FTSE 100 index

European stock indices hit new yearly lows and the main index of the UK broke through its summer low amid a sell-off triggered by rising recession risks. The Stoxx50 index lost 0.6% in early European trade. Miners and retail investors posted the biggest losses, while tech stocks scored gains. The Stoxx50 index broke through its yearly low. The FTSE 100 index updated its summer low. Today, it bounced slightly off the psychological level of 7,000: Italy's FTSE MIB dropped by 0.1%, following Giorgia Meloni's win of a clear majority in Sunday's Italian election. The European benchmark index plummeted by 21% from its January high amid a collapse in the market triggered by rising recession risks, the energy crisis, and the hawkish stance of the large central banks. Investors are closely monitoring the inflation situation. The European Central Bank is forecast to raise the interest rate by 75 basis points at the next meeting. "In terms of our central bank expectations at this juncture, risks of them over-tightening have significantly increased and that leading to a recession has increased too," Wei Li, global chief investment strategist at BlackRock Inc. said. Relevance up to 10:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322646

Stock markets in Europe and North America bounced back on Wednesday, thanks to growing demand for US Treasuries, which put pressure on their yields and dollar. There were no special reasons for growth, but the closing of short positions after a multi-day sell-off helped the markets recover the previous losses. However, the hawkish rhetoric of the Fed pointed to a continued increase in interest rates in the foreseeable future, so stock futures started to decline again today. Minutes ahead of the European trading session, the yield on 10-year bonds grew by 3.15% to 3.824%, while futures fell from 0.36% to 0.70%. This is a strong bearish signal for the equity markets and a significant support factor for dollar. Due out today is Germany's data on consumer inflation and revised US GDP figures for the second quarter. Forecasts say the former will rise to 1.3% m/m and 9.4% y/y, which will prompt the ECB to raise rates again by 0.75%. But this is unlikely to stimulate a strong growth in euro as the currency is affected by the current economic situation in the Eurozone. The latter, meanwhile, is expected to show a slight decrease to -0.6%, but a much larger fall will put pressure on market sentiment, which will increase the sale of stocks and purchases of dollar. Forecasts for today: USD/CAD The pair is currently testing the level of 1.3715. If it rises above it, further growth to 1.3835 is possible, especially amid a decline in crude oil prices and general negative dynamics in the markets. USD/JPY The pair is currently testing the resistance level of 145.00. If it rises above it, further growth to 146.00 is possible, especially amid a general negative dynamics in the markets and resumption of growth in the yield of US Treasuries.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323002

Stocks opened lower and Treasury yields rose as the strong report reaffirmed bets that the central bank would continue to be aggressive with its tightening campaign. Odds of a 75-basis point hike increased to a certainty following the report. Aside from the anxiety that usually precedes these numbers, traders had to digest remarks from a raft of Federal Reserve speakers who sounded unequivocally committed to crushing inflation with rate hikes. The hawkish rhetoric helped push the S&P 500 to its second straight day of losses, while lifting the dollar and Treasury yields. Oil topped $88 a barrel. European stock indices are in a downtrend with the target of updating year lows: This is the last jobs report Fed officials will have before their November policy meeting as they consider a fourth-straight 75-basis point interest rate hike. Fresh inflation data coming out next week will also play a fundamental role in their decision making. The report is projected to show the depth and breadth of the Fed's inflation problem, with a key indicator of consumer prices potentially worsening. The Moscow Exchange Index failed to hold above 2,000 and continued its decline: Key events this week: US unemployment, wholesale inventories, non-farm payrolls, Friday Bank of England Deputy Governor Dave Ramsden speaks at event, Friday Fed's John Williams speaks at event, Friday   Relevance up to 17:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323750

On Monday, the leading stock indicators of Western Europe show a decline against the background of the negative dynamics of stock exchanges in the Asia-Pacific region. The general pessimism on the world markets was also provoked by investors' concern about further tightening of the monetary policy of the US Federal Reserve in the context of permanently rising inflation. In addition, the tense situation in Ukraine has returned to the agenda. Thus, at the time of writing, the composite index of the leading companies in Europe STOXX Europe 600 sank by 0.68% - to 389.21 points, reaching a weekly low. Meanwhile, the French CAC 40 shed 0.53%, the German DAX rose a symbolic 0.05% and the UK FTSE 100 shed 0.45%. Rising and falling leaders The value of securities of the French oil and gas company TotalEnergies SE sank by 1.5%. On the eve of the company's management proposed to organize annual negotiations on employee salaries with trade unions in France ahead of the scheduled date, provided that strikes at refineries are completed The quotes of the British online retailer THG PLC fell by 7.8%. The market capitalization of the German energy company Uniper SE decreased by 7.5%. The share price of the Austrian manufacturer of sensors, semiconductor components and lighting equipment ams-OSRAM AG fell by 6.7%. The value of the securities of the French automotive corporation Renault SA sank by 3.1% after the company's management confirmed that it was negotiating an alliance with Japanese Nissan about future investments in Renault's new electric vehicle business. Quotes of the French bank Societe Generale SA rose by 0.8% on the news that the company's chief operating officer, Gall Olivier, will leave his post at the end of 2022 due to management reshuffles. Market sentiment The focus of attention of participants in the European stock market on Monday is concerns about the consequences of rocket attacks in Ukraine over the weekend. In addition, investors continue to worry about the decisive steps of the world's central banks in the field of monetary policy. So, this morning it became known that the Bank of England will increase the maximum volume of daily auctions for the redemption of government bonds under the temporary program. The British central bank announced the start of the program on September 28. At the same time, the British central bank plans to fully complete the repurchase of government securities on Friday, October 14. Since the launch of the program, the BoE has held 8 auctions. In total, the central bank bought bonds for $ 5.5 billion, although it had previously stated that it was ready to buy securities for 40 billion pounds. Last Friday, a stronger-than-expected labor market report was published in the United States. As a result, the September figures from the US Department of Labor increased investors' concern that the Fed will continue to increase the interest rate in an attempt to cope with record inflation. On Monday, world media reported that Russian President Vladimir Putin plans to meet with representatives of the Security Council after the attack on a major bridge between Russia and Crimea. Following the results of Monday's trading, the stock exchanges of the Asia-Pacific region collapsed sharply. At the same time, trading volumes were insignificant due to the holidays in Japan and South Korea. Thus, the Shanghai Shenzhen CSI 300 stock indicator sank by 2.21%, and the Shanghai Composite lost 1.66%. The main factor of pressure on the Asia-Pacific exchanges on Monday was the securities of chip manufacturers. Thus, the quotes of Anji Microelectronics Tech and Chengdu Xuguang Electronics companies fell by 20% and 10%, respectively, after the White House introduced export control measures. Under the new rules, Chinese companies will no longer have access to some semiconductor materials produced on United States equipment. Such a decisive step by the American authorities, experts suggest, could provoke a tangible deterioration in trade relations between the United States and China and have serious economic consequences if the PRC takes retaliatory measures. Another factor of pressure on Asian stock markets was the release of fresh data that by the end of September, the country's services sector declined amid permanent disruptions related to the consequences of the coronavirus pandemic. This week, European traders will be waiting for the publication of statistical data on consumer prices in the United States. According to preliminary forecasts of experts, by the end of September, annual inflation in America slowed to 8.1% from August's 8.3%.   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/323903

European stock markets are poised for another weak open as much of Asia reopened on Tuesday to large declines. Asia is flashing red as it nears the close and Europe may be facing a similarly bleak day. JP Morgan CEO Jamie Dimon didn’t hold back in his assessment of the economic outlook, adding to the warnings of the IMF and World Bank, among many others. Dimon was one of the first earlier this year to warn of far more aggressive monetary tightening and even he proved to be ultra-conservative, even if it didn’t look that way at the time. There is growing pessimism in the markets now and with some big data points to come from the US this week, not to mention the start of earnings season with JP Morgan among those getting us underway, investors should probably brace for more volatility ahead. Tight UK labour market making BoE job harder The UK labour market is showing little sign of loosening, with unemployment in the three months to August falling to 3.5%. At the same time, average earnings including bonuses jumped to 6% while excluding bonuses they rose to 5.4%. That’s another sizeable increase but perhaps not surprising when firms are facing labour shortages, according to a report from CBI and Pertemps. At the same time, with inflation running at close to 10% and expected to increase further, real UK incomes remain extremely negative. One lesson from the pandemic was that companies shouldn’t be in such a rush to let workers go as hiring them back can be difficult and expensive. While that knowledge, alongside higher wages, may help households navigate the cost-of-living crisis and impending recession, it makes the job of reining in inflation that much harder for the Bank of England. How hard that will prove to be will depend on the Chancellor’s budget in three weeks. Markets expect at least 1% of rate hikes in November, maybe more, but that may well change over the coming weeks. The pound tumbled again after the data and is threatening to break back below 1.10 against the dollar, a move that will no doubt fuel parity debate once more. No one panicking just yet The risk-aversion of recent days hasn’t been ideal for bitcoin either, with the cryptocurrency slipping back below $20,000 and struggling to turn its fortunes around. It’s off more than 1% again this morning around $19,000, having spent much of the last six days in the red. Of course, we’ve become accustomed to these fluctuations and the recent sell-off has been modest in pace. No major technical supports have been broken at this stage so I can’t imagine anyone is panicking. Of course, we’ll see if the same is true after Thursday. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Summary:  A rocky session for equity markets once again yesterday, which tried to find cheer on falling bond yields, only for a thorough thrashing after the close yesterday on Amazon issuing its weakest ever holiday sales outlook, which saw its shares knocked some 13% in the aftermarket. Elsewhere, Apple shares managed to stabilize after its earnings report in, as revenue and earnings topped estimates. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The recent string of US earnings have not done much to keep the recent momentum in US equities alive. Neutral earnings from Apple last night was topped with awful outlook from Amazon, the second largest stock in the US equity market, that saw its shares decline 13% in extended trading. S&P 500 futures are retreating this morning trading around the 3,790 level despite a sizeable readjustment lower in the US 10-year yield to 3.93%. Euro STOXX 50 (EU50.I) European equities saw more diverging price action yesterday but closed above the 3,600 level again, but this morning STOXX 50 futures are coming down 1% trading around the 3,570 level with 100-day moving average at 3,528 being the next support level to watch. There are no economic releases in Europe of importance today so it will be interest rate direction and sentiment on earnings that will drive price action into the weekend. FX: USD pulled in two different directions as falling yields negative, weak sentiment positive The further drop in US treasury yields fail to extend the US dollar sell-off yesterday, as a far less hawkish than expected ECB took EURUSD back below parity and the Bank of Japan sent no new signals on its terminally stuck policy mix of ongoing QE and yield-curve-control.  Weak risk sentiment seems to provide offsetting support from the greenback, but the dollar will find stronger support if US data remains resilient and the Fed is faced to stay on message with further tightening, especially now that the market has significantly downshifted expectations for peak Fed Funds rate beyond the 75 basis point move expected at next Wednesday’s FOMC meeting, with less than 100 basis points of further tightening now priced and a peak rate near 4.78% by next March. Gold (XAUUSD) Gold remains on track for a second week of gains although some caution has emerged ahead of next week's FOMC meeting. Yesterday, the positive sentiment received a knock as the dollar regained some ground, especially against the euro after the ECB stayed far less hawkish than expected. Countering this potential gold negative development, US bond yields continued lower with the US 10-year treasury yield benchmark falling below the important 4% level to record a +25-basis point drop on the week. While the FOMC is expected to deliver another bumper 75 basis points hike they may tilt towards slowing the pace at future meetings while assessing the impact of their rate and quantitative tightening actions. As a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called. Crude oil (CLZ2 & LCOZ2) Crude oil remains on track for a second week of gains but for now without challenging resistance indicating a market still struggling for direction with no overriding theme being strong enough to set the agenda. Strength this week has been driven by a developing tightness in the fuel product market, US exports of crude and fuels setting a weekly record and the weaker dollar, as well as strong buying from China as refineries there plan to boost fuel exports through the end of the year. Diesel markets in Europe and the US continues to signal tightness ahead of winter with elevated refinery margins and prompt spreads signalling tight market conditions. Focus next week on the Nov 2 FOMC meeting and major OPEC producers beginning to cut their production. Additional technical upside in WTI above $89.25 while Brent’s next level of resistance is the October high at $98.75. US treasuries (TLT, IEF) The US 10-year treasury yield benchmark fell through the important 4.00% level yesterday, with the yield trading as low as 3.90% before treasuries found resistance. The 3.85% area is arguably a pivotal level if treasuries continue to rally. The entire yield curve dropped yesterday, in part on a less hawkish ECB continuing the trend recently of central banks delivering less than expected on guidance, as German 10-year Bunds dropped below 2.00% for the first time in weeks on the ECB meeting yesterday (more below). It looks like we’ll be heading into next week’s FOMC meeting with a fairly hard market lean for a significant downshift in the Fed’s hawkish message. What is going on? ECB the latest central bank to surprise dovish The ECB hiked its key rate 75 basis points to 1.5% from 0.75%. Officials dropped a reference to hikes continuing for "several meetings," in the statement, while saying they expect further action. Christine Lagarde said in the press conference that more rate hikes were on the way: "We still have ground to cover." The bank will continue to reinvest all maturing assets in its asset purchase program (QE) and QT won’t be discussed until the December meeting. The market read the meeting as a strong dovish surprise, as another 20 basis points of tightening were removed from forward expectations for 2023 (down some 50 basis points now from peak expectations just over a week ago.) Apple is a fortress FY22 Q4 revenue came out at $90.2bn vs est. 88.6bn up 8% y/y keeping up with inflation and EPS at $1.29 vs est. $1.26 driven by a new all-time high of active devices. The number of paid subscriptions, which Apple has recently announced will see price hikes, have doubled in three years to 900mn. Shares were unchanged in extended trading. Amazon shares plunged 13% on Q3 results Revenue in Q3 hit $127.1bn vs est. $127.6bn up 15% y/y but operating income hit $2.5bn vs est. $3.1bn. The weaker than estimated operating income was driven by a negative revenue surprise in their cloud business AWS with revenue of $20.5bn vs est. $21bn. The free cash flow in Q3 was still negative at $5bn with the combined negative free cash flow over the past year at $26bn. The change in cash generation for Amazon indicates that the pandemic turned out to be bad for the business as it spent too much on expanding capacity that could not be maintained. The outlook for Q4 was what terrified investors with the retailer guidance operating income in the range $0-4bn vs est. $4.7bn and revenue of $140-148bn vs est. $155.5bn. Japan announces massive fiscal stimulus Japan’s Prime Minister Fumio Kushida announced a ¥71.6 trillion (nearly $500 billion) stimulus package overnight, in a purported bid to “ease inflation” and shore up his government’s popularity. The new spending in the package is set at ¥39 trillion and will focus on incentivizing companies to raise wages, national security/defense and subsidies to reduce the impact of energy costs, especially electricity bills. With the Bank of Japan not allowing government bond yields to adjust, this risks adding to the yen’s weakness as long as other major central banks are not in easing mode. Caterpillar, McDonalds, and Boeing positive stories in the negative backdrop A few positive stories to highlight amidst the massive drop in marquee megacap names include Caterpillar, which soared a massive 7.7% on impressive results. Elsewhere McDonald’s (MCD) shares rose 3.3% on reporting sales that handily beat analysts’ estimates, despite inflationary pressures. McDonald’s results were boosted by McRib sales, and the fast-food chain will offer McRib nationwide in the US from the end of this month. Meanwhile, Boeing (BA) shares jumped a day after an ugly drop on its earnings report. Yesterday, shares rose 4.5% with the company releasing a bullish 20-year forecast for China’s commercial jet market, saying China will need to double its fleet in two decades and that China will be a major driver of Boeing sales. Boeing expects China to need 8,485 new passenger and freighter planes valued at $1.5 trillion through 2041. A tough week for coffee, cotton and sugar The Bloomberg Commodity Softs index trades down 5% on the week led by a 6% drop in Arabica coffee (KCH3) $1.79/lb, a 14-month low as money managers continue to exit long-held bullish bets, now turning increasingly sour amid concerns a global recession will hurt demand at a time where the outlook for the 2023/24 crop in Brazil is showing signs of improving. However, a combination of exchange monitored stocks lingering at a 23-year low and oversold condition may soon drive a technical bounce ahead of support at $1.73/lb. Sugar (SBH3) meanwhile has been hurt by a weaker Brazilian Real boosting incentives to export. Cotton (CTZ2), down 52% from its May peak has plunged to near a two-year low on weak demand for supplies as consumers around the world cut back on spending. Weekly export sales from top shipper, the US, plunged from a year earlier with overall sales for the current season being well behind last year and the long-term average. What are we watching next? Market leaning very hard now for a dovish downshift at next Wednesday’s FOMC After the Bank of Canada surprised with a smaller than expected hike this week and the ECB surprised with more dovish forward guidance, the market is now. But will the US data cooperate and is the maximum conceivable downshift from the Fed next week already in the price – given that the Fed itself has said that it will continue to hike even as the economy – including the labor market - weakens? After all, the market has removed nearly 25 basis points of tightening through the March FOMC of next year from the peak of just above 5.0% a bit more than a week ago to just under 4.8% now, and is more aggressively pricing the Fed to begin cutting rates by late next year (December ‘23 FOMC yield down almost 50 bps from peak).  Earnings to watch Today’s US earnings focus is on the two oil and gas majors Exxon Mobil and Chevron expected to report strong earnings in Q3. Exxon Mobil is expected to grow revenue 44% y/y with the operating margin expanding further. NextEra Energy is also worth watching given the recently passed US bill on renewable energy because it may lift the outlook for the industry. Today: Macquarie Group, OMV, ICBC, China Merchants Bank, LONGi Green Energy Technology, Midea Group, Imperial Oil, Danske Bank, Sanofi, Airbus, Volkswagen, China Construction Bank, Agricultural Bank of China, Bank of China, BYD, China Shenhua Energy, Eni, Keyence, Hitachi, Denso, Equinor, CaixaBank, Wilmar International, Swiss Re, Exxon Mobil, Chevron, AbbVie, NextEra Energy, Colgate-Palmolive, Royal Caribbean Cruises Earnings releases next week: Monday: Daiichi Sankyo, Stryker Tuesday: Toyota Motor, Sony Group, Mondelez, AMD, Airbnb, Eli Lilly, Pfizer, BP Wednesday: KDDI, Novo Nordisk, GSK, Booking, Qualcomm, CVS Health, Estee Lauder, Humana Thursday: Cigna, Amgen, PayPal, Starbucks, EOG Resources, ConocoPhillips, Regeneron Pharmaceuticals, Zoetis, Canadian Natural Resources, DBS Group Friday: Duke Energy, Enbridge Economic calendar highlights for today (times GMT) 0800 – Germany Q3 GDP0900 – Eurozone Oct. Confidence Surveys1200 – Germany Oct. Flash CPI1230 – Canada Aug. GDP1230 – US Sep. Personal Income/Spending1230 – US Sep. PCE Inflation1400 – US Oct. Final University of Michigan Sentiment   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-28-2022-28102022

Summary:  Equity markets closed strongly on Friday, even as the narrative that has purportedly driven strength at times in the equity market of late, the hope that central banks and especially the Fed are set for a dovish shift, failed to offer any fresh support on Friday. After a fresh article from “Fed whisperer” Nick Timiraos from the Wall Street Journal suggested that the Fed fears that it may have to keep the policy rate higher for longer, the event risk of the week will be the FOMC meeting this Wednesday, though other important central bank meetings are in the mix, including a Bank of England meeting on Thursday.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Strong Friday close in the S&P 500 futures reaching the highest closing price for the up cycle that began earlier this month. S&P 500 futures are now up 8.7% from their lowest close on 12 October. This morning the index futures are trading lower hovering around the 3,898 level which is just below the 100-day moving average. This week is all about the FOMC decision and the ongoing US earnings. Euro STOXX 50 (EU50.I) European equities had a less spectacular performance on Friday and the impressive performance in US equities has not positively impacted STOXX 50 futures this morning trading lower around the 3,620 level. European equities have done better than US equities over the past month as the US technology sector has had weak Q3 earnings. FX: USD mixed as Wednesday’s FOMC meeting eyed Mixed developments for the US dollar on Friday, with the wild rally in equity markets a headwind, while the sharp, partial unwind of the anticipated dovish shift from the Fed at this Wednesday’s FOMC meeting offered some offsetting support as yields perked up slightly after testing key levels last week (see more below in What are we watching next?). After the brief foray above parity and nearly to 1.0100, EURUSD has been tamed back well below that level, while GBPUSD remains relatively bid and well clear of the pivotal level of 1.1500 ahead of the key event risk of the week for sterling, the BoE meeting Thursday (preview below). Elsewhere, USDJPY is coiling within the 145.00-150.00 range, while USDCNH has rebounded sharply and nearly back to the cycle highs. Broad CNH volatility is worth watching for contagion across asset markets. Wheat futures gap higher on Ukraine supply worries Wheat futures (ZWZ2) in Chicago surged as much as 7.7% to $8.93 on the opening after Russia over the weekend pulled out of the UN brokered black sea grain deal (see below). Since the UN and Turkey supported grain corridor opened three months ago Ukraine has shipped more than 9 million tons of foodstuff and it has helped ease tight world supplies and control global food costs. Money managers have been wrongfooted by the latest developments after raising bearish bets on Chicago wheat futures by 63% to a 28-month high in the week to October 25. Food exports from Ukraine also includes corn and sunflower oil and reduced supply of those has lifted corn futures (ZCZ2) in Chicago by 2.3% to trade near resistance at $7/bu and soybean oil futures by 2%. Gold (XAUUSD) Gold trades nervously within a narrowing range ahead of Wednesday’s FOMC meeting where another bumper rate hike is expected. What may follow, however, has caused a great deal of volatility across markets with traders looking for guidance regarding the pace and strength of future rate hikes. Gold is heading for its seventh straight month of declines, the longest losing streak since at least the late 1960’s (Bloomberg) while bullion-backed ETF holdings have dropped to a 30-month low and money managers hold a net short near the highest in four years. All developments supporting an eventual recovery, but not until we reach peak hawkishness from where we could see yields and the dollar soften. As a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called. Crude oil (CLZ2 & LCOZ2) Crude oil trades softer therefore trimming a monthly gain driven by already tight markets and OPEC+’s planned supply cuts from next month. The latest weakness once again being driven by weak economic data from China and a stronger dollar ahead of Wednesday’s FOMC meeting after the famous FOMC whisperer at WSJ in an article speculated the Fed will need to keep rates higher for longer (see below). In addition to OPEC+ production cuts, the market will also have to gauge the impact of EU planned sanctions on Russian oil flows in December, a development that could be a “big hit” to already tight fuel supply, especially in Europe according to Eni’s CEO. US treasuries (TLT, IEF) The low water mark for the US 10-year treasury yield benchmark was near 3.90%, a key pivot level this week as we await the FOMC meeting and how the Fed’s guides for its future policy moves now that it is reaching an important inflection point in which the market expects it is likely the Fed will begin to hike in smaller increments as soon as December. It’s a delicate communication task to guide for a downshift without appearing too dovish. The important US economic data this week includes Thursday’s October ISM Services and especially the Friday October payrolls and earnings data for October. The October CPI is up next week. What is going on? Russia exits Ukraine grain deal Russia suspended its participation in the Ukraine grain export deal after a swarm of drones targeted at least one Russian warship from the Black Sea navy. This will block the passage of millions of tonnes of grain via southern Ukraine and may lead to a fresh jump in prices. The report is especially catastrophic as it comes together with massive wheat crop damage with the US crop belt seeing La Nina for its third consecutive year. Ukraine’s infrastructure ministry said 218 ships had been immediately affected. This included 95 that had already left its ports and were waiting at the inspection site before unloading, 101 waiting for inspection before collecting Ukrainian grain, and a further 22 that were loaded up and ready to set sail. “Putin needs leverage as things go south for him on the battlefields in Ukraine, so the threat of global food crisis needs to be put back in the Russian toolbox of coercion and blackmail,” wrote Alexander Gabuev, senior fellow at the Carnegie Endowment for International Peace via the FT. Lula’s comeback in Brazilian presidential elections Luiz Inácio Lula da Silva claimed a victory in Brazil’s presidential election on Sunday, defeating incumbent rightwing leader Jair Bolsonaro by less than two percentage points and setting the stage for a return to leftwing governance in Latin America’s largest nation. Brazilian ETFs including such as EWZ:arcx, IBZL:xams, RIO:xpar, BRZU:arcx, or BRQ:arcx may be the ones to watch, as will be the BRL later in the day. BRL has been the best performer in the EM basket (excluding Russian rouble) against the USD so far this year. Lack of economic plans from Lula may make a case for market outperformance somewhat weaker, however. What are we watching next? Is Fed concerned that market is expecting too much of a dovish shift at FOMC meeting this Wednesday? Nick Timiraos, who is seen as a kind of “Fed whisperer” and possible conduit of Fed communication with the market, had sent shivers across markets last week with a report suggesting that the November FOMC meeting may be used to signal a downshift to smaller rate hikes. This saw equity markets extending gains while the USD was on the backfoot last week, but now he has come out with another article: Cash-rich Consumers Could Mean Higher Interest Rates for Longer, saying that higher consumers savings buffers and a low level of interest expenses could require that the Federal Reserve raise rates higher and keep them there for longer due to less sensitivity to interest rates than was seen likely previously. The December 2023 EuroDollar contract had rallied as much as 50 basis points off the lows recently, correcting some 15 basis points Friday and slipping a bit lower to start this week as the market is unsure of how aggressively it should lean for dovish guidance. Big week ahead for central bank meetings The general theme is “downshifting” of guidance (As noted in the FOMC comments above). The FOMC meets Wednesday and is expected to hike 75 basis points with guidance indicating that the pace of hikes may start to slow as soon as at the December meeting (if likely with no commitment in either direction). First up, however, is tonight’s RBA meeting, where Governor Philip Lowe and company are expected to only hike 25 basis points tonight after a string of 50 basis point moves as the RBS is concerned about the impact of further tightening on consumption and mortgage payments, though a small minority still expect another 50 basis points moves. On Thursday, we have a pivotal Bank of England meeting, the first after the violent market swings during the uproar over former PM Truss’ fiscally risky policy moves. With calming markets and the new Sunak government rolling out far tighter budget plans, BoE expectations have fallen like a stone, but with the market still expecting the first ever 75 basis point move for this cycle. The BoE has s history of bad communication with the market – and an austere budget brings forward and increases the severity of the coming recession. Finally, Norges Bank also meets Thursday and is expected to hike 25 basis points, seemingly in no hurry despite a very weak currency and high inflation readings, and even having guided that it soon sees an end to the tightening cycle. Earnings to watch Today’s US earnings focus is Stryker which is expected to see its earnings growth increase to 7% y/y with operating margin still under pressure. Otherwise, as we look ahead, earnings tomorrow from Toyota, Sony, BP, AMD, and Airbnb will have the market’s focus. Monday: Daiichi Sankyo, Stryker Tuesday: Toyota Motor, Sony Group, Mondelez, AMD, Airbnb, Eli Lilly, Pfizer, BP Wednesday: KDDI, Novo Nordisk, GSK, Booking, Qualcomm, CVS Health, Estee Lauder, Humana Thursday: Cigna, Amgen, PayPal, Starbucks, EOG Resources, ConocoPhillips, Regeneron Pharmaceuticals, Zoetis, Canadian Natural Resources, DBS Group Friday: Duke Energy, Enbridge Economic calendar highlights for today (times GMT) 0900 – Switzerland SNB Weekly Sight Deposits 0930 – UK Se. Mortgage Approvals 1000 – Eurozone Oct. Flash CPI estimate 1000 – Eurozone Q3 GDP estimate 1345 – US Oct. Chicago PMI 1430 – US Oct. Dallas Fed Manufacturing Activity 1500 – ECB Chief Economist Lane to speak 0145 – China Oct. Caixin Manufacturing PMI 0330 – Australia RBA Cash Target Announcement Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-31-2022-31102022

Summary:  A surprisingly strong survey of US job openings yesterday suggests that the US labor market remains extremely tight, potentially continuing to feed inflationary pressures. Today sees the latest FOMC meeting, at which the Fed will have to grapple with guidance and whether to flag the much-anticipated possible downshift from 75 basis point hikes at the December meeting. Given the recent easing of financial conditions and strong risk sentiment, the Fed may try to lean against the market and hawkishly keep all options on the table. Industrial metals run higher on speculation China is preparing to ease Covid rules.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The fear of recession has eased quite a bit in October and as a result equities have rallied from their lows in October. S&P 500 futures are trading around the 3,868 level this morning as the US 10-year yield has moved higher above 4% again. The big event is tonight’s FOMC rate decision which will prove to be a delicate balancing act for the Fed keeping financial conditions tight enough but smooth the transition to this higher level of interest rates without breaking the market. If the market interprets a dovish tilt tonight the 4,000 level is quickly the main focus point in the S&P 500 futures. Euro STOXX 50 (EU50.I) STOXX 50 futures touched the 200-day moving average yesterday before retreating, but this morning the index futures are continuing higher trading around the 3,661 level, which is just below the 200-day moving average. The 3,800 level in STOXX 50 futures could be the next big level to watch if momentum continues. European equities are enjoying tailwinds from easing energy and electricity markets and better than expected GDP reports in Q3 showing that the European economy can absorb the input cost shocks for now. FX: USD rallies on very strong JOLTS survey, eyes FOMC The greenback rebounded yesterday on the very strong September JOLTS jobs openings survey, which jumped sharply from the large August dip (see more below), helping US treasury yields back higher. See the FOMC meeting preview under What are we watching next? below. Today and in the wake of the important US jobs data tomorrow, the pivotal areas for EURUSD are perhaps 0.9850 and parity on the daily/weekly close, for GBPUSD, the 1.1400-1.1500 area is the zone of contention, and in AUDUSD, 0.6350-0.6530. USDJPY will be sensitive to any sharp move in US treasury yields, leaning toward 150.00 if yields jump in the wake of tomorrow’s US jobs report or challenging 145.00 if the Fed fails to surprise hawkish today and the jobs data is weak. Gold (XAUUSD) Gold reached $1657 before running into sellers as bond yields rose following stronger US economic data. The dollar and yields developments continue to haunt the metal, especially ahead of today’s critical Fed meeting. Silver, initially enjoying a trifecta of support from rising gold and copper as well as the weaker dollar, traded up to once again challenge resistance at $20/oz before running out of steam. Crude oil (CLZ2 & LCOZ2) Crude oil trades higher for a second day with WTI challenging a recent high at $90 and Brent moving closer to $97.25 resistance. Oil prices initially received a boost from China reopening speculation, the weaker dollar and OPEC+ production cuts before extending gains after the API reported a bumper 6.5-million-barrel drop in crude inventories. Apart from today’s official inventory report from the EIA, crude oil traders will turn their attention to today’s FOMC meeting given the potential impact the rate decision and comments may have on the dollar and the general level of risk sentiment. US treasuries (TLT, IEF) The key US 10-year treasury yields pulled back above the important 4.00% level after the strong September jobs openings survey out of the US yesterday, but far more important are today’s FOMC meeting and further incoming data, discussed below. The recent price action makes it clear that the 3.90% area is important resistance for bond yields and at the shorter end of the curve, the 5.00% level will be an important focus, given that the market has been unwilling to take Fed expectations more than a couple of basis points beyond that level as it continues to see the Fed cutting rates by the end of next year. What is going on? Metals run higher on China speculation Copper and nickel led a surge in base metals on speculation - which was later denied - that Beijing is preparing to ease Covid rules. However, metals held gains after China’s outgoing premier Li Keqiang said China will strive for a "better" economic outcome and promote stable, healthy and sustainable development, saying China’s economy is showing signs of stabilizing, as well as “rebounding momentum" thanks to stimulus. Developments showing the potential support for industrial metals when restrictions are being lifted, and it brought the focus back on supply issues in Copper, with inventories running low on exchanges and major producers struggling to meet their production targets. The BCOM Metal index jumped 3.4% with steel and iron ore prices also receiving a bid. HG copper’s further advance will be challenged by multiple resistance levels between $3.55 and $3.78. European earnings This morning we have got strong results from Novo Nordisk, Maersk, and GSK, while the wind turbine maker Vestas misses big on revenue and EBIT. Vestas is also adjusting its FY EBIT to –5% from previously –5% to 0%. Novo Nordisk reports Q3 revenue of DKK 45.6bn vs est. DKK 44.4bn and EBIT of DKK 20.2bn vs est. DKK 19.2bn in addition to increase its sales forecast due to strong demand for its obesity drug Wegony. Maersk is still enjoying strong earnings beating estimates on EBIT in Q3, but the container shipping company is lowering its forecast for container volume and in general the market is expecting a slowdown in 2023. US job openings and ISM manufacturing complicate Fed’s message US job openings saw an unexpected rebound in September amid low unemployment, suggesting more wage gains could be in store. JOLTS job openings came in higher at 10.7 million in September from a revised 10.3 million in August. This likely thrashes expectations of any material downshift from the Fed after today’s widely expected 75bps increase. Meanwhile, October's ISM manufacturing index also remained in expansion at 50.2, albeit falling from last month’s 50.9. However, disinflationary trends were emphasised as the index of prices paid fell to an over 2-year low. Still, sticky shelter and services inflation remains materially high suggest still-higher interest rates remain on the horizon. Terminal rate pricing for Fed funds futures has picked up again to 5% levels, and it would be hard for the Fed to push it any higher at this point, but what it can clearly hint at today is pushing out of the rate cut expectations for next year. Read our full FOMC preview here for further insights. Lack of insurance halted UN Black Sea shipments, but progress being made The UN halted grain shipments from Ukraine's Black Sea ports on Wednesday, after Russia warned ships weren't safe using the route and demanded guarantees from Ukraine. However, reports suggested early on Wednesday that an agreement had been reached and ships will start to sail again from Thursday, as pressure on Russia continues to build. We continue to watch crop and fertilizer prices, as a meaningful reversal could come through if we see improving shipments across the Black Sea region. AMD earnings supported by servers despite weak PC sales Advanced Micro Devices rose in the after-hour trading as it reported better than estimated Q3 earnings, although issuing guidance that missed analysts’ expectations. EPS came in $0.67 vs estimated $0.65, revenue $5.57B vs estimated $5.62B. Guidance suggested AMD is expecting strong growth in its server chip business in the coming quarters. Q3 results were in-line with a warning issued by AMD on October 6 which helped to reset expectations, as weak PC sales continued to underpin. Airbnb drops on disappointing guidance Airbnb reported its highest revenue and most profitable quarter but a muted Q4 outlook as consumer preferences are shifting back to cities which tend to have lower rates based on smaller sized spaces. Q3 revenue rose 29% to $2.88B, estimated $2.84B. Net profit rose 45.6% to $1.21B. But the company said it expected bookings to moderate after a bumper third quarter. Sony surges on profit beat Weak yen propped up revenues for Sony and also nudged up the fiscal year profit outlook, pushing shares higher in early trading. Q2 sales came in at 2.75tr yen, est. 2.67 tr yen while operating income was 344bn yen vs. 280.66bn yen expected. Operating profit beat was broad-based, except in games. Australian home-lending falls more than expected in September House lending in Australia fell 8.2% YoY in September (far more than the market expected) while building construction lending fell 36.6% YoY, with the weaker data sets coming out just a day after the RBA remained dovish - raising Australia’s official cash rate by 25bps (0.25%) to 2.85%. Yesterday the RBA acknowledged tighter financial conditions and the ‘full effect’ of increased interest rates are yet to be felt in ‘mortgage payments’, but the rate hikes since May, combined with higher inflation have already put pressure on household budgets. What are we watching next? FOMC meeting – Fed may want to keep a low profile, but can’t afford to be seen dovish The September JOLTS jobs openings data point yesterday was the latest to suggest that the Fed will have a hard time pre-committing to any slowdown in the pace of its policy tightening after the 75-basis-point hike that is priced in for today’s meeting. The December 14 FOMC meeting odds have not shifted much over the last couple of weeks, as investors still favour a downshift to a 50-basis-point move then and another 50 basis points of tightening early next year over the space of a couple of meetings. To surprise hawkish today, the Fed may have to make it very clear that it is willing to continue tightening beyond current expectations and beyond its September forecasts to boost the greenback via rate guidance, but is probably also reluctant to pre-commit to anything. Pointing to high reactivity to further incoming data may be one way to achieve this. That will then mean extreme volatility on the next bits of Incoming data ahead of the December meeting, starting with the ISM Services tomorrow and then the October jobs report this Friday and two more CPI releases before December 14. Earnings to watch Today’s US earnings focus is Estee Lauder, Booking, Fortinet, and Albemarle. Analysts expect revenue to decline by 11% y/y at Estee Lauder but improving operating margin. The cosmetic business is facing headwinds from labour costs and transportation. Booking is expected to deliver strong earnings growth given the better-than-expected result from Airbnb yesterday. Analysts expect 26% y/y revenue growth and EPS growth of 35% y/y. Fortinet is one of the market leaders in the fast-growing cyber security industry and with the ongoing war in Ukraine we expect demand for cyber security solutions to be high; analysts expect Fortinet to grow revenue by 30% y/y in Q3. Albemarle is riding the demand for lithium as electric vehicle sales is seeing explosive growth. Albemarle is expected to deliver 168% y/y growth in revenue and EPS growth of 545% y/y. Today: Suncor Energy, Nutrien, Novo Nordisk, Maersk, Vestas Wind Systems, GSK, Qualcomm, CVS Health, Estee Lauder, Booking, Fortinet, Ferrari, Albemarle Thursday: Verbund, Barrick Gold, Orsted, Novozymes, BNP Paribas, BMW, Enel, ING Groep, DBS Group, ConocoPhillips, Amgen, PayPal, Starbucks, Regeneron Pharmaceuticals, EOG Resources, Moderna, MercadoLibre, Block, Cloudflare, Coinbase Friday: Enbridge, Societe Generale, Intesa Sanpaolo, SoftBank, Amadeus IT Group, Duke Energy, Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Final Oct. Manufacturing PMI 0855 – Germany Oct. Unemployment Change/Rate 1215 – US Oct. ADP Employment Change 1430 – EIA's Weekly Crude and Fuel Stock Report 1800 – US FOMC Meeting 1830 – US Fed Chair Powell Press Conference 2000 – New Zealand RBNZ Governor Orr before Parliamentary Committee 0145 – China Oct. Caixin Services PMI  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-2-2022-02112022

Investors got the policy pivot they were looking for this week; unfortunately, not from the Federal Reserve (Fed), but from the Bank of England (BoE) instead. Bank of England In a confusing way, the Bank of England raised its interest rate by 75bp yesterday, but announced that the city analysts have got the BoE’s terminal rate wrong, and that the future rate hikes from the BoE will be softer, given that the economic situation is alarming. Sterling dived, while gilt yields were steady to lower. Mareket Reaction Elsewhere, in an extended market reaction to Wednesday’s Fed decision, the US dollar gained across the board, as investors repositioned for a more aggressive Fed tightening. Fed The thing that could throw cold water on burning hot Fed expectations is soft jobs data from the US. That’s also the only thing that could save the rest of the world from the worsening Fed aggression: rapidly deteriorating economic conditions in the US. Due today, the NFP is expected to reveal 200’000 new nonfarm jobs in October, for an average hourly pay rise steady around 0.3%. Watch the full episode to find out more! 0:00 Intro 0:26 Confusing action & statement from the BoE 2:39 The dollar rally continues post-Fed, pre-US jobs 5:20 Stock selloff intensifies 7:10 Only ugly US data could reverse sentiment 8:22 Stoxx600’s 30% discount to S&P hides risk Ipek Ozkardeskaya 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. #US #NFP #jobs #wages #data #Fed #hawks #UK #BoE #GBP #dovish #hike #Netflix #Disney #BasicWithAd #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH

Summary:  Markets are off to a sluggish start this week after a choppy session on Friday, with China reporting its first official Covid deaths in months, one in Beijing, and driving new headwinds for reopening hopes. The Hang Seng Index was down over 5% at one point overnight. The week ahead is a short one in the US, with markets closed there on Thursday for the Thanksgiving holiday. Wednesday sees the release of many preliminary manufacturing and services PMI.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures are trading slightly lower in early European trading hours driven by lower sentiment as China’s zero Covid policy is already under pressure with rising case numbers and the central bank, PBoC, urging stabilisation of financing to the real estate sector indicating how fragile this part of the economy is. The key level on the downside to watch in the S&P 500 futures is the 3,955 level and after that the 100-day moving average at around the 3,919 level. Euro STOXX 50 (EU50.I) European stocks are still up more than 20% from the lows in early October following better than expected macro news and mild weather on the continent. But it seems the good fortune might change now with the weather turning much colder in Northern Europe and if China is not opening up as fast and wide as expected that is a negative for European companies as China is the largest trading partner to Europe. STOXX 50 futures are trading around the 3,910 level with the 3,892 level being the first support level to watch on the downside and then the 3,873 level. FX: USD grinds higher on wobbly risk sentiment The US dollar traded firmer in the Asian session overnight after choppy action late last week as there has been no major follow up move in US yields after the huge reaction to the October CPI data release the week before. Risk sentiment seems to be the local driver here and major reversal levels for USD pairs are still quite distant, meaning the USD can continue to consolidate without major technical implications just yet. Examples of levels are the 1.0100 area in EURUSD, the 1.1600-50 area in GBPUSD and 0.6500-25 in AUDUSD. Little in the way of US macro data this week, although on Wednesday we do get the FOMC minutes, together with a dump of data points including Oct. Durable Goods Orders, weekly jobless claims, preliminary Nov. Manufacturing and Services PMI, and Oct. New Home Sales ahead of the Thanksgiving holiday, with markets close in the US on Thursday and only partially open on Friday. Crude oil (CLZ2 & LCOF3) Crude oil dropped further to fresh multi-week lows in early Monday trading with January Brent touching 86.40 and December WTI below 80. The short-term outlook has been hurt by renewed dollar strength, the most inverted US yield curve in four decades signaling high risk of an economic recession, and not least China’s continued struggle with Covid (see below). Ahead of EU sanctions on Russian oil, which will reduce supply from early next year, the seasonal softness in demand has been exaggerated by the above-mentioned developments. Crude oil trades within a wide range, and it will take a break below the September low at $83.65 in Brent and $76.25 in WTI for that to change. Gold (XAUUSD) Gold trades lower for a fourth day with the market potentially targeting $1735 support. While a stronger dollar driven by FOMC hawks (see below) is weighing on prices, gold’s biggest short-term threat remains long liquidation from funds who in the runup to last week’s failed attempt to break resistance around $1800 had bought gold futures at the fastest pace since June 2019. During a two-week period to November 15 money managers bought 80k lots thereby flipping a short position to a 49k lots net long. During the same period holdings in bullion-backed ETFs continued to drop, signaling no appetite from longer-term focused investors to get involved. An extension of the recent rally likely requires further declines in yields and the US dollar driving fresh demand for ETFs or some other catalyst that sees a run to safety. US treasuries (TLT, IEF) US treasury yields rose slightly on Friday, but have fallen back to start the weak amidst soft risk sentiment in Asia. Friday saw the yield curve inversion reaching a new extreme for the cycle at –72 bps for the 2-10 slope. For the 10-year yield, the cycle low is 3.67%, with considerable focus on the 3.50% level (the major high from June just after the FOMC meeting), while an upside reversal would require a jump well through 4.00%. What is going on? China’s Covid outbreak is getting worse China reported its first official Covid-related death in nearly 6 months in Beijing as the outbreak continues to get worse and cast doubts on a Xi pivot. The capital added 516 cases on Sunday and called the situation "grim." There are some retail and school closures, and the request to stay home was made over the weekend and has been extended. Meanwhile, a district in Guangzhou has imposed a 5-day lockdown to conduct mass coronavirus testing in some areas. China focused commodities have taken a haircut on the recent deterioration on concerns tighter restrictions could be enforced, while China implements its new 20-point tweaking covid restriction plan, aimed at minimising disruptions to people’s daily lives and the economy. The iron ore (SCOc1) price fell almost 4% on Monday in Asia while copper has lost 8% during the last week. Hopes regarding China’s property sector remain after the nation introduced a property rescue package last week. Netherlands trade minister says US cannot impose trade restrictions on Netherlands Referencing the US’ ban against exports of key advanced semiconductor production technology, the Netherland’s trade minister said Friday. This was among signs that Europe is seeking a “middle path” on its policy toward China after US President Biden’s administration asked key allies to comply with its ban as well. French President Macron Friday also pushed back against the idea of dividing the world into rival blocs, while German Chancellor Scholz visited China two weeks ago looking for economic reconciliation between the two countries. Sweden house prices down 3% m/m in October This takes the decline in house prices down 14% from the peak sounding off the alarms at the Riksbank and commercial banks as the house price declines will drive impairments on loans related to the sector. This could in turn lead to lower credit extension from banks into the private sector and thus slow down the economy further. ECB Christine Lagarde reaffirms high inflation remains the number one issue In a speech on Friday, ECB president Christine Lagarde confirmed once again that the central bank will mostly focus on fighting inflation in the short- and medium-term. According to her, the risk of a recession in the eurozone has significantly increased but even if this happens, it is unlikely to quell inflation significantly. This means that hiking interest rates is still on the cards. She also advises the eurozone government to embrace targeted and temporary fiscal stimulus. Too much fiscal stimulus is likely to stimulate demand, thus increasing inflationary pressures. Based on the detailed eurozone HIPC report for October which was released a few days ago, there is so far no sign whatsoever of a peak in underlying inflation pressure. In our view, we should not take for granted that the ECB will slow the pace of hikes to 50 basis points in December. COT report shows major rotation between commodity sectors The weekly Commitment of Traders report covering the week to November 15 saw speculators make some major position adjustments as the dollar and yields dropped, a further inversion of the US yield curve raising the risk of an incoming recession as well as temporary hopes China would ease its Covid restrictions. Developments that saw funds reduce exposure in energy and grains while adding length to metals and softs. The biggest changes being a sharp reduction in speculative bets in crude oil, soybeans, corn and cattle while buying was concentrated in gold, copper, sugar and cocoa. What are we watching next? NZD gains ahead of RBNZ rate decision this week The Reserve Bank of New Zeeland is likely to deliver its sixth consecutive 50bps rate hike this week, or more with consensus tilting towards a larger 75bps move. The calls for a hike come amid hot inflation at 7.2% YoY in Q3 – well above the RBNZ’s 1-3% target – which comes in conjunction with a tight labour market. Most members of the RBNZ shadow board also supported a 75bps rate hike. NZDUSD started the week on a stronger footing, after having touched 0.62 on Friday. AUDNZD remains in a downtrend with China’s Covid outbreak as well as a relatively dovish RBA limiting the prospects for AUD. Fed’s Collins says 75bps still on the table for December, Bostic dovish Fed’s Boston Governor Collins appeared on a CNBC interview on Friday and said she hasn’t decided on the magnitude of next month’s interest rate hike, but that a 75bps rate hike remains on the table. She also emphasised that there is no clear and significant evidence that the overall inflation is coming down at this point, and there is also no clear consistent evidence of softening in labor markets. In fact, her comments raised terminal rate expectations as she said that data since September have kind of increased the top of where the Fed may need to go with interest rates. On the economy, she is concerned there could be a self-fulfilling dynamic that could make a more severe downturn more likely. However, Collins is reasonably optimistic a recession can be avoided. On the other hand, we also heard from Atlanta Fed Governor Raphael Bostic who said he favours slowing down the pace of rate hikes and hinted that terminal rates will be about 1% pt higher from here. Worth noting however that Collins is only a voter this year (and not in 2023) while Bostic is not a voter this year or next. Earnings to watch Today’s US earnings focus is Zoom Video and Dell Technologies. After being a darling through the pandemic Zoom Video has experienced revenue growth coming down to 4.4% y/y expected in the FY23 Q3 (ending 31 October) release down from 35% y/y a year ago. The company is well run but is facing intense competition in the video conferencing business. Dell Technologies will likely highlight the trends we already know of slowing PC sales and lower spending on enterprise technology driven by a slowing economy and falling share price in the technology sector. Today: Compass, Agilent Technologies, Zoom Video, Dell Technologies Tuesday: Kuaishou Technology, Medtronic, Analog Devices, VMware, Autodesk, Dollar Tree, Baidu, HP, Best Buy Wednesday: Xioami, Prosus, Deere Friday: Meituan, Pinduoduo Economic calendar highlights for today (times GMT) 1330 – US Oct. Chicago Fed National Activity Index 1800 – US Fed’s Daly (Voter 2024) to speak 2145 – New Zealand Oct. Trade Balance  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-21-2022-21112022

Markets were quiet yesterday, as the US was closed for Thanksgiving. European markets mostly surfed on the positive reaction from the US equities to the Federal Reserve (Fed) minutes released a day earlier. EU Stocks The German DAX advanced to a fresh 5-month high, as the French CAC40 hit a fresh 7-month high, thanks to the euro’s appreciation against the greenback, which somehow eases the inflationary pressures for the European companies, along with the falling energy prices. Central Banks Elsewhere, the latest minutes from the European Central Bank (ECB) released yesterday revealed that ‘a few’ officials favored a smaller rate increase, than the 75bp that the bank delivered last month, citing the other monetary tightening measures that would help restricting the monetary conditions. The Swedish Riksbank raised its interest rates by 75bp yesterday and said that the monetary tightening will continue to tame inflation in Sweden. The Korean Central Bank raised its interest rates by another 25bp to the highest levels since 2012 and the won gained, whereas the Turkish Central Bank CUT its policy rate by another 150bp points, but said that the easing is perhaps enough at 9%, and that risks on inflation – which stands around 85% officially, and 185% unofficially – increase from here. China In China, the central bank signals lower reserve ratios for banks, and conducts reverse repo operations to boost liquidity in the system, as news of fresh Covid restriction measures creep in. The Chinese news certainly prevent oil bulls from jumping in the market right now, and the American crude consolidates below $80pb this morning, with solid offers seen at $82/85 range. Credit Suisse In Switzerland, Credit Suisse continues making the headlines. The stock price flirts with all-time-lows, as UBS sees its share price extend gains as outflows from CS reportedly benefit UBS. Watch the full episode to find out more! 0:00 Intro 0:32 Soft USD boosts European stocks 4:02 Will the USD further soften? 5:40 Central bank roundup 7:44 China re-closing weighs on oil 8:11 Credit Suisse outflows benefit UBS Ipek Ozkardeskaya  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 #CAC #FTSE #EUR #GBP #USD #FOMC #ECB #minutes #Riksbank #CBT #SEK #TRY #China #Covid #crudeoil #CreditSuisse #UBS #Thanksgiving #BlackFriday #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

Summary:  Our Chinese equity baskets were down around 5% last week as China is finding it increasingly more difficult to leave its strict Covid zero policies behind as case figures are surging again and protests are erupting across several locations in the country including the main manufacturing hub for Apple and its iPhone. At the other end of the spectrum the defence basket is continuing its momentum up 3.8% last week. The performance means that the defence basket could get closer to end the year as the best performing theme basket this year. The biggest gainers in the defence basket last week were Rolls-Royce and Leonardo. China continues to be out of sync with the world The biggest outliers last week among our equity theme baskets were our two Chinese equity baskets declining 4.5% and 5% respectively as rising Covid case figures dented the narrative that China can smoothly reopen their economy. Already last week there were increasing protests at different locations in China including Apple’s biggest factory that produces its key product the iPhone. This has led sell-side firms to cut their forecast for iPhone production and investors are increasingly worried Apple’s supply chain risks. The protests against China’s Covid zero policies have not eased over the weekend so this theme will continue to impact markets this week. If we zoom out and take a longer look at Chinese equities it has been miserable period since early 2010 with Chinese equities underperforming MSCI World in total return USD terms by 7.9% annualized. But especially the period since mid-2021 has been brutal with the Chinese economy undergoing severe calibrations amid a troubling real estate sector and now the disruptions from the strict Covid zero policies. We remain underweight Chinese equities long-term as the common prosperity policies will continue cause headwinds for Chinese corporate sector profitability which has been very weak since the pandemic started. MSCI China vs MSCI World (total return USD terms) | Source: Bloomberg Could defence stocks end the year on a high? The defence basket was the best performing basket last week gaining 3.8% as the ongoing geopolitical landscape in Europe around the war in Ukraine will continue to drive military spending higher. With just one month to go and the Chinese reopening narrative shattered to pieces over the past week commodities could be under pressure, so if defence stocks can muster more momentum they might even end the year as the best performing theme basket. The two best performing stocks in the defence basket last week were Rolls-Royce and Leonardo up 7.5% and 6% respectively. Roll-Royce seems to have turned a corner and 10 days ago the company’s credit was lifted to positive outlook by S&P from stable suggesting the underlying cash flow generation is improving. Leonardo is still enjoying the tailwind from its good Q3 results and the Q4 performance will likely be driven by another good quarter in its defence and helicopter segments despite looming inflationary pressures on its input costs.   Source: https://www.home.saxo/content/articles/equities/weekly-update-saxo-thematic-investing-performance-28112022

Elon Musk surprises once again with his actions against Twitter management. Investors are looking a little more positively at Europe, spurring a revival in the region's downward equities. Read next: The Australian Dollar Failed To Hold Its Gains, The Pound Strengthened Against The US Dollar| FXMAG.COM Sharing internal messages Elon Musk bought Twitter for $44 billion more than six weeks ago. Since then, there has been a lot of talk about his actions towards this social networking site. Employees faced weeks of unrest, including the firing of half of Twitter's staff and sudden decisions on product plans. Musk said he thinks of Twitter as a digital urban market. Since taking over the platform, he has pulled a few levers to ensure that the Twitter conversation is also about Twitter. One of Twitter Inc.'s top lawyers "was exited," part of the fallout from the billionaire's unusual efforts to release internal communications to criticize prior practices. On Tuesday, Musk's tweets linked the departure to a project he dubbed "Twitter Files" - a disclosure of internal communications he characterized as showing partisan decisions by the previous leadership to the benefit of Democrats, for example. The documents are being published as evidence of claims that major social media platforms are biased against the political right. Twitter's own researchers said in a report last year that the platform's algorithms boosted the voices of the political right in several countries, including the US. Musk said he gave journalists Matt Taibbi and Bari Weiss access to company documents in order to rebuild public trust in Twitter. Sharing internal messages with outside control is another example of unconventional measures taken by Musk in managing Twitter. Prior to Elon Musk's share of Twitter, the stock fell, but has been on the rise since then. Currently, the TWTR share price is 53.35. Positive sentiment The benchmark Euro Stoxx 50 index gained nearly 19% this quarter, putting it on track to achieve its best quarterly results. Sentiment has improved after a period of extreme pessimism towards Europe sparked by the invasion of Ukraine, the subsequent spike in energy prices and the highest inflation in decades. Investors and analysts say market sentiment is improving thanks to early signs of easing inflation in the eurozone and hopes that the fight for alternatives for Russian natural gas reduced the risk of an energy crisis this winter. Russia was the European Union's largest energy supplier, exposing the region to the upheavals caused by Western sanctions. Some of Europe's best-performing companies this quarter are in the industrials sector. These companies were among the hardest hit by gas supply disruptions and energy price spikes, with many companies temporarily closing factories or reducing production. France's Alstom SA shares rose 43% this quarter, while Siemens Energy AG shares in Germany rose 42%. Chart: Alstom SA Chart: Siemens Energy AG Source: wsj.com, finance.yahoo.com

The European Central Bank meeting was held yesterday. The rate was raised by 0.50%, and the ECB decided to reduce its holdings in the APP program. The decline will amount to €15 billion per month on average until the second quarter of 2023. The Committee expects at least two more raises of 0.50%. The euro jumped more than 100 points on such news. But then active investors saw oil falling, the U.S. stock market going down a bit late for the previous Federal Reserve meeting, and the euro closed the day with a loss of 53 points. The market went with our scenario, as the stock market fell and the euro along with it. The S&P 500 is down 2.49%. Take note that the European stock indices started falling right from the opening, which means that they showed even more weakness for the rate hike (as representatives of the weaker economy) than the U.S. market. The European Euro Stoxx 50 collapsed by 3.51%. The reversal of the single currency is coming hard. It has not reached the target range of 1.0758/87, but the readings of the Marlin oscillator, which is persistently declining, confirming the divergence, suggests a new historical extreme of 1.0736. The price is now pondering in the range of 1.0615/42. A consolidation under it opens the way to 1.0470, the low of April 28. On the four-hour chart, the price is settling in the range of 1.0615/42. A reverse consolidation above the range will complicate and slow down the reversal. The MACD line, which is just below this range (1.0567), is also slowing the decline. The Marlin oscillator did not get ahead of events this time and returned to the positive area. We are waiting for the euro to complete its preparation for the downward movement. Relevance up to 03:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329993

Summary:  Markets stumbled into the close last week, shaken in Europe by a resolute, and possibly unrealistic ECB stance at last Thursday’s ECB meeting, while a heavy calendar of event risks combined with trillions in options expiries roiled US markets last week. The two final weeks of a remarkable 2022 await. Are traders willing to put any risk to work here after an exhausting year or hanging up their spikes until 2023?   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Following a close at the 50-day moving average on Friday, S&P 500 futures are attempting to rebound this morning trading around the 3,885 level driven by fresh sentiment change over China’s alleged move to enact pro-business policies and stimulus in 2023. There are no meaningful earnings or macro releases expected today so we expect a calm trading session with Friday’s low in S&P 500 at the 3,855 level being the key level on the downside and the 100-day moving average at the 3,935 level being the key upside level to watch. Euro STOXX 50 (EU50.I) European equities are still digesting their decline last week, biggest decline in many months, as the ECB delivered a more hawkish message than expected. STOXX 50 futures are trading around the 3,818 level getting a little bit of tailwind electricity prices coming down from excessive levels. The IFO December survey out at 0900 GMT is today’s main macro release that could jolt market sentiment. Analysts expect an improvement in the IFO survey for December. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hong Kong and Chinese stocks pared all the early gains and turned lower as investors turned cautious during a surge in media reports of rises in Covid inflections and death tolls. The lack of commitment to more large-scale economic stimulus measures from the Central Economic Work Conference was considered underwhelming. Nonetheless, a shift to a more conciliatory stance towards the private sector from the meeting may be a positive that will contribute to growth and reduce risk premium in the medium-term. More details about the Central Economic Work Conference can be found here. Hang Seng Index dropped 0.9% and the CSI300 Index tumbled 1.8%. FX: Dollar off to a weak start to the week as JPY gains on 2023 policy review speculation EURUSD has rebounded slightly from the Friday close as the market must decide whether the ECB can maintain the hawkish bluster on display at last Thursday’s meeting, which initially supported the euro, but subsequently saw doubts emerging as peripheral EU spreads widened sharply. USDJPY had a volatile week as a drop below 135 was not maintained despite US yields remaining capped, but a fresh bout of JPY strength arrived overnight on reports that Japan PM Kishida is considering a tweak in BOJ’s 2% inflation goal next year (read below). Crude oil (CLF3 & LCOG3) prices advance on China’s growth push and US refilling SPR Oil prices started the week on a firmer footing, with WTI rising towards the $75/barrel mark and Brent heading back towards $80. While there are unconfirmed reports of massive number of cases and fatalities in China from the spread of Covid, the government’s official message continues to stress upon the need to expand consumption as the key economic priority for 2023. This helps paint a better demand outlook for oil, as global demand slowdown concerns continue to mount in the US and Europe and Russian flows show no signs of slowing. Moreover, it was reported that the US is starting to replenish the Strategic Petroleum Reserve (SPR), starting with a 3-million barrel, fixed-price purchase. In week to Dec 13 funds cut bullish Brent and WTI bets to lowest since April 2020. Gold (XAUUSD) trades near $1800 as it continues to find support Since the current run up in gold started in early November, the price has not dipped below its 21-day moving average, today at $1775. Speculators increased bullish gold and silver bets by 50% in the week to December 13 when prices briefly spiked in response to a softer dollar and CPI print. The subsequent setback following Wednesday’s hawkish FOMC, however, was not big enough to rattle recent established longs. For that to happen the price in our opinion as a minimum need to break below $1765. The risk of a recession and the FOMC hiking into economic weakness – potentially without succeeding getting inflation under control - continues to strengthen the upside risk for investment metals in 2023.  US Treasury yield curve (TLT:xnas, IEF:xnas, SHY:xnas) steepens as market refuses to price Fed rate projections Soft US preliminary PMIs on Friday and weak risk sentiment kept treasuries supported and the 2-year benchmark yield remains near recent lows as the market refuses to price in the projected Fed Funds rate projections from last week’s FOMC meeting, as the market persists in pricing in high odds of Fed rate cuts late next year. At the longer end of the curve the 10-year yield remains pinned near the 3.50% level and the 2-10 slope steepened to –67 basis points this morning, near the highest reading in a month. What is going on? New Zealand Q4 Westpac Consumer Confidence plunges to lowest ever measured The survey reading was 75.6, a huge drop from 87.6 in Q3 and the lowest reading in the 34-year history of the survey and below the 78.7 former record low from Q2 of this year and the 81.7 trough during the global financial crisis. NZD gapped lower after another strong week on the recent relative hawkishness of the RBNZ, a stance that may soften in coming weeks. AUDNZD hit lows since late 2021 over the last couple of weeks after trading at the highest in years as recently as last September. EU considering cutting the proposed natural gas price The EU nations are likely to discuss cutting the gas price cap by almost a third today after the EUR275 per megawatt-hour was proposed last month. As the energy crisis continues to threaten a fresh surge in inflation and growth slowdown in the region, it is also stretching government budgets to maintain popularity. But this will eventually be inflationary again, as price caps hardly work effectively. US flash PMIs send warning signals. Flash December PMIs for the US slumped to fresh lows, sending more warning signals about the economic momentum going into 2023. Manufacturing PMI came in at 46.2, below last month’s 47.7 and the expected 47.8, while the services PMI receded to 44.4 from 46.2 previously – that survey has shown little correlation with the ISM Services survey, which continues to suggest an expanding US services sector. Japan PM Kishida hinting at altering inflation goal for central bank Reports suggested that Japan PM Kishida plans to revise a ten-year-old accord with the BOJ and will consider adding flexibility to the agreement's 2% price goal. Kishida will discuss the matter with the next central bank governor, who'll take office in April. Furthermore, some more comments from officials this morning continued to signal that the authorities may be considering a policy review in 2023, and more hints are awaited at the BOJ meeting tomorrow. Ex-BOJ Deputy Governor Yamaguchi said that the BOJ must stand ready to tweak YCC next year if Japan's economy can withstand overseas economic risks, while also warning that once inflation expectations become entrenched, it is very hard to control them. Speculators bought investment metals and sold dollars ahead of FOMC The latest Commitment of Traders report covering the week to December 13, when the market responded to a softer dollar and CPI print, showed speculators increase their dollar short against nine IMM currency futures to a 17-month high. The selling of CAD being more than offset by short covering in AUD, GBP, and not least the JPY. Since the turn of the dollar in early November, the speculative short in JPY has almost halved. In commodities, the net longs in gold, silver and platinum all increased strongly. Crude oil was mixed with the Brent long being cut to a 26-month low, the natural gas short was cut in half. Across the agriculture sector, the soymeal long hit a 4-½ year high, the cocoa position flipped back to long while buyers returned to coffee. What are we watching next? The calendar roll after a volatile 2022 Many long only equity funds have suffered their worst year since 2008, and “balanced” stock-bond funds have put in their worst year in modern memory on the surge in bond yields this year that has seen the 2022 calendar year providing nowhere for the passive investor to run and hide. On the flip side, some hedge funds and volatility traders enjoyed the market environment of the last 12 months. As we wind down 2022, note that new themes can quickly develop in 2023, as many have closed their books on taking risk as liquidity thins out for the holiday time frame and may be set to put on significant risk on the rollover into the New Year. Earnings to watch This week’s earnings focus is Nike, FedEx, and Carnival which we previewed in the earnings watch note on Friday. The bar is set high for Nike earnings as sell-side analysts have recently hiked their price target on the stock and increased their expectations for 2023 on margins. Today’s earnings focus is HEICO which sells aerospace products to the airline industry and defense contractors. Analysts expect FY22 Q4 (ending 31 October) revenue growth of 18% y/y and EPS of $0.70 up 12% y/y. Today: HEICO Tuesday: Nike, FedEx, General Mills, FactSet Research Systems Wednesday: Toro, Micron Technology, Cintas, Carnival Thursday: Paychex, CarMax Friday: Nitori Economic calendar highlights for today (times GMT) 0900 – Germany Dec. IFO Survey 1330 – Canada Nov. Teranet/National Bank Home Price Index 1500 – US Dec. NAHB Housing Market Index Bank of Japan meeting (Asian hours Tuesday)   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – December 19, 2022 | Saxo Group (home.saxo)

Summary:  Today we look at the Bank of Japan shocking markets overnight with a surprise shift in its yield-curve-control policy, as it lifted the cap on 10-year JGB's to 50 basis points from 25 basis points. The JPY rose in stepwise fashion together with the jump in longer Japanese yields and global yields were also impacted, taking risk sentiment lower. In commodities, we discuss metals and natural gas. In equities, we discuss the outlook for European defense stocks, including Rheinmetall and cover upcoming earnings reports from Nike, where the bar of market expectations looks high, and from FedEx, where the bar of expectations is quite low. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Bank of Japan roils markets with a surprise policy tweak | Saxo Group (home.saxo)

The good news with China’s reopening is that it should boost global growth. China and Covid The bad news with China’s reopening is that it will not only boost global growth, but also energy and commodity prices - hence inflation, the interest rate hikes from central banks and potentially the global Covid cases – which could then give birth to a new, and a dangerous Covid variant, which would, in return, bring the restrictive Covid measures back on the table, and hammer growth. Note that the reasoning stops here right now, the risky markets are painted in the red, but we could eventually go one step further and say that if the Chinese reopening hits the global health situation – hence the economy badly, the central banks could become softer on their rate hike strategies. But no one is cheery enough to see silver lining anywhere. This year really needs to end, now!   European and US markets So, Wednesday was marked by further selloff across European and US markets. The S&P500 slid 1.20% and Nasdaq lost another 1.32%. The DAX struggles to keep its head above the 50-DMA, but the FTSE 100 index is about to close the year with slight gains! Why? Also Turkish BIST 100 shot up to 188% at some point this year, making investors wonder whether Turkish stocks good performance could last and what happens if the lira dropped. Watch the full episode to find out more! 0:00 Intro 0:34 China reopening starts worrying 2:33 Why FTSE 100 outperformed in 2022? 5:00 What made Turkey’s BIST 100 rally 188%? Could it last? 7:37 Chinese stocks could outperform next year Ipek Ozkardeskaya 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. #FTSE #BIST #outperform #China #Covid #reopening #inflation #expectations #energy #mining #stocks #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      

Stocks rose, with U.S. futures showing gains on the first day of trading in 2023. The yen lost ground, while gold traded at its highest level in more than six months. Contracts on the S&P 500 rose, and European stocks rose after sluggish trading at a low Tuesday. Stocks in Hong Kong and mainland China rose after initial declines. European stock indices are growing more actively than American ones against the backdrop of a strengthening dollar: Investors start 2023 with subdued expectations after a sharp swing last year when global stocks lost 20% in value, the worst performance since the financial crisis. Bonds lost 16%, the biggest drop since at least 1990 for a single leading measure, as central banks raised interest rates to slow inflation. "We are starting the year in challenging financial conditions, with potential inflation momentum coming from China and more broadly this means we may need to approach the start of this calendar year with relative caution across the portfolio." – Marc Franklin, Senior Portfolio Manager at Manulife Investment Management. Relevance up to 11:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331369

European investors got an energy boost from lower inflation reads, and the falling nat gas futures, but US investors didn’t follow up on the cheery market mood. However, US sovereign bonds gained yesterday as an indication that the latest market moves were backed by recession fears, rather than hawkish Federal Reserve (Fed) expectations… The risk-off investors will likely continue And if the first trading day of the year is any indication, we could see the holy negative correlation between stocks and bonds come back in 2023. This is what many investors think will happen. The risk-off investors will likely continue exiting stocks on profit recession – and not on hawkish Fed expectations, and they could go back to bonds and to gold instead. US economy Due today, the ISM manufacturing index will reveal if and how fast US manufacturing contracted last month. If yesterday’s PMI is any hint, we could see a fastening contraction in ISM manufacturing, which would then boost recession worries, hit the stocks, but not necessarily the bonds and gold. Also, JOLTS data will show if, and by how much the US job openings fell in November. Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM But regardless of the ISM data, and the US job openings, the FOMC minutes will likely confirm that the Fed remains serious about further tightening policy, even if it slows the pace of interest rate hikes. Remember, if the Fed decided to go slower on its rate hikes, it’s to be able to go higher! And the more resilient the US economy and the US jobs market, the more eager the Fed will be to continue its journey north… Watch the full episode to find out more! 0:00 Intro 0:35 European stocks rally but… 3:04 US stocks fall, as bonds rise… 4:08 … hinting at the eventual return of negative correlation btw stocks and bonds? 5:51 …from which Gold could also benefit? 6:30 What to watch today? 7:38 Oh Tesla, Apple and Exxon… 9:06 Do you dare going back to Chinese stocks? Ipek Ozkardeskaya 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. #Stock #bond #correlation #USD #EUR #JPY #XAU #economic #data #recession #pricing #Tesla #Apple #Exxon #crude #oil #DAX #CAC #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

Summary:  DAX and Euro Stoxx 50 testing key resistance levels. A close above is likely to push Indices higher 3-4% higher short-term DAX is testing resistance at 14,654. RSI is back above 60 indicating higher levels are likely. However, there is still divergence but if RSI closes above its falling trendline will indicate DAX is likely to move higher and test key resistance at 14,901.However, 14,901 is not a strong resistance and if DAX closes above December 20222 peak at 14,676 uptrend has been confirmed both short- and medium-term. 15K is a very psychological level so a close above will give the market the feeling that all crisis talk is over and we are back to the “good old days” of Bull Market. We will most likely see stories about DAX could make an all-time high. But reality can easily return. However, a move above 15K is in the cards and a 1.618 Fibonacci Projection at around 15,222 could be seen before weakness will spread across the market. For DAX to reverse this uptrend a close below 13,791 is needed. First indication of this scenario to play out could be a break back below 14,149   Source all charts and data: Saxo Group sa Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM   Euro Stoxx 50 is at the time of writing above key resistance at around 4,025. If closing above and if RSI is closing above its falling trendline further uptrend should be expected. 4,165 is 0.786 retracement of the entire down trend since 2021 peak. However, a move to 1.618 Fibo Projection of the December correction at around 4,200 seems likelyIF Euro Stoxx fails to close above 4,025 the Index is likely to slide lower. But it needs to close below 3,767 to reverse the uptrend.      Source: Technical Update - European Equities higher. DAX and Euro Stoxx 50 testing key resistance | Saxo Group (home.saxo)      

Summary:  Today we note that the major European equity markets have come full circle since the Russian invasion of Ukraine last February, in part driven by a near freefall in natural gas prices over the last few weeks on mild weather. How much more can the market wring out of this development? We also note the reversal in the US equity market rally yesterday ahead of the important CPI data on Thursday. In equities, focus toward the end of the week on the major US banks reporting, but in the meantime, we have the important news for Google of a $10 billion investment in OpenAI as the future of internet search is heating up for the first time in many years. This and more on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Read next: The Weather-Driven Crash Showed The Southwest Airline's Bigger Problems| FXMAG.COM Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next:The Aussie Pair Is Trading Above 0.69$, The Euro Above 1.07, The British Pound Also Benefits From A Weak Dollar| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com   Source: Podcast: European equities have come full circle since Russian invasion | Saxo Group (home.saxo)

European stock markets are softer in early trade on Tuesday following a similar session in much of Asia as investors turn more cautious ahead of Thursday’s US inflation data. The commentary from Fed officials at the start of the week was more hawkish than what investors wanted to hear following a knockout jobs report. Considering the rhetoric in the weeks leading up to Friday, it shouldn’t have come as a great surprise that policymakers are sticking to the “higher for longer” narrative. There has been a determination to not allow financial conditions to loosen on the expectation of lower rates down the road as it undermines tightening efforts now. While the central bank’s assessment of future rates may be more hawkish than the markets, it’s also possible that they’re being intentionally overly hawkish now in an attempt to stop investors from getting carried away. The jobs report may not have been enough to warrant a shift in the language, but that doesn’t mean we aren’t close and any change could be quite stark. The inflation report on Thursday could further justify such a move although investors will be very wary that a bad one could ensure policymakers dig their heels in for a while longer yet. Tentatively higher Bitcoin is marginally higher after breaking back above $17,000 yesterday, buoyed by an improvement in risk appetite. That remains fragile though and a nasty surprise this Thursday from the US inflation report could send risk assets into reverse. The broader crypto environment remains the dominant driver though and it’s gone a little quiet on that front which will be welcome. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

European stocks kick off the week on last week’s positive vibes, adding more gains to their best ever start to a year. Dax The DAX extended its advance above the 15000 mark, to the fresh highs since before the war in Ukraine started. French CAC40 And the French CAC40 took over the 7000 resistance and is only around 4% below the 2022 peak. European stock The recovery in European stocks is impressive, yet could it last? China On the data front, China grew 3%, well below the government’s 5.5% target last year, but the Q4 rebound was well above market expectations. Retail sales contracted significantly less than expected as well, while unemployment unexpectedly fell, giving signs that the end of Covid zero measures are feeding into the data. Forex In the FX, the US dollar was better bid yesterday, but price rallies could be good to sell, especially against oil and commodity currencies, that should extend rebound on Chinese reopening story. Watch the full episode to find out more! 0:00 Intro 0:16 Could European stocks extend rally? 2:14 Energy, commodities swing between recession fears & China reopening 4:36 Stay away from meme stocks 5:57 Bitcoin catches up with stocks, but downside risks prevail 7:07 China posts encouraging data 8:18 Selling USD against energy & commodity currencies? Ipek Ozkardeskaya 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. #China #growth #recession #fear #WEF #Fed #ECB #expectations #USD #EUR #JPY #CAD #AUD #crude #oil #copper #DAX #CAC #rally #earnings #season #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

Summary:  Correction time in European Equities. But most likely not a correction larger than 3-4% before uptrend is likely to continue Today's Saxo Market Call podcast.Today's Market Quick Take from the Saxo Strategy Team AEX25 formed a Shooting Star candle followed by a bearish candle last week which is an indication of a top and reversal. A correction should be expected. A correction that could take the Index down to around 715. However, the steep rising 55 SMA will provide support and is likely to limit the downside. If AEX closes the gap buyers will try to lift AEX above last week’s peak. If they succeed the uptrend is set to continue with a move to resistance at around 772.There is no divergence on RSI indicating higher levels are likely after a correction. Source all charts and data: Saxo Group   BEL20 was hit last week by massive selling forming a Bearish Engulfing candle followed by a gap at text day’s open. There is no divergence on RSI indicating higher levels are likely after a correction that is under development. A correction that could take BEL 20 down to around 3,800 possibly dipping down to around 3,767 before buyers are likely to regain control.If BEL 20 closes the gap and takes our last week’s peak there is resistance at around 4,012-4,031. CAC40 reached 1.618 projection and 7,100 before selling set in. CAC seems set for a correction down to support at around 6,892 and around the 0.382 retracement at 6,837.No divergn3ce on RSI which is showing bullish sentiment supporting higher levels for CAC after a correction. If CAC closes the gap a move to 7,150 resistance and higher is likely.Medium-term CAC 40 has no strong resistance until previous high at 7,384. RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend   Soucre: Technical Update - AEX25, BEL20 & CAC40 | Saxo Group (home.saxo)

The sharp growth of US tech stocks boosted market sentiment amid optimistic earnings forecasts from electric car maker Tesla Inc. Futures contracts on the Nasdaq 100 index rose by about 0.5%. Tesla jumped more than 8% during premarket trading in New York after beating earnings and sales estimates. Futures on the S&P 500 index added 0.3%, and the industrial Dow Jones gained 0.2%. Europe stocks In Europe, investors reacted positively to reports from Nokia Oyj Telecommunications Group and chipmaker STMicroelectronics NV, which helped the Stoxx 600 index gain more than 0.5%. Although companies are not boasting of high figures they are not disastrous either, which keeps the demand for risky assets, including stocks. The January growth is exaggerated given the recession risks. However, next week's Federal Reserve meeting may confirm that the market and investors were right. China The buoyant market sentiment was also linked to China, where data on holiday and tourism spending showed that the country's recovery is gaining momentum. On the first trading day after the Lunar New Year, the Hang Seng Index jumped by 2.4% and closed at its highest level since March 1, 2022. US GBP Expectations of a soft landing of the US economy and that the Federal Reserve is nearing the end of its rate hike cycle are also pushing investors to buy cheaper assets. US GDP reports for Q4 this year are expected today, as well as employment data, which will help determine the Fed's future policy course. Euro The euro is down slightly, but it is getting continued support from statements by European Central Bank officials, who continue to argue in favor of further significant policy tightening in the coming months. Bond yields in the Eurozone rose by several points. Oil and Bitcoin Oil prices continued to rise amid expectations of a rebound in demand in China. Bitcoin fell by more than 2%, wiping out much of Wednesday's gains. S&P 500 index As for the S&P 500 index, the situation remains on the side of bulls. The index may continue to grow but bulls need to protect the support level of $4,010 as well as take control over $4,038. After that, we may expect a more confident spurt to $4,064. At the same time, it would be difficult to reach above $4,091. If the pair declines and we see weak activity from bulls at $4,010, they will have to protect $3,980 and $3,960. Breaking through this level, the index may be pushed to $3,923.   Relevance up to 12:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333364

The new week kicked off with Chinese equities jumping into a bull market as traders returned from their Lunar New Year holiday. S&P500 and Nasdaq The S&P500 and Nasdaq also freed themselves from the 2022 bearish trend, while global bond markets had their best January since 1990. And if the equity rally is still on a shaky ground – due to fear that the slowing economy could hit company earnings – the future in bonds looks brighter. Policy verdicts In the macro front, the Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of England (BoE) will be announcing their latest policy verdicts, between Wednesday and Thursday. Fed For the Fed, there is extremely little doubt that this week’s rate hike won’t be anything more than a meagre 25bp hike. BoE The ECB is expected to hike by 50bp this month, while we don’t know by how much the BoE will be raising its rates. In one hand, the BoE should continue fighting against inflation – which remains in the double-digit zone in Britain. On the other hand, the economic outlook for Britain is so morose – with country-wide strikes adding salt and pepper to the gloomy picture that Bailey cannot throw a series of 50bp hikes in the middle like Madame Lagarde. Stocks market Elsewhere, the Indian markets are being shaken by the Adani scandal. OPEC will meet this week, and big US companies including Amazon, Apple, Google, Meta, Exxon, Starbucks and Ford are due to announce earnings throughout this week! Watch the full episode to find out more! 0:00 Intro 0:39 China steps into bull market 1:01 S&P500, Nasdaq extend rally into bullish zone 2:04 Bonds record best Jan since 1990 & more gains are in the store 3:18 What to expect from the Fed, US jobs data this week? 6:10 50bp from ECB, and what else? 7:16 Will the BoE dare a 50bp hike? 8:53 Also this week: India shaken by Adani scandal, OPEC to hold fire, Apple, Amazon, Google & Meta to post Q4 results Ipek Ozkardeskaya  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. #Fed #ECB #BoE #OPEC #meeting #Apple #Amazon #Google #Meta #Exxon #earnings #US #inflation #NFP#data #Fed #expectations #USD #EUR #GBP #crude #oil #China #bull #market #Adani #scandal #Nifty #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

The equity marathon that kept going on for questionable reasons since Tuesday ended in tears yesterday, with the arrival of a new set of economic data that crushed the optimistic rhetoric of soft landing.  The latest data Released yesterday, the latest data showed that US producer price inflation rose more than expected on a monthly basis, both for headline and core data, and the core PPI eased less than expected – similar to what we saw in the CPI data, BUT the Philli Fed manufacturing index was a disaster with an unexpected drop from -8.9 to -24.3 – the expectation was a -7.4 print. Fed So that crushed the idea that the economy is strong, without however fueling the Federal Reserve (Fed) cut expectations, as the slowdown in inflation needs to be addressed for some more time. And of course, comments from two Fed members were the last nails in the coffin yesterday. Loretta Mester said that she would go for a 50bp hike if she had the right to vote in the latest FOMC meeting. And James Bullard said that he would back a 50bp hike in March, if he could vote this year. The US 2-year yield consolidates a touch below 4.70%, while the 10-year yield hit 3.90% for the first time this year. US Stocks The S&P500 gave back nearly 1.40% yesterday, while the more rate-sensitive Nasdaq fell nearly 2%. European stock US futures hint at further selloff before the weekly closing bell, as in the absence of important data, investors will have to digest the week’s mixed data. And the bad news is, the European stock traders will also have to think whether a further rally in European stocks makes sense, when the EURUSD is trending lower. Watch the full episode to find out more! 0:00 Intro 0:44 Equity investors are victim of mixed economic data 2:33 Rate expectations and yields update 4:35 Equity update 5:16 FX update 6:23 Gold down, Bitcoin up 8:40 There is no such thing as ‘no landing’ Ipek Ozkardeskaya  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. #mixed #economic #data #Fed #rate #expectations #USD #EUR #JPY #XAU #Crude #Oil #bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

The planet is boiling. US Dollar Escalating geopolitical tensions combined with the hawkish Federal Reserve (Fed) bets boost demand in the US dollar, while gold sees demand below the $1840 mark. US stock market But the US yields are trending higher on an increasingly hawkish Fed talk, and that could well send the precious metal into the bearish consolidation zone, sooner rather than later. Fed and ECB And the Fed hawkishness is spreading toward Europe. The European Central Bank’s (ECB) Isabel Schnabel warned last week that investors may be underestimating the persistence of inflation, and more importantly the response needed to tame it. Read next: Twitter And Elon Musk Faced A Growing List Of Claims| FXMAG.COM EUR/USD The EURUSD rebounded from the 1.0612 dip on Friday. European stock markets The European stock markets, on the other, continue performing well despite the hawkish ECB expectations. Why? Watch the full episode to find out more! 0:00 Intro 0:27 Rising geopolitical tensions… 2:21 … and Fed hawks support USD bulls 3:10 US stock rally in jeopardy? 4:41 What to watch this week? 5:50 ECB hawks become louder… 6:46 But European stocks push higher! 8:09 Energy under pressure 9:24 Is dovish Chinese monetary policy enough to boost appetite? Ipek Ozkardeskaya 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. #US #China #Russia #North #Korea #Iran #geopolitical #tensions #economic #inflation #data #Fed #ECB #China #rate #expectations #Alibaba #Baidu #earnings #USD #EUR #XAU #Crude #Oil #DAX #CAC #EuroStoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

The composite index of the largest companies in the region Stoxx Europe 600 by 12:33 GMT + 3 fell by 0.05% and amounted to 464.09 points. The British stock index FTSE 100 fell by less than 0.1%, the German DAX - by 0.24%, the French CAC 40 - by 0.31%. The Italian FTSE MIB and the Spanish IBEX 35 lost 0.1% and 0.3% respectively. Trading activity in world markets is expected to be lower than usual on Monday due to the celebration of Presidents Day in the US. Stocks in Shanghai and Hong Kong rose sharply on Monday on news that the People's Bank of China kept its one-year Loan Prime Rate at 3.65% and the five-year lending rate at 4.3%. per annum. People's Bank of China has not changed rates for six meetings in a row. At the same time, many economists believe that in the coming months the rate may be lowered to stimulate economic growth, writes Bloomberg. On Wednesday evening, the minutes of the last Fed meeting will be made public, at which the key interest rate was raised by 25 basis points. Investors are particularly looking forward to the minutes as several Fed officials, including the heads of the Federal Reserve Banks of Cleveland and St. Louis, said last week that they were calling for a sharper rate hike. Shares of Pernod Ricard SA rose 0.1%. One of the world's largest producers of alcoholic beverages announced the start of a new stage of the share buyback program. The purchase of securities in the amount of up to 300 million euros will take place before April 6 and will be carried out as part of a total program of 750 million euros. Stellantis and Pirelli are up 2%, leading gains on the Milan bourse, while Telecom Italia shares are down 2.9%. Capitalization of the British retailer Frasers Group rose by 3.5% after the company announced a share buyback worth up to 80 million pounds ($96.26 million). Quotes of Commerzbank AG fall by 2.7%. As reported, the shares of Germany's second-largest bank will be included in the calculation of the main German stock index DAX 40 from February 27 instead of the papers of the chemical company Linde, according to a report by Deutsche Boerse AG, operator of the Frankfurt stock exchange. French supermarket chain Carrefour jumped 8% in market value to lead growth in the Stoxx Europe 600 index. The retailer reported annual revenue of more than 90 billion euros and recorded an 11% increase in like-for-like sales in the fourth quarter of last year. The decline leader in the Stoxx Europe 600 is Raiffeisen Bank International, shedding 7.6%, while the gainer was led by French medical equipment maker Orpea S.A., which jumped 17.7%   Relevance up to 03:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313412

Summary:  European equities have not been this hot among investors since 2007 before the US equity market entered their golden era of digitalisation sweeping the world and conquering global equity markets. The comeback of the physical world plays into the advantage and composition of the European equity market. In today's equity note we provide an extensive overview of how Europe's equity market is constructed and how it differs from the US equities, and also why they are more interesting for investors amid the comeback of the physical world. Executive summary European equities have previosly outperformed US equities over long periods of time, but the relentless bull market in US technology stocks over the past 13 years has erased our memory of European equities being an interesting market. But since October last year, European equities have significantly outperformed US equities and clients are most interested than ever. This equity note aims to provide an extensive overview of European equities. The three main points are: Europe lost the digital technology race to the US and with it a 13-year long period of significant underperformance, but since October 2022 things have turned around and maybe we are in the early inning of Europe’s comeback. European equities have 20 supersectors and the diversification of European equities is much better compared to US equities. European equities are cheaper relative to US equities and they have recently improved their operating margins while US equities have seen a significant margin compression. The lost technology revolution Life used to be good in European equities with the continent’s equity market outperforming its nearest competitor across the Atlantic ocean. European equities outperformed US equities from December 1969 to October 1990 in USD terms by 2.7% annualised. The end of that period marked the transition period into the age of digitalisation which was a natural extension of the developments in semiconductors, CPUs and the first versions of an operating system for computers. During the 1990s, the Internet came to live for the ordinary person and the first pure digital companies outside software companies were born including Amazon in 1994. During the 1990s, the US economy began to accelerate faster than the European economy and the Internet boom in Silicon Valley accelerated into the first big bubble in US equities since the ‘Nifty-Fifty’ days in the 1960s. From October 1990 to June 1999 the US equity market outperformed European equities by 6.4% annualised putting US equities on the map in a way not seen in decades. During the subsequent period until November 2007, European equities outperformed again driven by the credit boom, post euro adoption leading to inflows of capital, Chinese driven commodity supercycle, and the first sizeable export boom to the roaring tiger economies in Asia. In November 2007, the US equity market reached its all-time relative low against European equities since December 1969. From November 2007 to October 2022 was a one-way highway for US equities as the digitalisation accelerated at an ever increasing speed with technology giants such as Microsoft, Apple, Amazon, Nvidia, Alphabet (parent company of Google), Meta (parent company of Facebook), Salesforce, and Adobe conquering the world of the digital age. US equities outperformed European equities by a staggering 7.5% annualised outpacing even the run-up to the Dot-Com Bubble. The technology race was effectively lost by Europe many years before this period, but the ultimate crystallisation for investors was during this period. Nobody wanted to touch Europe. It was the old sick man of the global economy according to investors. Silicon Valley was where the returns were to be made. European equities have outperformed US equities by 16.7% since October 2022 with the outperformance this year being 3.9% in USD terms. This significant comeback for European equities have made our clients more interested in European equities and wanting to understand this market. If we are right about the renaissance of the physical world as outlined in our Q1 Outlook, then European equities could continue to outperform. Understanding the European equities and the STOXX 600 Index The European equity market is the second largest combined equity market in the world with the STOXX 600 being the leading benchmark index consisting of the 600 most liquid equities in Europe. The STOXX 600 Index had market capitalisation of €12.7trn on 31 January 2023 compared to the S&P 500 total market capitalisation of around €32.8trn, so almost three times larger. The four largest country weights in the STOXX 600 Index are Great Britain, France, Switzerland, and Germany, and the largest sector being the health care sector. This is also evident in the top 10 components list where four health care companies are on the list (Novo Nordisk, Roche, AstraZeneca, and Novartis). The three biggest individual index weights are Nestle, ASML, and LMVH. Source: stoxx.com Source: stoxx.com Europe’s supersectors The STOXX 600 Index divides its constituents into 20 supersectors defined by the Industry Classification Benchmark (ICB) which can be seen in the table below. The STOXX 600 Index is a free-floating market weighted index and thus we have used the free-float market cap which sums to €9.7trn which is lower than the previously stated market cap. The reason is that free-float market cap only measures the shares that are part of the securities markets. Some shareholders have a more permanent status and are thus not available for sale in public markets. In terms of number of companies the biggest supersector is the Industrial Goods and Services consisting of 103 companies with the three largest being Siemens, Schneider Electric, and Airbus. The most profitable supersector measured by the return on equity (ROE) is Media with a ROE of 43.9%. The three largest companies in the media supersector are RELX, Wolters Kluwer, and Publicis Groupe. In terms of earnings growth over the past year the winner has been energy with earnings per share up 225%. Europe’s three largest energy companies are by far Shell, BP, and TotalEnergies. The most expensive supersector measured by the 12-month forward P/E ratio is Consumer Products and Services and the largest companies in this supersector are LVMH, L’Oreal, and Richemont. A significant contributor to Europe’s outperformance since October 2022 has been luxury stocks which are part of this supersector as investors have looked for good bets on the Chinese reopening post its zero-Covid policy. Interested readers can read our equity note from 17 February on the global luxury industry which is dominated by European companies. The most cheapest supersector measured by the 12-month forward P/E ratio is Automobiles and Parts and the largest companies in this supersector are Mercedes-Benz, Stellantis, and BMW. A more diversified and cheaper equity market Another interesting observation on European equities is the huge difference in GICS sector weights between the STOXX 600 and S&P 500. The biggest difference is in Information Technology with a 19%-points difference. US equities also have a higher exposure to Communication Services which includes media related companies such as Meta. European equities have a higher exposure to Financials, Industrials, Consumer Staples, and Materials (mining and chemical) which are all tangible-driven sectors. If we are right about reshoring, the geopolitical trajectory of the world splitting into two value systems, the green transformation and the tight supplies of key metals such as copper, the need for massive infrastructure spending then European equities should in theory outperform US equities. What we also observe is that European equity markets are more diversified and using the Herfindahl-Hirschman approach of comparing sum of squared weights we can conclude that US equities are 19% more concentrated on sector level than European equities. Being overweight US equities is essentially a significant active bet on technology companies to continue outperforming. Another positive factor for European equities in 2023 is that forward valuations are much more intriguing with STOXX 600 trading at 13.2x on 12-month forward EPS compared to 17.8x for the S&P 500. In other words, US equities are valued at a 35% premium to European equities. Which is still in the highest percentiles of the US valuation premium range since 2008 and a convergence of equity valuations back to the historical average should provide tailwind for European equities. A key driver to close the valuation premium gap is to close the operating margin gap between US and European companies which has been significant since 2009, but over the past year with the comeback to tangible-driven industries Europe has closed a big part of that gap.   Source: European equities A rising phoenix or a continuous fall | Saxo Group (home.saxo)

Summary:  Today we discuss the lack of conviction in the market after the action spilled lower below the 200-day moving average but failed to follow through and backed up to close the session higher, despite fresh pressure from rising yields, as the 10-year treasury benchmark took out the 4.00% level. In equities, a breakdown of what European equities have to offer relative to US equities. In commodities, focus on gold and natural gas. A look at the week ahead calendar for both earnings and especially macro as well. Today's pod features Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Neither bulls nor bears have conviction here. Week ahead a big one for macro | Saxo Group (home.saxo)

Despite another week of rising yields, European markets still managed to finish last week higher over concern that various inflation measures are starting to tick back higher again, having been in decline over the last few months.   The German DAX had a particularly good week posting its highest daily and weekly close in over a year, as confidence over falling energy prices and a more resilient global economy as China's economy reopens helps to foster a slightly less negative outlook about growth prospects.     The FTSE100 found itself lagging weighed down by underperformance in some of its more defensive names.      US markets also managed to finish the week higher, breaking a losing streak that had lasted three weeks in a row. Both the S&P500 and Nasdaq 100 managed to rebound after finding support at their respective 200-day SMA's.   Friday's rebound came against a backdrop of a sharp decline in US 10-year yields which fell back from their highest level since November, above 4%. Friday's ISM services report showed little sign that the big rebound in the US economy in January was a one-off, with the headline number falling slightly to 55.1, from 55.2, with further gains in employment to 54, and new orders rising to 62.4.   Prices paid did slow, but still remained high at 65.4.   As a leading indicator for this week's delayed non-farm payrolls number for February, it's a further indication that the US labour market continues to remain very resilient, with ADP and job openings (JOLTS) data also likely to add insight.     As we look ahead to this week the main focus, apart from Wednesday's ADP, and Friday's payrolls report, will be on Fed chair Jay Powell's testimony to US lawmakers tomorrow and Wednesday where he is likely to be quizzed on how he sees the US economy in light of recent strong data, and what measures the Fed might feel inclined to take if the data continues to come in strong.   It's unlikely that he will give too many clues given how close to the next meeting we are, and the main takeaway is likely to be data dependence, however, don't be surprised if markets pore over every single nuance just so that they can reinforce their own particular mindset.   We do have two other important rate decisions this week, namely from the RBA tomorrow, and the Bank of Canada on Wednesday, where the central bank may have cause to rue their decision to signal a pause at their last meeting given the strength of recent economic data.   Over the weekend the Chinese government signalled that this year's GDP target would be 5%, which comes across as a little on the low side given that last year saw a 5.5% target under more difficult circumstances. It's also potentially disappointing when it comes to the prospects for global GDP as a more restrained China means less potential for demand.   The lower-than-expected target might also suggest that Chinese officials are less likely to push stimulus into the economy as it strives for stability over anything else.   It could also be an acknowledgment that recent protectionist measures have damaged confidence in China as an investment opportunity, and consequently, investors could well be more cautious over the next 12 months.   This less-than-ambitious target appears to be weighing on commodity prices with Asia markets broadly positive as we look ahead to the start of today's European session, and a positive start to the week.   EUR/USD – struggled to get above the 1.0700 area last week but has remained above the bullish reversal of last Monday at the 1.0530 area. We need to push through the 50-day SMA at 1.0730 to open up 1.0820. While below 1.0730, the bias remains for a test of the January lows at 1.0480/85. GBP/USD – last week saw us ping between the 1.1920 area and the 200-day SMA, and the 50-day SMA at 1.2150 which remains a key resistance area. A break of 1.1900 retargets the 1.1830 area, while a break of the 1.2150 area is needed to retarget the 1.2300 area. EUR/GBP – failed to push above trend line resistance at 0.8900 from the January peaks last week. Above 0.8900 targets the 0.8980 area. We need to push below support at the 0.8820/30 area to retarget the 0.8780 area. USD/JPY – the failure to push through the 200-day SMA at 136.90/00 last week has seen the US dollar slide back. Support comes in at the 135.20 area. We also have interim support at 133.60. A break above 137.00 could see a move to 138.20.   FTSE100 is expected to open 5 points higher at 7,952 DAX is expected to open 47 points higher at 15,625 CAC40 is expected to open 37 points higher at 7,385 Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

Growing sales of electric vehicles — which typically use more semiconductors than their gas-powered counterparts — coupled with greater automation of all vehicles have kept car chip makers busy. Car chip boom Chip executives say the increase in the number of chips going into cars is staggering. As of 2021, the average car had about 1,200 chips, twice as many as in 2010, and that number is only likely to increase. Companies including Dutch automotive chip company NXP Semiconductors, German Infineon Technologies AG , Japanese Renesas Electronics Corp., an American company Analog Devices Inc. and Texas Instruments Inc. recently reported growing sales in its automotive divisions and made good forecasts for this year. NXP's automotive chip sales grew 25% last year, and the company expects about 15% growth in the first quarter of this year. Renesas' automotive business grew nearly 40% last year, and analysts expect more growth this quarter. Analog Devices, which accounts for nearly a quarter of its sales in the automotive industry, posted 29% growth in this segment last year. It's not just the cars themselves that are using more and more chips; as will vehicle manufacturing as manufacturers introduce more automation to deal with labor shortages and try to cut costs, semiconductor executives said. Car chip resilience comes despite a historic drop in car sales last year, which was the lowest in more than a decade in the US. Sales have been hampered by supply chain issues, including a lack of chips necessary for a new generation of cars with a range of digitally enhanced features, from driver assistance technology to automatic windshield wiper control. The increased digitization of cars means that even lower vehicle sales do not reduce the demand for car chips. Prospects of EV market Long-term EV market outlook looks solid, Tesla Inc. hinted last week as chief executive Elon Musk detailed plans for his car company to increase sales to 20 million vehicles a year by 2030, up from around 1.3 million in 2022. Electric vehicle sales surpassed a global milestone last year, reaching around 10% market share for the first time. While EVs still represent a fraction of U.S. car sales, their share of the overall market is becoming significant in Europe and China. Tesla is still the dominant manufacturer of electric cars in the world, but conventional carmakers are reducing their lead with new electric models. European carmakers have focused their production and sales of electric vehicles on domestic markets in an effort to meet EU emissions regulations. They also began a more aggressive expansion of their electric vehicle business in other major markets last year, especially China and the US. Declines in other sectors of chipmakers The boom in automotive chips contrasts with sharp declines in other sectors of chipmakers whose products end up in electronics closely tied to consumer appetites. Intel Corp. , the largest U.S. chip maker by revenue, reported a loss in the fourth quarter and expects another loss this quarter, hit by a weakening demand for personal computers that house its chips. Rival Advanced Micro Devices Inc. is also battling a volatile PC market where industry-wide shipments are expected to fall by 12.5% this year, according to recent Morgan Stanley estimates. Qualcomm Inc., known for its mobile phone chips, illustrates how some chip vendors feel both sides of market dynamics. The company saw an 18% drop in mobile phone revenue in the last fiscal quarter. NXP Semiconductors N.V. share prices NXP shares have been up since Feb 24. from 176.86 to 182.96. By comparison, Renesas shares also rose to 6.72, a record high in more than 10 years. Infineon Technologies shares also rose to 36.63 after falling to 35.43. Source: wsj.com, finance.yahoo.com

Summary:  DAX cancelling down trend build up. Uptrend could be extended.FTSE 100 and FTSE 250 range boundWith levels on GER40, UK100 and UK250MID Today's Saxo Market Call podcast.Today's Market Quick Take from the Saxo Strategy TeamDAX broke below lower rising trend line last week only for buyers to lift it back above cancelling the bearish break out. Testing February peak the Index is set for higher levels.RSI still showing divergence since January but is now back above 60 supporting the bullish move. If closing above 15,659 uptrend is confirmed and DAX is set for a push to all-time highs around 16,290. Minor resistance at 15,736.For DAX to turn bearish a close below 15,150 is needed Source all charts and data: Saxo Group The GER40 cfd is within a few cents of the February peak at 15,656. A close above will confirm uptrend has resumed despite divergence on RSI. An uptrend that will likely take GER40 to all-time high level around 16,298. Minor resistance at 15,738. For GER40 to turn bearish a close below 15,231 is needed. FTSE 100 is holding up above 7,850 support. A close below FTSE will confirm a down trend possible taking the Index down to around 7,708.Until that scenario plays out the uptrend is intact. However, RSI is showing divergence indicating a correction should be expected. UK100 cfd levels. Support at 7,848 and 7,700. Uptrend is intact until a break below 7,848. FTSE 250 still range bound between 19,574 - 19,938. A close below 19,574 i.e., the Neckline will confirm the Shoulder-Head-Shoulder pattern to unfold with potential down to 18,500. A close above the uptrend is likely to resume. Levels on UK250MID cfd RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend   Source: Technical Update - DAX, FTSE 100 & FTSE 250 | Saxo Group (home.saxo)

We could see some relief, and correction after two difficult days for risk assets, but investors will likely refrain from opening fresh positions before Friday’s US jobs data, because only God knows what could happen when the data falls in. Risks are two-sided, as soft data could easily spur a risk rally. Watch the full episode to find out more! 0:00 Intro 0:42 Why European stocks should’ve reacted more to the hawkish Powell? 3:53 Powell’s attempt to cool Fed hawks was spoiled by fresh data 6:43 Catch your breath before Friday’s US jobs data 7:42 Wasn’t gold supposed to have a good year? 8:32 Crude oil sold after hitting 100-DMA 9:48 Chinese inflation slows… 10:09 The ’ TikTok bill Ipek Ozkardeskaya 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. #Fed #Powell #testimony #inflation #jobs #economic #data #USD #EUR #XAU #Crude #oil #Occidental #Petroleum #China #TikTok #ban #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH