HFMarkets (hfm.com): Market analysis services.

[HFM]

Date: 16th February 2024.

Investors Continue to Buy Ahead of the US Producer Inflation Release!
 

 

• UK Retail Sales witnesses its strongest increase since May 2021, but economists advise the increase is simply correcting poor data from previous months.
• The Pound gains against most currencies, but the currency market has their eyes fixed on the upcoming US Producer Price Index.
• Applied Materials soars above earnings expectations. Earnings Per Share beat expectations by almost 12% and revenue by 3%. The stock rose 12% after market close.
• Bitcoin again renews its recent highs rising another 2.15% on Thursday. Cryptocurrencies are also likely to witness strong influence this afternoon.

GBPUSD – UK Retail Sales Beat Expectations

The GBPUSD was trading lower throughout the trading session but quickly rose to the day’s open price after the UK’s Retail Sales Release. The Retail Sales read 3.4%, significantly higher than 1.5% which was expected and -3.2% from the previous month. However, economists are advising a strong increase is not as positive as it may seem considering previous months saw a decline of 3.9%. Nonetheless, investors are reacting positively, and the GBP is rising moderately against all currencies.

In terms of technical analysis, the exchange rate is seeing neither bullish nor bearish signals. The price is trading at most trend lines and is neutral on most oscillators. In order for traders to obtain a clear signal, the exchange rate must maintain momentum and show a clear direction. If the price breaks above 1.26056, which is also the resistance level of the day before, buy signals will materialize. If the afternoon’s Producer Price Release is lower than expectations, a bullish breakout is likely to take place.

The US will release the Producer Price Index, Core PPI and the Prelim Consumer Sentiment. The strongest price driver will be the PPI and Core PPI release. Analysts expect both to read 0.1%, which is only slightly higher than the previous month. However, the question is if the rate of increase will be higher than expectations. Another higher inflation reading will again support the Dollar, but pressure Gold and US Stocks.
 

USA100 – Investors Await PPI Release and Attempt a Full Correction!

The USA100 saw a slight decline as we were approaching the US open due to weak Retail Sales, but again investors only used this to enter at a better entry level. The index ended the day 0.22% higher and is 0.85% lower than the previous high. Technical analysis currently points towards a full correction back up to $18,058, but this will largely depend on the Producer Price Index.

If the PPI reading is higher than 0.1%, the USA100 and the stocks market in general can witness another decline. The decline may simply be a retracement or a full correction back to 1.25341, but this would depend on how much higher the reading is. If the PPI and Core PPI reads 0.1% or lower, the bullish trend potentially can continue as per indications from Crossovers, VWAP, and Oscillators.

The index was supported by Applied Materials which released their quarterly earnings report. The company’s Earnings Per Share beat expectations by almost 12% and revenue by 3%. The stock rose more than 12% after the market close and can support the index if it continues to perform well in the upcoming days. The next major earnings report will be NVIDIA next Wednesday after market close.
 

Bitcoin – Net Inflows of Over $1 Billion this Past Week

The cryptocurrency market capitalization rose this week, but slightly fell this morning ahead of the PPI release. However, the general rise is positive for Bitcoin as is its higher market share which rose 0.29%. Investors should note the day’s inflation reading is likely to also affect Bitcoin in a similar way to the stock market.

The cryptocurrency market is being supported by the weaker monetary policy in China, one of its largest markets. However, the price action will depend on continued relaxation from across the globe. Another reason is demand for spot-Bitcoin ETFs which remains strong, with net inflows of over $1 billion over the past week. Technical analysts also note the importance of surpassing the $50,000 mark which is a strong psychological price/level.
 

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 19th February 2024.

Market Recap – China Back, US closed!


Economic Indicators & Central Banks:
 

• Chinese stocks climbed slightly as China returned from the long New Year holidays. Modest gains showed that investors are worried about the longterm outlook. Much of the economy’s sluggishness is a function of the collapse in the property sector as well as the bearish effects of the many regulatory restrictions in tech, problems that would not be helped much by easier policy.
• US markets are closed for the Presidents’ Day holiday.
• This week: Eyes on European inflation data, PMI data from EU, UK and US, RBA & FOMC Minutes, as well as earnings from Nvidia Corp. and BHP Group Ltd to help gauge the health of the global economy.

Market Trends:
 

• Nikkei (JPN225) holds near 1989 highs, pressured by Friday’s selloff but also due to decline in chip-related shares. Nintendo was the biggest percentage decliner though, slumping 5.8%. Chip-sector heavyweights Advantest and Tokyo Electron were the Nikkei’s biggest drags, shaving off 60 and 55 index points respectively with declines of 3.2% and 1.6%.
• European stock futures are in the red, US futures fractionally higher on what is likely to be a quiet day, as US markets are closed.
• S&P500(USA500) rose 0.1%, Nasdaq (USA100) rose 0.2%.

Financial Markets Performance:
 

• The USDIndex’s gains faded after the hot inflation stats crushed expectations for quick and deep Fed rate cuts. Currently at 104.
• The Yen is directionless, with USDJPY sideways close to 150 with volumes likely to be low through the day. The drag from higher US bond yields, particularly on tech stocks, is offsetting support from a weak yen.
• USOIL pulled back from $78 highs on the ongoing Middle East tension. The IEA signaled last week that oil markets could be oversupplied all year, and China’s soft economy has raised questions about consumption. Still, attacks on shipping in the Red Sea and the Israel-Hamas war are keeping prices from falling too far.
• Gold extends Friday’s gains, above $2020.
• Bitcoin at $52514.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 20th February 2024.

Market Recap – US & European equities declined, mirroring the drop in Asian stocks.


Economic Indicators & Central Banks:
 

• Futures for both US and European equities declined, mirroring the drop in Asian stocks, as an adjustment to China’s mortgage reference rate did little to alleviate worries surrounding the world’s 2nd largest economy.
• China implemented a record rate cut, reducing the 5-year loan prime rate by 25 basis points to 3.95%, surpassing economists’ expectations of 5 to 15 bp cuts.
• The RBA maintained its cautious stance, further suggesting that rate cuts were not imminent. Minutes from the central bank’s February meeting, released today, indicated that policymakers require additional time to ascertain if inflation is indeed decreasing before considering any potential interest rate hikes.
• Market sentiment outside China weakened as expectations for US rate cuts dwindled following higher-than-expected producer and consumer prices.
• Today: The Canadian inflation and European wages data, which are expected to influence market movements going forward.

Market Trends:
 

• Nikkei (JPN225) retreated by 0.3% from its recent highs.
• US Treasury yields edged up slightly, with S&P500 (USA500) futures and European futures both declining by 0.3%.
• BHP Group, the world’s largest miner, reported $6.57 billion in underlying profits, less than consensus estimates, and stated demand from top customer China was healthy despite weakness in housing.

Financial Markets Performance:
 

• The USDIndex strengthened broadly surpassing 150 Yen, amid expectations of sustained higher US interest rates, despite Japan’s recession and uncertainty over its monetary policy exit.
• The Aussie, often viewed as a proxy for China’s economic health, remained largely unchanged, while iron ore futures, linked to Chinese construction demand, declined by 3%.
• The Yuan initially dropped to its lowest level in 3 months but stabilized at 7.1981 in the Asia close.
• Gold was little changed after edging higher Monday to trade around $2,020 per ounce.
• The USOIL edged higher against the backdrop of ongoing tensions in the Red Sea, a vital trade route. It is retesting again the January’s high again.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 22nd February 2024.

In-Depth Analysis – AUDUSD – Investors Expect Fed to Cut First!


AUDUSD – Economists Do Not Expect the RBA to Cut Until 2024’s Third Quarter.
 

• The Aussie Dollar increases 0.67% and sees its strongest gain this week so far. The exchange rate trades at its highest price since February 2nd.
• The FOMC’s Meeting Minutes indicate the Federal Reserve is not yet willing to cut interest rates. FOMC Members are cautious about cutting rates too fast.
• Australia’s Wage Price Index for the latest quarter continues to read higher than where the RBA would like to see it.
• The Reserve Bank of Australia advise the regulator would not consider cutting interest rates until the second half of 2024.
• The Australian Economy weakens but not enough to pressure the RBA! Inflation remains moderately higher than the US!

AUDUSD – Technical Analysis

The AUDUSD is witnessing one of the lowest spreads amongst the major currency pairs and is seeing higher levels of volatility. The Australian Dollar has been rising against the USD for seven consecutive days, similar to the NZD and the Euro. However, the AUD is performing better than the GBP, JPY and CHF against the Dollar. However, investors should note that the bullish price movement is largely being driven by the weakness in the Dollar.

The US Dollar Index has fallen 0.50% this week and trades at a 3-week low. The Australian Dollar on the other hand is witnessing mainly bullish price movements depending on the currency pair. The Australian Dollar is increasing against the GBP, Euro, Yen, and the CHF but is declining against the NZD. So here we can see there are no major conflicts between the two individual currencies. However, investors will need to continue monitoring the US Dollar Index and price condition of the AUD against other major currencies.

The AUDUSD is trading above the 75-Bar Exponential Moving Average and above the “Neutral” level on the RSI as well as the Bollinger Bands. These three factors indicate a further bullish trend as the asset is yet to be read “overbought” on most oscillators. In addition to this, the asset has managed to break above the resistance level and the previous high, meaning the continuation of the traditional wave pattern.

The only negative indication when evaluating technical analysis is the measurements of the previous 4 impulse waves. The average bullish wave size is 0.87% and the largest has been 0.92%. The current impulse wave reads 0.87%. Therefore, if the pattern is to continue the price may retrace soon, even if it is going to continue rising thereafter. However, this cannot be known for sure.



AUDUSD – Fundamental Analysis

In the Meeting Minutes, representatives stated more fear about the remaining risks of a premature decline in rates than about a persistent period of high interest rates. Against this background, markets are reconsidering the timing of a possible easing of the regulator’s position in May and June. According to the CME Groups FedWatch Tool, the likelihood of a May adjustment is currently anticipated at 30-35%. A strong possibility is considered anything above 70%.

Next week’s Core PCE Price Index will be key for the Dollar as this will be the last inflation reading for the month and short-term future. If the PCE Price Index is also higher, this means all 5 inflation readings beat expectations. As a result, the Dollar may rise. However, the Dollar’s issue is that the market’s risk profile is high, and many expect the Fed to cut first. Therefore, the Dollar may continue to struggle unless other central banks become more dovish.

Even though the Reserve Bank of Australia’s interest rate is lower than the Fed’s, analysts expect the Fed to cut first. Even though GDP Growth in Australia is weakening, the economy is still performing better than Europe and the UK. In addition to this, inflation is still above 4.00%, which is extremely high for the Aussie and the Unemployment Rate has risen to 4.1% which is still manageable according to analysts there. Therefore, most analysts believe the RBA will cut in the third quarter and after the Fed. Therefore, fundamental analysis is slightly in the Aussie’s favor here, but technical analysis will need to continue signalling a rise.




Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 23rd February 2024.

Market Recap – Global Rally Pushing Valuations To Record Highs Across the US, Europe & Japan.


Economic Indicators & Central Banks:
 

• It was all about Nvidia. Nvidia got a $277 billion 1-day boost to its market capitalization yesterday – the biggest single-session increase in value ever!(the previous record was a $197 billion gain by Meta Platforms Inc.)
• Treasuries continued to lose ground, hurt by the surge in risk appetite with yields cheapening to the highest levels since late last year.
• The solid jobless claims report, which followed on the heels of the hawkish bent in the FOMC minutes, added to expectations the FOMC will leave rates in restrictive territory into June at least.
• A weaker than expected S&P Global services headline saw rates dip briefly.
• Japanese markets are closed for a public holiday.
• Fed Governor Christopher Waller: ”interest rate cuts should be delayed at least two more months, but indications of healthy demand and concerns over supplies could boost prices in the coming days.”
• Today: Germany IFO business climate & GDP, ECB publishes 1- and 3-Year inflation expectations survey.

Market Trends:
 

• Massive global rally in risk that saw the NASDAQ(USA100) jump 2.96% to 16,041.6, falling just short of the historic peak of 16,057 from November 2021. The S&P500 (USA500) climbed 2.1% to 5100, and the Dow (USA30) was up 1.18% to 39,069, both marking new records.
• Asian stock markets today continued to move higher, with the global rally pushing valuations to record highs across the US, Europe and Japan. The Nikkei jumped a further 2.2%.

Financial Markets Performance:
 

• The USDIndex was little changed at 103.80, below 104 for the first time since February 2.
• The Yen has performed the worst so far this year, experiencing a 6.3% decrease against the Dollar, as investors sought higher yields in other currencies, anticipating that Japan’s interest rates would remain close to zero for the foreseeable future.
• The Yen weakened against the Euro, Sterling, and other currencies this week, marking its 4th consecutive weekly decline against the US Dollar.
• USOil slipped to $77.85 per barrel after Fed speeches indicated delay to rate cuts.
• Gold dipped to $2021 per ounce.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 26th February 2024.

Oil and the New Zealand Dollar Decline After Weak Economic Data!

• The New Zealand Dollar witnesses a quick decline as we approach this week’s central bank decision and press conference. The NZD falls 0.50% within the first three hours of trading.
• Oil drops to the lowest price since February 15th after investors price in a delayed interest rate cut.
• US Oil declines after the Energy Information Administration (EIA) recorded an increase in oil reserves of 3.5 million barrels. The higher level of supply can continue to pressure quotes if demand falls.
• The US Dollar Index trades 0.12% lower during the Asian Session and so far, continues to maintain a “sell signal”.

NZDUSD – The New Zealand Dollar Declines Against All Currencies!

The day’s worst performing currency is the New Zealand Dollar which is declining against the whole currency market. Throughout the month of February, the NZD has been one of the best performing currencies, but as trading started this morning, a sizable decline was apparent. The NZDUSD is trading 0.50% lower, but the New Zealand Dollar is witnessing the strongest decline against the Pound. Against the Pound, the NZD fell 0.60% within this morning’s Asian Session.

The economy over the past 12 months within the country has seen a decline in GDP growth and Retail Sales while the Unemployment Rate has risen for four consecutive months. At the start of 2023, New Zealand had an unemployment rate of 3.4% while the latest reading was 4.00%. Economists are easily able to see how the restrictive monetary policy and weaker Chinese Market are weighing on the economy. Simultaneously, inflation remains stickier than elsewhere and considerably higher than elsewhere. These factors have resulted in economists potentially considering a more cautious tone towards the NZD.

Throughout the week, investors will mainly be keen to see what the Central Bank has to say regarding economic frailty and how this will affect monetary policy. For the current meeting, investors believe the policy will remain unchanged. However, if the economy continues to deteriorate in upcoming months, the RBNZ is likely to consider a cut sooner rather than later.



In terms of technical analysis, the price is currently “neutral” but close to a sell signal. The sell signal has not yet materialized as the exchange rate has seen significant gains over the past 2 weeks. However, if the price falls below 0.61618, the exchange rate will renew “sell” signals. Ideally investors would also like to see strength in the Dollar and the US Dollar Index. This way, the exchange rate is not experiencing two declining currencies.

USOIL – Oil Declines on Fears of a Global Slowdown!

The commodity saw a strong and sudden decline on Friday measuring 2.25% which lasted throughout the whole day. The price this morning is again witnessing a lower price as investors continue to struggle to maintain demand while the global economy is in stagnation, supply remains high and tensions in the middle east have not continued to escalate.

On Friday, the Fed’s board member Mr Waller said the Central Bank might refrain from lowering interest rates for at least several more months. Investors fear that maintaining a tight policy could cause a slowdown in economic growth. Consequently, this could limit oil demand in one of the leading consumers. Some economists have also voiced concern that other central banks in weaker economies may also follow the Fed even though their economies are underperforming.



Technical analysis, even though not a price driving factor, can assist with understanding the price condition. After the strong decline on Friday, the price is trading below most Moving Averages such as the 75-Bar-EMA and below 50.00 on the RSI. In addition to this, most timeframes show a downward crossover and the price trades below the Volume Weighted Average Price. However, Oil prices are trading at a support level which can be seen on February 21st, 15th and 12th. Therefore, to maintain a “sell” signal, the commodity will need to see fundamental factors pressure quotes further. This is likely if US economic data is lower and US inflation is higher. The US will release their Core PCE Price Index on Thursday and Germany will release their Consumer Price Index the same day.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 27th February 2024.

Japanese Bond Yields Rise to an 11-Year High Pressuring the BOJ!
 

 

• Japan’s 2-Year Bond Yield rises to its highest level in more than 10 years. On Tuesday, Japan’s inflation rate declined from 2.3% to 2.0% which was slightly higher than expectations.
• Japan’s bond yields rise as investors continue to speculate that Japan will move away from their ultra-expansionary monetary policy.
• Investors consider whether higher bond yields will support the Yen in the month of March and if the NIKKEI225 will retrace back to the previous low.
• The US Dollar Index declines for a second consecutive day. Dollar traders will focus on today’s US Durable Goods release as well as the Consumer Confidence Index.

USDJPY – The Yen Increases in Value Against All Currencies!

The US Dollar against the Japanese Yen has been one of the only currency pairs where the Dollar has been able to gain over the past week. Whereas the Dollar in general has been struggling against most major currencies. However, this morning the Yen has risen 0.28%. This is because Japanese Bond Yields have risen, and inflation reads slightly higher than previous expectations.

Over the past week, the major resistance level which can be seen has been at 150.280, which is close to the current price. If the price breaks below this level, sell signals will continue to emerge. If the price continues to decline and form a bearish breakout, the price will also trade below the 75-bar EMA and the 50.00 level on the RSI. This would further indicate a downward price movement in the short to medium term. On 30-Minute timeframe the exchange rate has formed a bearish crossover on the Stochastic Oscillator as well as the Moving Averages. Simultaneously, the oscillator is not yet indicating an oversold price. So why is the USDJPY declining?
 

Investors should take into consideration that the Dollar has been depreciating for over a week even though the USDJPY has risen. Therefore, investors are considering whether the exchange rate is overbought in the short term. The US Dollar Index also trades 0.14% lower this morning and the Yen is trading higher against all currencies. One of the reasons for the Yen increasing in value is the slightly higher inflation data.

Analysts advise the inflation rate in Japan is not high enough to support the Bank of Japan changing their policy. However, the fact the rate has not fallen as sharply as analysts previously thought supports the Yen. If the inflation rate remains stable above 2.00%, the regulator may consider switching to a more traditional monetary policy, in the second or third quarter of 2024. Also supporting the Japanese Yen are Japanese Bond Yields which are increasing to their highest level in over 11 years. The 2-Year Bond Yield has risen to 0.172% from 0.00% earlier this morning.
 

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JPN225 – Will Higher Yields Halt the NIKKEI225’s Bullish Trend?

The JPN225 has risen by almost 18% in 2024 so far and has been one of the best performing indices globally. The JPN225 has also outperformed US equities. However, investors are taking into consideration whether the JPN225 may retrace as the Yen gains. If investors use the Fibonacci levels to assist with what a retracement may look like, the indicators point to the assets declining to 37,863 as a minimum or to 35,010 as a maximum.

Alternatively, investors can use price action which indicates any retracement will on average be an 8.00% decline. Now, the index is yet to obtain a strong sell signal from indicators, however, the price is forming lower lows and highs which is a negative. In addition to this, the price has also recently been overbought on the RSI and has formed divergence signals. Therefore, investors are taking into consideration a possible retracement as Japanese Bond Yields rise and the Bank of Japan considers higher interest rates.
 

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 28th February 2024.

RBNZ Says No More Hikes, NZD Crashes More Than 1%!

• The Reserve Bank of New Zealand takes a more dovish tone as the economy’s cracks start to show.
• The New Zealand Dollar declines against all currencies. Against the Pound the NZD trades 0.83% lower and it has fallen more than 1.00% against the Dollar.
• The US Dollar Index trades 0.20% higher as investors take a more cautious approach due to weaker economic data.
• US Durable Goods Orders decline more than 6.00%, the largest contraction since May 2020.

NZDUSD

The New Zealand Dollar is witnessing the highest level of volatility during this morning’s Asian session. The lowest spreads and strongest price movement can be seen on the NZDUSD. The exchange rate is trading at its lowest price since February 16th after the NZD collapsed. Over the past 12 hours, the NZDUSD has fallen 1.11% primarily due to the dovish tone taken by the Reserve Bank of New Zealand and its Governor.

If we look at the 10 most traded currencies worldwide, New Zealand is the country witnessing the highest inflation and the weakest economic growth. The dovish tone taken by the RBNZ comes as a relief for locals and can support the economy. However, for the currency this simply adds more pressure. Economic weakness can primarily be seen in the New Zealand employment sector which has seen the unemployment rate rise from 3.2% to 4.00%. In addition to this, the Gross Domestic Product Growth Rate currently stands at -0.6%.

The RBNZ kept interest rates unchanged at 5.50%, but the main concern for investors were the comments made thereafter. The governor Mr Orr in his press conference said “there was very strong consensus that the official rate is sufficient”. As a result, the economy continues to remain unattractive due to weak data and potential for another hike is no longer possible. For this reason, demand has significantly fallen for the time being.

The Dollar on the other hand is seeing demand slightly rise due to poor economic data on Monday. The weaker data triggered a lower risk appetite within the market which supported the Dollar. Investors are now concerned whether the US’s GDP figure will indeed read +3.3% as per expectations considering certain data came in relatively weak. The Durable Goods Order fell 6.1%, Core Durable Goods fell -0.3% and the CB Consumer Confidence fell instead of remaining unchanged at 114.8. Throughout the remaining sessions, the price will continue to be influenced by the comments from the RBNZ, but also will depend on the Prelim GDP reading for the US this afternoon.



In terms of technical analysis, almost all indicators point towards a downward price movement which is understandable considering the bearish momentum. However, all timeframes below the 4-hour chart are currently reading oversold on the RSI. Investors should also take this into account.

USA100

The NASDAQ was the best performing index on Monday, but there continues to be a lack of bullish signals in the short term. The USA100’s price continues to remain above the 75-bar moving average and above the neutral level on most oscillators. However, the price is not maintaining bullish momentum and is failing to form higher highs. The price also continues to trade at the previous resistance level and many economists advise the price is trading at where traders believe is appropriate, hence the lack of a trend.

When we monitor the top 20 most influential stocks, 11 of the 20 ended the day higher while 9 declined. This is also an indication of no major trend within the session. From these 20 stocks, Netflix saw the largest increase (+2.39%) and Adobe saw the largest decline (1.43%).

So far, Bond Yields trade lower, which is known to support the stock market, however, the Dollar also trades higher which indicates lower investor sentiment. The next price driver for the USA100 will be the US GDP reading. Ideally investors will want to see strong growth but not strong enough to stop the Fed from cutting rates soon. Some economists are advising a GDP reading of 3.3% or slightly lower will be ideal for the stock market.



Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 29th February 2024.

The Japanese Yen Soars After The BOJ Indicate Interest Rate Hikes!

• The Japanese Yen witnesses its strongest gains since December 2023. The USDJPY drops more than 0.70% within the first few hours of trading.
• Japanese Yen is largely being driven by comments made by a key member of the Bank of Japan.
• The Bank of Japan advise they are considering taking small steps away from negative interest rates.
• US stocks decline away from the latest resistance level and trade 0.87% lower by end of day.

USDJPY –Bank of Japan Considering Steps Towards Higher Interest Rates

Many investors are looking to take advantage of the first clear indication that the Bank of Japan will look to take a more traditional stance on its policy. In other words, move away from negative interest rates. The Bank of Japan moved to negative interest rates in 2016 and since then the Yen has declined by 25% against the US Dollar and 40% against the Swiss Franc. The exchange rate is now trading at strong resistance levels from November 2023 and October 2022. However, the question now is if investors will continue investing in the Japanese Yen in the longer term?

The Yen’s advantages are its safe haven status and ability to mitigate risk away from the Dollar. Investors also note its current price is at an extremely “cheap” level compared to other options. For this reason, economists are evaluating whether investors will look to buy the Yen for the long-term considering the Bank of Japan may soon exit negative rates.



A key member of the Board of the Bank of Japan, Mr Takata, said to journalists, “It’s necessary to consider taking a nimble and flexible response, including on how to exit, or shift gear from the current extremely accommodative monetary policy”. Based on this, investors should not believe the BoJ will suddenly go on a hiking rampage or start hiking imminently. However, Mr Takata gave the first clear signal that the regulator will start hiking in 2024 to at least move away from negative rates.

Due to this the Japanese Yen rises against all currencies this morning and Japan’s 2-Year Bond Yield again renews its highs. The 2-Year Bond Yield now trades at 0.185% which is its highest level since 2011. The higher bonds yields can also support the currency and global interest in Japan’s Financial Service Market.

In addition to this, the Yen has also obtained further support from economic data this morning. Japan’s Retail Sales figure read 2.3%, higher than the 2.00% prediction. In addition to this, the Core CPI remained at 2.6%, again higher than expectations.

In terms of the US Dollar, the currency came under strain during the US Trading Session but kept to its previous price range. The currency came under slight pressure due to the Gross Domestic Product underachieving. The GDP data read 3.2% versus the 3.3% expected, however, investors should note the growth rate remains competitive. Investors are now mainly focusing on the PCE Price Index, which is a favourite of the Federal Open Market Committee. If the Index reads higher than 0.4%, rate cuts will start to feel like a far distance away. As a result, the Dollar potentially can rise, and stocks could possibly decline in the short to medium term.

USA100 – All Eyes On Today’s PCE Core Price Index

The NASDAQ continues to struggle for a fourth day as investors remain unsure on the future path of interest rates. In addition to this, investors should also note the weakness may partially be related to the end of the earnings season and due to its current high price.

The day’s price movement is likely to largely be dependent on today’s PCE Core Price Index. Analysts expect the index to read 0.4% which would be the highest since May 2023. If the index reads higher the USA100 can potentially experience significant pressure as interest rate cuts will seem a distant dream. However, if the data is lower, investors will be relieved and may re-enter at the current lower price.

Technical indicators’ signals are currently at the “neutral” level but are close to signalling a sell if the price continues to decline below $17,810. Lastly, investors will also be monitoring the performance of individual stocks within the NASDAQ. Of the top 30 influential stocks, only 3 rose in value on Wednesday indicating a clear downward trend for the day.



Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 1st March 2024.

Stocks Rise To A New All-Time High! ECB Considers An Earlier Pivot.
 

 

• The US Core PCE Price index read 0.4% in line with analysts’ expectations. January’s Core PCE Price Index was the highest reading since May 2023.
• The US Dollar Index ended the day higher but did come under pressure at times from the inflation reading.
• The NASDAQ again renews its all-time highs after rising 0.95% on Thursday and a further 0.47% in Friday’s Asian Session.
• German inflation declines to 2.6% in February putting more pressure on the European Central Bank to consider a “pivot”.

EURUSD – The ECB Consider An Earlier Rate Cut!

The EURUSD exchange rate declined by 0.28% by the end of the day, but more than 0.55% from high to low. The exchange rate came under pressure from German inflation declining from 2.9% to 2.5%, the lowest since 2021. In addition to this, the US Dollar rose in value after a short-lived decline. The Dollar continues to be supported by high inflation data.
 

The Germany economy has been struggling from poor economic growth and political tensions. The German GDP has not recorded an increase in the past three quarters. Overall the Germany GDP Growth Rate has actually fallen by 0.6% over the past year. Due to poor economic data and inflation now being at an acceptable level, investors are contemplating whether the ECB will cut rates soon. France also made public their latest inflation reading which fell from 3.1% to 2.9%. The largest four EU economies are now all at an inflation rate below 3.00% and very close to their 2% target. Italy is currently below the 2% and is in desperate need of monetary expansion.

Price growth in the Eurozone continues to slow down, which gives the ECB more reasons to consider cutting rates sooner rather than later. In this regard, it is worth noting the results of the latest survey of leading economists conducted by Reuters. According to the report, most economists believe that the regulator will reduce the deposits interest rate for the first time in June by 25.0 basis points, but some experts expect that the ECB will ease monetary policy in April.

The US Dollar Index is trading higher, but its growth seems uncertain. Interest rate cuts are also likely for the Federal Reserve; however, higher inflation data has pushed back the potential date. According to most analysts, a pivot is not likely until the summer months, and it would continue to depend on upcoming inflation.

US economic data has noticeably weakened, which will catch the Fed’s attention. The initial jobless claims for the week of February 23 rose from 1.86M to 1.905M compared to 1.874M expected. In addition, the dynamics of pending housing sales in January decreased by 4.9% after increasing by 5.7% earlier, falling short of forecasts of 1.0%. Though investors must note that if the employment sector remains strong, the pressure on the Federal Reserve will remain minimal.

USA100 – Can The NASDAQ Maintain Momentum!

The USA100 is now trading at its all-time highs after receiving a push from the Core PCE Price Index being unable to rise above expectations. However, technical analysts warn the asset can potentially retrace before continuing an upward trend.

When measuring previous impulse waves and the size of swings before retracing, the asset is now at a level which may indicate a pullback. Investors also note that 34% of the NASDAQ’s individual stocks ended the day lower, which does show signs of some weakness in the market. Lastly, the 10-Year Bond Yields have risen by 0.020% and the US Dollar trades slightly higher. These two factors are also known to pressure the stock market.

However, when monitoring momentum-based indicators, the USA100 is trading above trend-lines, regression channels and shows strong upward momentum. Therefore, traders will be monitoring how the asset may break out of previous significant price ranges.
 

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 4th March 2024.

Market Recap – March like the proverbial lion.
 

Economic Indicators & Central Banks:
 

• March came in like the proverbial lion with the NASDAQ composite and the S&P 500 roaring to new all time highs.
• This morning, Asian stock markets were initially boosted by a broader tech rally. Top chipmaker Taiwan Semiconductor Manufacturing Co saw its highest ever level – the company is the main supplier to Apple Inc. and Nvidia Corp. and is considered a key beneficiary of the ongoing AI boom.
• Bonds & US Treasury yields are under pressure at the start of a busy week that includes the ECB decision, Fed Chair Powell’s congressional testimony and China’s National People’s Congress.
• Fedspeak so far were supportive. There had been growing chatter in recent sessions that the strength in the economy could prevent the FOMC from trimming rates at all this year.
• Swiss CPI fell to 1.2% y/y in February, which is further proof that the SNB has brought inflation under control.
• Turkey’s annual CPI swung to a 15-month high, close to 70%.
• OPEC+ output cuts to remain in place until the middle of the year.
• Today: ECB Governing Council member Robert Holzmann & Fed’s Patrick Harker speeches.

Market Trends:
 

• European futures and Asian stocks higher, with key upcoming events such as Fed Chair Powell’s congressional testimony and China’s National People’s Congress adding to market anticipation.
• The renewed strength in the tech sector resonated across Asia, with Taiwan Semiconductor Manufacturing Co., the world’s leading chipmaker, reaching its all-time high.
• AI and Nvidia continued to underpin investor enthusiasm, boosting the NASDAQ by 1.14% to 16,275, finally besting the 16,057 historic peak from November 2021.
• The S&P500 advanced 0.80% to 5137, also a new high, marking its 15th record of the year, and it has gained in 16 out of the last 18 sessions, the best showing since 1971.
• Nikkei (JPN225) surpassed the 40,000 mark for the first time.

Financial Markets Performance:
 

• The USDIndex remains under pressure, falling to 103.67 but drifting within a tight range on pressure by lower Treasury yields, as traders waited for crucial economic data for fresh clues on the timing of Federal Reserve interest rate cuts.
• BTCUSD surged, briefly surpassing the $64,000 threshold. Market participants are speculating that the cryptocurrency is poised to exceed its previous record high of nearly $69,000, achieved during the Covid-19 pandemic.
• Gold remains in the green, edging up fractionally to $2084 per ounce.
• USOil is below $80 per barrel after OPEC+ members confirmed that output cuts will be extended through to the middle of the year. The decision was widely expected, but still supported the recent uptrend in prices.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 5th March 2024.

Market Recap – Stocks in red, Crypto mania extends.
 

Economic Indicators & Central Banks:
 

• The markets have significantly pared back rate cut expectations and the front end underperformed in a bear flattener on the increased pessimism.
• Japan: Core inflation picked up speed in February, surpassing the central bank’s 2% target, suggesting that conditions for ending negative interest rates are aligning.
• Deflationary China set an ambitious growth target at 5%, 5.5% urban unemployment & 3% inflation: Premier Li also announced a budget deficit of 3% of GDP and $138.9bn in special government bonds. That added pressure on officials for more stimulus and policy support to fight the property crisis and deflation! At the same time Chinese PMI came in lower than forecasts.
• Bloomberg forecast puts growth at 4.6% this year, which flags the challenges China officials are facing against the background of a struggling property market.

Market Trends:
 

• Wall Street finished with small losses, albeit after last Friday’s rally that saw all-time highs on the NASDAQ and S&P500, with weakness in energy, consumer and tech stocks offsetting strength in utilities and real estate.
• The tech-heavy NASDAQ slipped -0.41%, while the Dow was off -0.25% and the S&P500 fell -0.12%.
• Apple Inc down more than 2% on receiving a $2 billion antitrust fine in Europe.
• Tesla’s stock declined by more than 7% as shipments from the electric-car manufacturer’s China facility reached a 14-month low in February, partly due to disruptions caused by the lunar new year festivities and intensified competition resulting from a price war.
• US and European stock futures are in the red, after a largely weaker session across Asia.

Financial Markets Performance:
 

• The USDIndex was fractionally lower at 103.85 in spite of the eroding Fed outlook as gains in EUR and GBP outweighed the buck’s strength versus the other G10 peers.
• Yen holds steady within its 3-week range, currently at 150.40.
• BTCUSD holds largely in green, spiking to $68,800 highs. Its up around 57% this year, benefiting from flows into exchange-traded funds launched in the United States.
• Gold surged to $2115 as markets look ahead to Fed Chair Powell’s congressional testimony.
• USOil prices have corrected lower despite the confirmation that OPEC+ output cuts will remain in place through the first half of the year. International oil companies in Iraq’s semi-autonomous region of Kurdistan denied reports that there is a deal that would allow oil exports through the Iraqi-Turkey pipeline to continue. Markets are also keeping a close eye on talks about a possible ceasefire between Hamas and Israel. A Hamas delegation arrived in Cairo for the talks, but an Israeli official told CNN that Israel decided not to send a delegation to Egypt because Hamas had not responded to two Israeli demands.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 6th March 2024.

Market Recap – Gold & Bitcoin to New Record Highs.
 

Economic Indicators & Central Banks:
 

• Risk appetite boosts Bitcoin and Gold to new record highs – boosted by expectations for US rate cuts, geopolitical tensions & the risk of a pullback in equity markets.
• The remarkable ascent of Bitcoin, which has already seen a 55% surge year-to-date, has been fueled by investors’ increased allocation of funds into US spot ETF products. Additionally, the prospect of global interest rate decreases has contributed to the rally.
• On Tuesday, Treasury yields corrected lower, while the weaker ISM data encouraged profit taking, especially with stretched valuations and growing uncertainty over the FOMC’s stance ahead of Chair Powell’s Humphrey Hawkins testimony.
• US equities futures and European contracts edged higher ahead of Federal Reserve Chair Jerome Powell’s testimony.
• Attention turns now to labor market data on JOLTS and ADP today, Jobless claims Thursday, and NonFarm Payrolls Friday. It could be difficult to assess whether the boost is just a give-back or a real indicator of easing in tight labor market conditions.

Market Trends:
 

• The NASDAQ (US100) dropped -1.65% as the AI rally takes a breather. The S&P500 (US500) was down -1.02%. The Dow (US30) declined -1.04%. Weakness in the broad index was broadbased, though Target was a big winner after an earnings beat.
• The Hang Seng rebounded thanks to gains in Chinese tech giant Alibaba Group Holding Ltd and Tencent Holdings Ltd, and the Hong Kong index is currently up 1.9%.
• The Nikkei (JPN225) corrected slightly, however, and the CSI300 couldn’t sustain yesterday’s rally and is down -0.4%.
• DAX (GER40) and US futures are in the red, as the focus turns to Fed Chair Powell’s congressional testimony.

Financial Markets Performance:
 

• The USDIndex retests 2-week support at 103.50.
• The Yen strengthened against the US Dollar, while the GBP boosted higher ahead of Britain’s budget announcement. The EUR retests yesterday’s highs ahead of the European Central Bank’s policy decision, with investors keen on any indications of future rate adjustments amidst persistent inflationary pressures.
• Bitcoin experienced a 5% jump, reaching an intraday peak of $66,540 amidst volatile market conditions, closely trailing Tuesday’s record peak of $69,202. The funds into US spot ETF crypto products and the possibility of a global decline in interest rates have added fuel to the rally.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 7th March 2024.

Market Recap – Yen & Gold on a Ride; ECB Today.
 

Economic Indicators & Central Banks:

* Stock markets corrected across Asia. US futures are down, and European markets are also trading cautiously in early trade ahead of ECB.
* Ueda: Chance of reaching target getting higher little by little.
* BOJ board member Junko Nakagawa: expressed confidence in Japan’s economy moving steadily towards achieving the central bank’s 2% inflation target sustainably.
* Reports suggest a BOJ board member could propose removing negative interest rates at the upcoming policy meeting.
* Yen is the biggest gainer so far, with Yen’s strength contrasting with its weakening trend over the past two years due to diverging interest rate policies.
* Overnight: Wall Street rebounded and Treasuries extended gains after some weaker employment data (ADP and JOLTS).
* Chair Powell in his Humphrey-Hawkins testimony repeated the FOMC anticipates cutting rates later this year. There was some angst he might tilt to a more hawkish stance. Powell emphasized the need for more data to ensure sustained progress toward the 2% inflation target.
* A significant haven bid came from renewed concerns over NY Community Bancorp. Reports the bank is seeking a cash injection have boosted fears as this was the way Silicon Valley Bank imploded (March 10, 2023). NYCB shares plunged to the lows of the day at $2.47, where trading has been halted.
* Today: The ECB is expected to stay firmly on hold, and even the doves seem to be resigned to wait until June for a cut. The stubbornly high services inflation and uncertainty about the current wage round means that rate cuts are not on the agenda yet.

Market Trends:

* Stocks recovered most of the selloff earlier in the week after all-time highs last week. The NASDAQ (US100) bounced 0.58%, back to 16,031, and the S&P500 (US500) rallied 0.5% to 5104.76, just shy of Friday’s historic peaks of 16,275 and 5137, respectively. The Dow (US30) advanced 0.2% to 38,661 but is off of the 39,135 top from February 23.
* Target was a big winner after an earnings beat, while the S&P 500 rose, driven also by strong performances from Nvidia and Meta Platforms.
* The Nikkei (JPN225) reached a record high briefly but closed down at 39,598.71.
 

Financial Markets Performance:

* The USDIndex is underwater at 103.12, still under the 104 level on expectations the FOMC will be cutting rates down the road.
* EUR and GBP held near 1-month highs against the Dollar. AUD and NZD climbed to multi-week highs.
* The Yen surged to a 1-month peak against the US Dollar fueled by speculation about the Bank of Japan ending negative interest rates soon. USDJPY is currently at 148.08, as Yen gained also against the EUR and GBP.
* Gold was up for a 7th day, rising to a new closing high of $2146.48 per ounce. Oil was up 1.25% to $79.13 per barrel.
* Bitcoin retreated slightly from a recent record high but maintained a significant year-to-date rally. Ether slipped after hitting a 2-year peak.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 8th March 2024.

Market Recap – NFP day post ECB & FOMC signalling possible June cuts!
 

Economic Indicators & Central Banks:
 

• Global stocks rallied on dovish signals from the ECB and FOMC, while focus turns to today’s NFP.
• Lagarde signalled rates are likely to remain unchanged in April but that in the central scenario there will likely be sufficient evidence to make a decision in June. The ECB President stressed that wage growth remains key for the inflation outlook.
• Germany: German producer price inflation lifted to -4.4% y/y from -5.1% y/y in the previous month. German industrial production rose 1.0% m/m in January. The weak trend mainly reflects the contraction at the end of last year, but while production stabilized in January, orders trends and indeed manufacturing surveys suggest ongoing weakness through the first quarter of the year. That leaves Germany at risk of a technical recession!
• NFP Preview: The February nonfarm payroll report is likely to reflect gyrations and give-back from the outsized January figures. We expect a 160k rise in jobs, about half of the 353k jump in January and the 333k pop in December. The workweek should tick up to 34.2 from the prior 34.1, while average hourly earnings should edge up 0.2% following the prior 0.6% jump. The unemployment rate is expected unchanged at 3.7%.

Market Trends:
 

• Wall Street soared with the S&P500 (US500) jumping 1.03% to a fresh record high at 5157. The NASDAQ (US100) surged 1.51% to 16,273.38, fractionally shy of Friday’s all-time peak of 16,274.94. The Dow (US30) rose 0.34%. In Europe, all of the bourses ended in the green.
• Asian shares mostly saw gains, following the trend set by US stocks, which reached record highs. The Nikkei(JPN225) increased by 0.2%, Sydney’s S&P/ASX 200 surged by 1.1%, South Korea’s Kospi jumped by 1.1%, Hong Kong’s Hang Seng rose by 1.3%, and the Shanghai Composite gained 0.5%.

Financial Markets Performance:
 

• The USDIndex extended its losses and dropped to 102.67, the first close under 103 since January 15 as Treasury yields eased in the bond market after a couple reports gave potential signals of lessened pressure on inflation.
• The Yen extended advance as expectations grew for the BOJ to raise interest rates for the first time since 2007.
• EUR and GBP broke 1-month highs and multi-month channels against the Dollar respectively. EURUSD breached 1.0950 and GBPUSD is above 1.28.
• Gold held at 2160 territory, with COT reports indicating consolidation in the near future.
• Bitcoin maintained above $67,400.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 11th March 2024.

BoJ To Hike After Economic Growth! The NASDAQ Takes a Nosedive!
 

A Japanese flag flutters atop the Bank of Japan building in Tokyo, Japan, September 21, 2016. REUTERS/Toru Hanai/File Photo - RTX2UM36

• The US added 275,000 jobs in February 2024 beating expectations by 80,000.
• US Average Salary Growth slowed to the lowest growth since March 2022. The US Unemployment Rate rises back to 3.9% after 3 months of no movement.
• Japanese economists advise the Bank of Japan may opt to hike in their meeting towards the end of the month.
• US Stock Market unable to maintain bullish momentum and hold onto gains. Stocks traders watch this week’s CPI announcement with caution.

USDJPY – No Recession For Japan, When Will the BoJ Hike?
 

The new employment data for the US originally brought about a decline in the US Dollar, before correcting upwards. The first reaction to sell the Dollar was largely due to data indicating a rate cut by June. The salary growth fell to a level which the regulator is more comfortable with, and the unemployment rate rose to 3.9%. Previously economists were advising the Unemployment Rate will need to reach 4-4.5% to bring inflation down. According to the FedWatch Tool, 58% of traders believe the Fed will cut in June and 25% believe it could be in May.

The Japanese Yen on the other hand is not seeing major volatility within this morning’s Asian session. The Yen is trading slightly higher than the day’s market price, but investors will monitor any change in momentum. Previously, the preliminary economic growth data indicated that the Japanese economy has slipped into a recession. However, the GDP rate read 0.1% which confirms “no recession”. Therefore, economists are continuing to predict the Bank of Japan will keep interest rate hikes as an option for the next two meetings.

The market is implying a 53% chance the Bank of Japan will shift rates to zero at its meeting on March 19th. However, some analysts still believe it might be at April’s meeting. However, the currency is likely to grow for as long as the Japanese economy does not fall into a “technical recession” and other competitors continue with rate cuts.

For this reason, investors are wondering why the USDJPY is not witnessing a large clear downward price movement? According to fundamental analysts, many investors are awaiting confirmation from the monthly inflation figures to determine when the Federal Reserve is likely to “pivot”. If the yearly inflation rate does not decline, the Fed may opt to push back rate hikes. In this case, the Dollar may remain stubborn. However, any fall in inflation can result in the Japanese Yen rising.

USA100 – Analysts Expect Inflation to Remain At 3.1%! What Does This Mean For the NASDAQ?

After rising to a new all time high, the NASDAQ took a nosedive falling 2.29%. From the top 10 most influential stocks, only Apple and Alphabet stocks managed to maintain their value. Broadcom (-6.99%), Costco (-7.64%) and NVIDIA (-5.99%) saw the largest decline. Even though the price was obtaining buy signals as the price was rising, there were also clear signs the price may collapse. For example, the price was “overbought” on many oscillators, and the RSI also formed a “divergence” signal.
 

The price of the USA100 will now primarily be dependent on tomorrow’s inflation data. The employment data was ideal for the USA100 as it indicates a resilient employment sector but possibly less upward pressure on inflation. Analysts expect monthly inflation to read 0.4% which will keep the inflation rate unchanged at 3.1%. According to analysts, the Core Consumer Price Index will rise 0.3%.

If inflation reads lower than expectations, even if slightly lower, the stock market could potentially rise, as interest rates become less attractive. However, if inflation rises, the stock market is likely to struggle as a “soft landing” becomes a lower possibility.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 12th March 2024.

UK Salary Growth Slows But All Eyes On US Inflation Data!

• The Pound declines due to lower salary growth and the unemployment rate rising to 3.9%.
• The US Dollar Index rises after weaker UK employment data which triggered weakness in both the Pound and the Euro.
• US Dollar traders turn their attention to this afternoon’s inflation reading. Analysts expect US inflation to remain at 3.1% and for core inflation figures to fall from 3.9% to 3.7%.
• Gold sees significantly higher trades according to the CFTC’s latest report. The commodity formed its ninth consecutive bullish candlestick (daily), but trades lower today.

GBPUSD – UK Salary Growth Slows, But Will Inflation Become Less Sticky?

The GBPUSD is forming its third lower high but is yet to form a significant “lower low”. If the price declines below 1.27943, the downward price movement would have gained adequate downward momentum to form a bearish price pattern. Also, if the price declines below this level, the exchange rate will fall below the neutral on the RSI and closer to the 75-bar EMA.



However, in order for the GBPUSD to maintain momentum the price will also require positive data from the US inflation data. If US inflation falls below expectations, the Dollar may also witness downward pressure making the direction of the exchange rate less certain. However, if the inflation data reads as expectations or higher, the Dollar potentially will continue rising. This is due to interest rates potentially remaining high for additional months. Therefore, the price action is largely dependant on this afternoon’s inflation data.

The US’s latest employment data does show signs of weakening as the salary growth falls and the unemployment rate rises. These statistics may influence the decisions of US Federal Reserve officials on monetary policy: most experts expect a transition to the “dovish” rhetoric at the regulator’s June meeting, and in total, two to four interest rate cuts of 25 basis points each are predicted this year. Though, this will significantly depend on today’s inflation data.

The UK data, on the other hand, is largely viewed as negative, as it implies less upward pressure on UK inflation. The UK Unemployment Rate unexpectedly rose from 3.8% to 3.9% and the Average Salary Index fell from 5.8% to 5.6%. Therefore, UK salary growth has fallen to its lowest level since September 2022. Previously the Governor of the Bank of England was advising high inflation levels was partially due to salary growth. Now growth is subsiding, will inflation also become less sticky? If so, the Pound can be pressured, if lower inflation is not also seen in the US.

XAUUSD – CTFC Report Confirms Buyers Outnumber Sellers!

The Gold price did not review its all-time highs for a fifth consecutive day on Monday, but nonetheless, the commodity also did not show significant signs of weakness. Factors continue to indicate a need for the safe haven asset. This includes weakness in the stock market over the past week, geopolitical tensions, as well as potential lower interest rates.

If US inflation reads lower than expectations, the Fed will likely opt to cut interest rates sooner rather than later, as economic data has slightly withered over the past 2 months. If this is the case, the Dollar will see less attraction as a safe haven asset. For this reason, Gold could strengthen or at least retain the recent significant gains.

According to the CFTC, speculative Gold contracts have risen from 141,600 to 191,300 over the past week in the US. The report confirms 164,640 buy contracts against only 33,580 sell contracts. This indicates more traders believe the price will either remain high or continue rising. However, traders should note this will depend on the inflation reading in the short term.




Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 13th March 2024.

The Dow Jones Rises to Monthly Highs! Is Gold Retracing Or Correcting?

• The Dow Jones rises to a monthly high despite higher inflation data for February 2024.
• The Dow Jones’s best performing stock on Tuesday was 3M Co (+4.97), Intl Business Machines Corp (+3.16%) and Microsoft (+2.66%).
• US inflation rises from 3.1% to 3.2% and the Monthly Core CPI remains at recent highs for a second consecutive month.
• Gold forms its first bearish candlestick in March on the daily chart, but Dollar struggles to hold onto gains.

USA30 – Higher Inflation Fails To Keep the Dow Jones Down!

The USA30 did not see the highest gains and lags behind the SNP500 and NASDAQ which both rose more than 1.00%. However, the USA30 (Dow Jones), was the only US index which broke through resistance levels and rose to its highest level for March. The USA30 is now witnessing bullish signals from trend-lines, regression channels and oscillators. The price is trading above the 75-Bar EMA, above 60.00 on the RSI and above the VWAP. These factors indicate the asset has potential to further rise.

The only concern for technical analysts is entering too high and at a previous resistance level from February. Though fundamental analysts are more concerned about the higher-than-expected inflation data. The higher inflation data did not cause a decline in the price, as it normally would. However, it continues to be a concern for investors as it puts off a possible interest rate cut in May-June 2024. The US inflation rate rose from 3.1% to 3.2% and Core Inflation fell at a lower pace compared to previous predictions.

If we look at the top 15 influential stocks within the USA30, 8 of those stocks are declining. Also, the most volatile stocks in the pre-market hours are Travelers Cos Inc stocks which are declining more than 2%. This currently indicates a sideways price movement, but investors will need to continue monitoring as we come closer to the US Open. Other global indices are trading lower including the Nikkei225, DAX and CAC. However, US bond yields are trading 0.012% lower which is positive for the US stock market.



XAUUSD – Gold Forms Its First Retracement

Gold has formed its first retracement after the higher-than-expected inflation data. This ends a nine-day bullish trend where the commodity rose consecutively. However, traders should note the price is so far only forming a retracement and is yet to indicate a downward trend. Therefore, the price can potentially still be within a bullish trend. The retracement can provide investors the opportunity to enter at a more competitive entry level.

If the price breaks above the $2,161.53 mark, buy signals are likely to again materialize. The commodity formed a triple top at this level but is not showing any downward momentum. Therefore, above this level, investor sentiment can again rise. The Fibonacci levels indicate that a buy trade can potentially aim for levels between $2,169 and $2,175 in the short term.



The 30-Year Bond Yield Auction can influence the price movement of Gold as both are known as haven assets. However, tomorrow’s Producer Inflation and Retail Sales is likely to create higher volatility. Investors will also be keen to hear from members of the FOMC, but none are scheduled to speak throughout the day. Economists are now pricing in at least three 25 basis point interest rate cuts, the first of which could come in June. Previously investors were pricing in four cuts.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 14th March 2024.

China’s Gold Imports From Switzerland More Than Triple!

• Significant demand from China continues to push Gold prices higher!
• China has been using the safe haven asset to protect the central bank and reserves as the Chinese Yuan depreciated over the past 2 years.
• Economists advise the higher demand coming from China may indicate potential higher Chinese inflation. This could be a domino effect of lower interest rates and an expansionary fiscal policy.
• Gold declines 0.30% during this morning’s Asian session but remains above yesterday’s lows.

XAUUSD – China Pushes Gold Prices Higher And Looks to Move Away From the Dollar!

The price of Gold fell 0.33% during this morning’s Asian session, however, the asset continues to remain above yesterday’s price range. Using the Fibonacci levels-based impulse wave yesterday, the price is also still trading above the 50.00 and did not cross below the 61.8. Therefore, the possibility of upward price movement remains.



The price movement will also be largely influenced by this afternoon’s US economic data. The US will make public the latest producer inflation and retail sales. In the previous month, both supported the price of Gold as inflation rose, but interest rates cuts continue to remain “the main path forward”. Analysts believe the US Producer Price Index will again read 0.3% and retail sales to fully correct the 0.8% decline from the previous month. If retail sales disappoint, the demand for Gold can again rise.

Investors also note the price of oil has risen to its highest level since November of last year. If the price does not correct downwards, inflation may become more stickier than previously thought. This is also a concern which the Treasury and Ms Yellen have voiced in the past 24 hours. “I wouldn’t expect this to be a smooth path month to month, but the trend is clearly favorable,” Yellen said.

Though investors should note that according to the Swiss Federal Customs Administration, the higher demand is largely due to China. The Swiss Federal Customs Administration advised the physical exports to China trebled in 2024. Investors are also questioning whether China is increasing exposure to Gold in order to mitigate away from the Dollar. In addition to this, Chinese inflation is expected to again rise due to expansionary policies in 2023. According to the CME exchange, the average trading volume over the last five sessions is 511.5K positions, which is this year’s high, far exceeding the February average of 267.0K transactions.

The US Dollar index during this morning’s Asian session has risen +0.18%. However, the index has slightly fallen at the open of the European session. Investors will also continue to monitor the index after the PPI and Retail Sales release. If the index continues to rise, the price of Gold can become strained. However, if the Dollar falls along with retail sales, Gold can potentially see higher demand.

The price is unlikely to see a continuation of the trend seen last week, according to analysts. However, this does not necessary indicate that the price is collapsing. Many analysts believe the asset will form a new range and honor a wider range. This provides investors an opportunity to use reversion strategies and pay closer attention to support and resistance levels. The latest major support level can be seen at $2,148 and resistance level at $2,185.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 15th March 2024.

BOJ Puts Rate Hikes On The Table After Historic Wage Agreement!

• Wage deals with Japan’s largest employers and unions have been agreed according to reports. Bloomberg confirms a 5% wage increase.
• Bank of Japan may hike interest rates as early as next week. Other economists believe the hike will come in April. Analysts expect the Bank of Japan’s interest rate to rise to 0.00%.
• Producer Inflation rates double that originally expected by analysts. Core Producer Inflation also continues to rise.
• 31% of the NASDAQ’s stocks decline as investors price in fewer rate hikes in 2024.

GBPJPY – BOJ Set to Hike for the First Time Since 2007 After Higher Salaries Agreed!



The GBPJPY fell up to 0.28% during this morning’s Asian session as unions and employers gave consent for a 5% wage increase. This gives enough room for the Bank of Japan to consider a rate increase to move out of negative interest rates. However, the Yen has fallen since against the currency market as a whole. Nonetheless, the hike and wage increase could support the Yen in the medium to long term.

Analysts advise the Bank of Japan is likely to increase rates either at next week’s bank meeting or in April, but no later. However, economists are yet to confirm how high rates may go. Analysts advise the bank will most likely opt to hike on two occasions by 0.10%. This would bring the Cash Rate to 0.10%, the highest since 2010.

The possibility of rate hikes is deemed to be positive for the Japanese Yen as well as the higher possibility of sticky inflation globally. The Japanese Industry Activity also rose 0.3%, more than previous expectations, which supports the Yen. However, investors should be cautious of volatility and ensure their entry is appropriate based on technical analysis. The price over the past 48 hours is moving within a sideways range but is showing more downward volatility.

UA Zensen, Japan’s largest industrial and trade union representing more than 1.8 million workers, announced that companies have agreed to the largest wage increase since 2013. Thus, this year for full-time workers it may increase by 5.9%, and for part-time workers by 6.5%.

When monitoring each currency individually, we can see the Pound is seeing a “mixed” performance. The Pound during this morning’s Asian session and European Cash Open has depreciated against the Euro and the Pound. The Japanese Yen declined throughout the first 3 days of the week but rose on Thursday.

Even though the price of the Pound has considerably risen against the Yen over the past 90 minutes, the Yen could see different signals rise throughout the day. For example, if the price declines below 188.949, Fibonacci levels and price action will signal a decline. With such a decline, the price will also again fall below the 75-Bar EMA and “Neutral” level on the RSI.

USA100 – Global Stocks Rise on Friday

The USA100 rose 0.19% as the European markets opened as did other indices such as the DAX, French CAC and even the NIKKEI225. The positive price movement from global equities is positive as it may indicate a higher risk appetite and investor sentiment. In addition to this, US Bond Yields are also trading lower this morning which is known to potentially support stocks. These are signs of a potential correction to the trend line at $18,090. However, this is something investors will need to keep monitoring through the day.



In terms of fundamental analysis, yesterday’s Producer Price data and Retail Sales have added pressure on equities. Most analysis now believe the Federal Reserve will only opt for 2-3 hikes in 2024. Most economists still believe the Fed will cut in June, but rate cuts thereafter will be less frequent. Some analysts advise if this continues, the index will struggle to renew highs from March 8th.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.