ftse 100

Speaking of morose growth projections

Forecasts for German growth in 2024 have been significantly lowered following the recent budget chaos after the German Constitutional Court declared government's spending plans unconstitutional. Germany – Europe's growth engine – is now seen growing just 0.4% next year. The UK, on the other hand, cut its own growth forecast significantly in yesterday's Autumn Statement. Jeremy Hunt said that the economy would grow only by around 0.7% - still better than Germany, but that projection is down from the 1.7% announced earlier. The good news for British people and businesses is that Hunt announced tax cuts for both individual and companies and lowered the national insurance payroll levy.

The Brits will now make a permanent 100% - yes 100% tax relief – on companies' capital spending. But don't be fooled by these beautiful numbers. In reality, the British tax burden will still mount to 38% of its GDP by the end of this decade and will reach its hig

FTSE 100 and USDCHF slowly goes up?

FTSE 100 and USDCHF slowly goes up?

John Benjamin John Benjamin 17.01.2022 10:49
USDCHF attempts to rebound The US dollar came under pressure after a contraction in December’s US retail sales. Strong selling pressure from the supply area around 0.9280 has pushed the pair all the way below the daily support at 0.9100. An oversold RSI triggered a buying-the-dips behavior but the rebound could be limited as sentiment tilted to the bearish side. The bulls will need to reclaim the support-turned-resistance at 0.9190 first. Otherwise, a new round of sell-off below 0.9090 could send the greenback to last August lows near 0.9020. NZDUSD seeks post-rally support The New Zealand dollar fell as risk sentiment subsided going into the weekend. The surge above the supply zone around 0.6850 has triggered a reversal fever after a month-long sideways action. As the RSI drops back into the neutrality area, buyers could be waiting to jump in at a discount. A pullback below 0.6840 has led to some profit-taking but as long as the price stays above 0.6780 the rebound is valid, or the kiwi could revisit the critical floor at 0.6700. A break above the recent high at 0.6890 would extend the rally to 0.6960. UK 100 consolidates gains The FTSE 100 finds support from the UK’s stronger-than-expected GDP. A break above the top of the previous consolidation range (7545) means a continuation of the current uptrend. Trend-followers may consider a pullback as an opportunity to stake in. Short-term sentiment remains bullish as long as the index is above 7470. A break above the immediate resistance at 7580 would extend the rally upward. A deeper retracement would test 7370 which used to be a major resistance from the double top on the daily chart.
Swissquote MarketTalk: A Look At XAUUSD, Swiss Secrets, Tesla And More

Updates on APPL, OILUSD, NIKKEI 225, FTSE 100 and more - MarketTalk

Swissquote Bank Swissquote Bank 28.01.2022 11:33
US equities went from gains to losses, yet again, as the Ukrainian tensions, which support the rally in energy prices, and by doing so further boosts the inflation expectations and the Fed hawks didn’t do good to the overall market mood. US dollar extended rally as the US yields continued pushing higher. The EURUSD slipped below the 1.12 mark. Although it has been a blood-red month for the US equities, the FTSE 100 managed to eke out 3% gains in January, as a sign that the British blue-chip index is in a good place to be the winner of the finally-happening reflation trade. In equity news, Tesla tanked more than 11% yesterday, as investors focused on the warnings that chip shortage could take a toll on performance this year, rather than the record-high profits (which were already factored in the stock price). Apple, on the other hand, gained 5% in the afterhours trading as the results showed that the sales soared despite the chip shortage worries, helping Apple announce a better-than-expected revenue in the most important holiday quarter! Watch the full episode to find out more! 0:00 Intro 0:26 Market update 1:08 Russia-Ukraine tensions boost energy prices, boost inflation fears 2:13 More market update 4:25 FTSE gains 3% in Jan despite heavy losses in US indices 5:47 USD extends rally, EURUSD slips below 1.12 7:20 Tesla down more than 11% despite record profits 9:00 Apple up 5% in afterhours trading on strong Q4 results Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
DAX (GER 40) EuroStoxx 50 And FTSE 100 (UK100) In Focus

DAX (GER 40) EuroStoxx 50 And FTSE 100 (UK100) In Focus

Jason Sen Jason Sen 25.02.2022 09:53
Dax 40 tested strong longer term moving average support at 14100/000 but ran almost as far as the next target of 13750/710. We have now established a base & I think a further recovery is likely. EuroStoxx 50 MARCH crashed as far as my lower target of 3750/40 with a high for the day exactly here & a 150 tick bounce. FTSE 100 MARCH crashed as far as 7141, just 11 ticks above strong support at 7130/10 with a 100 tick recovery. Update daily at 07:00 GMT Today's Analysis. Dax is now holding above strong longer term moving average support at 14100/000. We are holding short term 23.6% resistance at 14360/380 & this is the main challenge for bulls today. A break above 14410 therefore should be a buy signal targeting 14500 & 14600/650 & perhaps as far as strong resistance at 14750/850. Sell with stops above 14900. Strong longer term moving average support at 14100/000. A break below 13950 however could retest 13780/750. Less chance this will hold on the next test. EuroStoxx managed a bounce to 3810/00 & my next target of 3880/90. A break above 3910 signals further gains to 3950 & probably as far as strong resistance at 3985/95. Failure to beat first resistance at 3880/90 risks a slide to 3845/35 before a retest of support at 3750/40. FTSE crashed as far as strong support at 7130/10 before a bounce to 23.6% resistance at 7250/60. A break above 7275 signals further gains to strong resistance at 7320/40. Watch for a high for the day. A break higher however targets 7380/90 before a sell opportunity at 7435/55. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Stock Markets In Europe – DAX (GER 40), EuroStoxx 50, FTSE 100 (UK 100) Update

Stock Markets In Europe – DAX (GER 40), EuroStoxx 50, FTSE 100 (UK 100) Update

Jason Sen Jason Sen 28.02.2022 12:06
Dax 40 paused for quite a while at 23.6% resistance at 14360/380 with a break above 14410 eventually for a buy signal targeting 14500 & 14600/650. A high for the day here. EuroStoxx 50 MARCH we wrote: managed a bounce to 3810/00 & my next target of 3880/90. A break above 3910 signals further gains to 3950 & probably as far as strong resistance at 3985/95. A high for the day exactly here! FTSE 100 MARCH through the roof & unexpectedly reaching as far as 7530. Update daily at 07:00 GMT Today's Analysis. Dax beat resistance at 14360/380 for a buy signal targeting 14500 & 14600/650 & perhaps as far as strong resistance at 14750/850 on Monday. Sell with stops above 14900. A break higher however is a buy signal targeting 15000/15050, perhaps as far as 15300/350. Shorts at strong resistance at 14750/850 target 14650 & 14500. First support at 14380/360. Longs need stops below 14300. A break lower targets 14150 before strong longer term moving average support at 14100/000. A break below 13950 however could retest 13780/750. Less chance this will hold on the next test. EuroStoxx beat 3880/90 for buy signal hitting my targets of 3950 & strong resistance at 3985/95 with a high for the day exactly here. A break above 4010 is the next buy signal targeting 4060/70, perhaps as far as strong resistance at 4135/45. Failure to beat strong resistance at 3985/95 targets 3940 then first support at 3905/3890. A break below 3875 however risks a slide to 3845/35 before a retest of support at 3750/40. FTSE in a stunning performance as we ran up over 300 points. Could continue higher after such a strong performance targeting 7570/80 before a test of resistance at February's high of 7620/30. A break higher is a strong buy signal initially targeting 7750/70. Downside is likely to be limited with first support at 7445/30 then support again at 7385/75. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
S&P 500 (SPX) Increased By 7.1%, FTSE 100 (UK 100) Went Up As Well

S&P 500 (SPX) Increased By 7.1%, FTSE 100 (UK 100) Went Up As Well

Alex Kuptsikevich Alex Kuptsikevich 03.03.2022 10:15
  Why the S&P500 is rising now Events in Ukraine at the end of last month provoked chaos in the stock markets of all regions. However, the S&P500 and FTSE100 indexes already managed to find the support of buyers on the first day of hostilities. Since then, these indices have formed an upward trend. The S&P 500 is testing the 4400 mark, above which it last traded solidly before Feb 17th. At the same time, futures are now 7.1% higher than the minimum point at which they were a week earlier.  The FTSE100 is not gaining as much and is now up 3.4% from last week's lows. In both cases, we see an upward movement, albeit shaky. It is explained by the market's less dependence on the state of affairs in Eastern Europe since the companies represented in the S&P500 are significantly diversified and removed from the epicentre of events. In contrast, the European Euro50 on the 1st of March fell to lows for almost a year.  A similar pattern was observed for the German DAX. The charts of both indices have been dominated by sellers since the beginning of the year, and this trend has intensified sharply in the last two weeks.  The DAX and EURO50 have about 7% more downside potential in the next few days before finding support. In our opinion, central banks may now be on the side of buyers in Western Europe and the United States, which are likely to soften plans for tightening monetary policy, despite the rise in commodity prices. Worth mentioning that in times of crisis, the market quickly calculates the winners: both in February-March 2020 and last month, the market decline was general, but very soon the markets diverged in their dynamics.
Tepid BoJ Stance Despite Inflation Surge: Future Policy Outlook

Russia-Ukraine Conflict - Ceasefire? DAX, FTSE100, CAC40 Gained, EUR Strengthened, USD Weakened. Is Crude Oil Price Likely To Decrease?

Swissquote Bank Swissquote Bank 30.03.2022 10:06
MarketTalk: What’s up today? | Swissquote Risk appetite improved, equities extended rally as talks between Ukraine and Russia hinted at progress, with Russia retreating from Kyiv to concentrate its military efforts in the Donbas region. The de-escalation gave a sigh of relief to investors, although many, including Joe Biden remain skeptical regarding the pullback from Kyiv, that could be ‘limited and tactical’. US crude dived to the 50-DMA yesterday, but that critical support held strong, and the price of a barrel rebounded back above the $105 level. The short-term outlook remains positive and price pullbacks are still seen as interesting dip buying opportunities if the 50-DMA is not cleared. The three major US indices followed up on the European session gains on de-escalation of the situation in Ukraine, but the US 2-year yield caught up, and even briefly surpassed the 10-year yield for the first time since 2019. Rising US yields, and de-escalation in Ukraine weigh on gold prices. But, the curve inversion, nor rising inflation prevent US stock indices from extending gains and the meme stocks are on fire, with GameStop up by 158% in the past two weeks and AMC up by more than 160%. Could the meme craze stretch higher? Yes, it could! Today, the Eurozone flash inflation figures for March start flowing in, and the US will reveal how many private jobs it added in March today. Strong economic data could revive the Fed hawks, push US yields even higher and dampen the mood. Watch the full episode to find out more! Timestamps: 0:00 Intro 0:24 Ukraine: light at the end of the tunnel? 1:50 Equities rally on de-escalation hope 2:49 US crude rebounds from 50-DMA 4:08 US 2-10 year yield inverts briefly 5:10 Rising yields, de-escalation weigh on gold 5:49 US indices, meme stocks defy rising yields 6:41 Bitcoin tests 200-DMA 7:12 Today's macro calendar & latest FX moves Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
5% for the US 10-Year Treasury Yield: A Realistic Scenario

GER 40 (DAX) And UK100 (FTSE 100) Morning Analysis - 30/03/22

Jason Sen Jason Sen 30.03.2022 16:14
Dax 40 JUNE finally reaches the target & strong resistance at 14750/850. Shorts need stops above 14950. We just held this level yesterday before a dip to 14780 this morning. FTSE 100 JUNE made another push higher but again there was a pullback in to the close. We have a series of candles on the daily chart with long upper wicks, indicating that there is strong selling pressure at the end of the day. This can be quite a negative signal, but of course does not tell us when the market will turn lower. Update daily by 06:00 GMT Today's Analysis. Dax finally tests strong resistance at 14750/850. Shorts need stops above 14950. A close above here tonight is a (surprising) buy signal targeting 15200/220, perhaps as far as 15400. Shorts at 14750/850 target 14600 & minor support at 14550. We should at least pause here on the downside. If we continue lower look for strong support at 14350/300 for some profit taking. FTSE higher again to the next target of 7510/30 with a high for the day just 11 ticks above. It is possible that we continue to crawl higher & ultimately reach the February high at 7610/30. However I feel the index is running out of steam. First support at 7470/60, with better support at 7430/20. A break lower meets strong support at 7360/40. A bounce from here looks likely, but longs need stops below 7320. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
DAX (GER 40), FTSE (UK100) And Forex Pairs: AUDJPY, EURJPY Analysis [VIDEO]

DAX (GER 40), FTSE (UK100) And Forex Pairs: AUDJPY, EURJPY Analysis [VIDEO]

Jason Sen Jason Sen 01.04.2022 09:54
AUDJPY lower as expected to test strong Fibonacci support at 9100/9080. Longs need stops below 9060. A break lower is a sell signal targeting 9000/8990 then support at 9010/8990. Our longs at 9100/9080 target 9145 & resistance at 9190/9200 for profit taking. Further gains are less likely but should target 9260/65 & perhaps as far as 9300/9320. If we unexpectedly continue higher however look for 9350/55 before a retest of what should be strong resistance at 9400/16. A break above 9430 is a buy signal. Dax finally tests support at 14350/300 for some profit taking on our shorts with low for the day exactly as predicted - longs could still be risky - if you try, stop below 14200. A break lower is the next sell signal targeting 13950/850. Minor resistance at 14540/580 but above 15610 can target strong resistance at 14750/850. Shorts need stops above 14950. FTSE outlook is more negative now. We could target first support at 7435/25 but longs here are probably risky. Best support at 7365/45. Longs need stops below 7325. Resistance at yesterday's high of 7530/50. Shorts need stops above 7570. A break higher (& weekly close above for confirmation) is a buy signal in to next week. EURJPY holding between first resistance at 135.60/50 & first support at 134.50/30, with a low for the day yesterday as predicted. Maybe we can trade this range before the NFP number today. Longs need stops below 134.10. A break lower targets 133.50/40. Shorts at 135.60/50 stop above 136.80. A break higher targets 136.25/35. Further gains today can allow a retest of this week's high at 137.40/52. A break higher can target 137.90/99.
EURUSD And XAUUSD Trade Lower Than Before. UK100 Gains Gradually

EURUSD And XAUUSD Trade Lower Than Before. UK100 Gains Gradually

Jing Ren Jing Ren 04.04.2022 07:34
EURUSD seeks support The US dollar rallied after March’s average hourly wages jumped by 5.6%. The euro came to a halt in the supply zone at the origin of the March sell-off (1.1180). A bearish RSI divergence pointed to softness in the rebound. A fall below 1.1120 then 1.1070 prompted buyers to bail out, further weighing on overall sentiment. 1.0980 at the base of the recent bullish impetus is major support. Its breach could invalidate the recovery and trigger a new round of sell-offs. The bulls need to clear 1.1120 to regain the upper hand. XAUUSD builds support Gold retreats as the US dollar finds support from a fall in the jobless rate. On the daily chart, price action still holds above the demand zone between 1890 and 1900 which is a sign of strong buying interest. A break above 1940 forced sellers out. This may also foreshadow a reversal. Sentiment would improve if the precious metal stays above 1915. A bullish close above 1960 could extend the rally to the psychological level of 2000. On the downside, 1890 is a critical level to maintain the bulls’ optimism. UK 100 consolidates gains The FTSE 100 treads water dragged by weaker energy stocks. A bullish MA cross on the daily chart suggests that the index could be back on track in the medium term. The intraday direction is still up despite its choppiness. A close above 7590 would extend the rally to this year’s high at 7690. Trend followers may see pullbacks as a bargain opportunity. The RSI’s oversold condition attracted some buying interest over 7460. A deeper correction would send the index to 7380 which coincides with the moving averages.
GBP/USD Analysis: GBP Maintains Growth Momentum, Market Awaits US Inflation Report

FTSE 100 Index Rises Thanks To Shell and BP Stocks, British Pound (GBP) Weakens After Thursday Morning Strengthen

Rebecca Duthie Rebecca Duthie 26.05.2022 21:17
Summary: Oil Giants are required to pay more taxes on profits. The BoE is put under more pressure FTSE 100 rises with BP and Shell stocks On Thursday oil giants Shell and BP were informed they would be required to pay 25% extra taxes on their profits from the North Sea. Investors did not seem to lose interest in these stocks despite this news, the share prices of both these companies rose. The Chancellor also announced there would be an extra tax incentive to invest in pumping up more oil and gas. Therefore it is possible that the oil giants can avoid almost their entire tax bill. FTSE 100 Price Chart GBP Weakens after its rally on Thursday morning On Thursday Chancellor Rushi Sunak announced that more than 8 million households would receive a lump sum of GBP650.00 in an attempt to try to fend off the cost of living crisis. The Chancellor also announced there would be a GBP15 billion spending boost. The move will put the Bank of England (BoE) under more pressure going forward, possibly forcing the BoE to raise interest rates even more. The Pound Sterling faces negative market sentiment in the wake of this news as the likelihood of a recession looms closer. Read next: FOMC Meeting Minutes Offer Support To The US Dollar (EUR/USD), Improved Market Attitude Favoured The GBP On Thursday (EUR/GBP, GBP/USD), Market Awaits RBA Monetary Policy  Follow FXMAG.COM on Google News Sources: finance.yahoo.com, poundsterlinglive.com
Eightcap analyst after UK CPI: It is an interesting position now for the Bank of England., do they need to go back to a few 50-point hikes to cut into the CPI rate?

FTSE 100 is doing better today, pound sterling had quite a good day yesterday reaching 3-weeks high

Walid Koudmani Walid Koudmani 10.01.2023 12:08
BRC report shows boost in sales over holiday season Today's BRC report showed an increase in total sales for the month of December by 6.9% compared with a year earlier as the economy still contends with the cost of living crisis. While this marked a noticeable improvement from November's 4.2% growth rate, it is important to note that some of this could be a result of high inflation driving prices and compensating for lower volumes. In addition, while sales were boosted by events like the world cup and holiday season, it remains to be seen if this trend will persist in the coming months while some economists believe inflation may have peaked or may at least be approaching its peak. In either case, this could be considered a positive sign and bring some optimism in a difficult economic context. The FTSE100 started the day trading higher after yesterday's pullback and with several central bank speeches today, could attempt to break through yesterday's highs. Meanwhile, the Pound managed to reach a 3 week high yesterday against the USD which has been experiencing significant weakness and today's events could bring some additional volatility to the currency market.  Read next: Damage to the crypto industry increased by almost a half in 2022 | FXMAG.COM Oil prices may be on the verge of breaking through the consolidation area Oil prices have managed to remain in the recent consolidation area after the prospects of an increase in demand from china supported higher valuations following a difficult start to 2023 which saw Brent drop over 10% from a high of $87 while WTI fell around 11% to reach a low of $72,44 before rebounding. In both cases it appears that the overall sentiment has improved and while traders await today's API inventory report from the US, it is possible that a surprise could cause a breakout from the recent sideways trading area. From a technical point of view, Oil.WTI is trading just below $75 and testing the 21SMA after breaking above the 8EMA on the hourly chart and while RSI still hovers around the 60 level, it appears that there might be still room for upside. On the other hand, a negative turn of events could swing sentiment in the other direction and cause an extension of the downward move.
Daily analysis by DayTradeIdeas - FTSE 100, Dax, Emini S&P 500 and more

Daily analysis by DayTradeIdeas - FTSE 100, Dax, Emini S&P 500 and more

Jason Sen Jason Sen 26.01.2023 10:11
Dax 40 March is forming a sideways consolidation as volatility decreases, which is normal in both a bull & bear trend. We do not know how long this process will take but there is definitely no sell signal at this stage. FTSE 100 March holding a 3 day range from 7710 up to 7780. Remember when support is broken it usually acts as resistance & vice-versa. Update daily by 06:00 GMT. Today's Analysis. Dax March held 18 ticks above support at 15000/14950 to hit my target & minor resistance at 15170/200. If we continue higher look for strong resistance at last week's high of 15300/330. Shorts need stops above 15380. A break higher is a buy signal. First support again at 15000/14950. A break lower targets 14870/850 then strong support at 14770/720. FTSE March reversed from first resistance at 7775/95 this week to my target of 7730/10 before a bounce from 7690. I think we are establishing a sideways trend but i will have to wait a but longer for reliable trend lines to trade. We should have strong resistance at 7745/65 today. Shorts need stops above 7785. A break higher is a buy signal targeting 7825 before a retest of 7850/60. Read next: McDonald's earnings: Currently, it is anticipated by several analysts that the EPS forecast for the quarter ending December 2022 is $2.44 | FXMAG.COM First support at 7695/75. Longs need stops below 7865.Emini S&P March is forming a new sideways range as we ignore the 3990/4010 area. I will have to wait a but longer to draw accurate tradeable trend lines but will do my best to identify support & resistance at this stage. I would forget running a swing trade & try to scalp the levels I provide. Nasdaq March we were offered 200 ticks on the short & another 200 ticks profit on the long at yesterday's support level. Emini Dow Jones March trades in an erratic sideways channel for 3 months. Unfortunately longs at first support at 33600/500 were stopped on the slide to 33347 before we shot higher to 33850. Update daily by 06:00 GMT. Today's Analysis. Emini S&P March should have minor support at 4005/3995. If you try a long stop below 3985. A break lower can target 3970/60, perhaps as far as 3940/35. Longs at 4005/3995 can target 4030, perhaps as far as 4050. A break above 4060 can target 4075 & 4095. Nasdaq March shorts at 11950/12050 worked perfectly this week, hitting first support at 11730/680 for profit taking. A nice 200 ticks. The long also worked perfectly with a 300 tick bounce from 11604. Did you make 400 ticks on the long & the short yesterday? The bounce is quickly taking us back to my sell opportunity at 11950/12050 - shorts need stops above 12100. A break higher is a buy signal targeting 12460/480. Shorts again at 11950/12050 can target 11830/820, perhaps as far as first support at 11730/680 for profit taking today. Longs need stops below 11600. Emini Dow Jones should have support at 33500/400. Longs need stops below 33300. A break lower can target 33000. Minor resistance at 33900/34000. A break higher can target 34180/200 before a retest ppf 34430/490. It is becoming a scalpers market in stock indices - perhaps we will trade sideways in to the spring now. The news has been about as bad as it could get for weeks - the Fed has been trying to take the market down, but it remains firm. A mild recession and US rates at around 5.25% are priced in. I think we will have to wait for a change of perception before we can start a new trend for stocks. Actually I would not be surprised to see stocks trade sideways through the summer, as long as inflation continues to ease very slowly & rates rise very slowly, then pause, all as expected. There will be no reason for stocks to soar or collapse.
Would Federal Reserve (Fed) go for two more rate hikes this year? Non-voting Bullard say he would back such variant

CMC analyst ahead of FOMC: I am surprised at how complacent markets are about this weeks Fed decision

Michael Hewson Michael Hewson 30.01.2023 15:39
This week is like a typical action movie - it begins with important, but not that striking events to gain momentum in time. First signs of the thrilling atmosphere will be earnings of McDonald's and other big names, but on Wednesday, it's the time for the first possible game-changer this week - the Fed interest rate decision. We reached out to Michael Hewson, Chief Market Analyst at CMC Markets, to discover his point of view, as for the first time since summer, the Fed rate hike of 25bp is indeed cemented. Is he of the opinion there will be no real market reaction though? Michael Hewson (CMC Markets): I am surprised at how complacent markets are about this weeks Fed decision - there seems to be this view that the Fed is close to signalling a pause like the Bank of Canada last week. If anything, the recent US data suggests that the Fed could easily get away with another 50bps move which is something I think they should do. With the Nasdaq 100 up over 11% year to date, financial conditions are too loose with the market pricing in rate cuts by year end. We are a long way from signalling that the fight against inflation is done and could see a hawkish surprise this week, especially if Powell pushes back on recent moves in bond and equity markets. Read next: Glovo Is Planning To Layoff 250 Workers Worldwide, The Middle East Is Already Suffering From A Water Shortage| FXMAG.COM We also asked Michael about the situation on the British market. FXMAG.COM: Despite turbulent times of British economy FTSE 100 is close to reach new all-time high - what could be the effects of BoE interest rate decision on Thursday? Michael Hewson: There is unlikely to be much effect from this week's Bank of England meeting on the FTSE100, given that most companies in the UK index do the bulk of their business overseas.
According to InstaForex analyst, demand for British pound may not increase soon

UK inflation seems to have peaked in October 2022 when it reached a multi-decade high of 11.1% and has since cooled off a notch to 10.5% in December

Markus Helsing Markus Helsing 09.02.2023 16:19
British economy and most popular index - FTSE 100, has been affected by various macroeconomic events recently. Bank of England decided on the interest rate the previous week. This week, UK economy's health will be examined on Friday, when GDP goes public. Some time ago, before the decision of BoE has been made, Markus Helsing (Quad Code) commented on the circumstances. UK economy snapshot - UK GDP as catalyst Unsurprisingly, the Bank has to balance its actions on a tightrope as it tries to mitigate slowing down the economy at the expense of fighting inflation. UK inflation seems to have peaked in October 2022 when it reached a multi-decade high of 11.1% and has since cooled off a notch to 10.5% in December. Meanwhile, the 3-month GDP average growth up until November showed a contraction of 0.3%. On top of that, the International Monetary Fund(IMF) has just downgraded the UK growth forecast for 2023, predicting a contraction of 0.6% of GDP for the full year of 2023. December GDP due in February could be a game changer for the FTSE’s performance as a contraction could halt the upside and reverse its course. Unemployment on the other hand, has risen only marginally from a low of 3.5% in August to a flat 3.7% for October and November 2022. Read next: It is extremely important that the British GDP report for Q4 at least coincided with the forecast | FXMAG.COM Fed - The external factor Lastly, the FTSE's rally coincided with the US dollar index’ large bearish correction from the all-time highs in September 2022 and S&P 500’s relief rally from recent lows. A large part of this can be attributed to the Fed’s previously anticipated slowing down in interest rate hikes, which has greatly impacted investor sentiment in a positive manner. As investors became more risk-on oriented, risky assets including stocks, indexes and commodities staged a recovery during the same period. So while it might seem BoE is holding most of the cards, the Fed could be playing an equally important role here too, in keeping investor sentiment positive and the risk appetite on.
Harbour Energy profits hit $2.46bn. Revenues increased to $5.4bn

US natural gas up on the back of forecasts of colder weather

Walid Koudmani Walid Koudmani 27.02.2023 13:34
FTSE100 and the Pound boosted by prospect of post Brexit deal The UK stock market started the week trading higher as investors await the outcome of today's potential EU-UK deal regarding Northern Ireland after a long wait and period of uncertainty. The index is up over 0,5% and is testing Friday's highs around 7930 points while the pound is one of the best performing currencies today trading higher against most other major, minor and emerging market currencies. While the prospect of a trade deal would resolve several long standing issues, any further roadblocks in the process could prove to be quite counterproductive for the moods of investors and could lead to a pullback from current levels which have already acted as a resistance in the past.  Read next: BNP Paribas Sued For Providing Financial Services To Companies That Allegedly Contribute To Deforestation Of The Amazon Rainforest| FXMAG.COM Natural Gas starts the week trading higher US natural gas prices once again started the week with an upward move as they continue the upward movement launched on Friday which was triggered by forecasts of colder weather in key US heating regions over the next two weeks and therefore increasing demand prospects for natural gas. It is important to note that US natural gas prices have fallen around 70% between mid-December 2022 and mid-February 2023 despite some expectations of a potential supply issue which brought concerns of shortages as we were heading into the winter months. While there have been some upward corrections during this downward impulse, the one we are observing currently deserves a note as it attempts to break above a consolidation range which has kept the price moving sideways since the beginning of February. A sustained break above might prove to be the beginning of a new trend, at least in the short term, while a pullback could once again see the price locked in the previously mentioned range.
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Nasdaq100 posted its best monthly close in 12 month. Reserve Bank of Australia hiked the rate by 25bp

Michael Hewson Michael Hewson 02.05.2023 14:16
With European markets closed yesterday, US markets finished the first day of the month broadly unchanged, with the Nasdaq 100 posting its best monthly close in 12 months, while the S&P500 closed within touching distance of its highs this year. April saw a similarly positive performance from European markets with record highs for the CAC 40, while the DAX closed at 15-month highs. The FTSE100 has found the recovery from the March lows slightly more challenging, but it still managed to reverse almost all of its March losses. With JPMorgan Chase stepping in to lance the boil of First Republic Bank over the weekend, recent regional bank results from last week are raising confidence that this bout of banking uncertainty could well be in the rear-view mirror. If so, and it is a view held by JPMorgan Chase CEO Jamie Dimon, this would be extremely welcome to jittery markets at a time when yields are rising again and recent economic data suggests that central banks may well have to continue to raise rates. This inevitably shifts the attention of the market to the Federal Reserve rate meeting which concludes tomorrow, and where we could see another 25bps rate hike, although there is a chance, we might see a pause, followed by the European Central Bank on Thursday. Yesterday's manufacturing ISM numbers from the US showed that economic activity in this sector remained in contraction for the 9th month in a row, but that prices paid were on the rise again. This has been a theme in recent manufacturing PMI numbers in Europe as well, with economic activity in contraction, although input prices have been slowing. Today's manufacturing PMIs aren't expected to add to the sum of knowledge as to what the ECB might do later this week given that we are expecting to see Spain, Italy, France, and Germany PMIs all contract to the tune of 49.9, 49.5, 45.5 and 44 respectively. The number that will determine what happens on Thursday is the April EU flash CPI numbers which are set to be the swing factor as to whether we get a 25bps move, or a 50bps move by the ECB when it meets this week. We've had a raft of ECB officials say there remains a long way to go before the central bank would even start to consider a pause in its rate hiking cycle. A strong core CPI print today could prompt a continued aggressive approach, with expectations that we could stay at a record high of 5.7%. Headline CPI is expected to tick higher from 6.9% to 7%, however, there are mutterings from some that the ECB could be overplaying its hand given what is already happening with PPI, which has seen sharp falls from highs of 43.3% back in August last year and are now down at 13.2% on an annual basis and could fall back to 5.9% later this week. It's also important to note the month-on-month readings are now starting to come in negative. After finishing the month of April strongly, European markets look set to open the month of May slightly higher, after US markets finished a quiet session more or less unchanged. In Asia trading the RBA surprised markets this morning by unexpectedly raising rates by 25bps to 3.85%, despite recent sharp falls in the headline rate of inflation. The Australian central bank has come under heavy criticism in the past few weeks for its failure to spot that inflation had run ahead of expectations, and today's unexpected pivot could be because of that. The tone of the statement was also more hawkish, saying that more tightening could be required if inflation continues to remain above target, with the central bank saying that services inflation was worryingly sticky. Forex EUR/USD – has spent the last few days range trading between 1.0940 and the 1.1080 area, with a break above 1.1120 needed to signal further gains. Below 1.0940 retargets the 1.0870 level. GBP/USD – having hit an 11-month high last week at 1.2584 the pound has slipped back. Still in t a broad uptrend with support at the 1.2340 area, which needs to hold to keep the bias for a move towards 1.2630 intact or risk a move towards 1.2270.  EUR/GBP – last week's triple failure at the 0.8875 area, has seen the euro slide back, finding support at the 0.8760 area, with the potential for further declines towards the 200-day SMA at 0.8730. A break above the 0.8870 area suggests a retest the March peaks of 0.8925. USD/JPY – the break above the 135.20 area has seen the US dollar rally strongly, through the 200-day SMA with the next resistance at 138.00. We could extend to the 139.60 area which is a 50% retracement of the 151.95/127.22 down move. FTSE100 is expected to open 14 points higher at 7,884 DAX is expected to open 23 points higher at 15,945 CAC40 is expected to open unchanged at 7,491
US Inflation Eases, Fed Holds Rates; BoE Faces Dilemma Amid Strong Jobs Data; China Implements Stimulus Measures

US Inflation Eases, Fed Holds Rates; BoE Faces Dilemma Amid Strong Jobs Data; China Implements Stimulus Measures

Ipek Ozkardeskaya Ipek Ozkardeskaya 14.06.2023 08:32
US inflation data gave investors a good reason to cheer up yesterday. The headline number fell more than expected to 4%, and core inflation met analysts' expectations at 5.3%. The biggest takeaway from yesterday's CPI report was, again, that easing in inflation was mostly driven by cooling energy prices, but shelter costs remained sticky – up by more than 8% on a yearly basis.   Yet because these shelter costs represent more than 40% of the core CPI, and private sector data is pointing at cooling housing costs, investors didn't see the sticky core inflation as a major issue. The producer price inflation data is due today, before the Federal Reserve's (Fed) policy decision, but the latter will unlikely change expectations for today's announcement. A softer-than-expected PPI number – due to soft energy and raw material prices, could, on the contrary, further soften the Fed hawks' hand.     In numbers, the expectation of a no rate hike at today's decision jumped past 90%, while the expectation of a no rate hike in July meeting rose from below 30% to above 35%. The S&P500 extended its advance to 4375, while Nasdaq 100 rallied past the 14900 level. Small companies followed suit, with Russell 2000 jumping to the highest levels since the mini banking crisis.     Tough accompanying talk?  The Fed's decision for today is considered as done and dusted with a no rate hike. But the chances are that Fed Chair Jerome Powell will sound sufficiently hawkish to let investors know that the war is not won just yet, because 1. Core inflation remains well above the Fed's 2% target, 2. US jobs market remains too strong to call victory on inflation, and 3. Equity valuations point at an overly optimistic market, at the current levels, the S&P500 trades at around 18 times its earnings forecast over the next year, and these levels are typically associated with times of healthy economic growth and rising corporate profits. But we are now in a period of looming recession odds, and falling profits.     Ouch, BoE!  Yesterday's jobs data in Britain printed blowout figures for April and May. The employment change rocketed to 250K in April, while the expectation was a fall from 180K to 150K. The unemployment rate unexpectedly dropped to 3.8%, and average earnings excluding bonus rose from 6.8% to 7.2%. Then, the jobless claims fell by more than 13K – while analysts expected a surge of more than 20K – hinting that the British job market will likely print solid figures for May as well.     While these are excellent news for Brits who could at least see their purchasing power partly resist to the terrible cost-of-living crisis – where eggs, milk and bread for example saw their prices rise by a whooping 30-and-something per cent, it makes the end of the BoE tightening look impossible for now.     The market prices in another 125bp hike this year, which will take the British policy rate to 5.75%, and there is around 20% chance for an additional 25bp by February next year.     And all this in a market where mortgage rates rise unbearably, and house prices tumble. The 2-year gilt yield took a lift yesterday and is preparing to flirt with the 5% mark. We are now at levels above the mini-budget crisis of Liz Truss, while the spread with the 10-year yield is widening, suggesting that the UK economy will hardly come out of this unharmed. On top, the FTSE 100 index has fallen well behind the rally recorded by the US and European stocks this month because of falling energy and commodity prices due to a disappointing Chinese growth. The only good news for the Brits is that the pound is being boosted by hawkish BoE expectations. Cable rallied past the 1.26 level and is slowly drilling above a long-term downtrending channel top. The trend and momentum indicators remain tilted to the upside, and the divergence between the Fed – preparing to call the end of its tightening cycle sometime in the coming meetings, and the BoE – which has no choice but to keep raising rates – remains supportive of further gains in Cable. We could see the pair regain the 1.30 level, last seen back in April 2022.      China cuts.  The People's Bank of China (PBoC) lowered its 7-day reverse repurchase rate by 10bp to 1.9% yesterday, a week after asking the state-run banks to lower their deposit rates. These are signals that the PBoC is preparing to lower its one-year loan rate tomorrow to give a jolt to its economy that has been unable to gather a healthy growth momentum after Covid measures were relaxed by the end of last year.     Copper futures jumped above their 200-DMA yesterday, though they remain comfortably within a broad downtrending channel building since the second half of January, while US crude rebounded from a two-week low yesterday but remains comfortably below its 50-DMA.     Final word.  Because the rally in tech stocks now looks overstretched and China is getting serious about boosting growth, we will likely start seeing investors take profit on their Long Big Tech positions and return to energy and mining sector to catch the next train which could be the one that leads to profits on an eventual Chinese reopening.   
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Central Bank Surprises: BoE Hikes, SNB and Norges Bank Follow Suit - Analysis and Outlook

Ipek Ozkardeskaya Ipek Ozkardeskaya 23.06.2023 11:36
Keeping up with the central banks.  There were three major surprises from three central banks yesterday.     BoE hikes 50bp, peak rate seen unchanged past 6%.  The Bank of England's (BoE) decision to step up the pace of rate hikes at the 13th meeting since the start of the tightening policy has been broadly unwelcomed from households, to bond and stock investors, and to FX traders.   The 2-year gilt yield stabilized above the 5% mark, yet didn't take a lift on doubt that the BoE could hike by another full percentage point without wreaking havoc across the British economy, especially in the property market. The 10-year yield fell on the morose economic outlook. At this point, it would be a miracle for Britain to avoid recession, and even a property crisis.   The FTSE 100 slumped below its 200-DMA, and tipped a toe below the 7500 mark. Trend and momentum indicators are negative, and the index is now approaching oversold conditions. It is worth noting that falling energy and commodity prices due to a softish Chinese reopening didn't play in favour of the British big caps this year. The rising rates step up the bearish pressure. The outlook remains neutral to negative until we see a rebound in global energy prices - which is not happening for now.   The pound fell as a reaction to the 50bp hike. You would've normally expected the opposite reaction, but the bears remained in charge of the market, pricing the fact that the dark clouds that are gathering over Britain will destroy more value than the higher rates could create.   In summary, it was a disastrous week for Britain. But at least one person didn't get discouraged by the data and the BoE hike, and it was Rishi Sunak who said that the British economy is 'going to be ok' and that he is '100% on it'.     He is not scared of being ridiculous.  Moving forward, the Gilt market will likely remain under pressure, the longer end of the yield curve will do better than the shorter end. The British property market will be put at a tougher test, and could crack under the pressure at any time, in which case the economic implications would go far beyond the most pessimistic forecast. And any government help package to help people go through higher mortgage costs would further fuel inflation and require more rate hikes. The outlook for pound weakens and the FTSE100's performance is much dependent on China, which is struggling with low inflation and sluggish growth on the flip side of the world. Long story short, there is not much optimism on the UK front.  Elsewhere, the Swiss National Bank (SNB) raised by 25bp as expected, Norges Bank surprised with a 50bp hike, said that there will be another rate hike in August, while Turkey hiked from 8.5% to 15% vs 20% expected, raising worries that Turkey's new central bank team could not shrug off the low-rate-obsessed goventment influence. The dollar-try spiked above the 25 level, the highest on record, but not the highest on horizon.       Consume less!  The US existing home sales came in better than expected, adding to the optimism that the US real estate market could be doing better after months of negative pressure. The surprising and unexpected progress in US home data is welcomed for the sake of the economic health, but a strong housing market, along with an unbeatable jobs market hint that the Federal Reserve (Fed) will keep hiking rates. Powell confirmed that there could be two more rate hikes in the US before a pause at his semiannual testimony before the Congress, while Janet Yellen said she sees lower recession risks, but that consumer spending should slow.   The US dollar rebounded on hawkish Fed expectations. 
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European Markets Flat as FTSE100 Lags, OPEC Meeting in Focus, Fed Releases Minutes

Ipek Ozkardeskaya Ipek Ozkardeskaya 05.07.2023 08:27
European markets were mostly flat; the Stoxx600 remained close to its 50-DMA, while the FTSE 100 remained offered near its 200-DMA, near the 7544 level. The FTSE has been one of the biggest laggards of the year, as capital flew into the tech stocks. The slow Chinese reopening and the crumbling commodity prices didn't help FTSE extend the last year's outperformance to this year.   Happily, more rate hikes from the Bank of England (BoE) and the darkening economic and political picture for the UK is not a cause for concern for the British blue-chip index. A major part of their revenue comes from outside the UK. Therefore, a rotation from tech to value could throw a floor under the FTSE100's selloff near the 7300 level  if of course we don't see a global selloff due to recession and hawkish central banks-    OPEC meets industry heads  The barrel of oil remains sold near the 50-DMA as OPEC meeting with industry heads is due today. Everything that involves OPEC is an upside risk to oil prices. Yet any OPEC-related rally will attract top sellers and won't let OPEC reach stability around $80pb level. The major medium-term risk is that the unresponsive price action could hide a worsening global glut that could hit suddenly in the H2, and send oil prices higher. Until then, bears will keep selling.    Fed releases minutes  The Federal Reserve (Fed) will release the minutes of its latest policy meeting today, and there will clearly be a couple of hawkish sentences that will hit the headlines, given that the Fed officials paused their rate hikes in their June meeting, but their dot plot showed two more interest rate hikes before a real and a longer pause.   At this point, the Fed expectations went so hawkish that there is a growing chance of correction. Fed funds futures gives near 90% chance for a another 25bp hike in July, and another 25bp after that is more likely than not. No one expects or is positioned for a rate cut from the Fed this year. Unless there is another baking stress or chaos in the housing market, nothing could stop the Fed from pursuing its battle against inflation. And interestingly, Bloomberg research found out that interest rate increases in the US are benefitting savers more than they are costing mortgage payers, because many mortgages are on fixed rates for 30-years and they have yet to expire.  
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Waiting for PBOC's Rate Cut: Disappointing Chinese Data and FTSE 100's Key Levels

Ed Moya Ed Moya 18.07.2023 08:23
Rate cut not coming yet from PBOC FTSE 100 nearing some key levels   It’s been a disappointing start to the week in Europe but I’m not sure investors will be too downbeat as a result given the strong gains recorded over the last five sessions. The Chinese data didn’t help kick things off in a more positive manner, with GDP figures for the second quarter falling well short of expectations as retail sales also decelerated sharply, recording their lowest increase since late last year. Of course, the data remains noisy due to varying base effects but the overall theme is clear, domestic demand is underwhelming and external demand isn’t inspiring either. Stimulus is likely going to be needed in the second half of the year backed up by some monetary support but we may have to wait a little longer for that to be announced. The MLF was left unchanged today at 2.65% which means the same will probably be true of the one and five-year LPRs later in the week. A cut could have helped offset some of the data disappointment although, in the absence of targeted fiscal measures, it may have ultimately been akin to pushing on a piece of string so waiting probably makes more sense.   Is a significant breakout coming? The small declines in the FTSE at the start of the week come on the back of Friday’s reversal which produced a shooting star candlestick around the two lows from last month. Whether that is a bearish signal, a confirmation of sorts, or simply a sign of some profit-taking isn’t yet clear. But it clearly hasn’t built on that negative momentum today.     If it does turn higher again then the area around 7,550 could be interesting from the perspective of it being roughly the high from earlier this month and the area of the 200/233-day simple moving average band. It’s worth noting that these MA bands haven’t been great as areas of support and resistance over the last year or so, which is normal when the price is ultimately trending sideways, but if we do eventually see it trend higher or lower, it may react to them more. Below, the rising trend line – from March 2020 lows – could be interesting as the price appeared to respond to it last week. A break below here may be significant, especially if followed by a move below 7,200. Ultimately, a lot of this could depend on the economic data, the most notable of which this week comes Wednesday in the form of the UK CPI data.  
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UK Q2 GDP Forecast: Potential Stall Amid Economic Outlook Uncertainty - Analysis by Michael Hewson

Michael Hewson Michael Hewson 11.08.2023 08:07
UK economy expected to stall in Q2. By Michael Hewson (Chief Market Analyst at CMC Markets UK)   European markets enjoyed their second successive day of gains yesterday, boosted by the announcement by China to end its ban on overseas travel groups to other countries has also helped boost travel, leisure, and the luxury sector. The gains were also helped by a lower-than-expected rise in US CPI of 3.2%, with core prices slipping back to 4.7%, which increased expectations that we could well have seen the last of the Fed rate hiking cycle, which in turn helped to push the S&P500 to its highest levels this week and on course to post its biggest daily gain since July.     Unfortunately, San Francisco Fed President Mary Daly had other ideas, commenting that the central bank has more work to do when it comes to further rate hikes, which pulled US yields off their lows of the day, pulling stock markets back to break even.   This failure to hang onto the gains of the day speaks to how nervous investors are when it comes to the outlook for inflation at a time, even though Daly isn't a voting member on the FOMC this year, and she's hardly likely to say anything else. Certainty hasn't been helped this week by data out of China which shows the economy there is in deflation, despite recent upward pressure on energy prices.     It also means that we can expect to see a lower open for markets in Europe with the main focus today being on the latest UK Q2 GDP numbers, as well as US PPI for July. Having eked out 0.1% growth in Q1 of this year, today's UK Q2 GDP numbers ought to show an improvement on the previous two quarters for the UK economy, yet for some reason most forecasts are for zero growth. That seems unduly pessimistic to me, although the public sector strike action is likely to have been a drag on economic activity.     Contrary to a lot of expectations economic activity has managed to hold up reasonably well, despite soaring inflation which has weighed on demand, and especially on the more discretionary areas of the UK economy. PMIs have held up well throughout the quarter even as they have weakened into the summer. Retail sales have been positive every month during Q2, rising by 0.5%, 0.1% and 0.7% respectively. Consumer spending has also been helped by lower fuel pump prices, and with unemployment levels still at relatively low levels and wage growth currently above 7%, today's Q2 GDP numbers could be as good as it gets for a while.     Despite the resilience shown by the consumer, expectations for today's Q2 are for a 0% growth which seems rather stingy when we saw 0.1% in Q1. This comes across as surprising given that Q2 has felt better from an economic point of view than the start of the year, with lower petrol prices helping to put more money in people's pockets despite higher bills in April. This raises the prospect of an upside surprise, however that might come with subsequent revisions.       Nonetheless, even as we look back at Q2, the outlook for Q3 is likely to become more challenging even with the benefit of a lower energy price cap, helping to offset interest rates now at their highest levels for over 15 years. With more and more fixed rate mortgages set to get refinanced in the coming months the second half of the year for the UK economy could well be a lot more challenging than the first half.     Yesterday US CPI came in slightly softer than expected even as July CPI edged up to 3.2% from 3% in June. Today's PPI numbers might show a similar story due to higher energy prices, but even here we've seen sharp falls in the last 12 months. A year ago, US PPI was at 11.3%, falling to 0.1% in June, with the move lower being very much one way. We could see a modest rebound to 0.7% in July. Core prices have been stickier, but they are still expected to soften further to 2.3% from 2.4%. 12 months ago, core PPI was at 8.2% and peaked in March last year at 9.6%.       EUR/USD – squeezed above the 1.1050 area yesterday, before failing again, and sliding back below the 1.1000 area. Despite the failure to break higher we are still finding support just above the 50-day SMA. Below 1.0900 targets the 1.0830 area.     GBP/USD – popped above the 1.2800 area yesterday and then slipped back. We need to see a sustained move back above the 1.2800 area to ensure this rally has legs. We have support at the 1.2620 area. Below 1.2600 targets 1.2400. Resistance at the 1.2830 area as well as 1.3000.         EUR/GBP – pushed up to the 100-day SMA with resistance now at the 0.8670/80 area. Support comes in at the 0.8580 area with a break below targeting the 0.8530 area. Above the 100-day SMA targets the 0.8720 area.     USD/JPY – closing in on the June highs at the 145.00 area. This is the key barrier for a move back towards 147.50, on a break above the 145.20 level. Support now comes in at the 143.80 area.     FTSE100 is expected to open 42 points lower at 7,576     DAX is expected to open 70 points lower at 15,926     CAC40 is expected to open 30 points lower at 7,403
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RBA Pauses, But ECB Could Hardly Skip Hiking Next Week!

Ipek Ozkardeskaya Ipek Ozkardeskaya 05.09.2023 11:36
RBA pauses, but ECB could hardly skip hiking next week!  By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank   Other than a nice 7% jump in Chinese property stocks following an apparently explosive weekend of home sales in Chinese big cities like Beijing and Shanghai amid the relaxed mortgage rules deployed by the government last week, we didn't have much on our plate yesterday. European trading volumes were down by almost a third below their 30-day average and the major European indices were slightly down, as neither Friday's jobs optimism in the US, nor the Chinese rebound on property news could help Europeans forget about their own slowing economies and sticky inflation, which probably require at least one more rate hike from the European Central Bank (ECB). The DAX remained offered near its 50 and 100-DMA, as the Stoxx 600 closed yesterday's session below its own 50-DMA. Americans coming back from their long weekend, after the latest data showed a sweet loosening in US jobs market last month, could add some optimism to the mix, but the topside in European stock markets remains limited.  There is one place on the old continent, however, where the stock market looks more promising, is the UK. The British FTSE 100 – which clearly lagged its continental European and American peers so far this year, is looking in a better place to outperform in the H2, because of its high exposure to energy and mining stocks. The FTSE 100 has potential for a further rise toward 7650 then to 7800 level.   Activity in FTSE futures hints at a bearish start today.    
Stocks Down, USD Up Amid Looming Government Shutdown Concerns

Stocks Down, USD Up Amid Looming Government Shutdown Concerns

Ipek Ozkardeskaya Ipek Ozkardeskaya 27.09.2023 13:04
Stocks down, USD up By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank     Investors continue to dump stocks and buy US dollars on looming uncertainty regarding whether the US government will be shut in three days. There is progress regarding a 6-week short-term funding deal, but getting an approval from the Senate will be a challenge. In the meantime, falling savings, rising theft and delinquencies hint at the growing cost-of-living crisis whereas the central banks' inflation fight is certainly not over just yet.  The looming government shutdown talks continue feeding into a stronger US dollar. US politicians have agreed to a 6-week short-term funding to keep the government running for another month and a half, but getting approval from the full Senate will be a challenge with far-right Republicans' determination to 'shoot it down if it reaches the floor'.   The S&P500 fell to the lowest levels since the beginning of June and the Stoxx 600 could slip below 445 due to slowing European activity, waning Chinese demand, the European Central Bank's (ECB) pledge to keep the monetary policy tight until inflation comes down significantly. The euro's depreciation makes inflation harder to ease along with rising energy prices.     After a few sessions of consolidation, and despite a more than 1.5-mio-barrel build in US crude inventories last week, US crude is upbeat this morning, again. The barrel of American crude is trading above the $92 level, as the European nat gas futures flirt with the 200-DMA. The EURUSD lost around 6.5% since the July peak. Oversold market conditions call for consolidation, or recovery, yet appetite in the US dollar remains too strong to let the other currencies breathe. And if this is not enough bad news, the EU is now investigating the degree to which China has subsidized EV manufacturers. Tesla is clearly in a hot seat, but not only. Some European carmakers including Renault and BMW also have joint ventures in China and will be probed. The cherry on top, VW announced to cut EV output at German sites due to lacking demand. All this to say, there is little place to go in the market other than the FTSE 100, which could at least take advantage of the energy rally.     The combination of higher energy and stronger dollar has well pushed inflation in Australia to 5.2% in August, up from 4.9% printed a month earlier -which was a 17-month low. We could see a similar upturn in global inflation metrics due to rising oil prices. The Eurozone data will soon be coming in. Unfortunately for the Aussie, the uptick in inflation won't prevent it from getting smashed against the US dollar. The pair will likely test and take out the September support of 0.6360
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Downgraded Growth Projections: Germany and UK Face Economic Challenges Amid Budget Chaos

Ipek Ozkardeskaya Ipek Ozkardeskaya 23.11.2023 13:07
Speaking of morose growth projections Forecasts for German growth in 2024 have been significantly lowered following the recent budget chaos after the German Constitutional Court declared government's spending plans unconstitutional. Germany – Europe's growth engine – is now seen growing just 0.4% next year. The UK, on the other hand, cut its own growth forecast significantly in yesterday's Autumn Statement. Jeremy Hunt said that the economy would grow only by around 0.7% - still better than Germany, but that projection is down from the 1.7% announced earlier. The good news for British people and businesses is that Hunt announced tax cuts for both individual and companies and lowered the national insurance payroll levy. The Brits will now make a permanent 100% - yes 100% tax relief – on companies' capital spending. But don't be fooled by these beautiful numbers. In reality, the British tax burden will still mount to 38% of its GDP by the end of this decade and will reach its highest since post-WW2 and that 100% tax relief – the so-called 'full expensing' - is good for businesses that invest in big machinery but in a service-focused economy like the UK's, the benefits will likely remain limited. This is certainly why the market reaction was muted yesterday. The 10-year gilt yield was slightly up, the FTSE 100 closed the session slightly in the negative, while Cable fell below the 1.25 mark, on the back of a broad-based rebound in the US dollar that hit most major peers.  

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