Market Update – June 17 – BIG Surprise from the FOMC Dots.
Trading Leveraged Products is risky
Market News Today – FED no rate change and $120bn bond buying to continue. BUT BIG hawkish surprise with plans for 2 x 0.25% rate rises in 2023 (13/18 votes), it had been 2024 and even 7/18 see rate rises in 2022. Statement increased 2021 growth to 7% from 6.5%, and inflation to 3.4% from 2.4% 3 months ago. “risks to the economic outlook remain“, rising inflation was “largely reflecting transitory factors”, recovery “significantly” dependent upon the next steps of the virus. We will taper when economy has reached “substantial further progress” will do what we can to “avoid a market reaction”. Next meeting July 27/28.
USD (91.43), Yields (1.57%) and the VIX (20.46) all rallied.
Stocks (-0.54%), Commodities(-2.0%+), EM currencies & Oil($71.10) all sank.
Biden-Putin – both talked tough and of a “constructive” first Summit. The thorny issues of Nuclear Weapons, (my arsenal is bigger than yours) Cybersecurity (leave us alone, we never touched you) Geopolitics (where you go we will follow) were all on the agenda.
Overnight – Big beats for AUD Jobs (115.2 k vs 30.5K) & Unemployment (5.1% vs 5.5%) & NZD GDP (1.65% vs 0.5%) data.
European Open – The September 10-year Bund future is down -63 ticks in catch up trade, while Treasuries have started to stabilise after the post-FOMC sell off. The slightly more hawkish stance at the Fed and stellar data out of Australia and New Zealand overnight seems to signal that markets need to prepare for a gradual withdrawal of stimulus. DAX and FTSE 100 futures are still down -0.3% and -0.4% respectively, US futures are also under pressure, after a largely weaker session in Asia overnight and a lower close on Wall Street. ECB’s Lane – “don’t be premature with assumptions over PEPP tapering” September meeting important but “a lot of data still to to come” before December.
Today – Norges Bank, SNB and CBRT rate decisions, Eurozone CPI (final), US Weekly Claims, Philly Fed, CB Leading Index & ECB’s Elderson.
Biggest Mover post FED @ (06:30 GMT) XAGUSD (-2.51%) turned lower again, ahead of FED after rejecting 27.80. Moved significantly below 27.00 to test of 26.56 in immediate aftermath, closed at 26.95. Faster MAs remain aligned lower, RSI 30.35 and testing OB zone, MACD signal line and histogram falling and significantly below 0 line. H1 ATR 0.210 Daily ATR 0.603.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – June 18 – The FED still dominates.
Trading Leveraged Products is risky
Market News Today – USD holds on to gains (USDIndex test 92.00) US Equities mixed – (USA100 +0.87% & new ATH, USA30 -0.62%). BoJ left policy unchanged and stuck to its ultra-accommodative policy setting & extended COVID funding. JPY Inflation came in better than expected to with the CORE reading turning positive (just) for the first time since April 2020. Asian shares up but closing lower for the week. Round Number Friday – EUR down to1.1900, JPY 110.00 and Cable 1.3900. 10 yr Yields 1.51% but the spreads between US Corporate debt and US Government debt is at a 10-year low¹ – and could explain the tech rally yesterday following the Hawkish FED. Gold dived to $1770 (open the week at $1875; -5.6%) trades at $1785 now. USOil
Overnight – Big beat for German PPI (1.5% vs 0.7%, & 0.8% prev.) and big miss for UK Retail Sales (-1.4% vs 1.5%, & prev: 9.2%)
European Open – The September 10-year Bund future is slightly lower and in cash markets Eurozone bonds are also finding some support, although the U.S. 10-year rate has lifted 0.7 bp to 1.51% overnight. Stocks traded narrowly mixed across Asia and DAX and FTSE 100 futures are also little changed, while US futures are slightly higher, led by a 0.3% rise in the NASDAQ. With growth stabilising the tide is slowly turning, although it is clear that central banks will be taking a very, very cautious approach on tapering, with policy set to remain extremely accommodative for a long time to come. It seems unlikely that the BoE will break the line when it meets next week. – Action Economics
Today – Little new news today – EU Econ Ministers meeting & Fed’s Kashkari, its also Quadruple Witching Friday (Quarterly Index & Stock Options and Futures Contracts all expire – 3rd Friday of the Quarter)
Biggest FX Mover @ (06:30 GMT) NZDJPY (-0.59%) turned lower again, has been under 20-day moving average since June 3 from 78.76. Breached 78.00 yesterday and 77.00 today. Faster MAs remain aligned lower, RSI 24 & OB, MACD signal line and histogram falling and significantly below 0 line. H1 ATR 0.130 Daily ATR 0.620.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – June 21 – USD remains Bid, Equities and Yields lower.
Trading Leveraged Products is risky
Market News Today – USD holds onto gains from last week. USDIndex over 92.00. US Equities lost over 1.5% (USA500 -55pts to 4166 (-1.31%), Dow -1.58%) & Asian markets (save China) very weak (Nikkei -3.3%). US 10 yr yields @ 1.39% (4 week low) & 30yr yields under 2% (4 mth low). JPY, AUD & NZD tad stronger to open. EUR down to 1.1875, JPY 110.00 & Cable 1.3815. Gold dived to $1760 on Friday back to $1778 now. USOil spiked down to $69.80 on Friday back to $72.00 now, over the weekend Iranian Nuclear talks broke down & Iran elected a very hardliner new president. US Senate coming together on much reduced $1 trillion Infrastructure – Biden unhappy. Bullard talked of tapering & Kashkari of no rate rises until 2024.
Week Ahead – BOE Super Thursday, Powell Testifies to Congress Tuesday and a week of PMI data. US lots of Fedspeak has GDP, CPE, Housing and US Durable Goods.
European Open – Markets continue to adjust the changed rate outlook, with the hawkish turn at the Fed weighing on shorter dating bonds, while bringing down rates at the long end. The September 10-year Bund future is up 33 ticks, US futures are outperforming. Reflation trades are being unwound and while the actual lift off in rates is still a long way off, even in the US, it is clear that the period of ever rising monetary support is coming to an end. Stocks are struggling in this environment and DAX and FTSE 100 futures are down -0.9% and -0.7% respectively. US futures are also in the red, after Japanese markets led a sell off overnight.
Today – ECB weekly bond purchases, Williams, Bullard, Kaplan and ECB’s Lagarde.
Biggest FX Mover @ (06:30 GMT) NZDUSD (+0.51%) recovered from last weeks sell-off (0.7150 – 0.6925) pushed to 0.6972 earlier, breaking 20Hr MA. Faster MAs remain aligned higher, RSI 50 and starting to rise but remains from neutral, MACD signal line and histogram rising but remain below 0 line. H1 ATR 0.0014 Daily ATR 0.0071.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market News Today – Volatility back – Equities rebound, USD slips from recent highs but USDIndex holds at 92.00. US Equities recover (USA500 +58pts to 4224 (+1.40%), Asian markets also recover. US 10 yr yields bounce too; 1.49%. EUR under 1.1900, from 1.1920, JPY up to 110.50 & Cable back to 1.3900. Gold holds at 1780, USOil spiked to $73.80 (Oct 2018 high). UKOil over $75.00 and April 2019 high) on the back of the Iranian news, OPEC still not talking production increases and growing global demand. Biden making positive noises over much reduced $1 trillion Infrastructure Bill.
CB-Speak Powell at sub-committee inflation has “increased notably” labor market “continue to improve,” Williams, “US economy hasn’t improved enough, inflation will hit 3%” Bullard “strong labor market” as the country’s (GDP) is observing a growth of almost 7%. Lagarde the ECB will keep a “very close eye on wage growth” she was also more optimistic on the outlook.
Week Ahead – BOE Super Thursday, Powell Testifies to Congress 18:00 GMT Tuesday and a week of PMI data. US lots of Fedspeak has GDP, CPE, Housing and US Durable Goods.
European Open – Sep 10-year Bund future down 8 ticks, pretty much matching Treasury futures. DAX & FTSE 100 futures both up 0.3% & US futures also slightly higher after a strong close on Wall Street yesterday. Markets are getting over the Fed’s hawkish tilt, as officials continue to stress that inflation will be transitory, suggesting that any tapering will be very gradual and dependent on economic developments.
Today – EUR Consumer Confidence (Flash) & US Existing Home Sales, Fed’s Powell, Daly, Mester, ECB’s Lane & Schnabel.
Biggest FX Mover @ (06:30 GMT) AUDUSD (-0.35%) yesterday’s rally from 0.7475 stalled at 0.7545 and has declined to 0.7520 today. Under PP and 20Hr MA. Next support 0.7500 and S1 at 0.7494. Faster MAs moved lower, RSI 46 and neutral, MACD signal line and histogram rising but weak break of 0 line. Stochs OS since 20Ma break. H1 ATR 0.0010 Daily ATR 0.0065.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – June 23 – Dollar Dips & Equities Stronger post Powell.
Trading Leveraged Products is risky
Market News Today – Equities rebound (USA100 +0.79% to new ATH) & USD slips again (USDIndex 91.80). Catalyst was Powell comments “inflation alone would not be enough to prompt rate rises” “we will wait for evidence of actual inflation or other imbalances.” Asian markets also recovered, AUD & JPY PMIs missed expectations. US 10 yr yields fell as USD cooled bounce again too; 1.47%. EUR holds over 1.1900 at 1.1925, JPY up again to 110.80 & Cable (5 years since Brexit vote today) up to 1.3945. Gold rotates at $1780, USOil down from Monday’s spike to $73.80 but holds over $72.00 as $100 Brent gossip swirls¹ & OPEC tests the waters on production increases.
CB-Speak Daly said bank was right to talk about slowing the pace of asset purchases, but economy is “not yet here” for such a decision, & even talk of changing rates is not on the table. Officials are looking to Fall data to get more clarity on the status of the economy & its developments. Inflation could approach 3% in the near future & the data is expected to remain volatile. Mester – inflation expectations have risen, but it has not yet reached an alarming level – it will hit between 3% to 3.5%, but after that it will drop to the Fed’s 2% year-over-year target. A better picture of the labor force will be seen in September, after schools reopen & increased unemployment benefits end.
European Open – The September 10-year Bund future is slightly higher, as are US futures. DAX and FTSE 100 futures are down -0.019% and -0.050% respectively, while US futures are fractionally higher, after Fed Chairman Powell managed to sooth nerves yesterday with calming words on the rate outlook and by reiterating that inflation pressures will be transitory.
Today – EZ, UK and US PMIs (Flash), ECB’s Lagarde, de Guindos; Fed’s Bowman, Bostic, Rosengren, and supply from Germany and the US.
Biggest FX Mover @ (06:30 GMT) GBPNZD (+0.29%) First down day in 9 yesterday to close at 1.9845. Rallied on open over PP and 50Hr MA (1.9985) to 1.9900. Next resistance R1 1.9931. Faster MAs aligned higher, RSI 55 but neutral, MACD signal line and histogram rising weakly & remain below 0 line. Stochs declined from OB & now neutral. H1 ATR 0.0023 Daily ATR 0.0122.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – June 24 – Tepid Markets ahead of big data day.
Trading Leveraged Products is risky
Market News Today – Sideways Wednesday into tepid Thursday, ahead of a busy day. USA100 +0.13% to new ATH again, TSLA +5%, Dow & S&P500 flat, USD dips & recovers, USDIndex 91.80. Global PMIs overall positive (partic. Manu.) New Home Sales big miss with prices at record highs. Overnight Asian markets also tepid. US 10yr yields 1.49%. EUR holds at 1.1925, JPY spiked to 111.10 (now 110.85) & Cable spiked to 1.4000 now down to 1.3960. Gold rotates at $1775, USOil spiked to $73.25 after inventories drawdown was twice as large as expected. Holds over $72.60 now. Much reduced (1.5 tn) bipartisan Infrastructure plan “agreed” & being presented to Biden today, possible re-start of Iran nuclear talks next week. Kaplan & Bostic both hawkish & expecting Inflation to “stick”.
European Open – September 10-year Bund future fractionally higher, US futures also little changed, while in cash markets US 10-yr rate has lifted 0.5 bp to 1.49%. DAX & FTSE 100 futures marginally higher, US futures slightly outperforming, but overall moves have been very tepid so far.
Today – German Ifo, US Initial/Continued Jobless Claims, GDP (Final, Q1), Durable Goods and New Zealand Trade Balance, BoE Rate Decision, Fed’s Williams, Barkin, Bostic, Bullard, Harker, Kaplan; ECB’s Schnabel, Panetta, and supply from the US.
Biggest FX Mover @ (06:30 GMT) NZDCHF (+0.23%) Day 4 of strong rebound from 0.6395 close on Friday. rallied to 0.6485 (R1) today. R2 sits at 0.6505. Faster MAs aligned higher, RSI 67 and rising, MACD signal line and histogram rising remain significantly above 0 line. Stochs rising and testing OB zone again. H1 ATR 0.0006 Daily ATR 0.0045.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – June 25 – USD slips, Stocks at new all-time highs.
Trading Leveraged Products is risky
Market News Today – Dollar a tad weaker, but holds onto gains, USDIndex 91.80, USA100 & 500 at ATHs. Agreed $1.2 tn Infrastructure plan lifts sentiment. However, mixed US data yesterday, Claims missed, GDP confirmed at 6.4% & Durable Goods missed. All US Banks passed stress tests late in the day. BoE – no change & no hawkish surprises but looks like tapering measures will start after the summer. GBP hit. Overnight Asian markets also bid, NZD bounces and JPY weakest. US 10yr yields 1.49%. EUR holds at 1.1950, JPY under 111.00 to 110.75 & Cable tests under 1.3900 now back to 1.3925. Gold still rotates at $1780/75, USOil Holds over $72.50 now.
European Open – German GfK consumer confidence much better than expected at -0.3 vs -6.9 in the previous month. The September 10-year Bund future is slightly lower, as are US futures. Gilts led a rally in EGBs yesterday after the BoE affirmed its accommodative policy stance, but there could be a slight pullback as markets continue to digest the statement. DAX and FTSE 100 futures meanwhile are up 0.3% and 0.1% respectively, alongside broad gains in US futures.
Today – US PCE Price Index, Personal Income and Consumption, Fed’s Williams, Rosengren, Mester, Kashkari; ECB’s de Cos.
Biggest FX Mover @ (06:30 GMT) NZDUSD (+0.25%) Rallied from test of 200HR MA yesterday at 0.7745. Faster MAs aligned higher, RSI 65.7 and rising, MACD signal line and histogram rising remain significantly above 0 line. Stochs rising and testing OB zone again. H1 ATR 0.0007 Daily ATR 0.0045.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – June 28 – Fear is back even in Summer.
Trading Leveraged Products is risky
Wall Street was mixed on Friday, with the USA30 outperforming as reflation trades are back on. Supporting the rally was a blowout earnings report from Nike. The company saw record quarterly US sales, and beat on the bottom line as well, seeing the USA30 member surge to all-time highs, gaining over 15%. The USA500 closed at record highs, adding 0.34%, up 14 points to 4,281. Yields pushed higher last week, as growth optimism dominated, but investors are keeping a weary eye on virus developments amid the emergence of new more infectious strains.
Today: It was a very slow start to the week for equities, with markets across the Asia-Pacific region hardly moving as investors weighed Covid developments and the outlook for central bank policy. The 10-year Treasury yield is unchanged at 1.5%. Equity markets have traded narrowly mixed, as a new rise in Covid-19 infections across Asia and concern over more potent strains weighed on sentiment. In Malaysia the nationwide lockdown was extended, while Greater Sydney was put under stricter restrictions in a bid to contain outbreaks. In Hong Kong the morning session was cancelled thanks to a rain storm warning. BoJ was confident of recovery at June meeting the summary of discussions showed. The sense was that accelerating vaccination programs would prop up the economy. At the same time inflation pressures were still judged to be benign given the fragile recovery.
Forex Market: JPN225 is currently down -0.1%. GER30 and UK100 futures are up 0.1% at the moment and US futures are posting similar gains. The Australian Dollar and New Zealand Dollar drifted lower, USDJPY dropped to 110.61 while the EUR steadied between 1.1920-1.1970 for a 5th day. The Pound strengthened across the board and cable is off last week’s lows, currently at 1.3909. The USOIL topped tto $73.69. Gold prices slipped to a 1-week low on Monday, weighed down by a bounce in the dollar and mixed signals from the FED on monetary policy tightening despite tame inflation data.
Monday’s Calendar – Fed’s Williams, Quarles and ECB’s Panetta along with Labor data and Retail Trade fom Japan.
Significant FX Mover @ (06:30 GMT) XAUUSD (+0.34%) Rallied to the upper range level at 1785.77. Faster MAs currently flattened, RSI 54 and slipping, MACD signal line and histogram close to 0 line. Stochs rising and testing OB zone again. H1 ATR 3.4457, Daily ATR 27.3871.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – June 29 – High Valuations, End of Quarter, Caution.
Sentiment remains cautious and stocks under pressure, but Treasury yields tumbled lower on the day, recovering all of last week’s losses and then some. The 10- and 30-year yields fell over 5 bps to the 1.4698% and 2.0857% areas, respectively, on the day, with the break in key technical levels of 1.50% and 2.10% supporting the richening. Concern about the spread of the more infectious Delta variant of the virus is weighing on confidence as governments try to limit the impact.
Equities remain mixed, with the USA100 holding in record territory, and keeping the bulk of its gains. The USA500 continues to idle on either side of unchanged, while the USA30 underperforms, losing over 200 points early on, then recovering slightly in afternoon trade. The USA30 components Chevron off over -3% as oil prices faded, while Boeing shed -3% after being told certification of its new long range aircraft would not come until at least 2023. The energy and financial sectors were the biggest laggards, while utilities and tech paced winning sectors.
Valuations remain a question for further stock market gains, with the USA500 P/E ratio the highest in over 10-years.
The charts that matter “Significant long-term charts with historical price data back to 1950 remain very powerful and important.
1. The 2 first weeks of July are the best weeks of the year
2. “we are here” – USA500 is just starting if you look at the seasonality pattern since 1985
3. After the 2 first weeks of July, USA500 and Russell tend to “chill”, while NDX continues moving higher, but above all, note the USA100 pattern starting now
4. Exposure in FAANMGs is close to record lows
5. Tech’s range break out has been extremely powerful, and the candle today shows just how strong this momentum remains”
Forex Market: EURUSD is little changed at 1.1907. The Australian and NZ Dollars weaken for second day on low risk appetite, USDJPY steadied to 110.10-60 while the EUR steadied between 1.1920-1.1970 for a 5th day. The Pound declines further with Cable to 1.3857. Gold prices edged lower as USDIndex hovers below 2-month high.
USOIL slid to 3-session lows of $72.63 after printing new trend highs of $74.45 in Asia. The move lower was linked to concerns over rising Covid cases in many parts of Asia, including Thailand, Malaysia and Indonesia, which prompted some profit taking from 32-month highs. In addition, long positions may be cut ahead of the OPEC+ meeting on Thursday, where expectations are for an announced production increase, beginning in August.
Tuesday’s Calendar – Data releases today include Eurozone ESI economic confidence, German June HICP and UK lending data, while US Consumer confidence is also due, but virus headlines will likely dominate.
Significant FX Mover @ (06:30 GMT) USA30 (+0.34%) dipped by more than 0.44% from 34,525 to 34,172 low. Faster MAs and RSI are currently flattened,while MACD signal line and histogram are negatively configured, all suggesting that the short term decline run out of steam and the asset is consolidating for the time being.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Wall Street was narrowly mixed again overnight, as investors sat on their hands ahead of the upcoming June jobs report. Data on ISM manufacturing, jobless claims, and construction spending was ignored in favor of the more crucial employment numbers on the horizon.
Also yesterday, according to FT, the world’s leading economies have signed up to a plan to force multinational companies to pay a global minimum corporate tax rate of at least 15% following intense negotiations in Paris at the OECD. The historic agreement among 130 countries will ensure the largest companies, including Big Tech, pay at least $100bn a year more in taxes, with more of that money going to the countries where they do most of their business.
The USA500 did manage another record high, with the USA30 in the green too as value shares were favored. The USA100 was largely flat. Stock markets in Japan and Australia managed to move slightly higher, though, while China bourses sold off with some commentators suggesting that the conclusion of the centennial celebrations for the Communist Party meant increased risks for markets.
In Europe, core exchanges rose, with the UK100 adding 1.25%, and the GER30 rallying 0.47%. Comments from ECB’s Lagarde suggesting that the current cap on dividends and share buybacks for banks could be lifted at the end of September helped underpin sentiment. Also:
Fed’s Harker (non-voter) backs tapering.
ECB’s Weidmann backs symmetrical inflation target for the ECB.
Dovish comments from BoE’s Bailey, who stuck to the view that inflation will be transitory, added support, although they didn’t prevent Gilts from underperforming versus Bunds, with the former up 1.4 bps to 0.728%, and the latter 0.7 bps higher at -0.203%. Hopes that the impact of the rapidly spreading Delta variant won’t prevent the projected re-opening of holiday travel, while also keeping central banks in supportive mode, helped peripheral stock and bond markets.
Forex Market: USDIndex edged up to 92.60, and USDJPY is at 111.65, while the USOIL future is at $75.22per barrel. The Australian and NZ Dollars hold at Q4 2020 lows, while the EUR slipped to 1.1834 from 1.1888. Gold sustains gains at the 1779 area.
As Soc Gen accurately notes, US 2y rates are driving the Dollar. “The challenge for the FX market is that with no rate on the cards for over 12 months, expectations about what the Fed will do are bound to move around with each and every major economic statistic. All eyes, then, are on payroll data and if they come in strong, the dollar bears are going to get squeezed.”
Today’s Calendar – ECB’s Lagarde is scheduled to speak today, but likely to repeat the familiar line that the crisis is not over and support is still necessary. At the same time we will see US labor market data.
US nonfarm payrolls preview: nonfarm payrolls are expected to rise 550k in June following increases of 559k in May and 278k in April as there continues to be a big gap between the strength in the recovery and the record high in job openings against the relatively slow return of workers amid various headwinds. We’re also forecasting a 35k jump in factory jobs. The work-week should hold steady at 34.9 while hours worked picks up 0.4%. The unemployment rate is seen dipping to 5.6%. Average hourly earnings are projected rising 0.2% as minimum wage workers have been slow to come back. However, the y/y wage gain should surge to 3.5% from 2.0%, with a big boost from base effects.
Significant FX Mover @ (06:30 GMT) USDZAR(+0.54%) extending highs for 2 days in a row, above the June high and the 50% retracement level since the February downleg. MACD lines and RSI are positively configured.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – July 5 – USD subdued, Bonds leap & Stocks hold gains.
Trading Leveraged Products is risky
Market News Today – The Dollar weakened, Bonds & Stocks rallied following NFP (850k vs 700k but an uptick for Unemployment & patchy Earnings) and ahead of long weekend. Asian markets follow through overnight – but big miss for Chinese Services PMI’s virus developments and China’s bid to curb the influence of internet giants quells the rally. Yields; the biggest driver – 10yr lost -3.31%, 5yr -4.77% & 30yr -1.97%. USDIndex holds 92.30, USA 500 4352. (Tech stocks lead rally (GOOGL+2.30%) Overnight AUD building approvals weaker but Retail Sales better. EUR 1.1855, JPY down to 111.00 & Cable tests up to 1.3835. Gold still rotates at $1785, USOil Holds over $74.00 at 74.35 as OPEC issues rumble on.
European Open – The September 10-year Bund future is fractionally higher, while in cash markets the 10-year Bund yield is unchanged at -0.24%. Other Eurozone bond markets are underperforming in early trade, while U.S. markets remain closed today for the observance of July 4 Independence Day. DAX and FTSE 100 futures are up 0.03% and 0.106% respectively, suggesting a cautious start to trading today. US Stock FUTS in the red so far.
Today – OPEC developments continue as the UAE and Saudi disagree over quotas; – EZ & UK PMIs (Final) ECB speak and US Independence Day.
Biggest Mover @ (06:30 GMT) Copper (+1.59%) Rallied from 4.222 lows on Friday to test 4.350 (20-day MA) today. Faster MAs aligned higher, RSI 73.50 OB but still rising, MACD signal line and histogram rising remain significantly above 0 line. Stochs rising and also in OB zone. H1 ATR 0.0150 Daily ATR 0.0950.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – July 6 – A weaker USD; RBA, OPEC & Kiwi hog the headlines.
Trading Leveraged Products is risky
Market News Today – USD continued to weaken, strong EZ & UK data lifted European markets, England to lift most restrictions by July 19. OPEC meeting abandoned, OIL prices hit 3-year high (Brent $77+). Overnight RBA no change but bond purchases extended for 6 months but at lower rate, “conditions will not be met before 2024.” NZD rallied (1.14%) on strong data and 2021 interest rate rise expectations, dragging AUD higher (0.98%). Asian equities firmer. USDIndex under 92.00, EUR 1.1890, JPY under 111.00 at 110.75 & Cable tests up to 1.3900. Gold breaches $1800, USOil over $75.00 at $75.85. German manufacturing orders missed significantly (-3.7%) but previous reading was revised sharply higher (+1.2%).
European Open – The September 10-year Bund future is slightly lower, as are US futures, while in cash markets the US 10-year rate has lifted 2.0 bp to 1.444%. Dax & FTSE100 FUTs are weaker on stronger GBP & EUR with German data weighing.
Today – EZ & UK Construction PMI, German ZEW, US Final Services & Composite PMI, ISM Services PMI, ECB’s de Cos, de Guindos. Day 1 of the ECB Strategy Review meeting.
Biggest FX Mover @ (06:30 GMT) NZDUSD (+1.06%) Rallied from 0.7020 zone yesterday, which was up from Fridays NFP low of 0.6945, to breach 0.7100 on very strong reversal in business confidence today. Faster MAs aligned higher, RSI 82.38 and significantly OB but cooling, MACD signal line and histogram rising remain significantly above 0 line. Stochs. also in OB zone, but also cooling. H1 ATR 0.0015 Daily ATR 0.0065.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MMarket News Today – USD consolidates on safe-haven bid, Bonds rallied/Yields dived, Nasdaq hit another ATH & Oil crashed. Chinese regulators flexed their muscles again & a surprise miss for ISM Services PMIs weighed on sentiment. Asian equities mixed. USDIndex up to 92.50, EUR slips to 1.1825, JPY holds under 111.00 at 110.70 & Cable tested under 1.3800. Gold holds $1800, down from $1814, USOil tanked from $77.00 to $72.00, trades at $72.90 now; what next for OPEC? 10yr yields dived to 1.348%. German industrial production dropped -0.3% vs expectations of +0.5%.
European Open – The September 10-year Bund future is slightly lower, while U.S. futures have found support. In cash markets the U.S. 10-year yield has moved up from lows, but at 1.36% remains below the 1.4% mark, underpinning the sense that the Fed will be able to wait before embarking on tapering action. Investors will be looking ahead to today’s release of the FOMC minutes for the June policy meeting, which could give a clearer sense on how far advanced taper talks really are. In Europe, the focus today will be on the EU Commission’s updated set of forecasts, which are likely to be more optimistic on growth, but also bring upward revisions to inflation projections. DAX & FTSE Futures a tad higher in early trades.
Today – EU Forecasts, FOMC Minutes, Fed’s Bostic.
Biggest FX Mover @ (06:30 GMT) NZDJPY (+0.35%) Rallied from 77.30 lows yesterday to breach 77.50 to 77.80 highs. Faster MAs aligned higher, RSI 51.70 & rising, MACD signal line & histogram remain significantly below 0 line, but rising. H1 ATR 0.0015, Daily ATR 0.0065.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – July 8 – USD & JPY on Bid as Risk Off Raises its Head.
Trading Leveraged Products is risky
Market News Today – USD at 3-month highs, Bonds rallied/Yields dived, Nasdaq & S&P hit another ATH. Seem familiar? FOMC minutes showed “Hawkish Tilt” & some members up for tapering as early as this year – conditions could be “met somewhat earlier than anticipated”. Asian equities down as risk off bites on Virus spikes, with Sydney, Indonesia and South Korea mixed. USDIndex up to 92.82 yesterday – 92.70 now, EUR slips under 1.1800, JPY down to 110.25 & Cable under 1.3800 at 1.3775. Gold holds $1800, down from $1808, USOil down again at $71.15 now; what next for OPEC? 10yr yields dived under 1.300%.
Overnight – RBA’s Lowe acknowledged QE will be required for foreseeable future, strong UK housing data, better data from JPY & German Trade balance missed expectations.
European Open – The September 10-year Bund future is higher, the 30-year outperforming, similar to developments in US futures. Yields continue to fall and curves flatten as markets adjust their tapering and central bank expectations amid the realization that the initial bounce back in activity is starting to level off – high levels and capacity constraints limiting the scope for a further acceleration in growth. In cash markets the US 10-year rate dropped back a further -1.2 bp to just 1.304%, and the German 10-year is set to fall further below the -0.3% mark. DAX and FTSE100 futures meanwhile are down -0.1% and -0.4% respectively and US futures are also in the red.
Today – ECB Minutes, Strategy Review Announcement and Lagarde Press Conference, US Initial & Continuing Unemployment Claims.
Biggest FX Mover @ (06:30 GMT) NZDJPY (-0.96%). Rallied to 78.00 highs yesterday before closing at 77.60. Move lower today on JPY bid, under 77.00. Faster MAs aligned lower, RSI 26.70 OS and still falling rising, MACD signal line & histogram remain significantly below 0 line & falling. H1 ATR 0.0015, Daily ATR 0.0065.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – July 9 – Risk Off cools as Yields slide & bounce.
Trading Leveraged Products is risky
Market News Today – USD off 3-month highs, as Bonds, (US 10yr down to 1.25% before big bounce to 1.345%) JPY and CHF get a bid and then squeezed, AUD and NZD slip. Equities closed lower, USA500 (-0.86% -37pts to 4320). ECB fixed the inflation target at 2% with acknowledgement that an overshoot is likely, unemployment claims missed again and Virus worries, along with Chinese tightening the regulation screw all added to weigh on sentiment. Asian equities down again as serious spikes in Virus outbreaks and low vaccination rates hit home. USDIndex fell to 92.25, back to 92.40 now, EUR back over 1.1800 to 1.1830, JPY back to 110.00 from 109.50 lows & Cable under 1.3800 at 1.3775. Gold holds $1800, down from $1818 yesterday, USOil up from a test of $70.00 yesterday to $72.30.
Overnight – Chinese CPI weaker than expected, (1.1%) but PPI holds at highs (8.8%), GBP data dump misses led by MAY GDP misses significantly (0.8% vs 1.5% & April revised lower to 2.0% from 2.3%.) Industrial production & manufacturing also weaker than expected. US to blacklist more Chinese companies – RTS & Daly warms Delta variant a threat to global recovery – FT.
European Open – Sentiment started to stabilise overnight and 10-year Treasury yields have moved up 3.3 bp to 1.33%, while Bund yields have lifted 0.3% bp to -0.306%. With risk aversion fading somewhat, markets will continue to digest yesterday’s announcement of the new ECB strategy, that formulates a clearer inflation target of 2% over the medium term, but also vows to take the cost of owner occupied housing more into account.
Today – ECB Minutes, Lagarde, Bailey, the Canadian labour market report and G20.
Biggest FX Mover @ (06:30 GMT) CADJPY (+0.35%). Bounced from week+ decline from 90.00 on weaker Oil prices and strong JPY at 87.15 to 87.85 now. Next key resistance 88.50. Breached 21EMA earlier, faster MAs aligned higher, RSI 53 but rising, MACD signal line & histogram remain below 0 line but rising. H1 ATR 0.157, Daily ATR 0.76.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – July 12 – A cautious start for equities.
Trading Leveraged Products is risky
Market News Today – Wall Street ended the week in a positive mood & investors continue to buy equities at the start of this week. Hopes of ongoing central bank support are supporting the long end as virus developments see investors trim growth & inflation expectations. China’s central bank cut the reserve requirement ratio, as flagged in advance last week. The liquidity sensitive ChiNext saw the highest level since June 2015 & the offshore yuan nudged higher. Japanese markets outperformed; JPN225 gained 2.2%.
Japan core machine orders jumped 7.8% m/m in May, much more than anticipated & the third straight month of improvement, despite tightening virus restrictions. Virus developments continue to impact the annual rate, but the sharp acceleration in the monthly rate compared to the 0.6% m/m rise in April is encouraging.
The 10-year Bund is swinging between gains & losses, while peripheral bonds are moving higher & spreads narrow. Curves are flattening as the long end outperforms. Equities meanwhile are finding a footing & GER30 is fractionally higher after paring earlier losses. UK100 is still in the red but up from earlier lows, USA100 future is also marginally higher, indicating that investor appetite has already turned cautious again as markets keep a very close eye on virus developments as the Delta variant spreads through Europe. The latest surge started in the UK, which continues to see very high daily infection numbers & now also a pick up in hospitalisations. Germany’s numbers remain much, much lower, but have also started to creep higher amid concern that developments will derail plans to re-open much of Europe for the summer.
Overall, we don’t expect the recovery to be derailed & that should see yields creeping higher at some point, even if central banks remain very cautious for now.
Today – It will be a slow start to the week, with a lack of key releases and likely focus on virus developments. The earnings season also kicks off with JPMorgan, Goldman, Citigroup and Wells Fargo.
Biggest FX Mover @ (07:00 GMT) XAUUSD (-0.40%). Gold prices eased on Monday as a slightly stronger dollar and buoyant equities dimmed the safe-haven metal’s appeal.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – July 12 – A cautious start for equities.
Trading Leveraged Products is risky
IN THE SPOTLIGHT: WELLS FARGO, BANK OF AMERICA, CITIGROUP, BLACKROCK
This week the key Q2 Earnings season kicks off in earnest, with many of the major US banks reporting and expected to massively beat consensus, something that could please the bulls. But will this be the case? And if yes, then what? Wall Street has remained in rally mode and at record highs, ahead of what is expected to be a strong Q2 earnings season. As the chief investment strategist at CFRA Research, Sam Stovall, told CNBC’s Trading Nation on Friday: “I think what we’re going to be seeing is the second-best year-on-year quarterly gain in the last 25 years, second only to what we saw in the fourth quarter of 2009, since USA500 earnings are expected to be almost 61% this quarter”.
Q2 earnings are seen as key for setting the tone of company performances as the spread of the Delta Covid variant will likely continue, with countries like the Netherlands reporting an 800% increase in cases over the past week, hence fears that economic growth could plateau, and slowing vaccination rates globally keeping investors cautious over high valuations. Overall the US equity markets notched further all-time highs with a strong close yesterday as strong economic data keeps recovery hopes alive.
The Financial sector has been a major beneficiary of the “reflation” trade since last year and the Stimulus Bill and the Infrastructure Bill, which also benefited and could continue benefiting the banking sector in particular. So far the financial sector posted 34.5% earnings growth in the first Quarter of 2021 while Q2 is projected an amazing 117% earnings per share growth for Financials in Q2, according to research firm FactSet. That’s the 3rd highest projection FactSet has on a sector basis. A key concern is a potential decline in “special purpose acquisition companies” (SPACs) activity during Q2 might also have hurt the sector.
Hence following the JPMorgan Chase and Goldman Sachs report today, Wednesday has Bank of America, Wells Fargo, Citigroup, BlackRock, Infosys, PNC Financial, and Delta Airlines
The Bank of America (#BankofAmerica OR BOA) consensus recommendation is “Buy”, as revenues are expected to beat as earnings are likely to exceed according to the majority of the consensus recommendations from the Eikon Reuters terminal. According to Reuters Eikon Research, the report for the fiscal Quarter ending June 2021 is expected to experience a near quarter rally of its Earnings Per Share (EPS) compared to last year, at $0.77 from $0.37, which implies a mean change of 0.41% and a year-over-year growth of 107.9%. Zacks Investment Research predicts similar EPS, while the company’s revenue is seen depreciating slightly from a year ago to $21.83 billion, down by 2.16% on a yearly basis.
Please note that BOA, the nation’s second-largest bank, has surpassed earnings forecasts in the last two quarters due to strong growth in its sales & trading and investment banking businesses, regardless the company’s revenues have dropped since 2020 due to net interest income decrease. The net interest income, which contributes more than 50% of the total revenues, was down due to the interest rate headwinds and lower new loan issuance. Further, the same factors are likely to continue supporting solid growth for the bank’s sales, trading and investment banking for the rest of the year but the interest rates are likely to remain low on the resurgence of rising Covid-19 cases.
In regards to Citigroup now, things are similar to BOA as the bank is expected to post a beat on Earning ESP but a slowdown on consumer banking revenues. Similar to Q1 2021, the factors that are anticipated to affect the financial report for Q2 are:
Low Consumer Banking Revenues: Lower credit card loans as credit card holders are now paying back their loans at faster rates based on abundant liquidity and government aid, resulting in delays or even preventing lending volumes.
Slip of Trading Revenue: After a jump in trading activity and underwriting deal volumes since 2020, management forecasted a decline in Q2 2021. Lower fixed-income revenues are anticipated to have been an undermining factor for bank’s earnings.
Slip of Investment Banking Revenue: On the one hand, more M&A deals implies rising advisor fees from Citigroup, something that is expected to be a strengthening factor. However on the flipside, a decline in investment banking revenues is a risk for the bank.
Net Interest Income Decline: another undermining factor for Revenue similar to BOA.
Expenses Rise: Q2 expenses will likely rise to $11.2 billion.
Asset Quality to Improve
Hence Citigroup is expected to report adjusted earnings of $1.96, in comparison with the $0.50 EPS reported for the same quarter last year. The revenue is seen at $17.20 billion, according to Eikon group analysts estimates, nearly 11% lower than Q1 2021.
From a technical perspective, whatever the outcomes are, much is anticipated from the numbers of Bank of America and Citigroup, as both banks are expected to outperform the consensus estimates for earnings, even though revenues are likely to fall short of expectations. Both banks remain technically Bullish in the medium term, trading north of their respective 20- and 50-week EMAs, even though a strong pullback has been seen in June. Today #Citigroup is at the $69 area, stabilising the past 5 weeks above the 50-week EMA finding a support at the $65.80 level suggesting that the correction might run out of steam. #BankofAmerica is at $40.59, above the double bottom seen at $38.47 as positively configured momentum indicators suggest that the outlook remains positive.
Finally, Wells Fargo and Blackrock, which are the fourth and fifth largest US banks, are expected to slate strong Q2 earnings reports, after the first posted its first loss since the global financial crisis of 2008 and the latter has a solid history of beating earnings estimates while it is well seated to hold a positive trend in its Q2 report.
Wells Fargo could post an EPS of $0.97 and revenues of $17.75 billion. The #Wells Fargo price sustains a move above the 20-week SMA for a 2nd week in a row, after the rebound from the $41 low. Momentum indicators and their positive to neutral configuration along with the sustained a move with a 1-year upward channel imply a positive medium term outlook for the stock price.
Blackrock on the other hand, in contrast with the other 3, has had a remarkably strong performance since March 2020 without a notable pullback on stock price in 2021, while it is currently trading at record highs. According to Eikon Reuters, the world’s largest asset manager is expected to report adjusted earnings of $9.36, in comparison with the $7.85 EPS reported for the same quarter last year. The revenue is seen at $4.605 billion, according to Eikon group analysts estimates, which is more than 25% growth since Q2 2020. Hence a beat of estimates could boost the stock to fresh all time highs.
Nevertheless, the US bank stocks have enjoyed a strong rally in 2021, clearly seen from US major indices such as USA30 which is up 92% since the 2020 bottom and up 33%YTD, due to the continued boost from massive stimulus packages, positive vaccination rollout, and the accomodative Fed’s policy. Based on Refinitiv estimates, together, Wells Fargo, Bank of America, Citigroup and JPMorgan are anticipated to report profits of $24 billion in Q2 2021, up significantly from the $6 billion seen last year.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Market Update – July 14 – Central banks are gearing up!.
Trading Leveraged Products is risky
Q2 earnings got off to a lackluster start Tuesday. Hefty earnings beats from JPM & Goldman Sachs were overshadowed by concerns over revenues& as a lot of the strength was on easy comps.
US: A much hotter than expected CPI print & very poorly bid 30-yr bond auction were a potent combination for a Treasuries selloff. The combo also left Wall Street heavy. June CPI surged 0.9% on both headline & core, more than double the estimate for the overall index & 3x the forecast for the ex-food & energy component. For the former it was the biggest jump since June 2008, while for the latter it tied for the largest since late 1981.
Asia: Bonds across the Asia-Pacific region were under pressure though & New Zealand’s 10-yr rate spiked 7.3 bp to 1.73% after the RBNZ unexpectedly decided to end large scale asset purchases by July 23. Stock markets mostly struggled, though the ASX managed to lift 0.4%, despite extended virus restrictions in some parts. JPN225 is -0.3%. The NZX 50 is down -0.5%. UK CPI inflation unexpectedly jumped to 2.5% y/y from 2.1% y/y in the previous month. A strong round of numbers, even if PPI readings show a slight deceleration in price pressures. The official BoE line has been that inflation overshoots will be transitory, but after today’s round of higher than expected numbers, labour market data later in the week will be watched very carefully.
Fed Chair Powell testimony preview: Chair Powell goes to Capitol Hill for his semi-annual Monetary Policy Report (aka Humphrey Hawkins) & his comments will be especially scrutinized after another hefty CPI jump. However, while he will likely indicate that price pressures have been above Fed expectations, we expect him to reiterate the price pressures should be “transitory” & largely a function of base effects & the supply/demand impacts from reopenings & supply chain constraints. He will also repeat that the FOMC is not yet ready to begin withdrawing accommodation as the labor market has yet to fully recover. And he won’t give a timeline on QE unwinding.
FX markets: GER30 & UK100 are down -0.1% & -0.007% respectively, while US futures are still narrowly mixed, with the USA100 future outperforming. NZD rallied in the wake of the hawkish turn at the RBNZ. USD is steady to weaker, with USDJPY at 110.53. EUR & GBP lifted against a largely weaker USD, although EURUSD remains below 1.18 & Cable below 1.39. USOIL meanwhile is at $75.06 per barrel.
Today – Data releases today focus on US June PPI, BoC Monetary Policy & Press Conference & the first day Testimony from Fed Chair Powell. The earnings calendar includes BOA, Wells Fargo, Citigroup and Blackrock.
Central banks are likely to gradually reduce the extraordinary degree of stimulus later in the year, but monetary policy will remain accommodative for a long time to come which should see economies through virus setbacks.
Biggest FX Mover @ (07:00 GMT) NZDUSD (+1.20%). Kiwi spiked to 0.7030 following the RBNZ’s unexpected move. Momentum indicators are still positively configured with exception of Stochastics which flattened into the OB area implying a potential sideways move. Fast MAs aligned higher.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
September 10-year Bund future rallied with Treasury futures overnight & in cash markets the US 10-yr rate corrected a further -1.3 bp to 1.33%. Υields also dropped in Australia & New Zealand, with the former outperforming despite a drop in the unemployment rate to just 4.9% – the lowest in 10 years. EGBs also ended higher yesterday after Fed Chairman Powell calmed nerves on the inflation front & managed to ease fears the Fed will move earlier than expected on tapering- Tapering is still “a ways off.”
The BoC left rates unchanged, as expected, while cutting its weekly QE purchases by C$1.0 bln, also as expected. The BoC statement left forward guidance unchanged from the previous meeting, though did downgrade 2021 GDP modestly while upping growth expectations for 2022.
BoE’s Bailey & ECB’s Schnabel were also out to calm nerves, with Bailey highlighting the central bank will need to assess the transitory factors that are driving headline rates at the moment, though comments from Ramsden sounded more cautious on inflation risks – no rush on rate decision.
Asia stock markets traded mixed after today’s round of growth data out of China. China Q2 GDP growth slightly weaker than expected at 7.9%. UK ILO unemployment rate unexpectedly lifted to 4.8% in the three months to May and pick up in employment fell short of expectations at just 25K.
Earnings: BOA shares fell after revenue declined from a year earlier because of a 6% drop in net interest income due to lower interest rates. Citigroup beat analysts’ estimates for profit, thanks to a $1.1 billion boost from releasing reserves the bank had previously set aside for loan losses. Wells Fargo posted Q2 profit of $1.38 a share as revenue jumped 11% from a year earlier to $20.3 billion, soundly beating Wall Street’s expectations despite weak demand for loans. BlackRock’s assets under management jumped to a record $9.49 trillion in Q2 from $7.32 trillion a year earlier.
FX markets: USD steady to weaker, with USDJPY at 109.74. EUR & GBP lifted against a weaker USD, though EURUSD is at 1.1846 & Cable below 1.3865. USOIL dips to $71.44 per barrel – the combination of a reported production agreement between Saudi Arabia and the UAE, allowing the Emirates to pump more oil in 2022, combined with an unexpected weekly rise in US fuel supplies, has weighed on prices. Gold topped at 1,832 (50% Fib).
Today – Fed Chair Powell’s testimony day 2 and Jobless claims.
Biggest FX Mover @ (07:00 GMT) EURCAD (+0.27%). CAD headed lower, despite the taper move, in what appeared to be a case of sell the rumor, buy the news.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Curve-flattening trades pressed longer dated Treasury rates lower again Thursday after Fed Chair Powell did not change his tune regarding the view on inflation; that it should be temporary, & that an accommodative stance is still necessary.
The curve collapsed to 108 bps, having retreated from 116 bps early in the week. It was the narrowest since February . Elsewhere BoJ did the expected & kept policy settings unchanged for now, but cut back its growth forecast for this year. JPN225 share average dipped below the psychologically key 28,000 mark as tech shares tracked declines on Wall Street overnight, while a continued surge in coronavirus infections dented investor sentiment. Weakness in chip-related shares also helped bring down USA500 & USA100.
European stock markets struggled yesterday, Gilts sold off & Bunds pared gains as BoE’s Saunders added to comments from Deputy Governor Ramsden suggesting asset purchases may have to end earlier than previously expected. At the same time, the Delta variant & concern over the fallout from recent devastating floods in Germany could also weigh on the GER30 today.
Mixed earnings, uncertainties over inflation & Covid, along with current richly priced valuations prompted some profit taking.
FX markets: EURUSD dropped to 1.1806, while GBPUSD eased to 1.3810. NZD up 0.6% at $0.7020 after consumer prices rose far faster than expected, bringing forward markets’ rate hike expectations to August. USOIL stayed under pressure drifting below $71.00 barrier. Gold on the other hand hit a 1-month high of $1,834.3, supported by a dovish Fed.
Today – Eurozone May trade & June CPI. US releases include Retail Sales & Michigan Index.
Biggest FX Mover @ (07:00 GMT) NZDJPY (+0.88%). NZD remains the biggest mover amongst majors in the Asia session, & so far, however the rally seems to have run out of steam as fast MAs flattened along with RSI at 55. MACD’s signal line remains negative while Stochastics gives mixed signals at OB area.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Новости
Фотогалерея
Клубы
Каталог
Оставить отзыв
Пользователи
Объявления
Хостинг
Технический анализ
Акция "Курс обучения в подарок"
Конкурсы фото
ПОЛНЫЙ СПИСОК
Блоги
