s&p 500

S&P 500 bulls didn‘t look back, and the credit markets spurt at close confirmed. The VIX is getting serious about reaching for early Sep lows, and it shows in the sharp upside reversal of value. The tech upswing hasn‘t been sold into either, and the overall picture is of improving market breadth. Such was my assessment going into yesterday‘s session: (…) So, how far could the bulls make it? 4,420 is one resistance level, and then prior local highs at 4,470 await. The fate of this correction is being decided right there, and it‘s my view we have lower than 4,260 to go still. Therefore, I‘m taking a big picture view, and that is one of continuous inflation surprises to the upside forcing the Fed to taper, which it may or may not do. The policy risks of letting inflation run wild are increasing, so the central bank would find it hard not to deliver fast – the market would consider that a policy mistake. The tone of yesterday‘s FOMC minutes has calmed the Treasury market jitters, and the dollar succumbed. So did inflation expectations, but the shape of the TIP:TLT candle suggests that inflation isn‘t done and out. The Fed is in no position to break it, supply chain pressures, energy crunch and heating job market guarantee that it will be stubbornly with us for longer than the steadily increasing number of quarters Fed officials are admitting to. Counting on the Fed being behind the curve, inflation has the power to derail the S&P 500 bull run – the more so it runs unchecked. The 1970s stagflation brought several wild swings, cutting the index in half as it spent the decade in a trading range. And given the breadth characteristics of the 500-strong index these days, the risks to the downside can‘t be underestimated. What‘s my target of 4,260 in this light? Let‘s consider that from the portfolio point of view – purely stock market traders might prefer to short exhaustion at 4,420 or the approach to 4,470, or balance the short position‘s risk in the stock market with precious metals, cryptos and commodity bets they way I do it – and it‘s working just fine as the precious metals and crypto positions do great while I‘m waiting for retracement in oil and copper (in price or in time). Let‘s check that against the following market performance – bonds aren‘t throwing a tantrum anymore, and continue being pleased by the Fed‘s pronouncements. Inflation expectations haven‘t been revolting over the last three days either. S&P 500 has a great chance of confirming the break back above the 50-day moving average. Neither oil nor copper have offered a reasonably modest retracement of their recent upswings (orderly in the former, stellar in the latter). Reassessing the developments way earlier today (have you already subscribed to enjoy the real-time benefits?) – both from the total portfolio and stock market point of views – has unequivocally led me to join the profitable bullish S&P 500 side (the upswing is likely to easily overcome 4,470s and then 4,510s too) and enjoy the meteoric long copper gains. This represents more conviction behind the still rising tide of accomodative monetary policy (undaunted by the taper prospects, crucially) that is likely to keep positively affecting the open precious metals positions, and further extend the extraordinary crypto gains. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 early stage bullish upswing goes on, and the next two days are likely to confirm – the cyclically sensitive sectors are behaving favorably. That‘s consumer discretionaries, financials and real estate. Credit Markets Quality debt instruments and HYG are rebounding accordingly, and I like particularly the HYG strength. Gold, Silver and Miners Gold is having trouble overcoming $1,800 but miners and silver are saying the issues are only temporary. Lower volume and lower knot yesterday mean that a brief consolidation is likely ahead. Crude Oil Crude oil consolidation in a very narrow range is likely to give way to price gains extension, if oil stocks are to be taken seriously. Likely, they are to. Copper Copper steep upswing continues unabated, and volume isn‘t drying up. Just as in the CRB Index, the path of least resistance is up – and continued copper outperfomance in the face of downgraded economic growth, is the most encouraging sign. Bitcoin and Ethereum The expected crypto pause came, and is again gone. Fresh highs await, and Ethereum is closer to these than Bitcoin is. Summary Stock market rebound has good odds of extending gains, but the most profitable case is to be made when it comes to commodities, cryptos and precious metals. Finally, if ever so slowly, the truth about no transitory but permanently elevated inflation that I had been hammering since early spring, is being acknowledged by even the Fed officials for what it is – let alone the banking sector. Remember, we‘re getting started, and I wouldn‘t be surprised if 5-7% inflation rates were being the predictable, ongoing result. At the same time, inflation isn‘t yet strong enough to force S&P 500 into a bear market, let alone extend the way less than 10% correction just experienced. The path of slowly but surely increasing resistance in the S&P 500 remains up for now as the break above 50-day moving average foretells. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co * * * * * All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

S&P 500 upswing continues, and is dealing with the 4,470 resistance – but the credit markets don‘t confirm. Still, that‘s rather a sign of stock market strength than of pending doom. The break back above the 50-day moving average has very good odds of sticking, and the sectoral performance bodes well for further advances. Financials and consumer discretionaries liked the daily upswing in yields while tech and real estates fared well regardless. VIX is likely to probe even lower values, it seems. So, the open S&P 500 long position is working out well, and will likely continue to do so as higher yields just can‘t help the dollar rise. Inflation expectations are again turning up as we have moved from 1H 2021 Fed saying that inflation was transitory to the current phrase that inflation is transitory, but would last longer than we though. The next stage (arriving latest in Q1 2022) will likely be that inflation is sticky but we have tools to deal with it, followed by putting up a happy face that it‘s a good thing we have inflation after all. Silver will likely keep leading gold, and the nearest target for the gold to silver ratio is 73. Crucially, miners keep confirming the upswing, and the copper example bodes well for silver as both metals are essential for the green economy, talking which means that crude oil is also likely to keep rising. Time to extend the commodity profits even more at a time when crypto gains keep doing great. Reflation is slowly giving way to stagflation – GDP growth is slowing down while inflation isn‘t disappearing, to put it mildly. The copper upswing isn‘t so much a function of improving economy prospects but of record low stockpiles. Anyway, much more to look for in the commodities and precious metals bull markets that are likely to appreciate much more than stocks this decade. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook   S&P 500 again gapped up and closed at daily highs – the path of least resistance remains up. Credit Markets Debt instruments declined across the board, showing that adjusting to unyielding inflation takes precedence over raging approval of growth prospects. Gold, Silver and Miners Gold is having trouble overcoming $1,800, but I‘m looking for it to reverse Friday‘s decline before too long if silver and miners are any clue. Crude Oil Crude oil again continues extending gains while oil stocks confirm – dips are to be bought as $90 look to be taken on still this year. Copper Copper steep upswing was finally sold into, a little. Sideways consolidation of the high gained ground looks to be most probable next, followed by even higher prices. Bitcoin and Ethereum Weekend consolidation of crypto gains continues today, and is likely to give way to the bulls reasserting themselves – further gains are ahead. Summary Stock market rebound is likely to continue once HYG kicks in, and overcome 4,520 as the Fed‘s perceptions management regarding inflation seems to be working – Treasuries have mostly bought it, but I‘m looking for the long end of the curve to do particularly poorly. At the same time, inflation isn‘t yet breaking the stock bull run – new highs are ahead this year still, but the same goes for spending some time then in a trading range. Commodities and precious metals led by silver are best positioned to rise once the Fed moves to the above described fresh rationalization as to why inflation is running so hot. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you,   Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co   * * * * * All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

S&P 500 keeps grinding higher, beyond 4,520 towards fresh ATHs. The VIX is approaching 15, and that means some volatility is likely to return as the current lull won‘t last indefinitely. Yields are steadily rising again, in line with my prior thesis of a summer lull followed by renewed march higher – the 10-year is at 1.65% already, but inflation expectations aren‘t as raging yet as in May when a similar rate was hit (this is part of the explanation why gold is lagging behind currently – it‘s not about hot present inflation figures only). Tech stocks couldn‘t care less – long gone seem the Mar and late Apr woes accompanied by similar Treasury moves. Value is similarly catching fire, and the improving market breadth bodes well for the stock market bulls. Credit markets have turned more constructive since these yesterday‘s words: (…) So far so good, and the stock market run continues without marked credit markets confirmation as the risk-on turn there isn‘t complete (yet). Treasury yields aren‘t retreating, yet tech is the driver of the S&P 500 upswing while value keeps treading water. Encouragingly, financials do well – it‘s cyclicals‘ time, and the open S&P 500 long position is very solidly profitable already. Not only that stock market profits are growing, I‘ve cashed some nice long copper profits before the overnight dive well below 4.70. Both crude oil and natural gas look like taking a breather – shallow one in case of black gold, and one probably more protracted around the 5.00 level (50-day moving average essentially) in case of its more volatile cousin. Cryptos open profits also keep doing great – there is no correction attempt to speak of really. Coming full circle to precious metals, all that‘s needed is one serious Fed policy misstep. Just imagine if they didn‘t deliver on Nov taper, or if the rate raising speculation was promptly snuffed while inflation fires just kept burning (no, this can‘t be blamed on supply chains really). The Fed is though well aware of market expectations that they themselves had been feeding since Jun. Still, they‘ll in my view easily make the Monday discussed intentional „mistake“: (…) we have moved from 1H 2021 Fed saying that inflation was transitory to the current phrase that inflation is transitory, but would last longer than we though. The next stage (arriving latest in Q1 2022) will likely be that inflation is sticky but we have tools to deal with it, followed by putting up a happy face that it‘s a good thing we have inflation after all. Reflation is slowly giving way to stagflation – GDP growth is slowing down while inflation isn‘t disappearing, to put it mildly. The copper upswing isn‘t so much a function of improving economy prospects but of record low stockpiles. Anyway, much more to look for in the commodities and precious metals bull markets that are likely to appreciate much more than stocks this decade. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 gapped again higher, and the steady move upwards continues – still without obstacles. Credit Markets Debt instruments have turned to risk-on, confirming the stock market advance. Rising yields don‘t look to be a problem for now. Gold, Silver and Miners Gold upswing hasn‘t been dashed, but merely delayed – the rest of the precious metals sector isn‘t as weak, and that‘s to be expected. Crude Oil Crude oil again didn‘t correct, and oil stocks didn‘t even pause yesterday – but as the pace of price increases is slowing down, the shallow downswing looks very much approaching (if not here already). Copper Copper is ready to consolidate prior steep gains, and its correction would likely be a sideways one not reaching overly far. Then, even higher prices await. Bitcoin and Ethereum Crypto gains consolidation with an upward bias continues today, and further gains are ahead – just like I wrote yesterday. Summary Stock market rebound goes on, practically nibbling at 4,520. Fresh ATHs are approaching, but given the ascent‘s pace and VIX, aren‘t probably a matter of a few short days. Still, the overall momentum is on the bulls‘ side as credit markets have also turned risk-on yesterday. Commodities aren‘t selling off in the least, but a brief oil and copper consolidation is likely now. Gold seems waiting for a dual confirmation of declining dollar and nominal yields, while silver isn‘t waiting – and it shouldn‘t as the white metal would be leading this unfolding upswing. Cryptos aren‘t hesitating either. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co   * * * * * All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

Stocks prices got even higher yesterday, as investors reacted to corporate earnings releases. Will the S&P 500 reach the new record high? The S&P 500 index gained 0.74% on Tuesday, Oct 19 after breaking above the 4,500 price level. The broad stock market’ s gauge went closer to its Sep. 2 record high of 4,545.85. The quarterly corporate earnings releases are positive for the market and they are only starting to gain traction. Today we will get the TSLA earnings release and tomorrow INTC, among others. The market seems overbought in the short-term. However, there have been no confirmed negative signals so far. The support level is now at 4,485-4,500, marked by the yesterday’s daily gap up of 4,488.75-4,496.41 and the previous resistance level. The next support level is at 4,440-4,450, marked by the last Friday’s daily gap up of 4,439.73-4,447.69. On the other hand, the resistance level is at 4,525-4,555, marked by the previous local highs and the early September topping pattern. The S&P 500 extends its advance after breaking above a month-long downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Let’s take a look at the Dow Jones Industrial Average chart. The blue-chip index broke above its over month-long downward trend line on Thursday, and on Friday it accelerated up above the 35,000 mark. Now, the nearest important resistance level is now at 35,500, marked by some previous local highs. The resistance level is also at the record high level of 35,631.19, as we can see on the daily chart: Apple’s Relative Weakness Apple stock weighs around 6.1% in the S&P 500 index, so it is important for the whole broad stock market picture. The stock broke above its short-term resistance level of around $144-145. The nearest important resistance level is at $148-150. The stock is relatively weaker than the broad stock market, as it’s still trading below the July-August local highs. Futures Contract Gets Closer to the Record High Let’s take a look at the hourly chart of the S&P 500 futures contract. On Friday, the market broke above its downward trend line and it broke above its previous local high of around 4,470. The nearest important resistance level is now at around 4,520-4,550, marked by the early September topping pattern. In our opinion no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index further extended its uptrend yesterday, as it broke above the 4,500 level. It’s getting closer to the Sep. 2 record high of 4,545.85. The market seems overbought in the short term. However, the coming quarterly corporate earnings releases (today it’s TSLA, and INTC on Thursday, among others) are supporting buyers here. Today the market is expected to open virtually flat and we may see an intraday consolidation along the 4,500 level or a downward correction. The risk/reward perspective seems less favorable right now and no positions are currently justified. Here’s the breakdown: The S&P 500 extended its short-term uptrend on Tuesday again, as it broke above the 4,500 level. We are waiting for a more favorable risk/reward situation and will probably enter a new speculative short position in the near term. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak, Stock Trading Strategist Sunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

The US dollar steadies over lower-than-expected initial jobless claims. Sentiment remains upbeat, however, the pair is struggling to climb past the psychological level of 115.00, probably due to overextension. The RSI’s double top in the overbought area and bearish divergence suggests that the rally could be losing steam. A breach below 113.90 would prompt weaker hands to exit, leading to a pullback towards 113.00. A rebound past the said resistance would send the price to March 2017’s high of 115.40. XAGUSD to test critical ceiling Silver stalls as the greenback reclaims some lost ground. The break above the round number of 24.00 indicates strong commitment from the buy-side. The bulls are looking at the major resistance at 24.80 from the daily timeframe, as a breakout would end a five-month-long correction and pave the way for a bullish reversal. However, an overbought RSI coupled with a bearish divergence suggests possible exhaustion in the run-up. 23.60 would be the first level to watch for if the price pulls lower in search of support. SPX 500 tests all-time high The S&P 500 flies high supported by better-than-expected third-quarter earnings. The index has reached the previous all-time high at 4550. A breakout may trigger a runaway rally. Nonetheless, a repeatedly overbought RSI may cause a limited pullback as buyers take profit. A drop below the immediate support at 4515 would pull the trigger. 4445 would be next as it coincides with the 38.2% Fibonacci retracement level of the October rally. The bulls are likely to buy the dips though after sentiment turns optimistic.

S&P 500 indeed overcame 4,520, but wavered at the same time – tech didn‘t rise. Volatility though remained meek, inching ever closer to 15, and the option traders also look a bit too complacent at the moment. A modest correction of recent sharp gains is the most likely scenario, especially since rising yields didn‘t sink tech even on a daily basis. Inflation expectations though have risen again, and that‘s tailwind for precious metals, which have taken advantage thereof just as much as of the declining dollar. The yesterday discussed dynamic of yields – inflation – inflation expectations and by extension the dollar, is playing out. So, the open S&P 500 long position remains solidly profitable while precious metals posture is improving, and commodities are entering a brief consolidation. Still, the yesterday open oil position is nicely in the black too, let alone crypto ones. Remembering yesterday‘s words: (…) Coming full circle to precious metals, all that‘s needed is one serious Fed policy misstep. Just imagine if they didn‘t deliver on Nov taper, or if the rate raising speculation was promptly snuffed while inflation fires just kept burning (no, this can‘t be blamed on supply chains really). The Fed is though well aware of market expectations that they themselves had been feeding since Jun. Still, they‘ll in my view easily make the Monday discussed intentional „mistake“ of attempting to pretend readiness to deploy tools to fight it (pretend is the key word), and finally spin inflation as something good. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 gapped a little higher again, but has met some selling into the close – consolidation looks to be ahead. Credit Markets Credit markets are still risk-on, but likely to take a breather, and that‘s likely to entail a pause in rising yields. Gold, Silver and Miners Gold and silver are swinging higher, and miners are on the move too – $1,800 awaits again. Should a whiff of risk-off indeed arrive, look for silver to waver more than gold. Crude Oil Crude oil intraday dip was again bought – too much and lasting downside isn‘t yet to be expected really. It‘s likely to remain a primarily sideways move before another upswing. Copper Copper smartly recovered, but perhaps a bit too fast – the prior two days‘ hesitation though means it won‘t likely keep the downside in check as well as oil did. Bitcoin and Ethereum Crypto gains are being consolidated, and the bears are finally stepping in – the lower knot shows that a downswing targeting $62-60K in Bitcoin might very well develop. Summary Stocks are likely to consolidate prior sharp gains before taking on the ATHs. Depending upon the credit markets risk-off breather I anticipate, the S&P 500 might retreat noticeably below 4,520, but this wouldn‘t mean the end of the upswing. The overall momentum remains on the bulls‘ side, including in commodities undergoing a brief (oil and copper) consolidation. Gold was indeed waiting for a dual confirmation of declining dollar and nominal yields, while silver wasn‘t cautious – and it shouldn‘t as the white metal would be leading this unfolding upswing. Finally, cryptos daily hesitation is adding to the mounting risk-off move odds.   Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.   Thank you,   Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co   * * * * * All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

With the S&P 500 back at its all-time highs, gold stopped lagging behind. However, how long can this unsustainable growth last? The FOMO Rally While the S&P 500 has demonstrated a resounding ability to shake off bad news, an epic divergence has developed between positioning and economic expectations. And while ‘fear of missing out’ (FOMO) keeps sentiment near the high-end of its range, Q3 GDP growth is projected near the low-end of its range. For example, while the Atlanta Fed’s third-quarter GDP growth estimate was north of 5% in early September, the bank reduced the estimate to 1.3% on Oct. 5. Moreover, with the outlook even worse now, the Atlanta Fed cut its Q3 GDP growth estimate to 0.5% on Oct. 19. Please see below: To explain, the blue line above tracks the Blue Chip consensus GDP growth estimate for the third quarter, and the shaded blue area represents the range of economists’ estimates. If you analyze the depth, you can see that economists expect a print in the ~2% to ~5.5% range. In stark contrast, the green line above tracks the Atlanta Fed’s GDPNow estimate – which has sunk like a stone and now implies 0.5% GDP growth in the third quarter. What’s more, Bank of America also released its latest Global Fund Manager Survey on Oct. 19. And with institutional investors increasing their equity exposure when their economic expectations have turned negative for the first time in 18 months, FOMO is now on full display. Please see below: To explain, the dark blue line above tracks the net percentage of respondents that are overweight equities, while the light blue line above tracks the net percentage of respondents that expect stronger economic growth. If you analyze the right side of the chart, you can see that intuitional investors’ equity positioning still far exceeds what’s implied from economic growth prospects. As a result, if the dark blue line moves lower and reconnects with the light blue line, plenty of sell orders will hit the market. On top of that, with stagflation fears now front and center, institutional investors are hitting the bid even when their better judgment tells them otherwise. Please see below: To explain, the dark blue line above tracks the net percentage of respondents that expect above-trend growth and above-trend inflation, while the light blue line above tracks the net percentage of respondents that expect below-trend growth and above-trend inflation. If you analyze the red circle on the right side of the chart, you can see that growth-with-inflation prophecies are losing momentum (the dark blue line), while fears of low growth and persistent inflation are increasing (the light blue line). Will We See an Inflation Miracle? Moreover, with the Fed stuck between a rock (high inflation) and a hard place (weak growth), the margin for error has dwindled and one policy mistake could bring down equities’ entire house of cards. To that point, while I’ve been warning for months that the Fed was (and still is) materially behind the inflation curve, FOMC officials aren’t the only ones displaying inflationary anxiety. Please see below: To explain, inflationary concerns have surged in October. And while the spread between institutional investors’ concerns over “Inflation” and the “Fed taper” is quite the oxymoron, persistent inflation makes another hawkish surprise even more likely. Moreover, with the death of QE unlikely to solve the inflationary conundrum on its own, the Fed will likely forecast further tightening in 2022. To that point, slowly but surely, institutional investors are waking up to this reality. For context, Q3 earnings calls have been riddled with mentions of inflation and many CEOs that dabble in real goods have projected a further acceleration in 2022. As a result, with the “transitory” camp now suffering a death by a thousand cuts, it will likely take a miracle for the Fed’s 2022 inflation forecast to come to fruition. To explain, 69% (28%) of respondents viewed inflation as “transitory” (“permanent”) in September. However, the script has flipped to 58% and 38% in October. As a result, it’s likely only a matter of time before the majority of institutional investors (and the Fed) realize what’s actually happening on the ground. Case in point: Unilever – a consumer goods company with 149,000 employees and 400 brands that operates in more than 190 countries – released its third-quarter earnings on Oct. 21. CFO Graeme Pitkethly said that Q4 price increases should at least rival Q3 and extend into 2022: Source: Reuters Moreover, Unilever CEO Alan Jope told Bloomberg on Oct. 21: “Peak inflation will be in the first half of 2022, and it will moderate as we move towards the second half…. We continue to responsibly take pricing, and that’s in relation to the very high levels of inflation we’re seeing.” The S&P 500 Ahead of a Deep Correction? Furthermore, I highlighted on Oct. 21 that rising commodity prices over the last month should filter into the Commodity Producer Price Index (PPI) and headline Consumer Price Index (CPI) in the coming months. I wrote: The commodity PPI is a reliable leading indicator of the following month’s headline Consumer CPI. And if the former stays flat for the next three months (which is unlikely) – referencing releases in November 2021, December 2021 and January 2022 – the readings will still imply year-over-year (YoY) percentage increases in the headline CPI in the 4.75% to 5.50% range. Furthermore, this is an extremely conservative forecast since the commodity PPI has increased month-over-month (MoM) for the last 17 months. Thus, it’s more likely that the headline CPI rises above 6% YoY than it falls below 4% YoY. To that point, Union Pacific Railroad – a shipping company that operates 8,300 locomotives in 23 U.S. states – released its third-quarter earnings on Oct. 21. And with freight revenue up by 12% and average revenue per car up by 9%, EVP Kenny Rocker said that the results reflected “strong core pricing gains and higher fuel surcharge revenue.” More importantly, though, with the input surge intensifying “over the last 30 days,” the cost-push inflationary spiral remains alive and well, and it signals something important. Source: Union Pacific Railroad/ The Motley Fool Finally, the reason why inflation is so important in terms of its direct effect on the general stock market and its indirect effect on the PMs is due to the composition of the S&P 500. With information technology and communication services stocks accounting for roughly 39% of the S&P 500’s movement, deflationary assets have been the go-to source for returns since 2009. However, if the “transitory” narrative suffers a painful death, a material unwind could ensure. Please see below: To explain, the “Deflation basket” (the dark blue line) has materially outperformed the “Inflation basket” (the light blue line) since the global financial crisis (GFC). Thus, if surging inflation encourages a reversion to the mean, immense volatility could strike the S&P 500. The bottom line? With investors prioritizing FOMO over fundamentals, the general stock market’s recent uprising has helped uplift the PMs. However, with the Fed losing its inflation battle and the USD Index poised to benefit from more hawkish momentum over the next few months, a profound correction of the S&P 500 will only enhance the U.S. dollar’s already robust fundamentals. Moreover, with the PMs often moving inversely to the U.S. dollar, their performance should suffer along the way. In conclusion, the PMs declined on Oct. 21, as the USD Index regained its mojo. Furthermore, the front-end of the U.S. yield curve surged (2-year yield up by 21% rounded), and the U.S. 10-Year Treasury yield closed at its highest level (1.7% rounded) since Apr. 4. Thus, while the PMs borrow confidence from the S&P 500, their fundamentals are actually deteriorating rather quickly. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFA Founder, Editor-in-chief Sunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Such was the S&P 500 correction, how did you like it? The whiff of risk-off that I was looking for yesterday, was a very shallow one in stocks, and much deeper in real assets. What‘s remarkable about the stock market upswing, is that it was led by tech while value barely clung to its opening values – and yields rose yet again. But the dynamic is supposed to work the other way – even financials felt the pinch, but at least real estate rose. Another characteristic worth noting is that the dollar increased yesterday too, and stocks didn‘t mind. The VIX closed almost at 15, which is its lowest value since the beginning of Jul. S&P 500 indeed didn‘t hesitate at 4,520, and broke above similarly to the prior turning point (that wasn‘t) at 4,420. I‘m letting the open long S&P 500 profits run as rising yields aren‘t yet a problem for stocks, and inflation isn‘t still strong enough to break the bulls‘ back – but inflation expectations keep rising, and that‘s a factor once again underpinning precious metals. When a brief risk-off moment arrives though, commodities are to feel the pinch, and that‘s true also about silver as opposed to gold. Indeed yesterday, the yellow metal did much better than the white one. Copper corrected with a delay to the fresh LME trading measures, and quite profoundly given that the London stockpile represents only a day‘s worth of China factory copper consumption. The dust in the red metal hasn‘t yet settled, but black gold recovered smartly from the steep intraday drop to $81, dealing open oil profits – and the selling in oil stocks looks to be overdone on a daily basis. Finally, the Bitcoin setback I was looking for, happened, but doesn‘t spell the end of the crypto run – more cypto gains to enjoy. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 buyers stepped in right at the opening hours, and the daily candle and volume confirms they have the upper hand. Credit Markets Credit markets turned risk-off, and it‘s especially up to HYG to get its act together. Gold, Silver and Miners Gold paused while silver declined  and miners kept steady – that‘s a reasonably good translation of much deeper commodity woes yesterday. Nothing unexpected, I was looking for silver to be affected more than gold in such circumstances. Crude Oil Crude oil intraday dip was again bought, but the bears have left a better impression than on Wednesday. The proof of a reversal is though still elusive. Copper Copper undershooting Wednesday‘s lows isn‘t a good sign for the short-term – and neither is the rising volume. Short-term outperformance of the CRB Index is also history, and it remains to be seen where would the bulls put up a fight. Bitcoin and Ethereum The bears stepped in some more yesterday, and today‘s upswing is lacking full vigor – the Bitcoin consolidation would likely take a few days. Ethereum still on the rise is a good sign. Summary Stocks have briefly consolidated prior sharp gains, and fresh ATHs are approaching. Credit markets should regain bullish posture as well though – yesterday‘s setback needs to be reversed so as not to be building negative divergences on the way. Precious metals are improving, and stand to benefit while commodities recover from yesterday‘s setback. Much easier in oil than in copper. Cryptos remain largely unaffected, and are set to assume their ascent shortly.   Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.   Thank you,   Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co   * * * * * All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

S&P 500 didn‘t decline much in spite of credit markets favoring a bigger daily setback – is the pendulum about to swing the other way then? It probably is, but it would take a while as I would like to see high yield corporate bonds turn up first. Rising yields are taking a toll on junk bonds as well, yet value stocks managed to eke out some daily gains regardless, and tech didn‘t crater. Bottom line, we saw a daily consolidation, whose key feature was 4,520 support holding up, and that means not too much downside is likely next. VIX was rejected both on the upside and downside, meaning that larger moves aren‘t favored now – and probably won‘t happen on Monday. The slow grind higher in S&P 500 is likely to continue, and the dollar is still in a precarious position – having gone down in spite of increase in yields. Well, inflation remains sticky, and Powell‘s latest pronouncements on Nov taper readiness don‘t pack the same punch as they did in Jun. So, as the Treasury markets revolt over inflation calms down for a while, gold and silver are welcoming more negative real rates. Apart from the miners supporting the upswing (I‘m not too worried about gold giving up much of its intraday gains), commodities continue running. We‘re at a moment of deceptive copper weakness – while the dust hasn‘t settled yet, the red metals is likely to consolidate and rebound next. Crude oil intraday correction didn‘t reach too far, but still triggered taking long oil profits off the table – and the same is true about the long S&P 500 position also. The crypto correction is also turning out to be quite shallow, so let the open profits run. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 didn‘t keep the opening gains, but recovered from the ensuing downswing – the balance of power between the buyers and sellers is likely to carry over into today‘s session. Credit Markets The risk-off posture in bonds would merit an S&P 500 selloff, but that didn‘t happen - and I‘m not looking for stocks to catch up on the downside with vengeance. Gold, Silver and Miners The heavy volume upswing in gold still favors the bulls in spite of the long upper knot – both miners and silver keep pulling ahead, and don‘t forget about ever more negative real rates. Crude Oil Crude oil intraday dip was shallower than on Wednesday and Thursday, and again readily bought. While Monday isn‘t likely to bring stellar gains, the upswing is set to continue. Copper Copper lower knot is a promising sign that finally, the downswing was bought, and the upper knot gives bulls a chance to attempt a reversal soon. Anyway, the rising volume is a positive sign – now, it‘s about follow through. Bitcoin and Ethereum The Bitcoin correction indeed stopped in the $60K region, and joined by Ethereum, cryptos are peeking higher again as Friday‘s decline has been erased. Summary Stocks are consolidating above 4,520, and more likely to go up over the next two days than down. Especially since credit markets will probably turn risk-on now that Powell‘s speech is again over, and didn‘t result in as much temporary selling as prior taper mentions – it‘s that inflation is increasingly biting, and it‘s getting more broadly recognized as not so transitory. The woes are likely to help real assets keep rising – both commodities and precious metals. Look for continued silver leadership accompanied by stock upswings, and for gold performing better during whiffs of risk-off. The run in energy isn‘t over, and that concerns both crude oil and natural gas. Cryptos are well positioned to benefit too.     Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.   Thank you,   Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co   * * * * * All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

Uneventful S&P 500 session, seemingly – and then the selling came. 4,550 barely held and the bond markets aren‘t looking favorable to the bulls. Ultimately, Treasury traders had the last word, snuffing hitherto positively mediocre HYG performance. The dollar didn‘t move much, and as I summed up in the intraday update, risk-off reigned supreme across many assets. The prior mentioned 15 level in VIX held, and we‘re treated to higher volatility now – breaking the 4,550s on a negative earnings surprise (expectations as to forward guidance are quite high, and yesterday‘s selling driven presumably by instituitional players doesn‘t bode well), wouldn‘t be unimaginable – so, I took open long profits off the table. I would like to see yields increasing again, and the yield curve not to be flattening anymore – positive sign thereof would be commodities rising again together with a fresh upswing in inflation expectations after the prior two down days. Such a move would also exert pressure on the dollar, and the high beta stock market sectors with commodities and precious metals would spring to life again. All in all, it looks like we‘re undergoing a soft patch, squaring of bullish bets before the coming Fed Wednesday. Would taper though mark the end of the commodity or precious metals superbull? Hardly. Remember that fresh money isn‘t needed to repair banks‘ balance sheets now, but flows directly into financial markets that are still most attentive to the money spigot. Cryptos are already recovering from yesterday‘s setback, joined by copper bucking the energy downswing, which in spite of the surprise build in oil inventories or Russia riding to Europe‘s natgas rescue, would likely prove temporary. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 setback stopped at a critical level, and it‘ll be shortly decided whether at least somewhat lower prices would arrive – look to credit markets for clues. Credit Markets The day ended with carnage, and not until HYG overcomes yesterday‘s open, can the bulls feel more confident. Not yet out of the danger zone, but it would be worse should the volume be higher. Gold, Silver and Miners Gold buyers timidly stepped in, and an upswing in the miners to confirm, is what we‘re waiting for. Lower yields are here, and a fresh commodities upleg (focus is on  the copper turn), would help as much as a fresh dollar setback. Crude Oil Crude oil bears are sniffing out opportunity, which would be invalidated with a return to the mid $83 zone. Until that happens, get ready for drawn out and tiring moves for the bulls. The energy crunch isn‘t over, and the U.S. economy can and will have to withstand even higher prices. Copper Copper steeply declined, a bit too much over the last 1+ week given the CRB Index performance – a corrective upswing looms, but has to decidedly overcome 4.55 to flip the short-term outlook to bullish again. Bitcoin and Ethereum The Bitcoin and Ethereum bulls are at it again, and lower crypto prices are being rejected – that‘s an encouraging sign going into the Fed next week. Summary Stocks aren‘t likely to fly today as yet another (this time) annualized GDP reading came in at merely 2.0% - with rising input costs from materials to labor, the stock bull run needs to be supported by more positive earnings news. Treasuries are signalling caution ahead, which however shouldn‘t sink either commodities or precious metals. Look for the dollar first to signal weakening of the risk-off positioning.     Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.   Thank you,   Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co   * * * * * All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.  

Wednesday brought us daily consolidation of prior S&P 500 gains, and that‘s a positive outcome for the bulls. Base building at a higher level, if you will, is looking set to continue also today. The credit market performance reveals that it‘s a reasonable expectation, and the internals examination would reveal the details of a coming run higher. Gold paused yesterday, and of course still doesn‘t look ready to rebound. But does it mean it‘s acting consistently weak? No, and today‘s analysis will show that its better days will come – and we won‘t have to wait for all that long. Let‘s dive into the charts (all courtesy of www.stockcharts.com). S&P 500 Outlook Yesterday‘s daily candle was one of hesitation, not marked by any kind of volatile move. The volume also shows that the price moves didn‘t invite much interest to jump in or out. The Force index nicely illustrates the directionless nature of very short-term trading. After the steep correction, it‘s back to neutral, and the muddle through February ahead can really start. Credit Markets and Smallcaps High yield corporate bonds (HYG ETF) continue trading with an upward bias, and the upper knots don‘t frighten me as the swing structure is positive, and there is no retreat to speak of. I see the credit market strength as conducive to further stock gains. The Russell 2000 (IWM ETF) is doing better than the S&P 500, and this is to be expected in a maturing bull market run. I certainly look for smallcaps to outperform the 500-strong index in the first half of 2021. S&P 500 Sectoral Peek Similarly to the S&P 500, technology has been consolidating its gains, yet with a bit more of a bearish flavor. Also the volume overcame Tuesday‘s levels, unlike the declining S&P 500 one. Technology being among the stronger sectors, that‘s what the above chart shows. The rotation into value stocks (as the tech took it on the chin) has failed, and this heavyweight sector (led by $NYFANG) is again leading stocks higher. As we‘re seeing absolutely no signs of broad based sectoral outperformance (which would be followed by less and less advancing issues), the stock bull market is far from making a top. The copper to gold ratio is repeating its December consolidation pattern before launching higher yet again. That‘s a testament to the strength of the economic recovery, which will keep lifting commodities including oil, and also ignite the love trade in precious metals discussed on Tuesday. Gold in the Spotlight Today‘s premarket price action isn‘t a nice sight to the precious metals bulls, as gold is largely mirroring silver‘s losses. But how far can this short squeeze reversal trade run? Can it usher a new downtrend? I don‘t think so. The protracted gold basing pattern I described last Monday, is holding up. What we‘re seeing, is a kneejerk reaction to a 33K drop in new unemployment claims (supportive for risk on assets). Does it mean that we‘re on the doorstep of a strong job market recovery? Given last 6 month payroll developments, it would take us … 5 years to get back to pre-corona levels. This gold chart will get a fresh facelift and a new red candle today. I look for the volume at the close, and the size of the lower knot first before drawing conclusions. Now that prices sunk below $1800, the lower Bollinger Band is getting pushed. Is a new trend starting here? That‘s the key question and I still say no as this (isolated) kind of a strong move meets corrective forces next. The dollar and gold chart shows that the strongly negative correlation is slowly giving way to more indepedent trading between the two assets. Now that the dollar is in a short-term run higher, it‘ll exert less pressure upon the precious metals. Is gold‘s slide today announcing much higher dollar values ahead? The dollar is less than half a percent higher while gold plunged by over two and half percent, which doesn‘t look like a move that can last, based on the fiat currency vs the metal of kings intermediate-term dynamic. Rising yields accelerating their decline in 2021, are another factor of gold‘s short-term headwinds. While I don‘t see yields as falling from a medium- or long-term perspective any time soon, they are set to stop dragging gold to the downside – and the Dec 2020 and also 2021 performance shows that gold buyers are happy to step in and buy the plunge. Gold to corporate bonds ($GOLD:$DJCB) ratio reveals the yellow metal as keeping gained ground. The rising Treasury yields are a manifestation of a large spending bill coming, and deteriorating public finances, which will catch up with the greenback. Summary The stock market recovery got an unemployment claims catalyst, and powers higher instead of more short-term digestion of recent gains. With a few points away from the highs, the talk about a correction will die down now hopefully as the value stocks have quite some catching up to do still. Gold is under short-term pressure, and the comming sessions would show just how much the market thinks the current fall has been overdone. The basing pattern remains unbroken, with technicals and fundamentals in place for the upcoming bull run. Patience is still the name of the game in precious metals currently still. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for both Stock Trading Signals and Gold Trading Signals.

S&P 500 sharply extended gains, and credit markets indicate some continuation even if by pure inertia. A trend in place, stays in place until reversed – and yesterday‘s upswing was sufficiently supported by the credit markets. The late day retreat in HYG is an obvious warning of a pause possibly coming next, but not of a reversal – the improvements in market breadth speak for themselves. So, I‘m looking for a lean day today, and I‘m keenly watching bonds and cyclicals such as financials for further short-term direction clues. While yesterday‘s upswing was driven by tech, the daily rise in yields and inflation expectations (however modest) was balanced out by still more yield curve compression. The risk-on turn in credit markets isn‘t over, and the key question is whether HYG can extend gains or at least go only sideways for a while. Today‘s key premarket news propelling risk assets up, was about Pfizer extolling its three-dose alleged efficiency against Omicron – even though the news was sold into shortly thereafter, it has the power to buy more time and provide fuel for stocks and commodities. The copper weakness remains the only watchout in the short term, and silver sluggishness reflects lack of imminent inflation fears. As if the current prices accurately reflected above ground stockpiles and yearly mining output minus consumption. It‘s the same story in the red metal, by the way. Patience in the precious metals – it‘s about Fed either relenting, or placing inordinate amount of stress on the real economy, which would take time. Spring 2022 most probably would bring greater PMs gains than 2021 with its fits and starts – aka when inflation starts to bite the mainstream narratives and stocks, some more. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 gapped higher, and is once again approaching ATHs. Hold your horses though for it would take some time to get there. I would prefer to see broader participation within value, which isn‘t totally there at the moment. It‘s improving, but still. Credit Markets HYG upswing was considerably sold into, and that spells some consolidation ahead. The degree to which it spills over into stocks, remains to be seen. Gold, Silver and Miners Precious metals are still looking stable, and ever so slowly improving after the Fed hawkish turn hit. The central bank and real yields projections hold the key, but the countdown to higher prices is firmly on. Crude Oil Crude oil upswing indeed continued, and black gold looks set to consolidate gains unless value stocks spring some more to life later today. Anyway, the medium-term chart remains bullish. Copper Copper is another reason why I‘m not overly bullish for today – the red metal‘s base building looks to need a bit more time to play out. Bitcoin and Ethereum Bitcoin and Ethereum are still base building, and looking vulnerable. While a downswing isn‘t guaranteed, it can come and turn out to be sharp. Summary S&P 500 is likely to consolidate recent strong gain, not accelerating the surge today. The bulls within risk-on assets look to be slowly gaining the upper hand, and the opening part of today‘s analysis describes it‘s not a one-way street to fresh highs as the Fed has turned from a tailwind to a headwind. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

Welcome to the last episode of Market Talk of the year. In this episode, I discuss the New Year resolutions, which sectors will likely do well, what to watch, where to be careful. There are US and Chinese tech giants, electric cars, cryptocurrencies, traditional currencies, energy stocks, reflation, the Fed and much more! Watch the full episode to find out more!

S&P 500 feels like hanging by the fingernails – tech down and value retreating intraday. Correction of prior steep upswing is here – the bears will try some more, but I‘m not looking for them to get too far. The signs are there to knock the bulls somewhat down, and fresh ATHs look to really have to wait till next week. Checking up on the VIX, financials and consumer discretionaries confirms the odds of the bears stepping in today, and perhaps also tomorrow (depending upon today‘s close). The repelled HYG downswing likewise doesn‘t represent a significant risk-off turn (yet) – instead, we appear to be on the doorstep of another rotation, and its depth would be determined by how well tech is able to hold near current levels. Looking at precious metals, commodities and cryptos, the sellers of this risk-on rally have good odds of closing in the black for today. Earliest signs of stabilization would come from bonds, tech and cryptos – that‘s where I‘m mostly looking today. Keeping in mind the big picture – all eyes on upcoming Fed balance sheet data: (…) The Fed didn‘t really taper much in Dec, thus the jubilant close to 2021 across the board. The compressed yield curve would eventually invert – regardless of the current levels of inflation, the GDP growth can still support higher stock prices. Precious metals and commodities would though become an increasingly appealing proposition as I‘m not looking for the Fed to be able to break inflation. The tightening risks are clearly seen in market bets via compressed yields, so they‘ll attempt to not only talk a good game – they will act, and the risks of breaking something (real economy) would grow. That‘s the message from Treasuries – hawkish monetary policy mistake is feared and increasingly expected. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 saw a shot across the bow, and it remains to be seen whether the bears take advantage of a promising position to strike later today. Odds are they would at least try. Credit Markets HYG‘s hammer-style candle on rising volume doesn‘t bode well for today. Stabilization in junk bonds would be a most welcome sign once it arrives. Gold, Silver and Miners Gold and silver aren‘t at all well positioned in the short-term – higher yields perhaps accompanied by consolidating inflation expectations, provide the bears with an opportunity. Crude Oil Crude oil is likewise stalling, but not too vulnerable unless fresh omicron fears return to the headlines. The $78 zone indeed looks to take a few days to be reached – I‘m still not looking at this week really. Copper Copper is taking a cautious stance – cautious, not panicky. Building a base not too far from yesterday‘s lows, would be most constructive now. Bitcoin and Ethereum Bitcoin and Ethereum are feeling the pinch, and the Ethereum underperformance has foretold stiffer headwinds than had been the case recently. Genuine downtrend hasn‘t yet developed – the bulls are being tested as we speak. Summary Santa Claus rally is getting the announced reprieve – the day of decision how far it reaches, is today. Unless bonds (I‘m looking at the junk spectrum mainly), tech and cryptos weaken inordinately much, today‘s move would come in the sideways consolidation category. Odds for that are slightly better than a coin toss, but regardless, I‘m looking for a positive first day of 2022 trading to help make up for end of this week‘s headwinds. It‘s also positive that oil remains well bid above $75.50, and copper above $4.40. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

S&P 500 plunged to open the week – how fitting given the unfinished job in tech and Treasuries. The rising yields are all about betting on a really, really hawkish Fed – just how far are the calls for not 25, but 50bp hike this Mar? Inflation is still resilient (of course) but all it takes is some more hawkish statements that wouldn‘t venture out of the latest narrative line. Anyway, the markets aren‘t drinking the kool-aid – the yield curve continues flattening, which means the bets on Fed‘s misstep are on. True, the tightening moves have been quite finely telegraphed, but the markets didn‘t buy it, and were focused on the Santa Claus (liquidity-facilitated) rally instead – therefore, my Dec 20 warning is on. The clock to adding zero fresh liquidity, and potentially even not rolling over maturing securities (as early as Mar?) is ticking. And the run to commodities goes on, with $85 crude oil not even needing fresh conflict in Eastern Europe – the demand almost at pre-corona levels leaving supply and stockpiles in the dust, is fit for the job. So, let‘s keep enjoying the SPX short and oil long profits, while having an eye on how far can the bulls move the 500-strong index today. That would require quite a move in bonds and tech… Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook The rise in volume doesn‘t qualify as accumulation just yet, and that detracts a little from the developing rebound. I still think we‘re likely to go down some more, but will happily reenter at higher levels as I was just taken out of the current position. Credit Markets HYG had a weak session – there is no outperformance of quality debt instruments to speak of. Crucially, cyclicals were unfazed with higher yields, which may be a sign of temporary exhaustion to the downside approaching. Bear markets simply like to take a breather before the sellers return. Gold, Silver and Miners Gold and silver are sending a mixed message – but it isn‘t one of worry. GDX actually printed a nice upper knot yesterday while silver rose in spite of the USD upswing. Classic signs of a top and impending slide? Formally, but I don‘t think that‘s applicable given the metals performance over the past few months. Crude Oil Crude oil is still on the path of least resistance – higher. No true reversal to be seen yet, but some sideways to up consolidation in the absence of geopolitic conflagration, is very much possible. Copper Copper missed another opportunity to catch up – postponed a little, it will still happen. It had been the red metal doing better than silver over quite a few 2020-2021 months, and silver now looks out of the blue to have woken up a little. More confirmation from the red metal would be helpful here. Bitcoin and Ethereum Bitcoin and Ethereum may be setting up a little breather but unless the 2022 highs are taken out, the most probable path next, is to the downside. This direction still makes most sense. Summary S&P 500 is staging an upswing, which could still turn into a dead cat bounce. That‘s still my leading scenario, but I would prefer to see the constellation when the bulls get tired again, first. Remember that the sharpest rallies happen in bear markets – and while we aren‘t in an S&P 500 bear market yet, this correction is likely to turn out on the really memorable side of the spectrum since the bull market was born on Mar 23, 2020. It‘s all about developing appreciation for the Fed‘s tools practical limits, still expansive fiscal policy and absolutely unyielding inflation (in that it‘s beyond the tastefully palatable limits). The unfolding correction for us to go through still would set the stage for a good 2H advance. As written in Monday‘s extensive analysis, the early phase of the Fed tightening cycle belongs to the bears, and it would continue to be commodities and precious metals to weather the storms best. Long live the inflation trades. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

GBPUSD falls into correction The sterling fell back after a slowdown in Britain’s wage growth in November. Sentiment favors the pound after it rallied above the daily resistance at 1.3700. However, an overbought RSI has cut back buyers’ appetite. A break below 1.3630 has prompted some traders to take profit, driving down the price. As the RSI dips into the oversold zone, 1.3570 is the next support. A bearish breakout would send the pair to 1.3480 which sits on the 30-day moving average. 1.3660 is the immediate resistance when a rebound takes shape. USDJPY struggles to bounce The yen softened after the Bank of Japan signaled no shift in its ultra-loose monetary policy. The US dollar bounced off the critical floor at 113.50 from the daily chart. A bullish RSI divergence revealed a deceleration in the downward impetus. The indicator’s oversold situation also attracted a number of bargain hunters. A break above 114.70 suggests a strong interest in keeping the correction in check. 115.50 from the latest sell-off is a major hurdle and its breach could extend the rally to the recent peak at 116.30. SPX 500 to test daily support The S&P 500 extended losses over rising rate worries. The fall below 4640 invalidates the latest rebound and indicates that sentiment is still downbeat. Below the psychological level of 4600, 4540 is a key support near last December’s lows on the daily chart. A bearish breakout would trigger a deeper correction towards 4400, the origin of the October rally. An oversold RSI may cause a limited rebound. Nonetheless, the bulls need to clear offers around 4675 and then 4745 to gain momentum.

  The S&P 500 index broke below its early December low. Are we in a new bear market or is this still just a downward correction? The broad stock market index lost 1.10% on Thursday following its Wednesday’s decline of around 1%. The S&P 500 index fell below the 4,500 level and it was the lowest since mid-October. Investors reacted to quarterly earnings releases and further Russia-Ukraine tensions. Late December – early January consolidation along the 4,800 level was a topping pattern and the index retraced all of its December’s record-breaking advance. This morning the market is expected to open 0.4% lower and it will most likely extend the downtrend. The nearest important resistance level is now at around 4,500-4,525, marked by the recent support level. On the other hand, the support level is now at around 4,450. The S&P 500 broke below an over month-long upward trend line this week, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract Broke Below its Previous Lows Let’s take a look at the hourly chart of the S&P 500 futures contract. The market broke below its previous local lows along the 4,520 level. There was a chance that entering a long position would be justified here, but any short-term bullish scenario seems invalidated now. On the other hand, it may be too late to enter a short position right now, because of some clear technical oversold conditions. (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index is expected to open 0.4% lower this morning, so it will likely extend a short-term downtrend. We may see another intraday rebound, but there have been no confirmed positive signals so far. Yesterday we’ve seen a convincing rally, but it failed and the market sold off to new lows. The coming quarterly earnings releases (next week we’ll have MSFT, AAPL, TSLA among others) remain a bullish factor for stocks, but there is still a lot of uncertainty concerning Russia-Ukraine tensions. Here’s the breakdown: The S&P 500 reached yet another new low yesterday and it was the lowest since mid-October. Stocks will most likely bounce at some point, but any rally may be short-lived. In our opinion no positions are currently justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

The S&P500 and Nasdaq dived 4% before reversing losses and closing the session in the green. But yesterday’s rebound doesn’t mean the equity markets are out of the woods just yet. On the contrary, the rising volatility hints at further market turbulence ahead, as investors are worried about the Fed tightening, the Ukrainian war threat, and some unachieved goals on Biden’s political agenda as the Build Back Better & Chinese trade deficit. The FOMC starts its two-day meeting today, yet given the bloodbath in equity markets, the policymakers could refrain from reviving the Fed hawks. But even with an eventually softer Fed statement, and some market correction, there is a slim chance we see meme stocks, SPAC deals, or highly speculative names doing well in an environment of tighter Fed liquidity. There is, on the other hand, a better chance for companies like Apple and Microsoft to navigate through a high turbulence market. So, the Fed tightening will certainly support the reflation trade, but it will more importantly trigger a flight to quality. Watch the full episode to find out more! 0:00 Intro 0:21 Market update: S&P500, Nasdaq shattered 2:47 … but UBS is positive 4:39 If you buy the dip, make sure to buy the right stocks 6:01 Fed meeting 7:09 Microsoft, Apple earnings 7:37 Challenges beyond the Fed tightening 8:53 Safe haven roundup: USD, gold & Swiss franc 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.

The S&P500 finished January with a strong two-day rally, but the index is still more than 5% lower than where it kicked off the year, having recorded its worst month since March 2020. Nasdaq closed yesterday’s session up by more than 3% for the second day in a row. Nasdaq is already up by almost 9% from the January dip. Yet, 3-4% gains are often sign of high volatility and stress, and they could easily melt down in no time. What we need to see now is smaller but more sustainable gains to call the end of the January selloff. Good news is that the Federal Reserve (Fed) officials start sending softer messages and the hawkish pricing is mostly done, which could lead to some more recovery in US stocks, especially of the upcoming earnings are strong, and in Bitcoin. Exxon, Google, General Motors, AMD and EA are among the most closely monitored companies due to announce their Q4 earnings. Watch the full episode to find out more! 0:00 Intro 0:23 Market update 1:58 Some factors supportive of a further recovery 4:19 Bitcoin ready to pull out the $40K offers 5:37 Google earnings: what could go wrong? 6:36 Exxon to announce a nearly-doubled revenue 7:23 Sony buys Bungie 8:21 DAX: potential to outperform US peers? 9:09 AUDUSD set for further slide as RBA hints at no rate hike 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 markets continue their shaky recovery. On Tuesday, intraday trading patterns in US equities point to a buying trend on declines. The S&P500 and Dow Jones indices rebounded from their 200-day simple moving average. Both indices were below those levels in the second half of January. Still, by the beginning of February, they managed to get back above them on the substantial buying activity of the retail investors. Yesterday's stock market dynamics slightly reduced the tension. Increased buying at the end of the session indicates a buying mood for professional market participants. There have been increasing reports from US investment banks that markets have already priced in a tight monetary policy scenario and will not press equity prices further. Moreover, BlackRock recently noted that markets had priced in overly hawkish expectations. The bond market also looks oversold, declining in previous weeks at the fastest pace since 2008. This is a good reason, at least for a technical rebound. In addition, buyers are supported by strong economic and wage growth, promising corporate earnings stability for the foreseeable future. The switch to a monetary tightening phase turns the market into a more frequent and deeper corrective pullback mode but does not trigger a bear market before a rate hike even begins. Strong fundamentals support a bullish technical picture, with a recovery from the strongest oversold S&P500 RSI and the ability to pop above the 200-day average. From this perspective, the January drawdown has cleared the way for growth, recharging buyers. On an equity level, we can see stabilisation and sharp upward moves in stocks that have been weak since June and shone in the pandemic before that: Peloton, Netflix, GameStop. In theory, this could be a dead cat bounce, but it reduces the selling pressure in blue-chip stocks such as Apple, Amazon, Microsoft, Google and straightens out the overall market sentiment.

S&P 500 recovered the steep losses as the shock was replaced with relief over the international response. Safe haven bids largely disappeared, and can be counted on remaining pressured – this concerns precious metals and crude oil. Credit markets – for all their downswing and forcing the Fed‘s hand through higher yields – have turned risk-on yesterday, but that got reflected just in the tech upswing as value didn‘t close the opening gap. But that would happen today as money flows out of the dollar hiding, and VIX can be counted on to stay much calmer than it was yesterday, in the days to come – that‘s what I tweeted late yesterday. Today‘s inflation data (core PCE) is going to take a backseat to geopolitics as uncertainty about where these tensions could lead, is getting removed in the markets‘ mind – especially as regards the international ramifications. Good to have taken sizable gold and oil profits off the table yesterday, well before the risk premiums were gone – fresh portfolio high has been reached. Remember that in times of high volatility, dialing back your exposure, your risk, is essential to proper risk management. Please have a good look at my style of open trade and money management if you haven‘t already so as to make the most of what I‘m doing. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Now, this looks a lot more as an S&P 500 bottom – volatility appears to be staying elevated but headed down next. Neutral to bullish outlook for today but downswings are likely to be repelled. Credit Markets HYG is marking the risk-on turn clearly, and volume was also solid. Credit markets won‘t be standing in the way of stock market upswing today, I think. Gold, Silver and Miners Precious metals ominous lower knot would have consequences for the days to come – but we have seen upswing rejection only, not a downside reversal. When miners catch their breath again, the move higher can continue. Crude Oil Crude oil upswing has been rejected, but the long base building goes on, and black gold can be counted on to extend gains even when the dust settles down. Copper Copper upswing would take time to develop, especially now – but the breakout in base metals is on, the inflationary messaging is still there and thriving – yesterday‘s words are still true today, but I am looking for a longer base building here than in crude oil. Bitcoin and Ethereum Cryptos are turning the corner, and the worst looks to be in here as well – yesterday‘s attempt to put in a low was successful. Summary S&P 500 turned around, and the bottom appears to be in. Unless a fresh and entangling escalation materializes (not likely), the markets are willing to shake it off, and erase yesterday‘s downswing. As chips (and international response) fall where they may, the tense air is being removed as markets abhor uncertainty the most. Risk premiums are evaporating, and until the Fed and yields come back into the spotlight, the odds favor risk-on muddying through ahead in the days to follow. The inflation chickens haven‘t though come home to roost, and that has continued bullish implications for real assets. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

NASDAQ 100 is set to open sharply lower on Monday. Russia placing nuclear forces on high alert spooked markets. European gas prices continue to surge as stagflation beckons. Global financial markets remain on edge this morning as the Russia-Ukraine conflict looks to be in danger of spilling into a global threat. Over the weekend Russia placed its nuclear deterrent forces on high alert, while Germany pledged increased defense spending. Now further developments include Russia talking of placing nuclear missiles in Belarus and an apparent escalation of the rhetoric between global superpowers. Western governments have gone for tougher sanctions than many observers anticipated with the Russian Central Bank reserves being targetted as well as the global banking payment system SWIFT being closed to Russian banks. Russian ally Belarus held a referendum this morning that ditched its non-nuclear stance, paving the way for Russian nuclear missiles to be deployed there. NASDAQ 100 (QQQ) Stock News All this has naturally seen risk assets collapse. European equity markets fell sharply this morning. At one stage the German Dax was down nearly 3% but has staged a slight recovery to lose 2.4% currently. However the European benchmark, the Eurostoxx 50, is down over 3.5% at the time of writing. Yields continue to fall as money flows into safe-haven assets. Gold and the dollar have naturally profited. The odds on rate hikes from the European Central Bank and the Federal Reserve have diminished as the threat of recession grows. Europe has the most to lose due to its dependence on Russian gas supplies. European natural gas futures (TTF) rose over 50% on Friday and have followed that up with a 12% gain on Monday. There is likely more to come here. NASDAQ 100 (QQQ) Stock Forecast We do have a bearish divergence on the Relative Strength Index (RSI). The RSI has not made matching new lows despite the NASDAQ 100 doing so. Usually, this is significant, but the RSI does remain in a strong downtrend in line with the NASDAQ. Thursday and Friday's rally was impressive, but even that failed to break the 9 and 21-day moving averages. Demonstrating this downtrend is powerful. The obvious target is a break of 4,300 and a test of the significant lows from March 2021 at $299.51. Nasdaq (QQQ) chart, daily For short-term traders, opening below $348 indicates we are on a bearish track and preparing for further declines. Last support at $338 could see a sharp decline to $328 based on the volume gap. Nasdaq (QQQ) chart, 15-minute

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

S&P 500 recovered most of the intraday downside, and in spite of value driving the upswing, there is something odd about it. Tech barely moved higher during the day, and the heavyweights continue being beaten similarly to biotech compared to the rest of healthcare. The key oddity though was in the risk-off posture in bonds, and the Treasuries upswing that Nasdaq failed to get inspired with. If TLT has a message to drive home after the latest Powell pronouncements, it‘s that the odds of a 50bp rate hike in Mar (virtual certainty less than two weeks ago, went down considerably) – it‘s almost a coin toss now, and as the FOMC time approaches, the Fed would probably grow more cautious (read dovish and not hawkish) in its assessments, no matter the commodities appreciation or supply chains status. Yes, neither of these, nor inflation is going away before the year‘s end – they are here to stay for a long time to come. Looking at the events of late, I have to dial back the stock market outlook when it comes to the degree of appreciation till 2022 is over – I wouldn‘t be surprised to see the S&P 500 to retreat slightly vs. the Jan 2022 open. Yes, not even the better 2H 2022 prospects would erase the preceding setback. Which stocks would do best then? Here are my key 4 tips – energy, materials, in general value, and smallcaps. But the true winners of the stagflationary period is of course going to be commodities and precious metals. And that‘s where the bulk of recent gains that I brought you, were concentrated in. More is to come, and it‘s gold and silver that are catching real fire here. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 setback was repelled on Friday, but I‘m looking for the subsequent upswing to fizzle out – we still have to go down in Mar, and that would be the low. Credit Markets HYG is clearly on the defensive, and TLT reassessing rate hike prospects. This doesn‘t bode well for the S&P 500 bulls. Gold, Silver and Miners Precious metals are doing great, and will likely continue rising no matter what the dollar does – my Friday‘s sentence is still fitting today. I‘m looking for further price gains – the upleg has been measured and orderly so far. Crude Oil Crude oil upswing still hasn‘t lost steam, and still can surprise on the upside. Slowdown in the pace of gains, or a sideways consolidation, would be the healthy move next. Jittery nerves can calm down a little today. Copper Copper isn‘t rising as fast as other base metals, which are one of the key engines of commodities appreciation. The run is respectable, and happening on quite healthy volume – if we don‘t see its meaningful consolidation soon, the red metal would be finally breaking out of its long range here. Bitcoin and Ethereum While I wasn‘t expecting miracles Friday or through the weekend, cryptos are stabilizing, and can extend very modest gains today and tomorrow. Summary S&P 500 is likely to rise next, only to crater lower still this month. It may even undershoot prior Thursday‘s lows, but I‘m not looking for that to happen. The sentiment is very negative already, the yield curve keeps compressing, commodities are rising relentlessly, and all we got is a great inflation excuse / smoke screen. Inflation is always a monetary phenomenon, and supply chain disruptions and other geopolitical events can and do exacerbate that. Just having a look at the rising dollar when rate hike prospects are getting dialed back, tells the full risk-off story of the moment, further highlighted by the powder keg that precious metals are. And silver isn‘t yet outperforming copper, which is something I am looking for to change as we go by. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

Awaited open of S&P 500 is here! Who has lost and who has gained?  

After hawkish rhetoric Fed raises interest rate by 25bps it amounts to 0.5%. Not only did this decision affect major FX pairs, but also exotic USDPLN. Let's see how have EURUSD, USDJPY, S&P 500 and Bitcoin reacted. Some might say markets were prepared for the raise of 25bps and their reaction are not that noticeable. Charts: Courtesy of TradingView.com [LAST UPDATE: 17/03/22 7:36 GMT] FX EURUSD - Slight fluctuation GBPUSD - Quite strong Pound USDJPY - chart shows a small uptrend after the release USDPLN - exotic, but interesting pair as in Poland interest rates were raised exactly a week ago S&P 500 Gold (XAUUSD) Bitcoin (BTC) Source: TradingView.com

The Russia-Ukraine peace talks have revived momentum in risk-sensitive assets. The market reaction to the outcome of the peace negotiations brought the indices back to where they had last been before the last days of February. The S&P500 reached its highest levels in two and a half months. European indices had bottomed as early as the 7th of March. Still, this recovery momentum stalled about a week ago, with the Euro50, FTSE100 and DAX all approaching levels where they were at the end of February, during the early days of the military conflict. The military conflict is far from over, and businesses have been badly affected by the sanctions and jump in commodities and energy. In addition, the turnaround in the indices took place well before the progress of the negotiations. Both these thesis lead us to look for other reasons behind the current share rally. In our opinion, the answer is to be found in monetary and fiscal policy. The uncertainty in Europe and the blow to the global economy looks like an important reason for the Fed to tone down its rhetoric last month and, as a result, raise the rate by 25 points rather than the 50 that we were prepared for in January. Monetary policy is still aimed at normalisation, but the authorities act more cautiously than required by the conditions of even higher inflationary pressures than estimated in January. Fiscal policy is considerably softer: Europe is discussing new stimulus and the next issue of EU joint bond; the USA is increasing defence spending and domestic programmes at new records. The remaining highly soft monetary policy and supportive fiscal policy create the conditions for further strengthening of the US and European stock markets. China is also contributing its support. The People’s Bank of China continues to inject liquidity into the financial system, supporting the pull into risky assets. Chinese indices have recovered much of March’s slump, adding 11% from the bottom in the China A50, 23% in the Hang Seng and 26% in the H-shar. It is also worth noting that stock markets are far from the overheated area, which leaves room for further upside moves in the coming days.

  The S&P 500 index extended its uptrend once again after breaking above the 4,600 level. However, today we will likely see some profit-taking action. The broad stock market index gained 1.23% on Tuesday following its Monday’s gain of 0.7%. Stocks extended their uptrend on a potential Ukraine conflict ceasefire news yesterday. There’s still a lot of geopolitical uncertainty, but investors keep on jumping back into stocks. This morning the index is expected to open 0.3% lower and we may see some short-term profit-taking action. The nearest important resistance level is now at around 4,650-4,700. On the other hand, the support level is at 4,550-4,600, marked by the recent resistance level. The S&P 500 index broke above its January-February local highs along the 4,600 level, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract Remains Above its Upward Trend Line Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading above the short-term upward trend line and above the 4,600 level. We can see some technical overbought conditions, however, there have been no confirmed negative signals so far. We are maintaining our profitable long position from the 4,340 level. (our premium Stock Trading Alert includes details of our trading position along with the stop-loss and profit target levels) (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index will likely open 0.3% lower this morning and we may see some short-term profit-taking action. There have been no confirmed negative signals so far. However, there are some clear technical overbought conditions that may lead to a correction. The market will be waiting for Friday’s monthly jobs data release. This morning we’ve got the ADP Non-Farm Employment Change release and it was as expected. Here’s the breakdown: The S&P 500 index further extended its uptrend yesterday, but in the near-term some profit-taking action seems likely. We are maintaining our profitable long position (opened on Feb. 22 at 4,340). We are still expecting some upside from the current levels; however, it is time to get more cautious as there may be a downward correction at some point. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

American households increased spending by 0.2% in February, compared with a 0.5% rise in income. But this data only looks optimistic at first glance. Americans saved 6.3% of disposable income compared to 6.1% in January. In other words, we are seeing a stabilisation at levels that last occurred 12 years ago. The decline in the propensity to save can easily be explained by higher inflation, just like in the first decade of the 21st century. While people largely ignore inflation of 2%, a 7% price increase burns up the value of money stored under the mattress rather quickly. Inflation is also a significant incentive to return to the labour market searching for work. An indirect confirmation of this is the weekly jobless claims data. Initial claims rose from 188K the week before to 202K. But the number of continued claims has dipped to 1.307M, last seen at the end of 1969. The published data is good for the Dollar as it sets the stage for a more aggressive policy tightening from the Fed. But the statistics are neutral for the stock market, where participants take the strong labour market as carte blanche for the FOMC to put more pressure on the policy tightening pedal.

Financial markets are clinging to positivity on Monday morning after a modest rise on Friday. Robust US labour market data reinforced expectations that the Fed will press the monetary policy brake harder. However, this news is countered by optimism that a strong labour market will allow the economy to avoid a recession by providing a soft landing. Furthermore, buyers' interest is supported by China's confirmation of cooperation in the audit of local companies according to US regulations. April has been described as a historically favourable month for equity markets, so the warning signals from outside are so far dissipating into buying streams after the correction at the end of last week. Against the market at the end of March, there was profit-taking activity after the more than 11% growth for S&P500 and an even sharper recovery for European and Asian indices from the March lows. The resurgence of positive sentiment among participants is setting up that buying near the close of trading on Friday and early on Monday is a sign of the end of the mini-correction, which will be followed in the coming days by a renewal of the late March highs. However, there are serious doubts about the market's ability to sustain the positive momentum in a broader context. Fed officials say they are considering a 50 point rate hike at the start of May and kick-starting the selling of securities off the balance sheet. The Fed raised the interest rate by 50 points in one meeting in May 2000, cementing the dot-com bubble's melting down for the next three years. Regarding China and the US, we should also be under no illusions. Over the last four years, we have seen many periods of truce, but the general trend towards more confrontation has continued, albeit along a somewhat winding road. An essential ally of the stock market is a strong economy. Investors are shifting capital from bonds to equities as a growing economy makes it possible to count on rising corporate earnings. However, this could prove to be a death trap for bulls. By buying now, they are pushing up equity indices, signalling to the Fed that markets are ready for a tightening. Historically, central banks in similar circumstances have tightened policy until markets are stressed, and economies are on the verge of recession.

Nasdaq100 has added over 2% on Monday, in contrast with a more modest gain of 0.8% for the S&P500 and a barely notable 0.3% rise for the Dow Jones. But this is not a signal of general optimism from market participants; instead, it’s a switch in focus to Chinese companies. Often the outperformance of technology-rich Nasdaq is taken as a signal of an accelerating economy and a move by investors to look for assets that outperform the broader market during an economic boom. But along with that, we would see the Russell Index, which includes 2,000 small US stock market companies, outperform. And it was only up 0.2% over Monday, struggling to move into positive territory by the end of the day yesterday. On the other hand, Chinese companies are going from weak to growth drivers. However, this is nothing more than a recovery from lows after a year of aggressive declines. Earlier in March, China’s H-shar lost more than half its value in 13 months of sell-off. Hong Kong’s Hang Seng was down 40% at its lowest point, plunging to 2016 lows. In the first half of March, the most significant acceleration came on signals that China and the US had moved from trade wars to financial wars as the latter threatened to delist. However, financial market turbulence is the last thing Xi Jinping needs this year, as there will be an election at the end of it, where he will be the leading candidate. Improving the economic situation is often the most effective way for the incumbent to gain electoral support. And China has a lot to work with. Much the same can be said for the US, where the November Senate elections will be held. Democrat Biden’s record-low approval rating plays against his party in the coming elections and the rising stagflation threat. The threat of delisting from the US is a blow to prestige, but it also closes off access to the softest financial terms for new companies and the deepest pool of liquidity. China could only afford it in the event of mania in Chinese markets and a booming Chinese economy. But that is not the case right now. The PRC economy lags behind its forecast growth trajectory due to continued covid lockdowns. Achieving the expected 5.5% GDP growth this year requires stimulus and easing of monetary policy, regardless of inflation risks and without regard to the rest of the world, which is tightening policy. This is a favourable environment for the market, at least for the time being. The Chinese equity market thus ceases to be a ‘sick man’, dragging global equity indices down and suppressing investor interest. On the contrary, even after returning to 5-week highs, Chinese equities still look very cheap, turning into a leading idea for the markets with a 9% jump in Baidu and a 6.6% rise in Alibaba on Monday. Placed amongst others in the US, Alibaba and Baidu, the biggest of which are now pulling the indices up, spreading positivity across the entire tech sector. Twitter’s 27% jump in shares on reports of Musk’s 9.2% stake in the company says more about the market’s mood to look for growth drivers than how much this passive share of the Tesla CEO can help the social network. And that’s good news a couple of weeks before the start of the new reporting season after a worrying first quarter.

AUDUSD breaks major resistance The Australian dollar soared after the RBA signaled higher interest rates later this year. The pop above the daily resistance at 0.7550 has put the Aussie on a bullish reversal course for the weeks to come. Solid green candles indicate a combination of short-covering and momentum buying. Last June’s high at 0.7770 is the next target. In the meantime, the RSI’s overbought situation led to a brief pause. Trend followers could be looking to join the rally at pullbacks. 0.7470 is fresh support in this case. GBPUSD awaits breakout The US dollar rallies as traders hoard the safe haven currency. The price is in a narrowing consolidation range as a sign of short-term hesitation. Overall sentiment remained downbeat after the latest rebound hit resistance at 1.3300. The bulls need to lift offers around 1.3220 before they could turn the tables. Otherwise, the path of least resistance would be down. 1.3050 is the closest support and the psychological level of 1.3000 is a critical floor. A bearish breakout could make the sterling vulnerable to a new round of sell-off. SPX 500 seeks support The S&P 500 falls back as yield curve inversion raises concerns of an economic contraction. On the daily chart, a break above the February high at 4590 and a bullish MA cross suggest a steady market mood. A drop below 4580 prompted leverage buyers to bail out but found support at 4510. 4455 on the 20-day moving average would be the second line of defense in case of a deeper correction. Buyers may see short-term retracements as opportunities to stake in. A bounce above 4600 could be a continuation signal.

Macro 2022-04-13 08:25 6 minutes to read Summary:  Markets are waking up about where they left off yesterday, as a US equity market rally in the wake of slightly softer than expected core US inflation in March was reversed back to its starting point. Overnight, the New Zealand central bank hiked more than expected, but guided less hawkish, so NZD fell. The Bank of Canada is expected to beat the Fed to the punch today by hiking by 50 basis points for the first time since 2000.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - US equities tried to shift back to a positive stance yesterday in the wake of a slightly softer core CPI reading for March, but the rally was erased by the close, as attention is set to shift to earnings season which kicks off today in earnest. The Nasdaq 100 index has yet to break down through the 61.8% Fibonacci retracement level at 13,831, a break of which could usher in a full test of the 12,942.5 low. The less yield-sensitive S&P 500 index is farther above its respective 61.8% retracement level (4,299) but posted a weak session to new local lows yesterday, even as sentiment has recovered again overnight. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) were little changed.  Energy and mining stocks outperformed.  China’s Ministry of Transport has issued a notice to local governments to urge the latter to keep highways in operation in areas affected by lockdowns.  China is also piloting in eight cities to reduce the number of days required for quarantine from 14 days to 10 days.  China reported better than expected March export data (+14.7% YoY in USD terms) while imports declined (-0.1% YoY in USD terms). Trade surplus increased to USD47.4 billion (vs consensus $21.7bln, Feb $30.6bln). Stoxx 50 (EU50.I) – the Stoxx 50 index snapped back from new local lows yesterday –emphasizing the importance of the 3,800 area support – and is fairly sideways overnight in the futures, a somewhat better performance than the major US averages, where a rally attempt yesterday was fully wiped out.  A weak euro certainly helps exporters, but energy/power prices continue to weigh on Europe’s economic outlook. EURUSD and EUR pairs  – the euro continues to trade heavily and EURUDS has nearly touched the lows for the cycle around near 1.0800. It was rather disappointing for bulls that the pair failed to get more support from a consolidation lower in US yields yesterday in the wake of the slightly cooler than expected core inflation reading (more below). The ongoing unease as Russia looks set to widen its offensive in eastern Ukraine and concerns that the ECB will remain dovish tomorrow perhaps weighing. The next major level lower is the 1.0636 level posted during the pandemic outbreak panic. USDCAD is at pivotal levels in the 1.2650 area, ... ...about the half-way point of the recent  price range and near the 200-day moving average ahead of today’s Bank of Canada meeting, which is expected to bring a 50-basis point rate hike (to take the policy rate to 1.00%), which would be the first rate hike of more than 25 bps since 2000. But with the Fed seen likely matching the Bank of Canada’s pace of tightening by year-end, the BoC may need to guide hawkish, or CAD may need to find more support from rising oil prices and improving risk sentiment broadly if it is to stage a rally against the US dollar. The technical situation certainly looks pivotal. Gold (XAUUSD) The advance in gold prices was a bit more impressive yesterday as the move higher above the key 1,966 area stuck, though the real challenge remains a bid to retake the psychologically important 2,000 level. The dip in treasury yields yesterday and weak risk sentiment in equities provided some of the boost. Crude oil (OILUKJUN22 & OILUSMAY22)  A solid comeback for oil prices yesterday, as WTI crude joined Brent in trading back above 100/bbl ahead of weekly US crude oil and product inventories from the DoE today. China moving to ease some of the Shanghai covid lockdowns may have boosted sentiment on the demand side. And longer-term supply concerns are in clear evidence as long-dated crude for December of 2023, trades within two dollars of the highest daily close for the cycle back in early March. US Treasuries (IEF, TLT) and European Sovereign Debt. Treasury traders took the slightest easing of the pace of core March US inflation as a signal for consolidation yesterday, as yields dropped all along the curve, and more so at the front end as the market perhaps figures that as long as the pace of inflation rises moderates, it can stop the constant upward adjustments to the perceived path of Fed policy tightening this year. A US 10-year treasury auction saw tepid demand yesterday. Today sees a 30-year T-bond auction. EU yields also eased lower yesterday from new cycle- and multi-year highs. What is going on? New Zealand’s RBNZ surprises with 50-basis point hike, but guides less hawkish.  The market was looking for a 25-basis point move to take the Official Cash Rate to 1.25%, but instead got 50 basis points and a 1.50% policy rate. The argument in the statement was that the bank saw it prudent to bring hiking forward to reduce the risks of rising inflation expectations. At the same time, the statement frets the slowing pace of global economic activity. After an initial spike higher on the impact of the larger than expected hike, the NZD traded lower in the wake of the decision as the 2-year NZ rate dropped some 15 basis points. AUDNZD also retains an upward bias given the demand in resource-rich Australian assets. Australia’s business data also continues to hold up for now, while New Zealand is facing deteriorating business sentiment and chronic labor shortage. UK Mar. CPI out this morning – hotter than expected.  UK March CPI hit +1.1% MoM and +7.0% YoY on the headline (vs. +0.8% /+6.7% expected) and +5.7% YoY (vs. +5.3% expected) for the core CPI reading Crowdstrike (CRWD) rose 3.2% on a Goldman Sach upgrade to buy. Crowdstrikeis the world’s biggest cybersecurity company. The analyst community also likes Crowdstrike  with 93% of analysts rating the stock as a buy. Goldman Sachs expects Crowdstrike’s shares to rise to $285 in a year. USDJPY refuses to drop below 125.  USDJPY dropped below 125 following the US CPI release overnight, focusing on the less-than-expected core print and the fall in US treasury yields. This morning, the pair is trading close to the near-20 year high of 125.86. The move was however reversed suggesting sustained weakness in the yen, which will continue until we see stronger action from the Japanese authorities and not just verbal intervention. The prospect of stagflation remains for Germany.  This is the main takeaway from the ZEW index released yesterday. The economic sentiment index decreased to minus 41.0 in April versus prior minus 39.3 while the current conditions index dropped to minus 30.8 versus prior minus 21.4. The ZEW experts are therefore pessimistic about the current economic situation, and they expect that it will continue to deteriorate. The only glimpse of hope is the decline in inflation expectations.  U.S. Inflation is still uncomfortably high.  March CPI hit 8.5 % year-over-year. This is the hottest annual pace since 1981. The pace of Core CPI rises moderated a bit at +0.3% month-on-month and + 6.5% year-on-year. This is still the hottest pace since 1982. On a year-on-year basis, the sharpest increases are : fuel oil (70 %), gas (48 %), used cars (35 %), hotels (29 %), airfare (24 %) and utility gas (22 %). You can find the full list here (scroll to pdf page 9). It is clear that the U.S. Federal Reserve is behind the curve. Expect a 50-basis point interest rate hike at the May FOMC meeting. What are we watching next? Ukraine war developments as new Russian offensive operations are underway in eastern Ukraine and US President Biden promised a new round of $750 million in military aid and said Russian leader Putin is guilty of genocide. Earnings Watch. The Q1 earnings season kicks off in earnest today week with US mega-bank JP Morgan Chase reporting today, but the more Main Street-oriented banks reporting in coming days, including the largest of these, Wells Fargo, tomorrow, will be interesting for a check-up on credit demand. The UK’s largest grocer Tesco is also worth watching for a sense of the impact of inflation on margins and customer behaviour as a cost-of-living crisis has hit a large portion of the UK population. Today: Tesco, JPMorgan Chase & Co, BlackRock, Fastenal Thursday: China Northern Rare Earth Group, Fast Retailing, Ericsson, UnitedHealth, Wells Fargo, Morgan Stanley, Goldman Sachs, Citigroup, US Bancorp, PNC Financial Services, Coinbase, State Street Friday: Hangzhou Hikvision Digital Economic calendar highlights for today (times GMT) 1230 – US Mar. PPI 1400 – Canada Bank of Canada Rate Decision 1430 – US DoE Weekly Crude Oil and Product Inventories 1500 – Canada Bank of Canada’s Macklem press conference 1700 – US 30-year T-bond auction 2301 – UK Mar. RICS House Price Balance 0130 – Australia Mar. Employment Change / Unemployment Rate   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:    

Stocks fluctuated following their recent decline on Tuesday and the S&P 500 index closed slightly below the 4,400 level. Is this still just a downward correction? The S&P 500 index lost 0.34% on Tuesday following its Monday’s decline of 1.7%. There is still a lot of uncertainty concerning the Ukraine conflict and Fed’s monetary policy tightening plans. On Monday it led to a more pronounced profit-taking action. However, the coming quarterly earnings releases season may be a positive factor in the near term. This morning the broad stock market is expected virtually flat following the Producer Price Index release. The nearest important resistance level is now at around 4,475-4,500, marked by the recent support level and Monday’s daily gap down. On the other hand, the support level is at 4,350-4,400. The S&P 500 index retraced more of its March rally, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract – Short-Term Consolidation Let’s take a look at the hourly chart of the S&P 500 futures contract. Recently it broke below the 4,400 level and our profitable long position was closed at the stop-loss (take-profit) level of 4,440. Overall, we gained 100 points on that trade in a little less than two months’ time (it was opened on Feb. 22 at 4,340 level). So now we will wait for another profit opportunity. (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index is expected to open 0.1% lower following the producer inflation number release. Stocks will likely extend their consolidation. For now it looks like a relatively flat correction within a short-term downtrend. Here’s the breakdown: The S&P 500 index trades within a short-term consolidation following the recent declines. Our profitable long position was closed at the 4,440 level (a gain of 100 points from the Feb. 22 opening). Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Volatility is the key word of markets today. There are not many important indicators printed, but geopolitics influence markets noticeably. Crude Oil inventories is released today and according to Investing.com it’s predicted, that if Russian gas is banned immediately by the EU, the price could rise to $185! DAX (GER40) - Volkswagen, Continental And BMW Impress! Three automotive companies are doing really, really well today as all of them gained above 1% over last 24 hours. What to come? We can somehow predict that Daimler will go up in the “gainers ranking” as there’s another car teased by Mercedes recently. #GIMSNEWS | @MercedesBenz is consolidating its position among luxury EVs manufacturers. This is the #EQS SUV, which is 5.125 m long and can accommodate up to 7 passengers. Engine outputs go from 265 to 400 kW (360 to 544 PS) and the WLTP range is announced from 507 to 660 km. pic.twitter.com/lKN3zryfzG — Geneva International Motor Show (@GimsSwiss) April 19, 2022 As we see DAX has been really volatile today losing and adding much throughout the day. However, despite the two noticeable moves the price was gradually going up for last two hours. We will see what will the next part of French election and the Russia-Ukraine bring to the state of this well-known index, where companies like Adidas, Daimler, BMW and Deutsche Bank (which has decreased last week) are included. IBEX35 – We’re Back! Ahead Of French Election – Emanuel Macron vs. Marine LePen! The Spanish index has been below-the-line for some today, but as the chart show it’s back in the game trading near 0% level. What’s next? As we wrote before, the second round of French election is coming. France decides where to go in the near future on April 24th so watch markets next week! Article on Crypto: Altcoins Showing Promising Growth - Take a Look at Solana (SOL), POLKADOT (DOT) and SHIBA INU (SHIB-USD)| FXMAG.COM What's up Twitter Stock Price (TWTR)? Twitter is one of the most trending topics recently. All the commentaries of Elon Musk has influenced the price of the stock. S&P 500 Trades Ca. 1% Higher! Let’s go NASDAQ! Fifty Third (FITB) has published its earnings already and they’re quite similar to the forecast of Investing.com, so don’t expect significant fluctuations. If someone ask me about volatility-maker which for now, I would point the Iridium (IRDM) and Lockheed Martin (LMT) which earnings reports exceeded or subceeded the expectations. So the earnings probably helped the index to open quite higher. Tomorrow is the day as well - Tesla (TSLA) and Procter&Gamble will release their earnings! What Will Earnings Bring On? J&J Done, Awaiting Netflix (NFLX) And IBM! There are two popular and major brands publishing their Q1 reports today. Netflix (NFLX) banned access to its platform in Russia, so we may predict that many subscribers are not there anymore. IBM serves many IT solutions around the world and as the Russia-Ukraine conflict escalated and became a “no.1 market mover”, it’s possible the company’s income had changed amid ongoing war. However, we’ll have to wait some time for the news about these two companies and the outlook for indices as earnings of IBM and NFLX are released after market hours. Let’s stay tuned! Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun Johnson&Johnson (J&J) Is Here For US Indices Johnson&Johnson, yes, that company you know from your children’s bathub published their earnings and according to Investing.com Earnings Calendar the results are quite similar as the predictions were so we may suppose the market has already discounted this one.

EURUSD consolidates post-sell-off The US dollar rallies as a 75bp rate hike by the Fed could be on the table. The single currency remains under pressure after last week’s sell-off. 1.0920 has become an important supply area after buyers’ failed attempts to push higher. Further above, the psychological level of 1.1000 is another support-turned-resistance, suggesting that the path of least resistance is down. Bearish trend followers could be waiting to fade the next rebound. The pair is treading water above 1.0760 as the RSI rises back to the neutrality area. Article on Crypto: Altcoins Showing Promising Growth - Take a Look at Solana (SOL), POLKADOT (DOT) and SHIBA INU (SHIB-USD)| FXMAG.COM XAUUSD keeps high ground Gold slipped as the greenback rallied across the board amid the Fed’s increasingly hawkish stance. The previous rally cleared the resistance at 1990 but struggled to grind to the psychological level of 2000. A drop below 1961 revealed underlying weakness and caused a liquidation of leveraged buyers. 1940 at the base of a previous breakout is the next stop to gauge the bulls’ commitment. An oversold RSI may trigger a buy-the-dips behavior and lead to a limited rebound. 1980 is now the closest resistance. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun SPX 500 breaks channel The S&P 500 recoups losses as the quarterly earnings season heats up. The index has been sliding down in a bearish channel, which indicates a cautious mood in the short term. The latest rally above the upper band (4420) and resistance at 4460 could prompt sellers to cover their positions, paving the way for a potential reversal towards 4590. 4360 is a fresh support. In fact, a series of higher lows would show buying interest and convince followers to jump in with both feet. Otherwise, 4300 would be the next support.

Netflix plunged over 20% in the after-hours trading, following the release of Q1 2022 earnings report. Subscriber base shrank by 200,000, marking the first drop in overall users in more than a decade. The drop was led by a loss of 700 thousand subscribers from Russia as the company suspended services in the country and as competition in the streaming sector continues to become more challenging. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun US indices have been increasingly reactive to this earning season Today, investors will focus on the highly anticipated earnings release form Tesla, which managed to mostly mitigate the impact of supply shortages and rising inflation thus far while expanding its production facilities. While growing concerns relating to covid-19 related lockdowns in China persist, investors will be keeping a close eye on Q1 results along with the company's outlook for the rest of 2022 after Elon Musk attracted additional attention after offering to buy Twitter at a significant premium. US indices have been increasingly reactive to this earning season after many investors have started to look past the initial shock caused by the Russia-Ukraine conflict and today could be no exception. Read next: Altcoins' Rally: Solana (SOL) Soars Even More, DOT and SHIBA INU Do The Same! | FXMAG.COM Oil prices attempt to recover after 6% drop Oil is trading higher after prices dropped significantly following the long easter weekend. WTI broke above $103 per barrel while Brent jumped above $108 at the start of today's session but appear to remain constrained in a narrow range for the time being. Traders await today's EIA inventory report which is expected to show a 2.5 million barrel increase after yesterday's API report defied expectations by indicating a 4.5 million barrel drop. While rising demand concerns caused by the increase in covid lockdowns in China continue to pressure the price, the uncertain situation relating to the potential import ban of Russian energy from Europe remains a key topic to watch and may cause noticeable volatility if things were to change suddenly.  

Not only has the earnings in the USA moving markets, but also all the news coming from Europe where Russia-Ukraine conflict persists influencing markets in various ways. The information about German Continental (CFD) restarting its factories in Russia to “protect workers” shocked many and brought on discussions. Continental (CONG) Gains Amid Controversy Technically, Continental has increased by over 4% and we wonder, if automotive companies who cooperate with the German tyres maker are going to revoke the partnerships making brands decline amid controversial decision. Continental restarts tyre making at Russian plant to protect workers https://t.co/POmwlhg41S pic.twitter.com/CChFSaNsz9 — Reuters (@Reuters) April 19, 2022 DAX (GER 40) Trades Higher Today Speaking of DAX, Continental is not the only “power source” today. Despite Continental, Sartorius (SATG_p) – a medical company and multi-branch Siemens (SIEGn) which provides various electric and electronic solutions to many markets. Read next: (XAGUSD) Price of Silver Vs. U.S Yields, Lumber and Corn Futures Dependent on Demand and Supply | FXMAG.COM Continental and Siemens Leading The Gainers’ Ranking Sartorius went for a 4.12% gain, CONG increase amounts to 4.55% and Siemens AG has risen by 4.06% over last 24 hours, but day is not over yet and these companies may fluctuate throughout next 2 hours of trading on XETRA. However, GER 40 has performed really well over last day gaining over 1.2% what can really gratify investors. Energy crisis? RWE is doing well! So which companies have lost? RWE AG (electricity) has increased over last year (+12.26%), but over last day the price has gone down by ca. 2%! HelloFresh (HFGG) investors probably feels upset as well – the company has lost -1.46% over last day. The third company which is currently below-the-line is Zalando SE known from its e-commerce brands. Read next: Unexpectedly Gold Price (XAUUSD) Falls, Canada And Chicago - Weather Makes Wheat Futures Fluctuate. The Price Of Palladium - Industrial Activity Is Taking Strain | FXMAG.COM The USA is back trading! Some news has moved the markets! Yesterday’s earnings of Tesla and Netflix has been shaping the prices from the time of announcements. But US Stocks is not only about big-tech and love brands! Read next: ECB Announcements to Possibly Tighten Monetary Policy Strengthens the Euro. EUR/USD, EUR/GBP, AUD/NZD and EUR/CHF All Increased | FXMAG.COM Netflix (NFLX) Has Begun With A Small Climb Surprisingly American Airlines shocked many with its earnings putting the stock price really, really high. The gain has amounted to ca. 10% and the commentary by the company’s CEO, Robert Isom is definitely worth a watch as he elaborates not only on the AAL revenue, but also on masks and post-COVID travelling. Rocking and Dancing Tesla Naturally opening Tesla factory in Berlin was a great reason to dance so we expect that the office of Elon Musk is like a danceroom right now as the stock price keeps high levels after yesterday’s evening release of the earnings. Tesla Stock Price (TSLA) Impressive AT&T AT&T earnings almost amounted to the forecast presented by Investing.com team in their insightful Earnings Calendar and the stock price has increased in premarket, so watch it closely throughout the day. Source/Data: Investing.com, TradingView.com Charts: Courtesy of TradingView.com

Since the market opened this morning, the price of Tesla’s stock has increased largely, this surge came after the earnings announcement for Tesla that took place late one Wednesday, which showed large increases in earnings and profits, reflecting unexpected growth for Q1. Tesla share price has surged in the past 24 hours as a result of musks earning announcement that took place late on Wednesday (CET) Read next: (XAGUSD) Price of Silver Vs. U.S Yields, Lumber and Corn Futures Dependent on Demand and Supply | FXMAG.COM The stock price was also affected by Musk’s determination to take over Twitter (TWTR) The price of Tesla's stock has shown very volatile price movements over the past week as a result of market sentiment and current market conditions. In addition, the stock price was also affected by Musk’s determination to take over twitter, an announcement that took place just over a week ago, since then the price has been rising again in general. Read next: Unexpectedly Gold Price (XAUUSD) Falls, Canada And Chicago - Weather Makes Wheat Futures Fluctuate. The Price Of Palladium - Industrial Activity Is Taking Strain | FXMAG.COM Research has shown that the value of Tesla's stock has a correlation between stock movements in the near term and earnings estimates. Currently the market sentiment for the stock is mixed as investors in general are unsure where the markets will go at this point and investors are seemingly more risk-averse amid the rising inflation and possibility of a looming recession. Tesla Stock Price Chart Sources: Finance.yahoo.com, investors.com  Read next: ECB Announcements to Possibly Tighten Monetary Policy Strengthens the Euro. EUR/USD, EUR/GBP, AUD/NZD and EUR/CHF All Increased | FXMAG.COM  

We are now seeing that major economies (US/UK/Japan) are not immune from global deleveraging and inflation. As investors seek safety in the US Dollar this may eventually trigger a broader and deeper selloff in U.S. stocks and market volatility will begin to pick up as the VIXY moves up. As the USD continues to strengthen corporate profits for US multinationals will begin to disappear. Especially in times like these, traders must understand where opportunities are and how to turn this knowledge into profits. Part of what we do at www.TheTechnicalTraders.com is to distill price action into technical strategies and modeling systems. These assist us in understanding when opportunities exist in the US stock market and specific sector ETFs. Our core objective is to protect capital while identifying suitable opportunities for profits in trends. Read next: Mike Swanson Podcast - Find Your Investing & Money Management Strategies| FXMAG.COM VOLATILITY MAY HAVE BOTTOMED SETTING THE STAGE FOR A TREND HIGHER Volatility is beginning to pick up as we see the VIXY moving up strongly from its 6-month base. Utilizing multiple time frame analysis and then focusing on the 4-hour chart we were able to capture the volatility low earlier than we would have by only using the daily, weekly, or monthly chart. VIXY – PROSHARES TRUST VIX SHORT-TERM FUTURES ETF: 4-HOUR THE USD IS UP VS ALL OTHER MAJOR CURRENCIES The US Dollar is continuing to appreciate as investors and central banks seek safety from geopolitical, inflation, and other market dislocations. The low in the USD was made on January 6, 2021. Read next: Global Market Trends Continue To Push US Dollar & US Assets Higher| FXMAG.COM 1 YEAR RELATIVE PERFORMANCE (USD) – WWW.FINVIZ.COM UUP – INVESCO DB USD INDEX BULLISH FUND ETF: DAILY STOCKS MEET RESISTANCE AND ARE SLIPPING AGAIN! Stocks hit resistance the first week of 2022 after hitting a Fibonacci iteration of 2.1618. Less than two months later the SPY found support at yet another Fibonacci number of 1.618. These Fibonacci levels are based on the range calculation of the pre-Covid high and the Covid March 2020 low. However, after rallying from the 1.618 level the SPY rolled over to the downside as it hit a 72-bar (12-day) Bollinger Band using a standard deviation setting of 1.618. Now we will watch closely to see if the price will make a new low for 2022 which may confirm a shift in the overall trend in stocks. SPY – SPDR S&P 500 ETF TRUST: 4-HOUR INVERSE ETFS OFFER AN ALTERNATIVE TO TRADITIONAL BUY AND HOLD Astute traders who want to do more than liquidate part or all their stock holdings may want to consider investing in an inverted ETF. Inverted ETFs provide the ability to take advantage of a downturn in the stock market without the complexities of having to sell individual stocks short. If our goal as a trader is to make money, we need to adapt and be as agile as necessary. This is one of the reasons why our team continually tracks global money flow according to each country's stock index but additionally other types of markets and asset classes. Our quantitative trading research is crucial in determining which markets to trade and how to efficiently employ trading capital. Read next: What Is Chia Coin? - (XCH) - First New Nakamoto Coin Since Bitcoin Launch (2009) | FXMAG.COM Since we reviewed the SPY uptrend and the potential for a change of trend to the downside; it’s only appropriate to view the opposite side of this trade by looking at the SH inverted ETF. SH – PROSHARES SHORT S&P 500 ETF: 4-HOUR UNDERSTANDING PRICE IS A GAME-CHANger As technical traders, we follow price only, and when a new trend has been confirmed, we change our positions accordingly. We provide our ETF trades to subscribers. Recently, we entered new trades, all of which hit their first profit target levels and then eventually triggered their break-even profit stop loss orders on their remaining position. After booking our profits we are now safely in cash preparing for our next trades. Our models continually track price action in a multitude of markets and asset classes as we track global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. Sign up for my free trading newsletter so you don’t miss the next opportunity! Successful trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com

April 25, 2022  $USD, Australia, China, Currency Movement, Federal Reserve, France, Germany Overview:  Fears that the Chinese lockdowns to fight Covid, which have extended for four weeks in Shanghai, are not working, and may be extended to Beijing has whacked equity markets, arrested the increase in bond yields, and lifted the dollar.  Commodity prices are broadly lower amid concerns over demand.  China's CSI 300 fell 5% today and Hong Kong's Hang Seng was off more than 3.5%.  Most of the major markets in Asia Pacific were off more than 1%.  Europe's Stoxx 600 is off around 1.9% after falling 1.4% last week.  US futures are about 0.7%-0.8% lower. The S&P 500 fell last week for the third consecutive week, the longest losing streak in 18 months.  The US 10-year Treasury yield is almost seven basis points lower at 2.83%.  European benchmark yields are 4-6 bp lower.  The BOJ bought JPY727 bln of 10-year bonds at the pre-committed fixed rate operation, more than in the previous three operations last week combined.  The yield slipped half of a basis point.  The dollar rides high.  It has appreciated against all the major currencies but the yen. The Australian dollar, Scandis, and sterling have been hit the hardest and are around 0.9-1.2% lower in the European morning.  Emerging market currencies are heavy as well.  Hungary, Mexico, and China have seen their currencies decline by around 1% to lead the complex.  Gold fell to new lows for the month around $1912 before stabilizing.  June WTI is 4.3% lower near $97.70 after falling around 4% last week.  US natgas is extending last week's 10.5% sell-off, while the European benchmark is up 2.5% after a flat showing last week.  Iron prices are off 8.7%, after tumbling closer to 12% at one juncture today.  It fell a little less than 5% last week.  Copper is off around 2.1% after declining about 3% last week.  July wheat is up about 0.5% as it tries to snap a four-day slide.   Read next: Tightening Alert! How Have Exchange Rates Of Singapore Dollar (SGD), NZD, Canadian Dollar And Korean Won (KRW) Changed?| FXMAG.COM Asia Pacific China's Covid has emerged as a powerful economic force in its own right.   It is threatening demand for commodities and threatening to extend supply chain disruptions.  Shanghai reported a record number of fatalities, and the infection is spreading to Beijing.  The Chaoyang district will submit to three days of testing this week for people who live and/or work in the area.  Reports suggest 14 smaller communities have been sealed and another 14 have imposed limitations on movement.  China's demand for gasoline, diesel, and jet fuel has reportedly fell by 20% year-over-year, which may translate to 1.2 mln barrels of oil a day.   The US has threatened unspecified action if Beijing's new security pact with the Solomon Islands result in a permanent Chinese military presence.   While the US has defended Ukraine's right to make its own foreign policy decisions, it seems to want to limit Solomon Island's choices.  Prime Minister Sogavare has articulated his own 3 No's Policy.  He says that the secret treaty has no provision for a Chinese military base, no long-term presences, and no ability to project power from the islands. The Solomon Islands are about 2k kilometers of Australia's coast.    Read next: President Of France To Be Chosen. It Is Another Factor Which Is Shaping Markets| FXMAG.COM The dispute over the Solomon Islands has emerged as a campaign issue in the May 21 Australian elections.  Prime Minister Morrison, who seeks a fourth term, has defended his foreign policy, and tried shifting the focus back to domestic issues with a promise to cap tax revenue at 23.9% of GDP and A$100 bln of tax relief over the next four years if re-elected.  Government revenues were 22.9% of GDP in FY21.  Labor leader Albanese has been diagnosed with Covid at the end of last week.  This disrupted his campaign in the tight contest.  Morrsion had contracted the disease in early March.   The dollar initially approached JPY129 but falling US yields saw it come off and traded below JPY128, where a $425 mln option expires today.   The greenback remains in the range set last Wednesday (~JPY127.45-JPY129.40).  Indeed, it is trading within the pre-weekend range (~JPY127.74-JPY129.10).  The takeaway is two-fold.  First the exchange rate is still closely tracking the US 10-year yield.  Second, after surging in March and most of April, the exchange rate is consolidating.  The Australian dollar is falling sharply for the third consecutive session.  It fell 1% last Thursday and 1.75% before the weekend and is off another 1% today. It is lower for the 11th session in the past 14.  It fell to a two-month low near $0.7150 in late Asian turnover before stabilizing.  The $0.7200 area now offers resistance.  The sell-off of the Chinese yuan continued.  The greenback gapped higher and never looked back.  Recall that the dollar settled around CNY6.3715 on April 15.  A week later, last Friday, it settled above CNY6.50 and today, pushed over CNY6.56.  It is the greenback's 5th consecutive gain and today's advance of a little more than 0.9% is the largest advance since March 2020. The dollar is trading at its best level in nearly a year and a half.  The PBOC set the dollar's reference rate at CNY6.4909, slightly lower than market projections (CNY6.4911 in the Bloomberg survey). The next key chart area is CNY6.60.   Europe Macron was easily re-elected with a roughly 58%-42% margin.   Partisans, perhaps trying to bolster the turnout and some press accounts seemed to exaggerate Le Pen's chances.  No poll showed her in the lead.  Still, the euro initially trading higher (~$1.0850) before falling to almost $1.07 before the end of the Asia Pacific session.  The June parliamentary election will shape Macron's second term and his ability to enact his program.  Separately Slovenia voted not to grant Prime Minister Jansa another term.  This further isolates Hungary's Orban.  Golob, the former head of the state-owned power company before dismissed by Jansa, will lead what appears to be a center-left government.   Last week, Germany's flash PMI was mostly better than expected.   Recall that helped by the surprising gain in the service PMI, the composite fell to 54.5 not the 54.1 economists expected (median, Bloomberg survey).  Today, the IFO survey was also better than expected.  The current assessment ticked up to 97.2 from 97.1, while the expectations component rose to 86.7 from a 84.9.  The overall business climate reading rose to 91.8 from 90.8.  Separately, the government is expected to announce a supplemental budget on Wednesday that will boost this year's net new debt to at least 140 bln euros.  This is a 40 bln euro increase to fund government measures to cushion the impact of the war and the surge in energy prices.  Some of the off-budget 100-bln euro defense spending initiative will may also be funded this year.   The euro traded to almost $1.0705 in late Asia Pacific turnover, its lowest level since March 2020.   There is a 945 mln euro option struck at $1.07 that expires today.  The pre-weekend low near $1.0770 may now serve as resistance.  There are large options at $1.08 expiring over the next two days (1.6 bln euros tomorrow and 1.2 bln euros on Wednesday). The Covid-low was set in March 2020 near $1.06.  Sterling has been pounded again.  It dropped nearly 1.5% before the weekend, a roughly two-cent fall that took it to around $.12825.  It has lost another cent today to about $1.2730.  While we noted chart support near $1.2700, the next important chart area is closer to $1.25.  It finished last week below its lower Bollinger Band, and it remains well below it (~$1.2850) today. In fact, it is more than three standard deviations from the 20-day moving average (seen near $1.2755).   America St. Louis Fed President Bullard opined last week that a 75 bp hike may be needed at some juncture.   He explicitly said that it was not his base case.  Yet some in the markets, and more in the media seemed to play it up.  No other Fed official seemed to endorse it; Fed futures are pricing in a 51 bp for next week rather than 50 bp.  The Fed's quiet period ahead of the May 4 FOMC meeting means no more official talk.  Today's economic calendar features the Chicago Fed's March national activity index, which is reported with too much of a lag to provide new insight or a market reaction.  The Dallas Fed's April manufacturing survey is due as well.  The early Fed surveys have not generated a consistent signal.  The Empire State survey was stronger than expected while the Philadelphia Fed survey was weaker than anticipated.  The Dallas survey is expected to have softened.   Canada's calendar is light until Friday's February GDP print.   The Bank of Canada does not meet until June 1.  The swaps market currently has a little more than a 25% chance that it hikes by 75 bp instead of 50 bp.  However, the Canadian dollar itself seems more sensitive to the risk-off impulse spurred by falling equities than the policy mixed in Canada.   Mexico reports IGAE economic activity survey for February.   It is too dated to have much impact, and in any event, is being overwhelmed by the risk-off attitude.  The bi-weekly CPI report, covering the first half of April, released before the weekend, was stronger than expected.  The headline rate rose to 7.72% and the core rate rose above 7% for the first time in this cycle.  It is particularly disappointing because seasonal considerations, like the summer discount on electricity taxes, often point to less price pressures.  The risk of a 75 bp hike at the May 12 Banxico meeting is increasing.   Read next: How Are Markets Doing? US Bonds, EuroStoxx 600, CSI 300 And More| FXMAG.COM The US dollar jumped 0.65% against the Canadian dollar last Thursday and slightly more than 1% before the weekend.   It is up another 0.2% in the European morning to around CAD1.2740, after having approached CAD1.2760 in Asia Pacific turnover.  The greenback finished last week above its upper Bollinger Band and has spent most of today's session above it (~CAD1.2720).  The market is over-extended but there is little chart resistance ahead of CAD1.28.  The peso's fall is also continuing.  The US dollar traded above its 200-day moving average (~MXN20.42) for the first time since March 18.  It is also above the (38.2%) retracement objective of the slide since the March 8 high (~MXN21.46), which is found around MXN20.39.  The next retracement (50%) is closer to MN20.60 and the measuring objective of the potential double bottom is near MXN20.60.     Disclaimer

Macro 2022-04-26 08:34 6 minutes to read Summary:  Market sentiment stabilized yesterday ahead of the heart of earnings season kicking off today, with the slide in the Chinese renminbi halted after official moves signaled some support for the currency. Still, the threat of Covid lockdowns looms in Beijing with tens of millions set for testing. Elsewhere, Elon Musk is set to take Twitter private in a debt-heavy deal, oil rebounded from a deep sell-off and gold has tested existential support. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - S&P 500 futures tested the 4,200 level yesterday as we highlighted was possible but found quick support before bouncing back to close above Friday’s close. That is a short-term positive signal but earning releases this week can still wreck this rebound trade, so we expect volatility to remain high over the coming days. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) - with another round of supportive rhetoric from central bank officials and pledge from the State Council to boost domestic consumption, markets found a bid in morning trading but their gains pared in the afternoon. Hang Seng Index was up 1.5% while CSI300 was down modestly. Chinese mega cap internet names traded in Hong Kong and retailers traded in the mainland were among the top gainers. HSBC reported in-line earnings, but common equity tier 1 (‘CET1’) capital ratio came at 14.1%, down 1.7 per centage point from 4Q21. Share price fell over 3%. Stoxx 50 (EU50.I) - signals from PBOC to support the Chinese economy and better than expected earnings from HSBC, UBS, Santander, and a FY profit guidance increase from Maersk are lifting equity sentiment with Stoxx 50 futures trading around the 3,735 level in early trading hours. That puts European equity futures back into the trading range from the past two weeks, but technically European equities remain weak it requires good news from earnings, China, and the war in Ukraine to move things higher. GBPUSD and USD/commodity currency and USD/EM pairs – with some relief in risk sentiment yesterday, the US dollar rally eased after first having extended its strength earlier in the day. As noted below, much of the force of the recent move has been linked by a jolt higher in USDCNH, which after a long period of quiet is finally catching up to the broader picture of USD strength and adding to that USD strength elsewhere. The weakest of currencies against the greenback in recent sessions have been commodity-linked, EM and Asian currencies with a significant exposure to China, but also sterling, which has suffered a vicious sell-off as the outlook for the UK economy rapidly deteriorates amidst soaring cost-of-living headwinds, cratering confidence, supply-side limitations, and massive external deficits. GBPUSD traders may eventually eye the ultimate support of 1.2000. USDCNH  at the center of the recent violent extension of the US dollar rally has been a marked weakening of the Chinese renminbi, which has come after a long period of extreme quiet even as volatility picked up elsewhere. Yesterday, China moved to cut the reserve-ratio-requirement for Chinese banks’ forex reserves by 1% (to 8% from 9%) to increase the supply of USD, a gesture suggesting that the recent pace of CNY devaluation has proceeded more rapidly than desired. The PBOC overnight promised targeted support for the economy, but the concerns linked to China’s zero-Covid strategy and threat weighs of a lockdown of Beijing similar to the recent experience in Shanghai.  Gold (XAUUSD)  trades back above $1900 supported by higher oil prices and a softer dollar. This following a two-day sell off that was triggered by aggressive US rate hike signals and a sharp drop in silver (XAGUSD) on growth concerns. With support around $1890 holding once again the yellow metal needs a break above support-turned-resistance at $1915. The Fed is currently on a collision course with the PBoC which needs to add stimulus on mounting growth fears, and it raises the question of whether the FOMC will be able to hike rates as aggressively as expected by the market. Until that question gets answered, the market is likely to get its directional input from oil (inflation and geo-risk gauge) as well as developments in China. Crude oil (OILUKJUN22 & OILUSJUN22)  bounced back following a two-day decline that briefly saw Bent crude dip below $100. A lockdown related drop in Chinese demand for fuel together with the prospect of a rapid succession of US rate hikes to curb growth have been the focus this past week. However, with the supply picture being as tight as it currently is, especially with Europe considering a ban on Russian crude imports, any signs of an improve situation in China would attract a renewed bid. Until then these major opposing forces are likely to keep the market rangebound and nervous. In Brent, only a break below $98 would signal additional and potential deep losses from technical selling. Resistance just above $106.50 where the 21- and 50-day moving averages meet. US Treasuries (IEF, TLT)  were sold late yesterday after posting a new 1-week low in yields, taking the yield for the 10-year benchmark back into the range above 2.82%. The high for the cycle in that important yield has been just above 2.95% - with 3.00% perhaps a psychological resistance ahead of the 2018 high near 3.26%. What is going on? US planting progress and crop conditions continue to highlight a challenging situation. A weekly report released Monday showed corn planting (CORNDEC22) had advanced by 3% to being 7% complete, the slowest pace in almost ten years and trailing last year’s pace of 17%. Winter wheat rated good/excellent dropped 3% to 27% and was near the worst on record. The planting delays and conditions have been caused by the weather being too cold, too wet, or a combination of both. Big grain harvests in North America are needed this year after Russia’s invasion of Ukraine has reduced shipments out of the Black Sea, from where 25% of the global wheat export originates, while raising doubts about this year’s crop production in Ukraine. Twitter board agrees with Musk on deal.  The two parties agreed yesterday with a purchase price of $54.20/share translating into a takeover market value of $44bn and part of the deal is massive use of debt which multiplied with the current interest rates will eat most of Twitter’s immediate operating profits, but since the company is going private the profit generation is no longer the main objective. Our view is that Musk’s acquisition of Twitter could be a problem for Tesla going forward as governments may use Musk’s ownership of Twitter against him in negotiations with Tesla. Bank of Canada Governor Tiff Macklem says BoC considering 50 basis point hike.  In testimony before Parliament, Macklem admitted that the BoC “got some things wrong” in its policy mix, voiced concern about broadening price pressures and guided for further tightening. Bank of Canada rate expectations were actually slightly lower yesterday, with CAD moves of late, at least in USDCAD, yesterday more correlated with risk sentiment and crude oil prices. The Bank of Canada is already priced to hike at least 50 basis points at each of its next three meeting. USDJPY lacks direction ahead of BoJ meeting on Thursday. The Japanese yen gains yesterday and overnight were capped by a rebound in US treasury yields. Japan finance minister Suzuki said that there is no truth to the media report on Japan/US discussion on joint FX intervention. While there may be room for a further fall in USDJPY given the outsized gains we have seen so far, policy divergence between the Fed and Japan remains the key theme and any BOJ policy tweak this week remains on watch. US earnings recap.  Coca-Cola beat expectations yesterday and is seeing higher revenue growth than what analysts had expected suggesting analysts are behind the curve on inflation dynamics and what it means for revenue growth. Activision Blizzard also reported earnings yesterday, which is part of the entertainment industry, and reported worse than expected figures with revenue especially disappointing at $1.48bn vs est. $1.81bn. IMF warns on Asia stagflation risk.  IMF has said that the Asian region faces stagflationary outlook with growth being lower than previously expected and inflation being higher. The larger-than-expected slowdown in China due to prolonged or more widespread lockdowns, longer-than-expected slump in the property market, constitutes significant risk for Asia. Monetary tightening will be needed in most countries, with speed of tightening depending on domestic inflation developments and external pressures. IFO April German business confidence surprises on the upside.  The headline index was up at 91.8 versus an estimated 89.0. The current assessment index is moving upward too, at 97.2 versus estimated 95.9. Finally, the expectations index is out at 86.7 versus estimated 83.5. This is very positive, of course. But we think optimism will not last. There are several factors which will negatively impact the German economy in the coming months: the possible new cold war, prevalent supply chain disruptions, higher energy bills, the acceleration of deglobalisation etc. All of this will have negative consequences on the German export industry. Be ready for worse data in the coming months. Inflation is hitting the UK consumer hard. According to the latest ONS survey, 43 % of UK households said they encountered difficulties paying their energy bill in March and 43 % say they will probably be unable to save in the next twelve months. These data are compared with a year ago. Expect UK consumption to fall sharply in the coming months. The likelihood of a recession is increasing, of course. What are we watching next? Risk of further Chinese Covid lockdowns.  The current focus in China as Covid spreads there is Beijing, where partial shutdowns were already ordered yesterday of one region of the city, but with mass testing of 20 million Beijing area residents set to begin. The province of Inner Mongolia is also a focus on concerns that Covid-related disruptions are set to reduce rare earth metal production there. Technology earnings and their profit margins.  Net profit margins are confirming their downtrend in Q1 according to preliminary earnings data, but technology companies measured by the Nasdaq 100 are seeing less impact on margins from rising input costs. As technology companies are the biggest constituents in the main indices it crucial how these companies perform on earnings this week, but also that they can demonstrate less impact from inflation. The first test of this thesis is tonight with earnings from Microsoft, Alphabet, and Visa. Earnings Watch.  Today’s earnings focus is on Microsoft, Alphabet and Visa which are all reporting after the US market close, which is the first real test of the US technology sector for the Q1 following preliminary disappointments from Netflix and yesterday’s Activision Blizzard earnings. Today: Kweichow Moutai, Ganfeng Lithium, First Quantum Minerals, Tryg, FANUC, Canon, HSBC, Banco Santander, Iberdrola, Atlas Copco, Novartis, UBS Group, Kuehne + Nagel, Microsoft, Alphabet, Visa, PepsiCo, UPS, Texas Instruments, Raytheon Technologies, General Electric, Mondelez, Chubb, 3M Wednesday: LONGi Green Energy, Teck Resources, DSV, Novozymes, Kone, Dassault Systemes, STMicroelectronics, Deutsche Bank, BYD, China Shenhua Energy, China Petroleum & Chemical, UniCredit, Keyence, GlaxoSmithKline, Lloyds Banking Group, Yara International, Iberdrola, Assa Abloy, SEB, Credit Suisse, Meta, Qualcomm, Amgen, Boeing, PayPal, ServiceNow, Ford, Southern Copper Thursday: Nokia, Sanofi, TotalEnergies, Denso, Hitachi, Barclays, Nordea, Apple, Amazon, Mastercard, Eli Lilly, Thermo Fisher, Merck, Comcast, Intel, McDonald’s, Linde, Caterpillar, Hershey, Twitter Friday: ICBC, China Yangtze Power, Midea Group, WuXi AppTec, TC Energy, Imperial Oil, Orsted, Neste Danske Bank, BASF, China Construction Bank, Agricultural Bank of China, Ping An Insurance, COSCO Shipping, Eni, AstraZeneca, BBVA, Hexagon, Exxon Mobil, Chevron, AbbVie, Bristol-Myers, Honeywell, Colgate-Palmolive Economic calendar highlights for today (times GMT) 0900 – ECB’s de Cos to speak 1040 – ECB's de Cos to speak 1200 – Hungary Central Bank Rate Decision 1215 – ECB's Villeroy to speak 1230 – US Mar. Preliminary Durable Goods Orders 1300 – US Feb. S&P CoreLogic Home Price Index 1400 – US Apr. Conference Board Consumer Confidence 1400 – US Apr. Richmond Fed Manufacturing Index 1400 – US Mar. New Home Sales 0130 – Australia Q1 CPI  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:    

Multi timeframe, as well as comparison analysis, have many benefits. As traders, we tend to utilize the shorter-term time frames to enter our trades and place our stops. But the BIG money is made from gleaning information from the longer-term charts. We would classify long term as monthly or weekly while short term would be a daily or 4-hour time frame. Comparison analysis can be done by comparing different time periods or we can see how our market is trading vs another highly correlated market. Since we have a lot of subscriber interest in stocks, we thought it might be time to compare the current chart of the SPY to the S&P 500 index during the 2002-2009 period. The S&P 500 weekly chart experienced a nice bull market with several buy points from 2002 up to 2007. S&P’s 2007 top occurred at its 2.0 or 200% extension of its 2002 high vs low. Then about 5-months later sold off a little over -20%. After hitting the key -20% psychological end-of-bull-market area the S&P rallied for several weeks up to its 1.618 overhead resistance. Then after turning back down at the 1.618 the S&P lost approximately -50% of its value. The complete drop occurred over a 17–18-month period from peak to trough. 2002-2009 SPX • S&P 500 INDEX CFD • WEEKLY • TRADINGVIEW SPY VULNERABLE TO ANOTHER -8% DOWN BEFORE STAGING A DEAD-CAT BOUNCE! The SPY is down approximately -12 to -13% from its peak for 2022. It is feasible the SPY could fall another -8% or reach -20% before it stages some type of rally into late summer or early fall. If this scenario plays out, we should then prepare for what could be a significant drop or bear market in the 4th quarter of 2022 that could extend into 2023 and beyond. The 2007 top of the S&P 500 index occurred at 2.0 or 200% of its previous major high-low swing low. The 2022 top for the SPY also occurred at 2.1618 or 200% of its Covid high-low swing low. The potential exists for the SPY to pull back -20% from its peak before staging a temporary rally to a lower distribution top. 2020-2022 SPY • SPDR S&P 500 ETF TRUST • 4-HOUR • TRADINGVIEW USD CONTINUES TO MOVE HIGHER We are now seeing that major economies (US/UK/Japan) are not immune from global deleveraging and inflation. Investors have been seeking safety in the US Dollar and this may eventually trigger a broader and deeper selloff in U.S. stocks. As the USD continues to strengthen corporate profits for US multinationals will begin to disappear. Especially in times like these, traders must understand where opportunities are and how to turn this knowledge into profits. Part of what we do at www.TheTechnicalTraders.com is to distill price action into technical strategies and modeling systems. These assist us in understanding when opportunities exist in the US stock market and specific sector ETFs. Our core objective is to protect our valuable capital while identifying suitable risk vs reward opportunities for profits in new and emerging trends. A CANARY IN THE COAL MINE – BERKSHIRE HATHAWAY Around 1911, miners would carry canaries into coal mines to give them an advanced warning of danger. This phrase or analogy is also utilized by traders in the financial markets. Our canary or canaries would simply be a market or stock that might give us an indication that there is a problem with the overall market or that the global equity markets are shifting from a bull to a bear. Berkshire Hathaway BRK.A (NYSE) founded and operated by famed Warren Buffet is a diversified holding company that owns subsidiaries that engage in insurance, freight rail transportation, energy generation, and distribution, services, manufacturing, retailing, banking, and others. It is a good candidate for “a canary in the coal mine”, in our case the stock market.  Berkshire is down approximately -9% from its 2022 peak but remains up +10% year-to-date. BRK’s stock price reached 200% as its shares traded above 2.618 and 2.666 for a few days before selling off. From its Covid low on March 23, 2020, to its 2022 high on March 29, 2022, BRK rallied 2 years and 6 days from trough to peak. If BRK were to lose -20% from its peak or give back all its 2022 gain in the stock price we should prepare to sell the rally that follows if we have not done so already. Note: TTT subscribers are already safely in cash awaiting trade instructions for select alternative or inverted ETFs. BRK.A • BERKSHIRE HATHAWAY INC. • NYSE • DAILY • TRADINGVIEW UNDERSTANDING PRICE IS A GAME-CHANger As technical traders, we follow price only, and when a new trend has been confirmed, we change our positions accordingly. We provide our ETF trades to subscribers. Recently, we entered new trades, all of which hit their first profit target levels and then eventually triggered their break-even profit stop-loss orders on their remaining position. After booking our profits we are now safely in cash preparing for our next trades. Our models continually track price action in a multitude of markets and asset classes as we track global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list. Sign up for my free trading newsletter so you don’t miss the next opportunity! Successful trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens. Historically, bonds have served as one of these safe-havens, but that is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there and how can they be deployed in a bond replacement strategy? We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com

Investing in mutual funds and ETFs is a fundamental part of long-term investing. In addition, when comparing ETFs to individual stocks, they are typically seen as safer investments since they are more diversified. Many of these funds aim to track specific indexes. Two examples of this are VOO which seeks to track the S&P 500 Index, and QQQ, which follows the NASDAQ 100 index. However, it can be hard to figure out which might be a better investment. Below is a comparison of these two popular funds to help you reach a decision. VOO vs. QQQ: Issuer When it comes to VOO vs. QQQ from an issuer standpoint, you're dealing with two very large firms. VOO is issued by Vanguard, the largest issuer of mutual funds globally. They are also the second-largest issuer of ETFs. So, needless to say, you don't become that large without knowing what you're doing. QQQ is issued by Invesco, another large and well-known issuer of mutual funds and ETFs. With more than $1.6 trillion in managed assets, it’s safe to say investing with an Invesco fund is a pretty safe bet. VOO vs. QQQ: Underlying Index Followed As mentioned early, VOO aims to track the S&P 500 Index. The S&P 500 Index seeks to track the 500 leading publicly traded US companies. Market capitalization is the primary criterion for a company to be included in the S&P 500 Index fund, but it is not the only criterion. QQQ aims to follow the NASDAQ 100 Index. The NASDAQ 100 Index includes 100 of the largest domestic and international non-financial companies based on market capitalization listed on the Nasdaq Stock Market. VOO vs. QQQ: Expense Ratios Expense ratios can be vital information when deciding what fund to invest in. Even a tiny difference can become thousands of dollars over the course of investing in a fund for 10 to 20 years. Essentially, with managed funds, there are expenses that go along with it. These expenses could be salaries to pay analysts or portfolio managers, management fees, rent for office space, and many others. Many funds will pass some or all these expenses on to you, the investor. The amount passed to you is shown as the expense ratio. When looking at VOO and QQQ, there is a stark difference in their expense ratios. While VOO maintains a meager 0.03% ratio, QQQ has a much higher ratio of 0.2%. For QQQ, that's more than six times that of VOO, which can add up to a lot of money paid to the fund over the long term. VOO vs. QQQ: Minimum Initial Investments Minimum initial investments (MII) will vary per fund and firm. The minimum initial investment only applies when you initially invest in a fund. Many funds require $100 - $5000 or more for your first investment. After that, you are free to invest any amount you wish on subsequent investments with the same fund. VOO’s current MII is the asking price of one share on that trading day. To give you an idea, as of writing this, VOO stands at roughly $387 per share. QQQ, however, has no minimum initial investment. QQQ is currently sitting at a share price of about $320, but you can essentially invest $1. VOO vs. QQQ: Net Assets and Holdings Comparing VOO vs. QQQ, each fund's top ten holdings are identical; see below. The main difference here is that while holding the same funds, VOO has roughly 24.7% of its $1.3 trillion ($321.1. billion) total assets in these stocks. In comparison, VOO holds about 29.5% of its $808.8 billion in the top ten holdings, roughly $238.6 billion. VOO vs. QQQ Top Holdings: Although tracking different indexes, VOO and QQQ have similar holdings in their top 10. Seven of the top holds are the same with: Apple (AAPL) Microsoft (MSFT) Amazon (AMZN) Tesla (TSLA) Alphabet Class A and C (QQQ holds both, while VOO does not) NVIDIA (NVDA) Meta (FB) QQQ rounds out its top 10 with Costco (COST) and PepsiCo (PEP), while VOO holds UnitedHealth Group (UNH), Johnson & Johnson (JNJ), and Berkshire Hathaway (BRK.A, BRK.B). While sharing similar stocks as their top 10, the amount invested in each varies slightly. VOO vs QQQ: Compositions One of the areas in which the VOO vs. QQQ comparison will differ is the fund composition. As mentioned earlier, VOO aims to track the S&P 500 Index, while QQQ seeks to track the NASDAQ 100 Index. As you might imagine, the number of stocks held in each is very different. QQQ currently has 102 different stocks. There are about 507 stocks in VOO, mostly large-cap and geared toward growth. Fewer stocks could generally be more volatile when there is more market volatility. VOO vs. QQQ: Overall Performance Of course, what most investors will put at the top of their criteria when determining which fund to invest in will be the performance! When looking at the performance of both VOO and QQQ, they both have very similar returns to the indexes they aim to track. Even though we say they have similar top 10 holdings, QQQ's returns over the past 1, 5, and 10 years have been much higher. It should be noted that NASDAQ tends to hold more Technology and tech-related stocks, a booming market sector over the past decade. QQQ Performance: VOO Performance: It should still be noted that the return over each fund's lifespan is better for VOO. It could also be a less volatile fund with more stocks being held meaning it is probably more diversified. VOO vs QQQ: Which is better? When making any investment, it comes down to your comfort level. The significant factor in VOO vs. QQQ is the performance, with QQQ winning out during the tech boom era. However, overall, VOO has had better long-term returns. VOO also has a much lower expense ratio, which should not be taken lightly as QQQ will need to continue outperforming VOO significantly to make up for its fees. VOO also holds more stocks, probably making it a less volatile fund to invest in. VOO vs. QQQ: Final Thoughts Both funds are backed by large asset managers in Vanguard and Invesco. Either ETF would make good additions to an investor's portfolio. While QQQ has better recent performance, the tech boom could be over since technology stocks are struggling in 2022, and the expense ratio is higher. On the other hand, VOO has better long-term total returns and would probably be less volatile. It can also serve as a core holding in some version of the Bogleheads 3-Fund portfolio. In the end, both have strengths and weaknesses. You'll need to determine which better fits your investment style and needs. Disclosure: None Author Bio: The author is the founder of the Dividend Power site. He is a self-taught investor and blogger on dividend growth stocks and financial independence. Some of his writings can be found on Seeking Alpha, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, FXMag, and leading financial blogs. He also works as a part-time freelance equity analyst with a leading newsletter on dividend stocks. He was recently in the top 100 and 1.0% (81st out of over 9,459) of financial bloggers as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha. Disclaimer: The author is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money. 

Financial markets still seem to be discounting the prospects of more difficult and expensive capital raising after interest rate hikes and a weaker outlook for the economy with consumption falling due to inflation. For the first 10 days of the month alone, the German Dax fell by about 4 percent, the U.S. Nasdaq 100 by 3.7 percent, the S&P 500 by 2.5 percent Thus, the stock market saying sell in May and go away in 2022 sounds prophetic, as since the beginning of the month it has been hard to find financial assets that could gain in value. For the first 10 days of the month alone, the German Dax fell by about 4 percent, the U.S. Nasdaq 100 by 3.7 percent, the S&P 500 by 2.5 percent, and the DJIA by 1.5 percent. Silver has dipped by 4.5 percent, Meanwhile, since the beginning of the month, the U.S. dollar has gained 0.64 percent. The markets are therefore seeing a broad outflow into cash as part of the potential cash phase of the business cycle, which typically occurs before the bond phase, when these have reached the peak of their yields. This, in turn, may be related to the anticipation of interest rate hikes and a peak in inflation. Nevertheless, it can be added that today's financial market offers solutions that can allow trading both under the rise and also under the fall of financial asset prices, including cryptocurrencies. It is cryptocurrencies that may be the loudest again today, since the beginning of May brought a crash in this market. It is cryptocurrencies that may be the loudest again today, since the beginning of May brought a crash in this market. Tonight bitcoin was trading near of $29,000, which was the lowest value since the crash in May 2021. It is safe to say that history has repeated itself in May 2022, and the background seems very interesting. We are talking about the breaking of the stablecoin UST, which at one point was trading below $0.7. This in turn may have forced the release of bitcoin reserves, which were a hedge against a 1:1 UST to USD exchange rate and a massive supply of BTC tonight. The event was reminiscent of George Soros' breaking of the Bank of England or the release of the franc from the minimum exchange rate at 1.20 against the euro. Whether cryptocurrencies can recover from this remains an open question, as one of the stable coin foundations has been undermined Once again the financial market, this time in crypto, served up an event like we have never seen before and on a scale that has not been seen before. Whether cryptocurrencies can recover from this remains an open question, as one of the stable coin foundations has been undermined. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

S&P 500 modest risk-on turn talked yesterday, is underway – with adequate support from bonds. That means the dollar is going to get under daily selling pressure, with positive consequences for assets spanning commonidities, precious metals and sure supporting tech as well (looking at TLT to cast a decisive vote for Nasdaq). Unfolding just fine, but what about the CPI effect? Likely to temper the oh so fast inflation theme, at least temporarily – and that would take pressure off the Fed‘s hand being twisted by the markets. Note though how both the 2-year and 10-year Treasury paused over the last days. Together with the arriving as anticipated negative quarterly GDP print, the temporary slowdown in pace of inflation would get an ally in retreating (especially long-term) Treasury yields reflecting the darkening real economy prospects. Time for a relief S&P 500 rally with both tech and value participation, if only HYG can perform somewhat better. Time for a relief S&P 500 rally with both tech and value participation, if only HYG can perform somewhat better. The bulls have a chance, and can run with it as best as they can. Cryptos thus far are modestly leaning in the „local bottom is in“ direction (in spite of the tectonic Tether developments), so the odds are for price gains across the board (at the expense of the dollar) during today – as long as markets interpret the upcoming CPI reading as slowing down / slowly peaking. Yes, since Jun 2020 when I started to talk early effects of inflation, the last week has been the first time when I raised the good likelihood of inflation making a local peak when May / Jun CPI readings come in, only to spring quickly back to life on the „economy is slowing, do something“ change in tune of demands made to the Fed. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM At these trying times for real asset bulls, let‘s take the proper precious metals perspective, enjoy the rich caption: It‘s the dollar, yields and miners coming back to life that would mark the coming upleg arrival Plenty of upside risk to become evident in 2H 2022, with my Monday‘s article covering the game plan for turnaround across the many assets on my daily watch. It‘s the dollar, yields and miners coming back to life that would mark the coming upleg arrival. Lean times until then. Read next: (EUR/USD) German Inflation Meets Forecasts, Pound Sterling Continues To Weaken (EUR/GBP, GBP/USD), (EUR/JPY) Japanese Yen Strengthens As Investors Seek Safe-Haven Assets| FXMAG.COM There, you can subscribe to the free Monica‘s Insider Club Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

The dollar got a fresh boost, with stocks coming under renewed pressure after a new batch of US inflation data. The annual inflation rate slowed from 8.5% to 8.3% The US consumer price index rose 0.3% in April after 1.2% a month earlier. The annual inflation rate slowed from 8.5% to 8.3% but was higher than the expected 8.1% y/y. Particularly worrying for markets is the development of core inflation. The corresponding index added 0.6% m/m and 6.2% y/y last month, higher than the expected 0.4% and 6.0%, continuing the sprawl of inflation. Higher-than-expected inflation is now positive for the dollar and weighs on equities as it suggests a more robust Fed response While the annual rate of core and core inflation seems to have peaked, higher-than-expected inflation is now positive for the dollar and weighs on equities as it suggests a more robust Fed response. With inflation far from the 2% target, the Fed will be inclined to act faster (raise rates more than 50 points at a time) or stop hiking at a higher level. A significant risk demand indicator, bitcoin, has already moved out of the range with a lower boundary in January 2021 Locally, we see a tug-of-war around the dollar against the euro and yen near the lows of the past two weeks and swings against the pound and the franc near this week’s extremes. However, a significant risk demand indicator, bitcoin, has already moved out of the range with a lower boundary in January 2021. The S&P500 and Nasdaq futures were also pushed back to this week’s lows, indicating continued bearish pressure.

Summary: S&P 500 has seen 0.72% growth today. The value of (XAUUSD) gold has shown bullish signals in the market today. Read next: Tech Stocks Plunging!? Trade Desk Earnings Announcement Pushes Tech Giant Stock Down, Russian Ruble Strengthening and Ford Motor Co.  S&P 500 is rising during trading today The U.S CPI report which offered an update on price increases across U.S for April was released by the U.S labour department on Wednesday. The report reflected there was some deceleration of inflation figures compared to March, however, the rate of price increases exceeded analyst expectations. The CPI for April decelerated marginally compared to the March figures. The figures represent how far the Fed will have to go in the future regarding tightening monetary policy to fight the rising prices. S&P 500 Price Chart Will Gold rally in the wake of the CPI report? Gold futures have increased in value today, the initial increase came before the CPI report was released by the U.S labor department, and the increase has continued after the release. The lower than expected CPI figures bode well in the favour of the gold prices as uncertainty arises amongst investors on the Fed's next move. With volatility in the stock markets likely to continue, perhaps investors are trying to hedge their bets, driving the price of gold upwards. Gold Futures Jun’22 Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100.  Sources: Finance.yahoo.com

Summary: Elon Musk put the twitter deal on hold. Stock prices drop. Elon Musk Tweets that twitter deal is on hold On Friday Elon Musk tweeted that the deal to buy out twitter has temporarily been put on hold. Elon Musk claims to be awaiting data on the proportion of fake accounts on the social media platform. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM This pause in the acquisition is likely to cause frustrations for many people in the company In the wake of Musk's tweet, the share price of twitter has fallen by almost 15%. Musk Tweeted “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM This pause in the acquisition is likely to cause frustrations for many people in the company, especially given that many executives have been laid off already during company restructuring. The question lies in when the deal will be back on the table. TWTR Price Chart Sources: finance.yahoo.com

US stock markets closed last Friday with a substantial and widespread gain. Do we see a dead cat bounce or the beginning of a recovery? So far, there are more reasons to suspect the former. Technically, the S&P500 has managed to bounce back from a bear market territory and has temporarily returned to levels above 4000, while Dow is above 32000 The CNN Fear & Greed Index was down to 7 last week, rebounding to 12 by Monday. Current levels are still in extreme fear territory, but a rebound from multi-month lows often heralds a return of buyers who think the emotional sell-off has gone too far. Technically, the S&P500 has managed to bounce back from a bear market territory and has temporarily returned to levels above 4000, while Dow is above 32000. However, in our view, we saw positional profit-taking on Friday, but not the end of a downward trend. The weekly chart’s S&P500 and Dow Jones indices have not yet reached the oversold area where they appeared attractive for buying in March 2020. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM Particularly worrying is the comparatively quiet nature of the sell-off. The market volatility index VIX remains the only one of the seven “Fear and Greed” components in neutral territory. The latter signals a systematic sell-off of assets rather than a panic flight. This is not a straightforward approach for the market to change. Treasury and Fed officials are often willing to flood the markets with liquidity in cases of extreme volatility. Still, without it, they see what is happening as a natural process in which it is harmful to interfere. So far, we can see the intention of a 50 point hike in the next two meetings in June and July after a similar move in May at the same time as the asset sales from the balance sheet The technical picture in the US indices now more closely resembles the first half of 2008. That means that the climax of the panic (October 2008) and the bottom (March 2009) are yet to come. This is also supported by the Fed’s rhetoric that hopes to avert an economic recession through policy tightening is prevented. So far, we can see the intention of a 50 point hike in the next two meetings in June and July after a similar move in May at the same time as the asset sales from the balance sheet. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Monetary tightening locally looks like a breeding ground for bears, who might target the area below 30000 in the Dow Jones, trying to close the gap near 28300 from November 2020. For the S&P500, the bears’ ultimate target might be the 3300-3400 area, where the pre-pandemic peak and the starting point of the rally in November after the Biden victory are concentrated. Perhaps only by zeroing in on all the coronavirus and retail-associated gains in equities and taking inflation into negative territory could we see an inflow of long-term capital into equities.

As it does every month, Bank of America conducts a survey of fund managers with nearly $900 billion AUM. Its results in the May edition seem very interesting, indicating the risks and actions of institutional investors. According to the survey, investors appear to be hoarding cash as the outlook for global economic growth falls to an all-time low and fears of stagflation increase. Cash holdings among investors have reached their highest level since September 2001, according to the report. A survey this month of investors managing $872 billion also found that hawkish central banks are seen as the biggest risk to financial markets. A global recession came in second, and concerns about stagflation rose to their highest level since 2008. The findings could show an uninspiring outlook for global equities, which are already on track for their longest weekly losing streak since the global financial crisis, as central banks turn off the tap on money at a time of stubbornly high inflation. The BofA report said the stock market may be in a bear market, but the final lows have not yet been reached. More interest rate hikes by the Federal Reserve are still expected, and the market is not yet in full capitulation. The BofA survey also found that technology stocks are under the most pressure since 2006. Overall, investors were most attuned to holding cash, and are least inclined to go for: emerging market stocks, eurozone stocks and bonds at the moment. The report also found that the so-called most crowded trades at the moment are long positions on oil (28%), short positions on U.S. Treasury bonds (25%), long on technology stocks (14%), and long on bitcoin (8%). According to the respondents, the value to which the S&P 500 index would have to fall for the Fed to start refraining from further monetary policy tightening falls at the level of 3529, i.e. about 12% below the current level. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Plunging US equities set the tone for Asian markets  Source: shutterstock Macro outlook Global: Yesterday was a horrible session for US stocks. Selling pressure was evident from the starting bell, and equity futures today are signalling no sign of buying the dip either. The S&P500 fell more than 4% and the NASDAQ was down 4.73%. The S&P now stands just one bad day away from an official bear market. The NASDAQ is already there. Benchmark FX markets reflected the risk-off tone and reversed yesterday’s moves and more. The EURUSD is now back down to 1.0474, and this has helped pull the AUD back below 70 cents. The JPY has begun to appreciate again and is now at 128.24 whilst the KRW also made gains on a day when most Asian FX was looking fairly weak. US Treasuries too were benefiting from the fall in risk sentiment. Yields on the 2Y US Treasury note fell 3.1bp to 2.669%, while those on the 10Y bond fell 10.2bp to take the yield to 2.884%. There’s not much on the macro calendar today. US existing home sales may just be worth a second or two’s glance. With growing talk of recession vs soft-landing, the interest-sensitive housing sectors may provide a sneak preview of any turn in the economic cycle. Australia: Australia releases its April employment report shortly, and the market is looking for employment growth of about 30,000 and a further slight fall in the unemployment rate to 3.9% from 4.0%. We don’t have any issues with these assumptions. A 3.9% or lower unemployment rate would be a new record low, but we don’t think it particularly changes the story for the RBA, now that they have accepted that inflation is sustainably above their target. Likewise, yesterday’s slightly lower than expected wage price index is not particularly binding right now. All that a very strong labour report may do is raise the prospects of greater than 25bp hikes at forthcoming meetings. China: The Shanghai lockdown is unwinding gradually. The government expects the end of the lockdown will be in early June. For now, Beijing and Tianjin both have districts under lockdown. We expect more districts will be locked down as more Covid clusters are found. The port of Tianjin is important for hard commodity trade. Though we have not seen disruption in Tianjin’s port yet, this could become an issue if stricter social distancing measures are applied. Domestic prices of commodities could increase in this case. Japan: The trade deficit widened to -JPY839bn in April (vs -JPY412.4bn in March), recording the 9th consecutive month of deficit. Exports grew 12.5% YoY while imports rose by 28.2%. Import growth remained rapid, but probably peaked last November (+ 43.8%). Meanwhile, March core machinery orders rebounded by 7.1%MoM (vs 3.9% market consensus), partially offsetting the previous month’s loss of -9.8%.  Yesterday’s 1Q22 GDP was better than expected. But this means that the 2Q rebound will probably be weaker than we previously thought. Pent-up demand-driven consumer spending will lead growth in 2Q, but higher inflation will dampen household purchasing power and moderate any bounce. Today’s data suggest that trade will remain the main drag on 2Q growth, while investment spending will decelerate further. We are planning to revise down 2Q22 GDP soon. Philippines: Bangko Sentral ng Pilipinas (BSP) meets to decide on policy today.  Governor, Diokno, who previously vowed to keep rates untouched through to the second half of the year now indicates that the space to keep accommodation has “narrowed significantly”.  We expect BSP to hike policy rates by 25 bps and possibly hint at additional tightening at the 23 June meeting.  What to look out for: US initial jobless claims Japan trade balance (19 May) Australia unemployment (19 May) Philippines BSP policy meeting (19 May) Singapore 1Q GDP final (19 May) US initial jobless claims (19 May) Japan CPI inflation (20 May) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Every Tuesday our Global Macro Strategist Luke Suddards will be analysing the charts of key global asset classes such as FX, commodities and more. Catch him on Twitter - @lukesuddards Also, he produces The Weekly Close Out every Friday, which provides key insights into the main catalysts for all the major global macro assets throughout the week. The analysis takes a hybrid approach - combining fundamental and technical analysis with charts to enhance your trading experience. Sign up here to receive it directly in your inbox: https://cloud.go.pepperstone.com/week ➡️ Follow us on Telegram for daily market news and insights: https://t.me/s/PepperstoneFX Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Follow FXMAG.COM on Google News

Summary: S&P 500 suffers in the wake of market sell-off for tech shares Update on the Russian Ruble Read next: Hawkish ECB Bodes Well For The Euro, UK PMI Data Disappoints (EUR/GBP), Hawkish SNB Offers Swiss Franc Still Support (USD/CHF), AUD/JPY - Good Morning Forex!  S&P 500 price drops The price of the S&P 500 fell more than 0.8% on Tuesday in the wake of Snap Inc. (SNAP) saw its biggest recorded one day drop in price and dragged some of its tech peers along with it. On Monday Wall Street closed in the green for only the 13th time out of 98 trading days this year, Tuesday's price drop builds on the broader negative market sentiment towards equities. S&P 500 Price Chart Russian Ruble The Russian Ruble has been the best performing emerging currency, it has gained around 33% against the US Dollar over the past year. Russia maintains strong trade relationships with India and China, which keeps the Ruble flowing. In addition, Russia continues to supply the European Union with Natural Gas despite the EU’s alliance with the United States against the Russian invasion of Ukraine. Russia managed to find a loophole to get out of servicing its debt, however the loophole ends on May 25th and the Ruble may be in trouble, and Russia may face default. Read next: Snapchat (SNAP) Earnings Forecast Sends Causes Social Media Stocks To Fall  Sources: finance.yahoo.com, dailyfx.com

Summary:  A technical rally occurred overnight, seeing the S&P500 gain after 7 days of declines, while Agriculture and Energy stocks shone the most, gaining even more momentum proving they are an inflation hedge. In quality tech, Apple shares rose 4% with long-term investors dripping in buy orders. Meanwhile, in big banks JPMorgan gained 6% upon forecasting net interest income to rise, which supported gains in Bank of America, Citigroup. We don’t think the market is at breaking point yet. However see Commodity gains intensifying and offering further upside, as the world worries global wheat supplies could run out in 10 weeks, while demand for lithium batteries rises seeing lithium companies upgrade their earnings and rally. What’s happening in markets that you need to know Big picture themes? Of the Equity Baskets we track across different sectors, we can see select risk appetite is starting to come back in to the market; China’s little giants are up the most month-to-date, supported by China’s fresh interest rate cut. Meanwhile, Cybersecurity stocks were up overnight (but are still down 24% YTD). Year-to-date though, our high conviction asset class, Commodities continues to see the most growth, followed by Defence. In the S&P500 oversold Ag and Bank stocks shine; Agri and Farm Tech stocks were up the most overnight, followed by Diversified Banks. In terms of standout stocks; Ross Stores and Deere (DE) rose the most (9%, 7%), after being two of the most oversold stocks last week. In S&P500 Deer was THE most oversold member. Deer makes 65% of its revenue from Agricultural equipment and selling turf. Earnings are expected to grind higher in 2022 and Deer pays a small dividend yield (1.25%). Asia Pacific’s stocks are trading mixed following more Tech disappointment in the US. While risk sentiment was upbeat overnight on Wall Street, Asia Pac’s markets turned most lower following Snap’s warning that it is unlikely to meet revenue and profit forecasts. Tech sentiment eroded again and further consumer staples earnings results this week are keeping investors cautious. Australia’s ASX200 trades flat, weight by tech falling,  with Block (SQ) down 6% after Bitcoin trades under $30k (Block makes most of its money from BTC transactions). Meanwhile, ASX lithium stocks continue to surge, supported by the new Australian government’s EV stimulus, seeing Liontown (LTR), Allkem (AKE), MinRes (MIN), Pilbara (PLS) dominate the leaderboard and rise 3-4%. Japan’s Nikkei (NI225.I) is down 0.3% led by Recruit (6098) which operates the popular HR engine “Indeed” and company information website “Glassdoor”. Singapore’s STI index (ES3) was however up 0.2% despite a record high inflation and a potential chicken-price shock. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Chinese and Hong Kong equites see lackluster trading despite incremental stimulus measures from the State Council and Biden’s remarks on reviewing tariffs on goods from China.   The attempt to rally in the opening hour in response to positive news of 33 stimulus measures from China’s State Council failed.  Overnight news that Biden will discuss with Treasury Secretary Yellen about reviewing tariffs on goods from China as part of the Biden administration’s effort to ease U.S. inflationary pressures did not incur much excitement. Hang Seng Index (HSI.I) fell 0.8% and CSI300(000300.I) was 0.3% lower. Among the 33 measures was a reduction of RMB60 billion in the purchase tax on passenger cars Great Wall.  Great Wall Motor (02333), Geely (00175) and Guangzhou Automobile (02238) rose 3% to 10% while shares of EV makers fell 3%-9%.  Although reporting a larger than expected 159% YoY increase in revenues and a 30bp improvement of gross margins to 10.4% in Q1, XPeng’s (09868) share fell almost 9% on cautious Q2 guidance.  What to consider? Fed speakers remaining flexible. Fed’s Bostic backed a series of 50bps rate hike moves overnight but hinted at a pause in September if inflation comes down but also opened doors to more aggressive moves if inflation doesn’t cool. Fed’s George said she expects the central bank to raise interest rates to 2% by August (which also means about 100-125bps of rate hikes from the current 0.75-1% rates or 2-3 50bps rate hikes). While the base effects may make headline inflation appear to be softening into the summer, real price pressures aren’t going anywhere and Fed’s hiking pace is likely to continue to prove to be slow. AUD and NZD unable to sustain gains. A fresh slide was seen in NZD this morning following the unexpected decline in retail spending reported today. RBNZ decision is due tomorrow  (in early Asian hours) and it is still a close call between 25 and 50bps rate hike. But it’s more important to note that RBNZ is way ahead of other central banks and getting close to neutral faster than others, which means room for further upside in NZD is limited. AUDUSD is also back below 0.7100 and remains prone to a reversal in risk sentiment more than any domestic developments. While the AUDUSD rose to a 3-week high yesterday, supported by the Australian Labor Government being sworn in after winning the election and bringing in an EV policy ($2k tax incentives), vowing to keep Defense Spending at over 2% of GPD and pledging to offer more childcare support to keep employment high. The USD will likely remain favored for now as risk aversion returns and cut the rally of the AUD.  ECB getting ready to move to exit negative rates. ECB President Lagarde’s comment that the central bank is likely to exit negative rates by the end of the third quarter put a massive bid into the EUR overnight but the pair turned lower from 1.0700 with focus on Fed Chair Powell and PMIs due today. With Fed comments getting repetitive, there is room for ECB’s hawkishness to support the EUR even as Lagarde continues to downplay the possibility of a 50bps rate hike. Germany’s economy shows signs of unexpectedly strengthening in May. Germany’s IFO reading was out at 93.0 versus prior 91.9 in April. The increase is mostly explained by an improved current assessment. The expectations component is almost unchanged and close to levels last seen at the start of the pandemic. Several factors are pushing respondents to be careful regarding the future: supply chain frictions, the Shanghai lockdown, persistent inflationary pressures and lower real disposable incomes of households etc. The German economy will not plunge as it did at the start of the pandemic, of course. But we think that risks of a stagflation are clearly titled on the upside. We will watch closely the first estimate of the May PMIs this morning to have a better assessment of the economic situation in Germany and in the rest of the eurozone.  Potential trading ideas to consider? Singapore’s inflation pain is rising. Core CPI was at a decade high in April at 3.3%, and this is still not a peak. Singapore’s national lunch meal chicken rice is set to get expensive as Malaysia is halting exports of chicken. About 34% of Singapore's chicken imports come from Malaysia. While alternate sources of fresh chicken and options such as frozen chicken may be possible, this is not the last inflation shock to hit the island economy. Vegetable prices are also on the rise due to shortages of supply and the high fertilizer prices. In times like this, we would reiterate the possible inflation hedges remain gold, REITs and commodities. In summary, it is important to look for value investments or stocks that have a solid cash flow generation ability and pricing power but still priced below their fair value. The plot for investing in Lithium thickens.Lithium remains one of our preferred metal exposures for 2022 for upside. Albemarle Corp, the world’s largest lithium producer upgraded its outlook for the second time this month expecting higher lithium prices and demand to further boost their sales. We’ve seen many EV companies sell out of some of their electric vehicles, and this highlights the lack of supply in battery metals, which is also pushing up the lithium price. Albemarle Corp, expects sales to now be as high as $6.2 billion this year, up from its previous estimate of up to $5.6 billion. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM If have a long time horizon for investing, you could consider dripping money into the market (this is called dollar cost averaging). Remember Shelby Davis said you can make most of your money in a bear market, you just don’t realize it at the time. But the key is to look at quality names that are in a position to return cash to shareholders. So if you want to be in tech for example, you could look at names like Apple, Microsoft and Google, who lead the S&P500 and Nasdaq indices and are growing their earnings and this is likely to continue over the next several years and longer term. The idea is that names like these, will likely lead a secular bull market, once the Market eventually begins to recover. And you ideally want to be in names with growing earnings, rather than throwing darts at some of those names with patchy results that are akin to Ark innovation ETF for example. China’s State Council announced 33 stimulus measures.  An additional VAT credit refund of RMB140 billion brings the overall target of tax refunds, tax cuts and fee reductions to RMB2.64 trillion in 2022.  China is also introducing a reduction of RMB60 billion (equivalent to about 17% of auto purchase tax last year) in tax on passenger car purchases.  The Government is increasing its supports to the aviation industry and railway construction via special bond issuance and loans and is rolling out a series of energy projects.  It is doubling the lending quota for banks to lend to SMEs and allow certain borrowers to postpone repayments.  The State Council also reiterates its support to promote legal and compliant listings of platform companies in domestic as well as overseas markets. Key company earnings to watch this week: Tuesday: Kuaishou Technology, Intuit, NetEase, AutoZone, Agilent Technologies Wednesday: Bank of Nova Scotia, Bank of Montreal, SSE, Acciona Energias Renovables, Nvidia, Snowflake, Splunk Thursday: Royal Bank of Canada, Canadian Imperial Bank of Commerce, Lenovo, Alibaba, Costco, Medtronic, Marvell Technology, Baidu, Autodesk, Workday, VMware, Dell Technologies, Dollar Tree, Zscaler, Farfetch Friday: Singapore Telecommunications   For a global look at markets – tune into our Podcast.  Follow FXMAG.COM on Google News Source: Saxo Bank

Summary:  Today we look at the normally high-beta bubble sectors continuing to weigh very heavily on the US equity market, even as the S&P 500 managed to pull solidly off the lows yesterday. We continue to highlight the "Bermuda triangle" of Tesla-ArkInvest-Crypto as an ongoing contagion risk. We also look at the market impact of a trio of weak US economic data points, the latest on crude oil and natural gas, FX moves and the status of the US dollar, upcoming earnings including Nvidia and Snowflake, and more. 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 and have a look at today’s slide deck. 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: Saxo Bank   Follow FXMAG.COM on Google News    

Jonny Hart speaks to APAC Senior Market Analyst Jeffrey Halley about news impacting the market and the week ahead. It’s June already and a blockbuster week for data releases around the world. First of all, we take a look back at last Friday’s impressive US equity close. Jeff discusses its drivers, its threats, and potentially, its longevity. Then it’s over to Asian equity markets today which are also enjoying a banner day. US Stocks And China   The US Friday session and also covid-zero developments in China over the weekend are driving “most” stock markets higher. Potential banana skin is looming though, with Brent crude rising above $120.00 a barrel in Asia today. Jeff looks at the oil market, what’s driving the price increase, and its potential impact on market sentiment this week. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Holidays And US Non-farm Payrolls There are a number of holidays this week, starting with US markets today, then Greater China is dragon boating on Friday, and the UK has two days off at the end of the week. Happy Jubilee Your Majesty. We discuss how holidays can impact markets. Finally, it’s a wrap of the heavy-duty data calendar across Asia and the US this week, culminating in the US Non-Farm Payrolls. Jeff highlights also, something that markets have been ignoring up until now, the start this week, of Federal Reserve Quantitative tightening. 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. Follow FXMAG.COM on Google News

Asian markets rally on positive Wall Street and China hopes S&P 500, Nasdaq And Dow Jones US markets closed out the week on another positive note after US data alleviated inflation fears and thus, future Fed tightening, and showed strength among US consumers still. Realistically, after such a positive week, it would have taken a lot to knock the FOMO gnomes of Wall Street off their path of bottom-picking nirvana. The S&P 500 rallied by 2.48%, while the Nasdaq leapt by an impressive 3.33%, with the Dow Jones climbed by 1.76%. The rally has continued in Asia, with Nasdaq futures 0.90% higher, with S&P 500 futures up 0.40%, and Dow futures edging 0.10% higher. US OTC markets are closed for Memorial Day. End Of COVID Restrictions? Asia is also turning in a positive performance, following the impressive New York close, and boosted by hopes that China’s Beijing and Shanghai hubs are reopening from virus restrictions and a package of stimulus measures released by the Shanghai local government. Nikkei 225 And CSI 300 Japan’s Nikkei 225 has coat-tailed the Nasdaq 2.10% higher today, with South Korea’s Kospi gaining 1.25%, and Taipei rallying by 1.60%. In mainland China, the Shanghai Composite is a more cautious 0.30% higher, with the CSI 300 rising by just 0.40%. The ever-optimistic Hong Kong, however, had leapt 2.50% higher, boosted by hopes of an Evergrande bond deal. Follow FXMAG.COM on Google News Metals In regional markets, Singapore is up just 0.20%, while Kuala Lumpur has fallen 0.25%, and Jakarta is 0.60% lower. A Goldman Sachs report suggesting metals prices have peaked is likely weighing on all three markets, as risk sentiment swings back to more growth-stock orientated markets. Bangkok has gained 0.65%, while Manila has rallied by 1.25%. Australian markets have also liked what they have seen with Wall Street and China, the ASX 200 and All Ordinaries climbing by 1.25% today. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Russian Oil Friday’s New York close and Asia’s rally today should be enough to lift European equity markets this afternoon, although the still simmering EU import ban on Russian oil and Brent crude above USD 120.00 a barrel will temper bullish animal spirits. 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.

S&P 500 turned the corner, yields peaked for now, and dollar likewise. Risk-on sentiment is ruling the day, with value outperforming tech – but at least the latter is also recovering. Stocks though haven‘t turned the corner in earnest, no matter the gains they‘re still about to clock in. Enjoy the rally while it lasts (long entry is a matter of individual trade‘s risk reward ratio – more than a few good percent are still ahead before the fresh downleg strikes. Fed You can look forward for tomorrow‘s extensive analysis, where I‘ll examine the Fed and macroeconomics in the weeks and months ahead vs. the turnaround sequence discussed three weeks ago – unfolding like clockwork. Here‘s a quote from tomorrow‘s article: (…) I don‘t think we‘re looking at a fresh uptrend, there is still much stress (to be reflected in stock prices) in the consumer arena. VIX For now, the key question is the degree to which VIX calms down – would it be able to keep below 23-24 to extend the shelf life of this rally? And for how long would the lull in volatility last? I think the answer is a few short weeks, before it becomes obvious that the fundamentals haven‘t changed. The consumer remains in poor shape, inflation would remain stubbornly high (even as it had indeed peaked), and the credit default swaps for quite a few (consumer sensitive) companies are rising relentlessly, which isn‘t yet reflected in underlying stock prices. I‘m talking financials too – this broad stock market rally has more than a couple of percent higher to go before the weight pulls it back down, and earnings estimates get downgraded again. Stayed tuned for more, enjoy and profit along! Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Happy extended weekend. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Follow FXMAG.COM on Google News

US stock indices developed a strong rebound all last week. The S&P500 spot index reached 4200, gaining more than 10% from the lows of May 20. Such a rapid recovery has raised the question of whether we are seeing a brief bear market rally or whether the markets have passed the “bottom” of the correction. The situation looks like touching bear market territory was a red rag for the bulls, who have since turned to aggressive action. Fundamental factors are now on the side of the former, while technical analysis favours the latter scenario. Fighting With Inflation Or Supporting Economic Growth Monetary authorities in the USA and other developed economies are increasing the pace of monetary policy tightening, focusing on fighting inflation rather than supporting economic growth. We continue to get bearish signals from this perspective, as the economy and markets have yet to feel the brunt of rates not seen in over ten years. Meanwhile, inflation and a slowdown in consumer demand due to high rates promise to eat into real corporate profits in the coming months. The tipping point in consumer activity is unlikely to come before we hear from the Fed that there will be no further rate hikes. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The S&P500 index has perfectly touched 61.8% of the rally from the lows of March 2020 to January 2022. We have seen some rallies in a falling market during the five-month decline. But so far, touching the formal bear market area (20% decline from the peak) in the S&P500 has attracted buyers. Moreover, by the time the lows were touched earlier this month, the market was already oversold, but there were also signs of divergence between the RSI on the daily timeframes and the index level. This is a clear indication that the selling was not as fierce as before. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM S&P 500 The very fact that the S&P500 took a 7-week-long losing streak, one of the longest in history, and has now shown a sharp rebound, is setting a positive mood. The last time we saw such a bullish awakening was in November 2020, after which the stock market added for more than a year, even though there seemed to be no room for growth. Follow FXMAG.COM on Google News

Summary: S&P 500 makes up for May losses. The Pound sterling hasn't had a great run lately especially because the UK economy isn't performing as well as its major economy counter-parts. Read next: Strong Investor Sentiment Toward The Euro Continues (EUR/USD), EUR/GBP Currency Pair, As China Ease Lockdowns The AUD Outlook Seems Positive (GBP/AUD, AUD/USD)  The S&P 500 gained almost 2.5% on Monday On Monday the S&P 500 gained back its May losses and broke its seven week losing streak, as institutional investors chose to balance their portfolios again to the end of the month. Luxury stocks seemed to be the top performers today in the wake of improved investor sentiment as China begins easing lockdowns. GSPC Price Chart Pound Sterling under pressure As the cost of borrowing increases, a cost-of-living crisis, the reality of lower productivity and inflation at 40 year highs, all of these factors mentioned are putting the Pound sterling under pressure. The reality of a looming recession keeping investors on their toes. A source on bloomberg predicts that the UK economy could shrink by 0.4% this quarter. The Pound sterling hasn't had a great run lately especially because the UK economy isn't performing as well as its major economy counter-parts. Sources: investors.com, bloomberg.com, finance.yahoo.com

Summary: S&P 500 has lost more than 1% during the trading day. AUD outperformed USD on Wednesday. S&P 500 loses Tuesdays gains U.S stocks fell early on Wednesday in the wake of stronger-than-expected data from the U.S manufacturing sector. Since then, the S&P 500 has lost more than 1% during the trading day. The data released by the institute for supply management reflected that the U.S manufacturing sector grew faster than the market expected, another signal that the fears of the U.S economy going into a recession may be overblown. Following the manufacturing data release, the JPMorgan boss (Dimon) told Bernstein's Strategic Decisions Conference that the U.S. economy is facing a "hurricane" as the Fed continues its to try to normalise interest rates. GSPC Price Chart Australian Dollar benefits from favourable GDP data The Australian Dollar may have outperformed the US Dollar on Wednesday, but future policies from both the central banks could impact this currency pair. Reserve Bank of Australia (RBA) GDP data released on Wednesday exceeded market expectations, making it Wednesdays best performing currency. Read next: Russian Oil Embargo Decision Weighs on The Euro (EUR/USD, EUR/GBP), Australian GDP Data Released On Wednesday Exceeds Market Expectations (AUD/USD)  Sources: finance.yahoo.com, pounsterlinglive.com

Asian markets rise as China eases restrictions Friday’s higher than expected US Non-Farm Payrolls saw Wall Street make an abrupt retreat as easier Fed hiking hopes on a slowing economy were dashed, although I’d argue a slowing US economy wouldn’t be good for equities either. The S&P 500 finished 1.63% lower, the Nasdaq tumbled by 2.47%, and the Dow Jones fell by 1.06%.  Asian equities rise on Beijing reopening - MarketPulseMarketPulse In Asia, an easing of restrictions in Beijing, along with reiterations of easy monetary policy in Japan has shielded Asia from New York’s back-and-forth volatility, lifting sentiment in US futures and North Asian markets. US futures have rebounded with Nasdaq futures rising 0.70%, S&P 500 futures are 0.50% higher, and Dow futures have added 0.40%.   Japan’s Nikkei 225 has risen by 0.60%, unwinding a rocky start. South Korea is closed today, but mainland China’s Shanghai Composite has jumped by 1.05%, with the CSI 300 leaping 1.50% higher. Hong Kong’s Hang Seng has rallied by 1.10% and it appears that reopening news and its positive outlook forward is outweighing any backwards-looking Chinese data like the PMIs for now.   The picture is more mixed in the rest of Asia, possibly thanks to higher oil prices and a soggy New York close. Singapore is 0.15% lower, having unwound most of its earlier losses. Taipei is 0.55% higher, while Jakarta has fallen by 1.50%, led by resources after the government announced it was investigating potential palm oil distribution cartels. Malaysia closed today, while Bangkok is just 0.25% lower, and Manila is down by 0.55%. Australian markets have also been unable to shake off Friday’s weak Wall Street close, ahead of an expected rate hike by the RBA tomorrow. The All Ordinaries are down by 0.25%, with the ASX 200 falling by 0.55%.   With most of Europe closed today, most eyes will be on UK markets, which reopen after a four-day break. The rise in oil prices over the past two days is likely to make cost-of-living concerns front-and-centre again, potentially weighing on sentiment. A potential change of leadership in the UK, regardless of your political views, will be another source of uncertainty. 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:  The Bank of Japan continues to swim against the stream as it insisted on maintaining its yield-curve-control and negative policy rate at the meeting overnight, with daily operations to defend the yield cap on Japanese government bonds. Elsewhere, US equity markets continued to new lows even as US treasuries found strong support as a batch of weak US data points raises concerns on the US economic outlook.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The Nasdaq 100 and S&P 500 futures fully reversed and more the FOMC pump with S&P 500 futures closing at the 3,671 level yesterday down 3.2%, while technology stocks fell even more. The current drawdown is now the second deepest at the same time into the drawdown compared to previous historical drawdowns underscoring the seriousness of the current market regime. Initial jobless claims weakened yesterday, and the Philly Fed survey showed significant downward pressure on new orders hitting levels typical of recessions. The fear of recession could short-term keep a lid on interest rates and thus ironically support equities and maybe cause a mild rebound over the coming weeks. The VIX forward curve remains well behaved suggesting no panic yet in US equities. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) The indices were up more than 1% despite ugly selloffs in overseas markets overnight. The fall in property prices in the top 70 cities slowed to -0.2% m/m vs April -0.3%.  Property prices in Tier-1 cities rose 0.4% m/m and the declines in Tier-2 and lower-tier cities moderated. On the other hand, JD.COM’s (09618) JD Retail CEO told Bloomberg that recovery in consumption in China had been slow from the reopening of cities, such as Shanghai. The Company was expecting that it would take a long time for household consumption to recover as the economy and household income had been severely hit over this wave of lockdown. EURGBP and GBPUSD Sterling rallied hard yesterday in the wake of the Bank of England meeting yesterday on the guidance the meeting produced rather than due to the smaller 25-basis point hike. its reversal yesterday took GBPUSD well away from the cycle lows of 1.2000 posted earlier this week, trading as high as 1.2406 late yesterday, just above a major local 61.8% Fibonacci retracement of the recent sell-off at 1.2387 and far above the prior low-water mark from May of 1.2156. A full reversal in GBPUSD requires another rally surge through 1.2500. Elsewhere, sterling hopefuls should have a look at EURGBP, where the latest leg higher above 0.8600 has been sharply reversed, suggesting a more well-defined reversal. Watching the 0.8500 area for whether we follow through lower and back into the range extending below 0.8300 again. USDJPY and JPY pairs With the Bank of Japan voting 8-1 to maintain course and the 0.25% cap on 10-year JGB yields, the JPY weakened sharply after a bout of speculation this week that Governor Kuroda and company might relent on its policy and bring a sharp resetting of the JPY higher. In the background, ironically, a powerful rally in global bonds yesterday was a JPY-supportive development that has eased the JPY-negative impact of the overnight BoJ decision. The BoJ statement did say that the Bank needs to pay attention to the FX level, from which one might infer that there is a JPY weakness level that the BoJ would find unacceptable and could prompt a change of course in the future. From here, the only route to a higher JPY is via a new drop in bond yields and shift away from CB tightening elsewhere or if the Bank of Japan is seen as giving up on its policy at a later date, possibly on coming inflation releases and risks of a weaker JPY raising the cost of living to an unacceptable degree. Crude oil (OILUKAUG22 & OILUSJUL22) Crude oil is heading for its first weekly decline in six with global growth concerns and prolonged lockdowns in China being the main catalyst. On top of that the short-term technical outlook has weakened following several failed attempts to break higher, but given the tight supply outlook, highlighted by the IEA earlier in the week. Support in Brent is likely to emerge already between $116 and $113.25. NY Harbor Diesel (HOc1) and gasoil (GASOILUKJUL22) both trades higher on the week, a reflection of the tightness that despite growth concerns, is likely to keep the energy sector supported.  Gold (XAUUSD)  Gold remains rangebound following a two-day rally that was supported by US growth concerns and a continued rout in cryptos and global stock markets. Together with another dose of weak U.S. data (see below) they helped send US treasury yields and the dollar lower on Thursday, thereby easing some of the recent pressure on bullion.  Total holdings in bullion-backed ETFs have declined by less than 0.25% this past week, a strong sign that investors look to gold for protection against the rout in global markets, together with increased focus on the need to hedge against the risk of stagflation.  On a relative basis gold’s year-to-date outperformance against the S&P 500 has reached 24%, long-end bonds 26% and 75% against blockchain (BKCH:arcx). US Treasuries (TLT, IEF) US treasuries rallied hard yesterday amidst ugly sentiment in the equity market and on a set of weak US data points pointing to a decelerating housing sector (more below), with weekly jobless claims remaining near the highs of the last few months. The US 10-year treasury yield has declined back to the pivotal area around 3.20%, which was the cycle high before the latest surge toward 3.50%. An extension of the rally that takes yields significantly back below that 3.20% mark would suggest that we have reached a cycle peak for now and further consolidation is set to follow, perhaps on concerns for an incoming recession. What is going on? Bank of Japan defies the global tightening wave The Bank of Japan maintained the negative 0.10% policy rate today, confirming that it won't join the Federal Reserve and other major global central banks in tightening monetary policy. The Japanese central bank will keep its target for the 10-year Japanese government-bond yield at+0.25% and announced daily operations to ensure the cap on yields is maintained. While the central bank said we will take additional easing measures without hesitation if needed, there was a rare reference to the yen weakness. Swiss National Bank surprises with 50 basis point hike yesterday The Swiss National Bank, according to surveys, was not expected to hike rates yesterday, though a rapidly growing minority of observers were looking for a rate rise. The hike of 50 basis points brought the policy rate to –0.25% and makes it clear that the SNB is happy to separate itself from ECB policy and allow the CHF to strengthen as one of the tools to combat rising inflation risks in the country. EURCHF sold off below 1.0200 after trading above 1.0400 ahead of the decision. USDCHF slid to lows of 0.9632 from above parity the day before the decision. The Bank of England hikes 25 basis points, sharpens forward guidance language The majority of observers were looking for the 25-basis point move from the BoE, with some residual uncertainty on whether the bank might hike by more due to the large Fed rate hike this week and the weakness in sterling. Three MPC members of the nine voting wanted a 50-bp hike. At the same time, the BoE predicted that CPI would peak slightly above 11% in October, said that it would respond “forcefully” on any signs of worsening inflation, language that kept the short end of the UK yield curve pinned near the cycle highs. China centric commodities remain under pressure China centric commodities such as iron ore SCON2), coal and copper (COPPERUSSEP22) remain under pressure after China advised its covid restrictions probably won’t ease until next year. In addition, the recent spate of weaker than expected economic US data combined with central banks stepping up their fight to combat inflation have raised concerns about the outlook for global growth in general. US economic indicators weaken US building permits and housing starts eased in May to 1.695mn and 1.549mn respectively while the initial jobless claims were at 229k versus 217k expected. Further, Philadelphia Fed manufacturing survey printed a negative figure of -3.3 for June, the first such contraction since May 2020. More so, the future activity index was contractionary for the first time since the GFC. Adobe shares slip 5% in extended trading on revenue outlook miss As we highlighted on our podcast yesterday Adobe’s earnings were a test of business investment in marketing and content activities. While the business remains sticky the company put out a revenue outlook at $17.7bn vs est. $17.9bn due some demand weakness, Russia impact and USD headwinds.   What are we watching next? US recession concerns rising The mix of data this week generally raises concerns that the US economy is decelerating, but the evidence is patchy and will need confirmation for this to become a a more entrenched theme. At the same time, equity traders have to figure out whether they should celebrate weak data as something that will eventually lead US yields lower and see the pace of Fed tightening eventually reversing or fret weak data because of the implications for corporate profits. The next US data points of interesting include the preliminary Services and Manufacturing PMI surveys for June next week. Fed blackout period ending The Fed speakers will be back in action as the blackout period ends. Chair Powell is speaking later today at the inaugural conference on the International Roles of the US Dollar. Other Fed speakers are due as well including Esther George who voted for a 50bps rate hike this week. Earnings Watch Next week’s earnings calendar is light but there are three important earnings releases to watch and those are Lennar, FedEx, and Accenture that all will give insights into the US housing market, logistics, and recruitment dynamics. Monday: Kanzhun Tuesday: Lennar Thursday: FedEx, Accenture, Darden Restaurants, FactSet Friday: Carnival, China Gas, CarMax Economic calendar highlights for today (times GMT) 0900 – Eurozone May Final CPI 1200 – Poland May Core CPI 1230 – Canada May Teranet/National Bank Home Price Index 1245 – US Fed Chair Powell to make opening remarks at a conference 1315 – US May Industrial Production / Capacity Utilization 1430 – UK Bank of England Chief Economist Pill to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – June 17, 2022 | Saxo Group (home.saxo)

Deterioration, that is – be it in S&P 500 market breadth or the jobs data. More to come, obviously, the disappearing liquidity is making itself felt broadly, and the real economy weakness hasn‘t yet arrived in earnest. This is still the environment of relatively fine but perceptibly slowing growth where technical recession can be declared as in, literally any moment (thanks to monetary tightening). Notably, we never escaped manufacturing recession in similar circumstances, and I had been clear on the hard landing realities recognition to spread like wildfire in the mainstream over the months to come. So far, no signs of systemic risk – but real estate and commodities are feeling the pinch seriously already. VIX is also trending higher rather continuously – the 25 level was indeed vigorously defended by the bears. That has all facilitated yesterday‘s sharp turn in my calls, namely in putting the spread trades to rest. Gold is treading patiently while cryptos can‘t obviously take off. Forces of short-term gravity are taking over.... Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Promising upper knot, very promising. Maybe the 3,830s zone wouldn‘t be even tested – all that‘s needed, is for bonds to cooperate. And given the dollar showing today, it‘s perfectly imaginable. Credit Markets The much awaited turn in long-dated Treasuries higher, is here. That‘s where the engine of further recognition of darkening skies in stocks, would come from. HYG is slowly getting the message, and it would be great if it led to the downside now. Crude Oil Crude oil is pausing, making up its mind – the backdrop is richly described in the caption. Energy certainly holds better very short-term prospects than base metals or even some agrifoods. Copper Economically sensitive commodities are losing altitude, a bit too readily. That‘s a sign of more downside to come, and copper is arguably the best example thereof. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

S&P 500 bulls made a good run, but didn‘t deal with the bearish outcome looming, The renewed tightening bets spurred by strong headline NFPs figure, will take their toll on risk-on assets that had been driving Friday‘s run. Bets on another 75bp hike in Sep have increased dramatically, practically proving Daly or Kashkari right in that the Fed isn‘t done yet or even close to the Fed funds rate to really get inflation down. While they claim that 2% is doable and soft landing within reach, the progression from 9% downwards just doesn‘t go fast like that. At best (repeating myself for months here), they would get to 5-6% CPI, which means a tough Sep and one more FOMC still this year. Combined with balnce sheet shrinking projections, that would take a great toll on the real economy – one that is being softened by the still very expansive fiscal policy. Let‘s look around the world (apart from the troubles in Europe and Asia such as shown in JPY weakness), many other central banks are tightening, Latin America is also tightening. It‘s not only UK and the implications discussed on Friday: (…) Let‘s have a look at yesterday‘s Bank of England moves, kind of foreshadowing what‘s reasonable to expect from the Fed. In the UK, the prospect of entering recession Q4 2022 amd remaining in it for more than a couple of quarters, is being acknowledged. The central bank though intends to keep tightening anyway, preferring to take on inflation after it ran out of control longer they publicly anticipated. Meanwhile in the States, unemployment claims have edged higher – indicative of growing softness in the labor market. Long-dated Treasuries continue rising as is appropriate in these conditions of economic slowdown slowly gathering pace. Similarly to inflation expectations, they‘re not yet taking the Fed‘s hawkish rhetoric absolutely seriously unlike commodity prices that are at best carving out a bullish divergence (still in the making, therefore without implications yet). Precious metals appear farther along the route of acknowledging the upcoming stagflationary reality as I continue looking for inflation to remain in the stubbornly high 5-6% range no matter the Fed‘s actions over the next 3 FOMC meetings at least. Obviously, the hotter the underlying markets, the more tightening has to be done, and that‘s extra headwind for the markets, and one making the Fed pivot a bit more elusive. The key thing that has changed from the above, is the turn in yields – Treasuries would have a harder time rising now, but given that I expect better CPI on Wednesday (oil is down and hasn‘t bottomed yet etc), yields should retreat in what I look to be a positive market reaction – one of hoping that the Fed wouldn‘t tighten that much as is feared today they would. This wouldn‘t however save the stock market bulls. Consider though as well where the Fed funds rate is now, and how far above 3% Powell can take it. He will try, sure, but even 4% in our debt based economy would prove bridge too far when it comes to any soft landing (stating the very obvious). Back during the last successful one (mid 1990s), we were going through genuinely positive tech revolution that helped cushion restrictive monetary policy – these macro implications for productivity growth don‘t apply now. To feel the daily pulse, let‘s move right into the charts (all courtesy of www.stockcharts.com) – today‘s full scale article features good 6 ones, with more thoughts for premium subscribers. S&P 500 and Nasdaq Outlook S&P 500 is clinging by the finernails, and the only question remains whether we have a few dozen points still to go on the upside to reach even more excessive bullishness, or whether the slow grind lower is assuming the reins from here. The bull trap is almost complete. Credit Markets HYG is going to attract a sell in the not too distant future – more so than it did on Friday. The opening gap was more than half closed, but this isn‘t going to last. All it takes to bring junk bonds down, is more conviction about the Fed‘s hawkish path ahead. Bitcoin and Ethereum Cryptos are slightly up, which bodes well for risk taking. Not expecting huge gains today here or in SPX, but a reversal of Friday‘s setback.

S&P 500 bulls were clearly rejected, and it‘s highly questionable whether they would make another run. I doubt they would. And even if, it‘s bound to get rejected as none of the bearish fundamental reasoning ceased to apply, and it‘s getting reflected in the chart technicals as well. As stated yesterday: (…) The renewed tightening bets spurred by strong headline NFPs figure, will take their toll on risk-on assets that had been driving Friday‘s run. Bets on another 75bp hike in Sep have increased dramatically, practically proving Daly or Kashkari right in that the Fed isn‘t done yet or even close to the Fed funds rate to really get inflation down. While they claim that 2% is doable and soft landing within reach, the progression from 9% downwards just doesn‘t go fast like that. At best (repeating myself for months here), they would get to 5-6% CPI, which means a tough Sep and one more FOMC still this year. Combined with balnce sheet shrinking projections, that would take a great toll on the real economy – one that is being softened by the still very expansive fiscal policy. Given tomorrow‘s CPI that‘s likely to come in better than the markets fear it would (i.e. in support of the inflation has peaked thesis), the room for disappointment in inflation trades is there, and the hopes that the Fed might not get as aggressive on a better CPI figure, wouldn‘t balance that out in my view. Here comes a fitting question just in that allows me to develop these thoughts further to the benefit of the whole audience: Q: CPI wednesday will certainly show much lower numbers than previously (mainly because oil was recently much cheaper than in May, June). FED has proven to be rather readily dovish in such events. Investors will see the US companies and the US technology sector as the safe haven. Because elsewhere in the world (mainly in politically and economically weak Europe) is a mess. US as safe-heaven was proven by recent Apple and Amazon earnings and also by recently approved US government stimulus for micro-chip / semiconductor production. Isn't this environment rather bullish for US equities especially to the near future ?? Outflow of money from Europe into strong and safe US. A: I doubt the Fed would react dovishly to softening inflation as they have to take on the pesky inflation expectations (it was a key lesson of the 1970s when they didn‘t). It gives them optically a better chance at taking inflation down fast – and the markets would wake up to their dovish perception mistake, should they make it in the first place. The fiscal stimulus is though being faded in the stock market, it‘s closer to the case of sell the news than anything else. The money flows are going to be selective about what assets they would lift, and odds are it wouldn‘t be parked in tech for too long if Treasuries stop revolting against the Fed‘s rate raising. Such a time point would come over the nearest months ahead, but still I am not counting on any giant Nasdaq run, or rather any run to speak of (no matter the degree of Treasuries‘ next move). To feel the daily pulse, let‘s move right into the charts (all courtesy of www.stockcharts.com) – today‘s full scale article features good 6 ones, which I am unlocking today in full so that you get a better the regular care premium subscribers get, especially before tomorrow‘s inflation data. S&P 500 and Nasdaq Outlook S&P 500 is turning down, and Friday‘s signal is getting repeated – i.e. getting stronger. The daily indicators have also deteriorated, but the volume and sectoral internals message is the most important here. Credit Markets HYG indeed attracted sell – and the reversal to the downside needs a confirmation today in terms of rising volume and daily close anywhere in the Friday‘s daily range. Gold, Silver and Miners Precious metals want to turn up, and miners are at least on a daily basis following. Echoing yesterday‘s premium thoughts, they aren‘t selling too hard on the turn towards anticipating tougher tightening ahead. With hikes to be paused after Sep for a while, the metals would have an easier time before that FOMC day in Sep. Next week‘s CPI will have a short-term effect only – the consequences of recognizing inflation as sticky no matter what the Fed has done already, would be greater. This moment awaits still. Crude Oil Crude oil‘s rebound isn‘t yet turning the tide, and the approaching seasonality spells trouble ahead. I‘m still leaning towards the $88 support slowly giving way as $85 approach comes next – we may land in the low 80s really before rebounding early November. Copper Copper‘s short-term bullish move is encouraging, but the vulnerability to the hawkish Fed moves and rhetoric remains – it would probably play out after the CPI only, which applies also to oil. Bitcoin and Ethereum Cryptos are clearly reversing, and that‘s a good sign for those betting on a bearish resolution of tomrorow‘s inflation data overall.

Summary:  Another downside surprise in US inflation in the wake of lower energy prices lifted the equity markets initially overnight. However, sustained hawkishness from Fed speakers brought the yields higher, weighing on equities which closed nearly flat in the US. Crude oil prices made a strong recovery with the IEA boosting the global growth forecast for this year. EURUSD stayed above 1.0300 and will be eying the University of Michigan report today along with UK’s Q2 GDP. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  After rising well over 1% in early trading amid the weaker-than-expected PPI prints, U.S. equities wiped out gains and closed lower, S&P 500 -0.07%, Nasdaq 100 -0.65%. Energy stocks were biggest gainers, benefiting from a 2.6% rally in the price of WTI crude, Devon Energy (DVN:xnys) +7.3%, Marathon Oil (MRO:xnys) +7%, Schlumberger (SLB:xnys) +5.7%.  Consumer discretionary and technology were the biggest decliners on Thursday. Chinese ADRs gained, Nasdaq Golden Dragon Index climbed 2.6%.  U.S. treasuries bear steepened In spite of weaker-than-expected PPI data, U.S. long-end treasury yields soared, 10-year yields +10bps to 2.99%, 30-year yields +14bps to 3.17%. The rise in long-end yields were initially driven by large blocks of selling in the T-bond and Ultra-long contracts and exacerbated in the afternoon after a poor 30-year auction. The yield of 2-year treasury notes was unchanged and the 2-10-year yield curve steepened 10bps to minus 23bps.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland Chinese equities surged, Hang Seng Index +2.4%, CSI300 Index +2.0%. Northbound inflows into A shares jumped to a 2-month high of USD1.9 billion. In anticipation of a 15% rise in the average selling price of Apple’s iPhone 14 as conjectured by analysts, iPhone parts supplier stocks soared in both Hong Kong and mainland exchanges, Q Technology (01478:xhkg) +17.7%, Sunny Optical (02382:xhkg) +9%, Cowell E (01415:xhkg) +4%, Lingyi iTech (002600:xsec) +10%. China internet names rebounded, Alibaba (09988:xhkg) +4.3%, Tencent (00700:xhkg) +2.7%, Meituan (03690:xhkkg) +4.0%, Baidu (09888:xhkg) +5.2%. Power tool and floor care manufacturer, Techtronic Industries (00669:xhkg) soared nearly 11% after reporting  a 10% year-on-year growth in both revenues and net profits in 1H22. The company rolled out a new generation of drill drivers that have embedded with machine learning algorithm. After collapsing 16% in share price yesterday, Longfor (00960) managed to stabilize and recover 5.7% following the company’s refutation of market speculation that it had failed to repay commercial papers due. EURUSD re-tested resistance levels EURUSD reclaimed the key 1.0300 on Thursday amid a softer dollar, and printed highs of 1.0364. While weaker-than-expected inflation prints in the US this week have curtailed dollar strength, it is hard for EURUSD to sustain gains amid the energy crisis and European recession concerns. A break below 1.0250 would be needed for EURUSD to reverse the trend, however. AUDUSD, likewise, trades above 0.7100 amid the risk on tone, but a turn lower in equities could reverse the trend. GBPUSD has been more range-bound around 1.2200 ahead of the Q2 GDP data scheduled to be released today, and EURGBP may be ready to break above 0.8470 resistance if the numbers come out weaker-than-expected. Crude oil prices (CLU2 & LCOV2) Crude oil prices gained further on Thursday amid signs of softer inflation, weaker dollar and improving demand. The International Energy Agency (IEA) lifted its consumption estimate by 380 kb/d, saying soaring gas prices amid strong demand for electricity is driving utilities to switch to oil. This could be aided by lower gasoline prices, which have dented demand during the US driving season. Prices fell below USD4/gallon for the first time since March. Meanwhile, OPEC may struggle to raise output in coming months due to limited spare capacity. WTI futures touched $94/barrel while Brent futures rose towards the 100-mark.   What to consider? Another downside surprise in US inflation US July PPI dipped into negative territory to come in at -0.5% MoM, much cooler than 1% last month or the +0.2% expected. But on a YoY basis, PPI remains up a shocking 9.8%. Core PPI rose 0.4% MoM, which means on a YoY basis core producer prices are up 7.6% (lower than June's +8.2% but still near record highs). Goods PPI fell 1.8%, dominated by a 9.0% drop in energy. Meanwhile, services PPI was up 0.1% in July. Despite the slowdown in both PPI and CPI this week, PPI is still 1.3% points above CPI, suggesting margin pressures and a possible earnings recession. Fed’s Daly said she will be open to a 75bps rate hike at the September meeting. US jobless claims rise, University of Michigan ahead US initial jobless claims 262K vs 265K estimate, notably higher than the 248k the prior week and the highest since November 2021. The 4-week moving average of initial jobless claims increased to 252K vs 247.5K last week, but still below 350k levels that can cause an alarm. The modest pickup in claims suggests that turnover at weaker firms is increasing. Key data to watch today is the preliminary University of Michigan survey for August, where expectations are for a modest improvement given lower gasoline prices. China’s central bank expects CPI to hover around 3% In its 2nd quarter monetary policy report released on Wednesday, the People’s Bank of China (PBOC) expects the CPI being at around 3% for the full year of 2022 and at times exceeding 3%.  The release of pend-up demand from pandemic restrictions, the upturn of the hog-cycle, and imported inflation, in particular energy, are expected to drive consumer price inflation higher for the rest of the year in China but overall within the range acceptable by the central bank.  The PBOC expects the recent downtrend of the PPI to continue and the gap between the CPI and PPI growth rates to narrow. The PBOC reiterates that it will avoid excessive money printing to spur growth so as to safeguard against inflation.  China’s President Xi is said to be visiting Saudi Arabia next week The Guardian reports that President Xi Jinping is expected to visit Saudi Arabia on an invitation extended from Riyadh in March.  China has been eager to secure its oil supply and explore the possibility of getting its sellers to accept the renminbi to settle oil trade.   While relying on the United States for security in a volatile region and supplies of weapons, Saudi Arabia with Prince Mohammed being in charge is looking for leverage in the kingdom’s relationship with the United States.  UK Q2 GDP likely to show a contraction The Q2 GDP in the UK is likely to show a contraction after April was down 0.2% and May up 0.5%. June GDP is likely to have seen a larger contraction given less working days in the month, as well as constrained household spending as inflation surged to a fresh record high. While there may be a growth recovery in the near-term, the Bank of England clearly outlined a recession scenario from Q4 2022 and that would last for five quarters. Our Macro Strategist Chris Dembik has painted a rather pessimistic picture of the UK economy.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 12, 2022

US equities could hardly consolidate gains they posted following the Wednesday’s softer-than-expected inflation data in the US, even as the producer price index printed the first monthly decline since April 2020. The barrel of US crude rebounded to $94 as the International Energy Agency (IEA) warned that the biggest US oil companies’ combined deficit is almost back to the historical lows, and that the soaring gas prices boosted the use of oil-power generation, and that the ‘substantial’ gas-to-oil switching is, in return, set to boost crude consumption for the rest of the year, even as demand growth from other parts of the economy slows. Technology stocks and cryptocurrencies remain on a positive path as well, for now. Apple hit $170 yesterday Oil stocks gained along with the rebound in crude prices. But technology stocks and cryptocurrencies remain on a positive path as well, for now. Apple hit $170 yesterday, as Amazon is preparing to test its 200-DMA to the upside. Elsewhere, gold remains under pressure, while Bitcoin tests $25K resistance- Ethereum’s final test before the Merge update was succesful, hinting that major cryptocurrencies could extend gains during the weekend. Watch the full episode to find out more! 0:00 Intro 0:30 Post-CPI rally remains short-lived 3:33 Oil jumps as IEA warns of ‘substantial’ oil-to-gas demand shift 5:12 Oil stocks gain, tech stocks remain on positive path, too 7:55 Gold soft, Bitcoin & Ethereum up on ETH’s successful pre-Merger test #MarketNews Some stock market #bulls are watching a technical indicator for clues on whether a summer rebound in #US equities will roll on. 👇https://t.co/k7q9LZhAsZ — Swissquote (@Swissquote) August 12, 2022 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. #crude #oil #rally #IEA #warning #BP #XOM #Apple #Amazon #Bitcoin #Ethereum #Merge #test #US #inflation #data #Gold #XAU #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:  The easing inflation narrative has been building strength for six weeks now and the short-term vindication in the US CPI release on Wednesday has bolstered the bulls. However, the structural issues in the supply-side of the economy have been resolved and wages combined with rents will add more pressure on inflation going forward. We also highlight the unfolding scandal around the heartburn drug Zantac as it has erased $40bn in market value from Sanofi and GSK. Finally, we take a look at next week's earnings. It is too early to call inflation is tamed The US July CPI release on Wednesday has bolstered the soft-landing and easing inflation trade catapulting high duration assets higher. S&P 500 futures are attempting to push higher and the 200-day moving average sitting around the 4,325 level is suddenly not an outrageous gravitational point for US equities in the near-term. While the equity market is buying the all good scenario on inflation we would emphasise that it is too early to call. The Fed will like to see the 6-month average on the US CPI core m/m to go back to 0.2% before easing policy and that is simply not possible until at least the end of Q1 next year. Many of the structural issues except maybe for logistics, and this pain could come back again this winter if China gets another big Covid outbreak, are still not solved as capital expenditures in real terms are still not coming up in the global mining and energy industry. Labour markets remain tight with especially the US being the worst hit having lost around 1.5%-point of its labour force due to the pandemic and these people are likely never coming back. Rent dynamics are also heating up in both the US and Europe, and this winter will test the strength of the European population as the energy crisis could get much worse. We encourage investors to watch the US 10-year yield as a break above 3% again should cause a negative reaction in global equities. S&P 500 continuous futures | Source: Saxo Group US CPI core m/m | Source: Bloomberg Potential gigantic Zantac liabilities hit Sanofi, GSK, and Pfizer Health care is typically associated with stability, high valuations, and high predictability in the underlying cash flows, but the industry is being rocked by increasing concerns over the heartburn drug Zantac. Sanofi, GSK, and Pfizer have lost combined market value of $40bn and analysts are estimating that damage liabilities could reach $10-45bn. Zantac was removed from the market in 2019 by the FDA as the drug appears to be producing unacceptably high levels of a cancer-causing chemical. There is case coming up in Illinois on 22 August which will give the first indications of where this is going. There will continue to be short-term headwinds for both Sanofi and GSK where Pfizer seems to have been selling the drug for a much more reduced period than the two others. Weekly share prices of Sanofi, GSK, and Pfizer | Source: Bloomberg Earnings to watch next week The Q2 earnings season is slowly coming to end and what a quarter it has been with earnings jumping to a new all-time high (see chart) driven by a significant increase in profits in the energy sector. The technology sector measure by the Nasdaq 100 had another bad quarter with earnings declining reinforcing the need to cut costs of many of these previously fast growing technology companies. Next week’s most important earnings are highlighted below with the names in bold being those that can move market or industry sentiment. Meituan on Monday is important for gauging consumer spending and behaviour in China. BHP Group is must watch on Monday as the Australian miner is tapped into China’s growth and demand for iron ore. On Tuesday, earnings from Walmart and Home Depot can provide an updated picture on global supply chains and price pressures across a wide range of consumer products. Tencent reports on Wednesday and is an important earnings release for investors watching Chinese technology stocks as the recent amendment to China’s anti-monopoly laws is adding more pressure on the big technology platform companies. In the payments industry, Adyen’s result on Thursday will be highly watched as Adyen is really challenging PayPal on growth and dominance in the industry. Monday: China Construction Bank, Agricultural Bank of China, Meituan, China Life Insurance, China Shenhua Energy, China Petroleum & Chemical, BHP Group, COSCO Shipping, Li Auto, Trip.com Group, DiDi Global Tuesday: China Telecom, Walmart, Agilent Technologies, Home Depot, Sea Ltd Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Source: The soft-landing and inflation easing narrative is thriving

Summary:  Equities traded higher still yesterday as treasury yields fell further back into the recent range and on hopes that an Iran nuclear deal will cement yesterday’s steep drop in oil prices. The latest data out of the US was certainly nothing to celebrate as the July US Homebuilder survey showed a further sharp drop in new housing interest and a collapse in the first regional US manufacturing survey for August, the New York Fed’s Empire Manufacturing.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their gains yesterday getting closer to the 200-day moving average sitting around the 4,322 level. The US 10-year yield seems well anchored below 3% and financial conditions indicate that S&P 500 futures could in theory trade around 4,350. The news flow is light but earnings from Walmart later today could impact US equities should the largest US retailer lower their outlook for the US consumer. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hong Kong and mainland Chinese equities were mixed. CSI300 was flat, with electric equipment, wind power, solar and auto names gained. Hang Seng Index declined 0.5%. Energy stocks fell on lower oil price. Technology names were weak overall, Hang Seng TECH Index (HSTECH.I) declined 0.9%. Sunny Optical (02382:xhkg) reported worse than expected 1H22 results, revenues -14.4% YoY, net profits -49.5%, citing weakening component demand from the smartphone industry globally. The company’s gross margin plunged to 20.8% from 24.9%. Li Auto’s (02015:xhkg/LI:xnas) Q2 results were in line with expectations but Q3 guidance disappointed. The launch L9 seems cannibalizing Li ONE sales. USD: strength despite weak US data and falling treasury yields and strong risk sentiment Yesterday, the JPY tried to make hay on China cutting rates and as global yields eased back lower, with crude oil marked several dollars lower on hopes for an Iran nuclear deal. But the move didn’t stick well in USDJPY, which shrugged off these developments as the USD firmed further across the board, despite treasury yields easing lower, weak data and still strong risk sentiment/easy financial conditions. A strong US dollar is in and of itself is a tightening of financial conditions, however, and yesterday’s action has cemented a bullish reversal in some pairs, especially EURUSD and GBPUSD, where the next important levels pointing to a test of the cycle lows are 1.0100 and 1.2000, respectively. Elsewhere, USDJPY remains in limbo (strong surge above 135.00 needed to suggest upside threat), USDCAD has posted a bullish reversal but needs 1.3000 for confirmation, and AUDUSD is teetering, but needs a close back below 0.7000 to suggest a resurgent US dollar and perhaps widening concerns that a Chinese recession will temper interest in the Aussie. Crude oil Crude oil (CLU2 & LCOV2) trades lower following Monday’s sharp drop that was driven by a combination softer economic data from China and the US, the world’s top consumers of oil, and after Iran signaled a nuclear deal could be reached soon, raising the prospect of more Iranian crude reaching the market. The latest developments potentially reducing demand while adding supply forced recently established longs to bail and short sellers are once again in control. Brent needs to hold support at $93 in order to avoid further weakness towards $90. Focus on Iran news. Copper Copper (COPPERUSSEP22) led the metals pack lower, without breaking any key technical levels to the downside, after China’s domestic activity weakened in July. Meanwhile, supply side issues in Europe also cannot be ignored with surging power prices putting economic pressure on smelters, and many of them running at a loss. HG copper jumped 19% during the past month and yesterday’s setback did not challenge any key support level with the first being around $3.50/lb. BHP, the world’s top miner meanwhile hit record profits while saying that China is likely to offer a “tail wind” to global growth (see below). EU power prices hit record high on continued surge in gas prices ... threatening a deeper plunge into recession. The latest surge being driven by low water levels on Europe’s rivers obstructing the normal passage for diesel, coal, and other fuel products, thereby forcing utilities to use more gas European Dutch TTF benchmark gas futures (TTFMU2) has opened 5% higher at €231/MWh, around 15 times higher than the long-term average, suggesting more pain ahead for European utility companies. Next-year electricity rates in Germany (DEBYF3) closed 3.7% higher to 477.50 euros ($487) a megawatt-hour on the European Energy Exchange AG. That is almost six times as much as this time last year, with the price doubling in the past two months alone. UK power prices were also seen touching record highs. US Treasuries (IEF, TLT) see long-end yields surging. Yields dipped back lower on weak US economic data, including a very weak Empire Manufacturing Survey (more below) and another sharp plunge in the NAHB survey of US home builders, suggesting a rapid slowdown in the housing market. The survey has historically proven a leading indicator on prices as well. The 10-year benchmark dipped back further into the range after threatening to break up higher last week. The choppy range extends down to 2.50% before a drop in yields becomes a more notable development, but tomorrow’s US Retail Sales and FOMC minutes offer the next test of sentiment. What is going on? Weak Empire State manufacturing survey and NAHB Index Although a niche and volatile measure, the United States NY Empire State Manufacturing Index, compiled by the New York Federal Reserve, fell to -31.3 from 11.1 in July, its lowest level since May 2020 and its sharpest monthly drop since the early days of the pandemic. New orders and shipments plunged, and unfilled orders also declined, albeit less sharply. Other key areas of concern were the rise in inventories and a decline in average hours worked. This further weighed on the sentiment after weak China data had already cast concerns of a global growth slowdown earlier. Meanwhile, the US NAHB housing market index also saw its eighth consecutive monthly decline as it slid 6 points to 49 in August. July housing starts and building permits are scheduled to be reported later today, and these will likely continue to signal a cooling demand amid the rising mortgage rates as well as overbuilding. China's CATL plans to build its second battery factory in Europe CATL unveiled plans to build a renewable energy-powered factory for car battery cells and modules in Hungary. It will invest EUR 7.34 billion (USD 7.5bn) on the 100-GWh facility, which will be its second one in Europe. To power the facility CATL will use electricity from renewable energy source, such as solar power. At present, CATL is in the process of commissioning its German battery production plant, which is expected to roll out its first cells and modules by the end of 2022. Disney (DIS) shares rise on activist investor interest Daniel Loeb of Third Point announced a significant new stake in Disney yesterday, helping to send the shares some 2.2% higher in yesterday’s session. The activist investor recommended that the company spin off its ESPN business to reduce debt and take full ownership of the Hulu streaming service, among other moves. Elliott exits SoftBank Group The US activist fund sold its stake in SoftBank earlier this year in a sign that large investors are scaling back on their investments in technology growth companies with long time to break-even. In a recent comment, SoftBank’s founder Masayoshi Son used more cautious words regarding the investment company’s future investments in growth companies. BHP reports its highest ever profit, bolstered by coal BHP posted a record profit of $21.3bn supported by considerable gains in coal, nickel and copper prices during the fiscal year ending 30 June 2022. Profits jumped 26% compared to last year’s result. The biggest driver was a 271% jump in the thermal coal price, and a 43% spike in the nickel price. The world’s biggest miner sees commodity demand improving in 2023, while it also sees China emerging as a source of stable commodity demand in the year ahead. BHP sees supply covering demand in the near-term for copper and nickel. According to the company iron ore will likely remain in surplus through 2023. In an interview Chief Executive Officer Mike Henry said: Long-term outlook for copper, nickel and potash is really strong because of “unstoppable global trends: decarbonization, electrification, population growth, increasing standards of living,” What are we watching next? Australia Q2 Wage Index tonight to determine future RBA rate hike size? The RBA Minutes out overnight showed a central bank that is trying to navigate a “narrow path” for keeping the Australian economy on an “even keel”. The RBA has often singled out wages as an important risk for whether inflation risks becoming more embedded and on that note, tonight sees the release of the Q2 Wage Index, expected to come in at 2.7% year-on-year after 2.4% in Q1. A softer data point may have the market pulling back expectations for another 50 basis point rate hike at the next RBA meeting after the three consecutive moves of that size. The market is about 50-50 on the size of the RBA hike in September, pricing a 35 bps move. RBNZ set to decelerate its guidance after another 50 basis point move tonight? The Reserve Bank of New Zealand is expected to hike its official cash rate another 50 basis points tonight, taking the policy rate to 3.00%. With business and consumer sentiment surveys in the dumps in New Zealand and oil prices retreating sharply the RBNZ, one of the earliest among developed economies to tighten monetary policy starting late last year, may be set for more cautious forward guidance and a wait and see attitude, although wages did rise in Q2 at their second fastest pace (+2.3% QoQ) in decades. The market is uncertain on the future course of RBNZ policy, pricing 44 bps for the October meeting after tonight’s 50 bps hike and another 36 bps for the November meeting. US retailer earnings eyed After disappointing results last quarter, focus is on Walmart and Home Depot earnings later today. These will put the focus entirely on the US consumer after the jobs data this month highlighted a still-tight labor market while the inflation picture saw price pressures may have peaked. It would also be interesting to look at the inventory situation at these retailers, and any updated reports on the status of the global supply chains.   Earnings to watch Today’s US earnings focus is Walmart and Home Depot with analysts expecting Walmart to report 7% revenue growth y/y and 8% decline y/y in EPS as the US retailer is facing difficulties passing on rising input costs. Home Depot is expected to report 6% growth y/y in revenue and 10% growth y/y in EPS as the US housing market is still robust driving demand for home improvement products. Sea Ltd, the fast-growing e-commerce and gaming company, is expected to report revenue growth of 30% y/y in Q2 but worsening EBITDA margin at -16.2%. The previous winning company is facing headwinds in its gaming division and cash flow from operations have gone from positive $318mn in Q1 2021 to negative $724mn in Q1 2022. Today: China Telecom, Walmart, Agilent Technologies, Home Depot, Sea Ltd Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0900 – Germany Aug. ZEW Survey 0900 – Eurozone Jun. Trade Balance 1200 – Poland Jul. Core CPI 1215 – Canada Jul. Housing Starts 1230 – US Jul. Housing Starts and Building Permits 1230 – Canada Jul. CPI 2030 – API Weekly Report on US Oil Inventories 2350 – Japan Jul. Trade Balance 0130 – Australia Q2 Wage Index 0200 – New Zealand RBNZ Official Cash Rate announcement 0300 – New Zealand RBNZ Governor Orr Press Conference  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – August 16, 2022

Summary:  Today we look at a confusing market backdrop as the US dollar rose across the board despite weak US data and US treasury yields easing lower again. While measures of risk sentiment and financial conditions look very strong here, we need to remember that the US dollar is a financial condition unto itself and one of the most import exchange rates, the USDCNH rate should be on every trader's radar. As well, the US S&P 500 index is pushing up against a major resistance level. Crude oil, copper, earnings reports ahead and more on today pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast  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: The US dollar is a financial condition, too

Summary: Walmart and Home Depot rose. RBNZ due to give their midweek policy decision. S&P 500 end the trading day in the green The Nasdaq suffered on Tuesday as technology equities fell, weighing on the Dow, while Walmart and Home Depot rose as a result of better-than-expected results and outlooks. Along with the S&P 500 retail index, the consumer discretionary and basics sectors both experienced significant increases. Home Depot outperformed forecasts for the most recent quarter of sales, and Walmart predicted a lesser decline in full-year earnings than was originally anticipated. The 10-year Treasury yield increased, which hurt high-growth firms in the technology sector. Stocks have recovered since mid-June after stumbling for the most of the first half of the year, aided in part by Corporate America's better-than-expected results. Investors are also hopeful that the Federal Reserve will be able to provide a "soft landing" for the economy as it tightens monetary policy and increases interest rates to lower inflation that has been historically high. GSPC Price Chart NZD ahead of the RBNZ policy decision Following the Reserve Bank of New Zealand's (RBNZ) midweek policy update, analysts at investment banks Goldman Sachs and HSBC are watching for NZD depreciation. Markets anticipate that the RBNZ will increase interest rates by another 50 basis points to 3.0%, but any significant changes in the currency are more likely to be caused by the RBNZ's tone in its guidance. "Importantly, we would not be surprised to see slightly more dovish guidance from the RBNZ," says Kamakshya Trivedi, Co-head of Global Foreign Exchange Research at Goldman Sachs. The meeting, according to Goldman Sachs, is expected to be one of the major developments for the foreign exchange markets this week, and the results are most likely to support their bearish NZ Dollar thesis. Their economists continue to be less pessimistic than the market currently is about the trajectory of upcoming RBNZ rate hikes. Sources: finance.yahoo.com, poundsterlinglive.com

Summary:  S&P500 index broke above the key 4,300 resistance level while the NASDAQ pushed lower amid mixed economic data and better-than-feared earnings from Walmart and Home Depot. US housing data continues to worsen, but the focus now turns to FOMC minutes due later today, as well as the US retail sales which will be next test of the strength of the US consumer. Asia session may have trouble finding a clear direction, but Australia’s wage price index and RBNZ’s rate hike may help to provide some bounce. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities were mixed. Tech names had an initial pullback, followed by short-coverings that narrowed the loss of the Nasdaq 100 to 0.23% at the close. S&P500 edged up 0.19% to 4,305 on better-than-feared results from retailers, moving towards its 200-day moving average (4,326). Walmart (WMT:xnys) and Home Depot (HD:xnys) reported Q2 results beating analyst estimates. Walmart gained 5% on strong same-store sales growth and a deceleration in inventory growth. Home Depot climbed 4% after reporting better than expected EPS and same-store sales but with an acceleration in inventory buildup. The declines in housing starts and building permits released on Monday and the downbeat comments about the U.S. housing market from the management of Compass (COMP:xnys), an online real estate brokerage, highlighted the challenges faced in the housing sector.  Short-end U.S. treasury yields rose as the long-end little changed The bigger than expected increases in July industrial production (+0.6% MoM), manufacturing production (+0.7% MoM), and business equipment production (+0.6%) triggered some selling in the short-end of U.S. treasury curve, pushing the 2-year yield 8 bps higher to 3.25% as 10-year yield edged up 1bp.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) China internet stocks were sold off on Tuesday afternoon after Reuters ran a story suggesting that Tencent (00700:xhkg) plans to divest its 17% stake (USD24 billion) in Meituan (03690:xhkg).  The shares of Meituan collapsed 9% while Tencent gained 0.9%.  After the close of the Hong Kong market, Chinese media, citing sources “close to the matter” suggested that the divesture story is not true. However, the ADRs of Meituan managed to recover only 1.7% in New York trading. The newswire story also triggered selling on Kuaishou (01024:xhkg), -4.4%, which has Tencent as a major investor. The decline in internet stocks dragged the Hang Seng Index 1% lower. On the other hand, Chinese developers soared on another newswire report that state-owned China Bond Insurance is going to provide guarantees to new onshore debts issued by several “high quality” developers, including Country Garden (02007:xhkg) +9%, Longfor (00960:xhkg) +12%, CIFI (00884:xhkg) +12.9%, and Seazen (01030:xhkg) +7.6%.  Shares of Chinese property management services also surged higher.  GBPUSD bounced off the 1.2000 support, NZD eyeing RBNZ A mixed overnight session for FX as the US yields wobbled. Risk sentiment held up with the mixed US data accompanied by a less bad outcome in the US retailer earnings than what was expected. This made the safe-haven yen a clear underperformer, and USDJPY rose back above 134. But a clear trend in the pair is still missing and a break above 135 is needed to reverse the downtrend. Cable got lower to remain in close sight of the 1.2000 big figure, but rose above 1.2100 subsequently. UK CPI report due today may confirm the need for further BOE action after labor data showed wage pressures. NZDUSD remains near lows of 0.6320 but may see a knee-jerk higher if RBNZ surprises on the hawkish side. Crude oil prices (CLU2 & LCOV2) Crude oil prices remain under pressure due to the prospect of Iran nuclear deal, and printed fresh lows since the Ukraine invasion. Some respite was seen in early Asian session, and WTI futures were last seen at $87/barrel and Brent is below $93. The EU submitted a final proposal to salvage the Iran nuclear deal, and prospects of more energy supply are dampening the price momentum. It has been reported that Iran’s response was constructive, and they are now consulting with the US on a way ahead for the protracted talks. The API reported crude inventories fell by 448,000 barrels last week, while gasoline stockpiles increased by more than 4 million barrels. Government data is due later Wednesday. European Dutch TTF benchmark gas futures (TTFMU2) touched €250/MWh, but has cooled off slightly recently, but still signals the heavy price that Europe is paying for the dependence on Russian gas. Copper holding up well despite China slowdown concerns Despite reports of weaker financing and activity data from China earlier this week, Copper remains well supported and registered only modest declines. BHP’s results provided some offset, as did the supply side issues in Europe. Only a break below the key 350 support will turn the focus lower. Meanwhile, zinc rallied amid concerns of smelter closures in Europe. What to consider? US housing scare broadens, industrial production upbeat Housing starts fell 9.6% in July to 1.446 mn, well beneath the prior 1.599 mn and the expected 1.537 mn. Housing starts are now down for five consecutive months, and suggest a cooling housing market in the wake of higher borrowing costs and higher inflation. Meanwhile, building permits declined 1.3% in July to 1.674 mn from 1.696 mn, but printed above the expected 1.65 mn. There will be potentially more scaling back in construction activity as demand weakens and inventory levels rise. On the other hand, industrial production was better than expected at 0.6% m/m (prev: -0.2%) possibly underpinned by holiday demand but the outlook is still murky amid persistent inflation and supply chain issues. US retailer earnings come in better than feared Walmart (WMT:xnys) and Home Depot (HD:xnys) reported better-than-feared results on Tuesday. Walmart’s Q2 revenues came in at USD152.9 billion (+8.4% YoY, consensus USD150.5bn). Same-store sales increased 8.4% YoY (vs consensus +6.0% YoY).  EPS of USD1.77, down 0.8% from a year ago quarter but better than the consensus estimate of USD1.63. While inventories increased 25.5% in Q2, the rate of increase has moderated from the prior quarter’s +32.0%. The company cited falls in gas prices, market share gain in grocery, and back-to-school shopping key reasons behind the strength in sales.  Home Depot reported Q2 revenues of USD43.9 billion (vs consensus USD43.4bn), +6.5% YoY.  Same-store sales grew 5.8%, beating analyst estimates (+4.9%).  EPS rose 11.5% to $5.05, ahead of analyst estimates (USD4.95). However, inventories grew 38% YoY in Q2, which was an acceleration from the prior quarter. The management cited inflation and pulling forward inventory purchases given supply chain challenges as reasons for the larger inventory build-up. Target (TGT:xnys) is scheduled to report on Wednesday. Eyes on US retail sales US retail sales will be next test of the US consumer after less bad retailer earnings last night. Retail sales should have been more resilient given the lower prices at pump improved the spending power of the average American household, and Amazon Prime Day in the month possibly attracted bargain hunters as well. However, consensus expectations are modest at 0.1% m/m compared to last month’s 1.0%. A cooling labor market in the UK UK labor market showed signs of cooling as job vacancies fell for the first time since August 2020 and real wages dropped at the fastest pace in history. Unemployment rate was steady at 3.8%, and the number of people in employment grew by 160,000 in the April-June period as against 256,000 expected. There was also a sprinkle of good news, with the number of employees on payrolls rising 73,000 in July, almost triple the pace expected. Also, wage growth was strong at 4.7% in the June quarter from 4.4% in the three months to May, which may be key for the BOE amid persistent wage pressures. Australia Q2 Wage Index to determine future RBA rate hike size? The RBA Minutes out on Tuesday showed a central bank that is trying to navigate a “narrow path” for keeping the Australian economy on an “even keel”. The RBA has often singled out wages as an important risk for whether inflation risks becoming more embedded and on that note, today sees the release of the Q2 Wage Index, expected to come in at 2.7% year-on-year after 2.4% in Q1. A softer data point may have the market pulling back expectations for another 50 basis point rate hike at the next RBA meeting after the three consecutive moves of that size. The market is about 50-50 on the size of the RBA hike in September, pricing a 35bps move. RBNZ set to decelerate its guidance after another 50 basis point move today? The Reserve Bank of New Zealand is expected to hike its official cash rate another 50 basis points tonight, taking the policy rate to 3.00%. With business and consumer sentiment surveys in the dumps in New Zealand and oil prices retreating sharply the RBNZ, one of the earliest among developed economies to tighten monetary policy starting late last year, may be set for more cautious forward guidance and a wait and see attitude, although wages did rise in Q2 at their second fastest pace (+2.3% QoQ) in decades. The market is uncertain on the future course of RBNZ policy, pricing 45bps for the October meeting after today’s 50bps hike and another 37bps for the November meeting. FOMC minutes to be parsed for hints on future Fed moves The Federal Reserve had lifted rates by 75bps to bring the Fed Funds rate at the level that they consider is neutral at the July meeting, but stayed away from providing any forward guidance. Meeting minutes will be out today, and member comments will be watched closely for any hints on the expectation for September rate hike or the terminal Fed rate. The hot jobs report and the cooling inflation number has further confused the markets since the Fed meeting, even as Fed speakers continue to push against any expectations of rate cuts at least in ‘early’ 2023. We only have Kansas City Fed President Esther George (voter in 2022) and Minneapolis Fed President Kashkari (non-voter in 2022) speaking this week at separate events on Thursday, so the bigger focus will remain on Jackson Hole next week for any updated Fed views.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 17, 2022

Relevance up to 05:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   As it became known from the report of the US Department of Commerce, the number of houses, the construction of which was started in the country in July, decreased by 9.6% compared to the previous month and amounted to 1.446 million in annual terms. The figure was the lowest since February last year. According to the revised data, in June the number of new buildings amounted to 1.599 million, and not 1.559 million, as previously reported. Experts predicted a decline to 1.54 million from the previously announced level in June. US industrial output rose 0.6% month-on-month in July, doubling the 0.3% rise expected by analysts. According to the revised data, industrial production did not change in June, while a decrease of 0.2% was previously reported. Production in the processing industry increased by 0.7% compared to June, while experts expected a more moderate growth of 0.2%. A month earlier, the indicator fell by 0.4%, and not by 0.5%, as previously reported. In addition, investors are waiting for the publication of the minutes of the July meeting of the Federal Reserve on Wednesday and the report on retail sales in the US on Friday. Also this week, many leading US retailers publish quarterly reports. AJ Bell financial analyst Danny Hewson noted that many US investors have taken a wait-and-see attitude, hoping to get new information from the Fed's minutes and retailers' reports, on the basis of which it is possible to understand what exactly consumers are saving on during a period of high inflation. The value of the Dow Jones Industrial Average by 16:47 GMT+3 increased by 0.05% - up to 33930.76 points. Standard & Poor's 500 has fallen 0.11% since the market opened to 4292.49 points. The Nasdaq Composite dropped 0.35% to 13,081.46. Shares of Walmart Inc. jumped by 5.5%, being the leader of growth in the Dow Jones index. The largest US retailer posted a strong quarterly report and improved its full-year outlook. Walmart's adjusted earnings for the fiscal quarter ended July 31 were $1.77 per share, above analysts' forecast of $1.62 per share. Revenue increased by 8.4% and reached $152.86 billion, while experts on average predicted the figure at $150.99 billion. Quotes Home Depot Inc. increase by 1.4%. The US-leading home improvement chain posted record revenues and net income in the quarter, even though the number of purchases at its stores fell by 3%. Target and Lowe's will report on Wednesday, while department store chain Kohl's will report on Thursday. World Wrestling Entertainment's share price is up 3.2% after the wrestling tournament organizer increased net profit and revenue slightly more than market expectations in the second quarter of 2022. Shares of Warner Bros. Discovery shed 0.3% on rumors of new cost-cutting measures. In particular, the staff of the subsidiary streaming service HBO will be reduced by about 14%. Zoom Video Communications' capitalization fell 5.6% after Citi analysts downgraded the recommendation for the company's shares to "sell" from "neutral" levels.   Read more: https://www.instaforex.eu/forex_analysis/288768

  Summary:  The US equity market rally extended modestly yesterday, but turned tail upon the cash S&P 500 Index touching the key 200-day moving average at 4,325. Market today will eye the latest US Retail Sales report from July, which saw peak gasoline prices in the US mid-month, while the FOMC Minutes may prove a bit stale, given they were created before three weeks of the market rallying sharply and financial conditions easing aggressively, likely not the Fed’s intention.   What is our trading focus?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures broke above the 200-day moving average yesterday and then got rejected. Momentum in US equities got a bit more fuel from two good earnings releases from Home Depot and Walmart rising 4% and 5% respectively. S&P 500 futures are pushing higher again this morning and will likely attempt once more to break above the 200-day moving average. Long-term US interest rates are still well-behaved trading around the 2.8% level and the VIX Index has stabilised just below the 20 level. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index rallied 1% today, reversing yesterday’s loss. Meituan (03690:xhkg) bounced nearly 5% after its 9% drop yesterday due to a Reuters story suggesting that Tencent (00700:xhkg) plans to divest its 17% stake (USD24 billion) in Meituan.  Tencent denied such a divesture plan last night.  Power drills and floor care equipment maker and a supplier to Home Depot (HD:xnys), Techtronic Industries (00669:xhkg) jumped more than 7% after better-than-expected results from Home Depot overnight.  On Tuesday, China’s Premier Li Keqiang held a video conference with provincial chiefs from Jiangsu, Zhejiang, Shandong, Henan, and Sichuan to reiterate the central government’s push for full use of policies to stabilize the economy.  CSI300 gained 0.6%. USD pairs, including GBPUSD, which bounced strongly off 1.2000 support  A mixed overnight session for FX as the US yields wobbled. Risk sentiment held up with the mixed US data accompanied by a less bad outcome in the US retailer earnings than expected. This made the safe-haven yen a clear underperformer, and USDJPY rose back above 134. But a clear trend in the pair is still missing and a break above 135 is needed to reverse the downtrend. Cable teased key psychological support at 1.2000 yesterday before rising later in the day above 1.2100 ahead of today’s UK CPI report, which may confirm the need for further BOE action after labor data showed wage pressures. EURUSD bounced from session lows at 1.0123 but has posted a recent bearish reversal that keeps the focus lower, particularly on any breakdown through 1.0100, the multi-week range low. USD traders will focus on today’s US Retail Sales and FOMC minutes. USDCNH – there was a brief spike higher in USDCNH earlier this week as China moved to stimulate with a small 10-basis point rate cut of the key lending rate – no drama yet, but traders should keep an eye on this very important exchange rate for larger volatility and significant break above 6.80, as Chines exchange rate policy shifts can provoke significant moves across markets. Crude oil (CLU2 & LCOV2) touched a fresh six-month low on Tuesday with Brent trading lower, in anticipation of the Iran nuclear deal being revived, before bouncing in response to the API reporting a draw in crude oil and especially gasoline stocks. While a deal with Iran could see it raise production by around one million barrels per day, Goldmans talks about a mutually beneficial stalemate for both sides with Iran wanting to avoid sanctions while the US wants to avoid higher oil prices but also the political backlash from a potential deal. EIA’s weekly crude and fuel stocks report on tap later with the market also focusing on gasoline demand and the levels of exports. Over in Europe meanwhile the Dutch TTF benchmark gas trades near an eye-popping $400 per barrel crude oil equivalent, a level that will continue to attract demand for oil-based products due to switching. Copper (COPPERUSSEP22) continues to trade within its established upward trending range after China’s Premier Li Keqiang asked local officials from six provinces to bolster pro-growth measures after weaker financing and activity data were reported earlier this week. In addition, copper is also enjoying some tailwind from rising zinc and aluminum prices after Europe's largest smelters said it would halt production and after producers in China were told to curb production in order to preserve electricity supply during the current heatwave. HG copper’s trading range has narrowed to between $3.585, the uptrend from the July low and $3.663 the 50-day moving average.   What is going on?   US housing scare broadens, industrial production upbeat US Housing starts fell 9.6% in July to an annualized 1,446k, well beneath the prior 1,599 and the expected 1,537k. Housing starts are now down for five consecutive months, and suggest a cooling housing market in the wake of higher borrowing costs and higher inflation. Meanwhile, building permits declined 1.3% in July to 1,674k from 1,696, but printed above the expected 1,650k. There will be potentially more scaling back in construction activity as demand weakens and inventory levels rise. On the other hand, industrial production was better than expected at 0.6% m/m (prev: -0.2%) in July, possibly underpinned by holiday demand but the outlook is still murky amid persistent inflation and supply chain issues. UK headline inflation hits 10.1% The highest in decades and above the 9.8% expected and for the month-on-month reading of +0.6%, higher than the +0.4% expected. Core inflation hit 6.2% vs. 5.9% expected and 5.8% in Jun. That matched the cycle high from back in April. Retail inflation rose +0.9% MoM and +12.3% YoY vs. +0.6%/+12.0% expected, respectively. The Bank of England has forecast that inflation will peak out this fall at above 13%. Reserve Bank of New Zealand hikes 50 basis points to 3.00%, forecasts 4% policy rate peak The RBNZ both increased and brought forward its peak rate forecast to 4.00%, a move that was actually interpreted rather neutrally – more hawkish for now, but suggesting that the RBNZ would like to pause after achieveing 4.00%. 2-year NZ rates were unchanged later in the session after a brife poke higher. RBNZ Governor warned in a press conference that New Zealand home prices will continue to fall. This is actually a desired outcome after a huge spike in housing speculation and prices due to low rates from the pandemic response and massive pressure from a Labor-led government that had promised lower housing costs were behind the RBNZ’s quick pivot and more aggressive hiking cycle in 2021. Walmart shares rally on improved outlook The largest US retailer surprised on both revenue and earnings in its Q2 report with most of the revenue growth coming from higher prices and not volume. The retailer now sees an EPS decline of 9-11% this fiscal year compared to previously 11-13% suggesting input cost pressures are easing somewhat. Walmart is seeing more middle and high-income customers and the retailer has also cancelled orders for billions of dollars to lower inventory levels suggesting global supply chains are improving. Walmart shares were up 5%. Home Depot still sees robust market The largest US home improvement retailer beat on revenue and earnings yesterday in its Q2 results with Q2 comparative sales up 5.8% vs est. 4.6% highlighting that volumes are falling as revenue growth is below inflation rates. The US housing market figures on housing starts and permits cemented that the US housing market is slowing down due to the recent rally in mortgage rates. Home Depot is taking a conservative approach to guidance, but the market nevertheless pushed shares 4% higher. Apple supplier Foxconn suspends its factory in Chengdu due to a power crunch Foxconn’s Chengdu factory is suspending operations for six days from August 15 to 20 due to a regional power shortage. The suspension is affecting Foxconn’s supply of iPad to Apple. The company says the impact “has been limited at the moment” but it may affect shipments if the power outage persists. The Chengdu government is imposing power curbs on industrial users to ensure electricity supply for the city’s residents. At the same time, Foxconn has started test production of the Apple watch in its factories in Vietnam. With the passage of CHIPS and Science Act earlier this month in the U.S., there have been speculations that Taiwanese and Korean chipmakers and their customers may be accelerating the building up of production capacity away from China. Big European aluminium plant to halt production Norsk Hydro’s aluminium plant in Slovakia is halting primary production by end of September due adverse conditions such as elevated electricity prices. The aluminium company would incur significant financial losses should it continue its operations.   What are we watching next?   Eyes on US retail sales today  US retail sales will be next test of the US consumer after less bad retailer earnings last night. Retail sales should have been more resilient given the lower prices at pump improved the spending power of the average American household, and Amazon Prime Day in the month possibly attracted bargain hunters as well. However, consensus expectations are modest at 0.1% m/m compared to last month’s 1.0%. FOMC minutes to be parsed for hints on future Fed moves The Federal Reserve had lifted rates by 75bps at the late July meeting to bring the Fed Funds rate to a level they have previously considered neutral, but stayed away from providing any forward guidance. The minutes of that July meeting are to be released later today, and member comments will be watched closely for any hints on the expectation for September rate hike or the terminal Fed rate. The hot July US jobs report and the cooling July inflation number, as well as a blistering three week rally in equity markets have further confused the markets since the Fed meeting, even as Fed speakers continue to push against any expectations of rate cuts as soon as ‘early’ 2023. The next chief focus for Fed guidance will remain on the Fed’s Jackson Hole, Wyoming symposium next week. Earnings to watch Today’s European earnings focus is Carlsberg and Coloplast with the former reporting strong first-half organic growth of 20.7% vs est. 15.5% suggesting breweries are seeing healthy volume and price gains. Tencent is the key focus in Asia and especially given the recent developments in China on anti-monopoly laws and its decision to divest its $24bn stake in Meituan. In the US the focus will be on Cisco which saw its growth grinding to a halt in the previous quarter. Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0900 – Eurozone Q2 GDP Estimate 1230 – US Jul. Retail Sales 1430 – US Weekly Crude Oil and Product Inventories 1800 – US FOMC Minutes 1820 – US Fed’s Bowman (Voter) to speak 2110 – New Zealand RBNZ Governor Orr before parliamentary committee 0130 – Australia Jul. Employment Change (Unemployment Rate)   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Has The Best Main Interest Rate In 7 Years

Summary:  Today we look at the US equity market rolling over a bit after hitting a key resistance point in the form of the S&P 500's 200-day moving average. We continue to note the resilient US dollar and the risk of USDCNH suddenly commanding the market's attention again if China moves to devalue its currency. We also zero in on weak Antipodean currencies as AUDUSD struggles and NZD can't get a boost from the RBNZ overnight. Crude oil, industrial metals, the latest on the dire power emergency in the EU, danger of meme stocks, earnings ahead and more on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found 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: Watching for signs of altitude sickness

Summary:  US equities traded a bit lower yesterday after the S&P 500 challenged the 200-day moving average from below the prior day for the first time since April in the steep comeback from the June lows. Sentiment was not buoyed by the FOMC minutes of the July meeting suggesting the Fed would like to slow the pace of tightening at some point. Crude oil rose from a six-month low on bullish news from the US and OPEC.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures rolled over yesterday wiping out the gains from the two previous sessions and the index futures are continuing lower this morning trading around the 4,270 level. US retail sales for July were weak and added to worries of the economic slowdown in real terms in the US. The 10-year yield is slowing crawling back towards the 3% level sitting at 2.87% this morning. A move to 3% and potentially beyond would be negative for equities. The next levels to watch on the downside in S&P 500 futures are 4,249 and then 4,200 Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Shares in the Hong Kong and mainland China markets declined. China internet stocks were weak across the board with Tencent (00700:xhkg) +2.7% and Meituan (03690:xhkg) +1%, being the positive outliers. Tencent reported a revenue decline of 3% y/y in Q2, weak, but in line with market expectations. Non-GAAP operating profit was down 14% y/y to RMB 36.7bn, and EPS fell 17% y/y to RMB 2.90 but beating analyst estimates. Revenues from advertising at -18% y/y were better than expected. In the game segment, weaker mobile game revenues were offset by stronger PC game revenues. Beer makers outperformed China Resources Beer (00291:xhkg) +3.8%, Tsingtao Brewery (00168:xhkg) +1.7%. COSCO Shipping Energy Transportation (01138:xhkg) made a new high at the open on strong crude oil tanker freight rates before giving back some gains. USD pairs as the USD rally intensifies The US dollar rally broadened out yesterday, as USDJPY retook the 135.00 area, but needs to follow through above 135.50-136.00 to take the momentum back higher. Elsewhere, AUDUSD has broken down again on the move down through 0.7000 and USDCAD has posted a bullish reversal, needing 1.3000 for more upside confirmation. The GBPUSD pair looks heavy despite a massive reset higher in UK rates in the wake of recent UK inflation data, with a close below 1.2000 indicating a possible run on the sub-1.1800 lows, while EURUSD is rather stuck tactically, as price has remained bottled up above the 1.0100 range low. USDCNH, as discussed below, may be a key pair for whether the USD rally broadens out even more aggressively, and long US treasury yields and risk sentiment are other factors in the mix that could support the greenback, should the 10-year US treasury benchmark move higher toward 3.00% again or sentiment roll over for whatever reason. Certainly, tightening USD liquidity could prove a concern for sentiment as the Fed turns up the pace of quantitative tightening – something it seems behind schedule in doing if we look at the latest weekly Fed balance sheet data.  USDCNH The exchange rate edged higher again to above 6.80 overnight after a brief spike higher earlier this week as China’s PBOC moved to stimulate with a small 10-basis point rate cut of the key lending rate. There is no real drama in the exchange rate yet after the significant rally this spring from below 6.40 to 6.80+, but traders should keep an eye on this very important exchange rate for larger volatility and significant break above 6.83, as China’s exchange rate policy shifts can provoke significant volatility across markets. Crude oil Crude oil (CLU2 & LCOV2) bounced from a six-month low on Wednesday in response to a bullish US inventory report that saw big declines in gasoline and crude oil stocks as demand from US motorist climbed to the highest this year while crude exports reached a record $5 million barrels per day. The prospect for an Iran nuclear deal continues to weigh while OPEC’s new Secretary-General said spare capacity was becoming scarce. US strategic reserves are now at the lowest level since 1985 and the government has by now sold around 90% of what was initially offered in order to bring down prices. While demand concerns remain a key driver for macroeconomic focused funds selling crude oil as a hedge we notice a renewed surge in refinery margins, especially diesel, supported by increased demand from gas-to-fuel switching Gold and silver Gold has so far managed to find support at $1759, the 38.2% retracement of the July to August bounce, after trading weaker in response to a stronger dollar and rising yields. Silver (XAGUSD) meanwhile has almost retraced half of its recent strong gains with focus now on support at $19.50. The latest driver being the FOMC minutes which signaled ongoing interest-rate hikes and eventually at a slower pace than the current. The short-term direction has been driven by speculators reducing bullish bets following a two-week buying spree in the weeks to August 9 which lifted the net by 63k lots, the strongest pace of buying in six months. ETF holdings meanwhile have slumped to a six-month low, an indication investor, for now, trusts the FOMC’s ability to bring down inflation within a relatively short timeframe   What is going on? Financial conditions are tightening, if modestly. Recent days have brough a rise in short US treasury yields, but more importantly it looks as though some of the risk indicators like corporate credit spreads may have bottomed out here after a sharp retreat from early July highs – one Bloomberg high yield credit spreads to US treasuries peaked out above 5.75% and was as low as 4.08% earlier this week before rising to 4.19% yesterday, with high yield bond ETFs like HYG and JNK suffering a sharp mark-down yesterday of over a percent. Factors that could further aggravate financial conditions include a significant CNH weakening, higher US long treasury yields (10-year yield moving back toward 3.00%, for example) or further USD strength. Adyen sees margin squeeze. One of Europe’s largest payment companies reports first-half revenue of €609mn vs est. €615mn despite processed volume came significantly above estimates at €346bn suggesting the payments industry is experiencing pricing pressures. Cisco outlook surprises. The US manufacturer of networking equipment surprised to the upside on both revenue and earnings in its fiscal Q4 (ending 30 July), but more importantly, the company is guiding revenue growth in the current fiscal quarter of 2-4% vs est. -0.2% and revenue growth for the current fiscal year of 4-6% vs est. 3.3%. Cisco said that supply constraints are beginning to ease and that customer cancellations are running below pre-pandemic levels, and that the company’s growth will be a function of availability. Stale FOMC minutes hint at sustained restrictive policy, but caution on pace of tightening. Fed’s meeting minutes from the July meeting were released last night, and officials agreed to move to restrictive policy, with some noting that restrictive rates will have to be maintained for some time to bring inflation back to the 2% target. Still, there was also talk of slowing the pace of rate hikes ‘at some point’, despite pushing back against easing expectations for next year. The minutes were broadly in-line with the market’s thinking, and lacked fresh impetus needed to bring up the pricing of Fed’s rate hikes. Chairman Powell’s speech at the Jackson Hole Symposium next week will be keenly watched for further inputs. US retail sales were a mixed bag. July US retail sales were a little softer at the headline level than the market expected (0% growth versus the +0.1% consensus) but the ex-auto came in stronger at 0.4% (vs. -0.1% expected). June’s growth was revised down to 0.8% from 1%. The mixed data confirmed that the US consumers are feeling the pinch from higher prices, but have remained resilient so far and that could give the Fed more room to continue with its aggressive rate hikes. Lower pump prices and further improvements in supply chain could further lift up retail spending in August. The iron ore miners are resilient despite price pressures Despite China planning more fiscal stimulus to fund infrastructure investment, the iron ore (SCOA, SCOU2) price paired back 8% this week, retreating to its lowest equal level in five weeks at $101.65, a level the iron ore price was last at in December 2021. Since March, the iron ore price has retreated 37%, with the most recent pull back being fueled by concerns China’s Covid cases are surging again with cases at a three-month high, as the outbreak worsens in the tropical Hainan province. Despite iron ore pulling back, shares in iron ore majors like BHP, remain elevated, up off their lows, with BHP’s shares trading 14% up of its July low, and moving further above its 200-day moving average, on hopes of commodity demand picking up. What are we watching next? Norway’s central bank guidance on further tightening. The Norges Bank is expected to hike 50 basis points today to take the policy rate to 1.75% despite an indication from the bank in June that the bank would prefer to shift back to hiking rates by 25 basis points, as a tight labour market and soaring inflation weigh. The path of tightening for the central bank has been an odd one, as it was the first G10 bank to actually hike rates in 2021, but finds itself with a far lower policy rate than the US, for example, which started much later with a faster pace of hikes. But NOK may react more to the direction in risk sentiment rather than guidance from the Norges Bank from here, assuming no major surprises. The EURNOK downtrend has slowed of late – focusing on 10.00 if the price action continues to back up. Japan’s inflation will surge further. Japan’s nationwide CPI for July is due on Friday. July producer prices came in slightly above expectations at 8.6% y/y (vs. estimates of 8.4% y/y) while the m/m figure was as expected at 0.4%. The continued surge reflects that Japanese businesses are grappling with high input price pressures, and these are likely to get passed on to the consumers, suggesting further increases in CPI remain likely. More government relief measures are likely to be announced, while signs of any Bank of Japan pivot away from its low rates and yield-curve-control policy are lacking. Bloomberg consensus estimates are calling for Japan’s CPI to accelerate to 2.6% y/y from 2.4% previously, with the ex-fresh food number seen at 2.4% y/y vs. 2.2% earlier.   Earnings to watch In Europe this morning, the key earnings focus is Adyen which has already reported (see review above) and Estee Lauder which is deliver a significant slowdown in figures and increased margin pressure due to rising input costs. Today’s US earnings to watch are Applied Materials and NetEase, with the former potentially delivering an upside surprise like Cisco yesterday on improved supply chains. NetEase, one of China’s largest gaming companies, is expected to deliver Q2 revenue growth of 12% y/y as growth continues to slow down for companies in China. Today: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0800 – Norway Deposit Rates 0900 – Eurozone Final Jul. CPI 1100 – Turkey Rate Announcement 1230 – US Weekly Initial Jobless Claims 1230 – Canada Jul. Teranet/National Bank Home Price Index 1230 – US Philadelphia Fed Survey 1400 – US Jul. Existing Home Sales 1430 – EIAs Weekly Natural Gas Storage Change 1720 – US Fed’s George (Voter) to speak 1745 – US Fed’s Kashkari (Non-voter) to speak 2301 – UK Aug. GfK Consumer Confidence 2330 – Japan Jul. National CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 18, 2022

Last night's publication of the minutes of the last Fed meeting, which took place at the end of July, may have affected the US dollar's trading. The policymakers touched on the regulation of the digital asset market for the first time at such a meeting. According to the published minutes, Fed officials remain very attentive to inflation risks and are committed to lowering price growth and keeping inflation expectations under control. A commitment to tightening monetary policy can take place, even if it comes at the expense of economic growth, the FOMC minutes show. The July discussion touched on the possible risks of too many and too large interest rate hikes. There was also talk that the Fed may be pursuing too much restrictive monetary policy than is necessary to restore price stability in the economy. The Fed, for the moment, seems unconcerned about GDP data and the risk of a sustained slowdown or official recession, as officials said the economy is stable for now, pointing to strong job growth, a low unemployment rate and elevated wage growth. Moreover, there was also discussion of the possibility of a later upward revision of earlier GDP readings, which are revised over time. There was also a statement regarding possible further action by the Federal Reserve. Policymakers discussed the possibility of slowing the pace of interest rate hikes at some point, but this will require data readings that can be considered satisfactory in terms of the impact of current hikes on slowing inflation. Meanwhile, for the moment, it may be crucial to maintain a restrictive stance to avoid a loosening of inflation expectations. Initially, after the release of the minutes, the EUR/USD exchange rate rose to 1.0200, before retreating to the region of 1.0150 this morning. The reaction thus appears to be mixed, without leading to a major impulse, and the exchange rate of the main currency pair has remained in consolidation since the morning of August 16. On Wall Street, on the other hand, indexes were down after the publication. The S&P500 fell 0.3 percent and the Nasdaq 100 fell 0.6 percent. The committee also turned its attention to the world of digital assets. Participants recognized the growing importance of digital assets and their increasing interconnectedness with other segments of the financial system, underscoring the need to establish a robust supervisory and regulatory framework for the sector to adequately mitigate potential systemic risks. Several participants mentioned the need to strengthen supervision and regulation of certain types of non-bank financial institutions, according to published minutes. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Highlights from the Fed minutes

Overview: The sell-off in European bonds continues today. The 10-year German Bund yield is around four basis points higher to bring three-day increase to about 22 bp. The Italian premium over Germany has risen by almost 18 bp over these three sessions. Its two-year premium is widening for the fifth consecutive session and is above 90 bp for the first time in almost three weeks. The 10-year US Treasury yield is a little softer near 2.88%. Most of the large Asia Pacific equity markets fell, with India a notable exception. Europe’s Stoxx 600 snapped a five-day rally yesterday with a 0.9% loss. It is slightly firmer today, while US futures are hovering around yesterday’s closing levels. The greenback is firm against most of the major currencies. The Australian and Canadian dollars  and Norwegian krone and sterling are the most resilient today. The Philippines, like Norway hiked 50 bp but unlike Norway, the currency has not been bought. Most emerging market currencies are softer today. Gold is trying to break a three-day slide after approaching $1760. It settled last week at $1802. October WTI found a base a little below $85.50 and is around $88.50 near midday in Europe. The week’s high was set Monday by $91.50. US natgas is up 1.1% to recoup yesterday’s loss in full. Europe’s benchmark is extended this week’s run. It finished last week near 205.85 and now is around 232.00, a 12.7% gain after 6% last week. Iron ore ended a four-day 8% slide. September copper is recovering from the early drop to near two-week lows ($354.20) and is now near 362.00. A move above yesterday’s high (~$365) would be constructive. The sell-ff in September wheat has accelerated. It is off for the fifth consecutive session and is at its lowest level since January. After falling around 3% in three days from last Friday, it is off more than 5% between yesterday and today. Asia Pacific For good reasons, Beijing and Washington suspect the other of trying to change that status quo over Taiwan  The visits by US legislators may be only the initial efforts by Congress to force a more aggressive US position. It could come to a head in the fall when a bill that wants to recognize Taiwan as a major non-NATO ally and to foster Taiwan's membership in international forums will draw more attention. Meanwhile, US-Taiwan trade talks will begin later this year that was first aired a couple of months ago. At the same time, the Biden administration has been considering lifting some of the tariffs levied by the previous administration, but China's militaristic response to the visits makes it more difficult. Biden wants to lift the tariffs not to reward Beijing but to ease the costs to Americans. The Consumer Technology Association, an industry group, estimated that the tariffs have boosted the bill for American consumer technology companies by around $32 bln. The tariffs are paid to the US government. It seems that in lieu of lifting the tariffs, a broad exclusion process is possible. Related but separately, the Nikkei Asia reported that Apple is in talks to produce its watches and computers in Vietnam for the first time  Two suppliers have been producing Apple Watches in northern Vietnam. A couple of months ago, reports indicated that Apple would more some production of its tablets to Vietnam. Apple's ecosystem is establishing a presence in Vietnam, with nearly two dozen suppliers have factories now, almost doubling since 2018. As a result of these forces and the movement of capacity outside of China, Vietnam's trade surplus with the US is exploding. The $33 bln surplus in 2016 ballooned to $91 bln last year and was nearly $58 bln in the first half. For the past five years, the dollar has traded in a roughly 2% band around VND23000. The greenback is near the upper end of the range. Australia's July jobs report was disappointing  It lost almost 87k full-time positions after gaining nearly 53k in June. Part-time positions increased (46k), leading to a 40.9k loss of overall jobs. The median forecast (Bloomberg survey) was for a gain of 25k jobs. The unemployment rate slipped to a new record low of 3.4% (from 3.5%) but this was due to a sharp drop in the participation rate (66.4% from 66.8%). Ostensibly, this could give the central bank space to be more flexible at its September 6 meeting. However, the futures market as taken it in stride that has left the odds of a 50 bp hike next month essentially unchanged around 57%. This is essentially where it was at the end of last week and the week before. Many are now familiar with China's rolling lockdowns to combat Covid and the implosion of property market, a key engine of growth and accumulation  A new threat has emerged. The extreme weather has seen water levels in Sichuan's hydropower reserves as much as 50% this month, according to report, prompting the shuttering of factories (hub for solar panels, cement, and urea). Dazhou, a city of nearly 3.5 mln people, imposed a 2 1/2-hour power cuts this week that were expanded to three hours yesterday. Office buildings in Chengdu, the provincial capital, were barred from using air conditioning. Many areas in central and northern China imposed emergency measures to ensure the availability of drinking water. The heat and drought threaten summer crops and risk greater food-driven inflation. At the same time, Shanxi, which provides about a quarter of China's coal is worried about floods, it has suspended the operation of more than 100 mines since June. The government-imposed measures to boost output and Shanxi coal output rose by around 16% in H1.  The dollar is confined to a narrow range, straddling the JPY135 area  It has held `below last week's high around JPY135.60 and above the JPY134.55, where options for $700 mln expire today. The Australian dollar has been sold aggressively this week. It began near $0.7115 and tested $0.6900 today, meeting the (50%) retracement objective of the rally from the mid-July low (~$0.6880). It was only able to make a marginal new low today, suggesting that the selling pressure has abated. The next retracement (61.8%) is closer to $0.6855. Initial resistance is seen around $0.6950. After slipping a little yesterday, the greenback returned to its recent highs against the Chinese yuan around CNY6.7960. This year's high was set in May near CNY6.8125. Between Covid lockdowns, the weather disruptions, and the continued unwinding of the property bubble, a weaker yuan may the path of least resistance. The PBOC set the dollar's reference rate at CNY6.7802 compared with expectations from Bloomberg's survey of CNY6.7806. The yuan is falling for the sixth consecutive month against the dollar. Europe The eurozone may not have completed its banking and monetary union, but the ECB said that it would harmonize how banks offer crypto assets and have sufficient capital and expertise  Crypto companies have negotiated with national authorities in several EMU member countries, but common EU licensing rules are unlikely any time soon. There is a patchwork of differing national rules, and in some countries, some types of crypto activity may require a banking license, for example. Norway's central bank hiked its deposit rate by 50 bp and indicated it would "most likely" lift rates again next month What makes today's move somewhat more aggressive that it may appear is that the hike took place at a meeting that did not include an economic update and projections for the future path of policy. Norges Bank acknowledged that the policy rate trajectory would be faster than projected in June and the inflation risks being higher for longer. The deposit rate now sits at 1.75%. Another 50 bp hike next month (September 22) seems likely followed by a 25 bp move in November, the last meeting of the year. The euro briefly popped a little above $1.02 on what was initially seen as dovish FOMC minutes in the North American afternoon yesterday  However, it returned to yesterday's lows low near $1.0145 before finding a bid. The week's low was set Tuesday slightly below $1.0125, which is ahead of the retracement objective we identified near $1.0110. The euro is consolidating as the US two-year premium over Germany falls to its lowest level in a nearly a month (2.54%), and almost 25 bp below the peak seen after the US jobs data on August 5. Labor disputes are crippling UK trains, buses, subways, and a key container port today. Sterling slipped to $1.1995, its lowest level since July 26. The nicking of the neckline of a possible double top was not a convincing violation and sterling has recovered to the $1.2060 area in the London morning. If this is not the peak in sterling, it seems close. Tomorrow, the UK is expected to report a decline in July retail sales, excluding gasoline. This measure of retail sales rose by 0.4% in June, the first increase since last October. The median forecast (Bloomberg survey) is for a 0.3% fall. The swaps market is pricing in a 50 bp hike at the mid-September BOE meeting and about a 1-in-5 chance of a 75 bp move. America US interest rates softened and dragged the dollar lower following the release of the FOMC minutes  The market seems to have focused on the concern of "many" members that it could over-tighten but there was no sign that this was going to prevent them for raising rates further. Indeed, it suggest that the risk of inflation expectations becoming embedded was greater. More hikes were appropriate, the minutes said, and a restrictive stance may be required for "some time". The minutes also played the recent pullback in commodity prices as an indicator of lower inflation, which it still says the evidence is lacking. When everything was said and done the September Fed funds futures were unchanged for the fourth consecutive session. Autos and gasoline held by retail sales in July, but excluding them, retail sales rose by 0.7%, matching the June increase  The core measure, which also excludes building materials and food services rose a solid 0.8%. Retail sales account for around 40% of personal consumption expenditures. The July PCE is due next week (August 26) and picks up service consumption too. The early call is for it to rise by 0.5%. However, it too is a nominal report, and in real terms, a 0.3%-0.4% gain would be a strong showing. The retail sales report lent credence to anecdotal stories about department stores discounting prices to move inventory. Amazon's Prime Day (July 12-13) was claimed to be the biggest so far. Online sales overall surged 2.7%. Today's data includes weekly jobless claims, the Philadelphia Fed survey, existing home sale, and the index of Leading Economic Indicators  Th four-week average of weekly jobless claims rose to 252k in the week ending August 5. Recall the four-week moving average, used to smooth out some of the noise bottomed in the week ending April 1 at 170.5k. They averaged around 238k in December 2019, which was the highest since the first half of January 2018. Continuing claims have edged higher in recent weeks, but at 1.428 mln, they are roughly 20% below the peak at the start of this year. The Philadelphia Fed survey is particularly interesting today because of the disastrous Empire State survey. The median forecast in Bloomberg's survey is for a -5 reading after -12.3 in July. Meanwhile, existing home sales have fallen for five months through June. In fact, new home sales have been fallen every quarter since the end of 2020, with the exception of Q3 21. They fell by an average of 1.7% in Q1 22 and 3.8% in Q2 22. The median forecast is for a nearly 5% decline in July. The market tends not to get excited about the leading economic index series. Economists expected the fifth consecutive decline. The only month it rose this year was February. The US dollar extended its recovery against the Canadian dollar to reach almost CAD1.2950, its highest level since August 8 today  It was pressed lower by new offers in the European morning that drove it back to almost CAD1.2900. The market may take its cues from the S&P 500 and the general risk appetites in the North American session. With the intraday momentum indicators stretched, yesterday's post-FOMC minutes low near CAD1.2880 may offer sufficient support. The greenback rose to a five-day high against the Mexican peso yesterday around MXN20.09. It is consolidating and straddling the MXN20.00 area. Our reading of the technical condition favors the dollar's upside, and the first important target is near MXN20.20. The US dollar gapped higher against the Brazilian real yesterday and approached the BRL5.22 area, where the 20-day and 200-day moving averages converge. The opening gap was closed late on the pullback spurred by the reading of FOMC minute headlines. The price action is similar to the peso, where the dollar has traded heavily since last month but appears to have found a bottom. A break above BRL5.22 would target the month's high near BRL5.3150.       Disclaimer   Source: Fed Minutes were Not as Dovish as Initially Read

Summary:  Better than expected economic data continued to support sentiment in US in contrast to Europe, where ECB’s Schnabel's warning on the growth/inflation picture aggravated concerns. Fed speakers meanwhile continued to push for more rate hikes this year, aiding dollar strength despite lack of a clear direction in long end yields. EUR and GBP broke below key support levels, but oil prices climbed higher amid improving demand outlook but sustained supply issues. Focus now on Jackson Hole next week. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  In its second lightest volume session of the year, U.S. equities edged modestly higher, S&P 500 +0.23%, Nasdaq 100 +0.26%. As WTI crude climbed 2.7%, rebounding back above $90, the energy space was a top gainer aside from technology. Exxon Mobil (XOM:xnys) gained 2.4%.  Cisco (CSCO:xnas) surged 5.8% after reporting better-than-expected revenues. Nvidia (NVDA:xnas), +2.4% was another top contributor to the gain of the S&P 500 on Wednesday.  95% of S&P 500 companies have reported Q2 results, with about three-quarters of them managing to beat analyst estimates. On Friday there is a large number of options set to expire.  The U.S. treasury yield curve bull steepened on goldilocks hope The U.S. 2-10-year curve steepened 7bps to -32bps, driven by a 9bp decline in the 2-year yield.  In spite of hawkish Fed official comments and the August Philadelphia Fed Index bouncing back to positive territory, the market took note of the falls in the prices paid diffusion index and the prices received index from the survey and sent the short-end yields lower.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Both Hang Seng Index and CSI300 declined about 0.8%.  Tencent (00700:xhkg) rose 3.1% after reporting results that beat estimates as a result of better cost control and adverting revenues. Other China internet stocks traded lower, Bilibili (09626:xhkg) -4.2%, Baidu (09888:xhkg) -4.5%, Alibaba (09988:xhkg) -2.1%, JD.COM (09618:xhkg) -2.5%. The surge of Covid cases in China to a three-month high and the Hainan outbreak unabated after a 2-week lockdown, pressured consumer stocks.  Great Wall Motor (02333:xhkg) led the charge lower in autos, plunging near 6%.  Other automakers fell 2% to 4%.  Geely (00175:xhkg) fell 3.1% after reporting 1H earnings missing estimates.  A share Chinese liquor names declined, Kweichow Moutai (600519:xssc) -1.2%, Wuliangye Yibin (000858:xsec) -1.6%. Chinese brewers were outliner gainers in the consumer space, China Resources Beer (00291:xhkg) +4.8%, Tsingtao Brewery (00168:xhkg) +1.9%. Chinese property developers traded lower with Country Garden (02007:xhkg) losing the most, -5.2% , after warning that 1H earnings may have been down as much as 70%. The China Banking and Insurance Regulatory Commission (CBIRC) is looking at the quality of real estate loan portfolios at some financial institutions.  EURUSD and GBPUSD break through key support levels Dollar strength prevailed into the end of the week with upbeat US economic data and a continued hawkish Fedspeak which continued to suggest more Fed rate hikes remain in the pipeline compared to what the market is currently pricing in. EUR and GBP were the biggest loser, with both of them breaking below key support levels. EURUSD slid below 1.0100 handle while GBPUSD broke below 1.2000 despite a selling in EGBs and Gilts. USDJPY also broke above 136 in early Asian trading hours despite lack of a clear direction in US 10-year yields and a slide in 2-year yields. AUDUSD testing a break below 0.6900 as NZDUSD drops below 0.6240. Crude oil prices (CLU2 & LCOV2) Oil prices reversed their drop with WTI futures back above $90/barrel and Brent futures above $96. Upbeat US economic data has supported the demand side sentiment in recent days. Moreover, President Xi’s comment that China will continue to open up the domestic economy also aided the demand equation. Supply concerns, meanwhile, were aggravated by geopolitical tension around a potential incident at the Zaporizhzhia nuclear plant in Ukraine. Meanwhile, Shell hinted at reducing the capacity of Rhineland oil refinery due to the lower water level on the Rhine river and said the situation regarding supply is challenging but carefully managed. Gold (XAUUSD) still facing mixed signals The fate of gold has been turned lower again this week with the yellow metal facing decline of 2.5% so far in the week and breaking below the $1759 support, the 38.2% retracement of the July to August bounce. Stronger dollar, along with Fed’s continued hawkish rhetoric, weighed. Silver (XAGUSD) is also below the key support at $19.50, retracing half of its recent gains. The short-term direction has been driven by speculators reducing bullish bets, but with inflation remaining higher-for-longer, the precious metals can continue to see upside in the long run. What to consider? Existing home sales flags another red for the US housing market US existing home sales fell in July for a sixth straight month to 4.81 mn from 5.11 mn, now at the slowest pace since May 2020, and beneath the expected 4.89 mn. Inventory levels again continued to be a big concern, with supply rising to 3.3 months equivalent from 2.9 in June. This continues to suggest that the weakening demand momentum and high inventory levels may weigh on construction activity. US economic data continues to be upbeat The Philly Fed survey outperformed expectations, with the headline index rising to +6.2 (exp. -5.0, prev. -12.3), while prices paid fell to 43.6 (prev. 52.2) and prices received dropped to 23.3 (prev. 30.3). new orders were still negative at -5.1, but considerably better than last month’s -24.8 and employment came in at 24.1 from 19.4 previously. While this may be a good signal, survey data tends to be volatile and a long-term trend is key to make any reasonable conclusions. Jobless claims also slid to 250k still suggesting that the labor market remains tight. Fed speakers push for more rate hikes St. Louis Federal Reserve President James Bullard flagged another 75 basis point rate hike at the September meeting and hinted at 3.75-4% Fed funds rate by the end of the year with more front-loading in 2022. Fed’s George, much like Fed’s Daly, said that last month’s inflation is not a victory and hardly comforting. Bullard and George vote in 2022. Fed’s Kahskari said that he is not sure if the Fed can avoid a recession and that there is more work to be done to bring inflation down, but noted economic fundamentals are strong. Overall, all messages remain old and eyes remain on Fed Chair Powell speaking at the Jackson Hole conference on August 25. Japan’s inflation came in as-expected Japan’s nationwide CPI for July accelerated to 2.6% y/y, as expected, from 2.4% y/y in June. The core measure was up 2.4% y/y from 2.2% previously, staying above the Bank of Japan’s 2% target and coming in at the strongest levels since 2008. Upside pressures remain as Japan continues to face a deeper energy crisis threat into the winter with LNG supplies possibly getting diverted to Europe for better prices. Still, Bank of Japan may continue to hold its dovish yield curve control policy unless wage inflation surprises consistently to the upside. Cisco’s revenues came in flat, beating a previously feared decline Cisco Systems reports July 2022 quarter revenues of USD13.1 billion, down 0.2% YoY but better than the consensus of a 3% decline.  Net income came in at USD3.4 billion, -3.2% YoY but more than 1 percentage point above consensus.  The fall in product order was also smaller than feared.  The company guided the fiscal year 2023 revenue growth of +4% to +6%, ahead of the 3% expected and FY23 EPS of USD3.49 to USD3.56, in line with expectations as gross margin pressures are expected to offset the impact of higher sales.  NetEase’s Q2 results beat NetEase (09999:xhkg/NTES:xnas) reported above-consensus Q2 revenues, +13% YoY, and net profit from continuing operations, +28%.  PC online game revenues were above expectations, driven by Naraka Bladepoint content updates and the launch of Xbox version.  Mobile game segment performance was in line.  Geely Automobile 1H earnings missed estimates on higher costs Chinese automaker Geely reported higher-than-expected revenue growth of 29%YoY in 1H22 but a 35% YoY decline in net profit which was worse than analyst estimates.  The weakness in profit was mainly a result of a 2.6 percentage point compression of gross margin to 14.6% due to higher material costs and production disruption, higher research and development costs, and the initial ramping-up of production of the Zeekr model.  The company maintains its sales volume target of 1.65 million units, an growth of 24% YoY, for the full year of 2022.    For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 19, 2022

Relevance up to 19:00 2022-08-24 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. After the spring fever, which ended with a global sell-off of all indices and a bearish reversal, many retail traders again tried to get back into the game. However, before the S&P 500 had time to accelerate, a new blow from the meme-stock market brought new losses to the bulls. However, the survey showed that traders are not ready to follow the bearish trend. Retail traders saved markets by keeping trades open during tough times According to analysts, this time it was a fairly large army of "mom-dad" investors that suffered, that is, traders with little trading experience and without a strong educational base. Wall Street was talking about this type of investor when they tried to explain the July rise in cryptocurrencies. Now they are suspected of provoking the latest global surge in US indices.In my opinion, if this reflects the real state of affairs, then only partially. Yes, one cannot but agree that the retail investor base has changed dramatically in recent years, especially after the COVID-19 pandemic. The rise of social media (hello Reddit) and online trading sites and apps has created younger and more market-savvy individuals who complement the more traditional older investors who make monthly contributions to their pension funds. This army of traders, if it can be suspected of naivety, then after the last two extremely volatile years of trading, they have clearly gained experience and are in no hurry to part with their money. Wall Street analysts paint us a portrait of a fickle, speculative day trader who just wants to make a quick buck, especially in the riskier and more complex parts of financial markets like cryptocurrencies. To some extent this is true, let's not deny the obvious. This is also a direct consequence of the surge in liquidity in financial markets after the pandemic, which the Federal Reserve is now trying to reverse. Yet research shows that retail investors are not as easy-going as institutional investors might have thought.For example, a survey of 1,000 retail investors in the United States conducted by the social investment platform eToro in June, when the market was in a bearish peak, showed that 80% of them buy or sell assets monthly or less often. At the time of the survey, about 65% of respondents were holding their investments, 29% were holding and buying more, and only 6% had sold. These numbers give us a completely different picture of what is happening in small trades. According to the traditional school of investing, young investors are less likely to keep their investments. Yet 42% of investors aged 18 to 34 did just that, and 43% held and bought more. Sold only 15% of the total. Typically, retail investors are late to the peak of profitable deals and exit them last and with the worst hangover. Many of them lost some headroom earlier this year, when the S&P 500 (.SPX) posted its worst first half performance in more than half a century. Of course, one might think that retail investors are generally not the most sophisticated or nimble, and that they probably suffered huge losses as the market went against them for months on end. But if they had given up and sold them, the market crash could have been even worse. And more importantly, according to this survey, they never really left. They kept their positions in the trades, not allowing the market to collapse even more. And it's impressive. Therefore, the sharks of Wall Street immediately suspected these hurry-ups that it was they who were now pulling the markets up. Just this week, retail investors were again taken aback by the wild swings in shares of home improvement retailer Bed Bath & Beyond. Meme shares soared over 130% at the start of the week, but fell 20% on Thursday and 40% in early trading on Friday. It comes after billionaire Ryan Cohen suddenly sold his stake in troubled retailer Bed Bath & Beyond - just days after he went bullish on stock options. For Cohen himself, the deal could bring in between $55 million and $60 million. But the traders, who hurried to invest in the newly popular funds, did not do well. Not good for other meme companies. Retail favorites GameStop and AMC Entertainment continued their decline on Friday, leaving most of their weekly profits behind. GameStop and AMC Entertainment lost between 4% and 6%. E-commerce firm Vinco Ventures plunged 17%. Interestingly, Cohen also owns a stake in GameStop. And yet, despite the current dip, BBBY and call option buying volumes by retail investors are up more than 70 times their all-time average, with current five-day net buying up to $188 million on Wednesday.     However, the market is still on a positive wave: step away from meme stocks and look towards the luminaries: the S&P 500 and Nasdaq Composite rebounded almost 20% and 25%, respectively, from their mid-June lows. This has certainly been helped by the strong growth in retail investor buying, which currently averages $1.36 billion per day, with a 21-day moving average of over $27 billion. Moreover, the data shows that retail investors remained active buyers throughout the January-June market downturn. Yes, the 21-day moving average fell to $23 billion over the summer, but it's still well above last year's low of about $21 billion. What does this tell us? That the markets don't want to accept the reality of a bearish downturn, preferring to hold positions and bet on the bulls as soon as there is the slightest opportunity for growth. According to the technical data, the bearish decline is already in full swing. Thus, Citi analysts have identified 22 bear market rallies since the 1920s, lasting from two to 128 trading days and ranging in size from 11% to 47%. There were three such episodes from 2001 to 2002, four in the period 2008-2009, and two this year. However, I want to caution you. The influence of retail traders on the markets is largely seasonal. It's August now, when liquidity is low and the big investment companies usually take their staff on vacation, so it's the off season... and an opportunity for the retail bulls, who have increased their influence due to this factor. In late August - early September, the market of large investors will revive, and the game will follow different rules. The real economy is slow to recover, a recession is waving a red flag in China, the conflict in Ukraine is dragging on, and the coronavirus promises us a fresh strain this season. So there are not so many grounds for optimism. With this in mind, we can expect a rather difficult autumn-winter season, including for traders.   Read more: https://www.instaforex.eu/forex_analysis/319451

Summary:  Equities closed last week on the defensive as a rising US dollar and especially US treasuries weighed. The US 10-year yield is threatening the 3.00% level for the first time in a month ahead of the important US July PCE inflation data and Fed Chair Powell’s speech on Friday. How forcefully will Powell push back against the virtual melt-up in financial conditions after the market felt the Fed pivoted to less tightening at the July meeting?   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures are still rolling over as the US 10-year yield zoomed to 3% on Friday with the index futures trading just above the 4,200 level this morning. The next levels on the downside sit around the 4,100 to 4,170 range, but in the longer term the 4,000 level is the big level to watch. Energy markets are still sending inflationary signals which is key to watch for sentiment this week. In terms of earnings, Palo Alto Networks and Zoom Video will report earnings. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index and CSI300 were moderately higher, +0.2% and +0.8% respectively. Chinese developers gained on today’s larger-than-expected cut in the 5-year loan prime rate and last Friday’s report that the PBoC, jointly with the Housing Ministry and the Ministry of Finance to roll out a program to make special loans through policy banks to support the delivery of stalled residential housing projects. Great Wall Motor (02333:xhkg) soared 11%. In A-shares, auto names were among stocks that outperformed. Xiaomi (01810:xhkg) dropped 3% after reporting Q2 revenues -20% YoY and net profit -67% YoY, largely in line with expectations.  US dollar dominates focus in forex this week The US dollar rally picked up speed last week, with key levels falling in a number of USD pairs last week that now serve as resistance, including 1.0100 in EURUSD and 1.2000 in GBPUSD, both of which now serve as resistance/USD support. A significant break of EURUSD parity will likely add further psychological impact, and more practically, an upside break in yields at the longer end of the US yield curve is playing a supportive roll, one that will intensify its driving roll if the benchmark 10-year US Treasury yield follows through higher above the 3.00% level it touched in trading overnight. A complete sweep of USD strength also threatens on any significant follow through higher in USDCNH as it threatens an upside break here (more below). The next key event risk for the US dollar arrives with this Friday’s Jackson Hole symposium speech from Fed Chair Powell (preview below). USDCNH Broad USD strength is helping to drive a move to new cycle highs above 6.84 as the week gets underway, but CNH is not weak in other pairings with G10 currencies, quite the contrary. Still, a move in this critical exchange rate will remain a focus, and the contrast between an easing PBOC (moving once again overnight) and tightening central banks nearly everywhere else is stark. The USDCNH moving higher will receive considerable additional focus if the 7.00 level. Crude oil prices (CLU2 & LCOV2) Crude oil turned lower in the Asian overnight after modest gains last week as the focus continues to alter between demand destruction fears and persistent supply shortages. Fears of an economic slowdown reducing demand remains invisible in the physical market but it has nevertheless seen crude oil give up all the post Russia invasion gains while speculators or hedge funds have cut bullish bets on WTI and Brent to the lowest since April 2020. WTI futures trades back below $90/barrel while Brent futures dipped below $96. Still, the gas-to-fuel switch led by record gas prices in Europe has seen refinery margins strengthen again lately and it now adds to the fundamental price-supportive factors. Focus may turn back to Iranian supply early in the week though, with reports that a deal is ‘imminent’. Cryptocurrencies The crypto market took a major hit on Friday with the total crypto market cap diving by more than 9 %, but prices have stabilized over the weekend. The total market cap is now close to the psychological $1 trillion level. US Treasuries (TLT, IEF) Rising US Treasury yields are pushing back against the strong improvement in financial conditions of recent weeks after the US 10-year Treasury yield benchmark jumped to new highs on Friday, well clear of the prior range after a few teases higher earlier in the week and bumping up against the psychologically key 3.00% level. Any follow through higher toward the 3.50% area highs of the cycle would likely add further pressure to financial conditions and risk sentiment more broadly. What is going on? German PPI shocks on the upside Germany’s July PPI smashed expectations to come in at 5.3% MoM, the biggest single gain since the Federal Republic started compiling its data in 1949 and above the consensus estimate of 0.7%. The data suggests potentially a lot more room on the upside to Eurozone inflation, and a lot more pain for German industries. European PMIs due this week will gather attention, as will Germany’s IFO numbers. Berkshire Hathaway wins approval to acquire Occidental Petroleum Warren Buffett’s industrial conglomerate that recently increased its stake in Occidental Petroleum to over 20% following the US Climate & Tax bill which adds more runway for oil and gas companies has now won regulatory approval for acquiring more than 50% the oil and gas company. This means that Berkshire Hathaway is warming up to its biggest acquisition since its Burlington acquisition. The power shortage in China China is currently being hit by a heatwave with a large part of the country experiencing -degree Celsius temperatures since the beginning of August. The surge in air conditioning caused electricity consumption to soar. To make things worse, drought has reduced hydropower output.  Some provinces and municipalities, especially Sichuan, are curbing electricity supply to industrial users in order to ensure electricity supply for residential use. This has caused disruptions to manufacturing production and added to the headwinds faced by the Chinese economy. China cut its 5-year loan prime rate loan prime more than expected China’s National Interbank Fund Center, based on quotes from banks and under the supervision of the PBoC, fixed the 1-year loan prime rate (“LPR”) 5 bps lower at 3.60% and the 5-year loan prime rates (“LPR”) 15 basis points lower at 4.30%. The larger-than-expected reduction in the 5-year LPR, which is the benchmark against which mortgage loan rates in China are set at a spread, may signal stronger support from the PBoC to the housing market.  The Chinese authorities are coming to the developers’ aid in delivering pre-sold homes Last Friday the Housing Ministry, the Ministry of Finance, and the PBoC, according to Xinhua News, jointly rolled out a program to make special loans through policy banks to support the delivery of presold residential housing projects which are facing difficulties in completion due to lack of funding.  Investors will monitor closely this week to gauge if there is additional information about the size of the program and if the PBoC will print money to fund it.  The resurgence of Covid cases in China Daily locally transmitted new cases of Covid-19 in China persistently stated above 2,000 since August 12, 2022, with Hainan, Tibet, and Xinjiang being the regions most impacted. The constituent companies of the Hang Seng Index will increase to 73 from 69 Hang Seng Indexes Company announced last Friday to add China Shenhua Energy (01088:xhkg), Chow Tai Fook Jewellery (01929:xhkg), Hansoh Pharmaceutical (03693:xhkg), and Baidu (09888:xhkg) to the Hang Seng Index, bringing the latter’s number of constituent companies to 73 from 69. The changes will take effect on September 5, 2022. In addition, SenseTime (00020:xhkg) will replace China Pacific Insurance (02601:xhkg) as a constituent company of the Hang Seng China Enterprises Index.  Australian share market at a pivotal point After rising for five straight weeks including last week's 1.2% lift, many market participants hold their breath this rally will continue. However, standing in the way are profit results from a quarter of the ASX200 companies to be released this week. For the final week of profit results, we hear from Qantas (Australia's largest airline), Whitehaven Coal (Australia's largest coal company), as well as other stocks that are typically held in Australian superannuation funds; including Coles, Woolworths, Wesfarmers, Endeavour. And lastly about 20 companies trade ex-dividend this week, however they are not expected to move the market's needle. Money managers increased their commodity exposure for a third week to August 16 The Commitment of Traders (COT) Report covering positions and changes made by money managers in commodities to the week ending August 16 showed a third week of net buying with funds adding 123k lots to 988k lots, a seven-week high. The buying was broad led by natural gas, sugar, cattle and grains with most of the selling concentrated in crude oil and gold. More in our weekly update out later. Prior to the latest recovery in price and positions hedge funds had been net sellers for months after holding 2.6 million lots at the start of the year. What are we watching next? USD and US Treasury yields as Jackson Hole Fed conference is the macro event risk of the week Friday The US dollar strengthened sharply, with EURUSD challenging near parity, USDCNH breaking higher today after another PBOC rate cut, and USDJPY not far from cycle highs. US Treasury yields have supported the move with the entire curve lifting over the last couple of weeks and longer yields pulling to new local highs last week. The Fed has pushed back consistently against the market’s pricing of a Fed turnaround to easing rates next year with partial success, as expectations for rate cuts have shifted farther out the curve and from higher levels. This week, the key test for markets is up on Friday as the US reports the Fed’s preferred measure of inflation, the July PCE inflation data, while Fed Chair Powell will also speak on Friday, offering the most important guidance on how the Fed feels about how it feels the market understands its intentions.   Earnings to watch Plenty of important earnings releases this week with the largest ones listed below. Today’s key focus is Palo Alto Networks, Zoom Video, and XPeng. Cyber security stocks have done reasonably well over the past year despite valuations coming down as demand is still red hot, Analysts expect Palo Alto Networks to report revenue growth of 27% y/y. Zoom Video, which was the pandemic superstar, is also reporting today with estimates looking for 9% revenue growth, down considerably from 54% y/y growth just a year ago. Monday: Palo Alto Networks, Zoom Video, XPeng Tuesday: CATL, Intuit, Medtronic, JD.com Wednesday: LONGi Green Energy, Royal Bank of Canada, PetroChina, Ping An Insurance Group, Nongfu Spring, Mowi, Nvidia, Salesforce, Pinduoduo, Snowflake, Autodesk Thursday: South32, Toronto-Dominion Bank, Fortum, Delivery Hero, AIA Group, China Life Insurance, CNOOC, CRH, Dollar General, Vmware, Marvell Technology, Workday, Dollar Tree, Dell Technologies, NIO Friday: Meituan, China Shenhua Energy, China Petroleum & Chemical Economic calendar highlights for today (times GMT) 0800 – Switzerland SNB weekly sight deposits 1230 – US Jul. Chicago Fed National Activity Index 2300 – Australia Aug. Flash Manufacturing/Services PMI 0030 – Japan Aug. Flash Manufacturing/Services PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 22, 2022

Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to August 16. A week that potentially saw a cycle peak in US stocks and where the dollar and treasury yields both traded calmly before pushing higher. Commodities meanwhile continued their recent recovery with funds being net buyers of most contracts, the major exceptions being gold and crude oil Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to August 16. A week that potentially saw a cycle peak in US stocks with the S&P 500 reversing lower after reaching a four-month high, and where the dollar and treasury yields both traded calm before pushing higher. Commodities meanwhile continued their recent recovery with all sectors, except precious metals and grains recording gains. Commodities Hedge funds were net buyers for a third week with the total net long across the 24 major commodity futures tracked in this update rising by 14% to reach a seven week high at 988k lots. Some 56% below the recent peak reached in late February before Russia’s attack on Ukraine drove an across-the-board volatility spike which forced funds to reduce their exposure. Since then and up until early July, worries about a global economic slowdown, caused by a succession of rapid rate hikes in order to kill inflation, was one of the key reasons for the slump in speculative length.Returning to last week, the 123k lot increase was split equally between new longs being added and short positions being scaled back, and overall the net increase was broad led by natural gas, sugar, cattle and grains with most of the selling being concentrated in crude oil and gold. Energy: Weeks of crude oil selling continued with the combined net long in WTI and Brent falling by 26k lots to 278k lots, the lowest belief in rising prices since April 2020. Back then the market had only just began recovering the Covid related energy shock which briefly sent prices spiraling lower. While funds continued to sell crude oil in anticipation of an economic slowdown the refined product market was sending another signal with refinery margins on the rise again, partly due surging gas prices making refined alternatives, such as diesel, look cheap. As a result, the net long in ICE gas oil was lifted by 24% to 62k lots while RBOB gasoline and to a lesser extent ULSD also saw net buying. The net short in Henry Hub natural gas futures was cut by 55% as the price jumped by 19%. Metals: Renewed weakness across investment metals triggered a mixed response from traders with gold seeing a small reduction in recently established longs while continued short covering reduced bearish bets in silver, platinum and palladium. With gold resuming its down move after failing to find support above $1800, the metal has been left exposed to long liquidation from funds which in the previous two weeks had bought 63.3k lots. Copper’s small 1% gain on the week supported some additional short covering, but overall the net short has stayed relatively stable around 16k lots for the past six weeks. Agriculture: Speculators were net buyers of grains despite continued price weakness following the latest supply and demand report from the US Department of Agriculture on August 12, and after shipments of grains from Ukraine continued to pick up speed. From a near record high above 800k lots on April 19, the net long across six major crop futures went on to slump by 64% before buyers began dipping their toes back in to the market some three weeks ago. Buying was concentrated in bean oil and corn while the wheat sector remained challenged with the net long in Kansas wheat falling to a 2-year low. The four major softs contract saw strong buying led by sugar after funds flipped their position back to a 13.4k lots net long. The cocoa short was reduced by 10% while the coffee long received a 25% boost. Cotton’s 18% surge during the week helped lift the long by 35% to 44.7k lots.     Forex A mixed week in forex left the speculative dollar long close to unchanged against ten IMM futures and the DXY. Selling of euro saw the net short reach a fresh 2-1/2-year high at 42.8k lots or €5.3 billion equivalent while renewed selling of JPY, despite trading higher during the reporting week, made up most of the increase in dollar length. Against these we saw short covering reduce CHF, GBP and MXN short while CAD net long reached a 14-month high.    What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Source: COT: Gold and oil left out as funds return to commodities

Summary:  Equities were sold off on Monday, continuing a slide from their summer rally high, in the midst of position adjustments ahead of the Jackson Hole central banker event later this week. U.S. 10-year yields returned to above 3%. China cut its 5-year loan prime rates and plans to extend special loans to boost the ailing property markets. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities lost ground and continued to retrace from the high of the latest rally since mid-June.  The market sentiment has become more cautious ahead of Fed Chair Powell’s speech this Friday at the Jackson Hole symposium and a heavy economic data calendar, S&P 500 – 2.1%, Nasdaq 100 -2.7%.  The rise of U.S. 10-year bond yield back to above 3% added to the selling pressures in equities.  Zoom Video (ZM:xnas) fell 8% in after-hours trading as the company reported Q2 revenues and earnings missing estimates and cut its full year revenues guidance. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Bonds were sold off as traders adjusted positions ahead of the Jackson Hole.  The treasury yield curve bear flattened with 2-year yields surging 8bps to 3.30% and 10-year yields climbing 4bps to 3.01%, above the closely watched 3% handle.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Seng fell 0.6% while CSI300 climbed 0.7% on Monday. Chinese developers gained on today’s larger-than-expected cut in the 5-year loan prime rate and the Chinese authorities plan to provide special loans through policy banks to support the delivery of stalled residential housing projects, CIFI (00883:xhkg) +11.5%, Country Garden (02007:xhkg) +3.2%.  China extended EV waivers from vehicle purchase tax and other fees to the end of 2023, but the share price reactions of Chinese EV makers traded in Hong Kong were mixed.  Great Wall Motor (02333:xhkg) soared 11%, benefiting from launching a new model that has a 1,000km per charge battery while Nio (09866:xhkg) and Li Auto(02015:xhkg) fell 4.2% and 1.4% respectively. Xiaomi (01810:xhkg) dropped 3.3% after Q2 revenues -20% YoY and net profit -67% YoY, on lower smartphone shipments (-26% YoY).  Smartphone parts suppliers, AAC Technologies (02018:xhkg) and Sunny Optical (02382:xhkg) declined 5.6% and 4.2% respectively.  The share price performance of the four companies that will be added to the Hang Seng Index was mixed, Baidu (09888:xhkg) +0.9%, China Shenhua Energy (01088:xhkg) +2.1%, Hansoh Pharmaceutical (03692:xhkg) +3.2% but Chow Tai Fook Jewellery (01929:xhkg) -0.6%.  SenseTime (00020:xhkg) gained 4.2% as the company will replace China Pacific Insurance (02601:xhkg) -2.8% as a constituent company of the Hang Seng China Enterprises Index.  ENN Energy (02688:xhkg) plunged more than 14% after reporting H1 results below market expectations.  China retailer Gome (00493) collapsed 20% after resuming trading from suspension and a plan t buy from the controlling shareholder a stake in China property assets.  EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows of 0.9926. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. Also on the radar will be Fed Chair Powell’s speech at the Jackson Hole later this week, with a fresh selloff in the pair likely to target 0.9500 next. USDCNH heading to further highs After PBOC’s easing measures on Monday, the scope for further yuan weakness has increased. USDCNH broke above 6.8600 overnight and potentially more US dollar strength this week on the back of a pushback from Fed officials on easing expectations for next year could mean a test of 7.00 for USDCNH. Still, the move in yuan is isolated, coming from China moving to prevent the yuan from tracking aggravated USD strength rather than showing signs of desiring a broader weakening. EURCNH has plunged to over 1-month lows of 6.8216 on the back of broader EUR weakness. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a recovery overnight despite the strength in the US dollar. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nordstream pipeline. Diesel and refinery margins have also been supported as a result, with Asia diesel crack rising to its previous high of $63 amid low inventory levels. WTI futures reversed back to the $90/barrel levels and Brent were back above $96. Comments from Saudi Energy Minister threatening to dial back supply also lifted prices, but these were mis-read and in fact, focused more on the mismatch between the tightness in the futures and the physical market. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support and is now eying $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July.   What to consider?   German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 8% in Europe amid concerns around the next scheduled 3-day maintenance of the Nordstream pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more.  Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Europe and UK PMIs may spell further caution The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. China’s plan to provide loans to ensure delivery of presold residential projects is said to be of the size of RMB 200 billion Last Friday, Xinhua News reported that the PBoC, jointly with the Housing Ministry and the Ministry of Finance rolled out a program to make special loans through policy banks to support the delivery of stalled residential housing projects but the size of the program was not mentioned.   A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the support lending program could be as large as RMB 200 billion.  Beijing municipal government rolled out initiatives to promote hydrogen vehicles The municipal government of Beijing announced support for the construction of hydrogen vehicle refueling stations with RMB500 million for each station, aiming at building 37 new stations by 2023 and bringing the adoption of fuel-cell cars to over 10,000 units in the capital. Earlier in the month, the Guangdong province released a plan to build 200 hydrogen vehicle refueling stations by 2025. Since last year, there have been 13 provinces and municipalities rolling out policies to promote the development of the hydrogen vehicle industry.  Earnings on tap Reportedly there have been shorts being built up in Dollar Tree (DLTR:xnys) as traders are expecting that discount retailer missing when reporting this Thursday.   On the other hand, investors are expecting Dollar General (DG:xnys) results to come in more favourably, , which also reports this Thursday.  Key earnings scheduled to release today including Medtronic (MDT:xnys), Intuit (INTU:xnas), JD.COM (09618.xhkg/JD.xnas), JD Logistics (02615:xhkg), Kingsoft (02888:xhkg), and Kuishaou (01023:xhkg). Singapore reports July inflation figures today Singapore's inflation likely nudged higher in July, coming in close proximity to 7% levels from 6.7% y/y in June. While both food and fuel costs continue to create upside pressures on inflation, demand-side pressures are also increasing as the region moves away from virus curbs. House rentals are also running high due to high demand and delayed construction limiting supplies. The Monetary Authority of Singapore has tightened monetary policy but more tightening moves can be expected in H2 even as the growth outlook has been downwardly revised.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 23, 2022

Summary:  US equities continued to push sharply lower yesterday as the strong US dollar is in focus as EURUSD dropped well below parity yesterday. US Treasury yields are playing their part in pressuring sentiment as the US 10-year yield benchmark rose above 3.00%. The next important event risk is this Friday’s Jackson Hole, Wyoming speech from Fed Chair Powell, as the Fed is expected to remind the market that it remains in full inflation-fighting mode, pushing back against the impression that it may be set to cut rates next year.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their losses yesterday as the US 10-year yield moved above the 3% level and the Fed Funds futures curve moved lower across the whole curve (meaning less rate cuts expected next year). Markets are beginning to second-guess their aggressive bets in July on inflation cooling fast enough to warrant rate cuts next year as the galloping energy crisis makes it difficult for inflation to cool. Tangibles-driven themes such as commodities, logistics, energy storage and financials were the relative winners in yesterday’s session. S&P 500 futures are now in the support zone from before the last leg up that started on 10 August; we see the 4,100 level as the next level to watch on the downside and then the 100-day moving average at 4,085. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index and CSI300 were both down about 0.6%. A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the central bank and other authorities’ support lending program to developers could be as large as RMB 200bn. The reaction of the share prices of Chinese Property developers were mixed, Country Garden (02007:hkg) +3.1%, Longfor (00960:xhkg) -1.4%. Postal Savings Bank of China (01658:xhkg) plunged 5.5% after the Chinese bank reported net profit miss with a 10 bps y/y fall in net interest margin to 2.27% in H1. Gross loans grew 13% y/y in H1 but at a more tepid growth of 3% q/q.  Non-performing loans ratio overall was steady at 0.8% but mortgage NPL ratio climbed by 8 bps to 0.52%. US dollar rally following through The US dollar rally continued apace yesterday, as EURUSD traded well below parity and closed at its lowest level in nearly twenty years yesterday. GBPUSD has teased below 1.1760, its lowest level since a one-off pandemic-outbreak spike in early 2020, while other USD pairs are not yet at extremes of the cycle, including AUDUSD, still well above the sub-0.6700 lows of July, and USDJPY, which has not yet challenged the cycle high north of 139.00. There is clearly a reflexive situation at the moment in the US dollar, risk sentiment and US treasury yields. USDCNH Broad USD strength remains behind the weaker CNH in the USDCNH exchange rate as the CNH continues to rise versus, for example, the EUR, while the CNHJPY exchange rate trades near the important 20.00 area. Any more significant move in this critical exchange rate could quickly steal some of the focus away from the US dollar. The contrast between an easing PBOC (moving once again earlier this week) and tightening central banks nearly everywhere else is stark. The next important level for the pair is 7.00, with the range high of the last decade near 7.20. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a sharp U-turn higher on Monday after the Saudi Energy Minister talked about a potential production cut after saying the futures market has become increasingly disconnected from underlying fundamental developments, a view that we share. His comment supported the market on a day where risk appetite generally took a knock from the stronger dollar and falling equity markets. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nord Stream 1 pipeline and heatwaves in China. Diesel prices trades higher supported by refinery margins, the so-called crack spread hitting seasonal highs around the world. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support on Monday before finding support at $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July. German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 13% in Europe amid concerns around the next scheduled 3-day maintenance of the Nord Stream 1 pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more. US Treasuries (TLT, IEF) US treasury yields rose yesterday, with the 10-year benchmark closing above 3.00% for the first time in over a month yesterday. Rising yields are likely an important driver of weaker risk sentiment after the melt-up in the wake of the late July FOMC meeting, but practically, a move toward the cycle highs from June near 3.50% (in the lead-up to the FOMC meeting on June 16) is needed to seize the spotlight. The behavior of the treasury market in the wake of the Jackson Hole conference speech from fed Chair Powell this Friday is an important next step, particularly if Powell provides strong guidance on the pace or importance of the Fed’s balance sheet tightening (QT). What is going on? EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows in the low 0.9900’s this morning. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. The next step for the US dollar is the Fed Chair Powell speech this Friday as discussed below. Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Palo Alto outlook remains strong The cyber security company reported last night Q4 revenue and EPS above estimates and Q1 outlook is slightly above estimates while the FY outlook is well above consensus estimates. Q4 networks billing growth was 44% vs est. 25% suggesting demand is accelerating and bolstering our view that the cyber security industry is a high growth and counter-cyclical industry in the years to come. Shares were up 9% in extended trading. Zoom shares were down 8% in extended trading The popular video conferencing software that rose to prominence during the pandemic is lowering its FY outlook relative to previous announcements. The slowdown in their business is due to slower enterprise growth which could be a function of Microsoft and other major technology companies that have entered the enterprise business for video conference. What are we watching next? Europe and UK PMIs may spell further caution. The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. USD and US Treasury yields as Jackson Hole Fed conference is the macro event risk of the week Friday The US dollar and yields are setting risk sentiment on edge as EURUSD has plunged well through parity. US Treasury yields have supported the USD rally with the entire curve lifting over the last couple of weeks and longer yields closing at new one-month highs. The Fed has pushed back consistently against the market’s pricing of a Fed turnaround to easing rates next year with partial success, as expectations for rate cuts have shifted farther out the curve and from higher levels. The next focus is this Friday’s Jackson Hole symposium speech from Fed Chair Powell, who is expected to stay on message and maintain credibility on fighting inflation after the two large 75 basis point hikes at the last two meetings. The Fed’s attitude toward quantitative tightening may be a focus in the speech as well, with the pace of QT supposedly set to pick up in coming weeks to $95B/month. So far, the QT has been slow out of the gates, with the balance sheet currently only some $115B smaller than at its mid-April peak. Earnings to watch Today’s earnings focus is on CATL and JD.com, with especially CATL being important as the world’s largest battery manufacturer to the car industry and thus pivotal for the electrification of the transportation sector. CATL is expected to report revenue growth of 126% y/y in Q2 as EV adoption is accelerating, but key risks ahead are rising input costs across lithium and energy. JD.com is expected to report 3% revenue growth in Q2 as growth is grinding to a halt on very weak consumer confidence in China. Today: CATL, Intuit, Medtronic, JD.com Wednesday: LONGi Green Energy, Royal Bank of Canada, PetroChina, Ping An Insurance Group, Nongfu Spring, Mowi, Nvidia, Salesforce, Pinduoduo, Snowflake, Autodesk Thursday: South32, Toronto-Dominion Bank, Fortum, Delivery Hero, AIA Group, China Life Insurance, CNOOC, CRH, Dollar General, Vmware, Marvell Technology, Workday, Dollar Tree, Dell Technologies, NIO Friday: Meituan, China Shenhua Energy, China Petroleum & Chemical Economic calendar highlights for today (times GMT) 0715-0800 – Eurozone Aug. Flash Manufacturing and Services PMI 0830 – UK Aug. Flash Manufacturing and Services PMI 1000 – UK Aug. CBI Trends in Total Orders and Selling Prices 1100 – ECB's Panetta to speak 1345 – US Aug. Flash Manufacturing and Services PMI 1400 – US Aug. Richmond Fed Manufacturing 1400 – Eurozone Aug. Flash Consumer Confidence 1400 – US Jul. New Home Sales 2300 – US Fed’s Kashkari (non-voter) to speak  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 23, 2022

Summary:  Financial conditions loosening over the past six weeks were a natural evolution of the US economy improving in July, but the Fed is poised to hike potentially 75 basis points at the September meeting to tighten financial conditions even more as the nominal economy is still running too hot to get inflation meaningfully lower. The most likely scenario is weaker equities as winter approaching as the energy crisis will hurt. Financial conditions will soon begin tightening again S&P 500 futures are trading 3.4% lower from their high last week touching the 200-day moving average before rolling over again. Sentiment has shifted as the market is slowly pricing less rate cuts for next year with Fed Funds futures curve on Friday (the blue line) has shifted lower compared to a week ago (the purple line) as inflationary pressures are expected to ease as much as betted on by the market over the past month. Fed member Bullard recently said that he was leaning towards 75 basis points rate cut at the September FOMC meeting to cool the economy further. If the Fed goes with 75 basis points while the real economy is seeing lower activity it will mean that financial conditions will begin tightening more relative to the economic backdrop. Financial conditions have been loosening since June but expectation is that we will see another leg of tightening to levels eclipsing the prior high and with that US equities will likely roll over. S&P 500 futures are now well below the 4,200 level and currently in the congestion zone from before the last leg higher. The next gravitational point to the downside is the 4,100 and below that just above 4,000. December put options on the S&P 500 are currently bid around $208 which roughly a 5% premium for getting three-month downside protection at-the-money. S&P 500 futures | Source: Saxo Group   Fed Funds futures forward curve | Source: Bloomberg   US financial conditions | Source: Bloomberg The US is headed for a recession, but when? US financial conditions eased in July lifting equities and with good reasons we can see. The Chicago Fed National Activity Index (the broadest measure of economic activity) rose to 0.27 in July from -0.25 in June suggesting a significant rebound in economic activity. The rebound was broad-based across all the four major sub categories in the index with the production index rising the most. The three-month average is still -0.09 with -0.7 being the statistical threshold for when this indicator suggests that the US economy is in a recession. The probability is therefore still elevated for a recession but the slowdown in the US economy has eased which is positive factor for US equity markets. Predicting the economy is difficult but our thesis going into the winter months on the Northern hemisphere is that it is very difficult to avoid a recession, at least in real terms, when the economy is facing an energy crisis. The most likely scenario is that the US economy will slide into a nominal recession but continue at a fast clip in nominal terms.          China is facing a 2008-style rescue of its real estate sector We have written earlier this year about the downfall of Evergrande and the other Chinese real estate developers. The stress in China’s real estate sector was a big theme earlier this year but has since faded, but recently the Chinese central bank has eased rates and today the government is planning a $29bn rescue package of special loans for troubled developers. Tensions in Chinese real estate are weighing down on the economy through lower consumer confidence and investors are increasingly reducing exposure to China has we have highlighted in our daily podcast. The PBoC (central bank) is urging banks to maintain steady growth of lending, but with the market value of banks relative to assets having declined for many years the market is no longer viewing the credit extension as driven by sound credit analysis, but more as an extended policy tool of the government with unknown but likely less good credit quality.   Source: Equities are rolling over as conditions are set to tighten

According to Coinmarketcap data, the total capitalization of cryptocurrencies has fallen to nearly $1 trillion, showing a major shift in sentiment among traders and investors in recent days. The last time market capitalization was at this level was in late July. The possible trend reversal does not only apply to cryptocurrencies. The Nasdaq and S&P 500 have fallen from their local highs of August 16 by 5.7% and 3.8%, respectively. This is a significant change for such large indexes. Interest rates on U.S. 5-year Treasury bonds, after recording a local low of 2.55% on August 1, have risen to 3.17% in recent weeks, as Fed policymakers' statements proved more hawkish than expected. These are potential signs of a deteriorating outlook again, which should not be ignored. A chart of the Crypto Fear & Greed Index may show a decline in crypto market sentiment and an increase in investor fear. As recently as last week, the index showed a reading of 44, and now it is 28 points. Despite the partial decrease in the correlation between bitcoin and the S&P 500, it still seems to be high. Especially since it has historically risen during crashes - the last peak in the correlation was reached in mid-May, when both markets were down. BTC and ETH, despite finding support at $20,700 and $25,300, respectively, could be more exposed to the downside due to deteriorating economic data and market sentiment.  On the Conotoxia MT5 platform as of 12:00 GMT+3, one of the strongest falling tokens is EOS, which is losing nearly 9% after a 7-day gain of 48%. EOS is the native token of the EOSIO network. In practice, the project provides blockchain developers with a set of necessary tools and services to build and scale decentralized applications. The project's first whitepaper was released in 2017, and the team conducted an ICO, securing more than $4 billion in investment. It was one of the largest crowdfunding events in the history of cryptocurrencies.   Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Does data signal more short-term declines in the crypto market?

Summary:  Equities were sold off on Monday, continuing a slide from their summer rally high, in the midst of position adjustments ahead of the Jackson Hole central banker event later this week. U.S. 10-year yields returned to above 3%. China cut its 5-year loan prime rates and plans to extend special loans to boost the ailing property markets. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities lost ground and continued to retrace from the high of the latest rally since mid-June.  The market sentiment has become more cautious ahead of Fed Chair Powell’s speech this Friday at the Jackson Hole symposium and a heavy economic data calendar, S&P 500 – 2.1%, Nasdaq 100 -2.7%.  The rise of U.S. 10-year bond yield back to above 3% added to the selling pressures in equities.  Zoom Video (ZM:xnas) fell 8% in after-hours trading as the company reported Q2 revenues and earnings missing estimates and cut its full year revenues guidance. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Bonds were sold off as traders adjusted positions ahead of the Jackson Hole.  The treasury yield curve bear flattened with 2-year yields surging 8bps to 3.30% and 10-year yields climbing 4bps to 3.01%, above the closely watched 3% handle.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Seng fell 0.6% while CSI300 climbed 0.7% on Monday. Chinese developers gained on today’s larger-than-expected cut in the 5-year loan prime rate and the Chinese authorities plan to provide special loans through policy banks to support the delivery of stalled residential housing projects, CIFI (00883:xhkg) +11.5%, Country Garden (02007:xhkg) +3.2%.  China extended EV waivers from vehicle purchase tax and other fees to the end of 2023, but the share price reactions of Chinese EV makers traded in Hong Kong were mixed.  Great Wall Motor (02333:xhkg) soared 11%, benefiting from launching a new model that has a 1,000km per charge battery while Nio (09866:xhkg) and Li Auto(02015:xhkg) fell 4.2% and 1.4% respectively. Xiaomi (01810:xhkg) dropped 3.3% after Q2 revenues -20% YoY and net profit -67% YoY, on lower smartphone shipments (-26% YoY).  Smartphone parts suppliers, AAC Technologies (02018:xhkg) and Sunny Optical (02382:xhkg) declined 5.6% and 4.2% respectively.  The share price performance of the four companies that will be added to the Hang Seng Index was mixed, Baidu (09888:xhkg) +0.9%, China Shenhua Energy (01088:xhkg) +2.1%, Hansoh Pharmaceutical (03692:xhkg) +3.2% but Chow Tai Fook Jewellery (01929:xhkg) -0.6%.  SenseTime (00020:xhkg) gained 4.2% as the company will replace China Pacific Insurance (02601:xhkg) -2.8% as a constituent company of the Hang Seng China Enterprises Index.  ENN Energy (02688:xhkg) plunged more than 14% after reporting H1 results below market expectations.  China retailer Gome (00493) collapsed 20% after resuming trading from suspension and a plan t buy from the controlling shareholder a stake in China property assets.  EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows of 0.9926. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. Also on the radar will be Fed Chair Powell’s speech at the Jackson Hole later this week, with a fresh selloff in the pair likely to target 0.9500 next. USDCNH heading to further highs After PBOC’s easing measures on Monday, the scope for further yuan weakness has increased. USDCNH broke above 6.8600 overnight and potentially more US dollar strength this week on the back of a pushback from Fed officials on easing expectations for next year could mean a test of 7.00 for USDCNH. Still, the move in yuan is isolated, coming from China moving to prevent the yuan from tracking aggravated USD strength rather than showing signs of desiring a broader weakening. EURCNH has plunged to over 1-month lows of 6.8216 on the back of broader EUR weakness. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a recovery overnight despite the strength in the US dollar. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nordstream pipeline. Diesel and refinery margins have also been supported as a result, with Asia diesel crack rising to its previous high of $63 amid low inventory levels. WTI futures reversed back to the $90/barrel levels and Brent were back above $96. Comments from Saudi Energy Minister threatening to dial back supply also lifted prices, but these were mis-read and in fact, focused more on the mismatch between the tightness in the futures and the physical market. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support and is now eying $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July.   What to consider? German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 8% in Europe amid concerns around the next scheduled 3-day maintenance of the Nordstream pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more.  Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Europe and UK PMIs may spell further caution The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. China’s plan to provide loans to ensure delivery of presold residential projects is said to be of the size of RMB 200 billion Last Frida, Xinhua News reported that the PBoC, jointly with the Housing Ministry and the Ministry of Finance rolled out a program to make special loans through policy banks to support the delivery of stalled residential housing projects but the size of the program was not mentioned.   A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the support lending program could be as large as RMB 200 billion.  Beijing municipal government rolled out initiatives to promote hydrogen vehicles The municipal government of Beijing announced support for the construction of hydrogen vehicle refueling stations with RMB500 million for each station, aiming at building 37 new stations by 2023 and bringing the adoption of fuel-cell cars to over 10,000 units in the capital. Earlier in the month, the Guangdong province released a plan to build 200 hydrogen vehicle refueling stations by 2025. Since last year, there have been 13 provinces and municipalities rolling out policies to promote the development of the hydrogen vehicle industry.  Earnings on tap Reportedly there have been shorts being built up in Dollar Tree (DLTR:xnys) as traders are expecting that discount retailer missing when reporting this Thursday.   On the other hand, investors are expecting Dollar General (DG:xnys) results to come in more favourably, , which also reports this Thursday.  Key earnings scheduled to release today including Medtronic (MDT:xnys), Intuit (INTU:xnas), JD.COM (09618.xhkg/JD.xnas), JD Logistics (02615:xhkg), Kingsoft (02888:xhkg), and Kuishaou (01023:xhkg). Singapore reports July inflation figures today Singapore's inflation likely nudged higher in July, coming in close proximity to 7% levels from 6.7% y/y in June. While both food and fuel costs continue to create upside pressures on inflation, demand-side pressures are also increasing as the region moves away from virus curbs. House rentals are also running high due to high demand and delayed construction limiting supplies. The Monetary Authority of Singapore has tightened monetary policy but more tightening moves can be expected in H2 even as the growth outlook has been downwardly revised.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast Source: APAC Daily Digest: What is happening in markets and what to consider next – August 23, 2022

Prelude to Powell uniformly hawkish... Source: shutterstock Macro Outlook Global Markets: US equities seem to be betting on the Fed’s Powell providing a lifeline, which seems like an optimistic point of view.  The S&P500 opened up and had a strong start before fading and then rallying hard into the close to finish up 1.41% on the day. The NASDAQ closed 1.67% higher. Equity futures are hedging this optimism a bit, indicating small declines at the open today. The latest optimism could reflect a slightly lower bond yield environment, but it seems outsized if that is indeed the case. 2Y US Treasury yields backed off only 2.4bp yesterday to take them to 3.366%. There was a bit more action at the back end of the curve, where 10Y UST yields fell 7.8bp, taking them to 3.026%. What caused that? Well, it wasn’t other Fed speakers in the run-up to Powell’s speech at Jackson Hole today. James Bullard, for example, noted that he favoured “front-loading”, and a year-end Fed funds rate of 3.75%-4%. Esther George noted that rates may have to go above 4%, and hadn’t moved into a restrictive range yet. Raphael Bostic said it was too soon to call peak inflation and was keeping an open mind on 50bp to 75bp next month, and Patrick Harker said rates needed to become restrictive (implying that they currently aren’t). So it is a fair bet that the Powell speech will take a similar turn today. If so, the most likely market reaction would be a rise in yields at both the front and back of the yield curve, a sell-off in equities and dollar strength as markets seem to have been positioning themselves for a more supportive set of comments.  In currency space, EURUSD had another go at moving higher, pushing up in the direction of 1.004 before retreating back below parity to finish almost unchanged from this time yesterday at 0.9970.  The AUD has made further gains though, rising to 0.6982 vs the dollar before settling a bit lower at 0.6972. Cable is looking a little stronger today too, and is up to 1.1829 now, while the JPY has pulled back down to below 137 and is now 136.57. The rest of the Asian FX pack also gained, led by the THB (helped by the passing of a budget yesterday) and the KRW (lifted by the BoK’s 25bp rate hike). G-7 Macro: It really all boils down to what Jerome Powell says today, and his speech will eclipse any of the other macro releases in all likelihood. We have already had some Tokyo CPI data this morning for August, and this shows annual inflation for the Japanese capital running at 2.9%, up from 2.5% in July. This suggests a similar  0.4pp increase in national headline inflation, which would take it to 3.0%YoY if so. The rise in the core rate of inflation excluding fresh food and energy was more muted, however, rising only 0.2pp to 1.4%YoY, which should provide the BoJ with the comfort it needs to leave policy settings unchanged. PCE inflation data from the US for July are out today. Look in particular at the core measure which the Fed is thought to be taking a bit more interest in than the headline. The current rate of PCE inflation is 6.8%YoY. It is 4.8% for the core rate. The core rate is expected to fall 0.1pp today. A flat reading would be a disappointment. University of Michigan consumer sentiment and inflation expectations close out the macro calendar for the G-7 today.   What to look out for: Powell's speech at Jackson Hole Japan Tokyo CPI inflation (26 August) Singapore industrial production (26 August)  Thailand trade balance (26 August) Malaysia CPI inflation (26 August) Powell speech at Jackson Hole symposium (26 August) US University of Michigan sentiment and core PCE (26 August) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  U.S. equities rallied ahead of the Jackson Hole Powell keynote. Comments from discount retailer Dollar Tree about pressures to cut prices and customers shifting to “needs-based consumable products” cast doubts on the health of U.S. consumers. The market chatters and then a WSJ article on a potential deal between the U.S. and China on access to audit working papers and avoiding Chinese ADR delisting sent the share prices of China internet stocks and ADRs soaring. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities rallied for the second day in a row ahead of the much anticipated Powell speech at the Jackson Hole symposium on Friday, S&P 500 +1.4%, Nasdaq 100 +1.8%.  Discount retailers, Dollar General (DG:xnys) and Dollar Tree (DLTR:xnys) reported Q2 results.  Discount General beat the relatively high expectations and finished the session down modestly -0.6%.  Peer Dollar Tree’s results fared weaker with in-line Q2 results but a downward revision of full-year EPS due to its plan to cut prices sent its share price 10.2% lower.   U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) U.S. treasury yield fell 7 to 8 basis points from the belly to the long-end of the curve after a strong 7-year auction. The change in 2-year yields was relatively modest, -2bps. Flows were light ahead of Chair Powell’s keynote speech at the Jackson Hole event on Friday. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) China internet stocks rallied dramatically in a typhoon-shortened session in Hong Kong on Thursday, JD.COM (09618:xhkg) +11%, Bilibili (09626:xhkg) +10.3%, Baidu (09888:xhkg) +9.2%, Alibaba (09988:xhkg) +8.8%, Meituan (03690:xhkg) +8%, Tencent (00700:xhkg) +4.8%.  Hang Seng Tech Index (HSTECH.I) surged 6%.  Investors found optimism in the 19-point stimulus package as well as chatters among traders about unverified progress on resolving the audit working papers access issue in the heart of the Chinese ADR delisting risk.  During New York hours, the Wall Street Journal ran an article, suggesting that the U.S. and China are nearing a deal to allow American regulators to inspect in Hong Kong the audit working papers of Chinese companies listed in the U.S.  The NASDAQ Golden Dragon China Index soared 6.3%. Compared to their respective Hong Kong closing levels, Alibaba +4.5%, Meituan +4.0%, Tencent +2.1%.  Chinese property names rallied across the board by 2% to 5%.   The performance in A-shares was more measured, CSI 300 fluctuated between gains and losses and finished the session 0.8% higher.   Coal miners, oil and gas, and crude tankers stocks surged in Hong Kong as well as mainland bourses.  Mainland investors did not participate much in the sharp move higher as southbound flows registered a net outflow. AUDUSD on the backfoot in early Asian hours The USD rebound returned in early Asian hours on Friday amid a sustained hawkish tilt inn Fed commentaries ahead of Powell taking the stage at the Jackson Hole summit. AUDUSD saw downside pressures and slid to sub-0.6960 from an overnight high of 0.6991. AUDNZD found support at 1.1200 and may be looking at new highs of the cycle with the current account differentials at play. USDJPY caught a bid early as well, and rose to 136.70 with focus squarely on high Powell’s comments can take the US yields. Crude oil prices (CLU2 & LCOV2) Hawkish Fed comments and further prospects of Iran deal saw crude oil reversing lower in the overnight session. However, modest gains have returned this morning with the supply side remaining a key focus with Brent futures close to $100 and WTI at $93+. Saudi Arabia was joined by Libya and Congo in supporting the view that supply curbs may be needed to stabilise the oil market. Further concerns on Kazakhstan’s supply also emerged amid repair works required on three damage moorings at the port facility. What to consider? Some more hawkish Fed comments before we get to Powell Several Fed speakers were on the wires echoing the same message on inflation and more rate hikes. The markets are still holding their breath for wat Powell has to say later today. James Bullard (2022 voter) reiterated his year-end target of 3.75% to 4% and market expectation is not too far from that now. Esther George (2022 voter) was more open about rates going above 4%, but stayed away from a specific guidance for the September meeting. Patrick Harker (2023 voter) said rates need to be lifted into restrictive territory. Raphael Bostic (2024 voter) told the WSJ it's too soon to call inflation’s peak and that he hasn't decided yet on a 50 or 75bps rate hike next month. Tokyo CPI surprises to the upside Japan’s Tokyo inflation for August has come in close sight of the 3% mark, with headline at 2.9% y/y vs. expectations for 2.6%. The core measure was also above expectations at 2.6% y/y, coming in despite measures to help cool price pressures. Further gains can be expected later in the year as cheaper cell phone fees are reversed, and we also see threats of an energy crisis in Japan as LNG imports get diverted to Europe. This will continue to erode the purchasing power and keep the risk of a BOJ pivot alive. Europe’s energy woes French power prices soared 15% to EUR 900/MWh, more than 10x last year’s price amid expanding nuclear outages. Meanwhile in Germany, power prices for next year soared as much as 23% to an all-time high of EUR 792/MWh. UK and Italy also recorded fresh highs in power prices while Spain's parliament approved a law aimed at cutting energy use. The UK will announce its financial commitment for a new nuclear plant, Sizewell C, next week. The U.S. and China are said to nearing a deal in resolving the Chinese ADR audit papers inspection issue According to a Wall Street Journal article, Chinese securities regulators “are making arrangements for U.S.-listed Chinese companies and their accounting firms to transfer their audit working papers and other data from mainland China to Hong Kong” and “would allow American accounting regulators to travel to Hong Kong to inspect the audit records”. It is important to note that an agreement has yet to be reached and the regulators from both sides remain silent about it so far.  One of the hurdles to the proposed arrangement of transfer of audit working papers from the mainland to Hong Kong can satisfy the U.S. regulators, particularly the U.S. SEC Chair Gensler who has emphasized “full access”.  If this turns out to happen, it will not only benefit the Chinese companies that are listed in the U.S. but also sets the U.S. and China in a more conciliatory mood at least in some financial matters, and shows case the uniqueness of the position of Hong Kong.  German business sentiment is not that bad in August The headline reading is out at 88.5 versus expected 86.8 and prior 88.6. This is only a bit softer than the previous month. The same goes as well for the current conditions (out at 97.5 in August versus prior 97.7) and the expectations (80.3, unchanged compared to July). Overall, business sentiment remains soft. But given the quick economic deterioration, it could have been much worse. We still expect sentiment to further fall in the coming months as the German economy sinks into a recession. The energy crisis is hitting very hard consumers and companies – thus leading to lower demand and corporate investment. Yesterday, Germany’s benchmark year-end power kept rising (+13% in one day) to a new record of EU725/MWH. So far, the German government has spent roughly €60bn to limit the impact of higher energy prices on households and corporations. This represents about 1.7% of GDP according to the calculations of the Belgium-based think tank Bruegel. In percentage of GDP, this is still much less than many other European countries (3.7 % of GDP for Greece, 2.8 % for Italy and 2.3 % for Spain, for instance). In any case, this is unsustainable, of course. Softer July US PCE print would not derail Fed’s tightening After a softer CPI report in July, focus will turn to the PCE measure – the version of the CPI that is tracked by the Fed to gauge price pressures. Lower gasoline prices mean that PCE prints could also see some relief, although we still upside pressures to inflation given that energy shortages will likely persist and easing financial conditions mean that inflation could return. We would suggest not to read too much into a softer PCE print this week, as the stickier shelter and services prices mean that the 2% inflation target of the Fed remains unachievable into then next year. This suggests that the aggressive tightening by the Fed will likely continue, despite any likely softness in the PCE this week. U.S. discount retailers reported mixed Q2 results, highlighting pricing pressures ahead Dollar General (DG:xnys) reported revenue growth of 9% YoY to $9.4 billion, in line with the consensus estimate, and EPS of $2.98, +10.6% YoY, above the consensus estimate of $2.94.  Same-store sales in Q2 grew 4.6% YoY, above the consensus at +3.8%.  In the company’s guidance for 2022, revenue growth was raised to +11% from previously +10.0-10.5% and the same-store-sales growth was raised to +4.0-4.5% from +3.0-3.5%.  Q2 results from another discount retailer, Dollar Tree (DLTR:xnys) were however weaker, with revenue growth of 6.7% YoY to $6.77 billion, slightly below the consensus estimate of $6.79 billion.  EPS came in at $1.60, in line with expectations.  Same-store-sale for the quarter was +4.9%, below the consensus estimate at +5.0%.  The company lowered its 2022 full-year EPS guidance to $7.10-$7.40 and said that 60% of the cut was due to cutting prices.  The management said that they “expect the combination of this pricing investment at Family Dollar and the shoppers’ heightened focus on needs-based consumable products will pressure gross margins in the back half of the year”.  The comments from Dollar Tree casts a shawdow over the health of consumers in the U.S. in general.  Earnings on the tap Meituan (03690:xhkg) is scheduled to report Q2 results on Friday after the market close.  Analysts are upbeat about the food and grocery delivery platform’s potential in being benefited from the recovery of consumer demand amid the reopening and cost control initiatives.  The consensus estimate (as per the Bloomberg survey) for Q2 revenue is to grow 11% YoY to RMB48.59billion and adjusted net loss of RMB2.17 billion.  Coal miner China Shenhua Energy (01088:xhkg) and oil and gas company Sinopec (00386:xhkg) are also scheduled to report on Friday.      For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 26, 2022

Summary:  Markets are steady ahead of a widely anticipated speech at the US Federal Reserve’s Jackson Hole, Wyoming conference from Fed Chair Jerome Powell, although he may do little more than remain on message on the Fed’s plans for tightening policy. The US dollar trades near cycle highs ahead of the speech, with US treasury yields having eased back a bit yesterday on a strong 7-year treasury auction. In Europe, power and natural gas prices continue their ascent from already dire levels, thereby supporting demand for fuel-based products.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures bounced back 1.4% to the 4,200 level in what seems to have been a technical move ahead of Jerome Powell’s keynote speech at Jackson Hole which is expected today. For equities the main question is how central banks are seeing structural in the years to come because that will be linked to the terminal rate the Fed sees as neutral for the economy and inflation. The US 10-year yield is trading around the 3.05% level this morning and we expect a quiet session in US equities unless Powell’s speech delivers a hawkish tone which could then erase yesterday’s gains. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) After staging an impressive bounce from the trough of a 2-month losing streak yesterday, Hong Kong equities opened higher before giving back much of its gains to end the morning session 0.7% higher. Yesterday’s 3.6% rally in the Hang Seng Index and 6% surge in Hang Seng TECH Index were fueled by initially chatters among traders about unverified progress on resolving the audit working papers access issue in the heart of the Chinese ADR delisting risk. During New York hours, the Wall Street Journal ran an article, suggesting that the U.S. and China are nearing a deal to allow American regulators to inspect in Hong Kong the audit working papers of Chinese companies listed in the U.S. The news sent Chinese ADRs soaring, the NASDAQ Golden Dragon China Index +6.3%. US dollar steady on the strong side ahead of Jackson Hole Yesterday saw some tactical chopiness in USD pairs, as the greenback sold off to support in places and criss-crossed parity in EURUSD terms before settling back to the strong side ahead of Fed Chair Powell’s speech at the Jackson Hole conference today. Powell is widely expected to stay on message on the Fed’s hopes to get ahead of the curve, but surprises are possible if his language is a bit more pointed than expected or he brings stronger guidance on the importance of QT, etc. Next event risks for the USD in the wake of today’s Powell speech (and July PCE inflation print as noted below) are next Friday’s payrolls/earnings report, the Sep 13 Aug. CPI data release, and then the Sep 21 FOMC decision. AUDNZD The Antipodean currency pair closed yesterday at its highest level since 2017 in a bid to escape the range that has prevailed since then, with a bit more range toward 1.1300 that stretches all the way back to 2013. If the pair can make a notable foray above these levels, it might suggest that traders are viewing the pair from a current account perspective, as Australia has been running record surpluses on its formidable complex of commodity exports, while New ZEaland is running unprecedented deficits on rising costs for energy imports. In the longer term perspective, AUDNZD has traded above 1.3500 as recently as 2011. Crude oil (CLV2 & LCOV2) Crude oil trades steady with Brent trading around $100 per barrel with a tightening supply outlook offsetting the recessionary drums that have been banging ever louder in recent weeks. Focus on today’s Jackson Hole speech from Fed Chair Powell and its potential impact on bond and currency markets, and with that the general level of risk appetite in the market. EU gas and power reached new peaks on Thursday on worries about Russian gas supplies following the upcoming 3-day maintenance supporting demand for crude-based products like diesel and heating oil. The prospect of a revived Iran nuclear deal still receiving some attention although a deal may only have a small immediate impact, small change compared with the soon to expire US SPR release program which saw 8 million barrels pumped into the market last week. In Brent, the next level of upside interest can be found at $102.50. Copper (COPPERUSDEC22) Copper has settled into a $3.55 to $3.73 range after making a steady recovery from the June/July +30% collapse. The primary focus remains on China and the government’s efforts to shore up its troubled property sector and its slowing economy in general. This past week we have seen rate cuts and the announcement of a 1 trillion-yuan economic stimulus program, including a 300-billion-yuan investment in infrastructure projects, which will boost the consumption of industrial metals, including copper. Above the current range copper may target $3.85/lb next but it will likely require a rally above $4/lb before speculators reverse the net short they have held since April. US Treasuries (TLT, IEF) US treasury yields fel back a few basis points, but the 10-year benchmark still trades above 3.00% today ahead of Fed Chair Powell’s speech. (More below – special focus on longer end of the yield curve on any QT guidance in the speech). A strong auction of 7-year treasuries yesterday helped bring support to the market after the weak 5-year auction the prior day. What is going on? ECB meeting minutes suggest another 50-basis points hike The meeting minutes point to another 50-basis point hike at the September 8 ECB meeting, a move that is actually more than fully priced in by the market. At the same time, the ECB minutes noted that it saw “no evidence of significant second round effects” in which wages drive an inflationary spiral. The central bank’s “TPI” or Transmission Protection Instrument meant to prevent peripheral sovereign yield spreads from widening excessively was widely discussed and is clearly a hot potato politically. An FT article noted that hedge funds have built up a nearly EUR 40 billion speculative short in Italian BTPs Additional hawkish Fed comments before we get to Powell Several Fed speakers were on the wires echoing the same message on inflation and more rate hikes. The markets are still holding their breath for what Powell has to say later today. James Bullard (2022 voter) reiterated his year-end target of 3.75% to 4% and market expectation is not too far from that now. Esther George (2022 voter) was more open about rates going above 4% but stayed away from a specific guidance for the September meeting. Patrick Harker (2023 voter) said rates need to be lifted into restrictive territory. Raphael Bostic (2024 voter) told the WSJ it's too soon to call inflation’s peak and that he hasn't decided yet on a 50 or 75bps rate hike next month. German business sentiment is not that bad in August The headline IFO Survey reading was out at 88.5 versus 86.8 expected and 88.6 prior. This is only a bit softer than the previous month. The same goes as well for the current conditions (out at 97.5 in August versus prior 97.7) and expectations (80.3, unchanged compared to July). Overall, business sentiment remains soft. But given the quick economic deterioration, it could have been much worse. We still expect sentiment to further fall in the coming months as the German economy sinks into a recession. The energy crisis is hitting consumers and companies very hard – thus leading to lower demand and corporate investment. Yesterday, Germany’s benchmark year-end power kept rising (+13% in one day) to a new record of EU725/MWH. So far, the German government has spent roughly €60bn to limit the impact of higher energy prices on households and corporations. This represents about 1.7% of GDP according to the calculations of the Belgium-based think tank Bruegel. In percentage of GDP, this is still much less than many other European countries (3.7 % of GDP for Greece, 2.8 % for Italy and 2.3 % for Spain, for instance). In any case, this is unsustainable, of course. The US and China are getting closer to resolve Chinese ADR audit papers inspection issue According to a Wall Street Journal article, Chinese securities regulators “are making arrangements for US-listed Chinese companies and their accounting firms to transfer their audit working papers and other data from mainland China to Hong Kong” and “would allow American accounting regulators to travel to Hong Kong to inspect the audit records”. It is important to note that an agreement has yet to be reached and the regulators on both sides remain silent about it so far. One of the hurdles to the proposed arrangement of transfer of audit working papers from the mainland to Hong Kong will be whether it can satisfy the US regulators, particularly the SEC Chair Gensler who has emphasized “full access”. If this turns out to happen, it will not only benefit the Chinese companies that are listed in the US but also sets the US and China in a more conciliatory mood at least in some financial matters, and shows case the uniqueness of the position of Hong Kong U.S. discount retailers reported mixed Q2 results, highlighting pricing pressures ahead Dollar General (DG:xnys) reported revenue growth of 9% y/y to $9.4bn, in line with the consensus estimate, and EPS of $2.98, +10.6% y/y, above the consensus estimate of $2.94.  Same-store sales in Q2 grew 4.6% y/y, above the consensus at +3.8%. In the company’s guidance for 2022, revenue growth was raised to +11% from previously +10.0-10.5% and the same-store-sales growth was raised to +4.0-4.5% from +3.0-3.5%. Q2 results from another discount retailer, Dollar Tree (DLTR:xnys) were however weaker, with revenue growth of 6.7% y/y to $6.77bn, slightly below the consensus estimate of $6.79bn.  EPS came in at $1.60, in line with expectations. Same-store-sale for the quarter was +4.9%, below the consensus estimate at +5.0%.  The company lowered its 2022 full-year EPS guidance to $7.10-$7.40 and said that 60% of the cut was due to cutting prices. The management said that they “expect the combination of this pricing investment at Family Dollar and the shoppers’ heightened focus on needs-based consumable products will pressure gross margins in the back half of the year”. The comments from Dollar Tree cast a shadow over the health of consumers in the US in general.  Meituan is scheduled to report Meituan (03690:xhkg) is scheduled to report Q2 results on Friday after the market close. Analysts are upbeat about the food and grocery delivery platform’s potential benefitting from the recovery of consumer demand amid the reopening and cost control initiatives.  The consensus estimate (as per the Bloomberg survey) for Q2 revenue is to grow 11% YoY to RMB48.59 billion and an adjusted net loss of RMB2.17 billion What are we watching next? The Kansas City Fed hosts its annual symposium in Jackson Hole This year’s theme is “Reassessing Constraints on the Economy and Policy”. The symposium will last until Saturady. Fed Chair Jerome Powell will speak today. Given the loosening of financial conditions since the June FOMC meeting, the market has been concerned that Powell will echo the pushback against the notion that the Fed knows that it is set to materially slow its pace of policy tightening after the September 21 FOMC rate decision (majority looking for another 75 basis points). Data dependency will likely be underlined in his speech, but any guidance on the Fed’s approach to QT could also garner considerable attention as longer treasury yields pull back higher toward the cycle highs from June. Softer July US PCE print would not derail Fed’s tightening After a softer CPI report in July, focus will turn to the PCE measure – the version of the CPI that is tracked by the Fed to gauge price pressures. Lower gasoline prices mean that PCE prints could also see some relief, although we still upside pressures to inflation given that energy shortages will likely persist and easing financial conditions mean that inflation could return. We would suggest not to read too much into a softer PCE print this week, as the stickier shelter and services prices mean that the 2% inflation target of the Fed remains unachievable into then next year. This suggests that the aggressive tightening by the Fed will likely continue, despite any likely softness in the PCE this week. Earnings to watch Today’s earnings focus is Meituan which is expected to see 11% y/y revenue growth with estimates expecting to see growth accelerating into Q3, so this will be the market’s focus in today’s earnings release. The latest stimulus efforts by the Chinese government and lifting of mobility restrictions could provide tailwind for the consumer into Q3. Today: Meituan, China Shenhua Energy, China Petroleum & Chemical Next week’s earnings releases: Monday: Fortescue Metals, Haier Smart Home, Foshan Haitian Flavouring, Agricultural Bank of China, BYD, Pinduoduo, Trip.com, DiDi Global Tuesday: Woodside Energy, ICBC, China Yangtze Power, Midea Group, Tianqi Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Economic calendar highlights for today (times GMT) 0800 – Italy Aug. Consumer/Manufacturing Confidence surveys 1230 – US Jul. Personal Income/Spending 1230 – US Jul. PCE Inflation 1400 – US Fed Chair Powell to speak at Jackson Hole, Wyoming 1400 – US Aug. Final University of Michigan Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 26, 2022

Futures on US stock indices were trading in the red on Friday. Treasury bonds retreated from their highs as many US politicians from the Federal Reserve System have already begun preparing the ground for the long-awaited speech by Chairman Jerome Powell. The statements of the Fed's head will help form an opinion on the pace of tightening monetary policy. Futures for the S&P 500 and Nasdaq 100 declined 0.2% and 0.3%, respectively. The yield on 10-year Treasury bonds rose by about five basis points to 3.08%. In addition to Powell's speech later on Friday, traders will get acquainted with various fundamental statistics, including personal expenses of citizens and the Fed's preferred inflation indicator, where a decrease in price pressure is expected to be recorded.   Mining stocks continued to rise on Friday as prices of iron ore, copper, and other industrial metals rose following China's latest efforts to boost its flagging economy. Returning to Powell, who can confirm the Fed's determination to continue raising interest rates to combat high inflation, the desire to raise them and the pace of further tightening should be noted. Many experts have already announced the development of a hawkish scenario, rejecting expectations of moderate tightening. Against this background, there is a rebound in stocks and a decline in bonds. Another question is whether Powell will try to reset market expectations to ensure a further slowdown in economic activity. A dovish reversal would play well into the hands of buyers of risky assets looking forward to further stock market recovery. But if the Fed now departs from the set goals, the fight against inflation may drag on for many years. Then the economy has a chance not only to plunge into recession, but everything will flow into a full-fledged crisis, starting with the housing market and ending with the labor market and the stagnation of the manufacturing and service sectors. If Powell gives up the hope of a dovish reversal, we may see yields fall, and stock markets end the week at a high. Imagine other central banks have already stressed the need for further rate hikes. The president of the Federal Reserve Bank of Kansas City, Esther George, said that it is impossible to exclude the level of interest rates even above 4%.   Relevance up to 13:00 2022-08-27 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/320028

Powell's tough message on inflation upsets equities - bonds more resilient  Source: shutterstock Macro outlook Global Markets: Fed Chair, Jerome Powell did what he needed to do last Friday at Jackson Hole, and that was to make it clear that the Fed’s over-riding priority was to get inflation down…not give assurances that they would be gentle with markets, not hint that rates might come quickly down once they’d peaked. All these things might be true, but he would have been shooting himself and the economy in the foot if he had undermined his comments on inflation fighting, with remarks that would have loosened, not tightened financial conditions. So at least as far as this author is concerned, he gets full marks for the message. Equities were less impressed. The S&P500 fell 3.37%, and the NASDAQ came off 3.94%. Their gains last week look ill-judged through the prism of history. Further sharp losses look likely at the start of trading today judging by equity futures. The rise in US Treasury yields was less dramatic, but the bond market has, as is often the case, had a more realistic assessment of the economy and the Fed than the equity markets for some time. 2Y US Treasury yields went up only 3.1bp, though they were up closer to 6bp at one point before easing back.  10Y yields rose only 1.5bp to take them to 3.041%. Despite a spike to 1.009, EURUSD went with higher UST yields and falling risk sentiment and declined to 0.9937 and looks to be heading lower in early Asian trading. The AUD has followed the EUR lower and is 0.6863 now, down from about 0.6970 this time on Friday. Cable has plunged to 1.1691, and the JPY has pushed up above 138. There were some small gains from the KRW and MYR on Friday, but on the whole, the rest of the Asia pack was softer against the USD and the CNY still seems as if it is headed higher over the short-term despite some defensive-looking fixings last week. G-7 Macro: A quick backcast to last Friday, when the US released personal income and spending figures for July, both of which came in weaker than market expectations. However, the price measures of PCE inflation and core PCE were also weaker. Both came in 0.1pp below expectations. That resulted in a 0.2pp decline in core PCE inflation taking it to 4.6%YoY. Headline PCE inflation fell to 6.3% from 6.8% in June. There’s nothing of note on today’s G-7 calendar. Australia: July retail sales are expected to post a slight increase on the 0.2%MoM reading for June. An online retail sales survey for July released at the end of last week showed sales declining, though at the same pace as June, so we could be looking at a similar figure for overall sales growth in July What to look out for: Regional manufacturing and US non-farm payrolls Australia retail sales (29 August) Malaysia CPI inflation (29August) Japan labour data (30 August) Australia building approvals (30 August) US Conference board consumer confidence (30 August) South Korea industrial production (31 August) Japan industrial production (31 August) China manufacturing and non-manufacturing PMI (31 August) Hong Kong retail sales (31 August) South Korea GDP and trade (1 September) Regional PMI manufacturing (1 September) China Caixin PMI manufacturing (1 September) Indonesia CPI inflation (1 September) US initial jobless claims and ISM manufacturing (1 September) South Korea CPI inflation (2 September) US non-farm payrolls and factory orders (2 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  The 8-minute speech from Powell focused on one message: no pivot to easing in 2023. The hawkish remarks sent U.S. equities sinking the most since June and down more than 3% across major indices. Policymakers in the ECB also sent out hawkish comments and brought a 75 basis point hike to the table at the September ECB meeting. The U.S. and China regulators announced a deal on audit work papers and removed for the time being the risk of compulsory delisting of Chinese companies from U.S. bourses. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities sank last Friday after Powell spent all his Jackson Hole speech on one thing: pushing back on the market’s speculation that the Fed would pivot and start easing next year.  The tech-heavy Nasdaq dropped 4.1%, leading the charge lower, Alphabet (GOOG:xnas) -6.4%, Amazon (AMXN:xnas) -4.8%, Nvidia (NVDA:xnas) -9.2%. Apple (AAPL:xnas) fell 2.8% after the U.S. Department of Justice announced working on a potential antitrust case against the company. S&P 500 had its worst day since June and plunged 3.4%, Dell Technologies (DELL:xnys) -13.5%, HP (HPQ:xnys) -8.9%. The post-Powell speech selloff capped off a two-week losing streak of the markets and turned major indices’ performance in August into the red.  Earlier in the week, the market sentiment was dampened by downbeat comments from the management of retailers on a glut of inventory and plans to cut prices.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) After Fed Chair Powell’s hawkish comments about the need to keep raising rates until inflation is under control regardless of pains incurred to the economy and employment, the U.S. yield curve twisted and flattened, with the 2-year to 5-year yield rising by 3bps to 3.37%, 10-year nearly unchanged at 3.04%, and the 30-year yield falling by 5bps to 3.19%.  The money market continued to unwind the 2023 rate cut bet and the SOFR Dec 22-Dec 23 (SR3Z2 vs SR3Z3) spread narrowed to -24bps.  Weakness on the front ends began even before Powell’s comments as the market took notice of the ECB’s readiness to consider a 75bp rate hike in its meeting in September due to a deterioration in the inflation outlook.    Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Seng Index, +1% last Friday and +2% for the week staged an impressive bounce from the trough of a 2-month losing streak on Thursday and continued to charge higher on the back of reports that the U.S. and China regulators were reaching a deal to avoid the delisting of Chinese companies from U.S. bourses due to disagreement on access to audit work papers.  Later on Friday after the Hong Kong market close, the U.S. and China regulators separately announced that an agreement had been signed and released some details.  Chinese ADRs opened higher in the U.S. session but finished the day 0.7% lower as being dragged down by the sharp decline in the U.S. equity market.  CSI 300 was little changed last Friday and was down 1% for the week.  With U.S. index futures continuing to decline this morning in Asia, the markets’ focus today is likely to be shadowed by the development in the U.S. markets rather than much follow-through from the confirmation of the U.S.-China deal on audit working papers.  Dollar’s post-Jackson Hole gains extend into Asia The dollar continued its run higher in the early Asian hours on Monday after a hawkish tone from Fed Chair Powell on Friday resulted in some volatility but eventual dollar bid. AUDUSD was the weakest in the Asian morning, sliding below 0.6900 amid volatile commodity prices. USDJPY broke above 138 to 1-month highs and USDCNH surged to 6.9000+ levels. EURUSD ended last week below parity and slid further lower to 0.9936 this morning with a tough week ahead as Nord Stream 1 maintenance will likely cause a step up in energy supply concerns. With corporate month end on Monday, and a UK holiday, the scope for further dollar gains remains. Crude oil prices (CLU2 & LCOV2) Crude oil prices ended last wee in gains on supply concerns taking centre stage again, primarily with Saudi Arabia flagging the risk that OPEC+ may cut production to stabilise volatile markets. Demand picture stabilized, and higher gas prices increased the gas-to-fuel switching demand. But oil prices eased in the Asian morning session with Brent futures back at $100/barrel and WTI futures below $93. A warmer winter in the early weeks is putting a lid on demand, and hawkish central bank messages have also hinted at slowdown concerns. Meanwhile, OPEC+ member states, including Iraq, Venezuela and Kazakhstan, suggested readiness within the 23-strong oil producing alliance to intervene and restore balance in the oil market. This is building up concerns on a potential OPEC cut at its Sept 5 meeting. Corn futures surging at Asia open US corn futures rose to a fresh 2-month high in early Asian hours, following last week’s gains supported by concerns that hot and dry weather in the Midwest during the final crop development period may limit the production outcome. USDA’s crop progress report found a 2% decline in the share of the crop rated good or excellent, with 55 percent of fields falling in those two categories. The rating was a new five-year low for this time of year and the second lowest rating since the drought year of 2012. This comes on top of slow shipments from Ukraine and drought in China. The world's fourth largest iron ore miner, Fortescue releases 2nd highest profit on record Fortuecue Metals (FMG) posted a 40% drop in full-year profits. Despite posting record shipments to China, the steep declines in iron ore prices saw the company record a A$6.2 billion profit, down from the A$10.35 billion last year. The result still marked Fortescue’s second-highest profit on record, with the company to pay a final dividend of A$1.21 per share, taking the total payout to A$2.07 (which is a 75% payout on NPAT). So what’s next for Fortescue, the world’s 4th largest iron ore miner? Fortescue sees iron ore shipments being 187m-192m tones in the year ahead (that's another record). Fortescue also overhauled its management and wants to accelerate its push into clean energy. Its clean energy business, Fortescue Future Industries aims to produce an initial 15 million tons a year of green hydrogen by 2030, to help sectors including heavy industry and long-distance transport, decarbonize. $600-$700 million will be spent on clean energy in the coming financial year. As we covered last week in our BHP interview, iron ore demand is likely to slow over the coming 30 years (that’s where Fortescue’s income comes from). Meanwhile, the world requires double the amount of green metals. So the question remains; can Fortescue diversify its business in time? Fortescue’s shares are up 21% from their July low, with investors hoping China infrastructure stimulus will support iron ore demand and boost the company’s earnings.   What to consider? Powell’s message at Jackson Hole gets serious While Powell still stayed away from clearly defining a rate path or the expected terminal rates for the Fed, his strong message did suggest that the fight against inflation is far from over. Powell reiterated that the decision on September 21st on whether the Fed will lift rates by 50bps or 75bps will be driven by the “totality” of data since the July meeting. That puts a great deal of emphasis on the US jobs report due on September 2nd, and the US CPI report due September 13th. There was also some emphasis on rates being held at the peak rate for some time, but there isn’t a substantial change to the market’s expectation of the Fed path yet, with cuts still seen for next year by the money markets. Other Fed speakers still see higher terminal rates Inflation remains the overarching theme in all the Fed talk, and no comfort is being taken from the softening in July inflation. Mester (2022 voter) accepted Fed hasn’t reached neutral rates yet, and said that rates need to go above 4% and held there for some time. Bostic (2024 voter) also suggested a higher terminal rate of 3.5-4.75% compared to what was reflected in the June dot plot, and said rates need to be held there for some time and rate cut talks are premature. The deal between U.S. and China on ADRs Market chatters about a deal between the U.S. and China regulators regarding the allowance to the U.S. regulators access to audit work papers of the auditors of Chinese companies listed on U.S. bourses first emerged last Thursday and the deal was announced by the U.S. and China regulators on Friday.  According to the Public Company Accounting Oversight Board (PCAOB), the agreement gives the U.S. regulator, “complete access to the audit work papers, audit personnel, and other information [the PCAOB] need[s] to inspect and investigate any firm ‘the [PCAOB] choose[s], with no loopholes and no exceptions. But the real test will be whether the words agreed to on paper translate into complete access in practice”. On the other hand, in its announcement and Q&As with reporters, China Securities Regulatory Commission emphasized “the principle of reciprocity” and that “the two sides will communicate and coordinate in advance to plan for inspections and investigations”. The materials such as audit work papers that the U.S. regulator need[s] access to will be obtained by and transferred through the Chines side.  The Chinese side will also take part in and assist in the interviews and testimonies of relevant personnel of audit firms requested by the U.S. side.” Meituan delivered solid Q2 results Meituan (03690:xhkg) reported a 16% YoY growth in revenues to RMB 51 billion, above market expectations across segments better performance.  Adjusted net profits turned positive to RMB 2.1 billion versus a loss of CNY 2.2 billion in Q1 and analyst consensus of an over RMB 2 billion loss.  The company’s food delivery business a strong recovery and the management said that the recovery continued into July and August, with order volumes rising in low-teens YoY in July and at about 20% YoY in August month to date. Soft US PCE confirms the CPI message Lower pump prices cooled price pressures in July, and this has been re-confirmed by the PCE print on Friday. Headline came in at 6.3% YoY (vs. 6.8% expected) while core was at 4.6% YoY (vs. 4.7% expected). The market reaction to these softer numbers was however restrained as the hawkish message from Powell at Jackson Hole took the limelight. The magnitude of the September rate hike still remains a coinflip, but the Fed members have refused to take comfort with the softer CPI print and continue to push for an aggressive fight against inflation. ECB speakers remain committed to inflation despite recession risks A host of ECB speakers on the weekend continued to push for aggressive rate hikes to fight inflation. Schnabel, speaking at Jackson Hole, said rates must be raised, even into a recession. Kazaks also emphasised on further front-loading of rate hikes after the 50bps rate hike announced by the central bank in July. In fact, there were hints of a 75bps rate hike. There were also some concerns on a weaker EUR, as that fuels further inflationary pressures and the benefit of cheaper exports is diminished by supply chain disruption. Villeroy said that the neutral rate should be reached before the end of the year while Kazaks said he would get there in the first quarter of next year. Australian retail trade surged to another record; with dining out and a winter clothing sprees fueling the charge  Australian retail sales data showed how resilient the Aussie consumer is, with retail spending rising for the 7th straight month, up 1.3% vs the +0.3% consensus expected. As electricity bills in Australia are at a record high, and likely to rise, people are layering up this Aussie winter, so retail spending surged to another new record high, A$34.7 billion in July. The Australian winter spending spree saw Department Stores sales surge 3.8% and clothing (footwear and personal accessory retailing) rocket up 3.3%. Australians are living through one of their coldest winters in history; as such spending rose the most in the coldest climates; Victoria and the ACT. Yet spending at cafes and restaurants remained strong, surging to yet another brand new record high (A$5 billion in July), up from 1.8% from the prior month. All this, is despite a softening Australian housing market and the quickest succession of rate hikes in history.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 29, 2022

Summary:  Equity markets plunged on Friday in the wake of Fed Chair Powell’s speech, in which he invoked famed Fed inflation fighter Volcker and warned against a premature easing of policy. While US yields are only modestly higher in the wake of the speech, the US dollar is soaring, bringing a new unwelcome tightening on global liquidity. Particularly intense focus on USDJPY as the Bank of Japan faces a new challenge from JPY weakness as it insists on maintaining its maximum easing policy.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities posted their worst session since at least June in the wake of Fed Chair Powell’s Jackson Hole speech on Friday, with the S&P 500 losing over 3% on the session and trading lower still overnight to start the week, with the psychologically key 4,000 level looming into view. The Nasdaq sliced over 4% lower and traded near its 55-day moving average overnight, in the 12,400 area. Sentiment looks fragile, with any further rise in treasury yields and the US dollar the key risk for driving a possible worsening of sentiment this week. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) After having staged an impressive bounce from the trough of a 2-month losing streak last week on the back of reports that the U.S. and China regulators were reaching a deal to avoid the delisting of Chinese companies from U.S. bourses, Hang Seng Index fell nearly 1% on Monday following the post-Jackson Hole selloff in U.S. equities. In addition, in statements from the U.S. and China regulators last Friday regarding access to audit work papers, the interpretations looked rather different in some key aspects. According to the Public Company Accounting Oversight Board (PCAOB), the agreement gives the U.S. regulator, “complete access to the audit work papers, audit personnel, and other information”. On the other hand, in its announcement and Q&As with reporters, China Securities Regulatory Commission emphasized that audit work papers and other information will be “obtained by and transferred through Chinese regulators”. Meituan (03690:xhkg) outperformed, +3.7% after reporting a solid Q2 and continuous order growth in June and August. CSI 300 dropped 0.7%.  US dollar and especially USDCNH in the wake of Fed Chair Powell’s speech A forceful new USD rally was set in motion in reaction to Fed Chair Powell’s speech on Friday, with more aggravated strength versus Asian currencies on Monday as yields rose and the JPY weakened (more on USDJPY below), but also as China allowed its currency to drop versus the US dollar, a key development in cementing the impact of this USD move globally. The most salient potential driver for further USD strength this week would be strong US data (especially on Friday’s August US jobs and earnings report) that drives Treasury yields higher. USDJPY While the focus is generally on the US dollar this week already and the broader fallout should the greenback continue its aggravated ascent, the stakes are very high for USDJPY, which risks a new upward spiral that will challenge the Kuroda-led Bank of Japan as it insists on maintaining it accommodative policy in the face of rising yields elsewhere.  A massive bout of volatility may lie ahead if market participants decide to take on the BoJ, which will eventually likely cave at some unknown level higher, perhaps 150 in USDJPY if it rises that far? Crude oil prices (CLV2 & LCOV2) Crude oil trades higher extending last week’s gain with supply concerns more than offsetting the potential negative growth/demand impact of Powell’s higher-for-longer interest rate speech on Friday at Jackson Hole. An Iran nuclear deal has yet to be reached with a breakthrough unlikely to add much in terms of additional barrels before next year. Libya, one of OPEC’s most volatile producers saw deadly clashes in the capital over the weekend sparking fears over supply to an energy starved Europe. In a addition high gas prices in Europe and Asia will continue to underpin demand and prices for diesel and heating oil. Brent is currently stuck in a range around $100 with resistance around $103 and support at $98. Gold (XAUUSD), silver (XAGUSD), platinum (XPTUSD) and copper (COPPERUSDED22) ... have tumbled the most since Friday after Fed’s Powell signaled that interest rates would keep rising and remain elevated for longer. The US 2-year Treasury yield reached the highest since 2007 with additional headwinds seen from the stronger dollar. The markets belief in the Fed’s ability to combat inflation helped drive the one-year inflation swap down to 3.06%, a one-year low. We maintain the view of gold being a hedge against the belief the Fed will be successful in lowering inflation without hurting economic growth to the point where the focus returns to central bank support but given the renewed breakdown on Friday and continuation today, the price may in the short term once again look at critical support below $1700. US Treasuries (TLT, IEF) US treasury yields rose across the board on Friday, actually quite modestly relative to the attention given to Fed Chair Powell’s speech, but the move followed through further in the Asian session Monday as the US dollar also rose, a toxic combination for risk sentiment. The US 10-year benchmark yields trades near the highs last week above 3.10% this morning, with the chief focus on the 3.50% area high established in mid-June if yields continue to rise. This week features important US data through Friday’s US jobs report. What is going on? Powell’s message at Jackson Hole gets serious While Powell still stayed away from clearly defining a rate path or the expected terminal rates for the Fed, his strong message did suggest that the fight against inflation is far from over. Powell reiterated that the decision on September 21st on whether the Fed will lift rates by 50bps or 75bps will be driven by the “totality” of data since the July meeting. That puts a great deal of emphasis on the US jobs report due on September 2nd, and the US CPI report due September 13th. There was also some emphasis on rates being held at the peak rate for some time, but there isn’t a substantial change to the market’s expectation of the Fed path yet, with cuts still seen for next year by the money markets. Other Fed speakers still see higher terminal rates Inflation remains the overarching theme in all the Fed talk, and no comfort is being taken from the softening in July inflation. Mester (2022 voter) accepted that the Fed hasn’t reached neutral rates yet and said that rates need to go above 4% and held there for some time. Bostic (2024 voter) also suggested a higher terminal rate of 3.5-4.75% compared to what was reflected in the June dot plot, and said rates need to be held there for some time and rate cut talks are premature. Soft US July PCE inflation confirms the dip in the CPI data Lower petrol prices cooled price pressures in July, and this has been re-confirmed by the PCE print on Friday. The headline came in at 6.3% YoY (vs. 6.8% expected) while core was at 4.6% YoY (vs. 4.7% expected). The market reaction to these softer numbers was however restrained as the hawkish message from Powell at Jackson Hole took the limelight. The magnitude of the September rate hike still remains a coinflip, but the Fed members have refused to take comfort with the softer CPI print and continue to push for an aggressive fight against inflation. ECB speakers remain committed to inflation fight despite recession risks A host of ECB speakers at the weekend continued to push for aggressive rate hikes to fight inflation. Schnabel, speaking at Jackson Hole, said rates must be raised, even into a recession. Kazaks also emphasised the need for further front-loading of rate hikes after the 50bps rate hike announced by the central bank in July. In fact, there were hints of a 75bps rate hike. There were also some concerns on a weaker EUR, as that fuels further inflationary pressures and the benefit of cheaper exports is diminished by supply chain disruption. Villeroy said that the neutral rate should be reached before the end of the year while Kazaks said he would get there in the first quarter of next year. Energy prices continue to climb in France Last Friday, the French 1-year electricity forward was close to €1,000 per MWh (versus €900 per MWh for Germany). This represents an increase of +1000 % compared with the long-term average of 2010-2020. Since Autumn 2021, the French government has capped electricity and gas prices (electricity price increase was capped at +4 % this year). But this is very costly for public finances (about €20bn so far this year). The cap on energy prices will expire at the end of the year for gas and in February 2023 for electricity. The government is not planning to extend it further. More targeted measures to help the poorest part of the population to cope with higher energy prices is the most likely scenario. The risk of electricity shortage is real in France this winter. During the summer, electricity demand is around 45 GWh. During the winter, higher consumption will push electricity demand around 80-90 GWh. This will put under tension all the electricity infrastructure, thus increasing the risk of shortage. We think that France is certainly in a worse position than Germany when it comes to energy supply (in the short-term). The world's fourth largest iron ore miner, Fortescue releases 2nd highest profit on record Fortuecue Metals (FMG) posted a 40% drop in full-year profits, mirroring the steep declines in iron ore prices. Despite iron ore shipments hitting a record, Fortescue posted a A$6.2 billion profit, down from the A$10.35 billion last year. So what’s next? It’s pledged another record year of iron ore shipments (187-192mt) and wants to accelerate its push into clean energy, aiming to produce an initial 15 million tons a year of green hydrogen by 2030, to help its heavy industry and long-distance transport decarbonize. It will spend $600-$700 million to do so this financial year. As we covered last week in our BHP interview, iron ore demand is likely to slow over the coming 30 years (that’s where Fortescue’s income comes from). Meanwhile, the world requires double the amount of green metals. So the question remains; can Fortescue diversify its business in time? Fortescue’s shares are up 21% from their July low, with investors hoping China infrastructure stimulus will support iron ore demand and boost the company’s earnings.  What are we watching next? The US dollar is the wrecking ball here for risk sentiment – any rise in US yields would make things worse The rising US dollar is bad enough for global markets as the greenback is a financial condition unto itself, but if US treasury yields continue to rise this week, this could prove double trouble for global markets and potentially aggravate the sudden downside momentum tilt set in motion on Friday by Fed Chair Powell’s speech at the Jackson Hole conference.   China manufacturing PMIs, scheduled to release this week, are expected to decelerate in the midst of power curbs The median forecasts of economists surveyed by Bloomberg expect China’s official NBS manufacturing PMI to edge up to 49.3 in August from 49.0 in July but remains firmly in the contractionary territory and the Caixin manufacturing PMI to slide to 50.1 in August from 50.4 in July, approaching the threshold between expansion and contraction. The heatwaves and drought-induced power curbs caused Sichuan and Chongqing to shut-down manufacturing activities for six days and eight days in August, respectively. The median forecast for the August official NBS non-manufacturing PMI is 52.2, down from last month’s 53.8 but remains in the expansionary territory.  Earnings to watch This week’s earnings will tilt towards a Chinese focus, but from a macro perspective we are watching Lululemon on Thursday to get an update on the US consumer. Expectations are still looking for a +20% y/y revenue growth in the current quarter so the bar is set high on the outlook. Monday: Haier Smart Home, Foshan Haitian Flavouring, Agricultural Bank of China, BYD, Pinduoduo, Trip.com, DiDi Global, CITIC Securities Tuesday: Woodside Energy, ICBC, China Yangtze Power, Muyuan Foods, SF Holdings, Shaanxi Coal, Midea Group, Tianqi Lithium, Ganfeng Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB, Brown-Forman, Veeva Systems Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis Economic calendar highlights for today (times GMT) 0800 – Switzerland SNB Weekly Sight Deposits 1300 – ECB Chief Economist Lane to speak 1430 – US Aug. Dallas Fed Manufacturing survey 1815 – US Fed Vice Chair Brainard to speak 2330 – Japan Jul. Jobless Rate 0130 – Australia Jul. Building Approvals Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 29, 2022

Let's take a look at the technical picture of EUR/USD, USDX, GOLD, and SP500. Read next: Cryptocurrency: Bitcoin Price (BTC/USD) - Technical Analysis - 29/08/22| FXMAG.COM Relevance up to 11:00 2022-08-30 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/video_analysis/290355

Relevance up to 05:00 2022-08-30 UTC+2 Key US stock market indexes, the Dow Jones, the NASDAQ, and the S&P 500, dropped sharply on Friday and closed in negative territory. Over the past month, the US stock market strongly recovered from its decline of the previous several months. This was a rather paradoxical recovery, as there was nothing that could have triggered it. Now, everything falls into place. Friday's only key event on the economic calendar was a speech by Fed chairman Jerome Powell at the meeting in Jackson Hole. The US personal spending and income data, which was slightly below expectations, could not have caused Friday's slump. Powell assured the market that monetary tightening would continue and that a period of high interest rates would be longer than previously expected. He did not give any new information, and it was clear that one single monthly decrease of inflation could not indicate a downtrend. For example, the CPI decreased in May, only to surge in the following months. It remains unclear why investors went long on US stocks. It might have been a capital outflow from the EU to the US - the EU is also expected to enter a recession. However, the recession has already begun in the US - investors might have found the US economy to be more stable amid the difficult geopolitical situation in the EU. In addition, the Federal Reserve is actually taking steps to fight inflation, unlike the ECB. Jerome Powell noted on Friday that the regulator would be closely following macroeconomic data, indicating that the pace of interest rate increase could be slowed down in the near future. However, interest rates would still be hiked from the current level of 2.5%. The Fed funds rate is expected to reach 3.5% at the very least, which would weigh down on US risky assets. The strange upsurge in the US stock market could have possibly been a bull trap, deliberately triggered by major market players to sell their stocks at higher prices. Now, equities and US stock indexes are likely to drop once again and hit new yearly lows. In the meantime, the Fed is likely to increase interest rates at least until the end of 2022. 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. Source: Forex Analysis & Reviews: Jerome Powell triggers slump in US stock market  

Summary:  The rise in U.S. treasury yields pressured growth stocks with the Nasdaq 100 falling below its 50-day average, which puts it back in a precarious position. Fed Kashkari said he was glad to see the markets fell after Chair Powell’s Jackson Hole speech to tighten financial conditions. Global equity markets have certainly got the message and are in a risk-off mood. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  US Stocks fell for the second day, but modestly compared to Friday’s sell-off that was triggered by Fed Chair Powell vowing rates will stay higher for longer to cool runaway inflation while suggesting there will be no pivot to cutting rates in 2023, S&P 500 -0.7%, Nasdaq 100 -1%.  Minneapolis Fed president Kashkari said that “he certainly was not exited to see the stock market rallying” after the last FOMC meeting and “people now understand the seriousness of our commitment to getting inflation back down to 2%.” Tech stocks dragged the markets lower, Nvidia -2.8%, Tesla -1.1%.  Twitter (TWTR:xnys) dropped 1.1% after Elon Musk ad subpoenaed a Twitter whistleblower to share information.  Meanwhile, gains in value stocks somewhat held up the market last night, with the oil, gas, and agricultural sectors rising 1-2%. It comes as Oil prices rose 4% on Monday as potential OPEC+ output cuts and conflict in Libya helped to offset a strong U.S. dollar. While the Ag sectors were supported higher after the wheat price jumped 4.9% and corn rose 2.2% (at its highest level in 2 months) after heat damage worsened US crops more than expected. As such it appears markets are back to their risk off modus operandi, selling down growth names (which are based on future earnings which gets diminished amid higher rates), and instead, buying value (commodities), with rising cashflows. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) US treasury yield rose across the curve.  The 2-year yield rose to as high as 3.48% during the day, the highest level since November 2007, before paring the rise to settle 3bps higher at 3.42%.  The 10-year yield rose 7bps to 3.11%,  taking the 2-10 year curve steepened by 3bps to -32bps.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China equities traded relatively calm in the midst of a large post-Jackson Hole selloff in the U.S., Hang Seng Index -0.7%, CSI 300 -0.4%.  The deal made between the U.S. and China regulators last Friday regarding access to audit work papers did not trigger much new buying in China internet stocks on Monday as it had already been well wired before the official announcement.  Further, there is much remained to be seen if the agreement will be implemented to the satisfaction of both sides as the U.S. and China regulators seem to differ in their interpretation.  Meituan (03690:xhkg) gained 2.6% after reporting solid Q2 results, which Hang Seng Tech Index dropped 1.2%. China’s industrial profits slumped to contracting 14.5% YoY from (v.s. +1.1% in June) and a fall of 11.3% sequentially from June.  The weakness was mainly driven by upstream sectors.  Coal mining stocks initially slumped but rallied later in the days and finished higher in Hong Kong and mainland bourses.   Geely (00175:xhkg) rose 1.7% as the automaker’s Zeekr line of EVs will be the first to use a new battery from CATL that provides over 1,000km range per charge.  SMIC (00981:xhkg), -2.1%, announced spending USD7.5 billion to build a plant in Tianjin to make 12-inch wafers. Chinese banks traded weak as Reuters reported that China’s central bank and bank regulators had been making calls to banks to push them to make more lending to support the real economy than put their funds in financial investments.  USDJPY weakness to bring back pressure on Bank of Japan USDJPY is back to testing its record July highs despite little change in money market pricing of the Fed rate path following Powell’s hawkish speech at Jackson Hole. The peak Fed funds rate is still priced in at 3.8%, while some of the Fed speakers have started to suggest 4%+ levels that may be needed to combat inflation. This brings the September dot plot in focus, but we get the jobs and CPI data before that as well. Any further upward re-pricing of the Fed path, if resulting in gains in US 10-year yields, could very well take USDJPY to new highs with Japanese yields still remaining capped due to the Bank of Japan’s yield curve control policy. If however, US data underwhelms, the room on the downside for USDJPY is tremendous. USDCNH made a new high at 6.9327 Wider interest rate differentials between the U.S. dollar and the renminbi and a weaker economic outlook in China continued to pressure the renminbi weaker. USDCNH surged to as high as 6.9327 on Monday during Asian hours before paring it as the greenback fell against most of the G10 and emerging market currencies in London hours.  In Asia this morning, USDCNH is trading at 6.9066. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw their best day in a month amid threats of a decline in supply from OPEC cuts and production outages in Libya. Brent futures rose above $105/barrel although some softening was seen in the Asian morning, while WTI rose to $97/barrel. This follows news from last week that Kazakhstan’s exports of crude may be impacted for months because of damage to its port facility. Meanwhile, negotiations between Iran and the US over the revival of the 2015 nuclear deal could drag on for weeks, easing fears of an imminent surge in supply. What to consider? The volatility index rises to its highest level in 9 weeks, suggesting more volatility is coming. And the fundamentals back this up with US yields spiking After the Fed’s 8-minute Jackson Hole speech, the volatility index surged to its highest level in 9-weeks, forming an uptrend pattern, suggesting more market volatility is ahead. We believe the market is only just beginning to price in higher for longer interest rates and inflation. The bond market is affirming this with yields spiking again. But what is also alarming, is that the futures market is still pricing in that the Fed will cut rates in 2023. This is despite the Fed suggesting it won’t pivot to cutting rates. The other issue is keeping markets on notice is that; if the Fed makes more hawkish remarks and hikes rates more than expected, then the market will face further volatility, and selling in growth sectors and names that are interest rate sensitive, are likely to come under pressure. Shell CEO cautions against a prolonged European gas crisis Shell CEO Ben van Beurden gave comments from Norway’s ONS conference, suggesting that Europe could face gas shortages for a number of winters. This disproves reports suggesting that Europe has already built reserves for the winter demand, and reaffirms our belief that a move to broad-based energy supply will continue to be top of mind in the long run. In the near term, demand destruction appears to be the only possible solution, and Van Beurden stressed need for efficiency savings as well as rationing. Eurozone inflation and Nord Stream maintenance will be key for the ECB There is no question on the direction in Eurozone inflation, given the extensive reports on gas prices and power costs in the region over the last few days. However, some softening may be warranted after an all-time high of 8.9% was reached on the Eurozone inflation print in July, given the easing in pump prices in August. Still, gas supply concerns continue to remain top-of-mind for Germany with Gazprom announcing another leg of maintenance for the Nord Stream pipeline this week. Food prices are also seeing another pickup, and further gains in the headline print in Q4 cannot be ruled out. Calls for a 75 basis points rate hike by the European Central Bank have already picked up, and these could gain further traction if we see a strong CPI print this week. However, if Nord Stream supply comes back on time after its 3-day scheduled maintenance, and with some potential increases in capacity as has been hinted, that could mean a substantial decline in European gas prices and relief in utility costs in the months to come. ECB Lane tones dials back on jumbo rate hike expectations ECB chief economist Lane was on the wires on Monday, and hinted at a more steady pace of rate hikes in a “step-by-step” manner rather than jumbo rate hikes. This appears to be a pushback against calls for a 75bps rate hike at the September meeting, as he made the case to allow the financial system to absorb the rate changes. Moreover, on inflation, Lane said long-term inflation expectations remain close to the two per cent target, while near-term inflation expectations are quite elevated. BYD reported 1H earnings at the high end of the preannounced range Chinse auto maker BYD (01211) reported 1H revenues growing 66% YoY to RMB 151 billion.  In terms of segments, auto revenues surged 130% YoY while mobile handset revenues contracted 4.8% YoY. Net profits jumped 206% to rMB3.595 billion, at the top end of the preannounced range of CNY2.8-3.6 billion. Volume growth (353K new energy passenger vehicles in 2Q, +265% YoY) beat market expectations despite two rounds of price increases in 2022 and supply chain disruptions.  The company’s EV market share rose to 29% (vs 17% in 2021).  Pinduoduo delivered Q2 results showing stronger than peer sales growth Pinduoduo (PDD:xnas), a leading eCommerce platform with strong penetration into agricultural products and online shoppers from rural areas., reported 1H total revenue growing at 36% YoY, far exceeding the 3% YoY consensus estimate.  The company attributed the revenue growth to a recovery in consumption since mid-May, successful promotion campaigns, and 48-hour daily necessity supply packs for people facing lockdown.  The company’s strong market position in rural areas and agriculture-related products also help it stand out from its rivals.  In Q2, the company achieved a 20 percentage point improvement in margins, reaching 33.5%, but the management cautioned investors that the margin compression was attributed to temporary cost savings early in the quarter and spending had increased since mid-May.  Non-GAAP EPS came in at Rmb7.54, +161% Uranium companies and other nuclear-related companies are back in the spotlight  Elon Musk said countries should not shut down existing nuclear power plants as Europe grapples with an energy crisis “If you have a well-designed nuclear plant, you should not shut it down - especially right now”, said Musk during an energy conference in Norway. That resulted in the Global X Uranium ETF climbing 7.4% on Monday to its highest level since June 8, supported by US uranium stocks rising. Uranium stocks in the Asia-Pacific region to watch include Australia’s Paladin, Deep Yellow and Boss Energy, as well Japan’s Kansai Electric Power and Tokyo Electric Power, as well as Mitsubishi Heavy Industries. In South Korea watch Doosan Enerbility, Kepco. And in Europe, monitor Yellow Cake and Kazatomprom.      For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 30, 2022

Summary:  Markets traded mostly sideways yesterday as the US dollar’s advance was stymied and US yields pushed back slightly lower. China continues to allow its currency to trade toward the lows for the cycle versus the US dollar as the 7.00 area nears in USDCNH. The euro bobbed back up toward parity versus the US dollar yesterday as natural gas prices fell even as Russia shuts the key Nord Stream pipeline down for a purported few days of maintenance.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities stabilised yesterday following that knee-jerk reaction on Friday to the Jackson Hole presentations with S&P 500 futures touching and bouncing off the 50-day moving average closing above the critical 4,000 level. S&P 500 futures are trading around the 4,044 level this morning sandwiched between the 100-day moving average above this level and the 50-day moving average below suggesting a bigger move is shaping up in either direction. The next big shift in sentiment will be when we get the US August CPI print on 13 September as that is the key data point to shape expectations from current levels. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China equities pulled back moderately, Hang Seng Index -0.9%. Tech names were weak. Hang Seng Tech Index plunged as much as 3% before bouncing off the lows to finish the morning session down 1.7%.  According to the Ministry of Industry and Information Technology, smartphone sales in China fell 2.9% YoY in the period between Jan and July. Despite reporting solid 1H results, China automaker, BYD (01211:xhg) slid 0.6%. In A-shares, mining stocks, gas, electric equipment, and auto parts underperformed, CSI 300 -0.5%. Pinduoduo (PDD:xnas), a leading Chinese eCommerce platform listed on Nasdaq reported strong 2Q results, showing stronger than peer gross merchandise value growth and better-than-expected margin improvement. US dollar and especially USDCNH The US dollar tried higher, but failed to follow through as risk sentiment stabilized and US Treasury yields eased back lower. The USDCNH rate, however, continues to push toward the high of the cycle, trading near 6.92 this morning. EURUSD trades near parity this morning after natural gas prices fell sharply in Europe yesterday and despite ECB Chief Economist Lane arguing for steady rate increases (pushing back against the pricing of a possible 75 basis point move at next week’s ECB meeting). Incoming data this week will be critical for USD direction. JPY weakness to bring back pressure on Bank of Japan USDJPY is back to testing its record July highs despite little change in money market pricing of the Fed rate path following Powell’s hawkish speech at Jackson Hole. The peak Fed funds rate is still priced in at 3.8%, while some of the Fed speakers have started to suggest 4%+ levels that may be needed to combat inflation. This brings the September dot plot in focus, but we get the jobs and CPI data before that as well. Any further upward re-pricing of the Fed path, if resulting in gains in US 10-year yields, could very well take USDJPY to new highs with Japanese yields still remaining capped due to the Bank of Japan’s yield curve control policy. If, however, US data underwhelms, the room on the downside for USDJPY is tremendous. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw their best day in six weeks amid threats of a decline in supply from OPEC and production outages in Libya. Brent futures rose above $105/barrel although some softening was seen in Asia overnight, while WTI rose to $97/barrel. This follows news from last week that Kazakhstan’s exports of crude may be impacted for months because of damage to its port facility. Meanwhile, negotiations between Iran and the US over the revival of the 2015 nuclear deal could drag on for weeks, easing fears of an imminent surge in supply. Pro Farmer tour see lowest US corn production since 2019 The just completed Pro Farmer tour across the US grain belt helped drive corn futures in Chicago to a two-month high on Monday after the tour saw the US corn crop at 13.76 bn bushels, below USDA forecasts for 14.36 billion bushels. Pro Farmer predicted a soybean crop of 4.54 billion, in line with the USDA’s latest forecast. Wheat, supported by corn’s rally, touched its highest since July 12 despite news that Ukraine agricultural exports could rise to 6.5 million ton in October, double the volume in August.  The soybean vs corn ratio needs to stay low (favouring corn) ahead of the South American planting season in order to persuade farmers there to plant more of the fertilizer intensive crop. US Treasuries (TLT, IEF) US treasury yields eased lower yesterday. An interesting paper presented at the Jackson Hole conference at the weekend suggests that the Fed will have a hard time delivering on quantitative tightening without causing harm to financial market functioning, which could mean less supply of treasuries from the Fed if its shies away from reducing its balance sheet at the previously touted pace of $95 billion/month. Otherwise, incoming US data is the focus through the August CPI release on September 13. What is going on? Shell CEO warns of prolonged European gas crisis Shell CEO Ben van Beurden gave comments from Norway’s ONS conference, suggesting that Europe could face gas shortages for a number of winters. This disproves reports suggesting that Europe has already built reserves for the winter demand and reaffirms our belief that a move to broad-based energy supply will continue to be top of mind in the long run. In the near term, demand destruction appears to be the only possible solution, and Van Beurden stressed the need for efficiency savings as well as rationing. ECB Lane dials back on jumbo rate hike expectations ECB chief economist Lane was on the wires on Monday and hinted at a steady pace of rate hikes in a “step-by-step” manner rather than jumbo rate hikes. This appears to be a pushback against calls for a 75bps rate hike at the September meeting, as he made the case to allow the financial system to absorb the rate changes. Moreover, on inflation, Lane said long-term inflation expectations remain close to the two per cent target, while near-term inflation expectations are quite elevated. BYD reported 1H earnings at the high end of the preannounced range Chinese automaker BYD (01211) reported 1H revenue up 66% y/y to RMB 151bn. In terms of segments, auto revenue surged 130% y/y while mobile handset revenues contracted 4.8% y/y. Net profits jumped 206% to RMB 3.6bn, at the top end of the preannounced range of RMB 2.8-3.6bn. Volume growth (353K new energy passenger vehicles in 2Q, +265% y/y) beating market expectations despite two rounds of price increases in 2022 and supply chain disruptions. The company’s EV market share rose to 29% (vs 17% in 2021). Pinduoduo delivered Q2 results showing stronger than peer sales growth Pinduoduo (PDD:xnas), a leading eCommerce platform with strong penetration into agricultural products and online shoppers from rural areas, reported 1H total revenue up 36% y/y, far exceeding the 3% y/y consensus estimate. The company attributed the revenue growth to a recovery in consumption since mid-May, successful promotion campaigns, and 48-hour daily necessity supply packs for people facing lockdown. The company’s strong market position in rural areas and agriculture-related products also help it stand out from its rivals. In Q2, the company achieved a 20 %-point improvement in margin, reaching 33.5%, but the management cautioned investors that the margin compression was attributed to temporary cost savings early in the quarter and spending had increased since mid-May. Non-GAAP EPS came in at RMB 7.54, +161% y/y. Shares in Uranium companies and other nuclear-related companies are back in the spotlight Japan has signaled its openness to more nuclear power, at the same time, Tesla founder Elon Musk has applauded uranium as an energy alternative, during an energy conference in Norway. Uranium stocks moved higher as a result on Monday in the US, which boosted the Global X Uranium ETF up 7%, to its highest level since June 8. Shares in the Asia-Pacific region followed. Australian stocks saw the most significant moves given the country has the largest uranium reserves globally. Australia’s Paladin rose 11%, Deep Yellow 15% and Boss Energy 10%, while Rio Tinto (which owns a deposit) rose over 1%. Japan’s Mitsubishi Heavy Industries and Tokyo Electric Power gained 3%. Companies to watch in Europe, include Yellow Cake and Kazatomprom. What are we watching next? August U.S. job report is out on Friday There should not be a major surprise. The economist consensus expects a 300,000 payrolls increase in August and a stable unemployment rate at 3.5 % - this is a five-decade low. If this is confirmed, it all points to a healthy labor market (despite the moderate pace of job increases). Today, the U.S. government will also release July data on vacancies and quits. Expect job openings to remain elevated, thus pointing to resilient demand for labor. These figures are unlikely to play a major role at the September FOMC meeting since it is well-known that labor market data are lagged indicators. Inflation remains the main point of concern, as mentioned by Fed Chair Jerome Powell last week at Jackson Hole Symposium. August EZ CPI will be painfully high The consensus expects a new increase of 9 % year-over-year when the data will be released on Wednesday. This should convince European Central Bank (ECB) policy makers to raise borrowing costs by a sizable increase on September 8. At Jackson Hole, ECB’s executive board member Isabel Schnabel indicated the central bank has no other choice but to act with ‘determination’. This is a matter of credibility. According to Bloomberg, traders now price a 50 % chance of a 75-basis points rate hike in September. Earnings to watch Today’s earnings focus is China are lithium miners Tianqi Lithium and Ganfeng Lithium as the growth in electric vehicles sales is putting enourmous pressure on availability of lithium and prices of lithium carbonate. Baidu is another Chinese earnings release to watch today as the company’s footprint in online advertising will give insights into economic activity. Later in the US, earnings to watch are Crowdstrike in the cyber security industry and HP in computing hardware. Today: Woodside Energy, ICBC, China Yangtze Power, Muyuan Foods, SF Holdings, Shaanxi Coal, Midea Group, Tianqi Lithium, Ganfeng Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB, Brown-Forman, Veeva Systems Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis Economic calendar highlights for today (times GMT) 0700 – Spain Flash Aug. CPI 0830 – UK Jul. Net Consumer Credit 0830 – UK Jul. Mortgage Approvals 0900 – Euro Zone Aug. Confidence Surveys 1115 – ECB's Vasle to speak 1200 – Hungary Rate Decision 1200 – US Fed’s Barkin (Non-voter) to speak 1200 – Germany Aug. Flash CPI 1300 – US Jun. S&P CoreLogic Home Price Index 1400 – US Aug. Consumer Confidence 1400 – US Jul. JOLTS Job Openings 1500 – US Fed’s Williams (voter) to speak 1600 – ECB Speakers Holzmann and others 2030 – API's Weekly Crude and Fuel Stock Report 0130 – China Aug. Manufacturing/Non-manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 30, 2022

China-Taiwan tensions rise again after drone incident Source: shutterstock Macro outlook Global markets: It’s slow, and it’s measured, and volumes are normal, but US equities declined again yesterday. Both the S&P500 and NASDAQ declined by about 1.1% on Tuesday. Equity futures are mixed, but basically flat. Friday’s US non-farm payrolls report may provide the next big leg up or down. US Treasury yields are also grinding very slowly higher. The yield on the 2Y US Treasury rose 1.8bp to 3.442%, while that on the 10Y bond remained flat at 3.102%. 10Y UK Gilt yields pushed up 10.2bp yesterday, catching up their European peers after the public holiday on Monday.  EURUSD was fairly steady yesterday, holding above parity and edging up to 1.0022. The AUD pushed up strongly at one point to close to 0.696, but then collapsed back to 0.6857 on a Reserve Bank of Australia (RBA) report cited by Bloomberg that hinted at more moderate rate hikes ahead. Cable collapsed back below 1.17 to 1.1658 after the public holiday, while the JPY has remained fairly steady at 138.75. Asian FX was a mixed bag. The PHP and SGD joined Australia at the bottom of the pack, and the TWD was also weaker – perhaps disturbed by reports that a Chinese drone was shot at over the Kinmen islands. The INR, IDR and MYR all solid made gains yesterday, the INR rising on hopes that Government securities may be included in the JPMorgan global index. G-7 Macro: Eurozone preliminary CPI inflation for August and the US ADP employment survey are the main macro releases today. EU inflation could rise to 9.0% from 8.9%YoY. While analysts expect the ADP survey to show a 300,000 increases in private sector employment in August.   China: Official PMI data for China are due out at 0930SGT. Consensus forecasters expect the manufacturing index to remain in contraction territory at 49.2, though this would be a slight improvement from the July figure of 49.0 if so. The non-manufacturing index is expected to show a slowdown in growth with the index easing down to 52.3 from 53.8. India: Later tonight, India releases GDP data for 2Q22, where the consensus expects a base-effect dominated series could deliver a 15.3%YoY increase. This will keep India on track to achieve 7%-plus rate of growth for the calendar-year 2022. The consensus estimate is in line with our own expectations. Fiscal deficit data for July will also be released. Australia: 2Q construction work done and private sector credit growth are today’s macro offerings. Both will provide some indication of the work the RBA will need to do to slow the economy enough to bring inflation down. Construction is bouncing along either side of zero quarter-on-quarter and is due a slight upward bounce in 2Q after a -0.9%QoQ result for Q1. Private sector credit growth is running at more than 9%YoY and will need to come down to be consistent with the Reserve Bank’s inflation target. Korea: The July Industrial production outcome was weak with the all-industry index falling (-0.1% MoM). Manufacturing production (-1.3%), retail sales (-0.3%), equipment investment (-3.2%), and construction (-2.5%) all dropped while services (0.3%) alone rebounded. Forward-looking machinery orders and construction orders also declined, suggesting a weak investment outlook for the next quarter. Also, it was particularly noticeable that all semiconductor-related figures came out poorly. The weak start of the quarter poses downside risks to the current quarter’s GDP. We don’t expect growth to contract in the current quarter, but the likelihood of a negative quarter is growing. If GDP contracts this quarter, it will complicate the BoK’s policy action at the year-end. Japan: In contrast to Korea, the July Industrial production (IP) performance was pretty strong. IP rose unexpectedly by 1.0% MoM sa (vs -0.5% market consensus), following a 9.2% surge in June. Retail sales also rose more than expected (0.8% in July vs -1.4% in June).  Also, output forecasts for August and September improved suggesting that solid production is likely to continue this quarter. Today’s reports signal that the economy continues to recover, mostly due to catch-up production gaps and reopening boosts. What to look out for: Regional PMI and US non-farm payrolls South Korea industrial production (31 August) Japan industrial production (31 August) China manufacturing and non-manufacturing PMI (31 August) Hong Kong retail sales (31 August) India GDP (31 August) Fed's Mester speaks (31 August)  South Korea GDP and trade (1 September) Regional PMI manufacturing (1 September) China Caixin PMI manufacturing (1 September) Indonesia CPI inflation (1 September) US initial jobless claims and ISM manufacturing (1 September) Fed's Bostic speaks (1 September) South Korea CPI inflation (2 September) US non-farm payrolls and factory orders (2 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Tesla falls to the first point of support. TSLA should bounce on Tuesday as markets recover. Tesla stock still looking overvalued as the sector rerates. A more or less normal day for stock markets on Monday took place after the sharp sell-off on Friday. Monday's performance was somewhat better than expected or less bad than many feared. Equity markets held up relatively well with the main indices losing less than 1%. Fears of capitulation were short-lived. This should set up a recovery rally for Tuesday and Wednesday and then probably markets will flatline ahead of Friday's employment report. Also read: Tesla Stock Deep Dive: Price target at $400 on China headwinds, margin compression, lower deliveries Tesla stock news The good news for bulls was that Monday's price action opened on the lows at $280, retested it in the first half, and then put in place a double bottom on an intraday basis that set Tesla (TSLA) stock higher for the remainder of the session. Overall, it was a pretty boring day. Tesla had a range of about $7 on the day, but there was no follow-through from Friday's sell-off. Is this consolidation just a holding pattern before further falls or a base building for a recovery? Tesla stock forecast TSLA stock longer-term view remains bearish with the series of lower tops identified by our trendline below. As we can see, Tesla is stuck in a high-volume area (grey bars on the right). High-volume areas are stabilization zones, and markets tend to move from one to another. Below $281 and above $314, volume thins out, so we would expect Tesla to move quickly through those zones. The recent Fed hawkish commentary from Powell puts the risk-reward in favor of the downside in my view, so I would be looking for TSLA stock to break $281 and a swift move through light volume until we reach the next high volume zone at $240. However, ahead of Friday, there is likely to be some recovery and then stabilization around $300. TSLA 1-day chart

August seemed to be a month of high volatility, most likely due to the turbulent economic environment and a relatively good quarterly earnings season. We seem to be in for a very interesting bear market rally, with a possible peak in the middle of last month. At that time, the S&P 500 and Nasdaq Composite indices fell 3.2% and 3.9%, respectively. They set a peak (in mid-August), gaining 17.4% and 23.3% (the average historical magnitude of a bear market rally) from their local low (mid-June).    Disney (DIS) The entertainment market giant posted a 1-month gain of 5.9%. The stock had been declining for a year and a half, most likely influenced by extreme pessimism about the company's ability to continue to grow. As a result, the recession and lower consumer spending may have posed an additional threat to revenue from theme parks and streaming platforms. Since its peak in early 2021, Disney shares have fallen by 52.2%.  A short-term trend reversal occurred when Disney announced solid Q3 results (the financial year starts earlier than the calendar year for Disney). There was a 26% increase in revenue and a whopping 53% increase in net profits year-on-year. Net earnings per share were 10 per cent higher than expected. Among the main reasons for such a phenomenal jump in results is the expansion of owned streaming services, namely Disney+, Hulu and ESPN+.   Charles Schwab (SCHW) SCHW is a leading financial company engaged in brokerage, market making, investment banking, consulting and investment advisory services. Its share price rose by 5.5% last month. As for the stock price of other companies, Q2 results proved to be crucial the previous month.  The company reported an increase of as much as 31 per cent in interest income, which is the company's primary source of revenue (more than 50 per cent). Thus, SCHW's revenue and net profit increased by 11.7% and 41.7%, respectively. EPS (earnings per share) turned out to be 6.6% higher than Wall Street analysts' expectations. As a result, expectations of further possible interest rate rises and rising volatility (from which the brokerage business may benefit) appear to push the stock even higher.   Disney and Charles Schwab may be among the more interesting companies of August due to their phenomenal earnings despite the deteriorating macroeconomic environment.    Source: Leaders among the giants — stocks of the month?

Relevance up to 14:00 UTC+2 Stock futures are trading mixed on Wednesday after a sharp fall yesterday. Investors are worried about the ultra-tight monetary policy of the US Federal Reserve aimed at curbing inflation. The US dollar index and Treasury yields moved higher. The Dow Jones futures gained 0.2%, while the S&P 500 and the NASDAQ futures lost 0.1% and 0.2% respectively. European stock indices also slipped to trade at their lowest level in more than six weeks. This decline was caused by the eurozone inflation report and the downbeat data from France and Germany. Rising inflation in the eurozone is viewed as the number one problem by the European Central Bank. The regulator is very likely to announce further rate hikes next week in order to limit soaring prices. When pursuing tighter monetary policy, the ECB will have to find the balance between fighting inflation and pushing the economy into a recession. The inflation rate in the eurozone has already reached a record level of 9.1% and is seen to accelerate further. Yet, analysts wonder whether the regulator will raise the rate by 50 basis points or straight by 75 basis points. In the commodities market, oil has slightly lost ground and is now set to test monthly lows for the third time. The price of natural gas also went up. Hopes that the US central bank will ease its monetary tightening are gradually fading away, which is a bearish factor for stocks and bonds. Of course, investors consider the incoming data when looking for clues regarding monetary policy. Yet, the jobs report from the US will most likely cause another massive sell-off in the stock market. Meanwhile, Asian stocks are trading in positive territory thanks to tech companies. At the same time, Japan's stock indices have dropped. Shares of Chinese EV maker BYD Co. tumbled the most after Warren Buffett's Berkshire Hathaway Inc. trimmed its stake in the company. As for the S&P 500 technical outlook, buyers may get a small chance for an upward correction. For this, they will have to break above the level of $4,003. If the fundamental data from the US is positive, this level may be the key point to watch. Depending on a successful breakout of this range, the S&P 500 index may continue to rise. Otherwise, it may return to monthly lows and extend its fall. If the downtrend continues, a breakout below $3,968 will push the quote to the next downward target of $3,940. This will open the way towards the area of $3,905 where the downward pressure may slightly ease. An upside movement will be confirmed only when bulls take control over the resistance of $4,003. Then, the level of $4,038 will serve as the next target. Only then will the price move further to $4,064 where large sellers will return to the market. Some of you may want to take profit on long positions. The level of $4,091 will act as a more distant target. 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. Source: Forex Analysis & Reviews: US premarket trading on August 31, 2022. Stock market enters correction after yesterday's fall  

USD off to a strong start at the beginning of September Source: shutterstock Macro outlook Global markets: US equities continued their slow bleed on Wednesday, the S&P500 dropping another 0.78% and the NASDAQ going 0.56% lower. This wasn’t exactly a one-way street, with some periods of strength within the session, but the downtrend was never seriously threatened. Equity futures are poised for more weakness today too, which could set the scene for other asset markets today ahead of tomorrow’s payrolls release. 2Y US Treasury yields added another 5.1bp yesterday, which probably didn’t help the tone in equities, and 10Y yields put on another 9bp to reach 3.19%.  News from the Fed: Loretta Mester is reported as saying that she favours rates above 4% next year and no cut in rates in 2023. That probably helped keep Treasury yields rising across the curve. But despite the downbeat market sentiment and rising USD rates EURUSD managed to rise to 1.004, up from 1.001 this time yesterday. In contrast, the AUD is looking troubled again today following its sell-off yesterday and sits at 0.6835, and looks more likely to keep going down than head back up. Cable too looks in bad shape, dropping to 1.1599 and the JPY is hurtling upwards and at 139.29, the question is, do we hit 140 today? Asian FX saw some decent gains from the KRW yesterday, which pulled back to 1338. The INR is also still benefitting from rumours of the inclusion of government securities into global bond indices. Today, the USD looks rampant, however, and it may well be a different story. G-7 Macro: Yesterday’s ADP survey was published with a new methodology to make it more accurate (in line with payrolls) and it delivered a weakish looking 132,000 employment gain. It’s impossible to tell if this will be reflected in tomorrow’s jobs report, but it does seem to suggest that at least a slowdown from 528,000 jobs gain reported in July is on the cards. Manufacturing ISM data is the main release from the G-7 today. A slight decrease from last month’s 52.8 reading is the median expectation. The prices paid index is also expected to come down a bit more from last month’s reading of 60.0. There are also PMI releases in Europe and German retail sales to watch out for. India: Indian 2Q22 GDP wasn’t quite as punchy as had been expected, though the heavily base-affected release is a little tricky to interpret right now. A 13.5% YoY gain was a bit down on the 15.3% increase that had been expected, but probably still leaves India on track to achieve 7% growth this calendar year. Strong investment (+20.1%YoY) and private consumption (25.9%) underpinned the result. Though the boost from the re-opening of the economy will probably fade next quarter, and the economy will face stronger headwinds from falling external demand, higher inflation and rising domestic interest rates.  The fiscal deficit figures for July actually registered a small surplus, which is an improvement on last year’s equivalent fiscal balance and should keep India on track to meeting or even beating its 6.4% (GDP) deficit target. Australia: Private capital expenditure released at 0930 SGT provides the first insight into next week’s 2Q22 GDP figure. The median forecast is for a 1% gain. A further clue comes the day before the release when we get the net trade contribution component. We are tentatively looking for a robust 1% QoQ expansion of activity in 2Q22, which will add to the pressure on the Reserve Bank to keep leaning against inflation. Korea:  The trade deficit widened to a record USD -9.4 billion in August, almost double the USD 4.8 billion deficit recorded in July. Exports grew 6.6% YoY in August (vs a revised 9.2% in July and a market consensus of 5.6%). As early data suggested, semiconductor exports were quite weak with a -7.8% drop while petroleum/chemical and automobiles led the growth. Meanwhile, imports surged 28.2% YoY in August (vs 21.8% in July and market consensus of 23.7%) due to increases in energy, semiconductors, and chemicals. Separately, Korea’s manufacturing PMI fell to 47.6 in August from 49.8 in July. This is its lowest reading since July 2020. The output index fell to only 44.6, staying below 50 for the fourth month in a row. Combining this weak PMI data with the trade deficit data and yesterday’s weaker-than-expected industrial production outcomes, we are revising our growth forecast lower for the second half of the year and now expect a small contraction Indonesia:  August inflation is set for release today.  Both headline and core inflation have been on an uptrend this year with headline inflation now past the central bank’s target.  Headline inflation will likely settle close to 5%YoY while core inflation should exceed 3%.  Accelerating inflation and a planned subsidized fuel hike were enough to prod Bank Indonesia to finally hike rates at their last meeting and we believe that BI is not done for the year.  Faster inflation, especially after the fuel hike should keep BI on a hiking path.  What to look out for: Regional PMI manufacturing and US NFP South Korea GDP and trade (1 September) Regional PMI manufacturing (1 September) China Caixin PMI manufacturing (1 September) Indonesia CPI inflation (1 September) US initial jobless claims and ISM manufacturing (1 September) Fed's Bostic speaks (2 September)  South Korea CPI inflation (2 September) US non-farm payrolls and factory orders (2 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  The S&P500 fell 4.2% in August, erasing half of July’s rally, with investors selling down companies that face balance sheet tightening from runaway inflation and higher for longer interest rates. Meanwhile, in August, investors bought into sectors contributing to inflation. At Saxo, we think these trends will probably continue. We cover everything you need to know about what is happening in markets today and what to consider next. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities declined for the fourth day in a row, with S&P 500 down 0.78%, the Nasdaq 100 falling 0.57%.The month of August ended with S&P 500 losing 4.24% and Nasdaq 100 down 5.22%.  The markets were in a risk-off mood with the focus being fixed on rising bond yields and the hawkish stance of the central bank in the U.S. and across the pond in Europe, and with an eye on the job report coming out of the U.S. tomorrow.  Chewy (CHWY:xnys) dropped 7.9%, as the pet retailer lowered guidance for 2022 revenues, citing customer pulling back on discretionary items. The consumer trade-down echoed the general trend found in other U.S. retailers.   Bed Bath & Beyond (BBBY:xnas) tumbled 21.3% after announcing a plan to close about 150 stores. Nvidia (NVDA:xnas) plunged 5% in extended hours after the company warned that the new U.S. rules restricting the export of artificial intelligence may substantially affect the company’s sales to China.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas)   Yields took a blip lower initially after the weaker-than-expected ADP Employment report but surged higher to finish the day at the high.  The benchmark 10-year note yield closed at 3.19%.  Cleveland Fed President Mester joined the recent chorus of hawkish fedspeaks vowed to get inflation down “even if the economy were to go into recession” and “it will be necessary” to raise the Fed fund rate to “above 4% by early next year and hold it there”.  The U.S. treasury yield curve bear steepened, with the 2-year yield +5bps as the belly to the long-end yields jumped 8bps to 9bps. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg)   Hang Seng Index gapped down by nearly 2% at the open but managed to crawl back all the losses to finish the day flat.  China consumption stocks led the market higher in anticipation of incremental policy stimuli and recovery of consumer demand during the mid-autumn festival, Xiabuxiabu Catering (00520:xhkg) +9.4%, Haidilao (06862:xhkg) +6.5%, China Tourism Group Duty Free (01880:xhkg) +7.1%, Li Ning (02331:xhkg) +3.9%, Anta Sports (02020:xhkg) +1.5%.  In the auto space, BYD (01211:xhkg) tumbled nearly 8%, following news of Berkshire Hathaway reducing its stake in the company. On the other hand, Nio (09866:xhkg) and XPeng (09868:xhkg) rose more than 2%.  Hang Seng Tech Index (HSTECH.I) gained 1%, with performance divergence among stocks.  Tencent (00700:xhkg) gained 1.1% while Baidu (09888:xhkg) dropped by 3.3% on operating margin contraction. China banking shares traded in Hong Kong were mixed after ICBC (01398:xhkg), China Construction Bank (00939:xhkg), and Bank of China (03988:xhkg) reported growth in revenues and profits but higher non-performing loan ratios. Coal mining and oil stocks fell on the Hong Kong bourse as well as the mainland bourses on weaker energy prices.  CSI 300 bounced from the early sell-off and closed little changed.     Australia's ASX200 (ASX:XASX) closes higher for the 2nd month, but on the first day of September equities unwind the August rally and cut July’s rally  Australia’s market has rallied for two straight months. But the rally is likely to run out of steam iin September, with Aussie equites to face selling pressure. September is historically the worst month for equities, with the ASX200 losing 0.6% each month on average since the index was formed. The reason for this? Companies pay out their yearly dividends in September. Today, many major companies go ex-dividend, transferring the dividend right to shareholders. Companies going ex-dividend include BHP, Whitehaven Coal, AGL and Credit Corp. This month, the ASX faces a host of extra issues. The RBA is tipped to hike interest rates at its September meeting next Tuesday, front loading rate hikes for the next few months. This comes at a time when home prices marked their steepest decline in four decades and building approvals for private homes, fell to their lowest level since 2012. This means banks will face selling pressure. Crude oil prices (CLU2 & LCOV2)   EIA reported a decline in crude oil inventory of 3.3 million and gasoline inventory of 1.1 million with SPR slowing to 3 million barrels, so resulting in an overall draw of 6.4 mb/d, but the reaction in the oil market remained muted. Production was adjusted higher by 0.1 mb/d to 12.1 mb/d. No change in net trade with imports and exports both declining 0.2 mb/d. WTI futures still trading below $90/barrel in Asian morning as focus shifts back to demand concerns, and Brent futures were below $96. USDJPY heading to 140   The late move higher in US 10-year yields has come back to haunt the yen, with Bank of Japan still remaining committed to keeping its 10-year yields capped at 0.25%. USDJPY rose to fresh 24-year highs of 139.44 in early Asian trading hours, and heading straight to 140 unless we see some verbal intervention coming through from the Japanese officials today. Risk abound with US jobs data due on Friday, and dollar momentum remaining strong. EURUSD still above parity with ECB’s rate hike in focus for next week, beyond the vagaries of gas supplies. GBPUSD however made fresh 2022 lows at 1.1586 as economic weakness remains in focus.    What to consider?  Fed’s Mester calls for over 4% Fed funds rate Cleveland Fed President Loretta Mester backed rates to go above 4% early next year and holding it there, while also clearly calling for no rate cuts in 2023. On inflation, Mester noted it is too soon to say inflation has peaked and wage pressures show little sign of abating, while the fight against inflation will be a long one. This message should get stronger if jobs, and more importantly CPI, data continues to be strong. At the same time, we now have Quantitative Tightening going to its full pace and Mester said that balance sheet reduction could take three years or so. New US ADP jobs data disappointed, but wage data remain upbeat While it is hard to trust estimates on the US ADP report given that it is using a new methodology and market impact/trust is only likely to build over time, it was notable that the headline came in at less than the half of the median estimate. Employment change for August was 132k vs expectations of 300k – clearly putting Friday’s NFP release in focus. ADP said that the data suggests a shift toward a more conservative pace of hiring. ADP noted that the median change in annual pay (ADP matched person sample) was +7.6% YoY for Job-Stayers, and +16.1% YoY for Job-Changers, still suggesting a pretty tight labor market.    Eurozone August CPI continues to climb According to the preliminary estimate, it was out at 9.1% year-over-year versus prior 8.9% and expected 9.0%. Core CPI, which is highly watched by the European Central Bank (ECB), is still uncomfortably high at 4.3% year-over-year. This is likely that double-digit inflation in the eurozone will become a reality by year-end. The Bundesbank has already warned that German inflation could peak around 10% year-over-year in the coming months. Expect a lively debate among the ECB Governing Council about the pace of tightening on 8 September. Several governors are leaning towards an aggressive hike (meaning 75 basis points) while a minority of governors and the ECB chief economist Philip Lane would rather prefer a step-by-step increase in order to take into consideration the risk of recession. US stocks wipe out half of the July rally, what is behind this and what’s next? The S&P500 fell 4.2% in August, erasing half of July’s rally, with investors selling down companies that face balance sheet tightening from runaway inflation and higher for longer interest rates. Meanwhile, in August, investors bought into sectors contributing to inflation (The Oil & Gas sector rose 9%, Agricultural 6%, Fertilizers 5%, and Food Retailers 3%). Meanwhile, investors topped up exposure to stocks/sectors that benefit from higher rates, which is why Insurance rose 3%. Inversely, the most selling was in sectors that will likely suffer from slower growth, higher rates, and inflation (Home Furniture fell 14% in August, Semiconductors lost 10%, Office REITs slid 10%). Notably, the S&P500 closed under its 200-day moving average for the 100th day. The last time this occurred was in the GFC. And since then, this is also the only time the S&P500 and Nasdaq have not made a typical V-shape recovery. This is something Saxo’s strategists Peter Garnry and Jessica Amir warned of, and recently highlighted in the Quarterly Outlook. As uncertainty remains, and comments from Fed and ECB speakers are increasingly bearish; we think growth sectors (tech, consumer spending, and REITs) will face further pressure given their futures earnings will dimmish. Inversely we expect commodities to continue to outperform.     China’s official manufacturing PMI edged up but remained in contractionary territory  China’s official NBS manufacturing PMI edged up to 49.4 in August from 49.0 in July, above expectations but remaining in contractionary territory. The improvement was largely driven by the rise of the new orders sub-index to 49.8 in August from 48.5 in July and helped by strong activities in the food and beverage industries ahead of the mid-autumn festival.  Covid-related disruptions and energy rationing were negative factors pressuring manufacturing activities.  Heatwaves and drought-induced power curbs have caused Sichuan and Chongqing to shut-down manufacturing activities for six days and eight days in August respectively. The stepping up of pandemic controls in quite a number of cities affected the survey negatively. The non-manufacturing PMI decelerated to 52.6 in August from 53.8 in July.  Both the services sector and the construction sector weakened.     Caixin China Manufacturing PMI is expected to fall to 50.0 The median forecasts of economists surveyed by Bloomberg expect the Caixin manufacturing PMI to slide to 50.0 in August from 50.4 in July, right at the threshold between expansion and contraction.  The official NBS Manufacturing PMI released yesterday showed that improvements were found in large and medium-sized enterprises but the activities in small businesses decelerated t a 47.6 reading in August from 47.9 in July.  Moreover, during the survey month, a Covid-19 outbreak hit Yiwu, an export-focussed manufacturing hub in Zhejiang, and might drag on the Caixin manufacturing PMI, which has a higher weight for medium and small-sized businesses in the eastern coastal region.   Australian manufacturing data falls, pressured by higher rates, wages, and scarcity of staff  Manufacturing only contributes 30% to GDP, however, two key sets of weaker manufacturing data will be reflected on by professional investors today. Manufacturing data released by AI Group showed activity fell into contractionary territory, following six months of expansion. The drop in Australian PMI to 49.3 in August was triggered by slower growth in factory activity from higher interest rates and wages, and a lack of workers. The other set of manufacturing data released from S&P Global showed manufacturing fell to a reading of 53.8 in August, down from 55.7 in July. Significantly, the reading was revised lower from the flash (preview reading) and was the lowest read in a year. As such, investors may see selling pressures in key manufacturing stocks. ASX manufacturers and producers to watch include; Woodside, Caltex, Woodside, Whitehaven and Viva Energy, in energy, which may also see profit-taking after gaining a post as some of this year’s best ASX performers. Other companies to watch include Amcor, the global packaging giant. CSL, the global vaccine, and blood therapy business. As well as BHP, Rio Tinto, and Fortescue, global mining producers.  US ISM manufacturing data due today Lower prices at the pump has seemingly helped the US economy reverse from the slowdown concerns, with Chairman Powell also getting the confidence to say that the economic momentum is strong. ISM manufacturing, which is scheduled to be reported on Thursday, may reflect the weakness seen in the S&P survey, but will still be lifted by the backlog in auto vehicle production. Consensus estimates expect ISM manufacturing to cool slightly from July’s 52.8 and come in at 51.9 in August, still remaining in expansionary territory. ISM employment will also be key to watch ahead of the NFP data due on Friday.  Singapore’s first digital bank launch Grab and Singtel have entered an alliance to roll out a banking app next week in Singapore called GXS, that will be Singapore's first digital bank. This is mostly targeted to younger users and small businesses, tapping on Grab's food and ride-hailing customers, in order to improve the penetration of financial services in Singapore. A savings account is also in the offering, with no minimum balance requirement, in direct competition to the traditional banks.   For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets, what to consider – September 1, 2022

S&P 500 dicey premarket upswing fizzled out right after the open, volume picked up, and market breadth correspondigly deteriorated. Bonds confirmed, and the higher yields didn‘t even send the dollar much upwards. Together with the sea of red in commodities and precious metals, this smacks of deleveraging, still of the relatively orderly flavor if you look at the well behaved VIX at 26 only. The steep post Jackson Hole downswing will pause, but there isn‘t a sign that would happen precisely today yet. Looking at the daily chart of CRB Index, crude oil, gold and silver with the miners, odds are that we would see a repeat of yesterday‘s action today as well – to a good degree. Not much has really change since my yesterday‘s review of real assets and cryptos, and especially the crude oil setback (reinforced by the Iran deal speculation Europe is pinning its eyes on) is generally worrying. The Fed keeps hammering the same message, and short end of the curve keeps duly rising. Tombstone reminder for those overstaying in the S&P 500 rally to the 200-day moving average, would be „don‘t fight the Fed – the central bank doesn‘t have your bank now, and would act on the out of control inflation“. I hope you‘re enjoying the very lively Twitter feed, which comes on top of getting the key analytics right into your mailbox. Plenty gets addressed there, but the analyses over email are the bedrock. Still, the next days would feature generally shorter analyses per the legal update on my homepage. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bears still have the undeniable strategic initiative, and the pace of the downswing is really all that‘s being questioned. Earnings are still to deteriorate, and P/E to go down – inflation isn‘t declining fast enough, so equities react appropriately. CFA material 101. Read next: FX: GBP/USD May Catch Us By Surprise Soon! Tomorrow's US NFP May Let Boost USD (US Dollar) Or Arouse Concerns Over Fed's Strategy| FXMAG.COM Credit Markets HYG rested a little only on intraday basis, and objectively speaking it‘s downswing didn‘t trigger a genuine bloodbath in stocks. This can change but the steady dollar kind of doesn‘t hint at that right next. The S&P 500 bears should take it easy, because the coming days would be and feel like a consolidation compared to what we have been just through.

AAPL stock falls again on Wednesday as the sell-off continues. Equities remain under pressure ahead of the employment report on Friday. AAPL stock also waiting for next week's iPhone 14 release details. Apple (AAPL) stock continued its recent run of poor form as the stock once again closed lower on Wednesday. Apple has now registered three straight days of losses as equity markets come to terms with Fed Chair Jerome Powell utilizing himself last week. The doveish tilt that the market seemed to imply was firmly rebutted by Powell, and the equity market has been under continued selling pressure ever since. Also read: Apple Stock Deep Dive: AAPL price target at $100 on falling 2023 revenues Apple stock news Apple investors are now looking to next week for a catalyst to stem recent losses. September 7 is when most observers expect the iPhone 14 to be released. Details around pricing will be the key aspect, and as ever Wall Street analysts have been coming out with more and more bullish prospects. The latest from Bank of America says a price hike for the iPhone 14 over the iPhone 13 could see a boost to earnings in the region of $0.10 to $0.20 on EPS. It seems demand for iPhones will remain inelastic in the eyes of Wall Street, while clearly, the consumer looks to be shifting to lower-cost goods from what we have seen recently from retailers. iPhones are a luxury good and should see a slowdown in demand based on price hikes and inflationary trends. Margins will come under pressure from rising input costs, and the situation in China looks increasingly bearish. The property sector is beginning to falter alarmingly. The only Apple bullish caveat to add is the potential for massive monetary easing from China. We saw how the loose US policy juiced financial assets during the pandemic, and China may embark on its own financial juicing if the economy continues to decline. We do not think this will be enough to stem earnings compression for Apple though. The strong US dollar is another headwind for a firm that does business globally but reports in dollars. Apple stock forecast Enough of the long-term prognosis. How are we shaping up for some swing trading? Ok, first take a look at the AAPL stock daily chart. The downtrend continues with failure at the 200-day moving average, a continued sell-off from the overbought Relative Strength Index (RSI) and now support from the 50-day moving average. Below $171 looks bearish. AAPL daily chart The AAPL stock 15-minute chart below shows the areas of stability and high volume. Current levels around $158 are seeing stabilization. A move above $162 or below $156 will see further buying or selling pressure, so this range is key to playing a breakout scenario. AAPL 15-minute

At the close of the New York Stock Exchange, the Dow Jones rose 0.46%, the S&P 500 rose 0.30%, and the NASDAQ Composite fell 0.26%. The leading performer among the components of the Dow Jones index today was Johnson & Johnson, which gained 4.00 points or 2.48% to close at 165.34. Amgen Inc rose 5.20 points or 2.16% to close at 245.50. Merck & Company Inc rose 1.79 points or 2.10% to close at 87.15. The losers were Boeing Co shares, which lost 6.59 points or 4.11% to end the session at 153.66. Dow Inc. gained 2.04% or 1.04 points to close at 49.96, while Salesforce.com Inc shed 1.66% or 2.59 points to close at 153. .53. Leading gainers among the S&P 500 index components in today's trading were DXC Technology Co, which rose 7.75% to hit 26.70, General Holdings Inc, which gained 5.72% to close at 233.01, and also Moderna Inc, which rose 5.05% to end the session at 138.95. The losers were shares of NVIDIA Corporation, which lost 7.67% to close at 139.37. Shares of Hormel Foods Corporation shed 6.56% to end the session at 46.98. Quotes of Monolithic Power Systems Inc decreased in price by 6.11% to 425.47. Leading gainers among the components of the NASDAQ Composite in today's trading were Hempacco Co Inc, which rose 63.41% to hit 8.35, GigaCloud Technology Inc, which gained 61.43% to close at 23.65, and also shares of Virax Biolabs Group Ltd, which rose 58.69% to end the session at 5.57. American Virtual Cloud Technologies Inc was the biggest loser, shedding 52.17% to close at 0.22. Shares of Newage Inc lost 46.87% and ended the session at 0.12. Quotes of Okta Inc decreased in price by 33.70% to 60.60. On the New York Stock Exchange, the number of securities that fell in price (2231) exceeded the number of those that closed in positive territory (901), while quotes of 101 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,416 companies fell in price, 1,333 rose, and 244 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.20% to 25.56. Gold futures for December delivery lost 1.13%, or 19.55, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 3.54%, or 3.17, to $86.38 a barrel. Brent oil futures for November delivery fell 3.71%, or 3.55, to $92.09 a barrel. Meanwhile, in the Forex market, EUR/USD fell 1.11% to hit 0.99, while USD/JPY edged up 0.89% to hit 140.20. Futures on the USD index rose 0.91% to 109.65.         Relevance up to 04:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291092

Asian markets in limbo ahead of US jobs report while Asian FX feels the heat from USD strength.  Source: shutterstock Macro outlook Global markets: The slow bleed in US equities continues to show signs of clotting, though there was still a small fall from the NASDAQ yesterday even though the S&P500 managed to eke out a slight (0.3%) gain on the day. Futures markets are not signalling any intent ahead of the September payrolls release later today. Shorter dated US treasuries trod water yesterday. The yield on the 2Y note rose only 0.6bp – essentially flat – though 10Y yields kept pushing higher and added 6.1bp to take them to 3.253%. We still think there is a little more upside to come from these over the coming weeks, but let’s see how payrolls pans out first before we start thinking about direction too seriously. The EUR didn’t manage to buck the rest of the G-10 for long, and it has dropped back below parity against the USD to stand at 0.9948 now. That move has given other G-10 currencies another push lower, with the AUD now at 0.6789 after a weak day yesterday. Cable has dropped through another big figure, and is currently trading at 1.1545, virtually back to Covid-lows. And just as we intimated in yesterday’s note, the JPY did indeed breach 140, and is at 140.07 now. What’s going to stop the USD run? Right now, it’s very hard to come up with a convincing-sounding answer to that. Asian FX had a lousy day yesterday. The KRW was the worst-performing currency, pushing back up through 1350. The THB, PHP and SGD all lost around 0.4-0.5% vs the USD on the day. The latest comments from the Fed’s Bostic, that the Fed still has “work to do” to control inflation, add nothing to the fed/inflation/rates picture. Other regional news that may weigh on markets today includes China’s latest battle to keep Covid under control, involving more lockdowns in Shenzen, Chengdu and Dalian, more US restrictions on technology exports to China, and continued tension across the Straits of Taiwan. G-7 Macro: As mentioned, it is US payrolls Friday today. The median forecast on Bloomberg is for employment growth of just under 300,000 with an unchanged (3.5%) unemployment rate and average hourly earnings growth of 5.3%YoY.  Not much else matters today. Korea: Headline inflation slowed to 5.7% YoY in August (vs 6.3% in July) after six months of accelerating. The figure was also lower than the market consensus of 6.1%. The seasonally adjusted monthly growth rate declined by -0.23% for the first time since October 2020, mainly due to fuel-tax cuts and a drop in gasoline prices. We think inflation has now passed its peak.  But fresh food prices are still expected to rise further in September and manufactured food prices are also scheduled to rise after the Choseok holiday. Also, utility fees - city gas and power – will rise again in October, and some local governments are planning to increase service fees too. Consequently, inflation will likely remain above 5% until the end of the year.  The Bank of Korea (BoK) will take some comfort from today’s data but will continue to stay on a hiking path at least until the end of the year. However, the weaker-than-expected inflation print supports our view that the BoK will end its hiking cycle at 3.0% in November. What to look out for: US non-farm payrolls South Korea CPI inflation (2 September) US non-farm payrolls, durable goods orders and factory orders (2 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The S&P 500 is arguably the most popular index in the stock market, with its value reflecting the share price of the 500 largest companies listed in the US. At the same time, the US enjoys the largest equity market capitalisation, standing at a whopping $53.4 trillion at the end of 2021 and accounting for more than half of all equity markets worldwide. Exchange-traded funds (ETFs) are a popular way to invest in the S&P 500. They reflect the behaviour of the underlying asset, in this case, the mentioned index. One of the most popular is the SPDR S&P 500 ETF Trust (SPY).  Doing so ended the so-called bear market rally that started in June. The first popular indicators that pointed to the end of the rally were the RSI and the MACD. The SPY price fell shortly after the RSI signal line entered the overvaluation zone and the first downward bar of the MACD histogram was drawn. Two days ago, the MACD histogram entered the negative zone. The SPY price is below the 10, 20, 50 and 100-day moving averages. What could be influencing the S&P 500's declines? According to Current Market Valuation, the P/E ratio (share price/earnings per share) of the S&P 500, recently hit its lowest level in more than 2 years. The P/E is considered a relatively good measure of valuation and is around 20 for the index, 25% higher than the historical average of 16. Its above-average level, together with worrying data from the economy, may indicate a possible continuation of their downtrend, but it is worth noting that the market seemed to ben generally 'overpriced' for several decades.  This may be due to the increasing share of technology companies in the capitalisation of the S&P 500, whose valuations are largely based on future growth. In addition, the huge capital stock in the US relative to GDP may be driving demand for equities, and thus we may have higher equity valuations.  According to the report “Stock Market Briefing: Selected P/E Ratios" by Yardeni Research (which aggregates average recommendations from Wall Street analysts), the target forecast P/E for the S&P 500 in 52 weeks (1 year) is around 16.7. Other companies report a similar forecast P/E. This may indicate the market's belief that declines  might continue in the coming months.  Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: The S&P 500 has the lowest P/E in more than two years (conotoxia.com)

The US dollar bounced lower, yesterday, following the weak economic data in the US, which showed that the new home slowed, and business contracted. The ugly PMI data also hammered the mood among the European stock traders, as well. The DAX already gave back half of summer gains. But, situation in the British FTSE 100 is different, as the FTSE 100 has a solid exposure to energy and mining stocks, and having exposure to energy stocks is still one of the most interesting hedging options. Crude Oil Price Speaking of oil, oil stocks were boosted again yesterday, by firmer oil prices after crude rebounded past the $93 level on news that OPEC could cut production as they feel that the prices fell too much over the past two months. Also, the latest API data came to support the oil and oil stock bulls, as the latest figures suggested another bigger-than-expected decline in the US oil inventories. We can now say that there are signs of a positive momentum building among the oil bulls despite the recession woes. The rebound in oil prices, along with the surge in nat gas futures could have two effects depending on the market’s actual mood. In one hand, the higher energy prices dampen the economic activity, and therefore could revive the Fed doves. But on the other hand, the rebound in energy prices boost inflation and inflation expectations, and therefore could keep the Fed hawks alert. Which scenario is more likely to influence the market pricing?   Watch the full episode to find out more! 0:00 Intro 0:34 Stocks under pressure as weak data couldn’t revive Fed hawks 1:38 DAX gave back half of summer gains on deepening energy crisis 3:22 But FTSE remains a good hedge against soaring energy 5:20 What does rebound in oil means for market pricing? 6:17 Hedge funds increase bets against S&P500 companies 7:44 Tesla’s 3-for-1 stock split is about to happen! 8:15 Twitter down 7% on whistle-blower complaint 8.57 What we will be watching today? 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. #market #selloff #Fed #JacksonHole #USD #EUR #DAX #FTSE #enegry #crisis #inflation #USD #EUR #crude #oil #natgas #energy #stocks #XOM #Chevron #BP #Tesla #stocksplit #Twitter #ElonMusk #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:  U.S. equities took a pause from their week-long advance, with S&P 500 retreating before its 200-day moving average. Target’s Q2 results disappointed as the retailer suffered from high inventories and U.S. consumers shifted from discretionary to grocery items. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S.’s advance higher took a pause yesterday amid higher bond yields and disappointing results from Target (TGT:xnys), -2.7%. Target’s Q2 earnings fell sharply and missed consensus expectations on weaker gross margins due to slower sales in discretionary items and inventory impairments.  Lowe’s (LOW:xnys) reported mixed results, with earnings beating estimates but same-store sales growth weaker than expected. Higher U.S. bond yields triggered by a dramatic rise in U.K. bond yields and reported pension fund rebalancing-related selling added to the equity weakness.  S&P 500 dropped 0.7% and Nasdaq 100 shed 1.2%.  U.S. treasury yields rose from spilling over from a massive rise in U.K. Gilt yields and weak 20-year bond auction U.S. 10-year treasury yields jumped 9bps to 3.05%, taking cues from the sharp move higher in U.K. Gilts and European sovereign bond yields following white-hot UK CPI data. Long-end yields moved further higher on poor results from the 20-year auction.  Short-end yields fell in the late afternoon after the July FOMC minutes signaling that it “would become appropriate at some point to slow the pace of policy rate increases” which reaffirmed the market’s expectation of a 50bps, instead of 75bps on the September FOMC.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Seng Index bounced modestly by 0.5%; CSI399 gained 9.6%. Meituan (03690:xhkg) rallied 3.3% after a 9% drop yesterday due to a Reuters story suggesting that Tencent (00700:xhkg) plans to divest its 17% stake (USD24 billion) in Meituan. Tencent denied such a divesture plan last night.  Power tools and floor care equipment maker and a supplier to Home Depot (HD:xnys) and Wal Mart (WMT:xnys), Techtronic Industries (00669:xhkg) jumped more than 10% after better-than-expected results from the two U.S. retailers. China Resources Power (00836:xhkg) +5.7% after reporting weak 1H22 results but more wind and solar projects on the pipeline. Other Chinese power producers also outperformed amid power shortages. China Power (02380:xhkg) surged more than 8%. On Tuesday, China’s Premier Li Keqiang visited Shenzhen and held a meeting with provincial chiefs from Jiangsu, Zhejiang, Shandong, Henan, and Sichuan to reiterate the central government’s push for full use of policies to stabilize the economy. Hong Kong Exchanges (00388:xhkg) fell 1.6% after reporting lower revenues, higher costs, and a 22% YoY decline in EPS, worse than market expectations. After the market close, Tencent reported weak but in line with expectations revenues and better-than-feared earnings in Q2. Tencent’s ADR climbed 3.5% overnight from the Hong Kong close. AUDUSD eying the labor market report, GBP will see more pain ahead A mixed session again overnight for the US dollar with FOMC minutes and US retail sales failing to provide any fresh impetus to the markets. AUDUSD was the biggest loser on the G10 board, sliding below 0.7000 to lows of 0.6911 after real wage data for Q2 showed a massive slump. Labor market data due this morning could further weigh on RBA expectations, if it comes out softer than expected. The weakness seen in the commodity markets, especially iron ore and copper, weighed on the antipodeans. GBPUSD stays above 1.2000 despite a 40bps gains in UK 2-year yields after the double-digit UK CPI print. USDJPY tested the resistance at 135.50 but was rejected for now. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a slight recovery overnight, with WTI futures getting back to over $87/barrel and Brent futures close to $94 after data showed US inventories fell sharply. Sentiment was also supported by comments from OPEC’s new Secretary-General, Haitham Al Ghais, who said that world oil demand will rise by almost 3mb/d this year. He also said there is a high chance of a supply squeeze this year, in part because fears of slowing usage in China are exaggerated. This helped to take the focus off the prospects of the Iran nuclear deal for now. What to consider? Stale FOMC minutes hint at sustained restrictive policy Fed’s meeting minutes from the July meeting were released last night, and officials agreed to move to restrictive policy, with some noting that restrictive rates will have to be maintained for some time to bring inflation back to the 2% target. Still, there was also talk of slowing the pace of rate hikes ‘at some point’, despite pushing back against easing expectations for next year. The minutes were broadly in-line with the market’s thinking, and lacked fresh impetus needed to bring up the pricing of Fed’s rate hikes. Chairman Powell’s speech at the Jackson Hole Symposium next week will be keenly watched for further inputs. US retail sales were a mixed bag July US retail sales are a little softer at the headline level than the market expected (0% growth versus the +0.1% consensus) but the ex-auto came in stronger at 0.4% (vs. -0.1% expected). June’s growth was revised down to 0.8% from 1%. The mixed data confirmed that the US consumers are feeling the pinch from higher prices, but have remained resilient so far and that could give the Fed more room to continue with its aggressive rate hikes. Lower pump prices and further improvements in supply chain could further lift up retail spending in August. UK CPI opens the door for another 50bps rate hike UK headline inflation hits 10.1%, the highest in decades and above the 9.8% expected and for the month-on-month reading of +0.6%, higher than the +0.4% expected. Core inflation hit 6.2% vs. 5.9% expected and 5.8% in Jun. That matched the cycle high from back in April. Retail inflation rose +0.9% MoM and +12.3% YoY vs. +0.6%/+12.0% expected, respectively. The Bank of England has forecast that inflation will peak out this fall at above 13%. While the central bank forecasted a recession lasting for five quarters at the last meeting, it will be hard for them to not press ahead with further tightening at the August meeting, and in fact the scope for another 50bps rate hike is getting bigger. Reserve Bank of New Zealand hikes 50 basis points to 3.00%, forecasts 4% policy rate peak The RBNZ both increased and brought forward its peak rate forecast to 4.00%, a move that was actually interpreted rather neutrally – more hawkish for now, but suggesting that the RBNZ would like to pause after achieving 4.00%. RBNZ Governor warned in a press conference that New Zealand home prices will continue to fall. This is actually a desired outcome after a huge spike in housing speculation and prices due to low rates from the pandemic response and massive pressure from a Labor-led government that had promised lower housing costs were behind the RBNZ’s quick pivot and more aggressive hiking cycle in 2021. Australian wages grew at their quickest pace in eight years, but less than expected Australia’s wage-price index gained 0.7% in the second quarter, just shy of estimates further pressuring the Aussie dollar back toward its 50-day moving average against the US dollar. Annual wage growth came in at 2.6% but real wages - adjusted for headline inflation fell 1% QoQ, and was 3.3% lower than a year earlier, eroding consumer spending power. What’s next. All eyes will be on Australia’s Reserve Bank which might be pressured to hike more than expected at its September meeting. Despite Australian wages growing slower than expected, the RBA estimates retail gas and electric prices to rise 10-15% in the second half of the year, so that will be a focus point when they consider their next move in interest rates. Tencent reported weak but in-line Q2 revenues and better-than-feared earnings Tencent reported a revenue decline of 3% YoY in Q2, weak but in line with market expectations.  Non-GAAP operating profit was down 14% YoY to RMB 36.7 billion and EPS fell 17% YoY to RMB2.90 but they beat analyst estimates.  Revenues from advertising, -18% YoY, were better than expected.  In the game segment, weaker mobile game revenues were offset by stronger PC game revenues. Disappointing results from Target and mixed results from Lowe’s Target reported EPS of USD0.39, missing estimates.  The company indicated strength in food and beverage, beauty, and household essentials but weaker in discretionary categories.  Gross margin of 21.5%, down from 30.4% year-ago quarter and below expectations. Lowe’s reported better than expected EPS of USD4.67 (vs consensus USD4.58) but a decline of 0.3% in same-store sales.  Lowe’s inventories grew 11.6% YoY, substantially lower than peer Home Depot.  With a 15% increase in product costs, the inventory volume was in effect down low-single digit. Power crunch in China shut factories Chongqing is limiting power supply to industrial users from yesterday to next Wednesday.  In Sichuan, Foxconn’s Chengdu factory is suspending operations for six days from August 15 to 20 due to a regional power shortage. The suspension is affecting Foxconn’s supply of iPad to Apple.  The company says the impact “has been limited at the moment” but it may affect shipments if the power outage persists.  The Chengdu government is imposing power curbs on industrial users to ensure electricity supply for the city’s residents.  Toyota and CATL are also suspending some operations in Sichuan due to a power shortage. Foxconn has started test production of the Apple watch in Vietnam Foxconn has started test production of the Apple watch in its factories in Vietnam. With the passage of CHIPS and Science Act earlier this month in the U.S., investors are monitoring closely if Taiwanese and Korean chipmakers as well as their customers may be accelerating the building up of production capacity away from China.  World’s biggest Sovereign Wealth fund posts its biggest half-year loss on record   Norway’s oil fund, the world’s biggest owner of public traded companies lost 14.4% in the six months through to June. In currency terms that’s $174 billion. The slump was driven by the fund’s loss in technology stocks with Meta Platforms (owning Facebook and Instagram) and Amazon, leading the decline. However, just like the market, the fund’s energy sector delivered positive share price performance, benefiting from a sharp rise in earnings in the oil, gas, and refined energy product sector. Meanwhile, investments in logistics property helped the fund’s unlisted real estate holdings gain 7.1%, though they account for 3% of its assets. Japan’s inflation will surge further Japan’s nationwide CPI for July is due to be reported at the end of the week. July producer prices came in slightly above expectations at 8.6% y/y (vs. estimates of 8.4% y/y) while the m/m figure was as expected at 0.4%. The continued surge reflects that Japanese businesses are waddling high input price pressures, and these are likely to get passed on to the consumers, suggesting further increases in CPI remain likely. More government relief measures are likely to be announced, while any little hope for a Bank of Japan pivot is fading. Bloomberg consensus estimates are calling for Japan’s CPI to accelerate to 2.6% y/y from 2.4% previously, with the ex-fresh food number seen at 2.4% y/y vs. 2.2% earlier. For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 18, 2022

Surging bond yields won't help risk sentiment Source: shutterstock Macro outlook Global: US equities returned from their holiday yesterday, but the mood remained gloomy, with the S&P500 dropping 0.41% and the NASDAQ falling 0.74%. The session wasn’t particularly brutal. Both indices just fell at the open and stayed low. Equity futures remain in the red today, so the slow bleed in equities looks like it will continue today. However, given the sharp pick up in 2Y US Treasury yields (+11.6bp), it is a bit surprising that equities didn’t fall even more. 10Y yields also added 16bp, taking them to 3.349%. There is probably still some more upside here, but after these moves, we may see a bit of consolidation. Bond futures aren’t suggesting much direction currently. The EUR continues to lose ground to the USD, and EURUSD is now 0.9894. The AUD also took no comfort from yesterday’s 50bp rate hike from the Reserve Bank of Australia and has slid to 0.6729. At 1.1508, Cable is also well down and we are probably looking at a 1.14 handle before long. The JPY has also continued its ascent, rising to 143.24. It’s not clear what or how this dollar rampage will be ended. The USD is looking a bit overbought right now, so like bonds, we may see a pause in the carnage before too long. The CNY led the other Asia Pacific currencies in retreat yesterday, moving to 6.9545. G-7 Macro: European labour market and revised 2Q22 GDP figures are on today’s calendar, together with German July industrial production (-0.6%MoM fall expected). These are followed later by the US Trade numbers for July which are expected to show the trade deficit narrowing to USD70.2bn. Markets may withhold some of their firepower for tomorrow's ECB meeting.  Australia: At 0930 SGT, Australia releases its 2Q22 GDP numbers. We are looking for a slightly stronger than consensus 1.0%QoQ figure (consensus is 0.9%QoQ). Yesterday’s net export contribution and last week’s capex figures both indicate some upside to the consensus forecast. The GDP numbers won’t directly affect the RBA’s rate-setting thinking, but they will highlight the scale of the job that needs to be done to get inflation back down to target. China: China will release trade data today. We expect export growth to exceed import growth, leading to a trade balance of nearly USD100bn in August. Our expectation of almost no growth in imports reflects the weakness of the domestic economy, though the big trade balance could help support GDP growth slightly. Taiwan: Taiwan will also release trade data today. We should see a similar picture to that in Mainland China with exports growing faster than imports. The key detail to watch is semiconductor-related exports and imports. This is especially important for imports, which will provide a hint about the growth prospects of semiconductor exports that are so important for Taiwan’s economy. Korea: The current account balance recorded a surplus of USD 1.1bn in July but the goods trade account turned to a deficit of USD -1.2 bn, the first time it has done so since April 2012. This is mostly due to higher energy prices, but also, export growth slowed due to weak IT demand and weak exports to China.  In the financial account, domestic stock equity investments by foreigners declined for the sixth straight month, while bond investment continued its increase from January 2020. Japan: USDJPY slid to 143 for the first time since 1998. Rate differential widening is the main reason for this depreciation. The recent better-than-expected US data probably also pushed the yen weaker. USDJPY may show some correction this morning, but the trend direction is not likely to change any time soon. We expect there will be more verbal intervention but this is unlikely to be effective at this point. Japan’s last intervention to curb depreciation was in 1998 during the Asian financial crisis. Despite the yen’s rapid depreciation, we still don’t believe it will trigger a policy shift by the Bank of Japan. What to look out for: China trade data and ECB meeting Australia GDP (7 September) China trade (7 September) Taiwan trade (7 September) US trade balance (7 September) Japan GDP (8 September) Australia trade balance (8 September) ECB policy meeting (8 September) US initial jobless claims (8 September) Philippines trade (9 September) China CPI inflation (9 September) US wholesale trade (9 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

    Red lines- bearish channel Strong positive day for bulls yesterday in SPX. The index gained 1.83% to close around 3,980. Price has not broken any major resistance levels and remains inside the short-term bearish channel it has created. The RSI has provided a bullish divergence which warned short-term traders of a possible bounce. This bounce came yesterday and price is now challenging the upper channel boundary. Is the decline from 4,324 complete? As long as price is below 4,020 we remain short-term bearish looking to see new lower lows. Relevance up to 10:00 2022-09-09 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/291959

Summary:  Going back to 1987 individual investors have only been this bearish in less than 2% of the time. Extreme pessimism is often a good starting point for being contrarian and betting on a rebound. In today's equity note we test whether history has shown that it is a good idea to bet on being long equities when bearishness is dominating market sentiment among individual investors. Extreme pessimism is often fuel for a good rebound The American Association of Individual Investors (AAII) asks their members every about their sentiment using the question ”I fell that the direction of the stock market over the next 6 months will be”. From these answers AAII compute the percentage of their members that answered this question in terms of bullish, neutral, or bearish. The spread between the percentages being bullish vs bearish declined today to -35.2% which is an extremely negative reading only observed in less than 2% of the time. The question is whether this statistics have any information value for traders and investors. While the question is examining expectation over a 6-month horizon, it is more interesting to observe whether it has any predictive power over a shorter time horizon. First we identify all the weeks when the bull-bear spread has been lower than -30, which is 37 times since 1987. Three of these observations have been within the last 12 weeks. In our analysis we then calculate the forward 1, 4, 8, and 12-week return going long the S&P 500 Index if the spread is below -30. The table below shows the excess return over S&P 500 on such a strategy which is done by subtracting the average S&P 500 return since 1987 for these different time horizons. If a signal has any informational value then it should be able to beat the passive returns by just being invested in US equities. The average excess return in percentage is -0.11% for the 1-week holding period but then jumps to 1.33% for the 4-week horizon and 1.29% and 1.49% for the 8-week and 12-week holding period respectively. This looks good at first sight, but the average always comes with variance and if we apply a standard t-test on the samples of each holding period scenario then we see that the probability of these different samples being statistically significant from zero excess return is not very high. The best test statistic is for the 4-week holding period at t = 1.28 which correspond to a p-value of 0.21, which is not statistically significant under normal circumstances. In a low signal-to-noise process such as the equity market the question is whether the odds are good enough to bet on. The confidence interval is -0.79% to 3.46% after all, so we let each trader decide for himself whether the odds are stacked in favour of a rebound. One should note that many of the most bearish readings are clustered in time which means that the 34 observations that we are calculating our statistics on are not truly independent and thus the statistical significance is weaker than the numbers displayed below suggest. Outside the world of statistics, yesterday’s price action felt technical across both bond and equities as there was no real news driving the move. It seems the market might be positioning itself differently ahead of the important US CPI print on Tuesday where a lower than estimated inflation figure could ignite a short-term rally equities. These considerations are worth melting into the decision process of whether this is a good time to go long again.     Source: Do the odds favour a rebound in equities | Saxo Group (home.saxo)

  At the close of the New York Stock Exchange, the Dow Jones rose 0.61%, the S&P 500 rose 0.66% and the NASDAQ Composite rose 0.60%. Salesforce.com Inc was the leading gainer among the components of the Dow Jones index today, up 3.62 points or 2.36% to close at 156.90. JPMorgan Chase & Co rose 2.70 points or 2.33% to close at 118.60. Goldman Sachs Group Inc rose 4.82 points or 1.46% to close at 335.38. The losers were 3M Company shares, which lost 1.28 points or 1.06% to end the session at 119.27. Apple Inc was up 1.51 points (0.97%) to close at 154.45, while Honeywell International Inc was down 1.27 points (0.67%) to close at 187. 82. Leading gainers among the S&P 500 index components in today's trading were Regeneron Pharmaceuticals Inc, which rose 18.85% to 708.85, Freeport-McMoran Copper & Gold Inc, which gained 7.89% to close at 30 .62, as well as shares of Invesco Plc, which rose 4.77% to close the session at 17.36. The biggest losers were McCormick & Company Incorporated, which shed 6.71% to close at 79.30. Shares of Kraft Heinz Co lost 3.38% to end the session at 36.06. Quotes Campbell Soup Company fell in price by 2.98% to 47.84. Leading gainers among the components of the NASDAQ Composite in today's trading were ShiftPixy Inc, which rose 176.54% to 31.00, Amylyx Pharmaceuticals Inc, which gained 51.01% to close at 27.03, and shares of Rubius Therapeutics Inc, which rose 48.58% to close the session at 1.29. The drop leaders were Troika Media Group Inc, which shed 26.83% to close at 0.48. Shares of Ensysce Biosciences Inc shed 17.71% to end the session at 0.33. Quotes of Biophytis fell in price by 17.67% to 0.91. On the New York Stock Exchange, the number of securities that rose in price (1,743) exceeded the number of those that closed in the red (1,342), and quotes of 154 shares remained virtually unchanged. On the NASDAQ stock exchange, 2274 companies rose in price, 1485 fell, and 268 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.18% to 23.61. Gold Futures for December delivery lost 0.47%, or 8.20, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 0.99%, or 0.81, to $82.75 a barrel. Brent oil futures for November delivery rose 0.59%, or 0.52, to $88.52 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged, 0.01% to 1.00, while USD/JPY was up 0.25% to hit 144.05. Futures on the USD index fell 0.17% to 109.65. Relevance up to 05:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292080

This week suddenly ends on a positive note as the S&P 500 broad market index, which started to climb on Wednesday, has lead the major stock market indicator to 4032 points, the highest since August 30. This is very strange considering all the negative news that could have affected the stock market this week. The European Central Bank (ECB) raised all interest rates by 75 basis points. This is the second time in the history of the single currency that such a move has been performed. The Federal Reserve’s (Fed) Chairman Jerome Powell confirmed the central bank will continue to do everything needed to bring inflation down to the 2.0% target. This kind of rhetoric is also being echoes by ECB President Christine Lagarde who has assured markets that the Bank is likely to take further bold steps to raise interest rates over the coming months. The message from these two bank leaders may enforce stocks to continue to move down.  However, investors found a reason to pull on the breaks and stop markets from another sell-off. Chicago Fed Bank President Charles Evans supported investors by saying that the next inflation report next week may point to how much the Fed could raise its interest rates this month. "If I saw inflation maybe cooling a little bit that's not going to change the fact that I still think we are going to need to top out at something like 3.5% to 4%, it's just that maybe we don't have to do it that soon," Evans said. Some investors were flooded with euphoria after crude prices fell by 16% over the last two month. It is clear that inflation may slow down significantly in August and perhaps prompt a less-than-expected Fed interest rate move.  It sounds more like wishful thinking as inflation is considerably above the existing level of interest rates for the Fed to pull the breaks on, even if prices slowed down in August. However, many investors are seen to support the idea and hope for stocks to recover. Even though some investors are holding onto hope, we should not exclude the possibility that a downside path of stock indexes could be a bit bumpy. The technical picture for the S&P 500 index is still negative as it is moving within an aggressive downside formation after it failed to climb above 4020 points on Thursday. This has now become a strong resistance level that may send the index back to the downside targets at 3850-3950 points. More negative drivers may send the index further down to the extreme secondary targets at 3600-3700 points, and even further down to heartbreaking 3000-3100 points.  In recent weeks, short positions at 70% of the targeted volume were opened at the average price of 4285-4290 points. The rest of the 30% could be opened once strong reliable downside signals emerge. The final downside target in the long-term is located at 2100-2300 points that could be reached by the end of 2022. The oil market made a huge step to the downside towards $75-85 per barrel of the Brent crude benchmark. Crude prices dipped down amid new anti-covid measures in China, unwinding global recession fears and a sharp rise of oil inventories in the United States. Brent prices slipped down to $87-88 per barrel, the lowest since January 2022, and are likely to continue down to the extreme targets at $50-65 per barrel that could be hit by November. In the short-term crude prices are less predictable making any entry points unreliable at the moment.  Gold prices are on a downside slide and they may last until the end of October. The primary scenario suggests prices may reach $1350-1450 per ounce by November. So, it would be reasonable to open short or small-short positions considering the current price movement at $1730 per ounce. The Euro was cheered on by the ECB’s decision to sharpen its interest rates hike, changing its formation to the aggressive upside with a primary target at 1.02500-1.03500. A reasonable correction to 1.00500-1.00800 is needed to open long positions. Once this correction is made the EURUSD could be interesting for long trades. GBPUSD also changed its formation to the aggressive upside with a target at 1.18000-1.18500. The pair needs to step back to 1.15300-1.15800 to be interesting to open long positions.

At the close in the New York Stock Exchange, the Dow Jones rose 0.71%, the S&P 500 index rose 1.06%, the NASDAQ Composite index rose 1.27%. The leading performer among the components of the Dow Jones index today was Apple Inc, which gained 6.06 points or 3.85% to close at 163.43. Quotes of American Express Company rose by 4.01 points (2.53%), closing the session at 162.45. Salesforce Inc rose 3.04 points or 1.87% to close at 165.63. The biggest losers were Amgen Inc, which shed 10.07 points or 4.07% to end the session at 237.62. Home Depot Inc was up 2.23 points (0.74%) to close at 297.54, while Johnson & Johnson was down 0.07 points (0.04%) to end at 165. .64. Leading gainers among the S&P 500 index components in today's trading were DXC Technology Co, which rose 5.98% to hit 28.36, APA Corporation, which gained 5.01% to close at 40.00, and shares of Fortinet Inc, which rose 4.20% to end the session at 55.84. The biggest losers were The Mosaic Company, which shed 6.76% to close at 52.44. Shares of Amgen Inc lost 4.07% to end the session at 237.62. Quotes of CF Industries Holdings Inc decreased in price by 4.05% to 99.48. Leading gainers among the components of the NASDAQ Composite in today's trading were Neurobo Pharmaceuticals Inc, which rose 101.30% to hit 0.56, InMed Pharmaceuticals Inc, which gained 70.42% to close at 18.78, and also shares of Ventyx Biosciences Inc, which rose 64.98% to end the session at 38.11. The biggest losers were Tuesday Morning Corp, which shed 31.19% to close at 0.19. Shares of WeTrade Group Inc lost 30.19% and ended the session at 1.11. Akari Therapeutics PLC was down 27.88% to 0.75. On the New York Stock Exchange, the number of securities that rose in price (2,360) exceeded the number of those that closed in the red (764), while quotes of 160 shares remained virtually unchanged. On the NASDAQ stock exchange, 2431 companies rose in price, 1384 fell, and 259 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 4.74% to 23.87. Gold futures for December delivery added 0.43%, or 7.45, to $1.00 a troy ounce. In other commodities, WTI crude for October delivery rose 1.36%, or 1.18, to $87.97 a barrel. Brent oil futures for November delivery rose 1.44%, or 1.34, to $94.18 a barrel. Meanwhile, on the Forex market, EUR/USD rose 0.81% to hit 1.01, while USD/JPY edged up 0.21% to hit 142.82. Futures on the USD index fell 0.60% to 108.08.       Relevance up to 05:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292447

Summary:  Equity sentiment remained upbeat and the US dollar weakened further despite a surge higher in US Treasury yields. Globally sustained inflation pressures, such as those in Japan’s producer prices and New Zealand’s food prices, continues to raise concerns. US inflation print for August takes all the attention today with impact likely to reverberate through markets but unlikely to change the Fed’s upcoming rate hike at the September meeting. Precious metals tested key resistance levels and crude oil prices made a recovery as well. The lack of consensus on EU energy proposals may spark some concerns. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) extend their bear market bounce U.S. equities extended the bear market bounce for the fourth day amid a relatively uneventful and light volume day. The S&P 500 rose 1.1%, Nasdaq 100 up 1.2%. It comes despite bond yields rising, with the 30-year yield hitting a new high of 3.53%. Meanwhile the volatility index, the VIX rose for the first time in four days to 23.9, suggesting uncertainty could be brewing. Noteworthy moves in US stocks   Apple (AAPL:xnas) contributed to the days move, accounting for more than 60 points of the 151 points in Nasdaq 100, after the stock surged 3.9% on strong pre-order data of the new iPhone 14. A larger number of call options were traded on Apple shares on Monday. Twitter (TWTR:xnys) lost 1.7% after it sent a letter to Elon Musk and said the company intends to enforce Musk’s agreement to buy the company. Oracle (ORCL:xnys) reported sales growth of 18% to $11.4 billion, with higher contributions from cloud computing and the newly acquired Cerner, a health records provider. Adjusted EPS came in at $1.03, below the analyst consensus of $1.06 as per the Bloomberg survey. Oracle shares gained 1.3% in after-hours trading. Gilead Sciences (GILD:xnas) surged 4.2% following the settlement of an HIV drug intellectual property dispute. Bristol-Myers Squibb (BMY:xnys) gained 3.2% as regulators approved the company’s psoriasis drug.  US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The treasury yield curve bear steepened on Monday, with the 30-year yield finishing the day at 3.51%, a new high just a little above the previous high print in June. The long-end, yields of the 10-years through 30-years jumped 5 to 6 bps after the poor 3-year notes and 10-year notes auctions, in particular the latter. The 10-year auction stopped at a yield of 3.33%, which was 2.7 bps higher than the notes were trading at 1:00 pm New York time when the results were announced. The 10-year notes weakened to finish the day at 3.36%. In addition to the USD41 billion 3-year and USD32 billion 10-year auctions, eight corporate new issues with a total size of about USD12 billion came to the market yesterday. The decline in the inflation expectations print in the New York Fed’s survey of consumer expectations did not move the treasury markets which had the day’s focus on supply. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong and China markets were closed on Monday for a public holiday.  Overnight in U.S. trading, the Nasdaq Golden Dragon China Index bounced by 2.8%.  Chinese EV maker, NIO (NIO:xnys) soared 13.7% following Deutsche Bank and BoA Merrill Lynch analysts reiterating “buy” rating as well as reiterating and raising price targets respectively.  EURUSD recovery extended, but risks ahead EURUSD tested highs of 1.02 on Monday amid some optimism on Ukraine’s military advances and Bundesbank President Joachim Nagel signaling support for further interest-rate hikes in Europe. Gains however cooled later with ECB's Scicluna suggesting the central bank will continue with rate hikes but they are unlikely to be as large as the 75bps hike seen last week. Meanwhile, EUR/GBP printed a fresh YTD high of 0.8722 before unwinding the gains later. Pressure could build on EUR as the EU energy proposals will likely face some opposition, and US CPI data today will also be on watch. Russia may also increase the energy pressure on Europe if Ukraine’s advances stick. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw some recovery on Monday amid a softer USD as well as weaker US inflation expectations from the NY Fed offset some of the weaker dollar concerns. Iran nuclear deal also seems to be making little progress, delaying any possible relief on the supply side. WTI futures rose to $88/barrel while the Brent futures were up at $94/barrel. US CPI data due later today is key to further gauge the path of Fed’s rate hikes from here, and the EU energy proposals will also be a key catalyst. Gold (XAUUSD) and Silver (XAGUSD) Gold rose on Monday as the dollar extended its retreat from a record high ahead of US inflation data due later today, which could potentially slow down the pace of Fed’s rate hikes if the headline print is softer than expected. Gold tested $1734, the 21-day SMA and 38.2% retracement of the August slump, but was rejected and back below $1730 in early Asian trading. Silver also rallied sharply to touch the $20-mark supported by a weaker dollar, higher gold prices and signs of tightness supporting the copper market. Last Tuesday speculators held the largest short position in three years and the continued rally is now forcing broad short covering.   What to consider? US CPI print will point to higher and stickier price pressures With the labor market remaining strong in the U.S. over the last few months, the focus has remained on the inflation data to predict the path of the Fed’s rate hikes. Clearly, all of the Fed’s members have had a unified hawkish stance since the Jackson Hole conference, and many have clearly hinted at a 75bps rate hike for September. Tuesday’s US CPI report is the one to watch, as it can move the market pricing of the Fed’s rate path and is the last key data point scheduled to release ahead of the September 21 Fed meeting. After some softening in July, it can be expected that the headline print may ease further in August as well given the decline in gasoline prices. Still, the inflation print is likely to stay elevated due to the stickier shelter and services costs, as well as still-high energy and food prices. Consensus estimates point to a mild decline of 0.1% MoM while the core remains strong at 0.3% MoM. EU proposes mandatory cuts to power use and profit levies It is expected that the EU draft energy plan will include mandatory power demand cut, an “exception and temporary” levy on oil, gas, coal and refining companies, as well as revenue caps for non-gas fuelled power generators. There is likely to be opposition from some of the member states, as the plan is detailed out tomorrow. Here is another sign inflation is not peaking; New Zealand food inflation hits a 13-year high New Zealand food prices rose 8.3% over the year to August 2022, which is the biggest annual increase since July 2009, according to data from Statistics New Zealand. The surge was mainly driven by a 8.7% increase in grocery food prices compared to a year ago, after fruit and vegetable prices rose 15%. Prices for staples like, eggs, yogurt, and cheddar cheese saw the largest moves in grocery prices. Companies to look at that sell food and dairy products to supermarkets include Costa Group (CGC), as well as A2 Milk (A2M) and Bega Cheese (BGA) and Synlait Milk (SM1). The New Zealand dollar rose to a two-week high against the USD, on expectation the Reserve Bank of New Zealand (RBNZ) will need to keep hiking rates. Japan producer prices remain above expectations Japan’s August PPI was up 9.0% y/y (vs. 8.9% y/y expected) while last month’s was also revised higher to 9.0% y/y from 8.6% y/y previously. The m/m print was slightly softer at 0.2% vs. 0.4% expected, but continued to show rising cost pressures amid the surge in commodity prices and a weaker yen. This suggests more CPI pain is in the pipeline, and the resolve of Bank of Japan to maintain accommodative policy will continue to be tested. New York Fed 1-year consumer inflation expectations at 10-month lows The latest NY Fed consumer inflation expectation gauges declined sharply, suggesting easing price pressures. Expectations for US inflation three-years ahead fell to two-year lows to come in at 2.8% in August, while the one-year ahead gauge was at 5.7%, a 10-month low. Meanwhile, inflation expectations on a five-year horizon fell to 2% from 2.3% previously, suggesting that inflation expectations remain anchored. Gloomy economic outlook for the United Kingdom According to the Office of National Statistics, UK GDP grew only 0.2% month-over-month in July. This is less than expected (0.4 % month-over-month). The weakness is mostly centered on the industry and the construction sector. This is worrying. There is no big bank holiday effect. However, there is anecdotal evidence of a reduction in demand for power because of cost, but it was also a hot month. In addition, the UK July industrial production fell 0.3% month-over-month versus expected +0.3%. Expect negative print in the eurozone for the same period too. California’s electricity infrastructure is under severe tension According to data released over the weekend by California Independent System Operator, demand on California’s power grid hit an all-time high on 6 September above 50,000 MW. The last two times it was close to this threshold was in 2007 and in 2017. The situation is getting worse and worse. Oracle reported sales in line with expectations but missed EPS estimates Oracle (ORCL:xnys) reported sales growth of 18% to $11.4 billion, in line with expectations. The sales growth was largely attributable to contributions from cloud computing and the newly acquired Cerner, a health records provider. Adjusted income came in at USD1.68 billion, a 33% drop from last year quarter and missing analyst estimates.  Adjusted EPS was $1.03, below the analyst consensus of $1.06 as per the Bloomberg survey. The earnings miss was partly due to FX losses which were results of a stronger dollar. Banking job cuts? Goldman Sachs is getting ready for jobs cuts. Who’s next? Goldman to report a 40% drop in earnings, which will foreshadow job cuts. However, there could be a lot of stake; in July Goldman said it planned to slow hiring and reinstate performance reviews. There is a huge question looming about how banks will get work with global deal volumes having dropped by about $1 trillion from a year ago. Investment banks are reliant on equity capital markets and IPOs and our sense is that more job cuts could be coming with inflation set to continue to rise, and push up the yield curve, and official interest rates into next year. For investors the takeaway here is that while markets remain uncertainty and rates are rising, investment banks will likely continue to face pressure. Banking ETFs, such as Vanguard Financials ETF (VFH) and Financial Select Sector SPDR ETF (XLF) are both down about 13% from their October 2021 peaks. Although they are both rallying amid the bear market bounce lately, we think the sector is likely to pair back again once stronger US data comes out and Fed suggests more rate hikes are coming.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-13-sept-2022-13092022

Summary:  The equity market rally extended further yesterday, in part on hopes that Ukrainian battleground successes bring the chance of the war ending sooner rather than later and as natural gas prices in Europe trade at their lowest in more than a month. Today’s August US CPI release will be the critical event risk for whether the improvement in sentiment can extend. A hot core CPI number could yet spoil the party, while another soft number like July’s could boost the “peak Fed” narrative for a while and see the rally extend if treasury yields also drop in response.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities extended their gains yesterday with S&P 500 futures rallying another 1.5% closing at 4,130. This morning the index futures are continuing higher as the market is clearly positioning itself for a positive US August inflation figure later today which could see S&P 500 futures extend to 4,200. It is worth keeping in mind that the medium-term outlook has not changed much on inflation and a significant slowdown in the US releasing its oil reserves could quickly add renewed pressure on energy prices. But the key event to watch today is the US August CPI report out at 12:30 GMT. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong, Shanghai, and Shenzhen returned from a long weekend and traded moderately higher, Hang Seng Index +0.4%, CSI 300 +0.7%. HSBC (00005:xhkg) climbed 1.8% after its CFO said the bank was considering resuming share buybacks in the second half of next year and raising staff pay in 2023. Alibaba (09988:xhkg) gained 2.4%. NIO (09866:xhkg) jumped 17.2% following analysts reiterating “buy” on the EV maker.  Chinese biotech stocks traded in Hong Kong fell after US President Biden signed an executive order to develop a strategy to “mitigate risks posed by foreign adversary involvement in the biomanufacturing supply chain”, Wuxi Biologics -18.4%, Wuxi AppTec (02359:xhkg) – 14.4%, Genscript Biotech (01548:xhkg) -8.4%.  USD status, please European currencies surged yesterday on hopes that Ukrainian battlefield successes will compound and bring peace sooner rather than later. EURUSD rose up through key local resistance at 1.0100, but the move didn’t well, with plenty of backfilling. Elsewhere, the USD is in technical limbo in pairs like USDCAD (the 1.3000 area refusing to completely let go) and AUDUSD (a strong sense that the choppy bearish trend is ending would be a solid surge-and-hold above 0.7000.) Today’s US CPI release could give us a firmer sense of USD direction, with weaker inflation across the board relative to expectations and an easing back lower of treasury yields likely required to take the USD firmly lower. JPY crosses back higher as yields rise Expect JPY crosses to the be the most sensitive to any sharp move in US treasury yields off the back of the US August CPI data today. After surging to new local highs yesterday, the JPY bounced back a bit. The focus in USDJPY is on the cycle top near 145.00, a break of which likely sets the clock ticking for actual market intervention from Japan’s ministry of finance. Gold (XAUUSD) and Silver (XAGUSD) Gold rose on Monday as the dollar extended its retreat from a record high ahead of US inflation data due later today, which could potentially slow down the pace of Fed’s rate hikes if the headline print is softer than expected. Gold tested $1734, the 21-day SMA and 38.2% retracement of the August slump, and after getting rejected it retraced to $1720 during Asian trading. Silver meanwhile jumped 5% before running into profit taking around $20 with the added support from signs of a tightening copper market and short covering from speculators who in the week to September 6 raised their short bets to a three-year high. Focus on US CPI and its impact on the dollar and future rate hike expectations. Crude oil (CLV2 & LCOX2) Crude oil continues to trade above levels that otherwise could signal additional weakness amid worries about demand from China due to harsh anti-virus restrictions and the world in general as central banks attempt to dampen inflation by lowering economic activity through aggressive rate hikes. Instead, the oil market, just like most other commodities, has received support from a weaker dollar and fading prospect of an Iran nuclear deal anytime soon. However, the potential for a fresh and strong upside push in crude oil has faded as the world is going through a period of lower growth. Focus being the collapse of Russian defenses in Ukraine and the response from Moscow, the impact of a potential price cap on Russian oil, and monthly oil market reports from OPEC today and IEA tomorrow. US Treasuries (TLT, IEF) The 10-year US Treasury benchmark traded steady near the highs for the recent cycle above 3.30% after an auction of 10-year T-notes yesterday saw demand near the lower end of the range of recent months. A 3-year treasury auction yesterday saw better demand metrics. Treasury traders are watching today’s important US CPI release for clues on whether yields will continue to rise toward the cycle top at 3.50% or ease back again. A 30-year T-bond auction is up after the CPI release today. What is going on? Gloomy economic outlook for the United Kingdom According to the Office of National Statistics, UK GDP grew only 0.2 % month-over-month in July. This is less than expected (0.4 % month-over-month). The weakness is mostly centered on the industry and the construction sector. This is worrying. There is no big bank holiday effect. However, there is anecdotal evidence of a reduction in demand for power because of cost, but it was also a hot month. In addition, the UK July industrial production fell 0.3 % month-over-month versus expected +0.3 %. Expect negative print in the eurozone for the same period too. Ocado sees big miss in Q3 on revenue The UK online grocery retailer reports revenue of £532mn vs est. £557mn as the cost-of-living crisis bites the UK consumer. Ocado sees the value of the average basket down by 6% and energy costs are putting pressure on the operating margin. Nintendo shares surge 5% on game launch record The Japanese game developer announced its biggest Switch console game launch success Splatoon 3 with 3.45mn sold units in Japan in its opening weekend. The success is building on the previous years of strong sales figures for its Switch console and games sold on the console. Shares are up 745% over the past 10 years excluding dividends. Oracle hit expectations in Q1 results The software maker was solid in its performance in its FY23 Q1 results (ending 31 August) delivering $11.4bn in revenue up 18% y/y. The 15-17% revenue growth guidance for the current quarter is also in line with estimates and Oracle indicated that the acquisition of Cerner was going according to plan providing the company with more strengths in its cloud offering. California’s electricity infrastructure is under severe tension According to data released over the weekend by California Independent System Operator, demand on California’s power grid hit an all-time high on 6 September above 50,000 MW. The last two times it was close to this threshold was in 2007 and in 2017. The situation is getting worse and worse. EU proposes mandatory cuts to power use and profit levies It is expected that the EU draft energy plan will include mandatory power demand cut, an “exception and temporary” levy on oil, gas, coal and refining companies, as well as revenue caps for non-gas fuelled power generators. There is likely to be opposition from some of the member states, as the plan is detailed out tomorrow. A rare “triple-dip” La Ninã spanning three northern hemisphere winters is coming Changing temperatures around the world have led to several climate emergencies so far in 2022, from historic flooding, above average temperatures and drought. Parts of the world are expected to experience severe weather for the rest of the year and into 2023, as part of a rare "triple dip La Niña" event according to the World Meteorological Organization (WMO). In Australia it may lead to heavy rain and flooding in the coming months while South America and equatorial Africa could see a repeat of the droughts experienced during the past couple of years. A development that could strengthen concerns about a global food crisis with inventories of several key food items falling to a multi-year lows. Japan producer prices remain above expectations Japan’s August PPI was up 9.0% y/y (vs. 8.9% y/y expected) while last month’s figure was also revised higher to 9.0% y/y from 8.6% y/y previously. The m/m print was slightly softer than expected at 0.2% vs. 0.4% but continued to show rising cost pressures amid the surge in commodity prices and a weaker yen. This suggests more CPI pain is in the pipeline, and the resolve of Bank of Japan to maintain accommodative policy will continue to be tested. New York Fed 1-year consumer inflation expectations at 10-month lows The latest NY Fed consumer inflation expectation gauges declined sharply, suggesting easing price pressures. Expectations for US inflation over three years annualised fell to a two-year low at 2.8% in August, while the one-year ahead gauge was at 5.7%, a 10-month low. Meanwhile, inflation expectations on the five-year horizon fell to 2% annualised from 2.3% previously, suggesting that inflation expectations remain anchored. What are we watching next? U.S. August CPI is out today This is a first estimate and the latest release before the Federal Reserve’s September 20-21 meeting. In July, CPI rose 8.5 % on a yearly basis (much slower than the 9.1 % increase in June). The economist consensus expects inflation to continue decelerating at 8.1 % in August. But core CPI will likely be up. This shows that inflation is broad-based and also expanding into the services sector, for instance. At Saxo Bank, we believe the peak in inflation has passed in the United States in June. But this should not influence the path of monetary policy tightening in the short-term. Shanghai Cooperation Organization meeting on 15-16 September This the first time since 2019 that Asian leaders are meeting in person in a bigger strategic forum. Xi Jinping and Vladimir Putin are officially joining the summit and India’s Modi is expected to join as well. Given the recent military success in Ukraine, the pressures are mounting on Russia and Putin Earnings to watch The next important earnings release to watch is Inditex, one of Europe’s largest fashion retailers, which is expected to report revenue growth of 12% y/y in FY23 Q2 (ending 31 July) but with the operating margin expected to show downside pressure. Wednesday: Inditex Thursday: Polestar Automotive, Adobe Economic calendar highlights for today (times GMT) 0800 – Norway Aug. Region Survey 0900 – Germany Sep. ZEW Survey 1000 – US Aug. NFIB Small Business Optimism 1230 – US Aug. CPI 1700 – US 30-year T-bond Auction 2030 – API's Weekly Report on US Oil and Fuel Inventories During the day: OPEC’s Monthly Oil Market Report 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-sep-13-2022-13092022

Goldman Sachs say a difficult macroeconomic environment in Europe may continue to put pressure on assets, even despite a positive risk/reward ratio, financial support and measures to reduce energy demand. They remarked that they remain wary due to the energy crisis, monetary tightening and the political backdrop around Italy's elections, and only signs of an "imminent market downturn" could change their view. "Our economists expect the energy crisis to push both Europe and the UK into recession, albeit relatively mild, and forecast an acceleration in policy tightening by both the ECB and the Bank of England," Goldman Sachs strategists wrote. The technical picture also points to at least another wave of decline in European indices, which should lead to an update of the yearly lows. European equities have lagged the S&P 500 this year in dollar terms as euro weakened more than 10%. Meanwhile, the region's credit markets continue to be much more stressed than stocks. On the bright side, Europe's 12-month earnings projections are yet to see any major downsides. Although the region's income-based estimates have fallen this year, they still remain above levels reached during the 2008 financial crisis. Relevance up to 11:00 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/321558

  At the close on the New York Stock Exchange, the Dow Jones fell 3.94% to a one-month low, the S&P 500 fell 4.32%, and the NASDAQ Composite fell 5.16%. Chevron Corp was the top gainer among the components of the Dow Jones index today, losing 3.09 points or 1.90% to close at 159.41. Quotes of The Travelers Companies Inc fell by 3.11 points (1.88%) to end trading at 162.22. Walmart Inc lost 2.85 points or 2.06% to close at 135.22. The losers were Boeing Co shares, which lost 11.41 points or 7.19% to end the session at 147.31. Intel Corporation was up 2.27 points (7.19%) to close at 29.29, while Home Depot Inc was down 19.61 points (6.59%) to close at 277. 93. Leading gainers among the S&P 500 index components in today's trading were Corteva Inc, which rose 0.87% to hit 62.65, Twitter Inc, which gained 0.70% to close at 41.70, and shares CF Industries Holdings Inc, which rose 0.67% to end the session at 100.15. The biggest losers were Eastman Chemical Company, which shed 11.34% to close at 84.11. Shares of NVIDIA Corporation lost 9.47% and ended the session at 131.31. Quotes of Meta Platforms Inc decreased in price by 9.37% to 153.13. Leading gainers among the components of the NASDAQ Composite in today's trading were Akero Therapeutics Inc, which rose 136.76% to hit 29.05, Aditx Therapeutics Inc, which gained 113.75% to close at 0.37, and also shares of Comera Life Sciences Holdings Inc, which rose 100.00% to end the session at 3.86. The biggest losers were Cardiff Oncology Inc, which shed 41.12% to close at 1.89. Shares of Rent the Runway Inc shed 38.74% to end the session at 3.02. Quotes of InMed Pharmaceuticals Inc decreased in price by 35.73% to 12.07. On the New York Stock Exchange, the number of securities that fell in price (2827) exceeded the number of those that closed in positive territory (354), while quotes of 82 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,015 stocks fell, 811 rose, and 188 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 14.24% to 27.27, hitting a new monthly high. Gold futures for December delivery lost 1.64%, or 28.50, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 0.26%, or 0.23, to $87.55 a barrel. Brent oil futures for November delivery fell 0.67%, or 0.63, to $93.37 a barrel. Meanwhile, on the Forex market, EUR/USD fell 1.44% to hit 1.00, while USD/JPY edged up 1.23% to hit 144.59. Futures on the USD index rose 1.37% to 109.58. Relevance up to 05:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292655

Summary:  Equity markets were slammed for their worst losses in more than two years yesterday on a shocking August US CPI print, which showed core inflation rising at twice the anticipated pace for the month. This was a rude shock after a recent strong rally in equities, and US treasury yields jumped, and the US dollar soared as the market rushed to price in the risk that the Fed might hike 100 basis points next week.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities erased most of the gains since 6 September as the market’s positioning ahead of the US August CPI report was completely wrong. Not only did the headline inflation figures not fall m/m, but the core figure is up 0.6% m/m and has been fluctuating around 0.5% m/m for a year suggesting that inflation is getting entrenched at a level suggesting 5-6% annualised inflation in the US. The Fed Funds futures curve immediately shifted downwards lifting peak Fed funds rate at close to 4.5% from around 4% the day before the inflation report. S&P 500 futures tumbled 5.4% from its intraday peak and Nasdaq 100 futures plunged 6.7% from its intraday high. The 3,900 and 12,000 levels are the key levels to watch on the downside in S&P 500 futures and Nasdaq 100 futures respectively. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Shares traded in Hong Kong, Shanghai, and Shenzhen declined on the back of the worst day in more than two years last night in US equities, with Hang Seng Index at -2.6% and CSI 300 -1.2%. Among the top losers, Techtronic Industries (00669:xhkg) plunged 10.6%, Hua Hong Semiconductor (01347:xhkg), Bilibili (09626:xhkg) and Baidu (09888:xhkg) dropped more than 5%, JD.COM (09618:xhkg) and Alibaba (09988:xhkg) slid about 4%. Tencent (000700:xhkg), -1.4%, had an educational game being approved under a company controlled by Tencent’s executives including co-founder Pony Ma. This is the first time Tencent got a game approval this year though being an educational game, it will unlikely be a significant money-making title. CNOOC (00883:xhkg) and COSCO Shipping Energy outperformed, rising 2%-3%. A typhoon is approaching Shanghai and Ningbo causing major container ports in Shanghai and Ningbo to suspend operations. USD rips back higher – suddenly threatening cycle top after CPI data After the shocking August CPI number from the US yesterday, the US dollar soared higher, taking EURUSD all the way back below parity after nearly trading 1.0200 earlier this week. Elsewhere, the USD was universally higher, with a pair like AUDUSD slamming all the way to the low 0.6700's and therefore not far from the cycle low, while NZDUSD actually posted a cycle low, and GBPUSD trading south of 1.1500 after trading north of 1.1700. Moves by the Bank of Japan and verbal intervention from the Japanese Ministry of Finance helped temper the USD move this morning (more below). Now the focus shifts to next week's FOMC meeting, where the market is now pricing the rising risk that the FOMC could hike 100 basis points. JPY takes a stab at resilience on the anticipation of intervention The Bank of Japan carried out a “rate check” in the FX market, which is widely seen as a precursor for actual market intervention. This tamed the USDJPY move higher from sub-142.00 levels to nearly 145, as the gains were pared back to 144.00, with the JPY also firmer broadly. Finance Minister Suzuki said nothing could be ruled out in response to the weakening JPY and that if the current trend persisted, stepping into markets is an option. But as past experience has shown, intervention often only creates temporary volatility if the underlying issue is not addressed - in this case, the Bank of Japan's insistence on maintaining very low rates and controlling yields out to 10 years. If yields continue to rise globally, Japanese officialdom will have an enormous and likely unwinnable fight on its hands if the Bank of Japan fails to change its policy. Gold (XAUUSD), Silver (XAGUSD) and copper (COPPERUSDEC22) ... all tumbled following the stronger than expected US CPI print, thereby reversing some of the recent weak dollar-led gains. Prior to the release copper had been on a tear reaching $3.7/lb as the LME market continued to signal the tightest market conditions since November on increased demand from China. Gold trades near $1700 and close to the current floor around $1680 after the CPI print strengthened the view the FOMC will have to remain hawkish and continue to aggressively hike rates. However, the risk to economic growth while inflation remains stubbornly high may bring back worries about stagflation, a development that may lend support to investment metals. Continued focus on the dollar and the markets pricing of future inflation expectations. Crude oil (CLV2 & LCOX2) Crude oil traded higher on Tuesday before the hotter-than-expected US CPI print helped send most commodity prices, including oil, lower on fears aggressive rate hikes could curb demand. Earlier the market traded up after OPEC maintained their 2023 outlook for a 2.7 million barrel per day increase in global demand. The EIA delivered the same message last week and the IEA is likely to do the same today when their monthly oil market report is released. Developments that highlight the current discrepancy between the (lower) price action and what these major forecasters are seeing. A recovery later in the day was supported by the Biden admin saying it will consider starting refilling strategic reserves when WTI falls below $80. Ahead of today’s EIA stock report, the API reported a 6m bbl crude stock build, a 3.2m bbl drop in gasoline and 1.8m bbl build in distillates. US Treasuries (TLT, IEF) Treasury yields jumped yesterday on the shocking August US CPI data, with the yield curve flattening aggressively as the hot data point saw the market rushing to price in the risk of more aggressive moves to counter inflation at coming meetings. The 10-year yield was taken back toward the cycle top from mid-June at 3.50%. A further rise above this yield level will continue to drive the risk of weaker sentiment and USD strength. What is going on? US August CPI shocks with high core inflation reading The headline US CPI data came in slightly above expectations, with a year-on-year reading of 8.3% vs. 8.1% expected and a month-on-month reading of +0.1% vs. -0.1% expected, a real surprise given sharp drops of late in gasoline prices. But the real shock was the core Ex Food and Energy inflation reading of +0.6% month-on-month, twice what was expected. This triggered an enormous slide in risk sentiment as the market rushed to price the risk that the FOMC might hike as much as 100 basis points next week. As of this morning, about 85 basis points is priced for the meeting. The grains sector maintained a bid on Tuesday ... while most other commodities took a tumble after the US CPI print once again raised concerns about aggressive growth and demand killing rate hikes. With demand being relatively constant the grains sector held up well as the sector continued to focus on supply risks and dwindling inventories. The US Department of Agriculture this week slashed its estimates for soybean supplies from the US, the second-largest producer after Brazil where a lingering “triple-dip” La Nina repeat could bring dry conditions in the coming months. In addition, wheat exports have been cut because of the war in Ukraine, and there’s uncertainty over Ukraine’s grain export corridor after criticism from Putin. Inditex 1H revenue beats estimate The Spanish fashion retailer delivered first-half revenue of €14.9bn vs est. €14.6bn on top of delivering EBITDA margin of 27.1% vs est. 26.8%. Inditex reiterates guidance of online sales exceeding 30% of revenue by 2024. New lockdowns in China Two cities around Beijing announced lockdowns due to Covid risks. Shijiazhuang (over 2.3 million inhabitants) asked all residents of Yuhua district to work from home for a period of three days (expected to end on Friday morning). Sanhe (around 440,000 inhabitants) implemented a full lockdown of its entire population at least until Saturday morning. This underscores the supply chain risks during the winter period in the event China experiences a bigger Covid outbreak. UK August CPI comes in slightly above expectations at core UK inflation came in at 9.9% on the headline versus a slightly higher print expected, but the core inflation level rose to a new cycle high of 6.3%, just above the 6.2% expected. Price pressures are likely to remain elevated this month as well, despite some softening in fuel prices, as food and services costs continue to rise. Further gains in inflation can be expected in October, but the capping of household energy bills may help to soothe inflationary pressures thereafter. Cheniere was the one shining light on Wall Street overnight Cheniere, the US’ biggest LNG exporter, saw its shares rise 3.1% yesterday while markets saw a sea of red when US inflation data came out higher than expected. The highlights the fact that energy companies can and have been able to outperform the market. The largest US exporter of liquefied natural gas boosted its full-year 2022 profit forecast beyond analysts’ expectations as shipments are already set to depart their dock sooner than anticipated. What are we watching next? Shanghai Cooperation Organization meeting on 15-16 September This the first time since 2019 that Asian leaders are meeting in person in a bigger strategic forum. Xi Jinping and Vladimir Putin are officially joining the summit and India’s Modi is expected to join as well. Given the recent military success in Ukraine, the pressures are mounting on Russia and Putin Ethereum merger will draw attention The Ethereum blockchain’s much-anticipated software upgrade, the so-called Merge, is expected to take place tomorrow morning, according to its core developers. The new system, known as "proof-of-stake", will slash the Ethereum blockchain's energy consumption by 99.9%, developers say. Most blockchains, including Bitcoin's, devour large amounts of energy, sparking criticism from some investors and environmentalists. The merge could make Ethereum more favourable to pension funds and other institutional investors that are under the scanner for environmental concerns, but there is also come skepticism on how scalable Ethereum could become and if it becomes more susceptible to attacks by hackers. France is expected to enter a recession next year Barclays is the first major international bank to forecast a recession in France next year (2023 GDP growth at minus 0.7 %). This is highly likely, in our view. But it is certainly too early to assess the depth of the recession at this stage. It will depend on the evolution of the energy crisis and the risk of energy rationing. Forecasting is always a complicated task. This is even more complicated now due to the elevated level of uncertainty regarding the short-term economic path. Expect other European countries to enter a recession next year (the United Kingdom, Germany, Hungary etc.). Earnings to watch Inditex has already reported before the European equity market opens (read earnings review above), so the next earnings release in focus is Adobe tomorrow. Analysts expect revenue growth of 12.6% y/y with operating margin jumping back again following cost reduction exercises. The key risks for Adobe are the strong USD, falling technology spending, and lower advertising growth lowering demand for content creation. Today: Inditex Thursday: Polestar Automotive, Adobe Economic calendar highlights for today (times GMT) 0800 – IEA's monthly Oil Market Report 0900 - Eurozone Jul. Industrial Production 1230 - US Aug. PPI 1230 - Canada Jul. Manufacturing Sales 1430 - US DoE Weekly Crude Oil and Product Inventories 1430 - ECB's Villeroy to speak 2245 - New Zealand Q2 GDP 2350 - Japan Aug. Trade Balance 0120 - China Rate Announcement 0130 - Australia Aug. Employment Data  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-sep-14-2022-14092022

Asian markets to face a sharp drop after the inflation-driven rout in the US overnight  Source: shutterstock Macro outlook Global markets: US CPI data caught markets completely off guard, though in all fairness, there had been a lot of complacency about a figure that was only going to fall because of the volatility in energy markets. What made that US inflation print a much uglier one than forecast, was a much bigger than expected 0.6%MoM increase in the core CPI index, which took core inflation to 6.3%YoY. Core inflation was expected to rise, but not that much. And that upside surprise from core prices totally absorbed any downshift from lower crude oil prices, which resulted in the headline CPI index actually rising slightly on the month, resulting in only a very small decline in headline inflation to 8.3% from 8.5%YoY. See here for our US economist’s views on the figures. The S&P500 gapped lower and ended down 4.32% on the day. The NASDAQ fared even worse, dropping 5.16%. Equity futures suggest that the rout stops here. I’m not sure I would put a big bet on that outcome. Yields on 2Y US Treasuries rose 18.5bp to 3.756%, while those on the 10Y rose a more modest 5bp to 3.4% but are now closing in on the June highs. Here is a piece by our head of rates strategy on whether the 10Y yield could hit 4%. The EUR didn’t hold above parity for very long and is back down to 0.9972. The AUD, which had been nibbling at 0.69 is now back to 0.6733, and the GBP is also down back below 1.15, while the JPY will give the BoJ renewed headaches as it rises above 144.60.  All of this adjustment is yet to come for most of the Asia pack, and sharp falls are to be expected once markets begin trading. G-7 Macro: We have already outlined above the main macro driver – namely higher than expected US core and headline inflation numbers. Today’s US PPI inflation data won’t do much to affect the market’s reaction to those figures. UK CPI inflation data for August is also expected to remain above 10% today, which will encourage the Bank of England to keep hiking. India: Trade data for August could show a slight narrowing in the trade balance which clocked up a $29bn deficit in July. Lower crude oil prices, which account for much of the deficit, and a slightly weaker domestic demand outlook should bring imports down. That said, with the external environment looking increasingly challenged, we don’t expect much help to come from the export side. What to look out for: China activity data Japan industrial production and core machine orders (14 September) Hong Kong PPI and industrial production (14 September) US PPI inflation (14 September) Japan trade balance (15 September) Australia labour market data (15 September) US initial jobless claims and retail sales (15 September) South Korea unemployment (16 September) Singapore NODX (16 September) China industrial production, retail sales and fixed asset (16 September) US University of Michigan expectations (16 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

At the close in the New York Stock Exchange, the Dow Jones rose 0.10%, the S&P 500 rose 0.34%, and the NASDAQ Composite rose 0.74%. Chevron Corp was the top gainer among the components of the Dow Jones index today, up 3.86 points or 2.42% to close at 163.27. Quotes Johnson & Johnson rose by 3.33 points (2.06%), ending trading at 164.66. Merck & Company Inc rose 1.36 points or 1.59% to close at 86.95. The losers were shares of Honeywell International Inc, which lost 5.01 points or 2.71% to end the session at 179.97. 3M Company was up 2.44% or 2.94 points to close at 117.53, while Dow Inc was down 1.67% or 0.80 points to close at 47.07. . Leading gainers among the S&P 500 components in today's trading were Coterra Energy Inc, which rose 7.22% to hit 32.23, APA Corporation, which gained 6.72% to close at 41.74, and shares of Moderna Inc, which rose 6.17% to end the session at 139.40. The biggest losers were Nucor Corp, which shed 11.31% to close at 120.71. Shares of Centene Corp lost 6.79% to end the session at 83.92. Quotes of DISH Network Corporation decreased in price by 6.27% to 17.18. Leading gainers among the components of the NASDAQ Composite in today's trading were Avenue Therapeutics Inc, which rose 53.87% to hit 0.36, Aileron Therapeutics Inc, which gained 38.49% to close at 0.27, and also shares of Dawson Geophysical Company, which rose 41.44% to close the session at 1.57. The biggest losers were Neurobo Pharmaceuticals Inc, which shed 43.61% to close at 16.86. Shares of Vintage Wine Estates Inc shed 40.33% to end the session at 3.30. Quotes of Aditx Therapeutics Inc decreased in price by 38.22% to 11.43. On the New York Stock Exchange, the number of securities that rose in price (1,578) exceeded the number of those that closed in the red (1,506), while quotes of 124 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,956 stocks fell, 1,770 rose, and 254 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.07% to 26.16. Gold futures for December delivery lost 0.63%, or 10.90, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 1.68%, or 1.47, to $88.78 a barrel. Brent oil futures for November delivery rose 1.23%, or 1.15, to $94.32 a barrel. Meanwhile, in the forex market, the EUR/USD pair was unchanged 0.08% to 1.00, while USD/JPY fell 0.97% to hit 143.15. Futures on the USD index fell 0.15% to 109.36.   Relevance up to 05:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292844

US equities eked out small gains yesterday as dip buyers timidly came in, but risks remain tilted to the downside with the disappointing inflation figures, and the risk of the largest rail strike in the US since 1992. Crude Oil Prices Released yesterday, the US producer price data didn’t enchant investors. The headline figure fell for the second consecutive month but the core PPI strengthened, hinting that most of the easing in producer inflation was due to cheaper energy prices – which however remain very volatile, and which, more importantly carries a decent upside risk. The barrel of American crude flirted with the $90 mark yesterday, without however being able to clear resistance at this level. Energy companies gained despite news that Europeans are looking to raise $140 billion euros from energy companies to help households and businesses survive through winter. The situation on the stock market The S&P500 recover a part of losses yesterday, as Nasdaq gained 0.84%. But the risks remain clearly tilted to the downside. The US dollar remains relatively strong near the 20-year highs, the EURUSD consolidates below parity as gold slipped back below $1700 per ounce. The USDJPY retreated on expectation that the Bank of Japan (BoJ) could intervene to stop the yen’s depreciation. Ethereum trades around $1600 as Merger Upgrade is now imminent! Watch the full episode to find out more! 0:00 Intro0:24 Dip buyers return to a risky market2:31 US crude flirts with $90pb3:41 US rail strike risk weighs on sentiment4:55 Energy stocks rally despite EU measures to cope with crisis7:07 Gold under pressure7:50 BoJ could intervene to strengthen the yen8:52 Ethereum Merges today! 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 #PPI #inflation #rail #strike #USD #EUR #JPY #BoJ #rate #check #Gold #XAU #crude #oil #BP #XOM #Chevron #Coterra #windfall #taxes #energy #crisis #Bitcoin #Ethereum #Merge #update #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

Markets show cautious recovery after US CPI-induced rout - eye's on the BoJ as its verbal intervention looks increasingly desperate  Source: shutterstock Macro outlook Global Markets: The steer from yesterday’s equity futures proved an accurate one, and US equities made small gains yesterday. The S&P500 rose 0.34%, and the NASDAQ rose 0.74%. A further modest recovery is indicated today. Short-dated US Treasury yields continue to rise though, with the yield on the 2Y Treasury rising 3.2bp to 3.788%. 10Y yields were broadly unchanged at 3.40%. EURUSD hasn’t moved much since yesterday and is at 0.9983 currently. The AUD has traded in a very similar pattern, and remains at 0.6757. GBP has shown a bit more life and has recovered to 1.1546, while the JPY has managed to make some decent gains to 142.83, after the BoJ “rate check” yesterday (see more below), though few expect this JPY strength to continue unless there is some real change in the underlying policy stance. The BoJ is running out of “verbal” tools to check the yen’s slide without such changes. The rest of the Asia pack yesterday was broadly weaker, but much less so than a pure catch-up with the G-10 currencies would have suggested. Better fundamentals (lower inflation for one) and some background intervention are helping smooth the volatility in Asian currency markets for now. The KRW was the day’s worst performer, as is often the case in a weak market. USDKRW is now 1391. G-7 Macro: Yesterday’s US PPI figures showed some moderation in both core and headline PPI inflation, though the core numbers did not fall as much as had been forecast. The UK also saw inflation dip below 10%, but core inflation continued to rise, so this is probably going to be a short-lived dip. Eurozone trade data could be another excuse for EUR weakness. The trade deficit is forecast to widen further to EUR32bn (July figures). The US publishes August industrial production this evening. It is expected to make no progress following last month’s 0.6%MoM increase.  Australia: August labour market data are out later this morning (0930 SGT). The forecast employment change (+35,000) looks a bit low to us given the widespread labour shortages reported. This is an important report for the RBA, which has indicated that it may be prepared to slow the pace of its rate hikes if data permits. Participation rates and the unemployment rate complete the overall picture for employment today. China: While the PBoC seems to be trying to slow the pace of CNY decline, we don’t believe there is much likelihood that they will consider any further cuts to the 1Y Medium Term Lending Facility (1Y MLF) today. The current rate is 2.75%, down from 2.85% when it was lowered last month. Japan: The Bank of Japan’s “rate check” appears to have been effective in protecting a ceiling of USDJPY145. This should stabilize the currency, at least temporarily . The market is now slowly digesting the Fed’s next giant step at its September meeting. The rate-checking and intensified verbal intervention by the authorities will likely have a greater impact on market expectations about the possibility of intervention. But we still think that the probability of actual intervention is low because unless the BoJ's monetary policy changes, it is doubtful that intervention will work. We think the market will try to breach the ceiling of 145 again as yield differentials will likely widen further with more aggressive Fed hikes (the market is pricing in a terminal Fed funds rate of 4.25%).  South Korea: The Bank of Korea expressed a hawkish stance on future policy direction In the minutes of the August MPC meeting, saying that it would like to continue its hiking cycle until early next year. There was a minority opinion that the pace of rate hikes should be adjusted as downside risks to growth emerged. However, considering the general hawkish stance of the MPC, including Governor Rhee, it seems likely that  the BoK will continue hiking until the early next year. In addition, Ms. Seo Young-Kyung, a hawkish member, said at an event that “a more active policy response is needed to respond to the inflationary pressure caused by the weak KRW.” We believe that the BoK continues to communicate to the market its intention to raise interest rates further by next year. However, as we expect growth to slow sharply by the end of the year, it is questionable whether the BoK will be able to maintain this stance in the face of a sharp slowdown in growth. Indonesia: August trade data is set for release today.  Both exports and imports are expected to post double digit gains with the overall balance likely in surplus.  Exports have benefited from elevated commodity prices while imports are likely to grow by more than 30%YoY as the pace of economic growth picks up.  The IDR has remained relatively more resilient this year as its favorable trade balance keeps the current account in surplus.  A relatively stable IDR and lower inflation than most of its peers has limited the pressure on the central bank to hike rate aggressively so far in 2022.  Bank Indonesia will likely sustain its measured pace of rate hikes but they could accelerate tightening should the IDR come under more intense depreciation pressure.  What to look out for: China activity data Japan trade balance (15 September) Indonesia trade balance (15 September) Australia labour market data (15 September) US initial jobless claims and retail sales (15 September) South Korea unemployment (16 September) Singapore NODX (16 September) China industrial production, retail sales and fixed asset (16 September) US University of Michigan expectations (16 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  Yesterday’s session was a muted affair as the market picked up the pieces in the wake of Tuesday’s huge slide in the market after a hot US August CPI number. Tomorrow sees the expiry of options on trillions of notional value in equities and futures, which may have added to the volatility this week. The US dollar remains strong as surging US treasury yields threaten new multi-year highs ahead of the US August Retail Sales release later today.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities are scratching around after the enormous sell-off triggered by the hot US CPI release on Tuesday. Some of the scale of the volatility on Tuesday could be due to options exposures, as options of trillions of dollars on notional equities and futures expire on Friday. If the US August Retail Sales release today leads to even higher yields, stocks could find themselves under renewed pressure. The technical focus is on the recent pivot lower just below 3,900 in the S&P 500 and the 12,000 area low in the Nasdaq 100 index.  USD strength continues, threatens cycle highs A bit of consolidation yesterday in USD pairs after the huge comeback strengthening move in the US dollar in the wake of the Tuesday US August CPI release, but the USD rallied anew from late yesterday and overnight, with the action pinned near the cycle highs in some USD pairs, such as USDSEK, USDNOK and NZDUSD, but elsewhere with a bit of range left to play with. The August Retail Sales release today should garner attention as a strong number could underline the risk of higher US yields and a Fed tightening cycle that extends longer and higher than currently expected if US consumers are getting a second wind after the shock of higher gasoline prices has eased notably since the beginning of the summer. USDJPY has rebounded from yesterday’s lows as traders treat JPY crosses with care, knowing that new highs in the key USDJPY pair are likely to bring actual market intervention from the Bank of Japan/Ministry of Finance. Gold (XAUUSD) Gold trades below $1700 and close to an area around $1680 that has provided support on several occasions during the past two years. The yellow metal turned lower after Tuesday’s CPI shocker raised the prospect of a one percent rate hike next week and a terminal Fed Funds target rate around 4.5% (up 2% from the current level) before March next year. Developments and speculation that continue to underpin the dollar while undermining dollar denominated commodities, such as precious and industrial metals. Crude oil (CLV2 & LCOX2) Crude oil trades sideways with the stronger dollar and expectations for higher US rates hurting the prospect for future demand being offset by news that China’s Chengdu, locked down for weeks, plans to ease measures. The impact of China’s zero-Covid tolerance strategy this year has led to the biggest drop in oil demand in more than three decades according to the IEA. In their latest monthly oil market report, they predicted a continued slowdown in global demand ahead of year-end before accelerating to rise by 2.7 million barrels a day in 2023. Oil market tightness at the beginning of 2023 would be led by a potential 1.9 million barrels Year on year drop in Russian production by February due to sanctions. US natural gas US natural gas trades back above $9 per MMBtu and up 13% on the week as a looming rail strike (see below) would reduce supplies of coal, forcing power generators to rely more heavily on natural gas at a time where demand for cooling remains elevated due to expectations for hotter-than-normal weather across the Midwest and Eastern parts of the US. US Treasuries (TLT, IEF) US 10-year yields are now pinned at the highs for the cycle near 3.50% ahead of today’s US August Retail Sales release. Interesting to see how the market treats a strong data point – with a deepening inversion as the market prices a more aggressive Fed (as happened on the surprisingly strong CPI release Tuesday) or with the entire curve lifting. Exceptionally weak data would also be interesting as it would challenge the rising yields trend/narrative. What is going on? U.S. inflation remains broad-based The producer price index (PPI) dipped 0.1 % month-over-month in August. This reflects cheaper gasoline prices (minus 13 % in August compared to July) and to a lesser extent lower freight costs. However, less volatile elements of the index rose more than expected. The core price index was up 0.4 % on a monthly basis. The numbers like those seen in Tuesday’s US CPI report confirm that U.S. inflation is still broad-based and inflation pressures are unbroken. This opens the door to a new interest rate hike by the U.S. Federal Reserve next week. The majority of the market expects a 75 basis point hike but a minority (between 10 % and 20 % of market participants depending on which indicators we monitor) bet on a 100 basis point hike in the cards. Chinese cities move to boost housing demand Local governments across China have moved to encourage property demand after the Chinese central government called for measures to ease the crisis. Some 120 have loosened restrictions on funds for property purchases. This news supported beleaguered Chinese developers’ stocks in trading on Thursday. Ethereum Merge The second-largest cryptocurrency, Ethereum, is very close to its expected Merge, scheduled to be within the next hour. Ethereum will go through a major upgrade which fundamentally changes the way that transactions are validated on the blockchain, and it will reduce the energy consumption for running the network with around 99.95%. What are we watching next? Looming rail worker strike in the United States The two largest railroad trade unions said they will strike if the ongoing negotiations with employers about higher salaries and better work conditions fail. The strike could start as early as tomorrow and could have a very negative impact on the U.S. economy. Estimates suggest this could cost the economy nearly $2bn per day. In the United States, rail freight represents almost a third of the total domestic freight. Shanghai Cooperation Organization meeting today and tomorrow This is the first time since 2019 that Asian leaders are meeting in person in a bigger strategic forum. Xi Jinping and Vladimir Putin are officially joining the summit in Samarkand, Uzbekistan and India’s Modi is expected to join as well. Given the recent Ukrainian military success against Russia, the pressures are mounting on Russia and Putin, which will test a Russian-China "friendship” that at a meeting of Xi and Putin during the Beijing Olympics and just ahead of Russia’s invasion of Ukraine was declared to be “entering a new era” and “without limits”.  Earnings to watch Today, focus is firmly on Adobe’s earnings report today after the close. The company has seen a wild ride in recent years, pumped to remarkable heights by late 2021 due to its steady solid growth and high profitability with a backdrop of seemingly ever falling yields, only to see the share price crushed in half since its 2021 peak, first due to the seismic shift higher in yields, but compounded by faltering growth rates for the company starting two quarters ago. Today: Polestar Automotive, Adobe Economic calendar highlights for today (times GMT) 0900 – Eurozone Jul. Trade Balance 0915 – ECB's Guindos to speak 1230 – US Weekly Initial Jobless Claims 1230 – US Sep. Empire Manufacturing 1230 – US Aug. Retail Sales 1430 – EIA's Natural Gas Storage Change  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-sep-15-2022-15092022

At the close of the New York Stock Exchange, the Dow Jones fell 0.56% to a one-month low, the S&P 500 fell 1.13% and the NASDAQ Composite fell 1.43%. UnitedHealth Group Incorporated was the top performer in the Dow Jones Index today, up 13.14 points or 2.58% to close at 522.91. JPMorgan Chase & Co rose 1.75 points or 1.51% to close at 117.87. Goldman Sachs Group Inc rose 4.36 points or 1.33% to close at 331.62. The losers were Salesforce Inc, which shed 5.50 points or 3.43% to end the session at 154.78. Microsoft Corporation was up 2.71% or 6.84 points to close at 245.38, while Visa Inc Class A was down 2.03% or 4.04 points to close at 195. .37. Leading gainers among the S&P 500 index components in today's trading were Humana Inc, which rose 8.37% to 497.24, Wynn Resorts Limited, which gained 7.48% to close at 65.23, and shares of Paramount Global Class B, which rose 5.16% to close the session at 23.05. The losers were Adobe Systems Incorporated, which shed 16.79% to close at 309.13. Shares of Albemarle Corp shed 6.49% to end the session at 286.75. West Pharmaceutical Services Inc lost 5.91% to 273.63. Leading gainers among the components of the NASDAQ Composite in today's trading were Heartbeam Inc, which rose 85.60% to hit 2.32, Neurobo Pharmaceuticals Inc, which gained 47.21% to close at 24.82, and shares of Nabriva Therapeutics AG, which rose 40.65% to end the session at 0.27. The drop leaders were Shuttle Pharmaceuticals Inc, which shed 55.65% to close at 16.63. Shares of Eloxx Pharmaceuticals Inc lost 40.97% to end the session at 0.22. Quotes Color Star Technology Co Ltd fell in price by 39.54% to 0.07. On the New York Stock Exchange, the number of securities that fell in price (2188) exceeded the number of those that closed in positive territory (909), and quotes of 125 shares remained virtually unchanged. On the NASDAQ stock exchange, 1991 stocks fell, 1759 rose, and 265 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.42% to 26.27. Gold futures for December delivery lost 2.08%, or 35.55, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 3.84%, or 3.40, to $85.08 a barrel. Brent oil futures for November delivery fell 3.56%, or 3.35, to $90.75 a barrel. Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.20% to 1.00, while USD/JPY was up 0.23% to hit 143.48. Futures on the USD index rose by 0.06% to 109.44.     Relevance up to 05:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293021

Summary:  U.S. equity markets declined again on the economic good news which added to investors’ worries about more and for longer rate hikes from the Fed. The Chinese Yuan weakened and broke the 7-handle. China's August activity data is scheduled to release today. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) face further pressure as US eco news brightens        US equities closed lower on Thursday with the S&P500 losing 1.1% taking its weekly loss to almost 4%, while the Nasdaq fell 1.4%, losing 4.6% across the week, with both major indices eroding last week’s gain. Investors are growing cautious, as new economic data gives the Fed room to raise rates, and keep them higher for longer to control inflation. Retail sales unexpectedly rose in August, showing consumer spending is far from collapsing and jobless claims fell for the fifth straight week, suggesting employers worker demand remains healthy despite an uncertain outlook. For the market to turn around, it will need to see earnings multiples expand, as that supports share price growth. And we need to see earnings per share move up from a decline, to growth. But if the Fed keeps hiking rates, and the energy crisis continues, this scenario means tech stock earnings multiples are likely to see earnings per share (EPS) growth pressure. On the flip side, EPS in energy continues to gain momentum. Big movers in US shares Adobe shares fell 17%, weighing on the Nasdaq and S&P 500 after the software giant announced $20 billion deal to buy design start up Figma. The weakness flowed through to other tech stocks, with Apple shedding 1.9% and Salesforce sliding 3.4%. Meanwhile oil stocks also copped selling after the WTI oil price fell below $86 after the US announced it would restock oil reserves but without a trigger price. Bank stocks were a bright spot, with Goldman Sachs and JPMorgan rising more than 1% apiece. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The U.S. short-end yields continued to charge higher, 2-year yields up 7bps to finish the session at 3.86%, flattening the 2-10 year curve to -42bps, as the 10-year yields up 5bps to 3.44%.  The 30-year yields, however remained well anchored at 3.47%, up only 1bp and not far from the pre-CPI release levels. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index edged up by 0.4%, helped by the rise in Chinese developers, while the CSI 300 dropped by 0.9%.  Securities Times reported that more than 120 cities have relaxed providence fund policies to boost the local property markets and other media reported that a large number of cities had loosened home purchase restrictions.  Country Garden (02007:xhkg) surged by 8.7% followed by Guangzhou R&F (02777:xhkg) up 8.6%, CIFI (00884:xhkg) up 7%, China Resources Land (01109:xhkg) up 4.9%, and China Overseas Land & Investment (00688:xhkg) up 4%. Catering names gained on news that Chengdu was relaxing its lockdown, Xiabuxiabu (00520:xhkg) up 5.5%.  Li Auto (02015:xhkg) fell 2.3% as the President of the company reduced his shareholding. EV names overall were also pressured by the news that China’s ambassador to the U.S. warned against the potential risks of the US trying to cut China off the EV supply chains.  Solar names were down following reports about the European Union was going to ban manufactured goods with forced labour in them and raised concerns about much of China’s solar products originated from Xinjiang. Australia’s ASX200 The ASX200 is on tracking lower this week, after losing 0.7% Monday to Thursday with the technical indicators suggesting the market is likely to head lower from here and it could retest the lows set in June. However, it’s not all doom and gloom. We saw commodity stocks march up this week, with coal companies Coronado Global rising 13%, New Hope up 5%. It’s also worth noting these are some of this year’s best performing stocks on the ASX, with Coronado up 82%, New Hope up 182%, while the coal giant Whitehaven is up 266% YTD, supported by the coal price hitting new highs this week, as well as the coal futures price. Meanwhile, with crop prices likely to go higher amid La Nina, Agri business Elders rose 4%. Elsewhere, technical buying picked up in oil and gas companies including Woodside, supporting its shares rise ~4%, with Beach Energy following. USDCNH breaks above 7 handle USDCNH broke 7.00 and the markets is expecting little reactions from the PBOC given the latest state-owned media’s effort to downplay the importance of the 7-handle. Crude oil (CLU2 & LCOV2) Crude oil prices slumped overnight as demand concerns came back into the focus. The International Energy Agency said that China faces its biggest annual drop in demand in more than three decades as COVID-19 lockdowns weigh on growth. Oil demand could fall by 420kb/d, or 2.7% this year. This led to the IEA trimming its estimate of global demand. It now sees consumption rising by only 2mb/d. Further, supply situation also seemed to fluctuate with the US Department of Energy walking back on its SPR refill stance by saying that it didn’t include a strike price (that was said to be around $80/barrel) and it isn’t likely to occur until after fiscal 2023. WTI futures fell below $85/barrel while Brent futures touched lows of $90/barrel. Oil technical levels to watch For traders and investors, for WTI to reverse its downtrend, it needs to close above resistance at $97.66, which is what our technical analyst pointed out here. So the next level for you to watch, is if it breaks above $90.40, it would signal an uptrend, for this to occur, the market will need good news, perhaps even bright news from China, the biggest oil consumer. Regardless, right now, oil is in a bear trend and if it closes below $81.20 the bear run-lower could be extend to $78.48-$74.27. Gold (XAUUSD) The yellow metal saw a drop to $1,660/oz down more than 2% to over 2-year lows, amid expectations of more aggressive rate hikes by the Fed as strong US economic data underpinned. Markets are now pricing in a more than 75bps rate hike by the Fed at the September meeting, and a terminal rate of ~4.5%. What to consider? Mixed US data, but further upward pricing of the Fed rate path US retail sales saw the headline rising 0.3% m/m in August (exp -0.1%, prev -0.4%) but the core retail sales print was weaker than expected at -0.3% m/m (exp 0%, prev 0.0%). The slower retail spending does reflect the current slowdown in goods spending despite services remining strong and supporting the overall consumer strength in the US. Meanwhile, initial jobless claims were lower than expected at 213K (exp 226K, prev 218K). That is the lowest since early June and the 5th consecutive decline (the high reached 262K), suggesting that labor markets still remain tight. Regional Fed indices offset each other The regional Fed indices on manufacturing gave contrasting signals with the Philly Fed index falling -9.9 vs +2.8, but the Empire improving markedly to -1.5 vs -13.0 estimate. For both indices, the prices paid components did fall and has moved markedly lower over the last few months, but still remains with a positive number (i.e., more businesses reporting higher prices vs lower prices). For the Philly Fed, the price paid came in at 29.8 v 43.6. For the Empire, the prices paid came in at 39.6 vs 55.5. Australia’s latest economic news shows employment growth is slowing with the jobless rate rising for the first time in 10 months; giving the RBA less room to hike rates Australia’s unemployment rate unexpectedly rose in August, rising from 3.4% to 3.5% with less jobs being added to economy than expected (33,500 instead of the 35,000). Given employment has fallen from its 50-year peak, and job growth is slowing, the RBA effectively has a solid barrier in its way preventing it from rapidly rising rates over the coming months, with room of a 0.5% hike being taken off the table. For equity investors, this supports risk-appetite slightly increasing in the banking sector, given employment nears its peak and credit might not be squeezed as hard as feared, thus property price growth also might not continue to fall as rapidly as forecast. For currency traders, the AUDUSD sharply fell from its intraday high (0.6769) and now faces pressure back to two-year lows, where support is at 0.61358, implying it may fall 10%. Further to that, the currency pair faces downside simply as the market is pricing in 0.25% RBA hike next month, versus the more aggressive US Fed Reserve’s hike potentially being 100bps (or 1%) next week. Slower export growth, power shortage, and pandemic controls would probably have taken their toll on China’s August activity data China’s activity data for August, scheduled to release today, would probably be at risk of missing the median forecasts in the Bloomberg survey, which has industrial production at 3.8% YoY in August (vs 3.8% YoY in July), retail sales at 3.2% YoY in August (vs 2.7% YoY in July), and fixed asset investment year-to-date 5.5% YoY (vs 5.7% YoY). The heatwave-induced power shortage caused disruption to industrial production in Sichuan. The heatwave might have also caused delays in infrastructure construction which was largely outdoor and offset some of the positive impacts of accelerated credit extension. The pandemic control measures affected the manufacturing and export hub of the city of Yiwu in Zhejiang province in August. The much weaker expected export growth data for August released last week and the continuously weak data in the property market also pointed to potentially downside surprises to these forecasts.  While a favourable base effect and stronger auto sales in August could have boosted retail sales, tightened pandemic control measures might have damped catering and other services and dragged down retail sales growth.  Russian President Putin said he appreciated China’s “balanced position” on Ukraine President Xi and President Putin met on the sidelines of the Shanghai Cooperation Organization summit held in Uzbekistan.  The Russian president said he values China’s “balanced position” on Ukraine and he backs the latter’s “One China” principle and opposes “provocations” by the U.S. on the issue of Taiwan.  On the other hand, the readout released by China only did not touch on Ukraine.  As in the readout, Xi told Putin that “China is ready to work with Russia in extending strong support to each other on issues concerning their respective core interests”. China’s State Council reiterated support for the economy and opening up trade and investment In a meeting chaired by Premier Li Keqiang, China’s State Council rolled out an additional RMB200 billion relending quota to support key industries in the real economy and pledged to support international trade and open up to foreign investment. Ethereum Merge – a new chapter in crypto Yesterday, the second-largest cryptocurrency Ethereum successfully underwent its merge from proof-of-work to proof-of-stake. From consuming around 0.2% of the world’s electricity, Ethereum now consumes a fraction of that. Our Crypto analyst calls it a new chapter not only for Ethereum but crypto in general. Read more here.    For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-16-sept-2022-16092022

US railroad companies and the unions representing their workers reached a tentative agreement early Thursday to prevent a rail strike in the US. Avoiding a rail strike is good news, but not good enough to give a smile to investors. The markets remain too focused on inflation. Increases and decreases The S&P500 closed the session more than 1% lower, as US retail sales and jobless claims – which both hinted that the US economy remains relatively resilient to the Federal Reserve (Fed) rate hikes - didn’t help keeping the Fed hawks at bay. The US 2-year yield spiked to 3.90%, the mortgage rates in the US topped 6%, the US dollar consolidated a touch below the 110 level, Ethereum lost 10% and gold dived to $1660 per ounce. US crude took a good 4% dive. But this time, it wasn’t just the recession talk, it was because the Americans rectified a beginner’s mistake that they have made earlier this week, saying that they will refill their strategic oil reserves if prices fall below $80 per barrel. Waiting For Reports We will likely close this week on a sour note. Next on the economic calendar are the final European CPI read, which will confirm that inflation spiked to 9.1% in August, and the University of Michigan Consumer Sentiment, which will hopefully not print a significantly positive number, because the Fed hawks got strong enough the week before the Fed decision. Watch the full episode to find out more! 0:00 Intro 0:25 US rail strike will likely be avoided! 2:08 But sentiment remains sour on strong US data 3:57 World Bank points at recession 5:04 Crude oil down as Americans understand their mistake 6:41 Strong dollar weighs on major peers 6:55 Joke of the day 7:09 Ethereum down 10% post Merge upgrade 7:51 Adobe dives 17% on Figma acquisition 8:44 Watch EZ final CPI & UoM Consumer Sentiment today! 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 #rail #strike #inflation #USD #EUR #GBP #Gold #XAU #crude #oil #natgas #energy #crisis #Bitcoin #Ethereum #Merge #update #Bitcoin #Adobe #Figma #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

At the close on the New York Stock Exchange, the Dow Jones fell 0.45% to hit a monthly low, the S&P 500 index fell 0.72%, and the NASDAQ Composite index fell 0.90%. The leading performer among the components of the Dow Jones index today was Home Depot Inc, which gained 4.43 points (1.63%) to close at 275.97. Amgen Inc rose 3.48 points or 1.53% to close at 231.14. Johnson & Johnson rose 2.52 points or 1.53% to close at 167.60. The losers were Boeing Co shares, which fell 5.49 points or 3.67% to end the session at 144.29. Chevron Corp was up 2.60% or 4.17 points to close at 156.45, while Walt Disney Company was down 2.28% or 2.52 points to close at 108. 25. Leading gainers among the S&P 500 index components in today's trading were Iron Mountain Incorporated, which rose 3.35% to hit 55.29, Newmont Goldcorp Corp, which gained 3.09% to close at 43.71, and also Dollar Tree Inc, which rose 2.89% to end the session at 141.92. The biggest losers were FedEx Corporation, which shed 21.40% to close at 161.02. Shares of WestRock Co lost 11.48% to end the session at 34.15. Quotes of International Paper fell in price by 11.21% to 35.23. Leading gainers among the components of the NASDAQ Composite in today's trading were Panbela Therapeutics Inc, which rose 53.06% to hit 0.58, Applied Opt, which gained 50.40% to close at 3.76, and shares of Axcella Health Inc, which rose 29.57% to end the session at 2.41. The biggest losers were Aditx Therapeutics Inc, which shed 58.52% to close at 4.31. Shares of Esports Entertainment Group Inc lost 46.15% and ended the session at 0.18. Shuttle Pharmaceuticals Inc lost 45.94% to 8.99. On the New York Stock Exchange, the number of securities that fell in price (2294) exceeded the number of those that closed in positive territory (816), and quotes of 121 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,586 stocks fell, 1,158 rose, and 233 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.11% to 26.30. Gold Futures for December delivery added 0.38%, or 6.35, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 0.29%, or 0.25, to $85.35 a barrel. Brent oil futures for November delivery rose 0.81%, or 0.74, to $91.58 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.10% to 1.00, while USD/JPY fell 0.40% to hit 142.95. Futures on the USD index fell 0.02% to 109.43.   Relevance up to 05:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293169

Summary:  Sentiment in U.S. equities has been dampened by rising expectations of larger rate hikes for the rest of the year and profit warnings and depressed remarks from the management of heavy-weight companies about their business outlook and the economy. All eyes are on the FOMC meeting this Wednesday. China’s August industrial production, retail sales, and infrastructure construction surprised on the upside but housing market activities and home prices remained sluggish. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) are looking bearish again US equities closed off the week with the biggest loss since January after heavy-weight companies were hit by a series of company earnings and guidance woes, with their pain being compounded by rising bond yields. S&P 500 was down 0.7% on Friday and down 4.8% for the week and Nasdaq 100 dropped 0.6% on Friday and 5.8% for the week, wiping out the prior week’s gains. The Nasdaq 100 is now down 29% from its November 2021 peak and the technical indicators on the monthly chart tend to suggest further downside ahead. Big US stock movers   Last week there were a number of industrial titans, first Dow Chemical (DOW:xnys), Eastman Chemical (EMN:xnys), Huntsman (HUN:xnys), Nucor (NUE:xnys), and capped with FedEx (FDX:xnys) warning about grim demand outlook.  FedEx only missed EPS for the August quarter massively but also cut its Nov quarter EPS guidance and completely withdrew the FY2023 guidance, citing significantly worsened macroeconomic trends both internationally and in the US. FedEX tumbled 21.4% on Friday. Amazon (AMZ:xnas) declined 2.2%, following FedEx’ warning. General Electric (GE:xnys) warned the supply chain pressure is having a negative impact on profits.  Uber (UBER:xnys) dropped 3.7% after the ride-hailing services provider following a major data breach in its computer network caused by a hacker.  Amazon (AMZ:xnas) declined 2.2%, being dragged down by the woes in FedEx.  Adobe (ADBE:xnas) slid another 3.1% on Friday and a massive 19.4% in two days since the software maker announced a USD20 billion offer to acquire Figma, collaborated product design platform at 100x of the latter’s recurring revenue. For more discussion on FedEx and Adobe, please refer to Peter Garny’s note here.  Last Friday, over USD3 trillion notional of options expired on Friday and S&P3900 puts traded about 95,000 contracts.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Trading in treasuries on Friday was mixed, with yields of -2-year and 10-year notes unchanged at 3.86% and 3.45% respectively as 5-year yields came off 3bps to 3.63%, and 30-year bonds underperformed for the first time during the week, seeing yield rising 4bps to 3.51%. Treasuries pared their early losses (higher yields) after the 5-10 year inflation expectations in the University of Michigan consumer sentiment survey fell to 2.8%, the lowest since July 2021.  The underperformance in the 30-year bonds was attributable to supply, including a USD12 billion 20-year treasury bond auction on Tuesday and expected corporate issuance of about USD20 billion this week.  The latest data shows that the holding of Japan, the largest foreign holder of U.S. treasury securities, fell USD2 billion to USD1.23 trillion and China, the second largest holder, saw its holdings increase by USD2.2 billion to USD970 billion in July.     Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Shares traded in Shanghai and Shenzhen plunged, with CSI 300 down 2.4%.  The General Office of the State Council issued guidelines to encourage securities firms, funds, and financial guarantee companies to lower fees.  Shares of brokerage firms fell across the board in mainland bourses by nearly 5%.  East Money (300059:xsec) tumbled 10.8%. Chinese brokerage companies listed in Hong Kong also plunged, with GF Securities (01776:xhkg) down by 8.6%, CITIC Securities (06030:xhkg) down by 5.0%, Huatai Securities (06886:xhkg) down by 4.8%.  Chinese property stocks fell in both the mainland bourses and Hong Kong bourse, following the report that new home prices 2nd to 4th tier cities fell sharply again in August despite the recent relaxation of home purchases in a large number of cities.  The weakness of the property sector in the fixed asset investment data in August and the news that the city of Suzhou resumed home purchase restrictions on non-residents in four districts added to the woes in the developer space.  Country Garden (02007:xhkg) tumbled 7.6%.  The EV space declined, falling from 1% to 4.5% following the Ministry of Industry and Information Technology’s Vice Ministry said that there are “blind investments” and overlapping projects in EV in some provinces and municipalities.  In the China internet space, Kuaishou (01024:xhkg) led the charge lower, down more than 7%, as Alibaba (09988:xhkg), Tencent (00700:xhkg), Meituan (03690:xhkg), and Bilibili (09626:xhkg) down from 1.5% to 4.4%.  Australia’s ASX200 has wiped out July’s rally. Focus will be on RBA minutes released Tuesday The ASX200 shed 2.3% last week, erasing July’s gain but faring better than US equities. The market woes have not only come after Australian 10-year bond yield rose to fresh highs, up 0.2% last week, while hovering in 8-year high neighbourhood. But secondly, market sentiment has also been capped as the Fed is set to aggressively hike rates, which pressures Australia’s tech stocks, with many Aussie tech companies making the majority of their revenue from the US. And thirdly, metal commodities have come under pressure again of late, as China’s demand continues to wane. In fact, fresh Chinese export data shows their rare earths and aluminium exports surged yoy. Meanwhile total China’s imports of steel plunged 16% yoy, corn fell 44% and wheat dropped 25% yoy. The trifecta of issues is seeing the ASX200’s technical indicators on the day, week and month charts flag further downside is ahead. Australian dollar on notice with the Fed to hike this week The AUDUSD is under pressure after hitting a new low last week, 0.6727 US cents, which is about a two year bottom. Despite already losing 7% this year, the commodity currency, the AUDUSD is on notice again this week with the Fed expected to hike by 75bps (0.75%) at its Wednesday meet, which will take the Fed funds rate to 3-3.25%. There is also a slim chance (25% chance) of a full percentage hike of 100bps (1%) after the hotter-than-expected August inflation. Either way, the fundamentals support the US dollar gaining momentum against the Aussie, especially as the RBA is limited in its hiking power and likely to only hike by 0.25% next month. Also consider a jump in the US 10-year yield will likely further bolster the USD. A slightly softer USD heading into the FOMC week The USD is slightly softer going into the FOMC week amid some profit-taking, but it still remains the haven of choice with massive amounts of policy tightening packed into the week. AUDUSD pared some of the recent losses amid China reopening optimism and RBA’s Kearns saying that Aussie home buyers could benefit from higher rates. USDCAD rose to near 2-year highs on Friday at 1.3308, partly oil induced, but also due to increasingly sour sentiment and perceptions that BoC-Fed policy will likely diverge in wake of the latest disappointing Canadian employment data vs still-tight US labor markets. USDJPY will be a key focus with both FOMC and BOJ meetings scheduled in the week, and possibility of another round of strong verbal intervention from the authorities is seen. EURUSD is back above parity, as ECB members stay hawkish, but risks remain titled to the downside in the near term. Crude oil (CLU2 & LCOV2) With massive central bank action scheduled in the week, it can be safely assumed that demand concerns will likely remain center-stage. A spate of rate hikes is aggravating concerns of an economic slowdown, but easing of restrictions in China’s Chengdu today will ease some of the concerns. Dalian will also exit restrictions today. Nevertheless, more supply disruptions remain a risk. Germany seized the local unit of Russian oil major Rosneft PJSC, including three refineries. One of those is now preparing for short-term restrictions in crude supplied via the Druzhba pipeline. WTI futures were seen higher above $85/barrel in early Asian hours, while Brent futures were close to $92. Gold (XAUUSD) Gold saw some recovery after touching support of $1660/oz on Friday as interest rate hike bets picked up following the hotter-than-expected August CPI in the US last week. Further resilience in economic data out of the US has further kept interest rates expectations on an upswing, while rising geopolitical and economic risks are doing little to entice haven buying as the US dollar still remains the prime safe-haven choice. Gold was back close to $1680 this morning in Asia. The risk of the FOMC sending the US economy into a recession before getting inflation under control is rising and, once that occurs, the dollar is likely to turn sharply lower, thereby supporting fresh demand for investment metals. What to consider? University of Michigan survey remains optimisticThe preliminary September University of Michigan sentiment survey saw the headline rise to 59.5 from 58.5, just short of the expected 60, but nonetheless marking a fourth consecutive rise. Notably, the rise in forward expectations was starker than in current conditions, with the former also coming in above consensus expectations. Also, key were the inflation expectations, which echoed what was seen in the Fed surveys last week. The 1yr slowed to 4.6% from 4.8% and the 5yr expectations slowed to 2.8% from 2.9%.   China’s August activity data improved better-than-expected China’s activity data for August came in at stronger than expected growth rates.  Industrial production grew 4.2% Y/Y in August beating the consensus estimate of 3.8% Y/Y and improving from last month’s 3.8% Y/Y.  Higher output in automobile and power generation offset the impact from slower activities in other industries such as pharmaceuticals and computers.  Retail sales grew 5.4% Y/Y in August, well exceeding the 3.3% Y/Y median forecast from the Bloomberg survey and the 2.7% YoY in July. A favourable base effect and stronger auto sales during the month boosted retail sales and more than offset the drag from tightened pandemic control measures and a slow housing market.  Fixed asset investment grew 6.4% Y/Y in August, notably accelerating from the 3.6% Y/Y in July, led by 14.8% Y/Y growth in infrastructure and 10.7% Y/Y growth in manufacturing investments while investment in properties slowed further to a decline of -13.9% Y/Y in August from July’s -12.1%.  China’s property prices in lower-tier cities continued to decline in August According to data released by the National Bureau, the weighted average of new home prices in the top 70 cities in China fell 1.1% Y/Y (vs -0.6% Y/Y in July), driven largely by declines in property prices in lower-tier cities.  The easing of home purchase restrictions by local governments has so not been able to stop the decline in property prices in lower-tier cities.  Sequentially, new home prices in Tier-2, Tier-3, and Tier-4 cities dropped by about 5% M/M annualized while new home prices in Tier-1 cities rose by 1.6% M/M annualized.  An unexpected seventh bidder for Macao gambling licenses created uncertainties about incumbent operators In a tender for the six 10-year casino operating licenses, the six incumbent casino operators faced an unexpected rival from the Malaysian Genting Group which submitted a bid into the tender.  As the maximum number of licenses remains at six, the entry of Genting Group into the competition may mean one of the incumbent license holders might be ousted. Chengdu exits lockdown Chengdu, the largest city in Western China ends its nearly 3-week-long lockdown today and allows its 21 million population to leave their home and resume most aspects of normal life.  Residents are required to do PCR tests at least once a week.  Hong Kong considers ending hotel quarantine for inbound travelers The Hong Kong Government is reviewing and considering plans to end the hotel quarantine requirements for inbound travelers.  Currently, travelers to Hong Kong are required to be quarantined in a hotel for 3 nights and followed by four-day medical monitoring at home and then another 3 days of self-monitoring without mobility restriction.  The news may lift the share price of travel-related stocks, such as Cathay Pacific (00293:xhkg).   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-19-sept-2022-19092022

Today, U.S. stock index contracts seem to indicate the possibility of a cash market opening on the downside. Investors may be estimating the possibility of Fed action, and not just this week, but for the rest of the year. Currently, the market may believe that the Federal Reserve will not end the cycle of hikes below the 4 percent level, but above it. This could put pressure on company valuations on Wall Street. Have low-interest rates helped the Wall Street stock market? Since 2008, the US stock market has been able to enjoy the ongoing bull market that followed the Great Financial Crisis. Back then, both the financial markets and the economy were supported by very low-interest rates or asset purchase programs. From 2008 until the beginning of 2022, the average federal funds rate was 0.58 percent, and the average price-to-earnings P/E ratio for the entire S&P 500 index had a value of 25. Currently, the P/E for the S&P 500 is 21.49, according to wsj.com, and the federal funds rate rose to 2.33 percent in September. The market, in turn, seems to expect that it could rise above 4 percent in the next two quarters. Source: Conotoxia MT5, US500, W1 Current valuations on Wall Street According to data from wsj.com, the forward P/E ratio, which is the one showing the future earnings of companies in relation to the current stock price, is 17.48 for the S&P 500, while the Nasdaq 100 has a value of 22.57. The current values are 21.49 and 24.97, respectively. This may mean that the market expects that the earnings of U.S. companies may increase next year, which may be good news, but on the other hand, interest rates may rise at the same time. This, in turn, could have a negative impact on company valuations and could cause rates to potentially be lower than they were during a period of low-interest rates. If investors can choose between the U.S. dollar soon at 4.5 percent interest, or riskier stocks with a P/E ratio of 17, it seems that some of them may choose the U.S. dollar over stocks and thus demand for them may be lower. Another group of investors, on the other hand, may forgo risk in favor of safety until valuations become more attractive relative to interest rate levels. This, in turn,  could  happen in one of two ways, either U.S. companies will begin to rapidly expand earnings (which may be difficult in an environment of a slowing economy) or stock prices will find lower levels. Forecasts for the S&P500 at the end of 2022 According to analysts surveyed by Reuters, the S&P 500 could end this year at 4280 points. This is the median forecast of nearly 50 strategists surveyed by Reuters in the second half of August 2022. The median forecast for 2022 is down from 4400 points in a Reuters survey conducted in late May. Survey respondents, therefore, seem to be optimistic about the index's year-end result after all. This could mean a return to the peaks of August this year.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Are valuations on Wall Street currently attractive? (conotoxia.com)

Summary:  Equity markets consolidated some of the recent losses yesterday as traders mull a cavalcade of central bank meetings this week, topped by the FOMC meeting tomorrow. The market has been burned in its attempts at pricing “peak Fed” in recent months and now Fed rate expectations are running steadily higher into tomorrow’s meeting. Can the Fed deliver on the hawkish side of a market that has finally begun to respect what this Fed is all about?   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Yesterday US equities touched new lows intraday for the cycle lower that started on 17 August, but despite weak sentiment and downward momentum the market turned around rallying into gains. S&P 500 futures rallied 1.9% from its lows to the close and the positive momentum is continuing this morning with the index futures trading around the 3,929 level. The US 10-year yield is still sitting just below 3.5% and any meaningful push above the 3.5% level will likely renew the headwinds for equities. The rally in US equities was driven by no news so the setup feels almost like the rally ahead of the Jackson Hole event and the recent US CPI report. The market wants good news and a positive surprise, but the question is whether the FOMC will deliver that tomorrow. We doubt it believing the Fed will rather fail being too hawkish than being too dovish. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong equities rallied, with Hang Seng Index rising 1.3% and Hang Seng Tech Index (HSTECH.I) climbing 2.3%. Alibaba (09988:xhkg), Meituan (03690:xhkg), JD.COM (09618:xhkg), and Netease (09999:xhkg) surged 3% to 4%. EV stocks rebounded, with XPeng (09868:xhkg) soaring nearly 9%, NIO (09866:xhkg), and Li Auto (02015:xhkg) rising nearly 6%. Macao casino stocks were among the outperformers, rising from 3% to 6% across the board. CSI300 Index was little changed, with solar power, energy storage, and auto outperforming. Major Chinese banks fixed their 1-year and 5-year Loan Prime Rates unchanged this morning. USD traders mull FOMC meeting this Wednesday The US dollar slightly on its backfoot yesterday and overnight as EURUSD criss-crosses parity and USDJPY is locked in a tight range ahead of tomorrow’s FOMC meeting. The degree to which the Fed is able to surprise the market on the hawkish side and trigger another rise in US treasury yields (possibly it as important to see longer US yields rising, not just an adjustment at the front-end of the US yield curve to absorb,  for example, a higher than expected Fed “dot plot” forecast for next year) will determine whether the US dollar is set for another significant surge to cycle highs in the wake of the meeting. AUDNZD breaks higher through major level Despite a nominally dovish set of RBA minutes overnight, AUDNZD leaped to a new six-year high overnight, clearing the 1.1300 level. The diverging current account developments in recent quarters are likely a key driver as Australia features a formidable commodity portfolio and has become a current account surplus nation at a time when New Zealand’s reliance on energy imports has taken a toll on its trade balance, which has gone into a steep deficit. The next focus is perhaps 1.1430, the high from 2015 and highest since AUDNZD traded in a range north of 1.2500 for much of the 2008-2012 time frame. Gold (XAUUSD) Gold putting in a higher low compared with Friday was the takeaway from Monday’s price action. The yellow metal has settled into a 20-dollar range near a two-year low ahead of Wednesday’s FOMC meeting and while the risk of a 1% hike cannot be ruled out, the market seems the be settling for another 75 bp hike, a development that may ease some of the recent selling pressure which has seen speculators flip their positions back to a net short, a relatively rare occurrence. Today’s price action is likely to be just noise ahead of Wednesday with algo-driven strategies likely to be in the driving seat, given the dollar and yield movements the overall say on the direction. Below $1854, last week's low in gold, the market may target the 50% retracement of the 2018 to 2020 rally at $1618. Crude oil (CLV2 & LCOX2) The best that can be said about Monday’s price action in energy is that traders don’t currently know which leg to stand on, a situation made worse by thin liquidity. With another interest rate hike looming and with global growth slowing there are good reasons to call for lower prices. Lower prices were also sought in response to news China may grant export permissions for excess fuel supplies, and the US announcing it will offer an additional 10 million barrels from its strategic reserves. Against these a softer dollar and recovering equity markets and continued worries about Russian supply once the EU embargo begins in early December helped sent Brent and WTI back in black following a near seven-dollar round trip. More of the same can be expected until a clearer picture emerges. US Treasuries (TLT, IEF) US treasury yields continue to trade near the peak of the cycle as the market wonders whether the 10-year can explore new territory for the cycle above 3.50% the cycle high from back in June, as well as whether any adjustment higher in Fed rate hike expectations will be entirely felt at the front end of the yield curve, as the inversion has fallen close to the cycle extreme near –0.50% for the 2-10 yield spread as the 2-year rate pushed close to 4.00%. What is going on? The euro area looks set to enter a recession According to Bloomberg, economists see an 80 % chance of a recession in the euro area in the next twelve months. This now looks inevitable. Last week, Barclays downgraded its 2023 growth forecast for France to minus 0.7 %. The Bank of France also published its three main scenarios for the French economy for next year. A recession is one of them (expected drop in GDP of minus 0.5 %). This is not its baseline, though. The length and amplitude of the recession in the eurozone will highly depend on the evolution of the energy crisis and on the risk of energy rationing. This is a bit too early to know exactly how much GDP will drop next year. Economists also expect that the European Central Bank (ECB) will continue to tighten monetary conditions (financial conditions are still loose in the euro area based on the latest credit growth data). More than half consider a second 75 basis-point rate hike is likely in October. This is only the beginning. It is likely the ECB will continue until early next year (when the recession might be officially announced). Covid vaccine related stocks tumble on Biden declaring pandemic over Shares in Moderna and BioNTech fell 7% and 9% respectively as the Biden administration declared the pandemic for over. The designation follows other countries and will lower the alertness among health care regulators and likely lower the demand for Covid vaccines as only the very high-risk people in the population will get a vaccine and booster shoots. This is worse than expected news for Covid vaccine manufacturers such as Moderna and BioNTech that are now forced to expand their product portfolio to offset this weakness. US NAHB declines for ninth month in a row NAHB Housing Market Index reported its ninth consecutive decline to 46.0, beneath the prior 49.0 and expected 47.0. Save for two panicky months during the early 2020 pandemic break-out, this is the lowest levels cine 2014, but for perspective, the indicator was sub-20 for most of 2008 through 2011. The weaker-than-expected data highlighted the pessimism hitting the US housing market due to the rising mortgage rates, and housing starts may be set to cool further in the coming months. Japan CPI hits a 31-year high Japan’s August CPI touched the dreaded 3% YoY mark from 2.6% previously, coming in at the strongest levels in over three decades and significantly above the Bank of Japan’s 2% target level. The core measure, which excludes fresh food and energy, also come in higher-than-expected at 1.6% YoY. With wage growth remaining restrained, this may mean nothing for Bank of Japan, which remains committed to maintaining its yield curve control policy. However, the markets may start to test the BoJ’s resolve once again, especially with US 10-year yields also touching 3.5% overnight while JGB yields remain capped by BoJ YCC policy at 0.25%. Grains trade mixed but remains in an uptrend The Bloomberg Grains Index continues its steady ascent after hitting a low point two months ago with global weather concerns, dwindling stockpiles and uncertainty about the Ukraine grain deal being the focus. Chicago wheat nevertheless fell on Monday on an expected increase in Russia’s crop that will compete with US exports already challenged by a strong dollar. Soybeans was supported by Chinese export demand while corn traded sideways but finding support at its 21-day moving average. Lithium prices and stocks back at records Lithium equities are back in focus as the lithium price hits a fresh record after tripling in the past year fuelled by electric vehicle demand. Recently the IEA forecast lithium demand to accelerate more than 40 times over the next two decades. The lithium carbonate price has also had an extraordinary run, up 1,000% from its covid low as supply remains a concern. Shares in Albemarle Corp (ALB:xnys), the world’s biggest lithium company and its neighbour Livent (LTHM:xnys), as well as SQM (SQM:xnys), the world’s second biggest lithium producer are on watch with their shares trading near their peaks. US President Biden wows support for Taiwan When being asked in a CBS 60 Minutes interview whether the U.S. would send forces to defend Taiwan in case of military actions from mainland China, President Biden replied: “Yes, if in fact, there was an unprecedented attack.” In answering a follow-up question about if the U.S, unlike in Ukraine, would send forces men and women to defend Taiwan, Biden said: “Yes”. China’s Emerging Industries PMI slightly improved Emerging Industries PMI (EPMI) in China climbed slightly to 48.8 in September from 48.5 in August. The modest improvement was below market expectations and the 48.8 print was the lowest September figure (EMPI is not seasonally adjusted) since 2014 when the survey first started, suggesting weak growth momentum. What are we watching next? Sweden’s Riksbank set for largest hike in decades today The market is divided on whether the Riksbank hikes 75 basis points or a full 100 basis points, either of which would be the largest hike in nearly 30 years. One factor possibly tilting the odds in favour of a larger move is the exchange rate, as EURSEK trades near the range high of 10.90 since 2020, and USDSEK is less than three percent from its all-time high, which was just above 11.00 back in 2001. SEK is traditionally very sensitive to risk sentiment, so a larger hike may only impress beyond a knee-jerk reaction if broader sentiment and the outlook for Europe improves. FOMC meeting tomorrow Many headlines discuss whether the Fed is set to hike 75 or 100 basis points tomorrow. The Fed generally doesn’t like to surprise markets too much, so arguably it is safe in “only” hiking another 75 basis points as the 100-basis point odds are priced rather low. The more likely hawkish surprise scenario is one in which the Fed sets the “dot plot” of Fed policy forecasts for 2023 higher than the market currently expects – possibly as high as 5.00% for the median expectation. Another item to watch is the Fed’s forecast of PCE inflation for 2023 and 2024, together with where it places the first forecasts for inflation in its first set of forecasts for 2025. Earnings calendar this week This week our earnings focus is on Lennar on Wednesday as US homebuilders are facing multiple headwinds from still elevated materials prices and rapidly rising interest rates impacting forward demand. Later during this week, we will watch Carnival earnings as forward outlook on cruise demand is a good indicator of the impact on consumption from tighter financial conditions. Today: Haleon Wednesday: Lennar, Trip.com, General Mills Thursday: Costco Wholesale, Accenture, FactSet Research Systems, Darden Restaurants Friday: Carnival Economic calendar highlights for today (times GMT) 0730 – Sweden Riksbank Interest Rate Announcement 0800 – ECB's Muller to speak 1230 – Canada Aug. Teranet/National Bank Home Price Index 1230 – US Aug. Housing Starts & Building Permits 1230 – Canada Aug. CPI 1700 – ECB President Lagarde to speak 2030 – API's Weekly Crude and Fuel Stock Report 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-sep-20-2022-20092022

At the close of the New York Stock Exchange, the Dow Jones fell 1.01% to a one-month low, the S&P 500 index fell 1.13%, and the NASDAQ Composite fell 0.95%. The leading performer among the components of the Dow Jones index today was Apple Inc, which gained 2.42 points (1.57%) to close at 156.90. Quotes Boeing Co rose by 1.06 points (0.73%), ending trading at 145.94. 3M Company lost 0.12 points or 0.10% to close at 116.52. The biggest losers were Nike Inc, which shed 4.79 points or 4.47% to end the session at 102.42. Caterpillar Inc was up 2.26% or 4.12 points to close at 177.99, while Home Depot Inc was down 2.23% or 6.25 points to close at 274. 17. Leading gainers among the components of the S&P 500 in today's trading were Wynn Resorts Limited, which rose 2.90% to hit 67.80, Valero Energy Corporation, which gained 2.63% to close at 107.42, and also shares of Expedia Inc, which rose 2.09% to end the session at 104.63. The fallers were shares of Ford Motor Company, which fell 12.32% to close at 13.09. Shares of Iron Mountain Incorporated shed 9.84% to end the session at 50.65. Quotes of Generac Holdings Inc decreased in price by 6.99% to 183.49. The leading gainers among the components of the NASDAQ Composite in today's trading were Sobr Safe Inc, which rose 234.98% to 3.05, Powerbridge Technologies Co Ltd, which gained 60.62% to close at 2.20. as well as Neurobo Pharmaceuticals Inc, which rose 42.40% to end the session at 20.79. The biggest losers were Virios Therapeutics Llc, which shed 75.50% to close at 0.49. Pagaya shares shed 67.24% to end the session at 2.29. Quotes of Integrated Media Technology Ltd decreased in price by 46.07% to 1.03. On the New York Stock Exchange, the number of securities that fell in price (2599) exceeded the number of those that closed in positive territory (546), while quotes of 129 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,705 companies fell in price, 1,091 rose, and 227 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 5.43% to 27.16. Gold futures for December delivery shed 0.29% or 4.80 to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 1.19%, or 1.02, to $84.34 a barrel. Brent oil futures for November delivery fell 1.14%, or 1.05, to $90.95 a barrel. Meanwhile, in the Forex market, EUR/USD was flat at 0.49% at 1.00, while USD/JPY edged up 0.35% to hit 143.71. Futures on the USD index rose 0.39% to 109.89. Relevance up to 05:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293539

Summary:  Nasdaq 100 and S&P 500 on tenterhooks after bond yields hit record highs, the US dollar index hits a record with markets bracing for the Fed’s jumbo hike. Shocking German PPI and Riksbank’s 100bps rate hike sets the stage for the FOMC to deliver a hawkish surprise. Ford becomes the second major company to downgrade their outlook, seeing its shares slide 12%, and sending another warning signal on the upcoming earnings season. Hang Seng rallies on the prospect of ending hotel quarantine. Russia-Ukraine tensions on a boil, sending wheat futures up 7%. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) on tenterhooks after bond yields hit record highs The US benchmark indices came under further pressure overnight (with the S&P500 down 1.1%, the Nasdaq 100 losing 0.9%) with investors selling equities and bonds and buying the US dollar, with markets on tenterhooks for the Fed’s jumbo rate hike on Wednesday. Added pressure came when the US 2-year bond yield hit 4% and the 10-year US bond yield hit 3.6%. Those are treasury yields’ highest levels since 2011, and they are better yields than the S&P500’s 1.7%. Meanwhile the US dollar index hit a record high as investors took shelter in the currency. Investors and traders are bracing for the Fed to boost rates to levels not seen since before the 2008 financial crisis. But is there more downside? The risk is that the Fed paves out a hawkish dot plot, or raises rates more than the 75 bps expected. That scenario will pressure equities. However, if the Fed believes inflation is rolling over, and signals this is peak hawkishness, then equities may see a knee jerk reaction and whipsaw higher. The technical indicators on the day and week chart for the S&P500 and Nasdaq imply further pressure are ahead. Big U.S. stock movers All 11 sectors in the S&P 500 fell on Tuesday, with Real Estate, Materials, and Consumer Discretionary falling the most, and Information Technology, Consumer Staples, and Energy relatively outperformed. Ford (F:xnys) tumbled 12.3% after the automaker said that inflation is making supplier costs USD 1 billion higher than expected in the current quarter. Gap (GPS:xnys) lost 3.2% on reports that the apparel retailer is cutting 500 corporate jobs in response to growing costs and weaker sales. Casino stocks gained as investors found optimism from relaxed Covid test requirements for passengers boarding a flight in Macao and the prospect of loosening hotel quarantine restriction in adjacent Hong Kong, through which many travelers arrive in Macao. Wynn Resorts (VYNN:xnas) gained 2.9% and Las Vegas Sands (LVS:xnys) climbed 1.2%. Apple’s (AAPL:xnas) shares rose 1.6% on Tuesday with estimates now suggesting the company’s most expensive iPhone, the iPhone 14 Pro model accounts for 60-65% of total iPhone 14 shipments, which is up from the previous estimated range of 55-60%. This means Apple could have a positive outlook when they release their next quarterly earnings in late October. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) were sold off again with 10-year yields reaching 3.6% intraday The sell-off in bonds continued on Tuesday.  The 5-year and 10-year segments of the treasury curve were hit most, with 10-year yields reaching a new intra-session high at 3.60% before paring and settling at 3.56%, up by 7bps from Monday.  The woes in the treasury markets stared across the pond in Europe following the larger-than-expected 100bp hike by the Riksbank in Sweden and the jaw-dropping 45.8% Y/Y increase in German PPI. A solid 20-year treasury bond auction, which stopped through 1.3bps and had a low award to primary dealers (8.1%), helped treasuries stage a short-lived rally and saw yields off their session highs before being sold (yields higher) again as a block sale of 7,200 contracts in the 5-year at 108-221/4 hit the tape.  The 2-year segment relatively outperformed, rising only 3bps in yield to finish the day at 3.97%, a touch below 4%. Hong Kong’s Hang Seng (HSIU2) rallied on the prospect of ending hotel quarantine   Hong Kong equities rallied on Tuesday, with Hang Seng Index rising 1.2% and Hang Seng Tech Index (HSTECH.I) climbing 2.0%. China’s Hong Kong and Macao Affairs Office of the State Council said the Chinese Government supports Hong Kong’s efforts to have “close, extensive contact” with the rest of the world. It was interpreted as a nod to Hong Kong’s plan to scrap the hotel quarantine requirement. Cathay Pacific Airways (00293) rose 2.2%. Stocks in the retail space gained, with jewellers surging from 2% to 7%. Macao casino stocks rose from 3% to 15% across the board, following the enclave extending the validity of PCR tests from 48 hours to 7 days for any person boarding a flight in Macao. Mainland state-owned media continued to publish articles with a positive tone to boost investor confidence. The latest was Securities Daily’s op-ed claiming that investors should have confidence in China’s long-term growth as the Government has launched quite a number of stimulus measures. CCTV says President Xi is committed to ensuring the stability of industrial and supply chains.  The China internet pace gained and Alibaba (09988:xhkg), Baidu (09888:xhkg), Meituan (03690:xhkg), JD.COM (09618:xhkg), and Netease (09999:xhkg) surged 2% to 4%.  EV stocks rebounded, with XPeng (09868:xhkg) soaring nearly 9%, NIO (09866:xhkg), and Li Auto (02015:xhkg) rising around 5%.  CSI300 Index was little changed, with solar power, energy storage, and auto outperforming.  Australia’s ASX200 to unwind yesterday’s rally. But watch for green and gold shoots in agricultural stocks The futures imply the ASX200 could unwind yesterday’s rally and rally 1.1% following US equites. However bright sparks might be seen in the soft commodity space with Wheat prices jumping 7.6% overnight as undersupply fears grip the market. It could be worth watching GrainCorp (GNC) and Elders (ELD).   Australian dollar against the NZ Dollar scales to 7-year highs The Aussie dollar against the kiwi dollar, the AUDNZD leaped to new highs, clearing the 1.1344 level. What supports this currency pair moving is the large divergence between Australia’s exports rising (Australia’s trade surplus rising), versus New Zealand’s imports increasing due to higher costs of energy products (and its trade deficit rising). If this continues, this supports AUDNZD. Want to know more? Australia’s trade account surplus trades near a record high, as Australia is exporting a record amount of coal and LNG. Inversely, the New Zealand economy is trading at a deficit for the second month in a row, as its heavily reliant on energy imports, which have increased significantly in price. What to watch if you are trading this pair? On Thursday September 22, NZ releases its Balance of Trade data. If there is another large deficit, we could see the AUDNZD leap up again. The next focus is perhaps 1.1516, the high of 2015. USDJPY range-bound despite the surge in US yields USDJPY saw some gains on Tuesday but the cap at 144 still prevailed despite the US 10-year yields making a fresh high. The verbal intervention from the Japanese authorities in the last few weeks, and the rate-check from last week, has helped to calm yen traders. However, if the FOMC delivers a hawkish surprise this week and Bank of Japan maintains its dovish policy, further pressure on the yen cannot be ignored. That may prompt another round of intervention from the Japanese authorities, spooking 2-way volatility, but still throwing up some potential trading opportunities as discussed here. Crude oil (CLU2 & LCOV2) suffers on the back of a stronger USD Crude oil prices were lower on Tuesday following the Riksbank’s hawkish surprise and a run higher in US Treasury yields as well as the US dollar. The fresh release announcement from the US strategic reserves scheduled through November also added to the downside. API inventories also saw crude stocks rising for the third straight week, and there were inventory builds across the board. WTI futures dipped below $84/barrel while Brent futures dipped below $91. This comes despite rising war tensions in Ukraine (see below) as the focus has shifted to the massive monetary policy tightening being delivered this week. What to consider? Riksbank goes for a 100bps rate hike, setting the stage for FOMC The Swedish Riksbank surprised yesterday with a 100-basis point hike to take the rate to 1.75%, a move only a minority were looking for. This, in addition to guidance that the Riksbank would look to continue hiking rates, took Swedish yields higher, but didn’t do much for the currency. The decision to hike by 1% was unanimous, prompted by the highest level of CPIF inflation since 1991 and the negative implication it could have on the upcoming wage negotiation which will lock in pay growth for the next three years. However, with global tightening wave turning more hawkish that expectations after ECB’s 75bps rate hike and Riksbank’s 100bps, the stage is being set for the FOMC to deliver above expectations as well. Shocking August German PPI According to the German statistics office Destatis, the PPI rose by 7.9% month-on-month in August. This is much higher than the consensus (2.4%). This shows that forecasting in the current macroeconomic environment is more challenging than ever. On a year-over-year basis, the increase is at 45.8%. This is an historical record. The continued jump is explained by higher energy prices (+139% year-over-year). But not only. Actually, inflation is broad-based. Prices for intermediate goods, for capital goods and for non-durable consumer goods are much higher too. This will probably get worse in the short-term. In the eurozone, it is unlikely the peak in inflation has been reached (contrary to the situation in the United States). Russia-Ukraine tensions heat up Russia is trying to stage a referendum on annexing the regions of Ukraine its forces still control. There were heightened geopolitical tensions regarding Russia and Ukraine where the separatists are to hold a referendum in Donetsk, Luhansk, Kherson and Zaporozhye on September 23rd-27th, although Ukraine and its allies have denounced the referendums as illegal and few countries are likely to recognize the results. An update from Putin on the matter is being awaited, where there have been some suggestions that he is considering introducing martial law and full mobilisation of the Russian army - the speech has now reportedly been delayed until 06:00BST/01:00EDT Wednesday. The move threatens to escalate the conflict even further, potentially giving Putin the formal legal basis to use nuclear weapons to defend what Moscow would consider Russian territory. China’s Emerging Industries PMI slightly improved Emerging Industries PMI (EPMI) in China climbed slightly to 48.8 in September from 48.5 in August.  The modest improvement was below market expectations and the 48.8 print was the lowest September figure (EMPI is not seasonally adjusted) since 2014 when the survey first started, suggesting weak growth momentum.  Reserve Bank of Australia minutes hint at more, but slower, rate hikes RBA minutes from the September 6 meeting suggested that there is more room for interest rates to go up, but there is no pre-set path given the uncertainties surrounding the growth/inflation outlook. After a 50bps rate hike announced at the September meeting, and with global tightening race picking up to make a 75bps as the new 25bps, expectations for further RBA rate hikes of that magnitude could have potentially gained traction. However, the RBA has said that it will consider either 25bps or 50bps for the upcoming meetings. While another 50bps can still be expected in October, given that inflation reached 6.1% (vs. target of -3%), the pace of tightening is set to slow from there. Chinese banks kept Loan Prime Rates unchanged China’s leading banks fixed the 1-year and 5-year loan prime rates unchanged at 3.65% and 4.30% respectively, as expected.  Ford, the second major company to downgrade their outlook Investors have been hit with the second major company downgrade in two weeks, with Ford (F) joining FedEx (FDX) in guiding of a challenging economic environment ahead. As mentioned yesterday, Ford warned inflation will cost its business $1 billion in the quarter, sending Ford shares down 12%, which is the stocks biggest loss in over 10 years. The automakers expect EBIT to range between $1.4b -$1.7 billion when it reports results next month. Lennar’s results may provide some insights into the U.S. housing market With 30-year fixed rate mortgage interest rates jumping above 6% for the first time in 14 years, since Sept 2008 and home affordability has fallen to historically low levels, investors are concerned about the state of the U.S. housing markets.  Results from a leading home builder Lennar (LEN:xnys) this Wednesday after market close will give a good opportunity for investors to gauge the latest market conditions in the U.S. housing market. Analysts, as per the survey by Bloomberg, are estimating revenue growth of 30% Y/Y and 8.3% Y/Y EPS growth in the quarter ending Aug 31, 2022.  Investors, however, will focus on the management’s comments and forward guidance.    Check out here for our views on the FOMC meeting and the Bank of Japan this week. For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-21-2022-21092022

The Australian dollar now and in the coming days will be in the weakest position against European currencies, as amid a general strengthening of the US dollar, commodity and stock markets are declining. Oil in the last two days has fallen in price by 2.35%, copper has lost 2.04% over the same time, the S&P 500 stock index -2.82%. The price is approaching the target level of 0.6565 on the daily chart, its breakthrough will open the way to the underlying level of 0.6515. The Marlin Oscillator of the daily scale is going down, it has an oversold zone ahead of it. A slight price correction from the nearest level of 0.6565 is possible, or a larger one from the level of 0.6515. The price is in a completely downward position on the H4 chart - the price is falling below both indicator lines, the Marlin Oscillator is falling in the negative area. Relevance up to 05:00 2022-09-23 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/322351

XAUUSD struggles to bounce back Bullion whipsawed after the Fed's rate hike came out in line with expectations. The price’s failure to hold above the critical level at 1680 may have triggered a long journey to the south. The RSI’s oversold condition led to some profit-taking by intraday traders. But stiff selling could be expected in the former demand zone around 1700. The bulls, if there is any left must lift 1735 before a bounce could materialise. Otherwise, the precious metal may drift towards 1640 from the base of a bullish breakout back in April 2020. SPX 500 tests critical support The S&P 500 plunged after another super-sized US rate hike. The break below 3900 has invalidated the recent bounce and put the buy side on the defensive. As sentiment deteriorates, strong selling pressure may continue to prevail. A fall below 3820 at the origin of a bullish breakout last July shows little buying interest left, and the index could continue to sink to the daily support at 3725 which is a critical floor to prevent a bearish reversal. The support-turned-resistance at 3920 is the first hurdle in case of a rebound. USOIL awaits breakout WTI crude weakens over a gloomy economic prospect amid tighter financial conditions. Sentiment has remained fragile after the psychological level of 90.00 proved to be a tough level to crack for now. The current consolidation above 81.50 is temporary, and a breakout on either side would dictate the direction in the days to come. Only a rally above 90.00 could turn the mood around in the short-term. The bearish bias might take over and a breakout would resume the downtrend and send WTI to 78.00.

At the close of the New York Stock Exchange, the Dow Jones fell 0.35% to a 3-month low, the S&P 500 fell 0.84%, and the NASDAQ Composite fell 1.37%. Merck & Company Inc was the top performer among the components of the Dow Jones in today's trading, up 2.98 points or 3.53% to close at 87.51. Quotes Johnson & Johnson rose by 2.90 points (1.78%), ending trading at 166.18. Salesforce Inc rose 2.52 points or 1.71% to close at 150.15. Shares of American Express Company were the leaders of the fall, the price of which fell by 5.68 points (3.82%), ending the session at 143.03. Boeing Co was up 3.20% or 4.58 points to close at 138.71, while Goldman Sachs Group Inc was down 2.43% or 7.79 points to close at 312. .92. Among the S&P 500 index components gainers today were Eli Lilly and Company, which rose 4.85% to 310.87, Merck & Company Inc, which gained 3.53% to close at 87.51. , as well as shares of Bristol-Myers Squibb Company, which rose 2.63% to end the session at 71.29. The biggest losers were Caesars Entertainment Corporation, which shed 9.44% to close at 37.62. Shares of Ball Corporation lost 8.66% to end the session at 49.23. FactSet Research Systems Inc dropped 8.29% to 394.75. Leading gainers among the components of the NASDAQ Composite in today's trading were Spero Therapeutics Inc, which rose 167.74% to hit 2.20, Avenue Therapeutics Inc, which gained 105.90% to close at 0.44, and also shares of Panbela Therapeutics Inc, which rose 46.39% to end the session at 0.35. Top Ships Inc. was the biggest loser, shedding 44.06% to close at 0.12. Shares of Ecmoho Ltd lost 42.72% and ended the session at 0.10. Quotes of Pintec Technology Holdings Ltd decreased in price by 28.80% to 0.42. On the New York Stock Exchange, the number of securities that fell in price (2596) exceeded the number of those that closed in positive territory (546), while quotes of 120 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,011 stocks fell, 765 rose, and 257 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.29% to 27.35. Gold futures for December delivery added 0.24%, or 4.00, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 0.54%, or 0.45, to $83.39 a barrel. Brent oil futures for November delivery rose 0.50%, or 0.45, to $90.28 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.04% to 0.98, while USD/JPY fell 1.14% to hit 142.40. Futures on the USD index rose by 0.65% to 111.07.   Relevance up to 05:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293918

The ongoing correction has only just started making us feel uneasy and we should expect a move into the fear-zone or even extreme fear-zone before this correction is over. Taking into consideration how much the central banks and governments injected extreme liquidity into the market during the Covid-19 pandemic, we should expect an equally huge amount that needs to be removed from the financial system to bring it back into balance. So, we should be looking for a spike into the fear or even extreme fear zone before jumping on the train again for the next big upswing. Relevance up to 07:00 2022-09-26 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/293924

Summary:  Massive tightening was delivered globally after the Fed’s 75bps rate hike, which saw Bank of England, SNB, Norges Bank, and several emerging market central banks joining the race. Bond yields rose to fresh multiyear highs, with 10yr hitting 3.70% and 2yr well above 4%. The strength in the US labor market continues to hint at more room for tightening, and equities slumped. Japan’s intervention to defend the yen put some brakes on the dollar rally, but it would likely be ‘temporary’ at best, and focus shifts to US/UK and Eurozone PMIs today. What is happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) pressured by bond yields rising. S&P500 experiencing a rare technical breach With a parade of central banks joining the Fed in boosting rates to curb inflation, the US 10-year yield rose to 3.7% (its highest since 2011), while the two-year yield rose for the 11th day (which its longest rally in over three decades). This upward pressure in safe-haven yields is luring investors away from investing in companies exposed to inflation and facing earnings slowdowns. The Nasdaq Composite fell 1.4%, on Thursday, shedding 3% over the week, while the S&P500 lost 0.8% on Thursday, falling 3% Monday-Thursday. Of note, the S&P500 is experiencing a rare technical breach, as it trades under its 200-day moving average for over 100 sessions. The last time this occurred in the last 30 years; was in the tech bubble when the index fell 50% before hitting its trough, and before that, the Global Financial Crisis, when the index fell 40% before hitting its trough. The technical indicators show the index is poised for more downside with the June bottom likely to be retested in the coming weeks, then the next level of support is perhaps about the psychological level 3,500, which is 9.1% lower below current levels. Get to know the best performer in the US stock market this week, with the most momentum, General Mills The US’s biggest wheat producer General Mills (GIS) has outperformed the S&P500 this week and risen 7.4% and claimed the best performing post this week. It’s vital to reflect on why this is the case. We’ve been speaking about the Wheat (WHEATDEC22) price of late, being supported higher due to deteriorating global wheat supply, and now with Russia mobilizing fleet against Ukraine, the wheat price move supported higher again, on concerns Ukraine’s export terminal will be shut once more. Wheat is also in a technical uptrend, so we think stocks General Mills could be a stock to watch ahead, as its earnings are likely to swell. In the S&P500 this week, following General Mills (GIS) higher is; Kellogg and Campbell Soup, as the second and third best performers in the S&P500. Costco (COST) was down over 2% post-market on Thursday despite reporting better-than-expected earnings results.  Australia’s ASX200 (ASXSP200.1) to react to the Fed after being closed yesterday for a public holiday On Friday morning the futures are surprisingly calm, with the ASX200 suggested to only open 0.3% lower. So far this week, the ASX200 has once again outperformed global equities and only lost 0.5%, which is a stark contrast to the S&P500’s drop of 3%.  All eyes will be in cybersecurity stocks with Optus investigating a cyber-attack which may have led to authorized access of customer information. In terms of economic news to watch, S&P Global releases September PMI results. As for stocks to watching Fonterra might see increased bids after its APAC chief executive said she sees strong sales ahead for dairy protein. Rio Tinto will also be on watch after it signed a pact to promote low-carbon solutions for the steel value chain. Rio’s focus areas include low-carbon technology, blast furnace and basic oxygen furnace optimization and carbon capture utilization. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong’s Hang Seng index was at 11-year lows yesterday amid the massive global tightening as well as rising geopolitical tensions. HSI later recovered some of the losses to end the day down 1.6%. Hong Kong's de-facto central bank mirrored the tightening and raised its base lending rate by 75 basis points to 3.5% with immediate effect. Hong Kong’s banks have waited through five rounds of rate hikes this year before moving. More pain is in store for Hong Kong’s borrowers, as the HKMA has been conducting its monetary policy in lockstep with the Fed since 1983 to maintain the local currency’s peg to the US dollar. EV shares tumbled with Xpeng down 11.6% and Nio falling 7.5%. Property sector continued to show weakness, with NWD down 3.4%. Meanwhile, CSI300 ended the day down 0.9% EURCHF ignored the intervention warnings EURCHF surged to 0.9700+ levels from 0.9465 after the SNB’s 75bps rate hike remained short of market’s expectation of a 100bps move. USDCHF also moved higher to touch 0.9850 from sub-0.9650 levels, but that was helped by a weaker US dollar following Japan’s intervention to defend the yen. With higher inflation forecasts, one can argue that there will be more room for the SNB to raise rates, and the CHF’s haven status could also come to its rescue as the case for economic slowdown gets stronger with the massive global tightening being delivered. Crude oil (CLU2 & LCOV2) focus back on supply issues Crude oil edged higher as OPEC warned of additional cuts to output. Nigeria’s oil minister, Timipre Sylva, said that OPEC would consider additional cuts if crude prices fall because current levels are affecting the budget of some member states. This helped the crude oil market to shrug off the massive tightening being delivered. A softer USD in the aftermath of Japan’s intervention also created room for the oil prices to focus on the demand-supply fundamentals. WTI futures rose to highs of $86/barrel before some easing, while Brent touched $92+.   What to consider? SNB delivers a 75bps rate hike The 75bps rate hike by the Swiss National Bank lifted the policy rate out of NIRP to 0.50% but disappointed the markets which had started to look for a 100bps rate hike. Guidance that further rate hikes cannot be ruled out was also accompanied by repeating guidance that they are willing to intervene in FX markets as necessary with Chairman Jordan subsequently stressing they are ready to step in to prevent excessive weakening or strengthening of the Franc. Bank of England goes for a dovish 50bps as recession concerns imminent While the consensus was looking for a 50bps rate hike from the Bank of England, market had started to price in a case for 75bps rate hike as well and so the decision to hike rates by 50bps was a slight disappointment. More so, the decision was not unanimous with three members supporting a 75bps move and one calling for a smaller 25bps move. However, the BoE confirmed that they are going to reduce their holdings of government bonds by GBP 80bln over the next 12 months, although the schedule remains open to amendments. Additionally, the BoE retained its guidance that they will continue to “respond forcefully” as necessary to inflation and while the peak forecast was reduced vs August’s update, it remains elevated and well above target. Finally, the Bank has downgraded its view on the UK economy in the near-term, Q3 2022 is now expected to see GDP declining by 0.1% (vs August projection of +0.4%), for a second quarter of contraction; a forecast which, if confirmed by the ONS release, implies the economy is already in a technical recession. US jobless claims suggests a resilient labor market Initial jobless claims marginally rose to 213k from the revised lower 208k but it was beneath the expected 218k. Meanwhile, continued claims fell to 1.379mln (prev. 1.401mln), also lower than the consensus 1.4mln, and dipped beneath 1.4mln for the first time since mid-July. While the strength in the labor market still remains intact given the large number of open positions in the American job market, some moderation can be expected in the coming months with the rapid pace of tightening and still-strained supply chains affecting output. However, as the Fed noted yesterday, the pace of rate hikes is set to continue despite some economic/labor market pain. Japan’s intervention temporarily strengthens the yen Japan’s first market intervention in over two decades came right after a hawkish FOMC and a steady policy decision by the Bank of Japan, with the widening yield differential between the US and Japan continuing to weigh on the Japanese yen. The intervention announcement came as USDJPY surged above 145 – the level that has been the line in the sand for last several weeks – and pair dropped to 140.36 over the next few hours. But as with most unilateral interventions, the effect was short-lived and USDJPY returned to 142+ levels subsequently, just as we had expected here. More steps remain likely, and the US Treasury said it understood Tokyo's move, but stopped short of endorsing it. Eurozone PMIs on the card to gauge how hawkish ECB can get Eurozone PMIs are likely to dip further into contractionary territory as energy price hikes weigh on spending and business plans. Manufacturing PMIs are likely to ease to 48.8 in September from 49.6 previously, and services are expected to fall to 49.1 from 49.8, according to Bloomberg consensus estimates. A weaker-than-expected number could temper the hawkish ECB bets for the October meeting. Singapore and Malaysia inflation to see further upside pressures Singapore’s headline inflation likely jumped further above the 7% mark in August from a reading of 7% YoY in July, underpinned by higher food and energy prices globally, higher rents due to under-supply, and demand side pressures from regional reopening and a pickup in tourism. Malaysia’s continued ban on chicken exports is also adding to the food inflation, and further tightening from the Monetary Authority of Singapore at the October meeting remains likely. Meanwhile, Malaysia’s inflation also likely rose further in August from 4.4% YoY in July due to higher commodity prices and weaker ringgit, as well as the strength in consumer demand. Bank Negara Malaysia’s next meeting is only scheduled in November, before which we will have another CPI print out. However, it can be assumed that monetary tightening will likely continue. Costco outperforms. Is this a sign of what to expect for fourth quarter earnings season? Costco reported fourth quarter earnings results that beat average analysts forecast, with total revenue hitting $72.09 billion, vs the $70.3 billion expected. It comes as fourth quarter membership fees rose 7.5% year on year, to $1.33 billion and accounted for 2% of the retailer's revenue. Although the company typically raises membership fees every five to six years (with its last fee increase in June 2017), Costco held off on rising fees “at this time”. Costco flagged that it sees some beginnings in the inflation situation improving, while it also expects to sell an overstock of holiday goods this season, which was left over from last year. Costco shares fell 2% post market after their results, implying its shares will sour when the market opens.    For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-23-2022-23092022

For a long time, bitcoin and US stock indices, hand in hand, walked along the same road. As a result, the 60-day correlation between the S&P 500 and the leader of the cryptocurrency sector reached 0.72, which is slightly lower than the May record. At the same time, the collapse of the stock market, provoked by the increase in the federal funds rate to 3.25% in September, causes less and less panic in the ranks of the BTCUSD bulls. The token managed to cling to the psychologically important level of 19,000. Has it really hit the bottom, or is the crypto winter far from over? The dynamics of bitcoin proves that investors have classified it as a risky asset, the value of which is affected by the Fed's monetary policy. In this respect, BTCUSD's 70% drop from November highs and 60% YTD can be easily explained by the Fed's changing mindset. If in 2021 it was confident in the temporary nature of high inflation and was in no hurry to get rid of monetary incentives, in 2022, everything turned upside down. Raising the federal funds rate from 0.25% to 3.25% and scaling up the quantitative tightening program to $95 billion a month pushed real Treasury yields to levels last seen in 2011. Such a surge in real rates could not but affect the positions of risky assets, which are now in the black. Dynamics of BTCUSD and S&P 500 With 85% of stocks in the S&P 500 having a higher earnings forecast for the next 12 months than before the pandemic, and 81% trading below their values from those days, it seems that the stock index has room to rise. However, it should be borne in mind that at the height COVID-19 pandemic, the profits of companies, especially technology companies, have increased significantly. Their fundamental estimates, on the contrary, fell due to the Fed's monetary restriction. In addition, the stock market does not fully take into account the high probability of a recession, which allows us to talk about the untapped potential for its collapse and is bad news for BTCUSD. Why, then, did bitcoin manage to clutch at a straw like a drowning man? Even with information that the federal funds rate could rise to 4.6% in 2023, in line with FOMC forecasts? In my opinion, it is due to the overflow of capital. Money is running out of stocks and bonds, resulting in higher yields for the latter. At the same time, the presence of the US dollar in the area of 20-year highs suggests that the currency is overvalued. Where else can the capital be directed? Why not in the crypto sector? Whose assets, on the contrary, look oversold against the background of grandiose collapses from the levels of November highs. Technically, on the daily chart of BTCUSD, the bulls do not give up hope of completing the formation of the Broadening Wedge reversal pattern. To do this, they need to raise bitcoin quotes above 22,800. Risky entries into longs are associated with the storm of resistance at 19,800 and 20,200, where the fair value and moving averages are located. Relevance up to 09:00 2022-09-28 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/322505

Summary:  The global macro environment took another beating late last week with disappointing Eurozone PMIs and a UK mini-budget causing a havoc in markets as it fueled further debt and inflation concerns. Dollar dominance continued with sterling pressured despite higher UK yields, and risk off tone is likely to continue as Russia-Ukraine tensions in focus. The yen’s intervention risks also on watch as Japan returns from holiday today. Oil prices slid to multi-month lows amid a stronger dollar and demand concerns, with supply factors turning supportive for now, weighing on energy stocks. What is happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) continue to tumble on rising interest rates  The selloff last Friday continued its long stretch of turbulence, which first kicked off following Powell’s hawkish Jackson Hole speech on August 26, then was exacerbated by a much-stronger-than expected CPI on September 13. And the selloff has most recently been bolstered by the hawkish rate and economic projections released after the FOMC meeting last Wednesday. Adding to the woes, earnings warnings from heavy-weight industrial and transportation companies have warned of weaker demand and an opaque outlook. The S&P 500 lost 12% and Nasdaq 100 dropped 13.9% over the period. Of note, last Friday, financial conditions tightened further, with US 2-year yields soaring to 4.2%, the highest since 2007, while the dollar soared to a new high and dragged down stocks, with both the S&P 500 and Nasdaq ending Friday down 1.7% lower.   Big US stock movers: oil and gas stocks plunge as oil falls to an eight-month low  All 11 sectors in the S&P500 closed lower on Friday, with Energy falling the most, 6.8%, after WTI crude declined by about 5% to an eight-month low after the US dollar hit its highest level in two decades on fears rising interest rates will tip major economies into a recession. APA Corp (APA:xnas) and Marathon Oil (MRO:xnys) fell about 11%. FedEx (FDX:xnys) fell 3.4% with its US$2.7 billion cost-saving by cutting flights, deferring projects, and closing offices facing skepticism. Ford (F:xnys) fell 3.6%, following a WSJ report that Ford delayed vehicle deliveries due to supply chain issues in getting Ford logo badges to put on its vehicles. On the upside, Generac Holdings (GRNC:xyns), Domino’s Pizza (DPZ:xyns) shares rose the most in the S&P 500 on Friday, gaining 3.2% and 3.1% respectively, perhaps with traders closing shorts as their stocks are continuing to hit new lows on a yearly basis.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rattled by soaring U.K. bond yields  In London trading hours before New York came in, U.S. treasuries were rattled by the jaw-dropping, emerging market style meltdown in U.K. Gilts, as 5-year UK Gilts soared 50bps and 10-year Gilts jumped 33bps in yields in an hour, following the announcement of a massive loosening of fiscal policy of nearly 2% of GDP by the new U.K. government. Investors are worried as when the U.K. acted similarly last time in 1972, inflation soared and the U.K. had to go to the IMF for a loan in 1976. When New York came in, bids emerged for U.S. treasuries, in particular, for the long end of the curve. 10-year and 30-year yields fell 3bps to 3.68% and 3.61% respectively while 2-year yields finished the session 8bps higher at 4.20%, the highest level since 2007.    Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) glided lower  Hang Seng Index continued its losing streak and tumbled 1.2% to its lowest level last seen in 2011.  Materials, healthcare, China Internet, EV, shipping, and consumer stocks led the market lower.  In the materials sector, Ganfeng Lithium (01772:xhkg) plunged 5%, followed by MMG (01208:xhkg) down 3.6%, and China Shenhua (01088:xhkg)  off 3.4%.  Despite the weakness in international crude oil prices, PetroChina (00857:xhkg) and Sinopec (00386:xhkg) managed to bounce by around 1.5%. Alibaba (09988:xhkg), Tencent (00700), and Meituan (03690:xhkg) declined by nearly 3%. Hong Kong’s end of hotel quarantine requirement lifted the share price Cathay Pacific (00293:hk) by 1% while Chinese airlines declined moderately.  Hong Kong luxury retailers gained, with Oriental Watch (00398:xhkg), Luk Fook and Chow Sang Sang rising from 0.5% to 2.2%. Banks in Hong Kong gained in anticipation of improvement in net interest margins following the lenders increased their prime rates, BOC Hong Kong (02388:xhkg) rising 3.8%, Hang Seng Bank (00011:xhkg) up by 2.5%. In mainland A shares, CSI300 swung between modest gains and losses and finished the day down by 0.3% and declining to within 3% from its April low. In terms of sectors, electronics, semiconductors, autos, coal, and solar power were among the worst laggards, while banks and appliances outperformed. Australia’s ASX200 (ASXSP200.1) to be pressured by oil prices pulling back  This week Australia’s share market will likely take its lead from commodity prices pulling back, with oil stocks like Woodside (WDS:xasx), Santos (STO:xasx) and Worley (WOR:xasx) to take a hair cut. Inversely, the coal price has continued to move higher, along with coal futures, so there is likely to be further upsdise in coal stocks including; New Hope, Whitehaven (WHC:xasx) and Coronado (CRN:Xasx) Washington Soul Patts (SOL:xasx). Dollar dominance continues, sterling battered The dollar rallied broadly, hitting a new all-time high against a currency basket and pushing the euro to a 20-year low while the pound plunged to a fresh 37-year low below 1.10 after the new UK government unveiled a massive fiscal stimulus plan to boost economic growth, which is sure to send inflation soaring even higher and force the BOE to do even more QT. Safe-haven demand also boosted the greenback amid risks from the escalation of Russia tensions and more signs of a slowing Chinese economy, which raised concerns about the outlook for global economic growth.  Crude oil (CLU2 & LCOV2) inches below key supports Crude oil prices fell sharply last week with the focus fixed on demand concerns while supply issues turned supportive. The continued surge higher in dollar and yields, aided by not just the FOMC but also the UK fiscal expansion measures into the end of the week, drove a slump in risk appetite. Brent crude fell to a nine-month low of $86.15/bbl, and this may warrant an OPEC action to support prices. Russia also warned it will not supply commodities to nations that join any agreement to cap prices for its crude. WTI crude traded below $80/bbl in early Asian trading hours as the new week kicked off.   What to consider? US PMIs come in better than expectations US flash PMIs for September surpassed expectations across the board, as manufacturing rose to 51.8 (prev. 51.5, exp. 51.1) and services, despite remaining in contractionary territory, printed 49.2 (prev. 43.7, exp. 45.0). Composite lifted to 49.3 from 44.6. At the same time, the inflation components of the PMIs continue to show some relief, with the report showing that supplier shortages eased and both cost and selling prices for both goods and services were at fresh lows, while still-high compared to the usual levels.  Eurozone PMIs disappoint, but ECB speakers (including Lagarde) will be in focus this week Both manufacturing and services PMIs for the Eurozone came in weaker-than-expected in a flash reading for September, with rising energy costs and decline in purchasing power weighing on manufacturing activity as well as the services sector. The headline reading fell to 48.2 in September from 48.9 in August. New orders disappointed, and the outlook was bleak as well. Manufacturing continues to be hit harder by elevated commodity prices. The reading slipped to 48.5 from 49.6. The services figure came in a bit higher at 48.9, but still fell from 49.8 in the previous reporting period. While supply bottlenecks eased, surging energy prices suggest these could reverse again. UK’s historic tax cuts raise the case for a BOE’s emergency rate hike New UK Chancellor Kwasi Kwarteng announced a mini-budget on Friday, which included wide-ranging tax cuts of the order of GBP 45bn, adding to an estimated cost of GBP 60bn for the energy plan. Instead of stabilizing markets, the announcement sparked mayhem as it promised even more inflation at a time when the UK is set to slide into a crippling stagflationary recession as prices soar. Bank of England last week stuck with a 50bps rate hike as recession is likely on the cards. Bonds were sold off and the sterling dipped to 37-year lows, suggesting UK’s inflation-fighting credibility at stake and demands risk premia.  Investors pile into insurance against further market sells offs. Over the last four weeks money managers have spent US$34 billion purchasing put options, which provides protection against a further fall in stock markets (according to the Financial Times). According to the article, ‘Investors pile into insurance against further market sell-offs', $9.6 billion was spent in the last weeks alone on options protecting against downside risks.  Will Japanese authorities intervene further to defend the yen? The Japanese authorities intervened in the currency markets for the first time in two decades last Thursday. USDJPY’s move above 145 following a hawkish FOMC and a still-accommodative Bank of Japan prompted the intervention, and dragged the pair to sub-141 levels before some of the move was retraced. However, Japan was closed on Friday for a holiday, and returns to trading today. Moreover, Governor Kuroda will make a speech and talk to reporters today. We believe the yen could weaken further given the pressure from yield differentials between the US, which continues to rise to fresh highs, vs. the yields in Japan which continue to remain capped. Meanwhile, the intervention last week has been possibly unilateral, suggesting it may not be long-lasting. This continues to raise the possibility of further intervention from the Japanese authorities, especially if USDJPY rises back above 145. Russia referendums results may create market volatility The four Moscow-held regions of Ukraine – Donetsk, Luhansk, Kherson and Zaporizhzhia – began voting on Friday on whether to become part of Russia, and results may be expected this week. The referendums are reminiscent of one in 2014 that saw Ukraine’s Crimea annexed by Russia. The four regions’ integration into Russia – which for most observers is already a foregone conclusion – would represent a major new escalation of the conflict. The threat of nuclear weapons will also keep risk off on the table, with Putin threatening to use “all means” to protect the annexed Russian territory. Hong Kong ended hotel quarantine for arrivals Effective from today, Hong Kong ended its requirements for people arriving Hong Kong to be under hotel quarantine.  Under the new arrangement, people arrive to Hong Kong from overseas and Taiwan are still required to undergo three days of medical surveillance at home or hotels.  They can go out, including taking public transportation and going to work but are still denied access to some public venues such as restaurants during the medical surveillance as well as required to take RAT daily for seven days plus three PCR tests on day 2, 4 and 6 each.  For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast .     Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-26-2022-26092022

Summary:  Market sentiment continues to deteriorate as markets test the lows of this bear market on the surging US dollar and US treasury yields, although the latter came down sharply from the highs Friday as the equity market sell-off accelerated. The strong US dollar posted new highs for the cycle against many DM currencies, while sterling is in crisis mode, plunging to an all-time low at one point overnight below 1.0500 to the US dollar.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Last week was hectic with many central bank decisions, BoJ currency intervention and Russian military mobilisation. This morning US equities are not in a better mood with S&P 500 futures down 0.7% trading around the 3,680 level as the US 10-year yield continues to move trading at 3.76%. The VIX Index has also pushed to almost 30 and the VIX forward curve slipped into inversion on Friday signaling a potential panic selloff is in the making. We expect pressures to continue in equities, but with sentiment already historically low, there could be a short-term rebound if S&P 500 futures can hold the line around the June lows at around the 3,640 level. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index fluctuated between modest gains and losses and was 0.4% lower as of writing. HSBC (00005:xhkg) and Standard Charted (02888:xhkg) tumbled around 8% as the Pound Sterling was in turmoil. The market however was supported by rallies in China internet stocks, the China catering space, EV names, and Macao casino stocks. In mainland bourses, tourism, catering, semiconductors, solar power and EV rebounded, CSI300 up by 0.3%. Strong USD, weak GBP The US dollar strength has continued to start this week, as the greenback posted new cycle highs versus most other G10 currencies, with the notable exception of USDJPY, which did trade back higher above 144.00, but continues to respect the threat of official intervention from Japan after last week’s episode. Most intense focus at the moment is on the collapsing pound sterling, which crashed to an all-time low below 1.0500 overnight, down more than 5% in a couple of trading sessions. More on whether sterling’s slide will lead to an emergency move from the Bank of England below. The EURUSD traded to new cycle lows below 0.9600 overnight. There are no real chart points for that exchange rate until the all-time low of 0.8230 from the year 2000. Gold (XAUUSD) under pressure A hawkish Fed and the continued rise in real rates and not least the surging US dollar has seen gold fall towards the lowest since April 2020. Last week’s 1.9% drop, however, was relatively muted given the +3% rally in the dollar index and a 24 basis points jump in the US ten-year nominal and real yield, but as long the dollar continues its relentless rise and until the market reaches peak hawkishness and yields start to top out, gold will struggle to act as a defense against stagflation. Ahead of last week's slump money managers had increased short bets on gold to become the most bearish in more than four years. Having dropped below $1654 on Friday, the market may now target the 50% retracement of the 2018 to 2020 rally at $1618. Focus being the dollar, US inflation data and Russia geopolitical developments. Crude oil (CLX2 & LCOX2) The unrelenting pressure on commodities, including crude oil, continues following Friday’s gloomy session which saw accelerated dollar strength and growth pessimism cause a ripple through markets. The result being a near 5% drop in crude on Friday and weakness remained the theme overnight in Asia as the dollar ripped higher against most major currencies, not least a collapsing sterling. WTI trades below $80 per barrel while a return to the mid-80's in Brent may soon see OPEC+ action to support prices. With Russia repeating its warning of not supplying commodities to nations that join any agreement to cap prices for its crude, and with the market increasingly having priced in a recession, the energy sector could be the first to find support once the dollar stabilises. US treasuries (TLT, IEF) US treasury yields pulled sharply higher on Friday, but treasuries finally found support later in the session before melting lower again to start the week in Asia – taking the 10-year treasury yield back toward the cycle high near 3.80%. The next focus higher for the US 10-year benchmark is 4.00% after the cycle high 3.50% level fell last week. This was the highest yield posted all the way back in the 2009-10 period. What is going on? Right bloc wins Italian election, with Brothers of Italy’s Giorgia Meloni set to be next PM of Italy The bloc will have at least 114 Senate seats, ten more than the level required for a majority.  The three right-leaning parties Brothers of Italy, League and Forza Italia won about 43% of the popular vote, with 25% going to Brothers of Italy. The new government will have to scramble to put together a new budget for approval by the Italian parliament and the EU. Populist pressures could see the new government calling for large deficit spending that former PM Draghi refused to consider. Meloni has promised to roll back some of the reform measures introduced by Draghi, a move that could risk the EU withholding some portion of the EUR 200 billion of extraordinary EU pandemic budget funds targeted for Italy. US PMIs come in better than expected US flash PMIs for September surpassed expectations across the board, as manufacturing rose to 51.8 (prev. 51.5, exp. 51.1) and services, despite remaining in contractionary territory, printed 49.2 (prev. 43.7, exp. 45.0). The Composite lifted to 49.3 from 44.6. At the same time, the inflation components of the PMIs continue to show some relief, with the report showing that supplier shortages eased and both cost and selling prices for both goods and services were at fresh lows, while still high compared to the usual levels.  Eurozone PMIs disappoint, but ECB speakers (including Lagarde) will be in focus this week Both manufacturing and services PMIs for the Eurozone came in weaker-than-expected in a flash reading for September, with rising energy costs and decline in purchasing power weighing on manufacturing activity as well as the services sector. The headline reading fell to 48.2 in September from 48.9 in August. New orders disappointed, and the outlook was bleak as well. Manufacturing continues to be hit harder by elevated commodity prices. The reading slipped to 48.5 from 49.6. The services figure came in a bit higher at 48.9, but still fell from 49.8 in the previous reporting period. While supply bottlenecks eased, surging energy prices suggest these could reverse again. Apple iPhone 14 initial sales below previous introductions According to initial surveys demand for the iPhone 14 is running below previous model instructions suggesting consumers are holding back due to lower disposable income. The lower initial sales figures are in contrast to the pre-orders of the iPhone 14, but these pre-orders do not come with an obligation to buy. It is also worth noting that Apple has begun assembling some of its iPhone 14 in India.  The United States is boosting investments in new sources of energy Over the weekend, the U.S. government has announced it will provide up to $50 million as a reward to private nuclear fusion firms. They will need to provide pre-conceptual nuclear fusion reactor designs within 18 months of receiving their award. Fusion is considered by experts as a clean energy source with less radioactive waste than existing nuclear power plants. If they succeed, this could help accelerate the transition towards a more sustainable and greener economy. At the same time, the United States is the developed country with the most conventional nuclear capacity under construction, according to the latest data of the World nuclear association. While many European countries are debating whether nuclear energy is safe or not, the reality is that it is one of the safer sources of energy. Radioactivity resulting from uranium use diminishes quickly with time. About 40 years after it is done making power, the radioactivity of the fuel bundle falls by over 99 %. Most of the industrial waste we manage never gets less toxic over time…not even in a million years. Investors pile into insurance against further market sell offs During the last four weeks money managers have spent US$34 billion purchasing put options, which provides protection against a further fall in stock markets (according to the Financial Times). US$9.6 billion was spent in the last weeks alone on options protecting against downside risks, according to the Financial Times article ‘Investors pile into insurance against further market sell-offs'. What are we watching next? Sterling crisis after UK’s historic tax cuts may bring emergency rate hike New UK Chancellor Kwasi Kwarteng announced a mini budget on Friday, which included wide-ranging tax cuts approximately GBP 45 billion, adding to an estimated cost of GBP 60bn for the energy plan. Instead of stabilizing markets, the announcement sparked mayhem as it promised even more inflation at a time when the UK is set to slide into a crippling stagflationary recession as prices soar. The Bank of England last week stuck with a 50bps rate hike as recession is likely on the cards. Bonds were sold off and the sterling dipped to 37-year lows, suggesting UK’s inflation-fighting credibility at stake and demands risk premia, in other words, the Bank of England may be forced to announce an emergency rate hike to stabilize the currency. Will Japanese authorities intervene further to defend the yen? The Japanese authorities intervened in the currency markets for the first time in two decades last Thursday. USDJPY’s move above 145 following a hawkish FOMC and a still-accommodative Bank of Japan prompted the intervention, and dragged the pair to sub-141 levels before some of the move was retraced. However, Japan was closed on Friday for a holiday, and returns to trading today. Bank of Japan Governor Kuroda has been out speaking this morning, with no new signals on offer. The yen could weaken further given the pressure from yield differentials between the US, which continues to rise to fresh highs, vs. the yields in Japan which continue to remain capped. Meanwhile, the intervention last week has been possibly unilateral, suggesting it may not be long-lasting. This continues to raise the possibility of further intervention from the Japanese authorities, especially if USDJPY rises back above 145. Earnings calendar this week The Q3 earnings season kicks off in three weeks but there are still earnings releases being released not following the traditional calendar. The action this week will be on Thursday with earnings from H&M, Nike, and Micron Technology, with earnings from Micron being the most interesting to watch as we already know H&M and Nike are seeing weak demand. Micron has exposure to the consumer electronics industry and manufactures memory chips in Asia which means that the company sits in at the intersection of many interesting trends. Tuesday: Ferguson Wednesday: Paychex, Cintas Thursday: Polestar Automotive, H&M, Nike, Micron Technology, CarMax Friday: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0800 – Germany Sep. IFO Survey 0800 – Switzerland SNB Weekly Sight Deposits 1230 – US Chicago Fed National Activity Index 1300 – ECB President Lagarde to speak 1400 – US Fed’s Collins (Voter this year) to speak 1430 – ECB’s Centeno to speak 1600 – US Fed’s Bostic (non-Voter) to speak 1600 – UK Bank of England’s Tenreyro to speak 1835 – New Zealand RBNZ Governor Orr to speak 2000 – US Fed’s Mester (Voter) to speak 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-sep-26-2022-26092022

A difficult start to the week beckons as Asian markets eye Friday's G-10 carnage Source: shutterstock Macro outlook Global Markets:  US stocks had a bad end to the week. Both S&P500 and NASDAQ dropped sharply, and despite some slight recovery towards the end of the session, equity futures remain negative today, likely setting the scene for Asia’s markets. EURUSD also continued its losing streak, dropping below 0.97, though Cable was the star underperformer in G-10 FX space, dropping to 1.0824. New all-time lows beckon. This is not exactly a ringing endorsement by markets of the new Truss government and budget proposals. The AUD fared better, but not much, falling to 0.6525 and the JPY is making tentative moves higher again after the BoJ intervened at the end of last week. It probably won’t remain below 1.45 for long. The US yield curve continues to invert more forcefully.  2Y US Treasury yields are now 4.20%, a rise of nearly 8bp on Friday, while the yield on the 10Y Treasury bond dipped by just under 3bp to 3.685%. UK 10Y Gilt yields were up 33.3bp on Friday, a worse performance than the weakest Eurozone member bond.  Asian FX has been outperforming its G-10 peers. Most Asian currencies fell less than one-percent against the USD on Friday, though there could be some more catch-up today. Crude oil joined the general slump on Friday, no doubt helped by the USD’s strength, and front-month Brent crude futures are back below USD90/bbl. Gold is also soft, at $1643/oz, with inflation fears being swamped by interest rate rises. G-7 macro: It’s a very quiet day in the G-10 for macro news after the slew of weak PMI data on Friday. Germany’s Ifo survey may be the main highlight for the day – further falls are expected.  Regional US Fed activity indices provide additional insight into the US economic condition. Otherwise, the OECD’s Economic Outlook will probably garner a few downbeat headlines, though there is a good chance any forecasts will already have been overtaken by events. Singapore: Industrial production data for August is due at 13:00 today. Weakness in the electronics segment is likely behind the consensus -0.6%YoY forecast. The earlier NODX numbers for August were, if anything, a bit weaker than this consensus view, so there may be some downside risk to these estimates. Korea: The foreign exchange authorities (the Bank of Korea, the Ministry of Strategy and Finance) and the National Pension Service have agreed to conduct FX swap transactions within a limit of $10 billion. This is the second FX swap agreement after the 2008 agreement. The maturity of each case is 6 months or 12 months with no rollover and either party has the right to early liquidation. Despite the authorities’ efforts to stabilize the FX market, the KRW depreciation will likely continue for a while given that the market impact of these transactions will be limited. The Bank of Korea will likely take a big step at its October meeting, concerned that the weak KRW will add more pressure on inflation. What to look out for : China PMI Japan Jibun PMI composite (26 September) Singapore industrial production (26 September) Hong Kong trade (26 September) US Dallas Fed manufacturing activity (26 September) South Korea consumer confidence (27 September) China industrial profits (27 September) US durable goods orders (27 September) US Conference Board consumer confidence and new home sales (27 September) Australia retail sales (28 September) Japan leading index (28 September) Bank of Thailand meeting (28 September) US mortgage applications and wholesale inventories (28 September)       South Korea business survey manufacturing (29 September) US initial jobless claims, 2Q GDP and core PCE (29 September) South Korea industrial production (30 September) Japan labour market data (30 September) China official and Caixin PMI manufacturing (30 September) India RBI meeting (30 September) Hong Kong retail sales (30 September) US personal income, personal spending and core PCE (30 September) US University of Michigan sentiment (30 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

AAPL suggests the development of the primary fifth wave, taking the form of an ending diagonal (1)-(2)-(3)-(4)-(5) of the intermediate degree. Wave ⑤ is the final leg in a scale impulse a of the cycle degree. Most likely, the market has completed the construction of an intermediate correction (4) in the form of a minor triple zigzag W-X-Y-X-Z. Thus, now the price is moving up, in an intermediate wave (5), which may take the form of a standard zigzag A-B-C, as shown on the chart, where wave A is a minute impulse. Bulls in wave (5) may reach 189.11. At that level, wave (5) will be equal to wave (3). An alternative scenario assumes that the cycle wave a has been fully completed. Thus, in the last section of the chart, we see a downward corrective movement of the stock price in a cycle wave b, which may take the form of a double zigzag of the primary degree. It seems that the first two primary sub-waves Ⓦ-Ⓧ have already been formed. There is a high probability that the bears in the final sub-wave Ⓨ, in the form of an intermediate simple zigzag (A)-(B)-(C), will be able to bring the market to 118.80. At that level, primary wave Ⓨ will be at 100% of wave Ⓦ. Read next: Bitcoin Price Going Above The $69K In The Near Future? Find Out What Does Michal Saylor Think About It | FXMAG.COM An approximate scheme of possible future movement is shown on the chart.

The FX markets kick off the week on an extremely chaotic note. Both the pound and the euro are being severely punished for the political decisions that are taken in the UK and in Italy respectively. Elections in Italy As expected, the far-right candidate Giorgia Meloni won a clear majority in Italy at yesterday’s election, with Brothers of Italy gaining more than 25% of the votes. And Meloni’s right-wing alliance with Salvini’s League and Berlusconi’s Forza Italia got around 43% of the votes: the terrible consequence of the pandemic, the war and the energy crisis. Situation the major currency  The EURUSD has been shattered this morning. The pair dived to 0.9550. But it’s almost worst across the Channel, if that’s any consolation. Investors really hated the ‘mini budget’ announced in UK last Friday. Investors were expecting to hear about a huge spending package from Liz Truss government, but the package has been even HUGER than the market expectations. UK’s 10-year yield jumped more than 20% since last week, the FTSE dived near 2% and Cable tanked below 1.0350 in Asia this morning. Elsewhere, the US dollar index took a lift, and the dollar index is just crossing above the 114 mark at the time of talking. Stock market Outlook Gold dived to $1626 on the back of soaring US dollar. US crude oil plunged below $80 per barrel. The S&P500 fell to the lowest levels since this summer, whereas the Dow Jones fell below the summer dip. Happily, the European equities are better bid this morning, but investors remain tense and worried. Watch the full episode to find out more! 0:00 Intro 0:24 Italy turns right, euro gets smashed 4:15 UK assets treated like EM after the ‘MINI’ budget 7:45 USD rallies, XAU, oil under pressure 8:49 US stocks dive to, or below summer lows on Fed fear 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. #Italy #election #Meloni #UK #mini #budget #EUR #GBP #selloff #USD #rally #crude #oil #XAU #BP #APA #XOM #recession #energy #crisis #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

At the close in the New York Stock Exchange, the Dow Jones fell 1.11% to hit a 52-week low, the S&P 500 fell 1.03%, and the NASDAQ Composite fell 0.60%. Walmart Inc was the top gainer among the components of the Dow Jones index today, up 1.25 points (0.96%) to close at 131.31. Apple Inc rose 0.34 points (0.23%) to close at 150.77. Procter & Gamble Company rose 0.13 points or 0.10% to close at 135.71. The biggest losers were The Travelers Companies Inc, which shed 4.88 points or 3.14% to end the session at 150.60. Boeing Co was up 2.99% or 3.92 points to close at 127.34, while Chevron Corp was down 2.63% or 3.81 points to close at 140.96. . Leading gainers among the components of the S&P 500 in today's trading were Wynn Resorts Limited, which rose 11.99% to 66.80, Las Vegas Sands Corp, which gained 11.81% to close at 39.66. as well as Costco Wholesale Corp, which rose 2.98% to end the session at 480.30. The losers were DISH Network Corporation, which shed 6.12% to close at 14.27. Shares of The AES Corporation shed 5.48% to end the session at 22.96. Quotes of Halliburton Company decreased in price by 5.17% to 23.31. Leading gainers among the components of the NASDAQ Composite in today's trading were LAVA Therapeutics NV, which rose 97.50% to 4.74, DIRTT Environmental Solutions Ltd, which gained 42.87% to close at 0.45. as well as shares of Panbela Therapeutics Inc, which rose 25.96% to close the session at 0.34. The biggest losers were Powerbridge Technologies Co Ltd, which shed 68.57% to close at 0.50. Shares of Scienjoy Holding Corp lost 43.77% to end the session at 1.67. Quotes of Snow Lake Resources Ltd fell in price by 40.88% to 1.88. On the New York Stock Exchange, the number of securities that fell in price (2652) exceeded the number of those that closed in positive territory (536), while quotes of 132 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,592 stocks fell, 1,248 rose, and 275 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 7.82% to 32.26, hitting a new 3-month high. Gold futures for December delivery lost 1.56%, or 25.90, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 2.82%, or 2.22, to $76.52 a barrel. Futures for Brent crude for December delivery fell 2.81%, or 2.39, to $82.64 a barrel. Meanwhile, in the Forex market, EUR/USD fell 0.84% to hit 0.96, while USD/JPY edged up 0.94% to hit 144.66. Futures on the USD index rose by 0.98% to 114.07.   Relevance up to 05:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/294320

A strong decline in the S&P 500 and a strong spike in the VIX index will provide a very good buying opportunity for the long term. Relevance up to 07:00 2022-09-28 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/294330

Summary:  Bond yields surged and the US dollar picked up strength once more, pressuring US equities for the fifth day. The S&P 500 finished Monday at its lowest closing level in 2022. Investors continued to dump the U.K. Gilts and the Pound Sterling. Australia’s ASX200 could be boosted by M&A and earnings, but pressure remains. China’s central bank raised its risk reserve requirement on banks’ forward FX sales. Australia’s Federal government considers new coal mines, we cover what you need to know. For the latest in markets, with trading and investing ideas, read today's market insights. What is happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) trade at their lowest levels in 2022 The sell-off in equities continued as bond yields continued to surge, and the US dollar picked up strength, which pressed the S&P500 lower for the 5th straight day, seeing the index for the biggest 500 stocks fall 1%, while the Nasdaq 100 gave up 0.5%. The S&P500 not only took out June’s low but closed at its lowest level in 2022. VIX jumped to 32.3. And we think the market is now trading at a level that could perhaps see a very short-term relief technical rally, with the market in oversold territory and the S&P500 trading 9% under its 50-day moving average. Although we could see quant traders likely to swoop and trigger a rally, we emphasize that headwinds still remain in place; as bond yields and the USD are still charging, financial conditions and valuation remain pressured by the Fed’s pledge to tighten liquidity, and we are still likely to see more earnings downgrade. So the overarching pressure on equities remains, which is why we think a potential rally will likely be very short-lived. Australia’s ASX200 (ASXSP200.1) rallies, boosted by M&A and earnings, but pressure remains After falling 1.6% on Monday to 6,469, the Australian share market opened 0.4% higher on Tuesday boosted by earnings results and M&A talk. A company to watch might be Santos, after selling down its PNG LNG in a $1.1 billion deal. Another company to watch is Synlait Milk as it tripled its financial 2022 net profit after tax to NZ$38.5 million, after sales rose 21% to $NZ1.66 billion. Over 2021/2022 the average milk price was NZ$9.30 per kilo of milk solid, and it forecasts for that to rise to an average of NZ$9.50 in 2022/2023. The milk company gave few clues about profits ahead with no financial guidance, but it expects a similar level of profitability in financial 2023 as in financial 2021. Selling in U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) continued as yields surged to new highs Continuous melt-down in U.K. government bonds (10-year Gilt yields jumped 42bps to 4.24%) across the pond and a poor 2-year U.S. treasury note auction pushed treasury yields to a new high, with the 10-year note yielding soaring 24bps to finish the day at 3.92%, putting the psychologically important 4% handle within reach.  The 2-year yield rose 14bps to 4.34%.  The 10-year real rate, represented by the 10-year Treasury Inflation-Protected Securities (TIPS) jumped to as high as 1.62% before settling at 1.59%, a new high since 2010. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) ended lower but casino stocks were a bright spot Hang Seng Index fluctuated between modest gains and losses and finished the session 0.4% lower. HSBC (00005:xhkg) and Standard Charted (02888:xhkg) tumbled more than 7% as the Pound Sterling was in turmoil. The market however was supported by rallies in China internet stocks, with Meituan (03690:xhkg) up by 4.5%, and Tencent (00700:xhkg) rising nearing 3%.  Macao said that it will resume receiving tour groups from mainland China in November. The news boosted Macao casino stocks, Sands China (01928:xhkg) soared 15.7%, followed by SJM (00880:xhkg) and Wynn Macau (01128:xhkg) each rising more than 11%.  XPeng (09868:xhkg) jumped 8.7% after the EV maker’s founder bought USD30 million worth of shares in the company.  Ahead of the National Day golden week holiday, China catering stocks surged, led by Xiabuxiabu’s 14.4% surge and followed by Haidilao (06862:xhkg) and Jiumaojiu (09922:xhkg) rising more than 6%. Following the plunge in gold prices, share prices of gold mining companies dropped sharply, led by Zijin Mining (02899:xhkg) falling nearly 9%, Zhaojin Mining declining more than 5%.  In mainland bourses, tourism, catering, semiconductors, solar power, and EV stocks rebounded. CSI300 Index fell 0.5%. GBPUSD reversed Monday’s flash crash, but risks seen ahead Sterling reversed from the flash crash seen in the Asian session on Monday, and thin liquidity conditions may be a reason for the sharp drop. The new all-time lows were set at 1.0350 but GBPUSD recovered later to trade closer to 1.0800-levels even as BOE’s lack of action (read below) continued to weigh on sterling. BOE’s Chief Economist Pill is scheduled to make a statement on Tuesday, and lack of real action may mean further downside in sterling. EURGBP below 0.90 may mean room for further spikes as the UK inflation picture deteriorates significantly. JGB futures test the Bank of Japan’s patience again The 10-year Japanese government bond futures tested the Bank of Japan’s yield cap of 0.25% this morning as global bonds continued to be sold off following the hawkish Fed last week doubled up by the UK fiscal plan. Japan’s 2-year yield also rose above 1% for the first time since 2015, but these are outside the scope of BOJ’s yield curve control policy. This suggests the central bank may need to increase the pace of its bond buying for longer maturities, as it did in June. USDJPY is also back in close sight of 145, the level above which we saw the direct intervention by the Japanese authorities last week. Still, the scope for intervention may be lower this time as the yen has strengthened against most other currencies other than the USD. EURJPY is still below 140 from 143+ levels at the time of intervention, while GBPJPY is down from 164 to ~154. Crude oil (CLU2 & LCOV2) at year-lows Crude oil prices stabilized in the Asian morning after dipping to the lowest levels since January as tighter global monetary policy continues to underpin recession concerns. Meanwhile the rally in the US dollar continues to stretch further, as we had expected, weighing on the overall commodities sector. WTI futures drifted closer to $77/barrel while Brent futures stayed below $85. Hawkish Fed remarks overnight continue to underpin more USD gains, but the question now is at what levels OPEC will step in to pare supplies and stem the rout. What to consider? Bank of England’s lack of action As a fallout from UK’s fiscal plan, the sterling slid to record lows of 1.0350 on Monday and this prompted calls for an immediate action from the Bank of England to stem the slide in the currency or stabilize inflation expectations. However, all that the BOE did was to try to calm the market nerves with some words rather than action, and delayed any hopes of a rate hike to the next meeting scheduled on November 3. The risk of rate hikes being ineffective to restore sterling credibility may be seen, but BOE’s currency reserves are also rather limited and can only cover about two months of imports. This suggests sterling can remain prone to more wild swings. Fed speakers maintain a hawkish rhetoric Cleveland Fed President Mester was on the wires in the late US hours, reaffirming that further rate hikes will be needed and will need a restrictive stance for some time, while she added it can be better to act more aggressively in an uncertain environment and that pre-emptive action can prevent the worst-case outcome. Collins also spoke about getting inflation under control even if that mean deteriorating labour markets, while Logan (2023 voter) also stressed on the 2% inflation goal. Fed’s 2023 rate cuts bets are easing since the hawkish FOMC last week, More Fed speakers are lined up for Tuesday, including Powell, Bullard, Evans and Kashkari. However, focus may be more on what BOE’s Chief Economist Pill has to say. German Ifo survey slips to new lows Germany’s Ifo business-climate index fell to 84.3 points in September from a revised figure of 88.6 points in August, data from the Ifo Institute showed Monday. This is its lowest value since May 2020 and below expectations of 87.1. The Ifo president said that the German economy is slipping into a recession, as business confidence worsened considerably due to the escalating energy crisis. No Russian oil price cap for the moment The EU countries announced they will delay the introduction of an oil price cap on Russian imports. At least two countries, Cyprus and Hungary (the Hungarian government is one of the most vocal European governments criticizing the sanctions against Russia) have expressed opposition to the oil cap proposal. Expect intense negotiations ahead in order to reach a compromise. For this matter, the EU requires unanimity among member countries. Each country has an effective veto. Australia’s Federal government considers new coal mines; pressuring coal equites The Australian Federal government is considering 29 applications for new expanded coal mines. Coal is already a AUD$63 billion export industry for the nation down under and supported its trade surplus growing to a record. The extra capacity will be able to produce 250 million tones a year. If some or all mines are approved, it will likely cause selling in coal equities in the short term. However, given most of Australia’s coal is exported to India, and green resources will not be able to power Australia’s grid until 2024 (off peak for retail Australians only), the coal price remains supported over the longer term. A climate advocacy group said the extra coal capacity will add to half of the world’s emissions. The government is reviewing applications with BHP, and Glencore on the list.  Australia’s economic data this week, is unlikely to stop the AUD from sliding, but the AUDGBP is the pair to watch Australia’s economy has remained resilient despite the global growth slowdown; however the Aussie currency has continued to lose out, and be pressured by the resilient dollar strength, with the USD index moving to 20-year highs and rising 5% since the Fed’s hawkish Jackson Hole speech on August 26. Also keep in mind, Australian economic data; Australian retail sales out tomorrow (Wednesday 28 September) and private sector credit (borrowing) out Thursday 29 September, are both expected to fall. Although the AUDUSD faces further pressure over the medium term, the AUDGBP is perhaps a pair to watch, after hitting six-year highs on the back of the UK’s tax cuts announced. What also supports this pair rising is Australia’s surplus continuing to trade at record highs, vs UK’s deficit likely to widen. Given that’s likely for now, the AUDGBP is a worthy pair to watch that could extend its uptrend. China’s central bank imposed a 20% risk reserve requirement on banks’ forward FX sales The PBOC imposed a 20% risk reserve requirement on commercial banks’ foreign exchange forward sales to their clients. The move requires banks to set aside a 20% reserve of any forward sale of foreign currencies to their clients, including importers who seek to hedge their FX exposure. As banks will pass along the now higher funding costs of these FX forward transactions to their clients, it is estimated that it will be about 600 to 700 pips more expensive for banks’ clients to hedge their FX exposures for 12 months.  The PBOC did use the same tool before in 2015 and 2018 and triggered some selling in USDCNY but did not reverse the depreciating trend then.  PBOC’s move on Monday failed to halt the weakening in the onshore and offshore Yuan in the midst of a super-charged strong dollar against major currencies, with USDCNH rising by 0.4% to 7.17. Tesla’s share price performance rivals Apple’s So far this year, out of the five biggest US firms by market value, Tesla has become the new megacap unlikely rival to Apple. Tesla shares are outperforming Microsoft, Alphabet, and Amazon so far this year, and coming close to Apple’s performance. However, Tesla’s shares are by far the most expensive. For more on what to expect from Tesla ahead, it’s worth reading or watching our update, available here. Apple begins production in India Apple has begun assembling some of its iPhone 14 in India. This may be the start of a manufacturing boom in India, as China transitions to a consumption economy and US-China tensions continue to play out. Meanwhile, India’s push on electronics manufacturing could mean more foreign investments to come, as India seeks to solidify its position in global supply chains in addition to being a large consumption-driven economy. Our India equity theme basket is worth considering as India remains one of the big winners of deglobalization and slowing Chinese economy. Separately, also consider Apple is one of the most traded stocks at Saxo globally this month. We wrote recently on why to expect Apple to perhaps pave out a bullish sales outlook, for more read here.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-trading-and-investing-ideas-to-consider-27-sept-27092022