DAILY ANALYSIS 17october 2022

  • Indices from Asia-Pacific traded mixed at the beginning of a new week. Nikkei and S&P/ASX 200 dropped over 1%, indices from China traded mixed while indices from India and South Korea gained around 0.4%
  • US index futures trade slightly above Friday’s cash close while European index future point to a flat opening of the trading session on the Old Continent
  • According to the Times report, UK Prime Minister Liz Truss decided to defer 1 percentage point income tax cut until 2024. New UK Chancellor of Exchequer Jeremy Hunt is also expected to make a speech on new fiscal plan today
  • Japan’s finance minister Suzuki once again said that his country will act firmly against excessive FX moves. USDJPY jumped above 148.00 and looked towards 149.00 mark on Friday
  • Bank of England Governor Bailey said that a bigger-than-expected rate hike may be needed at next meeting (November 3, 2022) as inflation keeps accelerating
  • Survey conducted by Wall Street Journal found out that economists see a 63% chance of US recession in the next 12 months
  • Chinese President Xi Jinping praised the country’s zero-Covid policy during his speeches at party congress. His speech completely ignore domestic property sector issues
  • OPEC Secretary General Haitham al-Ghais said that the recent output cut was a pre-emptive measure. UAE Energy Minister said that the decision was not political and was not aimed at any country
  • Cryptocurrencies are trading mostly higher but the scale of moves is small. Bitcoin gains 0.7%, Ethereum trades 1.2% higher while Ripple drops 0.9%
  • Oil as well as precious metals trade higher amid USD weakening
  • JPY and USD are the worst performing major currencies while AUD and GBP outperform

GBPUSD caught a bid this morning on reports saying that more parts of Liz Truss’ tax plan may be scrapped or delayed. Pair bounced off the price zone marked with 23.6% retracement of recent upward impulse in the 1.1225 area.

DAILY ANALYSIS 13october 2022

  • US indices finished yesterday’s session slightly lower. The S & P 500 and Nasdaq extended losing streak to 6 days yesterday, dropping 0.33% and 0.09%, respectively. Dow Jones and Russell 2000  closed lower, posting losses of 0.10% and 0.30%, respectively.
  • Indices from Asia-Pacific traded mixed today.  Nikkei  fell 0.48% and Kospi ticked 1.20% lower while S&P/ASX 200 rose 0.10%. Indices from China struggled to find common direction.
  • DAX futures point to a more or less flat opening of the European cash session today
  • Fed’s Bowman believes inflation expectations appear to be well anchored. Sizable rate hikes should remain on table if inflation not seen moving down
  • US consumer spending is up 10% in October, according to Bank of America
  • Japan finance minister Suzuki says excess FX volatility can hurt economy and excess moves by speculators cannot be tolerated
  • US chip manufacturer Applied Materials lowered financial outlook due to export restrictions to China. Meanwhile Taiwan Semiconductor Manufacturing Co. has secured a one-year license to continue ordering American chip making equipment for its expansion in China
  • China Securities Times report local governments to buy houses in order to support developers nad economy
  • Hong Kong’s central bank intervenes in FX in order to support HKD
  • Yellen Worries Over Loss of ‘Adequate Liquidity’ in Treasuries, according to Bloomberg. She also believes that Russia could profitably sell oil at prices circa $60 / barrel
  • ECB policymakers are close to a deal to change terms of the TLTRO, decision could occur on October 27, according to Reuters
  • Australia October inflation expectations survey: 5.4% (previous 5.4%)
  • Japan September PPI +0.7% m/m (expected +0.3%)
  • API report showed larger than expected inventory build of 7.05 million barrels
  • Cryptocurrencies are trading lower today. Bitcoin fell 0.9% and approaches $19,000 mark while Ethereum adds 1.2% and approaches $1,280 area
  • Energy commodities fell slightly with Brent  trading 0.2% lower
  • Precious metals are trading little changed with gold and silver trading 0.2% lower.
  • JPY and NZD are the best performing major currencies while GBP and CAD lag the most

USDCAD once again approaches major resistance at 1.3850.

DAILY ANALYSIS 12october 2022

  • S&P 500 and Nasdaq extended losing streak to 5 days yesterday, dropping 0.66% and 1.00%, respectively. However, Dow Jones and Russell 2000 managed to close higher, posting gains of 0.12% and 0.06%, respectively
  • Indices from Asia-Pacific traded mixed today. S&P/ASX 200 and Kospi ticked higher while Nikkei and indices from China traded lower
  • DAX futures point to a more or less flat opening of the European cash session today
  • US President Biden said that he does not expect recession in the United States but it is a possibility
  • The United States will reconsider its relationship with Saudi Arabia after the latest OPEC+ production cut. This could mean limiting arms sales and military assistance to Saudis
  • RBA members Ellis said that neutral rate in Australia is at least 2.5%
  • According to Financial Times, Bank of England Governor Bailey reportedly told bankers that the bond-buying scheme may be extended beyond the current deadline (October 14, 2022). Report comes after Bailey said a few hour earlier that he will not extend bond purchases
  • ECB’s Villeroy said that debate whether ECB will hike 50 or 75 bp in October is premature, given current volatile markets
  • According to Bloomberg report, Intel is preparing for mass lay-offs with some divisions expected to see workforce cut by 20%
  • Japanese machinery orders dropped 5.8% MoM in August (exp. -2.2% MoM). It was the biggest drop in 6 months
  • Cryptocurrencies are trading mostly higher today. Bitcoin gains 0.6% and climbs back above $19,000 mark while Ethereum adds 1.4% and approaches $1,300 area
  • Energy commodities gain with Brent and WTI trading 0.5% higher at press time
  • Precious metals caught a bid with gold and silver trading 0.2% higher. Platinum jumps 0.7%
  • GBP and NZD are the best performing major currencies while JPY and CAD lag the most

There are no signs of an end to the rally on USDJPY market with the pair jumping above the 146.00 mark this morning. Risk of BoJ intervention increases but its impact is likely to be short-term as it was the case in late-September (orange circle).

DAILY ANALYSIS 11 october 2022

  • South Korean exports dropped 20.2% YoY in the first 10 days of October. Imports were 11.3% YoY lower. Chip exports dropped 20.6% YoY
  • Declines can be spotted all across the cryptocurrency market. Bitcoin drops 1.1%, Ethereum trades 2.5% lower and Ripple is quotes almost 5% down
  • Oil is trading little changed with Brent quoted slightly below $96 per barrel and WTI trading slightly below $91 per barrel
  • Precious metals trade slightly lower amid USD strengthening. Gold drops 0.2% and trades near $1,665 per ounce while silver declines 0.9%
  • USD and JPY are the best performing major currencies while AUD and CAD lag the most

Tech shares were top laggards during the US session yesterday with Nasdaq-100 (US100) trying to break below 10,900 pts support zone. Index briefly traded below October 3 low and reached a fresh 2-year low.

DAILY ANALYSIS 7october 2022

  • US indices finished yesterday’s session lower, while investors look ahead to the NFP report for fresh clues on the trajectory of Fed tightening. S&P 500 fell 1.02%, Dow Jones dropped 1.15% and Nasdaq lost 0.68%. Russell 2000 fell 0.60%.
  • Indices from Asia-Pacific also traded lower. Nikkei fell 0.80%, S&P/ASX 200 traded 0.58% lower while Kospi lost 0.30%. Markets in China were closed for holidays.
  • DAX futures point to a flat or slightly lower opening of the European cash session today
  • Fed Mester said, right now the Fed needs to be focused on getting inflation down, not jobs. In her opinion US central bank will not be cutting rates at all in 2023
  • Fed’s Waller believes that chances of a soft landing falls the more aggressive Fed has to be
  • Japan’s PM Kishida said, recent sharp, one-way yen moves are undesirable and government cannot turn a blind eye to speculative FX moves
  • RBA believes the risks to financial stability have increased globally due to policy tightening, geopolitical tension, higher US dollar, rising energy prices
  • US lawmakers are pushing bills that aim to break up the OPEC cartel, charge it in front of the WTO, or even seize assets its members own in the US, according to WSJ
  • Goldman Sachs raised its brent oil price forecast for 2022 to $104 per barrel from $99 and for 2023 to $110 per barrel from $108
  • Binance, the largest crypto exchange suffered an ‘exploit’ but assures clients that funds are safe.
  • Cryptocurrencies are trading slightly higher. Bitcoin rose 0.2%, Ethereum jumped 0.4%
  • Energy commodities pulled back, with Brent trading lower near $93.15 per barrel
  • Mixed moods prevail on the precious metals market. Gold fell 0.1% while silver gains over 0.8%
  • JPY and CH are the best performing major currencies while AUD and NZD lag the most

OIL.WTI price managed to stay above the major support zone around $87.60, which is marked with upper limit of the local 1:1 structure, downward trendline and 61.8% Fibonacci retracement of the upward wave launched in December 2021. As long as price sits above this level, upward move may accelerate towards next resistance at $92.75

DAILY ANALYSIS 6october 2022

  • US indices finished yesterday’s session lower. S&P 500 fell 0.20%, Dow Jones dropped 0.14% and Nasdaq lost 0.25%. Russell 2000 fell 0.74%.
  • Indices from Asia-Pacific traded higher. Nikkei gained 0.9%, S&P/ASX 200 traded 0.10% higher while Kospi added 1.45%. Markets in China were closed for holidays.
  • DAX futures point to a higher opening of the European cash session today
  • US plans to ease Venezuela sanctions, enabling Chevron to pump oil, according to WSJ
  • Biden administration said oil output cuts “align OPEC with Russia” and it would explore options with the US Congress on how to reduce cartel influence over energy prices.
  • Russian Deputy PM Novak said Russia may temporarily reduce output in response to a US-led plan to impose a price cap on Russian oil.
  • Fed’s Bostic said, the fight on inflation is still in its early days
  •  London Metal Exchange imposed an immediate ban on new deliveries of copper from Russian firm Ural Mining & Metallurgical Co.
  • Australian Construction PMI for September 46.5 (previous 47.9)
  • Cryptocurrencies are trading higher. Bitcoin rose 1.7%, Ethereum jumped 2.5%  and Ripple gains 2.3%
  • Energy commodities are trading little changed with Brent trading flat near $93.40 per barrel
  • Precious metals are trading slightly higher. Gold rose 0.4% while silver gains over 0.8%
  • NZD and AUD are the best performing major currencies while JPY and USD lag the most

SILVER pulled back sharply on Wednesday, however sellers failed to break below key support at $20.00 per ounce. As long as price sits above, continuation of the upward move is possible

DAILY ANALYSIS 4october 2022

  • US indices rallied yesterday and finished trading with big gains. S&P 500 gained 2.59%, Dow Jones moved 2.66% higher and Nasdaq added 2.27%. Russell 2000 gained 2.65%
  • Indices from Asia-Pacific followed into footsteps of US peers and rallied as well. Nikkei gained 2.8%, S&P/ASX 200 jumped 3.7% and Kospi traded 2.5% higher
  • DAX futures point to a higher opening of the European cash session today
  • Reserve Bank of Australia surprised with a smaller-than-expected rate hike of 25 basis points (exp. 50 bp). However, RBA said that it plans to keep rising interest rates in the coming months
  • Fed’s Williams said that policy rates are not yet restrictive for growth and that there is still a room for them for growth given a 4.6% median forecast in dot-plot
  • OPEC+ canceled the Joint Technical Committee meeting scheduled for tomorrow. Ministerial meeting is still scheduled to go
  • North Korea launched a ballistic missile that flew over Hokkaido, Japan’s second largest island, and landed in the Pacific Ocean
  • Australian building permits increased 28.1% MoM in August (exp. 5.0% MoM)
  • Cryptocurrencies are trading mostly higher, although the scale of gains is small. Ethereum gains 0.7%, Bitcoin trades 0.3% higher and Ripple drops 1%
  • Oil trades higher with both Brent and WTI adding around 0.8% today
  • Precious metals trade higher – silver jumps 0.5%, platinum trades 1% higher and gold trades flat
  • EUR and GBP are the best performing major currencies while AUD and NZD lag the most

AUDUSD took a hit following a smaller-than-expected RBA rate hike. Pair dipped and tested 0.6450 support zone in the aftermath of the decision. However, bulls managed to defend the area and push the pair back above the 50-hour moving average

DAILY ANALYSIS 3october 2022

  • Indices from Asia-Pacific traded mixed today. Nikkei gained 0.5% while S&P/ASX 200 dropped 0.3%. Liquidity was thinner due to market holidays in China and South Korea
  • US and European index futures dropped at the start of a new week but have recovered the majority of the drop since. DAX futures trade around 150 pts below Friday’s cash close
  • Telegraph reports that vote on cutting UK income tax rate for high earners from 45 to 40% will be postponed until sources of financing are presented in budget in late-November
  • BBC reports that whole idea of tax cut for high earners may be dropped
  • S&P maintained ‘AA’ rating on the UK debt but changed outlook from “stable” to “negative”
  • Japan’s finance minister Suzuki repeated that authorities are monitoring FX moves and will respond if necessary. USDJPY jumped above 145.00 today, a level that trigger intervention two weeks ago
  • Oil is trading higher at the beginning of a new week amid media chatter that OPEC+ may cut output this week by 1 million bpd or 1.5 million
  • Precious metals gain as the US dollar rally is taking a pause this morning. Gold and platinum gain 0.2% while silver is rallying 2%
  • AUD and NZD are the best performing major currencies while JPY and USD lag the most
  • Cryptocurrencies are pulling back. Bitcoin trades 0.2% lower, Ethereum drops 0.7% while Ripple slides over 4%

USDJPY jumped above a key 145.00 resistance zone this morning, leading to a verbal intervention from finance minister Suzuki. The pair pulled back slightly since but remains near recent highs.

DAILY ANALYSIS 30september 2022

  • US indices finished yesterday’s session significantly lower. S&P 500 dropped 2.11%, Dow Jones moved 1.54% lower and Nasdaq slumped 2.84%. Russell 2000 finished 2.35% lower
  • Interestingly, declines came in spite of a weakening of the US dollar yesterday. US 10-year yields hold below 3.8%
  • Indices from Asia-Pacific traded lower as well. Nikkei dropped 2.1%, S&P/ASX 200 moved 1.1% lower and Kospi traded 0.3% down. Indices from China traded 0.1-0.7% lower
  • DAX futures point to a flat opening of the European cash session
  • GBPUSD continued recovery and jumped above 1.11 handle, erasing most of declines made since ‘mini-budget’ announcement last Friday
  • Local governments allowed for relaxation of mortgage rate limits in almost two dozen Chinese cities, in an attempt to support property market
  • Fed Daly said that US interest rates got to neutral levels. She also said that a deep recession is neither warranted, nor necessary
  • Chinese Caixin/Markit manufacturing PMI jumped from 49.4 to 50.1 in September (exp. 49.5) while services gauge dropped from 52.6 to 50.6 (exp. 52.4)
  • Japanese industrial production increased 2.7% MoM in August (exp. 0.2% MoM). Retail sales increased 1.4% MoM (exp. 0.2% MoM)
  • Japanese unemployment rate dropped from 2.6 to 2.5% in August (ex. 2.5%)
  • Australian private sector credit increased 0.8% MoM in August (exp. 0.6% MoM)
  • Cryptocurrencies are trading mostly higher today but the scale of moves is small. Bitcoin and Ethereum gain 0.2% each while Ripple lags and drops 1.5%
  • Energy commodities are trading slightly lower with Brent dropping 0.3% and WTI moved 0.5% lower
  • Precious metals trade higher – gold gains 0.4% while silver jumps 0.7%
  • GBP and EUR are the best performing major currencies while NZD and CAD lag the most

Nasdaq-100 (US100) slumped yesterday but bulls managed to prevent a drop below the 11,200 pts support zone. However, price action recently has been ugly and another attempt at breaking below cannot be ruled out.

DAILY ANALYSIS 29september 2022

  • US indices recovered from early-session losses yesterday and finished trading with significant gains. S&P 500 jumped 1.97%, Dow Jones moved 1.88% higher and Nasdaq added 2.05%. Russell 2000 jumped 3.17%
  • Recovery in risk moods was accompanied with a drop in US yields and weakening of the US dollar. 10-year US yields pulled back from around 4% to below 3.8%
  • Moods were additionally supported by Fed’s Bostic comments. While he said that he will support another 75 bp rate hike at the next FOMC meeting, he also said that first signs of easing price pressures are emerging
  • Indices from Asia-Pacific followed the US lead and also traded higher. Nikkei gained 0.8%, S&P/ASX 200 moved 1.8% higher and Kospi jumped 0.9%. Indices from China traded 0.2-0.5% higher
  • DAX futures point to a higher opening of the European cash session
  • Fed’s Evans said that policy rates at 4.50-4.75% at the end of 2022 or end of Q1 2023 would be a good place to get
  • UK Chief Secretary to the Treasury Philp said that course on tax cut plan will not be changed
  • RBC sees a chance of 500-1000k bpd output cut at next OPEC+ meeting (October 5, 2022)
  • BlackRock said it is avoiding most stocks as markets haven’t yet fully priced-in an upcoming recession
  • Australian CPI inflation decelerated from 7.0% to 6.8% YoY in August
  • Major cryptocurrencies are trading slightly lower today. Bitcoin drops 0.7% while Ethereum trades 0.8% lower
  • Oil and precious metals are trading lower today as USD managed to regain some ground overnight. Brent and WTI drop around 0.4% while gold trades 1% down
  • USD and JPY are the best performing major currencies while GBP and NZD are top laggards

Russell 2000 (US2000) bounced off the 1,650 pts support zone and launched a strong upward move. Index jumped over 3% yesterday amid broad improvement in risk moods.