse reaction.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3263, the downtrend will likely resume.

News feed for 2023.02.15:

– Canada Manufacturing Sales (m/m) at 15:30 (GMT+2);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+2).

By JustMarkets

Financial News Forex and Currency News

15 Feb

The prospect of higher interest rates increases the likelihood of a recession in the US this year

By JustMarkets

The US indices traded yesterday without a single dynamic. By the close of the stock market, Dow Jones (US30) Index decreased by 0.46%, S&P 500 (US500) lost 0.03%. The NASDAQ Technology Index (US100) added 0.57%. The latest consumer price data showed that the US inflation rate fell from 6.5% to 6.4% (forecast 6.2%) annually, with core inflation, which excludes food and energy prices, also falling from 5.7% to 5.6% (forecast 5.5%). Inflationary pressures are declining, but not as quickly as the US Fed would like. Because of this, expectations for the Fed’s final interest rate may rise slightly, which would create a favorable environment for the US dollar and government bonds and an unfavorable situation for stock indices. The prospect of higher interest rates also increases the likelihood of a US recession this year, as rising short-term yields reflect investor fears of slower economic growth.

NVIDIA (NVDA) shares closed up more than 5% after Bank of America said Nvidia is in a winning position to lead the “AI arms race.” Palantir Technologies (PLTR) was also a source of optimism for tech companies, as the data analytics company’s share price rose by 21% after it reported its first quarterly earnings. Shares of some Asian tech companies came under pressure from Warren Buffett’s Berkshire Hathaway (BRKa), which dumped most of its Taiwan Semiconductor Manufacturing Corp (TSMC) shares and increased its stake in Apple Inc (AAPL).

Stock markets in Europe were mostly up Tuesday. Germany’s DAX (DE30) decreased by 0.11%, France’s CAC 40 (FR40) increased by 0.07%, Spain’s IBEX 35 (ES35) added 0.70%, and Britain’s FTSE 100 (UK100) closed Tuesday up by 0.08%.

Eurozone GDP rose by +0.1% in the fourth quarter of 2022 on a seasonally adjusted basis. The European Commission’s winter economic forecast, released yesterday, said the EU economy is set to avoid a recession, but “headwinds persist.” In additional positive news, the inflation forecast has been revised downward. Overall inflation is projected to fall from 9.2% in 2022 to 6.4% in 2023 and to 2.8% in 2024 in the EU. In the euro area, it is projected to decline from 8.4% in 2022 to 5.6% in 2023 and to 2.5% in 2024.

The UK Consumer Price Index fell from 10.5% to 10.1% (forecast 10.3%) in annual terms. Core inflation fell even more sharply, from 6.3% to 5.8% (forecast 6.2%). Such data on the back of a strong labor market may provide the Bank of England with at least one more 0.25% rate hike at its next meeting.

Oil prices decreased by 1% on Tuesday as traders worried about supply growth as data from the American Petroleum Institute showed a large increase in crude inventories. Another inventory report from the US Department of Energy will be released today, which is considered more significant. Rising inventories, in most cases, are a factor in lower oil prices. But sometimes, it does not work due to a more complicated oil price formation mechanism.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 0.64%, China’s FTSE China A50 (CHA50) lost 0.09%, Hong Kong’s Hang Seng (HK50) ended the day down by 0.24%, India’s NIFTY 50 (IND50) gained 0.89%, and Australia’s S&P/ASX 200 (AU200) ended the day up by 0.18%.

The Japanese government on Tuesday introduced Kazuo Ueda to parliament as a candidate for the next governor of the Bank of Japan, suggesting the academic and former Bank of Japan policymaker will replace Haruhiko Kuroda. The Bank of Japan, the most dovish central bank among the G7 countries, is facing market pressure to adjust its policies. Ueda’s comments in parliament will be scrutinized for any signs of a shift away from the current adaptive monetary policy. Kuroda’s second five-year term ends April 8 after a decade marked by strong monetary easing, and his current deputies, Masayoshi Amamiya, and Masazumi Wakatabe will leave their posts on March 19.

Shares of Australia’s four biggest banks (Commonwealth Bank Of Australia, Westpac Banking Corp, National Australia Bank Ltd, and ANZ Group Holdings Ltd) fell Wednesday after Commonwealth Bank, the largest of them, noted a potential worsening of credit conditions due to pressure on consumers from high-interest rates and overheated inflation.

S&P 500 (F) (US500) 4,136.13 −1.16 (−0.028%)

Dow Jones (US30)34,089.27 −156.66 (−0.46%)

DAX (DE40) 15,380.56 −16.78 (−0.11%)

FTSE 100 (UK100) 7,953.85 +6.25 (+0.079%)

USD Index 103.25 −0.10 (−0.09%)

Important events for today:

– Australia RBA Governor Lowe Speaks at 02:15 (GMT+2);
– UK Consumer Price Index (m/m) at 09:00 (GMT+2);
– UK Producer Price Index (m/m) at 09:00 (GMT+2);
– Spanish Consumer Price Index (m/m) at 10:00 (GMT+2);
– Eurozone Industrial Production (m/m) at 12:00 (GMT+2);
– Canada Manufacturing Sales (m/m) at 15:30 (GMT+2);
– US Retail Sales (m/m) at 15:30 (GMT+2);
– US NY Empire State Manufacturing Index (m/m) at 15:30 (GMT+2);
– Eurozone ECB President Lagarde Speaks at 16:00 (GMT+2);
– US Industrial Production (m/m) at 16:15 (GMT+2);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+2).

By JustMarkets

Economics & Fundamentals Financial News

15 Feb

Donations by top 50 US donors dropped sharply to $14 billion in 2022 – Bill Gates, Mike Bloomberg and Warren Buffett lead the list of biggest givers

By David Campbell, Binghamton University, State University of New York; Elizabeth J. Dale, Seattle University, and Michael Moody, Grand Valley State University

The 50 Americans who gave or pledged the most to charity in 2022 committed to giving US$14.1 billion to foundations, universities, hospitals and more – a total that was 60% below an inflation-adjusted $35.6 billion in 2021, according to the Chronicle of Philanthropy’s latest annual tally of these donations.

The Conversation U.S. asked David Campbell, Elizabeth Dale and Michael Moody, three scholars of philanthropy, to assess the significance of these gifts and to consider what this data indicates about the state of charitable giving in the United States.

What trends stand out overall?

Elizabeth Dale: After two years of giving that was close to record levels, the nation’s biggest donors seem to have resumed giving at pre-pandemic levels, with support largely directed to the causes they have historically favored: higher education, hospitals and medical research. They also put a lot of money into foundations, for the most part those bearing the names of these extremely wealthy donors or their relatives.

I believe that the decline in giving likely had something to do with last year’s stock market volatility – major indices lost as much as 33% of their value in 2022 – and the onset of high inflation. Both financial markets and inflation can influence charitable giving.

David Campbell: Despite giving from these very rich Americans being so much lower than in 2021 and 2020, the total for 2022 was still higher than more than half of the years since 2000. Nonetheless, nearly half of the total came from two donors, Microsoft co-founder Bill Gates and former New York City mayor and financial media entrepreneur Mike Bloomberg, both of whom have led this list three of the past four years. Some $8 billion – more than half of these gifts – went to foundations in 2022, with $5 billion injected into the Bill & Melinda Gates Foundation alone.

This means that the benefit of these donations will not be experienced immediately but rather over many years. U.S. foundations are required to spend only 5% of their assets annually, and most foundations try to preserve their holdings so that they may continue operating well into the future.

Michael Moody: The gifts from Bill Gates and Warren Buffett both point to how the Bill & Melinda Gates Foundation has been evolving in the past couple years, following the founders’ divorce in 2021.

Bill Gates’ contribution to the foundation came from him alone, and Buffett’s big gifts last year went to foundations led by his relatives rather than to the Gates Foundation, an institution that he announced years ago would receive the bulk of his fortune. While Buffett has said he still fully supports the Gates foundation, he did step off its board in 2021. That board has since gained new members who aren’t related to Bill Gates or Melinda French Gates.

What surprises you about the biggest donors?

Campbell: One thing that stands out to me is not only that some donors appear on this list year after year but also that they have a clear vision for their philanthropy and consistently use it to focus on a few core passions: John and Laura Arnold on a specific set of public policy concerns, including reproductive rights and civil rights; Gates on global health; and Bloomberg on higher education access, public health and gun safety.

Dale: I’d like to point out that only 19 of this year’s top 50 donors are on the Forbes list of the 400 wealthiest Americans. It’s worth paying attention to who isn’t giving on a big scale, especially in an era of such extreme wealth inequality and an effective 8.2% tax rate on the wealthiest Americans. It can be easier to pay a lot of attention to the perennial donors on this list like Bill Gates, Bloomberg, the Arnolds, Sergey Brin and a few others who have consistently been among the country’s top charitable donors for years.

I also find it interesting that three big donors all re-upped their commitments to the Alzheimer’s Drug Discovery Foundation Diagnostics Accelerator. Leonard Lauder – an heir to the Estée Lauder Cos. cosmetics fortune – Amazon founder Jeff Bezos and Bill Gates each made $11.25 million gifts to this venture, which they helped launch in 2018 to research ways to make earlier diagnoses Alzheimer’s disease.

Moody: I find it noteworthy that none of the top 50 donors in 2022 was under 40 and that only five of them were under 50. That the top donors skew older should not be too surprising given that Baby Boomers have nine times as much wealth as millennials. But some members of Generation X and millennials are starting to enter the echelon of the world’s wealthiest, so I’d expected to see more of them crack this list.

What concerns do you have?

Moody: I think a lot of Americans would say that one of our biggest problems as a country right now is our divisiveness and our apparent inability to overcome it. Yet with the notable exception of Pierre and Pam Omidyar, who support efforts to ensure free and fair elections as well as what they term “constructive politics” through their Democracy Fund, few of the biggest donors are focused on overcoming this polarization.

Dale: I’m struck by how little money in 2022 was clearly identified as being directed to the environment and climate change, especially given the climate-related disasters of Hurricane Ian in Florida, heat waves in Europe and flooding in Pakistan and India.

While several of these top donors did announce that they had made gifts totaling $186.8 million to environmental-related causes, only $27.6 million was directly given to an environmental organization and $50 million to address climate change. Other large gifts went to the Schmidt Ocean Institute and the ocean program at the University of California, Santa Barbara.

Campbell: I think it is important to note that giving by MacKenzie Scott is not included on this list because she did not respond to the Chronicle of Philanthropy’s survey. She has given at least $14 billion to some 1,600 nonprofits since 2019.

Scott’s approach to philanthropy stands out because of its unusual scale, as well as her focus on equity and marginalized groups and her no-strings-attached grants. Her gifts to organizations to use for their immediate needs provide a stark contrast to other top givers who place their donations in foundations, where much of the public benefit is deferred.

What do you expect to see in 2023 and beyond?

Campbell: I have more questions than answers.

How will the devastating earthquake in Turkey and Syria affect giving? Will the scale of the disaster, which had left 36,000 people dead by mid-February 2023, be a motivator, considering that many of the largest U.S. donors focus their giving on causes operating in the United States? Will declining inflation spur more giving by the wealthiest Americans next year and a return to the levels seen in recent years?

I imagine we will see Melinda French Gates on this list next year. Will her giving look more like Scott’s, making donations to organizations that address equity issues a priority? Or will it look more traditional and long-term, emphasize foundation giving and be shaped by the input of in-house experts?

Dale: While the composition of the data obscures much about the end recipients of this elite giving, I believe it’s clear that more philanthropy, in addition to large-scale public funding, is needed to address major diseases, climate change and social and racial inequality. I’d like to see more of these donors make efforts to work together and a speedier disbursement of grants from foundations.

The Bill & Melinda Gates Foundation has provided funding for The Conversation U.S. and provides funding for The Conversation internationally. Arnold Ventures provides funding for The Conversation U.S.

About the Authors:

David Campbell, Professor of Public Administration, Binghamton University, State University of New York; Elizabeth J. Dale, Associate Professor of Nonprofit Leadership, Seattle University, and Michael Moody, Chair for Family Philanthropy, Grand Valley State University

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

Economics & Fundamentals Opinions

15 Feb

Market caution returns on hot US CPI data

By ForexTime

Asian shares flashed red on Wednesday along with US futures as investors evaluated sticky American inflation data and remarks from Fed officials. European futures are pointing to a negative open this morning amid the cautious sentiment and this could find its way back to Wall Street later today.

In the currency arena, dollar bulls were injected with some renewed confidence as expectations intensified over interest rates remaining higher for longer than initially anticipated. Gold struggled to keep above $1850 during early trade and could extend losses as expectations shift towards a more hawkish Fed in the near term. Given how the latest red-hot US inflation figures are likely to create some uncertainty over the US economy, caution may remain the name of the game.

Sticky inflation data rekindles rate fears

Buying sentiment towards the dollar slightly improved after the latest US inflation figures printed higher than expected.

The headline consumer price index number climbed 6.4% in January from a year earlier, one-tenth lower than the 6.5% print in December. Although this was higher than the forecast of 6.2%, it was still the lowest reading since October 2021. The core reading, which excludes volatile items such as food and energy, cooled for the fourth consecutive month to 5.6%. This figure was above market expectations of 5.5% but still, the lowest witnessed since December 2021.

While inflation in the world’s largest economy continues to slow, it’s not falling as quickly as investors anticipated – ultimately rekindling Fed rate hike bets. Given how these latest inflation figures add to January’s blowout jobs report, the dollar could edge higher in the short term. However, the bigger picture has not changed with the Fed closer to a peak in rates in the coming few months.

It will be wise to keep a close eye on the US retail sales and industrial production figures released later today. There has been a lot of hype and excitement around the US CPI but the retail sales data may provide fresh insight into consumer behaviour and health of the economy. A strong set of economic data will most likely stimulate expectations around US rates being higher for longer.

On the technical front, the DXY could be gearing up for a breakout above 104.00. Such a move could open the doors towards 105.00. Alternatively, sustained weakness below 104.00 may open a path back toward 102.00.

Commodity spotlight – Gold

After swinging between losses and gains in the previous session, gold kicked off Wednesday on a negative note.

The precious metal is trading below $1850 thanks to the sticky US inflation print and conflicting views from Fed officials. Given how the dollar is likely to draw strength from expectations around the Fed staying hawkish for longer, this could translate into more pain for zero-yielding gold down the road. Buying sentiment towards the precious metal could also take another hit this afternoon if the US retail sales and industrial production data exceed market forecasts.

Focusing on the technical picture, gold is under pressure on the daily charts. A solid daily close under $1850 may open the door toward $1815 and $1800, respectively.

Article 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

14 Feb

Murrey Math Lines 14.02.2023 (AUDUSD, NZDUSD)

By RoboForex.com

AUDUSD, “Australian Dollar vs US Dollar”

On H4, the quotes have broken through the 200-day Moving Average and are now above it, which reveals possible development of an uptrend. The RSI has bounced off the support line. An upward breakaway of 7/8 (0.7019) should be expected, followed by growth of the resistance level of 8/8 (0.7080). The scenario can be cancelled by a downward breakaway of the support level of 5/8 (0.6897). In this case, the pair may drop to 3/8 (0.6774).

On M15, the upper line of VoltyChannel is broken away, which increases the probability of further growth on H4.

NZDUSD, “New Zealand Dollar vs US Dollar”

On H4, the quotes are under the 200-day Moving Average, which reveals the prevalence of a downtrend. The RSI is testing the resistance line. A test of 3/8 (0.6286) is expected, followed by falling to the support level of 2/8 (0.6225). The scenario can be cancelled by rising over the resistance level of 5/8 (0.6408), which might lead to a trend reversal and growth to 6/8 (0.6469).

On M15, an additional signal confirming the decline will be a breakaway of the lower border of VoltyChannel.

Article By RoboForex.com

Financial News Forex and Currency News

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