Archive for Financial News – Page 5

Silver prices have reached a one-year high. Oil is growing amid a decline in inventories

By JustMarkets

At Wednesday’s close of the stock market, the Dow Jones Index (US30) was up 0.09%. The S&P 500 Index (US500) decreased by 0.19%. The NASDAQ Technology Index (US100) closed negative 0.54%. The Dow Jones Industrials Index received support from companies such as 3M (MMM) with a gain of 5.42%, as well as Chevron (CVX), Caterpillar (CAT), Home Depot (HD), NIKE (NKE), Goldman Sachs (GS) and Coca Cola (KO) with gains of more than 1%.

Fed Chairman Powell said last week that the Fed is “not far” from being confident enough to cut interest rates. However, markets rate the Fed’s probability of cutting interest rates at its meeting next week as near zero, as inflation is still too far above target. Markets estimate the odds of a 25 bps rate cut at next week’s March 20 FOMC meeting at 1%, the May 1 meeting at 13%, and the June 12 meeting at 73%.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) was down 0.02%, France’s CAC 40 (FR40) added 0.62%, Spain’s IBEX 35 (ES35) index increased by 1.65%, and the UK’s FTSE 100 (UK100) closed positive 0.31%. The FTSE Index closed at 7,772 on Wednesday, the highest in ten months and marking the third consecutive session of gains. Market sentiment was driven by positive economic data that boosted hopes that the UK is recovering. UK Gross Domestic Product rose by 0.2% month-on-month in January, driven by strong retail and house-building performance.

ECB council spokesman Martins Kazaks said Wednesday that rate cuts could come within the next few meetings. His counterpart, Bank of France Governor Francois Villeroy de Galhau, said the ECB’s first rate cut is more likely in June than April.

WTI crude oil prices rose to $80 a barrel on Thursday, extending gains from the previous session, as an unexpected drop in US crude inventories signaled strong demand in the world’s top oil consumer. EIA data showed US crude inventories fell by 1.536 million barrels last week, contradicting expectations of a 1.338 million barrel increase. It was the first decline in seven weeks, confirming industry data reported Tuesday by API. In addition, the report noted a decline in inventories at the Cushing hub in Oklahoma and a decrease in gasoline inventories.

Silver prices (XAGUSD) rose to $24.7 an ounce, the highest since early December. They followed gains in other precious metals amid growing expectations that major central banks will soon start cutting interest rates. The Fed and ECB are expected to begin easing monetary policy in June, while the Bank of England will likely make its first rate cut in August.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down 0.26% on the day, China’s FTSE China A50 (CHA50) was up 0.89%, Hong Kong’s Hang Seng (HK50) lost 0.07% on Wednesday, and Australia’s ASX 200 (AU200) was positive 0.22%. The Hang Seng Index (HK50) moved further away from the 3-month highs reached earlier in the week after Wall Street fell from recent highs overnight due to losses in chipmaker stocks, and market participants were wary of new key US economic data ahead of next week’s FOMC meeting.

The US House of Representatives passed a landmark bill that gives Chinese TikTok owner ByteDance six months to sell a controlling stake or the app will be blocked in the US.

Investors remain cautious amid growing speculation that the Bank of Japan (BoJ) could adjust its monetary policy as early as next week due to rising wages, inflation, and a strong economy. The country also concluded this year’s spring wage talks on Wednesday, with several major Japanese companies agreeing to solid wage increases.

S&P 500 (US500) 5,165.31 −9.96 (−0.19%)

Dow Jones (US30) 39,043.32 +37.83 (+0.097%)

DAX (DE40) 17,961.38 −3.73 (−0.021%)

FTSE 100 (UK100) 7,772.17 +24.36 (+0.31%)

USD Index 102.80 -0.16 (-0.16%)

Important events today:
  • – Switzerland Producer Price Index (m/m) at 09:30 (GMT+2);
  • – US Producer Price Index (m/m) at 14:30 (GMT+2);
  • – US Retail Sales (m/m) at 14:30 (GMT+2);
  • – US Initial Jobless Claims (w/w) at 14:30 (GMT+2);
  • – US Natural Gas Storage (w/w) at 16:30 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Target Thursdays: USDJPY, Silver & Crude reach targets!

By ForexTime

Check out these potential profits that you may have missed from our Daily Market Analysis.

  • USDJPY bulls lock in 80 pips
  • Silver up almost 3% this week
  • Crude hits all bullish targets   

 

    1) USDJPY rebound lends bulls support

  • Where and when was Target Price (TP) published?

In our Trade of The Week article on Monday 11th March:

We cautioned around the possibility of a “technical rebound” and highlighted how the USDJPY’s “14-day relative strength index (RSI) was already flirting with the 30 level”.

Note: When the 14-day RSI hits or goes below 30, this signals that prices are oversold.  

 

  • What happened since TP was published?

After failing to push lower, the USDJPY experienced a technical rebound on Tuesday thanks to the hotter-than-expected US inflation data.

This report cooled hopes around the Fed cutting interest rates in the coming months, boosting this dollar – which sent the USDJPY higher as a result.

Prices shot past the 147.20 resistance with the momentum briefly taking the currency pair above 148.00.

 

  • How much in potential profits?

Traders who took advantage of the breakout above 147.20 and exited at 148.00 would have been rewarded with 80 pips.

Note: The USDJPY could be injected with fresh volatility on Friday due to the results of Japan’s wage negotiations.

 

    2) Silver hits fresh 2024 high

  • Where and when was Target Price (TP) published?

In our article covering Silver on Wednesday, March 13th we maintained a bullish outlook for the precious metal due to technical forces.

“Silver is currently in a daily uptrend after breaking out of a ranging period…, if the price reaches the $24.676 level, a long scenario becomes feasible.”

 

  • What happened since TP was published?

Silver prices rallied higher, hitting a fresh 2024 high above $25 and gaining almost 3% since the start of the week.

 

  • How much in potential profits?

440 points for traders who bought silver at $24.676 and locked in profits at the second bullish price target at $25.116.

 

    3) Crude bulls enter the scene

  • Where and when was Target Price (TP) published?

This technical scenario (Crude) is based on the FXTM Signals that are posted twice a day (before the London and New York sessions) for all FXTM clients to follow.

It can be found in the MyFXTM profile under Trading Services… FXTM Trading Signals.

 

  • What happened since TP was published?

Oil prices initially rallied on Wednesday due to a surprise drop in U.S crude stockpiles and geopolitical risks concerning Ukraine/Russia.

The global commodity extended gains this morning (Thursday) after the International Energy Agency warned of a supply deficit throughout 2024.

 

  • How much in potential profits?

Crude has hit all its profit targets.

Traders who entered at $79.49 and exited at the final target level of $79.83 would have gained 34 points.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Canadian Dollar Seeks Opportunities for Growth

By RoboForex Analytical Department

The USDCAD pair remains within a sideways range, with the Canadian dollar occasionally showing a tendency to strengthen.

Recent DES data revealed that Canadian households have become more affluent. In Q4 2023, their “net” worth increased by 1.8%, or 300 billion Canadian dollars, smoothing out the decline seen in the previous quarter.

This increase can be attributed to the recovery in financial market returns, as both stocks and bonds appreciated during the period. This dynamic compensated for the “modest” decline in the country’s housing market value. Overall, Canadians became 712.7 billion CAD richer in 2023 than they were the previous year.

Borrowing rates in Q4 of last year increased for the second consecutive quarter, with households attracting 29.5 billion CAD, primarily in mortgage loans, followed by consumer loans. These figures raise concerns, suggesting that some households may become more indebted than others. Canada’s economy’s loan debt is currently estimated at 2.9 trillion CAD, with three-quarters of these debts being mortgage loans. However, in the economic context, household debt as a percentage of Canadians’ disposable income accounts for 178.7% in Q4, slightly lower than in Q3 of last year and the lowest level since the end of 2015. Thus, while debts exist, the overall picture is relatively stable.

USDCAD technical analysis

On the H4 chart of USDCAD, a declining wave is forming towards 1.3403. Today, we are considering the development of its fifth structure. After reaching the target level, a correction to 1.3511 is possible. Subsequently, we expect the beginning of a new declining structure towards the local target of 1.3354. This scenario is confirmed by the MACD indicator, whose signal line is below the zero mark and heading strictly downward towards new lows.

On the USDCAD H1 chart, the first structure of the fifth declining wave has been completed. Today, we are considering the possibility of a correction to 1.3488. After its completion, we expect a decline to 1.3454, then a rise to 1.3471 (testing from below), and then a decline to 1.3420. This is the first target. The stochastic oscillator, with its signal line above the 80 mark and preparing to drop to 20, also confirms this scenario.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

ECB intends to cut rates this spring. The US stock indices grow despite inflation growth

By JustMarkets

At Tuesday’s stock market close, the Dow Jones Index (US30) rose by 0.61%. The S&P 500 Index (US500) was up 0.61%. The NASDAQ Technology Index (US100) closed positive 1.54%. Despite a slight rise in inflation, stock indices refuse to fall. The bullish consensus in the market is so strong that it is almost unrealistic to turn this train around without a significant negative trigger. It is probably not worth waiting for any changes in the market until the quarterly expiration this Friday.

The market focus will shift to the Fed meeting next week on March 20. If the market does not hear any negative signals from Mr. Powell, the best strategy for the coming months will be to follow the bullish trend and buy risky assets. Currently, markets are pricing the odds of a 25 bps rate cut at 1% for next week’s FOMC meeting on March 20, 15% for the next meeting on May 1, and 78% for the subsequent meeting on June 12.

Shares of Oracle (ORCL) jumped by 11.88% on Tuesday after its earnings report beat market expectations on Monday, thanks to a surge in orders for cloud services. The company said that demand for Gen2 AI infrastructure is significantly outstripping supply. Boeing (BA) fell another 4.17% following news that officials in Chile have launched an investigation into a flight traveling from Auckland to Sydney where a violent air shake was reported, resulting in the hospitalization of 10 people and injuries to 50 people. In addition, the CEO of United Airlines told Boeing that it no longer wants to deliver Boeing 737 Max 10 airplanes because of delays in certification.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 1.23%, France’s CAC 40 (FR40) gained 0.84%, Spain’s IBEX 35 (ES35) added 0.61%, and the UK’s FTSE 100 (UK100) closed positive 1.02%.

There is broad agreement at the European Central Bank to start cutting interest rates in the spring as the fight against inflation is won, according to Governing Council spokesman Francois Villeroy de Galhau. The risk of waiting too long before easing monetary policy and unnecessarily hurting the economy is now equal to the risk of acting too soon and letting inflation recover. Policymakers can act independently of their counterparts at the Federal Reserve and will have ample room to adjust the pace of easing as needed once the process begins, the policymaker said.

WTI crude prices rose to around $78 a barrel on Wednesday, pulling back from two-week lows amid a favorable outlook for global demand. In its monthly report, OPEC said global oil demand is expected to grow by 2.25 million bpd in 2024 and 1.85 million bpd in 2025, unchanged from previous estimates. The group also raised its economic growth forecast for the current year, indicating room for improvement. In addition, industry data showed that US crude inventories unexpectedly fell by 5.521 million barrels last week, indicating healthy demand in the world’s largest oil consumer.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.06% on the day, China’s FTSE China A50 (CHA50) was up 0.89%, Hong Kong’s Hang Seng (HK50) added 3.05% on Tuesday, and Australia’s ASX 200 (AU200) was positive 0.11%.

Bank of Japan Governor Kazuo Ueda gave a slightly gloomier assessment of the economy ahead of the central bank’s policy meeting next week. Ueda told parliament that Japan’s economy is recovering at a moderate pace, although there is weakness in some data. He added that there are various ways to raise the cost of short-term borrowing if the central bank decides to end negative interest rates, but offered few clues. There has been increasing speculation recently that the Bank of Japan could start raising interest rates this month because of rising wages, high inflation, and a robust economy.

S&P 500 (US500) 5,175.27 +57.33 (+1.12%)

Dow Jones (US30) 39,005.49 +235.83 (+0.61%)

DAX (DE40) 17,965.11 +218.84 (+1.23%)

FTSE 100 (UK100) 7,747.81 +78.58 (+1.02%)

USD Index 102.93 +0.06 (+0.06%)

Important events today:
  • – UK GDP (q/q) at 09:00 (GMT+2);
  • – UK Industrial Production (m/m) at 09:00 (GMT+2);
  • – UK Manufacturing Production (m/m) at 09:00 (GMT+2);
  • – UK Trade Balance (m/m) at 09:00 (GMT+2);
  • – Eurozone Industrial Production (m/m) at 12:00 (GMT+2);
  • – US Crude Oil Reserves (w/w) at 16:30 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

XAGUSD: Bulls down but not out

By ForexTime

  • H4/D1 upside momentum still in play
  • Prices above 50 EMA & MACD bullish
  • CCI indicator hints possible oversold situation
  • 4 potential targets on H4 timeframe
  • Bullish scenario void below 23.943

After closing over 1% lower in the previous session, Silver kicked off Wednesday on a positive note with bulls not going down without a fight!

The precious metal initially found itself under fresh selling pressure on Tuesday after hotter-than-expected US inflation data dampened hopes around the Fed cutting interest rates in the coming months. It is worth noting that silver often follows gold’s direction, with interest rate bets impacting appetite for non-yielding assets like silver.

Last Friday, traders fully priced in a Fed rate cut by June following the mixed US jobs report.

These odds have now dropped to 75% following the sticky inflation data for February.

Rate cut bets could fall even further if more incoming US data this week support the argument around US rates remaining higher for longer.

Given silver’s zero-yielding nature, such a development may create headwinds down the road for bulls.

Nevertheless, silver is currently in a daily uptrend after breaking out of a ranging period where the price oscillated around a weekly support level at 22.433.

The current price action confirms that a correction wave is presently in progress.

While the current larger economic scenarios may impact the metal’s trajectory, the bullish momentum might not be over yet with prices potentially hitting the next weekly resistance level at 25.919.

On the 4-hour chart an uptrend is also in progress. The consecutively higher top and bottom can clearly be seen, but there has been a flatting of the market structure, signifying a slowdown in momentum. 

The price is however still above the 50 Exponential Moving Average and the longer price cycle Moving Average Convergence Divergence (MACD) Oscillators confirms the bullish sentiment by being above the zero base line. The Commodity Channel Index (CCI) gives a hint of a possible oversold situation with the potential of an increase in demand on the horizon.

If the price reaches the 24.676 level, a long scenario becomes feasible.

Attaching a modified Fibonacci tool to the trigger level at 24.676 and dragging it to just below the last bottom at 23.943, four conservative targets can be established:

  • Target 1: at 24.969

  • Target 2: at 25.116

  • Target 3: at 25.409

  • Target 4: at 25.776

If the price breaks past 23.943, this opportunity becomes invalid.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

US Dollar Strengthens Amid Inflation Data

By RoboForex Analytical Department

As of Wednesday, the EUR/USD pair is hovering near 1.0925 after experiencing a volatile session, with expectations for a more subdued week ahead.

Recent statistical data highlighted higher-than-expected inflation in the US for February, prompting adjustments to predictions about the easing of monetary policy by the Federal Reserve in June.

The Consumer Price Index (CPI) rose by 0.4% month-on-month last month, aligning with expectations. Year-on-year, the indicator expanded to 3.2% from 3.1%. Core inflation in the US increased by 0.4% month-on-month, surpassing the forecast of 0.3%. From year to year, the indicator rose to 3.8% from the previous 3.7%.

While these figures did not come as a “surprise,” they reaffirmed that inflation is more persistent than previously thought. Specific details of the reports offer local hope for improvement, although it is clear overall that the situation could be more comfortable for the Fed to make significant decisions.

The market interpreted these developments favourably for the US dollar, shifting investor preferences towards it.

Market focus is squarely on the Fed’s June meeting, with the March and May sessions attracting less interest. The Fed will likely require more statistical information by then.

As indicated by public data, investor expectations suggest a 69% chance of a rate cut in June, down from 71% earlier in the week.

In what would be the most optimistic forecast, the Fed will probably manage to cut rates only three times this year.

Technical Analysis of EUR/USD

On the H4 chart, EUR/USD is forming the first wave of decline towards 1.0777. The first structure of this wave and its correction have been completed. Today, we will consider the likelihood of breaking the minimum of the first structure and continuing the development of the wave to the local target level of 1.0815. The MACD indicator confirms this scenario, with its signal line above zero and a sharply decreasing histogram, indicating the continuation of the downtrend.

On the H1 chart, EUR/USD has formed the first wave of a decline structure to 1.0900 and a correction to 1.0939. The market has essentially delineated a consolidation range around the level of 1.0939. Today, a decline to the lower boundary of this range is expected. With a breach of 1.0900, a further decline to 1.0880 is anticipated, with the trend potentially continuing to 1.0815. The Stochastic oscillator confirms this scenario, with its signal line below the 50 mark, expecting a continuation of the decline towards 20.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Commercial Property Prices: Why the Decline May Have Just Started

This index has already retreated 20% since May 2022

By Elliott Wave International

The major bust in property prices 15 to 20 years ago started with the residential real estate market.

This time, the commercial real estate market may have taken the lead. Here are some recent headlines:

  • [“Shark Tank Star”] Says a Coming Real Estate Collapse Will Lead to ‘Chaos’ — Yahoo Finance, Jan. 30
  • Commercial Property Losses Hammer Banks on Three Continents (Wall Street Journal, Feb. 1)
  • Bracing for the commercial real estate ‘reckoning’ — Reuters, Feb. 2

As rough as it’s already been for the commercial real estate market, it appears that “reckoning” is only in its early stages.

Keep in mind, as you review this chart and commentary from the February Elliott Wave Financial Forecast, that progress in a market takes the form of five waves. Once those five waves are complete, a correction is due (Note: The Elliott Wave Financial Forecast is a monthly publication which covers major U.S. financial markets):

This chart of the Green Street Commercial Property Index shows the latest decline, a 20% retreat from May 2022. In terms of time, the 20-month plunge is already close to the 22-month decline from September 2007 to June 2009. … [T]he crumbling demand for commercial space, not to mention the five-wave form of its rise from 1998, suggests that further declines are “baked in.”

The U.S. commercial real estate market is valued at $20 trillion, according to Bloomberg, so the developing crisis is not a minor ordeal.

Part of the reason the full brunt of the crisis has been delayed is that many loans have been granted extensions.

When those mature loans are refinanced, some borrowers could see their interest rates skyrocket. This could set off a wave of defaults.

Business Insider recently quoted an economist who specializes in the property sector (Jan. 23):

“[B]uilding owners are looking to ‘extend and pretend’ but that strategy can’t last forever as there’s still a $2.2 trillion mountain of commercial real estate debt that will mature by 2027.”

Some building owners have already experienced a lot of financial pain. For example, Aon Center — the third-tallest tower in Los Angeles — sold for $147.8 million. That’s 45% less than its 2014 purchase price.

This is just one example of what’s going on in commercial real estate.

Also know that the property and stock markets tend to be correlated.

If you would like to ascertain the trend of the stock market via Elliott wave analysis, you may want to read the Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

In markets, progress ultimately takes the form of five waves of a specific structure. Three of these waves, which are labeled 1, 3 and 5, actually effect the directional movement. They are separated by two countertrend interruptions, which are labeled 2 and 4, as shown in Figure 1-1. The two interruptions are apparently a requisite for overall directional movement to occur.

[R.N.] Elliott noted three consistent aspects of the five-wave form. They are: Wave 2 never moves beyond the start of wave 1; wave 3 is never the shortest wave; wave 4 never enters the price territory of wave 1.

Get more insights into the Wave Principle by reading the entire online version of the book for free.

Just follow the link and you can have the Wall Street bestseller on your computer screen in moments: Elliott Wave Principle: Key to Market Behavior — get free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Commercial Property Prices: Why the Decline May Have Just Started. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Natural gas prices are falling again. Chinese indices are growing amid support from the Central Bank

By JustMarkets

The Dow Jones Index (US30) was up 0.12% at Monday’s stock market close. The S&P 500 Index (US500) was down 0.11%. The NASDAQ Technology Index (US100) closed negative 0.41%. Stocks traded slightly lower on Monday amid rising 10-year T-note yields and caution ahead of Tuesday’s US Consumer Price Index report. On an annualized basis, overall inflation is expected to fall to 3.1% from 3.2%. Core inflation (excluding food and energy prices) will fall from 3.9% to 3.8% y/y. In monthly terms, inflationary pressures are expected to rise by 0.3%. If the data comes out in line with consensus, it would indicate that underlying inflationary trends are not intensifying. However, a stronger-than-expected CPI report would dampen hopes of a near-term Fed rate cut, which could put additional pressure on the indices.

Shares of Nvidia (NVDA) are down 1.98% on Monday, adding to last Friday’s 5.47% selloff. Nvidia shares suffered profit-taking last Friday after initially hitting a record high and rising more than 17% over the previous six sessions. Boeing (BA) is down 3.0% after news that the US Department of Justice has opened a criminal investigation into the recent airborne door explosion on an Alaskan Airlines flight. Moderna (MRNA) was Monday’s best-performing stock of the NASDAQ benchmark (US100), adding 8.69%. The biotech company rose following news that it is partnering with Merck to begin a mid-stage study to test its experimental cancer vaccine on patients with skin cancer.

Bitcoin (BTCUSD) gained more than 4% on Monday and set a new record high, adding to last week’s 9.3% rally. Cryptocurrencies continue to rise because of the US Securities and Exchange Commission’s recent decision to allow spot bitcoin ETFs. However, shares of Coinbase (COIN) are down 0.93% on Monday, giving up an early rally of more than 4%.

Equity markets in Europe traded flat yesterday. Germany’s DAX (DE40) fell by 0.38%, France’s CAC 40 (FR40) lost 0.11%, Spain’s IBEX 35 (ES35) rose by 0.19%, and the UK’s FTSE 100 (UK100) closed positive 0.12%.

Shares of Austria’s Raiffeisen Bank closed 7.4% lower amid concerns over possible US sanctions over its relationship with Russia.

WTI crude oil prices climbed above $78 a barrel on Tuesday, recovering some of the losses of recent sessions. This week, markets await monthly reports from OPEC, the IEA, and the US EIA to assess the outlook for global demand. Investors continue to weigh conflicting supply and demand factors, as OPEC+ production cuts and tensions in the Middle East are offset by rising non-OPEC supply and signs of weak demand from major oil importer China. Data released last week showed that China’s oil imports fell about 5.7% to 10.8 million bpd in the first two months of the year, down from 11.44 million bpd in December.

The US natural gas price fell below $1.77 per Mmbbl to a two-week low, driven by reduced gas supplies to LNG export facilities and expectations of weaker demand due to milder weather in the next two weeks. Freeport LNG saw a nearly 50 percent drop in raw gas receipts last week due to the shutdown of one of its three processing lines. On the other hand, energy companies such as EQT and Chesapeake Energy cut gas production last month due to lower gas prices in February. Meanwhile, according to the latest EIA data, gas inventories as of March 1 are about 30.9% above normal levels.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down 2.19% on the day, China’s FTSE China A50 (CHA50) was up 1.78%, Hong Kong’s Hang Seng (HK50) added 1.43% on Monday, and Australia’s ASX 200 (AU200) was negative 1.82%.

Hong Kong stocks climbed 1.2% in Tuesday morning trading to a two-week peak 16.735, maintaining bullish momentum for the third consecutive session amid gains in most sectors, especially healthcare, real estate, and consumer discretionary. Investors were scrambling to look for more catalysts after the close of China’s annual plenary meeting on Monday. During the event, Beijing set its 2024 GDP growth target at around 5.0% and planned to issue special bonds for large projects. At the same time, China’s central bank pledged to keep prices stable and said it may cut the refinancing rate further this year.

Japan’s business activity index for large manufacturing companies fell sharply to 6.7% in the first quarter of 2024 from 5.7% in the previous quarter, posting its lowest reading in a year and defying expectations for an improvement to 6.2%. The survey came amid official data that Japan’s economy fell into a technical recession in the fourth quarter of last year but was later revised to show a return to growth.

NAB Australia’s business confidence index fell to 0 in February 2024 from 1 in January. The reading was below the long-term average, with the retail sector among the top risk factors amid high borrowing costs and rising inflation.

S&P 500 (US500) 5,117.94 −5.75 (−0.11%)

Dow Jones (US30) 38,769.66 +46.97 (+0.12%)

DAX (DE40) 17,746.27 −68.24 (−0.38%)

FTSE 100 (UK100) 7,669.23 +9.49 (+0.12%)

USD Index 102.85 +0.14 (+0.13%)

Important events today:
  • – Japan Producer Price Index (m/m) at 01:50 (GMT+2);
  • – UK Average Earnings Index (m/m) at 09:00 (GMT+2);
  • – UK Claimant Count Change (m/m) at 09:00 (GMT+2);
  • – UK Unemployment Rate (m/m) at 09:00 (GMT+2);
  • – German Consumer Price Index (m/m) at 09:00 (GMT+2);
  • – US Consumer Price Index (m/m) at 14:30 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

The US labor market is cooling. ECB officials talked about cutting rates in the spring

By JustMarkets

At Friday’s stock market close, the Dow Jones Index (US30) decreased by 0.18% (for the week -0.63%). The S&P 500 Index (US500) was down 0.65% (for the week -0.14%). The NASDAQ Technology Index (US100) closed negative 1.16% (for the week -1.10%).

Although the US economy added 275K jobs, unemployment jumped to 3.9%, and wage growth slowed. The data indicates that the labor market has begun to cool down. Investors’ first reaction to the report was a rise in risk assets and a fall in the dollar. Market expectations for the first rate cut in June were confirmed and strengthened. But since this is not a new scenario and such a consensus has been priced in over the past month, the positivity was not enough for long, and investors sold off all the growth by the end of Friday. Current market conditions suggest index weakness will continue this week as investors take profits after the recent market rally. That said, this week promises to be even more volatile with the release of inflation data on Tuesday, March 12, and the quarterly derivatives expiration on Friday. Usually, these periods are when new trends are born, or old trends are reversed.

Also on Friday, shares of Nvidia (NVDA) fell more than 5%, its worst single-day performance since late May. But the stock ended the week up more than 6% amid a rally that has boosted its market value by more than $1 trillion this year.

Bitcoin hit a new all-time high above $70,000, helped by investor demand for new US spot bitcoin ETFs launched this year and expectations of lower global interest rates. Billions of dollars have poured into ETFs over the past few weeks. Also, let’s not forget the bitcoin “halving” that will take place in April 2024. In addition, the market has received support ahead of an expected upgrade to the Ethereum blockchain platform. Bitcoin’s previous boom in 2021 was followed by a “crypto winter” when bankruptcies and collapses of major cryptocurrency companies left millions of investors destitute, prompting regulators to step up regulation.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) was down 0.16% (for the week +0.40%), France’s CAC 40 (FR40) added 0.15% (for the week +1.18%) on Friday, Spain’s IBEX 35 (ES35) was down 0.13% (for the week +2.34%), and the UK’s FTSE 100 (UK100) closed negative 0.43% (for the week -0.30%).

Nagel, representative of the ECB Governing Council and President of the Bundesbank, said on Friday that an interest rate cut before the summer is increasingly likely. His colleague, ECB Governing Council representative Villeroy de Gallo, added that the first rate cut is very likely to come in the spring.

Oil prices closed 1% lower on Friday as markets remain wary of weak demand from China, even as the OPEC+ producer group extended supply cuts. Both benchmarks fell for the week, with Brent down 1.8% and WTI crude prices decreased by 2.5%. Currently, traders in the energy market are focusing on the timing of possible rate cuts by the Fed and ECB. Lower interest rates may increase demand for oil by accelerating economic growth.

Asian markets traded yesterday without any unified dynamics. Japan’s Nikkei 225 (JP225) was down 1.28% for the week, China’s FTSE China A50 (CHA50) lost 0.28% for the 5 trading days, Hong Kong’s Hang Seng (HK50) was down 1.66% for the week, and Australia’s ASX 200 (AU200) was positive 1.31%.

Japan’s economy returned to growth in the fourth quarter of 2023, averting a technical recession. Revised data showed that the country’s GDP grew by 0.4% and 0.1% year-on-year and 0.1% quarter-on-quarter, respectively, reversing preliminary contraction figures of 0.4% and 0.1% for the period. The latest data reinforced speculation that the Bank of Japan may start raising interest rates in April.

Chinese consumer prices rose by 0.7% year over year in February 2024, above market forecasts of 0.3%, and a turnaround from the sharpest 0.8% drop in 14 years in January. The latest result was the first consumer inflation since August last year, reaching the highest level in 11 months. But despite the rise in consumer prices, producer prices remain in deflation.

S&P 500 (US500) 5,123.69  −33.67 (−0.65%)

Dow Jones (US30) 38,722.69 −68.66 −0.18%)

DAX (DE40) 17,814.51 −28.34 (−0.16%)

FTSE 100 (UK100) 7,659.74 −32.72 (−0.43%)

USD Index 102.74 −0.08 (−0.08%)

Important events today:
  • – Japan GDP (q/q) at 01:50 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Japanese Yen Surges to Monthly High as Economy Shows Signs of Growth

By RoboForex Analytical Department

The Japanese yen strengthened against the US dollar on Monday, reaching a month-long peak following the release of statistics indicating Japan’s return to economic growth in Q4 2023. This development effectively ends the previously declared technical recession.

Japan’s GDP experienced a quarterly increase of 0.1% and an annual growth of 0.4%. These figures revise earlier estimates, suggesting 0.1% and 0.4% declines, respectively. In comparison, the Japanese economy contracted by 0.8% quarterly and 3.3% annually in Q3 2023.

The positive economic data have fuelled market speculation about a potential interest rate hike by the Bank of Japan, with some economists and traders anticipating such a move as soon as March.

Bank of Japan board member Junko Nakagawa recently commented on the visible prospects for achieving inflation targets and a positive wage cycle, further supporting the yen.

The Japanese currency is currently benefitting from the weakening US dollar and a drop in US government bond yields amid the Federal Reserve’s dovish rhetoric.

Technical Analysis of USD/JPY

On the H4 USD/JPY chart, a correction wave to the 146.48 level has been completed (tested from above). The market is now forming a consolidation range above this level, expecting to break upwards and initiate the fifth growth wave towards 152.72. The MACD oscillator supports this scenario, with its signal line trading below zero at minimums and poised for growth.

On the H1 USD/JPY chart, a correction wave to 146.48 has finished. A growth impulse to 147.26 and its correction to 146.55 have been executed, essentially setting the consolidation range boundaries. With an upward breakout, growth towards the 148.00 level is anticipated. This target is the first in the growth wave. The Stochastic oscillator confirms this scenario, with its signal line above the 50 mark and strictly heading towards 80.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.