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Markets Week Ahead: Nasdaq 100, Dow Jones, US Dollar, Gold, Bitcoin, FTX, G-20 Summit
- 2022/11/14
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No CommentsMarket sentiment notably improved this past week. On Wall Street, Nasdaq 100, S&P 500 and Dow Jones futures soared about 8.4%, 5.7% and 4.02%, respectively. This was some of the best performances in months. Risk appetite also improved around the world. The Dax 40, Nikkei 225 and Hang Seng soared 5.68%, 3.91% and 7.21%, respectively.
The key driver of sentiment last week was October’s US inflation report, where both the headline and core rate of CPI unexpectedly softened. Traders quickly pared back 2023 Fed rate hike bets as odds of a 75-basis point rate increase in December virtually disappeared overnight. The US Dollar tumbled as gold prices soared.
From a financial markets’ standpoint, this data overshadowed US mid-term elections, where expectations of a Republican ‘red wave’ faltered. Cryptocurrencies were in the hot seat last week amid FTX filing for bankruptcy after Binance walked away from a possible acquisition. Despite the surge in stocks, Bitcoin was down about 20 percent last week.
As far as economic event risk goes next week, the US will see more Fedspeak, PPI and retail sales data. Unexpectedly strong showings here may to a certain extent risk reversing some of the market moves to the CPI print last week. For the British Pound and Canadian Dollar, the UK and Canada will release inflation data.
Meanwhile, the group of G-20 nations will be meeting in Bali, Indonesia during the middle of the week. Tensions are high amid the war in Ukraine and ongoing high levels of inflation. Earnings season is also in play, with major retailers in focus such as Walmart and Home Depot. What else is in store for financial markets in the week ahead?
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Melbourne Cup Holiday Notice
- 2022/10/27
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Dear Customer,
This office will be closed on 01/11/2022 (Tuesday) for Melbourne Cup , and we will reopen on 02/11/2022 (Wednesday). If you have any inquires, please contact Sydney office on 02 9267 8878 .
Sorry for any inconvenience caused. Wish you have a nice holiday.SUPAY
01/11/2022 -
Markets Week Ahead: Dow Jones, Yields, US Dollar, USD/JPY, EUR/USD, USD/CAD, China GDP, ECB, BoC
- 2022/10/24
- Posted by: admin
- Category: 暂无
US stock indexes finished the week with healthy gains despite ongoing bond market volatility that sent US rates to fresh multi-year highs. The benchmark 10-year Treasury yield rose as high as 4.335%, its highest level since November 2007. Equity traders weren’t all that phased by the moves, as higher rates effectively tighten financial conditions. That said, the need for further Federal Reserve action lessens—a tailwind for equity valuations. The S&P 500 Index, Nasdaq-100 and the Dow Jones Industrial Index finished the week with gains of 2.37%, 2.39% and 2.47%, respectively.
The US Dollar DXY Index took a breather last week, falling around 0.75% as the policy-sensitive 2-year yield lost steam. The Federal Reserve entered a blackout period on Saturday, which forbids FOMC members from commenting on monetary policy before the November 02 policy meeting. Rate traders see a terminal rate of around 5% early next year, leaving plenty of rate hikes on the table between now and then. The US is set to see updated purchasing managers’ indexes from S&P Global. US factory activity has remained stubbornly strong, with a Fed report stating that factory production utilization hit the highest level since 2000. The consensus estimate sees manufacturing PMI for October remaining in expansion territory at 51.0, according to a Bloomberg survey.
Chinese President Xi Jinping is expected to take the stage on Sunday, marking the start of a third term in office. That would be a precedent-breaking move that further consolidates his power and influence as “leader,” a revered term previously reserved for Mao Zedong, which has started circulating among his followers. The Chinese Yuan weakened around 0.5% against the Dollar, hitting a record low. Traders are keen to see GDP numbers due this week after the high-impact print was delayed last week. The Bloomberg consensus sees China’s third-quarter growth rate at 3.5% from the previous three-month period.
The Japanese Yen was nearly unchanged from last Friday after USD/JPY trimmed mid-week strength. A broadly weaker USD helped alleviate JPY pressure, but policymakers likely intervened after the exchange rate rose above the 150 level. A still-ultra-dovish Bank of Japan is casting doubts on the ability of Japan’s Ministry of Finance to hold the line against JPY shorts, although capitulation now would signal an embarrassing failure and likely see the Yen plummet. A Kobayashi Maru indeed.Elsewhere, US natural gas prices plummeted over 23% as warmer weather across much of the Continental United States combined with a larger-than-expected US inventory build dashed supply shortage fears going into the winter months. Brent oil prices rose a modest 1.9%, while WTI crude slipped 0.6%. The US and global benchmarks remain on track to break a 4-month losing streak, although prices are still well off yearly highs.
It is an eventful week ahead in terms of rate decisions. On Wednesday, the Bank of Canada is expected to hike its benchmark lending rate by 75 basis points, according to overnight index swaps (OIS). Canadian inflation remains above estimates, with the latest core CPI reading at 5.4% in September solidified chances for a larger hike. The Canadian Dollar rose nearly 2% against the Greenback on the week. The European Central Bank (ECB) will announce its interest rate decision on Thursday. OIS pricing is showing an 89% chance for a 75-bps rate hike. EUR/USD rose around 1.5% last week.
(From Thomas Westwater) -
Central Bank Watch: BOC, RBA, & RBNZ Interest Rate Expectations Update
- 2022/10/14
- Posted by: admin
- Category: 暂无
CENTRAL BANK WATCH OVERVIEW:
The Bank of Canada is expected to raise rates by 50-bps when policymakers meet later this month.
While the Reserve Bank of Australia and Reserve Bank of New Zealand won’t meet again until November, both central banks are forecast to raise rates by 50-bps next month.
Retail trader positioning suggests that AUD/USD rates have a bearish bias, NZD/USD rates have a mixed bias, and USD/CAD rates have a bullish bias.
RATE HIKE PATH SLOWING
In this edition of Central Bank Watch, we’re examining the rates markets around the Bank of Canada, Reserve Bank of Australia, and Reserve Bank of New Zealand. After raising rates aggressively over the course of 2022 – frontloading rate hikes, if you will – the three commodity currency central banks appear poised to slowdown their pace of monetary policy tightening moving forward. Relative to the Federal Reserve’s still-aggressive intentions, this change in perception has been a negative development for the Australian, Canadian, and New Zealand Dollars.
RBA DISAPPOINTMENT WEIGHING ON AUSSIE
Recent comments by key Reserve Bank of Australia officials suggests that the central bank still has some ways to go in order to bring its main rate into neutral territory, the level as which monetary policy is neither expansionary nor contractionary. RBA Assistant Governor for Economics Luci Ellis remarks this week effectively pegged the neutral rate between 2.5% and 3.5%; currently, the RBA’s main rate is 2.6%. More tightening may be ahead, but it may come in more measured increments over the next few months.
According to Australia overnight index swaps (OIS), there is an 82% chance of a 25-bps rate hike in November and a 59% chance of a 25-bps rate hike in December. Rates markets are priced such that the RBA will bring its main rate to 2.997% by the end of 2022, which is a meaningful reduction from where markets were priced in early-September, when the main rate was expected to rise to 3.259% by the end of the year.
AUD/USD: Retail trader data shows 80.49% of traders are net-long with the ratio of traders long to short at 4.13 to 1. The number of traders net-long is 7.84% lower than yesterday and 1.35% higher from last week, while the number of traders net-short is 27.51% lower than yesterday and 6.14% lower from last week.We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUD/USD prices may continue to fall.
Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger AUD/USD-bearish contrarian trading bias.
— Written by Christopher Vecchio, CFA, Senior Strategist -
Dollar Technical Forecast: USD Ripper Relaxes into October- DXY Levels
- 2022/9/30
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The US Dollar Index surged nearly 6.6% off the September lows with DXY stretching to multi-yearly highs this week. An outside-day reversal off uptrend resistance yesterday may be signaling the threat for topside exhaustion here and while the broader outlook remains constructive, immediate advance may be vulnerable in the day ahead. These are the updated technical targets and invalidation levels that matter on the US Dollar Index weekly price chart heading into the October / Q4 open. Review my latest Strategy Webinar for an in-depth breakdown of this DXY technical setup and more.
— Written by Michael Boutros, Technical Strategist with DailyFX -
US Dollar Trims Losses Following Better-than-Expected US Consumer Confidence Data
- 2022/9/28
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CONSUMER CONFIDENCE KEY POINTS:
U.S. consumer confidence rises to 108.00 in September from 103.6 in August, topping consensus expectations calling for an advance to 104.6
A sharp increase in the present situation and the expectations indicator can be attributed to the recovery
U.S. dollar trims losses after the survey results cross the wires
Most Read: S&P 500, Dow Jones, Nasdaq 100 Outlook – Bounce May Unfold, but Be Short-livedA popular gauge of U.S. consumer attitudes extended its recovery this month and climbed to its best level since April, as falling gasoline prices, coupled with strength in the labor market, served to offset concerns about the slowdown and persistently high inflation in some areas of the economy.
According to the Conference Board, consumer confidence in September rose to 108.00 from 103.02, beating expectations for an advance to 104.06. While the gain is not significantly large, it is still a step in the right direction and represents a positive sign for future consumption, the main driver of the U.S. economic activity.
Delving deeper into today’s numbers, the present situation index, based on the current business and labor market outlook, jumped to 149.6 from 145.4 on perceptions that hiring conditions are still healthy. This strong gain is consistent with stabilizing activity, a scenario that reduces the likelihood of an imminent downturn.Elsewhere, the expectations index, which tracks short-term prospects for income, the business environment, and the jobs market surged to 80.3 from 70.1, exceeding the 80.00 level that is indicative of improved growth prospects.
The U.S. dollar, as measured by the DXY index, trimmed most of its early session losses to trade around 114.05 after the survey results were released, as brightening sentiment among Americans bodes well for spending in the final months of 2022, which could add to inflationary pressures and prompt the Fed to continue aggressively raising interest rates.
With the American consumer holding up well despite sky-high inflation and tightening financial conditions, the U.S. central bank will have to slam on the breaks even harder to bring about the kind of demand destruction needed to knock inflation down and force it back to the 2.0% target. This reduces the probability of a monetary policy pivot in 2023, a situation that will bias U.S. Treasury yields to the upside. In this environment, the U.S. dollar is likely to retain strong momentum in the FX market, paving the way for the DXY index to keep conquering fresh multi-decade highs in the near-term.
—Written by Diego Colman, Market Strategist for DailyFX -
Public Holiday closures – Thursday 22 September and Friday 23 September 2022
- 2022/9/20
- Posted by: admin
- Category: 暂无
We are closed Thursday 22 September 2022 for the National Day of Mourning for Her Majesty The Queen and Friday 23 September for the AFL Grand Final Public Holiday. We will re-open at 8.30am on Monday 26 September.
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Australian Dollar Technical Forecast: AUD/USD Plunges to Pivotal Support
- 2022/9/14
- Posted by: admin
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AUSTRALIAN DOLLAR TECHNICAL PRICE OUTLOOK: AUD/USD WEEKLY TRADE LEVELS
Australian Dollar technical trade level update – Weekly Chart
AUD/USD plunges back towards downtrend support US post-CPI release
Aussie resistance 6930s, 6991-7016 (key) 7139- Support 6621/70 (critical), 6461, 6196The Australian Dollar plunged more than 2.2% against the US Dollar on the heels of a hotter than expected US inflation read with AUD/USD now approaching multi-year downtrend support. We’re looking for possible price inflection here with a break lower threatening an even sharper Aussie sell-off. These are the updated targets and invalidation levels that matter on the AUD/USD weekly technical chart.
Notes: In our July, AUD/USD Technical Forecast we highlighted that that AUD/USD had rebounded off the lower parallel of this multi-year descending pitchfork formation – that recovery failed into the median-line / August 2021 low-week close at 7138 last month before reversing sharply with the decline now once again approaching the lower parallel. It’s decision time for the Aussie bears.
A break below this slope exposes a key support pivot at 6621/70- a region defined by the 100% extension of the 2021 decline , the 2008 low-week close and the 2019 low. Ultimately, a close below this threshold would be needed to fuel the next leg lower in price towards the 61.8% Fibonacci retracement of the entire 2020 rally at 6461. Initial weekly resistance is eyed at the 25% parallel (currently ~6930s) backed by the November 2020 low / 2020 yearly open at 6991-7016. Broader bearish invalidation now lowered to the 52-week moving average which converges on the median-line around 7139.
Bottom line: The Australian Dollar is approaching multi-year downtrend support and we’re looking for a reaction in price on a stretch towards the lower parallel – watch the weekly close. From a trading standpoint, rallies should be capped by the monthly open at 6840 IF price is indeed heading lower with a close below 6621 needed to fuel the next major-leg lower in price. I’ll publish an updated Australian Dollar Price Outlook once we get further clarity on the short-term AUD/USD technical trade levels.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
A summary of IG Client Sentiment shows traders are net-long AUD/USD – the ratio stands at +2.43 (70.85% of traders are long) – typically bearish reading
Long positions are 2.41% higher than yesterday and 18.31% lower from last week
Short positions are26.43% lower than yesterday and 19.54% lower from last week
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUD/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger AUD/USD-bearish contrarian trading bias from a sentiment standpoint.— Written by Michael Boutros, Technical Strategist with DailyFX
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FX Week Ahead – Top 5 Events: China Manufacturing PMI; Eurozone Inflation Rate; Canada GDP; US ISM Manufacturing; US NFP
- 2022/8/30
- Posted by: admin
- Category: 暂无
FX WEEK AHEAD OVERVIEW:
The final days of August and early days of September will feature a smattering of growth, inflation, and jobs data from Europe and North America.
The calendar is relatively quiet at the beginning of the weak, most dense on Wednesday, and then tapers off again into the end of the week.
The August US jobs report is the highlight of the week, due out on Friday.The Chinese economy continues to struggle as government-mandated zero-COVID policies continue, with 2Q’22 Chinese GDP at its lowest level since the onset of the coronavirus pandemic. Amid the struggle for the world’s second largest economy, Chinese policymakers have cut interest rates several times to help spur growth – but the impact is likely not yet seen. The August China NBS manufacturing PMI reading is set to come in at 49.2 from 49, suggesting that contraction remains afoot, if only at a slightly moderated pace.
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08/31 WEDNESDAY | 09:00 GMT | EUR INFLATION RATE (HICP) (AUG)
With European gas prices surging in recent weeks, it’s unlikely that the Eurozone saw any reprieve on the inflation front in August. According to a Bloomberg News survey, the flash August Eurozone inflation rate is expected at +0.3% m/m from +0.1% m/m and +9% y/y from +8.9% y/y, while the core reading is due in at +4.1% y/y from +4% y/y. Inflation remains stubbornly high and appears set to accelerate in forthcoming readings, which is why European Central Bank policymakers have been publicly discussing the potential for a 75-bps rate hike in September.The initial 2Q’22 Canada GDP report came in at +4.6% annualized, but the upcoming revision is likely to lower the projected pace of growth. According to a Bloomberg News survey, the revised 2Q’22 Canada GDP growth rate is forecast at +4.4% annualized. It will be a potentially immaterial revision, as the Bank of Canada, according to Canada overnight index swaps (OIS), is projected to raise their main rate by 75-bps to 3.25% in September.
09/01 THURSDAY | 14:00 GMT | USD ISM MANUFACTURING PMI (AUG)
The US economy has clearly slowed down in recent months, but is it just a slowdown or a full blown recession? The upcoming August US ISM manufacturing PMI may help provide some more color to that answer. According to a Bloomberg News survey, the manufacturing gauge is due in at 52 from 52.8, which is a deceleration but still in growth territory. A revision to the Atlanta Fed GDPNow growth tracker for 3Q’22 US GDP is expected afterwards; the reading currently resides at +1.6% annualized.09/02 FRIDAY | 12:30 GMT | USD NONFARM PAYROLLS & UNEMPLOYMENT RATE (AUG)
Even as US recession concerns swirl, the US labor market has remained resilient. According to a Bloomberg News survey, the US economy added +300K jobs in August from +528K jobs in July, with the US unemployment rate (U3) holding at 3.5%. The US participation rate is expected to edge higher to 62.2% from 62.1%, while US average hourly earnings are anticipated to come in at +5.3% y/y from +5.2% y/y.According to the Atlanta Fed Jobs Growth Calculator, the US economy needs +343K jobs growth per month over the next 12-months in order to return to the pre-pandemic US labor market of a 3.5% unemployment rate (U3) with a 63.4% labor force participation rate.
It remains the case that ‘good news is bad news’ for risk assets as the Fed Chair Jerome Powell has reiterated the FOMC’s policy stance: a strong US labor market report could further reinvigorate Fed rate hike odds, which are discounting a 62% chance of a 75-bps rate hike in September.
— Written by Christopher Vecchio, CFA, Senior Strategist
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AUD/USD Buoyed After PBOC Action as Wall Street Stocks Sink
- 2022/8/23
- Posted by: admin
- Category: 暂无
TUESDAY’S ASIA-PACIFIC OUTLOOK
Asia-Pacific markets face increasing headwinds after stocks fell and the US Dollar surged overnight in New York. The benchmark S&P 500 index closed 2.14% lower, while the tech-heavy Nasdaq-100 Index fell 2.66% to the lowest since early August. The VIX volatility index jumped over 15%, posting its biggest daily gain since June.Treasury yields rose as traders positioned themselves ahead of this weekend when central bankers from around the world will meet at Jackson Hole. The Fed pivot thesis, which largely drove equity strength over the last few weeks, appears to have fallen apart. That may lead to additional Treasury buying throughout the week. Traders expect Federal Reserve Chair Jerome Powell to reaffirm the central bank’s stance against fighting inflation.
The People’s Bank of China (PBOC) cut the 1- and 5-year loan prime rates on Monday by 5 and 15 basis points, respectively. The larger-than-expected cut in the 5-year LPR, linked to mortgage lending, sent a signal of government support for the ailing property sector. Chinese equity markets closed mostly higher following the moves. Still, many remain skeptical and see broader measures being necessary to provide an adequate backstop to the country’s housing market.
Gold prices fell against a surging US Dollar and US Treasury yields. The yellow metal has lost ground for seven straight days, bringing XAU to the lowest level since July 27. Copper held up better against the USD, likely underpinned by the PBOC’s recent actions. In Europe, natural gas prices rocketed higher once again, this time over fears that a key Russian pipeline will remain closed after a 3-day maintenance period scheduled for next week.
— Written by Thomas Westwater, Analyst for DailyFX.com