HFMarkets (hfm.com): New market analysis services.

[HFM]

Date: 26th August 2024.


Market News – FED: “The time has come for policy to adjust”.


This year’s Jackson Hole central banker symposium provided the opportunity for Fed Chair Powell to set the policy course for the FOMC, looking to join the other core central banks already in rate cutting mode. The markets got a big boost after he confirmed the FOMC will begin lowering rates on September 18.


The question on size could be answered by upcoming jobs numbers.


* Europe & UK: The ECB is also likely to reduce rates again next month, while the BoE’s Bailey sounded a more cautious tone. Like the ECB, the BoE seems more likely to stick to meetings with updated projections and detailed analysis, which would mean the BoE will sit out the next meeting and move again in November.
* Japan: Governor Ueda signaled the BoJ remains on its normalization course, but a hike as soon as September 20 seems unlikely.


Asia & European Sessions:


* Asian stock markets have shown mixed performance so far today, with the Hang Seng rising more than 1%, while Japanese markets corrected as the Yen rallied.
* Japan’s Nikkei 225 index dropped by 1.1%, reaching 37,944.68. Hong Kong’s Hang Seng index gained 1.0% to 17,786.31. Shanghai Composite index slightly declined by 0.1% to 2,852.34. Australia’s S&P/ASX 200 rose 0.7% to 8,076.10.
* European stock markets are mostly lower, with the DAX currently posting a loss of -0.2%. UK markets are closed for a holiday.
* The Dow climbed 1.1% to 41,175.08, surpassing the 41,000 mark for the first time since July.


Financial Markets Performance:


* The USDIndex saw a session low of 100.53 after plunging on Friday. It is currently trading at 100.41.
* EUR and Sterling have benefited from dovish Fed bets and the correction in the Dollar. The EURUSD pulled back from 1.1200 and is currently at 1.1177. The GBPUSD broke key resistance at 1.31 and is retesting 1.3200 currently.
* The Yen outperformed, and rallied against most currencies.t is currently settled at 143.43.
* USOil spiked to $75.28. Safe-haven buying due to increasing tensions in the Middle East, alongside bets on the Fed, contributed to market movements. Oil prices rose 0.7% as the region prepared for further conflict following an Israeli strike on Hezbollah targets in southern Lebanon.
* Gold recovered to $2524.


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.


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.

Andria Pichidi
Market Analyst
HFMarkets

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.

[HFM]

Date: 12th September 2024.


Market Update – Eyes on ECB!


US inflation data supported bets for a rate cut from the Fed next week, but also argued for gradual moves.


Asia & European Sessions:


*Selling initially drove the moves on Wall Street and Treasuries as the pick up in the monthly US CPI core rate weighed on aggressive Fed rate cut bets, and basically confirmed a -25 bp reduction next week. However global equities turned around and dip buyers provided support with the major indexes bouncing off of support.
*European stock markets are broadly higher in catch up trade, after Wall Street turned optimistic yesterday and the tech rally extended through Asian hours. Japanese markets, which were hit by a rally in the yen earlier in the week, bounced back and the Nikkei closed 3.4% higher. DAX and FTSE100 are currently up 1.2% as markets wait for the ECB to deliver the widely expected 25 bp rate cut.
*Tech stocks like Amazon, Microsoft, and Nvidia drove Wall Street’s gains, pushing the S&P 500 and Nasdaq higher.
*ECB Preview: Comments from officials have left little doubt that rates will be cut by 25 bp once again at tomorrow’s meeting. It is likely to be another “cautious cut”, however, that doesn’t commit to additional moves. Growth indicators may have come in lower than hoped, and headline inflation dropped sharply. Underlying inflation, though, remains high and that means Lagarde is likely to stick with a data-dependent approach. We expect further cuts, but for now only at meetings with updated staff projections. A 25 bp cut would leave the deposit rate at 3.50% and the main refinancing rate at 4.00%. However, the ECB announced earlier in the year that it intends to lower the spread between the deposit rate and the main refinancing rate to 15 bp from currently 25 bp. That will come into effect on September 18, together with the changes announced tomorrow. That will leave the main refinancing rate at 3.65%, the marginal lending rate at 3.90%.


Financial Markets Performance:


*The USDIndex is at 101.796 and USDJPY has lifted to 142.66 amid a wider correction in the Yen.
*Oil rebounded 2.19% to $67.80 per barrel due to Hurricane Francine affecting Gulf of Mexico production.
*Gold dipped -0.15% to $2512.89 per ounce after rising to a session high of $2528.98 per ounce.


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.


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.

Andria Pichidi
Market Analyst
HFMarkets

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.

[HFM]

Date: 07th October 2024.


Oil bets most Bullish in 2 Years, Stocks pared some gains.



Trading Leveraged Products is risky


The September NFP report was a blowout by almost every measure. It quickly knocked out lingering fears of a recession this year or early next, but also knocked out expectations for another jumbo -50 bp rate cut this year. So, what’s the market signaling right now? ‘Goldilocks’ scenario?


Asia & European Sessions:


*Equity markets have moved broadly higher across Asia, and European markets are also finding buyers in early trade. Recent US data have boosted growth optimism, and Chinese officials seem more committed to growth boosting stimulus measures.
*Japanese stocks closed higher on Monday, with the Nikkei rising by 2.05%, driven by gains in the Mining, Chemical, Petroleum & Plastic, and Power sectors.
*European equities continue to benefit from a positive US jobs report. The DAX and FTSE 100 have already started to pare opening gains and the DAX is down -0.1%, while the FTSE 100 up a mere 0.04%.
*Data:German manufacturing orders plunged -3.8% m/m in August & U.K. house prices rose 0.3% m/m in September, according to the Halifax index. German data added to signs that the German economy will contract again this year.
*This Week: The inflation data are in view and will have a little more importance as the jobs report has extinguished fears of a recession and boosted the potential for a pick up in price pressures ahead. We expect gains of 0.1% and 0.2% for headline and core CPI for September (Thursday). Increases of 0.1% and 0.2% are projected for September PPI (Friday). Along with the data, there is a host of Fedspeakers through the week and the FOMC minutes (Wednesday). Supply is also on tap with the Treasury selling $119 bln in 3-, 10-, and 30-year maturities.
*Earnings season looms: JPMorgan Chase is scheduled to report on Friday, with PepsiCo in the spotlight tomorrow and Delta Air Lines on Thursday.





Financial Markets Performance:


*The USDIndex traded within Friday’s range so far today and is at 102.32.
*The USDJPY surged to test 149.00 immediately after the data before drifting down to 148.80. Still, this is the strongest since July and early August were the pair hit a multidecade peak at 161.69 on July 3. Currebntly is at 148.13
*According to Bloomberg, Oil futures posted their largest gain in more than a year last week. USOILhas lifted to $74.63 per barrel as markets watch developments in the Middle East. Gold meanwhile is at USD 2649.19 per ounce.





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.


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.

Michalis Efthymiou
HFMarkets

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.

[HFM]

Date: 30th August 2024.


Market Volatility, Stock Market and Upcoming US Elections.


US Elections have been and are always expected to be extremely volatile events worldwide. Elections, similar to other political or banking sector events, are notably treated by market participants with anticipation and speculation.


As soon as Kamala Harris entered the Presidential race, replacing Joe Biden on the ticket, the stock markets began showing a noticeable preference for her. Market Watch reports[ that based on current stock market trends, Harris has a 64% chance of winning the election, a significant shift from the previously erratic market behavior.


This shift in the stock market is a positive indicator, suggesting that investors are placing their confidence in the Democrats and their potential economic policies. While the impact on the election outcome might be minimal, the fact that a significant portion of these investors are also voters means that careful analysis of market trends could provide insights into the current political climate as the 2024 US Presidential Election approaches.


Historically, it has been noticed that during election years, market participants shift their investments into money market funds instead of the safety of stock and bond funds, as they wait out the heightened uncertainty.


But will 2024 be the same? We cannot quite know yet but it’s been a unique one so far as we have seen an extreme money flow into equity market and commodity market in comparison with past election years, due to geopolitical risk, US political uncertainties which added to the instability, AI mania which boosted global stock markets, and the recession concerns which initially returned but currently are considered to have been overblown, as were aggressive Fed rate cut bets.


Are stock market investors rallying behind Kamala Harris? If we consider Market Watch’s analysis, Harris is indeed receiving substantial support from stock market investors across the US. This is reflected in the increased investments and the positive performance of certain stocks following her entry into the race after Biden’s unexpected withdrawal.


Can the stock market serve as a reliable political barometer? The stock markets can offer insights into voter sentiment and have historically been a strong political predictor.


In periods of uncertainty, the equity markets’ volatility and volume tend to spike again since they are considered to be attractive and more stable assets. If we focus on the medium term though it is expected that if current conditions sustain, market volatility will extend beyond Election days with any potential outcome, i.e. a Harris win and Democrat majority in Congress, a Harris win but split Congress, or a Trump victory with split Congress.


Meanwhile, a chart from Wells Fargo Investment Institute, shows the USA500 implied Volatility index along with USA500 index performance prior and post the Election Day based on the elections since 1988 with the 2008 recession year excluded. This chart interestingly suggests that typically the USA500 tends to ease/consolidate a bit a month prior to the elections despite an extremely high volatility, while USA500 price continues its upwards move after the election day even though volatility declines significantly.


However, it’s crucial to remember that market trends don’t always align with election outcomes. For instance, during the 2016 election, the stock market favored Hillary Clinton, but the final results told a different story.


Historically, the markets have shown a tendency to respond more favorably to Democratic candidates rather than Republicans, due to various factors. It remains to be seen if the stock market’s predictions for the 2024 US election will prove accurate.


Currently, market trends suggest a positive response towards Democratic candidate Kamala Harris, who is gradually gaining traction in the polls. However, as fear of a potential recession is still in the background, the US stock markets are in a state of uncertainty.


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.


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.



Andria Pichidi
Market Analyst
HFMarkets

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.

[HFM]

Date: 18th September 2024.


What Does Tonight’s Fed Rate Cut Mean For Gold and the Yen?


*The UK’s inflation remains at 2.2% as per previous expectations. The Pound remains slightly weaker on Wednesday.
*Gold retraces as traders increase the possibility of a 0.25% rate cut after yesterday’s Retail Sales.
*Gold positions break the previous annual record of 242.314K indicating the high demand. JP Morgan advises the largest risk to the global economy remains the tensions within the Middle-East and this can also impact Gold.
*US Retail Sales unexpectedly rose 0.1%, higher than the previous expectation of -0.2%.


XAUUSD – Gold Retraces As Economists Stick To Their 0.25% Rate Cut Prediction!


The price of Gold on Tuesday fell 0.50% moving back to the trend-line (75-Period EMA) and then retraced upwards overnight. However, the price is now actively declining as we approach the opening of the European Cash Open. Previously the price of Gold significantly rose due to the expectations of the Federal Reserve adjusting interest rates. However, the pricing changes depending on a 0.25% and 0.50% interest rate cut. According to experts, 0.25% could apply some short-term pressure on Gold unless the Fed also adds dovish comments for the upcoming months.


The reason why a 0.25% cut could potentially be negative is because investors have partially priced Gold based on a 0.50% cut, not 0.25%. Therefore, the price movement is largely dependent on tonight’s Federal Reserve rate decision and press conference. During the press conference, investors will be expecting guidance from the chairman, Mr Powell, regarding potential future rate cuts. According to Bloomberg, traders have significantly increased the likelihood of a 0.50% rate cut. However, Bloomberg surveyed 115 US economists, of which 104 advised the Fed would opt for 0.25%.


Leading trading platforms confirm the surge of new investors in gold. According to the US Commodity Futures Trading Commission, long positions in contracts have reached 246.214K, surpassing the previous annual record of 242.314K. Seller positions in this category remain low, totaling just 19.505K transactions. A similar trend is seen at the CME Group, where the average daily trading volume for gold contracts over the past week was 376.2K, far exceeding August’s average of 134.0K.


In terms of technical analysis, the medium-term picture remains neutral. This is due to the RSI trading at the neutral level, and the price trading above the trend-line and the 100-Period SMA, but retracing downwards. Therefore, the overall scenario remains neutral. However, if the price rises above $2,576.00, buy signals are likely to strengthen.


GBPJPY – UK Inflation Holds at 2.2%, Yen Struggles to Gain Momentum Outside Asia!


The price of the GBPJPY trades considerably lower on Wednesday due to the higher value of the Japanese Yen. So far the Japanese Yen is the day’s best performing index and was trading 0.32% higher against the currency market. However, technical analysts have noted that the Yen’s performance becomes poorer within the European session. As the European session edges closer the Japanese Yen Index has fallen 0.06%. The price movement of the Japanese Yen will largely depend on the Fed’s rate decision due to recent correlations.


The Great British Pound Index trades 0.06% lower but is slightly improving since the release of the latest UK inflation date. The UK’s inflation remains at 2.2% as per previous expectations. The Bank of England’s rate decision and press conference will take place tomorrow. Analysts advise the BoE is likely to keep interest rates at 5.00% which is positive for the British Pound.


According to Bloomberg, if the Fed opts to cut interest rates by 0.50%, the Bank of Japan may choose not to increase interest rates again this year. Economists added that the Bank of Japan would prefer for the Yen to gradually decline back to 135.00. Therefore, a 0.50% rate cut could turn negative for the GBPJPY, however, the price movement would need to confirm this.


The GBPJPY is trading at the 55.00 level on the RSI, above the 75-Period EMA and 100-Period SMA. On the 5-Minute chart, the GBPJPY is also close to crossing above the 250-Period SMA. Therefore, most indicators are indicating upward price movement. Nonetheless, this will depend largely on the upcoming monetary policy developments.


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.


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.

Michalis Efthymiou
Market Analyst
HFMarkets

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.

[HFM]

Date: 11th October 2024.


Treasuries close mixed, Wall Street lower, US Dollar steady after data – Eyes on PPI.



Trading Leveraged Products is risky


The hotter CPI and cooler jobless claims made for mixed action in the markets. There was also some marginal impact from the 30-year auction and Fedspeak.


Treasuries were bifurcated in a curve steepening trade with the front end outperforming. The jump in claims, even if due in part to weather, strikes and other factors, supported expectations for additional rate cuts ahead, though of the -25 bp variety. The 2-year yield closed -5.6 bps lower at 3.966%. Dip buyers from the 4% rate also underpinned. Meanwhile, the long end was heavy on the hotter CPI and with the weight of supply. The 10-year was fractionally lower at 4.067%, but had spiked to 4.115% on the pop in inflation. The curve closed at 10.4 bps from 4 bps Wednesday.


Wall Street finished in the red after the Dow and S&P500 hit fresh records previously. The indexes were well off their lows at the end of the day. The NASDAQ dipped -0.05%, while the S&P500 was -0.21% lower and the Dow was down -0.14%.


The USDIndex finished little changed at 102.70 after jumping to a session high of 103.178 on the CPI then slipping to the day’s low of 102.720 on the claims numbers.


Oil climbed 3.26% to $75.63 per barrel and Gold rose 0.84% to $2629.51 per ounce.


Implied Fed funds futures continue to price in -25 bp cuts ahead, with some chance for no action rather than another jumbo -50 bps. Indeed, the latter has been priced out. This view was supported by the FOMC minutes yesterday that showed a big debate and some push back over the decision to lower rates by -50 bps on September 18. We continue to expect two quarter point reductions over the rest of this year.


In spite of being data dependent, we highly doubt the FOMC will skip November as they kick off their normalization process, especially as officials will be loath to do a start-stop so soon. And Chair Powell and others have told us to monitor the dot plot reflecting -25 bps in November and December as the base case.


Looking Ahead:


The hotter CPI puts attention on PPI and the inflation components of the consumer sentiment report due out Friday. Respective gains of 0.1% and 0.2% are projected for headline and core producer prices in September after increases of 0.2% and 0.3% in August. Results in line with the estimates would see the headline pace dip to a 1.6% y/y rate from 1.7% y/y previously, while the core rate should rise to 2.6% y/y from 2.4% y/y.


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.


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.

Andria Pichidi
HFMarkets

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.

[HFM]

Date: 2nd September 2024.


Is The Dow Jones Overpriced? The DJIA Declines On Monday!


*Markets expect US employment data to improve adding a further 160,000 employees to the country’s payroll.
*Analysts expect US Job vacancies to drop to their lowest level in 2024, but to remain at the 5-Year Average.
*According to the Chicago exchange, an interest rate cut on September 18th is certain. Markets expect a 0.25% rate cut.
*Strong gains on Friday evening saved the US Stock Market from witnessing another bearish close.


Dow Jones (USA30) – Recurring Pattern


On Friday, the stock market quickly fell at the opening of the US Session but thereafter the market quickly rose to close at a higher price. Investors should note that of the past 7 trading sessions, this has been a known pattern. Of the past 7 trading sessions the price has fallen at the open and then corrected on 5 occasions. A positive factor for the Dow Jones is the price is forming higher swing lows and is witnessing less bearish momentum over the past week.


Dow Jones Components


The Dow Jones’ components on Friday saw 5 stocks fall while 25 stocks rose in value. Therefore, 83% of the index rose in value confirming buy signals could have been relevant. Though, during today’s session investors should note that the US 10-Year T-Bond rose in value by 42 points. Currently, the VIX index is more or less unchanged, but as the US 10-Year T-Bond trades significantly higher, investors will need to be cautious of volatility. If the VIX increases in value and Bonds Yields remain significantly higher, the price of the Dow Jones may witness a horizontal trend. It will also be vital to again review the percentage of the components witnessing bullish and bearish price movements.


Earnings season is almost at a close, the only major company yet to release its earnings report is Broadcom. However, Broadcom stocks are not a component of the Dow Jones and the report will simply impact the market only through the broader market sentiment. Analysts will concentrate their attention on this week’s ISM PMI release, JOLTS Job Openings and the Employment data on Friday.


Ideally investors will want to see neither weak data which will trigger low consumer demand fears, nor positive data which will make rate cuts less likely. Ideally, investors would like to see the data read in line with expectations. Currently the market is pricing in 0.75% to 1.25% rate cuts in 2024. If the Fed indicates less than 0.75%, the stock market is likely to be overpriced.


Dow Jones Technical Analysis


In terms of technical analysis, the Dow Jones has been the only index which has continuously held above the 75 and 100 Period Moving Averages. Meanwhile, the SNP500 and NASDAQ have been unable to maintain momentum. Higher demand is due to the Market’s lower risk appetite and investors increasing exposure away from the technology market. However, the price is now trading very close to its all-time highs and close to its overbought market on most oscillators. Therefore, investors will be looking for further price drivers to regain momentum.


According to Fibonacci retracement levels, if the price declines, a retracement could fall as far as $41,339.55. If global indices rise and at least 65-70% of the Dow Jones’ stocks rise, investors may deem a breakout of the $41,641.00 level as a signal to speculate a price increase.


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.


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.

Michalis Efthymiou
Market Analyst
HFMarkets

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.

[HFM]

Date: 20th September 2024.


Bigger Interest Rate Cuts Spark Surge In Demand For The NASDAQ!

*Stocks rally after the Federal Reserve chooses to “go-large” with a 0.50% interest rate cut.
*The NASDAQ rises more than 2.50% and the Dow Jones 1.26%. The Dow Jones trades at an all-time high.
*UK Retail Sales rose significantly above expectations. The Great British Pound Index rises 0.35% and is the best performing index after the Japanese Yen.
*Gold attempts to break an all-time high as analysts expect the Federal Reserve to cut a further 0.50% by the end of the year.


NASDAQ – Larger Interest Rate Cuts Prompt Higher Demand


The NASDAQ saw a clear bullish trend with the index rising for 5 consecutive hours as the US Session opened. The higher demand is a clear result of the Federal Reserve’s decision to cut interest rates 0.50% and not 0.25%.


The US Federal Reserve announced a 50 basis point reduction in the interest rate, lowering it from 5.25–5.50% to 4.75–5.00%. In his remarks, Fed Chairman, Jerome Powell, highlighted that the target inflation rate of 2% had been achieved but suggested further decreases could follow. The updated economic forecast projects consumer price growth at 2.3% by the end of the year, down from the previous estimate of 2.6%. Furthermore, economic growth is now forecasted at 2%, compared to the 2.1% predicted in July.

In terms of technical analysis, the medium-term picture remains neutral. This is due to the RSI trading at the neutral level, and the price trading above the trend-line and the 100-Period SMA, but retracing downwards. Therefore, the overall scenario remains neutral. However, if the price rises above $2,576.00, buy signals are likely to strengthen.


GBPJPY – UK Inflation Holds at 2.2%, Yen Struggles to Gain Momentum Outside Asia!


The price of the GBPJPY trades considerably lower on Wednesday due to the higher value of the Japanese Yen. So far the Japanese Yen is the day’s best performing index and was trading 0.32% higher against the currency market. However, technical analysts have noted that the Yen’s performance becomes poorer within the European session. As the European session edges closer the Japanese Yen Index has fallen 0.06%. The price movement of the Japanese Yen will largely depend on the Fed’s rate decision due to recent correlations.

As a result, the Fed expects the key rate to drop to 4.50% this year and reach 3.40% by the end of 2025. Therefore, investors are changing their view as to the “intrinsic value” of the NASDAQ and the stock market in general. The NASDAQ on Thursday was the best performing index largely due to its exposure to growth stocks. Of the NASDAQ’s individual stocks, 85% rose in value on Thursday and none of the top ten influential stocks depreciated.


When monitoring other areas of the market, such as bond yields, indications still remain that buyers will control the NASDAQ. The US 10-Year Treasury Yields has fallen 0.024% during this morning’s asian session. Lower bond yields are known to be positive for the NASDAQ, and investors will continue monitoring the decline in yields throughout the day. The VIX index this morning is trading 0.15% higher; ideally buyers and shareholders would wish for the VIX to decline into a minus figure. Yesterday’s stronger employment data also continues to support the NASDAQ and stocks in general.


Technical analysis continues to indicate bullish price movement due to the upward momentum and volatility. However, as the NASDAQ is currently retracing, upward momentum will need to be regained in order for a buy signal to materialize. When attaching the Fibonnaci retracement levels onto the retracement, a potential buy signal can be seen at $19,920. However, investors are also concerned the price is trading at the resistance level from August 22nd.


GBPUSD – UK Retail Sales Significantly Higher Than Expectations!


The GBPUSD rose to its highest level since February 2022 after rising 0.38% during this morning’s Asian Session. The bullish price movement is related to both the US Dollar’s decline but also the bullish price movement the Pound has seen against the whole currency market. Currently, the GBP is the best performing currency of 2024 so far but also of the day. So far in 2024, the British Pound has risen 4.42%.

The Pound’s upward momentum is largely due to the Bank of England’s decision to keep its interest rate at 5.00%, whereas other global regulators had opted to cut interest rates. In addition to this, the UK’s Retail Sales figure for August read 1.0%, significantly higher than the previous expectations of 0.2%.


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.


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.

Michalis Efthymiou
Market Analyst
HFMarkets

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.

[HFM]

Date: 15th October 2024.


Global Markets Mixed Amid Earnings Optimism and Easing Oil Concerns.



Trading Leveraged Products is risky


The market’s momentum, fueled by optimism around earnings reports, falling interest rates and expectations that the Federal Reserve can reduce inflation without triggering a recession.


Asia & European Sessions:


*European futures rose while Asian stocks showed mixed performance following Wall Street’s record highs.
*Chinese shares saw extended losses after disappointing data showed China’s broader export growth slowed to just 2.4% year-on-year, the weakest since May, reflecting ongoing economic challenges. The lack of clear fiscal stimulus from Chinese authorities continues to weigh on investor sentiment and risk appetite in Chinese equities.
*Technology stocks in Asia followed the strong lead from their US counterparts, with the S&P500 gaining nearly 1% to reach its 46th record high this year. Despite concerns over lowered Q3 forecasts, investors seem to be betting on positive earnings surprises. The Nasdaq also advanced by 0.8%, led by gains in Nvidia Corp., Apple Inc., and Tesla Inc. Financial stocks like Goldman Sachs and Citigroup rose ahead of their earnings releases.
*Nikkei hit its highest level since July, with benchmarks in Australia and Taiwan also trending upward. Japanese stocks were among the strongest performers so far today, with the Yen maintaining strength near a key psychological level against the US Dollar.
*Earnings reports: Bank of America, Johnson & Johnson, and UnitedHealth Group.





Financial Markets Performance:


*The USDIndex strengthened against most major currencies.
*The USDJPY slightly dipped to 149.34 from 149.96. The EURUSD broke 1.09 and extended to 1.0830.
*USoil dropped sharply to $70.60 per barrel from $4.18 high yesterday. Oil prices declined as concerns about potential Israeli strikes on Iranian energy facilities eased. Oil and energy shares dropped after reports indicated Israel does not intend to target Iranian oil or nuclear sites.


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.


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Andria Pichidi
HFMarkets

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.

[HFM]

Date: 5th September 2024.


US Jobs Vacancies Fall to 3-Year Low Pressuring The US Dollar!


*US Job Vacancies drop to their lowest level in more than 3 years. The US Dollar Index declines.
*The best performing currency of the week is the Japanese Yen. Investors are turning to the only Central Bank which is not going to cut rates in 2024.
*The possibility of a 50-basis point rate cut increases, but economists stick to their 0.25% predictions for now.
*Oil prices fall close to lowest levels of 2024. Shareholders expect lower oil prices to prompt a lower inflation rate over the next 2 months.


USDJPY – JOLTS Job Data Points To Potential Larger Rate Cuts!


The price of the US Dollar came under pressure from the latest US job vacancies figures which fell below expectations. US Job Vacancies dropped to their lowest level in more than 3 years. The US Dollar Index as a result fell 0.42% and continues to be the worst performing currency of the day this morning. The Japanese Yen is currently increasing 0.43% higher and is the day’s best performing currency. This ensures no conflict between the two currencies so far, but investors will need to ensure this trend continues while they trade.


The July JOLTS job openings data was released today, revealing a decrease from 8.18 million to 7.67 million, signaling continued weakening in the labor market and raising the chances of a significant rate cut. Additionally, the Fed’s Beige Book economic review will be published later in the day, providing insight into the current economic conditions across different regions of the US.


According to experts, the possibility of the Bank of Japan again increasing interest rates is growing but the timing is not yet certain. However, even without an interest rate hike, the Japanese Yen is likely to witness support as global banks cut rates. This includes the Federal Reserve, Bank of England and European Central Bank. During this morning’s Asian session, the Japanese Yen has risen in value against all currencies. Though, investors will monitor that this does not change as the European trading session starts.


USDJPY – Technical Analysis Update


Upcoming Events


The price action throughout the remainder of the week will depend largely on the US Dollar. Today’s ISM Services PMI, ADP Employment Change and tomorrow’s official employment data will significantly influence the US Dollar and the USDJPY. Thereafter the market will turn their attention towards comments from members of the FOMC and the US inflation data.


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.


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.

Michalis Efthymiou
Market Analyst
HFMarkets

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.