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Gold Price Holds Firm

Gold Price Holds Firm Above $2,725 Amid Trade War Concerns and Fed Rate Cut Speculation

The price of gold (XAU/USD) continues to build on Monday’s rebound from the $2,689 level, maintaining a bullish trajectory for the second consecutive session. Early Tuesday, gold climbed to its highest level since November 6, trading near $2,729, fueled by U.S. President Donald Trump’s tariff remarks and growing demand for safe-haven assets. Additionally, declining U.S. Treasury bond yields, driven by market expectations of two Federal Reserve rate cuts this year, further support the yellow metal.

Safe-Haven Demand and Trade War Fears Bolster Gold Prices
President Trump announced his intention to impose a 25% tariff on Canada and Mexico, with implementation expected as early as February. He also threatened tariffs on China if it failed to approve a TikTok deal, increasing demand for gold as a safe-haven investment. Meanwhile, easing inflation signals, reflected in last week’s U.S. Producer Price Index (PPI) and Consumer Price Index (CPI), reinforce the possibility of Federal Reserve rate cuts, pushing 10-year U.S. bond yields to a three-week low.

USD Gains Amid Protectionist Policy Expectations
Despite the positive momentum for gold, the U.S. Dollar (USD) has regained some ground after touching a two-week low. This recovery is attributed to expectations that Trump’s trade policies could reignite inflation and compel the Federal Reserve to maintain a hawkish stance. This has limited further gains for the non-yielding gold.

Geopolitical Developments and Market Outlook
The recent Israel-Hamas ceasefire deal and speculation about potential U.S.-Russia negotiations over the Ukraine war are supporting a positive risk sentiment, which might restrict additional bullish moves for gold. Investors are also focused on upcoming events, including the Bank of Japan’s policy meeting on January 23-24 and global flash PMI data, expected to inject volatility into gold prices later in the week.

Technical Outlook: Bullish Bias Persists
Gold has broken above the key $2,720 resistance zone, with technical indicators suggesting further upward potential. The daily chart oscillators remain positive and are not yet signaling overbought conditions, favoring bullish traders. Gold could test the next resistance at $2,735, with a potential extension toward the $2,746-$2,748 zone and possibly the October 2024 peak of $2,790.

On the downside, support levels are found at $2,700 and $2,689, with additional safety nets at $2,662-$2,660. A breach below these levels could lead to a deeper correction toward $2,635 or the $2,622-$2,618 confluence zone, which includes the November trendline and the 100-day EMA.

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MT4

Japanese Yen Weakens Below 150.00 Against USD Amid Mixed Economic Signals

The Japanese Yen (JPY) continues to lose ground during Tuesday’s Asian session, with the USD/JPY pair climbing above the critical 150.00 psychological level. A combination of modest US Dollar (USD) strength and market dynamics is driving this movement, although speculation surrounding a potential interest rate hike by the Bank of Japan (BoJ) in December is tempering aggressive JPY bearish sentiment. Additionally, geopolitical risks, declining US Treasury yields, and concerns over US President-elect Donald Trump’s proposed tariff policies add complexity to the currency’s outlook.

Factors Influencing JPY and USD/JPY Dynamics
  1. BoJ Hawkish Expectations:
    Last week’s Tokyo Consumer Price Index (CPI) indicated accelerating inflation, raising expectations of a December rate hike by the BoJ. Governor Kazuo Ueda reiterated that the central bank would adjust monetary easing measures when confident inflation trends toward 2%.
  2. Geopolitical Risks:
    Tensions remain high as Russia escalates military actions in Ukraine, supported by North Korea. Additionally, Trump’s protectionist rhetoric, including opposition to the Nippon Steel-US Steel deal and potential trade wars with major partners, could reignite inflation concerns globally.
  3. US Economic and Monetary Policy:
    The US Federal Reserve’s future rate-cut trajectory remains uncertain. While markets anticipate a 75% probability of a 25-basis-point cut later this month (per CME FedWatch Tool), critical macroeconomic releases, including Friday’s Nonfarm Payrolls (NFP) and ISM Manufacturing PMI, are expected to guide expectations. Fed Chair Jerome Powell’s upcoming speech may further clarify the policy outlook.
  4. Yield Dynamics:
    The narrowing yield differential between US and Japanese government bonds, due to falling US Treasury yields, provides a modest tailwind for the JPY. However, this has not been sufficient to offset the Yen’s overall weakness.
Technical Outlook for USD/JPY

Support Levels:

  • The pair rebounded from its 100-day Simple Moving Average (SMA) near 149.00, a critical support level.
  • A decisive break below this level could expose the 50% Fibonacci retracement at 148.20 and subsequently 148.00. Further declines may test the 61.8% Fibonacci level around 147.00.

Resistance Levels:

  • Immediate resistance is seen near 150.75 and 151.00.
  • A sustained move beyond these levels could lead to a short-covering rally toward 151.65 and 152.00, where the 200-day SMA is positioned. A break above this pivot point would signal renewed bullish momentum.
Market Sentiment: Mixed Signals Limit Clear Direction

While the USD/JPY pair shows strength above 150.00, lingering uncertainties surrounding US monetary policy, geopolitical tensions, and BoJ rate decisions suggest the pair is not yet out of the woods. Traders will closely monitor upcoming macroeconomic data and central bank commentary for more precise guidance on the pair’s trajectory.

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Gold Price Falls Amid Renewed USD Strength, Rising US Bond Yields

Gold Price Falls Amid Renewed USD Strength, Rising US Bond Yields

Gold Price Falls Amid Renewed USD Strength, Rising US Bond Yields

Gold prices opened the week under heavy selling pressure, dropping to the $2,623-$2,622 range during the Asian session. This decline halts a four-day winning streak as the US Dollar (USD) gains momentum, supported by rising US Treasury bond yields. Expectations that US President-elect Donald Trump’s proposed tariffs could reignite inflationary pressures and reduce the Federal Reserve’s (Fed) room to cut rates further contributed to the bond yield uptick and USD recovery.

Key Factors Influencing Gold’s Decline

  1. USD Strength and Bond Yields:
    • The USD rebounded from a three-week low, fueled by a fresh surge in US Treasury yields.
    • Markets expect inflation concerns driven by potential tariffs to constrain the Fed’s ability to lower interest rates, adding to the USD’s appeal.
  1. Geopolitical Risks and Economic Data Awaited:
    • While the USD’s recovery pressures gold prices, geopolitical uncertainties in Ukraine, the Middle East, and trade tensions offer some support for the safe-haven metal.
    • Traders are cautious, awaiting key US data releases, such as the ISM Manufacturing PMI and the closely watched Nonfarm Payrolls (NFP), for clarity on the Fed’s rate trajectory.
  1. Trump’s Tariff Threats and Global Developments:
    • Over the weekend, Trump threatened 100% tariffs on BRICS nations if they moved to replace the USD in global transactions.
    • Meanwhile, in Ukraine, President Zelenskyy expressed willingness to negotiate territorial concessions for peace, introducing a potential shift in the conflict’s dynamics.
    • In Syria, escalating airstrikes add to regional instability, indirectly influencing market sentiment.
  1. China’s Mixed Economic Signals:
    • China’s Manufacturing PMI rose slightly to 50.3 in November, signaling modest expansion, while Non-Manufacturing PMI eased to 50.0.
    • The Caixin Manufacturing PMI jumped to 51.5, indicating hope for further government stimulus to boost demand.

Outlook

Gold’s near-term trajectory remains contingent on upcoming US macroeconomic data, particularly the ISM PMI and NFP reports. These figures will influence expectations for Fed rate cuts and drive USD dynamics. The interplay between geopolitical risks and economic signals will also play a crucial role in shaping the XAU/USD pair’s next move.

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Australian Dollar Gains on Hawkish RBA Remarks Despite US-China Tensions

Australian Dollar Strengthens on Hawkish RBA Comments; Risks Remain Amid US-China Tensions

Australian Dollar Strengthens on Hawkish RBA Comments; Risks Remain Amid US-China Tensions

The Australian Dollar (AUD) extended its rally for a third consecutive session on Friday, buoyed by hawkish remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock. However, the AUD/USD pair may encounter headwinds as the United States prepares to introduce new measures on Monday to limit China’s progress in artificial intelligence technology.

RBA’s Hawkish Stance and Revised Rate Forecasts
RBA Governor Bullock reiterated that core inflation in Australia remains “too high” to justify any near-term rate cuts, emphasizing that inflation is unlikely to sustainably return to the central bank’s target range before 2026. This hawkish tone prompted ANZ to revise its forecast, now predicting the RBA will delay interest rate cuts until May rather than February, following concerns over inflation staying elevated for the next two years.

Bullock’s comments underscore the RBA’s cautious approach, with Bloomberg reporting her focus on ensuring sustained progress in curbing inflation before any policy loosening.

US Dollar Outlook and Fed’s Vigilance
While the US Dollar (USD) has softened recently, its downside may be capped by the Federal Reserve’s cautious stance. Strong consumer spending data released on Wednesday highlighted resilient demand in October, but limited progress in reducing inflation could keep the Fed vigilant, delaying rate cuts.

Technical Analysis: AUD/USD Faces Bearish Momentum
The AUD/USD pair is trading near the 0.6500 mark on Friday, showing signs of bearish momentum. The pair remains within a descending channel, with the 14-day Relative Strength Index (RSI) below 50, indicating continued negative sentiment.

  • Support Levels: Immediate support is at the recent four-month low of 0.6434, marked on November 26. A breach of this level could lead to a test of the yearly low at 0.6348, last seen on August 5, with additional support near 0.6300 at the channel’s lower boundary.
  • Resistance Levels: Resistance lies at the nine-day Exponential Moving Average (EMA) of 0.6502, followed by the 14-day EMA at 0.6513. A breakout above these could target the channel’s upper boundary at 0.6530 and potentially the four-week high of 0.6687.

Key Risks Ahead
The AUD’s outlook remains vulnerable to geopolitical and economic developments, particularly the US measures targeting China. These actions could escalate trade tensions, impacting the risk-sensitive Australian Dollar. Traders will also closely monitor updates on US monetary policy and global risk sentiment for further cues.

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Japanese Yen Weakens Amid Rebounding

Japanese Yen Weakens Amid Rebounding US Yields and Modest USD Recovery

Japanese Yen Weakens Amid Rebounding US Yields and Modest USD Recovery

The Japanese Yen (JPY) softened on Thursday, with renewed demand for the US Dollar (USD) pushing the USD/JPY pair above mid-151.00 during the Asian session, recovering from a five-week low hit earlier. Robust US economic data released on Wednesday, indicating resilience and limited inflation progress, suggested the Federal Reserve might adopt a cautious stance on rate cuts. This fueled a fresh uptick in US Treasury yields, further supporting the USD while reducing demand for the lower-yielding JPY.

A broadly positive risk sentiment added to the JPY’s struggles, although speculation about a possible Bank of Japan (BoJ) rate hike in December limited the currency’s downside. Meanwhile, geopolitical concerns and lingering trade-related tensions provided some underlying support to the Yen, with market participants avoiding aggressive moves ahead of Japan’s inflation data on Friday and amid thin trading volumes due to the US Thanksgiving holiday.

Yen’s Weakness Offset by Rate Hike Speculations and Inflation Progress

The JPY remains pressured by multiple factors, but downside risks appear capped. Japan’s latest Consumer Price Index (CPI) data and stable corporate service inflation reinforced BoJ Governor Kazuo Ueda’s stance that wage-driven inflation is progressing. This sustains expectations for a potential BoJ rate hike in December, which had driven the Yen to a five-week high against the USD on Wednesday.

On the fiscal front, Japan’s parliament is considering a supplementary budget to aid inflation-stricken households, adding another layer of economic policy dynamics. Simultaneously, a flight to safety driven by geopolitical concerns, combined with expectations for US fiscal restraint, has kept the JPY somewhat supported.

US Dollar Rebounds Amid Strong Economic Data

The USD found renewed strength following Wednesday’s data, which highlighted solid Q3 economic growth (2.8% annualized) and consumer spending gains (3.5%, the highest this year). Labor market data also exceeded expectations, with jobless claims falling to 213K, while durable goods orders and the PCE Price Index showed mixed results.

Although the Fed is not expected to aggressively ease rates in December, markets are pricing in a 65% chance of a 25-basis-point cut. At the same time, expectations for inflationary pressures from expansionary policies are supporting the USD.

With low trading volumes due to Thanksgiving and key Japanese CPI data approaching, traders are likely to exercise caution in the near term.

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Gold Price Steady as Markets Await US PCE Inflation Data

Gold Price Holds Modest Gains as Traders Await US PCE Inflation Data

Gold Price Holds Modest Gains as Traders Await US PCE Inflation Data

Gold (XAU/USD) maintains its positive momentum, extending gains for the second consecutive day on Wednesday. After rebounding from a one-week low near $2,600, the precious metal climbed to a two-day high around $2,645 during the early European session. Persistent geopolitical tensions, including the Russia-Ukraine war, and tariff plans announced by US President-elect Donald Trump are driving demand for safe-haven assets like gold.

A subdued US Dollar (USD) has also supported gold prices. However, the yellow metal’s upside remains capped by a risk-on sentiment, expectations of slower Federal Reserve interest rate cuts, and steady US Treasury yields. Traders are now focused on key US economic data, including Q3 GDP and the Core PCE Price Index, for further direction.

Key Factors Supporting Gold Prices

  1. Geopolitical Tensions:
    • Ukraine reported its largest Russian drone attack on Tuesday, while Russia recently deployed hypersonic missiles.
    • Reports suggest Russia is using North Korean troops, and Ukraine is retaliating with Western-supplied missiles, heightening the risk of escalation.
  2. Trade Concerns:
    • President-elect Trump’s commitment to tariffs on imports from Canada, Mexico, and China has fueled safe-haven demand for gold.
  3. Middle East Developments:
    • A ceasefire deal between Lebanon and Israel announced by US President Joe Biden has eased tensions in the region, limiting additional haven flows.
  4. Economic Data:
    • US consumer confidence rose to a four-month high in November, while the Federal Reserve remains cautious about further rate cuts. The CME Group’s FedWatch Tool suggests a 63% chance of a 25-basis-point rate cut at the December meeting.

Technical Outlook

From a technical perspective, gold’s recovery from the 61.8% Fibonacci retracement level supports a bullish bias. However, oscillators on the daily chart indicate that gains may face resistance near the 100-period Simple Moving Average (SMA) on the 4-hour chart, currently around $2,645.

Upside Targets:

  • A break above $2,645 could push prices towards $2,665 and further to $2,677-$2,678. A move beyond $2,678 would set the stage for a retest of the $2,700 psychological level.

Downside Risks:

  • Immediate support is seen near $2,624-$2,622, followed by the $2,600 mark. A decisive break below $2,600 could expose the 100-day SMA near $2,569-$2,568, with further losses potentially extending to the monthly low of $2,537-$2,536.

Gold traders remain cautious as the market awaits the US inflation data, which could provide a clearer outlook on the Federal Reserve’s monetary policy trajectory.

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Gold Prices Drop Amid Risk-On Sentiment

Gold Prices Drop Amid Risk-On Sentiment, Hold Above $2,650 Level

Gold Prices Drop Amid Risk-On Sentiment, Hold Above $2,650 Level

Gold price (XAU/USD) saw a sharp intraday decline on Monday after briefly touching a nearly three-week high around the $2,721-$2,722 level. This drop ended the metal’s five-day winning streak, driven by a shift in market sentiment toward risk-on assets.

The decline in gold prices coincided with two key developments: US President-elect Donald Trump’s nomination of Scott Bessent as Treasury Secretary and reports suggesting progress toward a ceasefire between Israel and Hezbollah in Lebanon. These factors bolstered investor confidence, leading to a flow away from safe-haven assets like gold as markets opened for the new week.

Key Drivers Behind Gold’s Decline:

  1. Risk-On Sentiment Gains Momentum:
    • Scott Bessent’s nomination eased market uncertainties and signaled a more disciplined fiscal approach, boosting equity markets.
    • Reports of a potential ceasefire between Israel and Hezbollah further reduced geopolitical tensions, enhancing risk appetite.
  2. US Economic and Policy Factors:
    • Optimism surrounding the Trump administration’s pro-business policies reinforced positive sentiment in equities, adding pressure on gold.
    • Strong US economic data, including the S&P Global Composite PMI reaching 55.3 in November (the highest since April 2022), hinted at accelerated growth in the fourth quarter.
    • Hawkish signals from Federal Reserve policymakers and the possibility of inflation surprises supported expectations for a hold on rate cuts in December.
  3. US Dollar and Treasury Yields:
    • While the US Dollar experienced profit-taking after reaching a two-year high, expectations of sustained monetary tightening limited gold’s upside.
    • A drop in US Treasury bond yields, prompted by Bessent’s fiscal conservatism, offered only marginal support to non-yielding assets like gold.

Market Outlook:

  • Despite Monday’s decline, gold prices remain above the $2,650 support level, with investors awaiting key economic data and central bank signals for further direction.
  • This week’s focus will include the Federal Reserve’s November FOMC meeting minutes and the US PCE Price Index, critical indicators for inflation and monetary policy.

In the near term, a continued risk-on environment and easing geopolitical tensions could keep gold under pressure, though surprises in US data or policy shifts may spark renewed volatility in XAU/USD.

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Chinese Stocks Rally, but Global Funds Remain Skeptical

Chinese Stocks Rally, but Global Funds Remain Skeptical

Chinese Stocks Rally, but Global Funds Remain Skeptical

Chinese stocks have potentially reached their lowest point, yet there remains a significant hesitation among money managers to reengage fully with the market. The MSCI China Index has seen a 27% rise since its January low, primarily driven by a shift towards undervalued stocks. However, this increase in value hasn’t yet been backed by convincing Chinese corporate earnings, according to insights from Lombard Odier, Pictet Asset Management, and Fidelity International. Despite some optimistic views, such as those from abrdn plc emphasizing the importance of profit gains, the broader investment sentiment remains cautious.

At a glance, Chinese equities haven’t looked this appealing in some time, with major indices entering bull markets bolstered by supportive policies, and long-only funds ceasing to cut positions. However, persistent economic uncertainties and ongoing strategic tensions with the US have diminished the appeal of Chinese stocks as a staple in emerging-market portfolios. John Woods, Chief Investment Officer for Asia at Lombard Odier, notes that tactical plays on short-lived rallies are less preferred than a focus on earnings and fundamentals.

The recent rally, starting in April, took many by surprise, including analysts from Goldman Sachs Group Inc., who noted a widespread fear of missing out among traders. To date, Chinese stocks have regained about $2.5 trillion in market value, recuperating over one third of the losses from a historic downturn earlier this year. This recovery is partly due to a rotation from markets like the US, Japan, and India, where stocks are peaking, towards the relatively low valuations in China, marking the longest stretch of net purchases via Hong Kong trading links in a year.

David Mudd, founder and CIO of PegasusAsia, a hedge fund, predicts a continued shift towards Chinese tech firms from their US counterparts, setting the stage for potential divergences and intriguing trading pairs. The MSCI China Index currently trades at 10 times forward earnings, significantly below both its five-year average and the 20.6 times earnings of the S&P 500.

Nicholas Yeo, head of China equities at abrdn, describes the recent market surge as a technical rebound due to historically low valuations, emphasizing that its sustainability will hinge on forthcoming earnings reports. In contrast, John Lin from AllianceBernstein expresses skepticism, pointing out that the current earnings growth expectations for Chinese stocks, around 10%, may be overly optimistic without supporting corporate performance.As the earnings season progresses, companies within the MSCI China Index have reported a nearly 30% drop in net profits before exceptional items as of mid-May. The upcoming earnings reports from tech giants like Tencent Holdings Ltd. and Alibaba Group Holding Ltd. are highly anticipated, as they could be pivotal in determining the rally’s durability.

Additional momentum for the rally comes from signs of increased policy support in Beijing, especially measures aimed at addressing the stagnant property sector. Simultaneously, the persistent high policy rates in the US make Chinese stocks an attractive alternative, particularly in the tech sector. The Golden Dragon Index, which tracks US-listed Chinese firms, recently experienced a notable rise, fueled by robust quarterly results from Tencent Music Entertainment Group.

Despite the tempting market conditions, Luca Paolini from Pictet remains cautious, opting for tactical investments in China. Morgan Stanley’s strategists, including Laura Wang, advise against chasing the rally, although they recognize specific opportunities. As Beijing encourages companies to enhance dividends and buybacks, and incentivizes key industries like semiconductors, Chinese equities are gradually becoming attractive to value-focused investors, as noted by George Efstathopoulos from Fidelity. However, the critical determinant remains the improvement in consumer sentiment within China, a factor that is still considered fragile.

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Hong Kong Attempts to Attract Saudi Investment to Revitalize Stock Market

Hong Kong Attempts to Attract Saudi Investment to Revitalize Stock Market

Hong Kong Attempts to Attract Saudi Investment to Revitalize Stock Market

Hong Kong is actively seeking investment from Saudi Arabia to help rejuvenate its stock market, which has been facing multiple challenges. The city, known for its role as a global financial hub, is collaborating with the Saudi Tadawul Group to host a conference aimed at attracting fresh stock listings and fund inflows. This comes at a crucial time when Hong Kong needs to bolster its financial status.

The upcoming forum is not only an opportunity for Hong Kong but also for Saudi company officials who are keen on increasing their exposure to Asian markets. According to industry analysts, there is a significant political push fostering closer relations between China, including Hong Kong, and Gulf countries. Chinese businesses have expressed a keen interest in the Middle East, looking for new investment avenues to explore in the region.

This strategic conference highlights Hong Kong Exchanges & Clearing Ltd.’s efforts to attract new investors as part of its broader strategy to diversify its investor base amid reduced interest from U.S. and European investors due to rising geopolitical tensions. 

Last month, the nation’s securities regulator announced initiatives to encourage more companies to launch initial public offerings (IPOs) in Hong Kong, amidst a challenging period marked by a slow Chinese economy and increasing tensions between Beijing and Washington. These factors have led to a decline in investor interest and a significant drop in funds raised through IPOs, reaching a low not seen since 2009.

Bonnie Chan, CEO of Hong Kong Exchanges & Clearing, remains optimistic about the resurgence of significant IPOs in the city, with 100 applications currently in the pipeline and more expected. The recent uptick in applications has provided a hopeful outlook for the market’s recovery.

On the other side, Saudi Arabia sees clear benefits in tightening relations with China. Under the kingdom’s Vision 2030 agenda, spearheaded by Crown Prince Mohammed bin Salman, Saudi Arabia aims to increase foreign ownership and enhance liquidity in its stock markets. The Saudi market has shown robust growth, with the market capitalization increasing by 11% over the past three years, contrasting sharply with Hong Kong’s 25% decline. The Riyadh stock exchange has consistently performed well, attracting significant foreign investment, particularly after its inclusion in MSCI Inc.’s emerging-markets equities benchmark in 2019.

Recently, Hong Kong introduced the CSOP Saudi Arabia ETF, the first such exchange-traded fund in Asia, allowing investors to tap into the Saudi market. Despite a strong start with backing from Saudi Arabia’s sovereign wealth fund, it has seen modest fund inflows. Efforts are underway to cross-list this ETF in Shanghai to enhance accessibility for Chinese investors, who are increasingly recognizing the investment potential in the Middle East.

Further strengthening the ties, Hong Kong and Saudi Arabia have commenced negotiations on an “investment promotion and protection agreement.” There are also plans to launch a Riyadh-based ETF that tracks Hong Kong stock indexes. These initiatives underline the enduring partnership and mutual financial interests between the two regions.

Hong Kong’s Chief Executive John Lee has also expressed aspirations to attract a dual listing from Saudi Aramco, the world’s top oil producer, in Hong Kong. While this remains a future possibility, it signifies the city’s ambition to enhance its stature as a leading financial exchange.

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Asian Stocks Rise Slightly as Hopes for Federal Reserve Action Boost Sentiment

Asian Stocks Rise Slightly as Hopes for Federal Reserve Action Boost Sentiment

Asian Stocks Rise Slightly as Hopes for Federal Reserve Action Boost Sentiment

Asian stock markets achieved modest gains on Tuesday, driven by rising optimism that the Federal Reserve may initiate interest rate cuts within the year. This sentiment mirrored the uptick on Wall Street, sparked by soft U.S. employment figures which fueled speculation about potential changes in Fed policy. The optimism extended across major Asian markets, particularly in Japan, Korea, and Australia, contributing to the longest streak of gains in the region since February.

In Japan, the Nikkei 225 surged by as much as 1.6% as Tokyo investors returned from a holiday, showing robust trading activity. However, markets in Hong Kong and Shanghai experienced fluctuations, alternating between losses and gains throughout the trading day. The Japanese yen weakened following comments from Japan’s top currency official, Masato Kanda, who indicated that there was no immediate need for government intervention in currency markets as long as they remained functional.

The global equity landscape has been positively influenced by adjustments in investor expectations regarding the Federal Reserve’s monetary policy, especially after the recent U.S. jobs data suggested a less robust labor market. Chinese stocks, in particular, saw an uplift from assurances by China’s leaders to introduce new measures aimed at addressing the lingering issues in the housing sector.

Investment analysts highlight Asia’s attractive prospects in terms of growth, earnings potential, and valuation compared to the U.S. According to Ray Sharma-Ong of abrdn Plc, Asian markets have historically outperformed during periods of Fed monetary easing, thanks to better growth dynamics and attractive currency yields.

In the bond markets, there has been a cautious but noticeable shift towards expecting Fed easing this year, influenced by signs of cooling in the U.S. labor market. The yield on U.S. 10-year Treasuries showed little change, mirroring a stable yield environment in Australia as well.

Statements from Federal Reserve officials have underscored this cautious approach. Thomas Barkin, President of the Fed Bank of Richmond, noted that sustained high interest rates are likely to further slow economic growth and help bring inflation down to the 2% target. His counterpart in New York, John Williams, mentioned that rate cuts are anticipated eventually, but the timing would hinge on a broader array of economic data.

Meanwhile, the Reserve Bank of Australia held interest rates steady at a 12-year peak, indicating it would take time before inflation consistently met its target range. In China, positive sentiments were further buoyed as Shenzhen and other major cities relaxed home buying restrictions, part of broader efforts to rejuvenate the struggling real estate sector.

Strategists at HSBC Holdings, including Herald van der Linde, suggest that Chinese markets are poised to remain attractive in the short term due to an undervalued yen, high investment in Japanese funds, and ongoing improvements in China’s regulatory and economic environment. They predict that any Fed easing in late 2024 would likely benefit mainland China more than Japan, pointing to a continued shift in regional market dynamics.

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Asian Stocks Rise Post-Fed Decision; Yen Declines Resume

Asian Stocks Rise Post-Fed Decision; Yen Declines Resume

Asian Stocks Rise Post-Fed Decision; Yen Declines Resume

Most Asian stocks rose following comments from Federal Reserve Chair Jerome Powell, which tempered expectations for further interest-rate hikes. Meanwhile, the yen weakened after briefly surging, indicating possible intervention.

In market movements, equity indexes in Australia and Hong Kong saw gains, while Japanese stocks remained stable. U.S. stock futures experienced a rally, contrasting with a dip in European contracts. Market focus now shifts to forthcoming economic indicators, including euro-area manufacturing data and Apple Inc.’s earnings report.

The yen’s decline by as much as 1.1% against the dollar, following a sharp rise in New York, suggests doubts about Japan’s ability to counter further weakening despite its significant interest-rate gap with the U.S. Japan’s chief currency officer, Masato Kanda, refrained from commenting on potential market interventions.

The Federal Reserve maintained the federal funds rate at 5.25% to 5.5%. Powell indicated that a rate hike is unlikely without clear signs that current policies are insufficient to achieve a 2% inflation target. This stance suggests a cautious approach towards monetary policy, aimed at managing persistent inflation pressures.

On the currency front, the Bloomberg dollar index fell for a second consecutive day, influenced by lower U.S. yields post-Fed announcement. The euro remained steady after a slight increase the previous day.

Corporate earnings also highlighted market dynamics. ArcelorMittal SA reported better-than-expected results, and Apple’s upcoming earnings will provide insights into its performance amid a slowdown in China.

John Woods of Lombard Odier commented on the resilience seen in earnings, emphasizing the predominance of U.S. narratives in the current market environment.

Additional economic insights are expected with the release of April’s non-farm payroll data, with forecasts suggesting a stable unemployment rate of 3.8%. This could indicate persistent robust hiring trends, potentially challenging the Fed’s moderation efforts.

In commodities, oil prices bounced back from prior losses driven by concerns over demand and high U.S. crude inventories. Gold prices increased, supported by the Fed’s indication of a potential shift towards reducing borrowing costs once confident in the easing of inflation.

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Japan Drives Asian Stocks Up, China PMI Steady

Japan Drives Asian Stocks Up, China PMI Steady

Asian stock markets saw gains on Tuesday, with Japan taking the lead, as recent Chinese economic data indicated sustained recovery in the world’s second-largest economy. Japanese and Hong Kong indices climbed, while Chinese mainland shares showed mixed responses after reports of continued growth in factory activities. Meanwhile, U.S. stock futures remained stable following a robust earnings kickoff on Wall Street, despite expectations of sustained high interest rates by the Federal Reserve.

In Japan, equities rose sharply after a national holiday, buoyed by a strong rebound in the yen from a 34-year low against the dollar, amid rumors of government intervention to stabilize the currency. The yen experienced significant volatility, swinging over 2% after a previous drop to 160.17 per dollar, marking the broadest range since late 2022. During Asian trading hours, the yen’s gains moderated slightly as the U.S. dollar strengthened.

Analysts note a cautious optimism surrounding the Japanese currency, as fears of its continued depreciation seem to have eased. Elsewhere in Asia, there’s speculation that China might consider a drastic step to boost its sluggish economy, such as a substantial devaluation of the yuan. Chinese markets are set to close later in the week for the Labor Day holidays.

On the corporate front, Samsung Electronics saw a notable increase in earnings, driven by profits in its semiconductor unit for the first time since 2022, highlighting the surge in global AI development. Shares of Sumitomo Corp. also soared following reports that Elliott Management Corp. had acquired a significant stake in the company. Meanwhile, HSBC announced a decline in its first-quarter pretax profit and the upcoming retirement of its CEO, Noel Quinn, sparking a search for his successor.

In the U.S., early earnings reports are surpassing expectations with a significant majority of companies outperforming initial estimates. This has led to an upward revision in expected earnings growth, boosting investor sentiment. U.S. Treasury yields stabilized after a slight drop, and bond yields in Australia and New Zealand fell.

Market analysts anticipate continued volatility in U.S. markets but remain optimistic, particularly for AI-driven sectors. They recommend a balanced investment approach, emphasizing the potential in U.S. equities, especially technology stocks.

In commodities, oil prices steadied after a notable drop, as peace talks in the Middle East lowered risk premiums. Gold is on track to rise for the third consecutive month, with investors closely watching the upcoming Federal Reserve meeting.

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Apple’s Market Lead in China Slips as Q1 Shipments Drop 6.6%

Apple’s Market Lead in China Slips as Q1 Shipments Drop 6.6%

Apple has been dethroned as the leading smartphone seller in China during the first quarter of 2024, according to preliminary data released by research firm IDC on Thursday. The company saw its smartphone shipments decline by 6.6% compared to the same period last year, amidst fierce competition that has reshaped the market dynamics.

In a closely contested race for market dominance, both Honor and Huawei have now edged out Apple. Honor experienced a rise in market share to 17.1%, while Huawei closely followed with a 17% share. Apple’s market share, in contrast, has slipped to 15.6%. IDC identifies a statistical tie in market share when the difference between companies is 0.1% or less, underscoring just how tight the competition has become.

This shift comes despite Apple’s attempts to regain traction through price promotions during the quarter. Arthur Guo, a senior research analyst at IDC China, noted in the report that these efforts were insufficient to counter the robust challenge posed by Android-based competitors.

Adding to Apple’s challenges, the overall smartphone market in China is on the rise, with total shipments increasing by 6.5% to reach 69.3 million units, as reported by IDC. This growth suggests a recovering market where competition is becoming increasingly stiff.

Further emphasizing the scale of Apple’s current predicament, another research firm, Counterpoint, revealed that Apple’s smartphone shipments in China plummeted by 19% in the first quarter. This marks the company’s poorest performance since 2020, indicating significant hurdles in one of its key markets.

The increasing market share of rivals like Honor and Huawei is indicative of a broader trend where Chinese consumers are responding more favorably to domestic brands, which have been aggressively innovating and marketing their products. As these brands continue to capitalize on national sentiment and technological advancements, Apple faces the dual challenge of adjusting its strategy to regain lost ground and redefining its value proposition to appeal to Chinese consumers amidst a rapidly evolving smartphone landscape.

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UBS Upgrades Chinese Stocks to Overweight

UBS Upgrades Chinese Stocks to Overweight

UBS Group AG has upgraded its rating for a prominent Chinese stock index to overweight, indicating a renewed confidence in the market’s recovery prospects. This upgrade, described as a rare and optimistic move in 2024, reflects UBS’s positive stance on the financial health and earnings potential of China’s largest stocks.

In a detailed analysis released on Tuesday, UBS strategists, including Sunil Tirumalai, highlighted the robust earnings and solid fundamentals of these top companies. They pointed to a noticeable increase in consumer spending and a potential shift in household savings towards market investments as key drivers of this optimism.

The timing of UBS’s bullish outlook on the MSCI China Index coincides with the market showing signs of recovery from a prolonged downturn. The index, along with corporate performance, has begun to improve, buoyed by economic upturns and a tentative easing of corporate struggles. Despite this, the shadow of geopolitical strife and regulatory uncertainties continues to temper investor enthusiasm, preventing a full-scale commitment to this asset class.

Simultaneously, UBS has adjusted its views on other Asian markets, upgrading Hong Kong stocks to overweight while downgrading Taiwan and South Korea’s tech-centric markets to neutral. This shift reflects a broader strategy of divesting from highly valued tech stocks amid expectations of sustained high interest rates by the Federal Reserve.

Year-to-date, the MSCI China Index has risen over 13% from its January low, with similar gains seen in the Hang Seng Index. This growth comes after a cautious period among brokerages who were hesitant to amend their market forecasts following a volatile market phase post-2022’s aggressive rally.

Historically, UBS had moved Chinese stocks to a neutral stance in late 2023, mirroring actions by Morgan Stanley, as it awaited economic stabilization and policy interventions. Recent data, however, shows a rebound in the 12-month forward earnings estimate for the MSCI China Index by 1.7%, the first rise since a dip at 2022’s end.

This positive trend in Chinese equities is further supported by national policies aimed at stabilizing the market and enhancing corporate governance, as outlined in China’s recent “Nine-Point Guideline.” These initiatives are expected to foster better dividend practices and higher quality stock offerings.

Nonetheless, UBS warns that the looming US elections could escalate geopolitical tensions, posing a significant risk to the ongoing recovery in Chinese stocks. This backdrop of uncertainty makes the current market landscape both promising and precarious as investors navigate these complex dynamics.

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WTI Crude Stays Below $68.50 Ahead of OPEC+ Meeting

WTI Maintains Slight Uptick, Trading Near $76.50 as Market Anticipates US PMI Data Release

WTI Maintains Slight Uptick, Trading Near $76.50 as Market Anticipates US PMI Data Release

Western Texas Intermediate (WTI), a key benchmark for U.S. crude oil, has been trading around $76.50, demonstrating modest gains as the market awaits pivotal developments from the Organization of Petroleum Exporting Countries and allies (OPEC+). This anticipation is primarily centered around the upcoming virtual meeting scheduled for November 30, where decisions on oil production levels will be a significant focus.

OPEC+, an influential group in the global oil market, plays a crucial role in determining oil output levels. This upcoming meeting is particularly noteworthy as there are discussions around extending oil production cuts. Saudi Arabia, a leading oil exporter globally, is reportedly considering maintaining its production cut of 1 million barrels per day into the next year. Moreover, there is a possibility of OPEC+ members agreeing on additional supply reductions in response to recent declines in oil prices. The decision whether or not to implement further cuts in 2023 will be critical, as it holds the potential to significantly influence oil prices.

Adding another layer to this complex scenario is the recent data on U.S. crude oil inventories. According to the U.S. Energy Information Administration’s (EIA) weekly report, there was an unexpected increase of 8.70 million barrels for the week ending November 17, far exceeding the market’s anticipation of a 0.90 million barrel rise. This surge in inventories, from the previous reading of a 4.60 million barrel gain, adds to the factors influencing WTI’s pricing dynamics.

Concurrently, there’s growing optimism surrounding China’s economic stimulus plans, which could potentially stabilize WTI prices. Reports from Bloomberg indicate that China, a major global oil consumer, is including key property developers like Country Garden Holdings Co, Sino-Ocean Group, and CIFI Holdings in a list of 50 firms eligible for financial support. This support to the real estate sector in China, coupled with its status as a significant oil consumer, is likely to have a positive effect on WTI prices.

The immediate future for WTI prices also hinges on the release of the US S&P Global Purchasing Managers’ Index (PMI) data. There’s an anticipation of a slight decrease in both the Manufacturing and Services PMI indices. These indicators, essential for gauging economic health, could influence the USD-denominated WTI prices. Oil traders are closely monitoring these developments, ready to adjust their strategies based on the outcomes of the OPEC+ meeting and the U.S. economic indicators.

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Gold Price Maintains Minor Gains Amid Uncertainty

Gold Holds Near Two-Week High Ahead of FOMC Minutes

Gold Holds Near Two-Week High Ahead of FOMC Minutes

Gold prices (XAU/USD) have shown robust gains on Tuesday, maintaining their strong performance near a two-week high during the early European session. The persistent weakening of the US Dollar (USD) is a key driver, fueled by growing expectations of a dovish stance from the Federal Reserve (Fed). This shift in sentiment is providing strong support for the precious metal.

The recent disappointing US macroeconomic data has further diminished any remaining hopes of imminent interest rate hikes. Instead, it has generated speculation about the possibility of rate cuts in 2024. As a result, US Treasury bond yields have continued to decline, reinforcing the appeal of gold as a non-yielding asset.

Despite these supportive factors, gold’s positive momentum faces some headwinds from the generally upbeat sentiment in the equity markets. Optimism has been growing regarding additional stimulus measures in China to bolster the post-pandemic economic recovery. This positive sentiment has somewhat dampened the demand for traditional safe-haven assets like gold.

Investors are closely watching for cues from the release of the Federal Open Market Committee (FOMC) meeting minutes scheduled for later during the US trading session. This release is expected to provide valuable insights into the timing of the Fed’s potential monetary policy adjustments and is likely to influence gold’s direction in the near term.

In summary, gold is holding firm near a two-week high, benefiting from a weaker US Dollar and the prospect of a dovish Fed. However, it faces competition from the buoyant equity markets, driven by optimism surrounding stimulus measures in China. The FOMC meeting minutes release will be a crucial event to monitor, as it could offer clarity on the Fed’s monetary policy intentions and impact gold prices accordingly.

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Gold Price

Gold Price Lingers at Monthly Low Amid Anticipation of Fed Rate Insights

Gold Price Lingers at Monthly Low Amid Anticipation of Fed Rate Insights

As the markets navigate through uncertain tides, the price of gold persists at a near-monthly nadir, weighed down by continued selling pressure. As of Tuesday, gold (XAU/USD) wrestles with tepid demand, barely holding above its monthly low as it enters the European trading session. The strengthening U.S. Dollar (USD), which is rebounding from its September 20 low—its weakest point reached just the day before—casts a shadow over the traditional stalwart of commodities. Compounding this is the absence of new developments in geopolitical tensions, which traditionally might bolster gold’s appeal as a refuge asset.

Market sentiment remains fragile amidst geopolitical anxieties, particularly due to uncertainties in the Middle East. The lackluster performance of global equity markets mirrors this nervousness, providing a somewhat supportive backdrop for gold prices. However, a notable decline in U.S. Treasury bond yields—prompted by increasing speculation that the Federal Reserve may be approaching the tail end of its rate-hiking cycle—offers a glimmer of hope for gold, an asset that typically does not offer yields. This complex dynamic calls for a strategic approach from investors, particularly those with bearish inclinations towards the precious metal.

Looking forward, the anticipation is palpable among traders who are closely monitoring the Federal Reserve for hints on the future trajectory of interest rates. All eyes are on the upcoming pronouncements from pivotal figures within the Federal Open Market Committee (FOMC), including the much-anticipated commentary from Fed Chair Jerome Powell scheduled for mid-week. These communications are expected to significantly influence the short-term fluctuations of the USD and, by extension, the strategic positioning for gold.

Investors remain on standby for these insights, which could signal a new direction for gold’s valuation. Meanwhile, the impending release of the U.S. Trade Balance report on Tuesday offers yet another potential catalyst that could inject volatility into the markets, particularly during the early hours of the North American session.

The precious metal’s journey is emblematic of the broader economic narrative, entwined with policy decisions, fiscal reports, and geopolitical events that shape market sentiment. The delicate interplay between these factors and the resultant investor behavior underscores the complexity of forecasting gold’s future standing. As traders parse through economic data and geopolitical news, the dance between caution and opportunity continues to unfold in the global financial markets. The precious metal’s fortunes, while currently subdued, await the myriad forces at play, ready to pivot with each new piece of critical information.

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Gold Price Falls Amid Renewed USD Strength, Rising US Bond Yields

Gold’s Pricing Dynamics Amidst External Influences

Gold’s Pricing Dynamics Amidst External Influences

Gold’s pricing trajectory has experienced a downturn, reflecting a negative sentiment for two consecutive days, particularly as it lingers beneath the notable $2,000 benchmark. As we transition into the European trading session, numerous factors contribute to this phenomenon.

At the forefront of these influences is the anticipation surrounding the Federal Reserve’s (Fed) strategies. Market analysts largely believe that the Fed will remain unyielding in its hawkish approach, all in a bid to realign inflation to its designated 2% target. Such expectations have invigorated the US Treasury bond yields. Consequently, a rejuvenated demand for the US Dollar (USD) has emerged. The resultant effect of this surging USD demand is a palpable pressure on gold, primarily because gold doesn’t offer yield, distinguishing it from bonds and equities.

Geopolitical developments further accentuate these price dynamics. Israel’s recent tactics, reflecting restraint in its actions within Gaza, have assuaged overarching concerns about a potential exacerbation of tensions in the Middle East. This de-escalation sentiment, in turn, challenges gold’s traditional stature as a ‘safe-haven’ asset, leading to a softened demand for the precious metal. However, it’s crucial to acknowledge that the prevailing tension between Israel and Hamas hasn’t entirely dissipated. This lingering volatility, coupled with the prevailing ambiguity surrounding China’s economic revival, infuses some buoyancy into the gold price.

Interestingly, despite the downward pressure on gold, the market hasn’t witnessed aggressive selling, suggesting that traders might be exercising prudence. Such restraint could be attributed to the anticipation surrounding the imminent Federal Open Market Committee (FOMC) monetary policy assembly, spread across two days, commencing on Tuesday. The financial world awaits with bated breath for the Fed’s pronouncements, expected on Wednesday. The consensus is that interest rates will remain stable, projected between 5.25% and 5.50%, marking a peak not seen in over two decades. For stakeholders, the focal point would be any indications regarding prospective adjustments in the interest rates. These insights will undoubtedly shape the USD’s value and, by extension, gold’s pricing direction.

In summary, gold’s current price behavior is a confluence of macroeconomic policies, global political scenarios, and market speculations. With the FOMC meeting around the corner, the financial markets are braced for potential shifts in the precious metal’s valuation.

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Gold Price Maintains Steady Gains Amid Middle East Tensions and Anticipation of US PCE Price Index Release

Gold Price Maintains Steady Gains Amid Middle East Tensions and Anticipation of US PCE Price Index Release

For the third consecutive day on Friday, the gold price (XAU/USD) has witnessed a rise, underpinned by a consistent demand for safe-haven assets due to the ongoing unrest in the Middle East and stability in the US Dollar (USD). Yet, the precious metal still lingers below its recent five-month peak. This hesitation arises from the growing consensus that the Federal Reserve (Fed) will maintain its hawkish approach, resulting in sustained higher interest rates.

Traders are currently displaying caution around gold, opting to wait rather than make bold moves as the release of the Personal Consumption Expenditure (PCE) Price Index from the US approaches. This data, expected to be released soon, will be pivotal in setting expectations regarding the Fed’s imminent policy decisions, which will inevitably impact the USD and influence the trajectory of the non-yielding yellow metal. Despite this atmosphere of watchfulness, XAU/USD is on track to mark its third consecutive week of modest gains.

The backdrop for this movement in gold prices is multi-faceted:

– Ongoing geopolitical tensions are reinforcing the appeal of safe-haven assets like gold. However, expectations of a hawkish Federal Reserve have tempered any aggressive moves by bullish traders.

– Recent developments have seen Israeli forces make brief but significant incursions into Gaza, stirring concerns of a broader ground invasion.

– In a separate event, US military forces executed airstrikes on two sites in eastern Syria. This move comes as a response to multiple drone and missile attacks targeting American forces in the area.

– US President Joe Biden has sent a direct communication to Iran’s Supreme Leader, cautioning against any attacks on US bases or personnel in the Middle East.

– Recent economic data has spotlighted the US economy’s robust performance, growing at an impressive 4.9% annualized rate in the third quarter – its swiftest in almost two years.

– Given this economic resilience, it’s anticipated that the Fed will remain hawkish, potentially signaling another rate hike before the year concludes.

– Additionally, recently released US data that showed weaker-than-projected inflation and disposable income has further cemented beliefs that the Federal Reserve might retain its current stance through November.

With all eyes on the imminent release of the US PCE Price Index data, investors are keenly awaiting cues about the Fed’s subsequent moves before committing to any significant financial directions.

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WTI Nears $73.00 Amidst Rising Tensions

WTI Oil Stabilizes in Mid-$83 Range, Holding Near One-Week Low

WTI Oil Stabilizes in Mid-$83 Range, Holding Near One-Week Low

The West Texas Intermediate (WTI) Crude Oil prices have reportedly stabilized and are now fluctuating within a narrow trading band. As of the recent Asian trade session on Wednesday, the commodity was seen trading just below the mid-$83 range. This comes after a sharp pullback from a high over the past two weeks, which has led to significant losses, hitting a low that hasn’t been seen in more than a week.

This stabilization of the WTI prices can be attributed to several factors. On the global front, efforts by world leaders to contain the ongoing conflict between Israel and Hamas have been intensified, allowing for the delivery of much-needed humanitarian aid to Gaza. This has eased concerns about potential disruptions in oil supply which could have resulted in price volatility.

Additionally, the recent release of weak PMI data from the Euro Zone has reignited fears of a potential recession. Such an economic downturn is expected to negatively impact fuel demand, thus adding further pressure on the WTI Crude Oil prices. However, the US’s resilient economy, as indicated by the flash PMI prints, continues to provide some support.

The Federal Reserve’s (Fed) commitment to maintaining its hawkish stance to tackle inflation has also contributed to the stability of WTI prices. Despite the rising borrowing costs leading to economic headwinds, the strong fuel demand in the United States post-summer season and the tightening of global supplies have helped limit losses for crude oil prices.

Moreover, data from the American Petroleum Institute (API) has shown that US inventories have decreased by over 2 million barrels in the week leading up to October 20. This information precedes the official report from the Energy Information Administration, which is expected to be released later during the US session on Wednesday. The forthcoming report is likely to provide fresh impetus to oil prices.

Despite these factors, the overall fundamental backdrop appears to favour bearish traders. The WTI Crude Oil price’s ability to hold near a one-week low and oscillate in a narrow band around the mid-$83 range indicates a market that, while volatile, is showing signs of stabilizing. However, with numerous factors at play, including global conflicts, economic indicators, and supply-demand dynamics, the future trajectory of WTI prices remains uncertain.

 

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WTI Crude Stays Above $69 Amid Supply Worries Over Russia-Ukraine Conflict

WTI Climbs to $89.10 in Light of US SPR Initiatives and Rising Middle-East Strife

WTI Climbs to $89.10 in Light of US SPR Initiatives and Rising Middle-East Strife

The Western Texas Intermediate (WTI) oil has been experiencing a consistent ascent, marking its fourth consecutive day of gains. As the Asian trading session commenced on Friday, it was observed trading around the $89.10 per barrel mark. This continued rise in WTI prices can be attributed to a combination of geopolitical tensions and strategic oil reserve considerations.

A significant contributor to this uptrend is the escalating conflict between Israel and Gaza. There are heightened concerns that this unrest could spiral throughout the Middle East, jeopardizing the steady supply of oil from one of the world’s most prolific production zones. The already volatile situation was exacerbated by an explosion at a Gaza-based hospital, which, coupled with the imminent threat of an Israeli ground offensive, has cast shadows of uncertainty over the region’s stability. Such geopolitical tensions often have ripple effects on global oil prices, and the current scenario is no exception.

The U.S., a major consumer of oil, is grappling with its own set of challenges. A dwindling domestic oil inventory has put upward pressure on prices. Recognizing the potential risks of depleting reserves, the U.S. government has outlined an ambitious plan to rejuvenate the nation’s Strategic Petroleum Reserve (SPR). This strategic move is multifaceted. Not only does it aim to reinforce national energy security, but it also strives to ensure that there’s an adequate emergency oil reserve. A recent announcement by the U.S. Department of Energy affirmed the government’s commitment to this endeavor, revealing plans to procure 6 million barrels of crude oil destined for the SPR in the forthcoming December and January.

On the global front, major oil powerhouses, namely Saudi Arabia and Russia, are playing their part by extending oil supply cutbacks until year’s end. This decision is in anticipation of a projected supply deficit as the year draws to a close.

Moreover, the U.S.’s decision to momentarily lift oil sanctions on Venezuela has stirred the waters within the OPEC+ conglomerate. Despite this move, insiders from OPEC+ have indicated that it wouldn’t trigger any abrupt policy shifts. They believe that Venezuela’s oil production resurgence will be a slow process, thereby negating the need for hasty policy recalibrations within the OPEC+ framework.

In essence, the oil market currently finds itself at the confluence of several pivotal factors. Whether it’s geopolitical tensions, strategic reserve considerations, or global production dynamics, each element is playing a role in shaping oil prices. The intertwined nature of these factors ensures that oil prices remain underpinned for the foreseeable future.

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EUR/USD Price Forecast

EUR/USD Price Forecast: Consolidating Below 1.0500 Amid Multi-Week High

The EUR/USD currency pair is having a hard time continuing its recent winning streak, trading in a tight range just below the 1.0500 psychological mark during the Asian session on Monday. In spite of the consolidation, the pair is still close to its three-week high of Friday, buoyed by a weaker US Dollar (USD).

Technically, the pair‘s location above the 38.2% Fibonacci retracement level of the November-January bear run, combined with upbeat oscillators on the daily chart, indicates that the bullish momentum is still intact. This leaves room for a potential rally towards the 1.0545-1.0555 resistance area, which coincides with the 50% Fibonacci retracement level and the 100-day Exponential Moving Average (EMA).

A successful breach above this crucial barrier may set the stage for additional gains, with EUR/USD potentially challenging the 1.0600 level. A break above this level may propel the pair towards the December 2024 swing high of 1.0630, close to the 61.8% Fibonacci retracement level. Further bullish momentum may continue to drive the rebound from its more than two-year low in January.

To the contrary, however, the 38.2% Fibonacci level of 1.0465 acts as an instant support level. A resolute breach through this area can drive selling momentum faster, pulling the pair towards the 1.0400 round number and down further into the mid-1.0300s (23.6% Fibonacci level). Failure to hold these levels could shift the bias in favor of bearish traders, potentially exposing the 1.0200 handle.

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EUR/USD Eases Near

EUR/USD Eases Near 1.0300 Ahead of Lagarde’s Speech

The EUR/USD pair edges lower to approximately 1.0310 during the Asian session on Monday, weighed down by a stronger US Dollar (USD). Market participants are focused on the upcoming Eurozone Sentix Investor Confidence data for February and a speech by European Central Bank (ECB) President Christine Lagarde later in the day.

On Friday, former US President Donald Trump announced plans to introduce reciprocal tariffs on multiple countries by Tuesday or Wednesday, though he did not specify which ones. This move has heightened concerns about a global trade war, fueling demand for the safe-haven USD.

“The immediate concern might not be inflation, as counter-effects like a demand slowdown could come into play. However, the bigger issue is uncertainty and the shift toward a more protectionist world,” said Charu Chanana, Chief Investment Strategist at Saxo.

Meanwhile, the Euro faces pressure from growing expectations of further ECB rate cuts amid sluggish economic growth. ECB Governing Council member Boris Vujcic stated that the market’s anticipation of three rate cuts this year is reasonable. However, he emphasized that greater clarity on monetary policy direction may not emerge until early in the second quarter.

Traders will keep a close eye on US trade policies, especially Trump’s repeated threats against Europe. JPMorgan economist Nora Szentivanyi noted that the objectives, timing, and tariff rates remain unclear. Nonetheless, the European Commission has stated it would retaliate firmly against any tariffs imposed by the US.

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EUR/USD Holds Below 1.0400 Ahead of Eurozone Retail Sales Data

EUR/USD Struggles Below 1.0400 Ahead of Eurozone Retail Sales Data

EUR/USD is trading lower around 1.0390 in the Asian session on Thursday, extending losses following a two-day recovery. Investors remain wary ahead of the release of Eurozone Retail Sales data later today.

Market predictions suggest that Eurozone retail sales scaled by 1.9% year on year in December, up from the previous 1.2% increase. However, the monthly number is expected to fall by 0.1%, erasing the 0.1% increase reported in November.

The euro remains under pressure as market sentiment points to further monetary easing by the European Central Bank (ECB). Policymakers feel optimistic that inflation will steadily return to the ECB’s 2% objective, lessening the need for additional tightening.

Meanwhile, the US Dollar Index (DXY), which tracks the dollar against six major currencies, has stabilized at 107.70, restricting EUR/USD’s upside potential. The dollar’s resiliency comes after a three-day losing skid, which puts pressure on the pair.

On Thursday, Federal Reserve Vice Chair Philip Jefferson reiterated his desire for keeping existing interest rates, underlining that the Fed’s policy remained restrictive despite the 100-basis-point drop. Meanwhile, San Francisco Federal Reserve President Mary Daly emphasized the central bank’s cautious attitude in the face of prolonged economic uncertainties.

The dollar weakened on Wednesday following a disappointing US Services PMI reading. The ISM Services PMI dropped to 52.8 in January from a revised 54.0 in December, falling short of the market consensus of 54.3. Looking ahead, traders are watching Friday’s US Nonfarm Payrolls (NFP) report, which might influence the Federal Reserve’s next policy actions.

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EUR/USD Stuck in Range Near 1.0375-1.0380 as Bulls Struggle for Direction

EUR/USD Struggles for Clear Direction, Stays Range-Bound Near 1.0375-1.0380

The EUR/USD pair continues in consolidation mode, failing to build on its recent recovery from the 1.0200 region—the lowest level since January 13. After reaching a weekly high earlier on Wednesday, the pair is fluctuating within a narrow range around 1.0375-1.0380, showing little change for the day amid mixed market signals.

Tuesday’s Job Openings and Labor Turnover Survey (JOLTS) indicated a cooling U.S. labor market, reinforcing expectations of Federal Reserve (Fed) policy easing. Markets are now factoring in the likelihood of two rate cuts by the Fed this year. Risk-on sentiment also remains prevalent, but should continue to weigh on demand for the safe-haven USD, and thereby support EUR/USD.

Upside momentum, however remains constrained by issues on the introduction of U.S. tariffs over the goods to be imported in Europe under Trump’s administration, among others, and the ECB dovish direction which is being felt in restraining the Euro though HICP was reported higher to an annual rate of 2.5% in the last month, still, does not allow much upside in this pair.

Looking ahead, market participants will focus on the final Eurozone Services PMI release, while the U.S. economic calendar highlights the ADP private-sector employment report and the ISM Services PMI. Movements in the USD could also be influenced by key FOMC member speeches. Still, Friday’s NFP report will focus more attention on it as it will help deliver a better picture of the situation in the U.S. labor market and set the direction for future Fed policy.

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GBP/USD Holds Above 1.2400 as Markets Watch China Tariff Developments

GBP/USD Holds Above 1.2400 as Markets Watch China Tariff Developments

GBP/USD extends its gains for a second consecutive session, trading around 1.2430 during Asian market hours on Tuesday. With  the  decision   by   U.S. President Donald Trump   to pause tariffs on Mexico and Canada , the pair benefits from a risk-on sentiment .

Despite this, investors continue to pay close attention to ongoing trade negotiations, making market volatility a major concern. Trump declared that he would postpone imposing high tariffs on Canada and Mexico for at least 30 days following their agreements to send 10,000 troops to the U.S. border to fight drug trafficking.

This move follows Trump’s recent decision to impose 25% tariffs on Mexican and Canadian goods, along with a 10% tariff on Chinese imports. Additional tariffs on China are anticipated to go into effect Tuesday at 5:00 GMT. Trump managed to say that talks with Chinese officials might happen “probably over the next 24 hours,” and that tariffs on China would be “very, very substantial” if an agreement could not be made.

Meanwhile, the U.S. Dollar Index (DXY), which tracks the USD against six major currencies, hovers around 108.70 after erasing most of its gains from the previous session. Strong U.S. economic data could provide support for the greenback, as the ISM Manufacturing PMI climbed to 50.9 in January from 49.3 in December, surpassing the expected 49.8.

While GBP/USD may rise, the British Pound’s upside may be limited, given the expectation that the Bank of England (BoE) will cut interest rates once again. Despite rising wages in the UK, the BoE is expected to lower interest rates by 25 basis points to 4.5% on Thursday.

The BoE’s Monetary Policy Committee (MPC) is expected to vote 8-1 in favor of the rate cut, with one member likely advocating for maintaining rates at their current level for now.

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EUR/USD Drops to 1.0200 on Trump’s Trade Tariffs

EUR/USD Slumps to Multi-Week Low Near 1.0200 Amid Trump’s Trade Tariffs

The EUR/USD pair extends its decline on Monday, plunging to the 1.0200 region—a three-week low—during the early Asian session. This drop brings the pair closer to its lowest level in over two years, last seen in January, reinforcing the ongoing multi-month downtrend.

The US Dollar (USD) gains broad strength following President Donald Trump’s weekend announcement of new tariffs: 25% duties on imports from Canada and Mexico, along with an additional 10% tariff on Chinese goods. These measures escalate global trade tensions, dampening investor appetite for riskier assets and boosting demand for the safe-haven USD. As a result, the EUR/USD pair faces renewed selling pressure.

Adding to the bearish sentiment, Trump also declared on Friday evening that he would impose tariffs on goods from the European Union. This, coupled with the European Central Bank’s (ECB) dovish stance, further weighs on the euro. Last Thursday, the ECB cut borrowing costs by 25 basis points (bps) as expected and signaled the possibility of additional rate cuts before the year’s end, exacerbating the euro’s weakness.

The policy divergence between the ECB and the Federal Reserve (Fed) further tilts market sentiment in favor of the USD. While the Fed has opted for a hawkish pause, supporting the dollar’s strength, a recent pullback in US Treasury yields may limit further USD gains and offer some relief to the EUR/USD pair. However, the overall market outlook suggests that the pair’s downside momentum is likely to persist.

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EUR/USD Holds Above 1.0400 | Focus on Q4 GDP & ECB Policy Decision

EUR/USD Holds Above 1.0400 Ahead of Q4 GDP Data and ECB Policy Decision

The EUR/USD pair is edging higher after three consecutive losses, trading near 1.0420 during Thursday’s Asian session. The rebound is primarily driven by a technical pullback in the US Dollar (USD). Meanwhile, the US Dollar Index (DXY), which tracks the greenback against six major currencies, remains just below 108.00.

Despite the recent uptick, further gains for EUR/USD may be capped as the USD could regain strength following the Federal Reserve’s (Fed) cautious approach to monetary policy. The Fed reinforced its hawkish stance by removing language suggesting confidence in inflation reaching its 2% target.

During his press conference, Fed Chair Jerome Powell emphasized that any policy changes would require “real progress on inflation or some weakness in the labor market.” As expected, the Fed maintained its overnight borrowing rate at 4.25%-4.50% during its January meeting on Wednesday. This decision follows three consecutive rate cuts since September 2024, totaling a one-percentage-point reduction.

Meanwhile, the Euro faces downward pressure as the European Central Bank (ECB) is widely expected to cut interest rates by 25 basis points in its policy meeting on Thursday, lowering the Deposit Rate to 2.75%. Market sentiment suggests that further rate cuts from the ECB may follow in the coming months, potentially weighing on the Euro.

Investors will closely watch the release of fourth-quarter Gross Domestic Product (GDP) data from the Eurozone and Germany on Thursday. Later in the day, focus will shift to the US Annualized GDP report, which could influence market sentiment and currency movements.

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USD/JPY Holds Steady Near 147.00 as Yen Weakens on Trade Tensions and BoJ Rate Outlook

USD/JPY Holds Steady Near 147.00 as Yen Weakens on Trade Tensions and BoJ Rate Outlook

The Japanese Yen (JPY) continues to trade with a bearish bias on Wednesday, keeping the USD/JPY pair firm around the 147.00 mark during the Asian session. A stronger US Dollar and persistent concerns over rising trade tensions are weighing heavily on the Yen, as markets brace for the impact of US tariffs on Japanese goods starting August 1. 

Former US President Donald Trump’s announcement of a 25% tariff on Japanese imports, coupled with the threat of retaliatory action, has sparked renewed fears over Japan’s economic resilience. The country’s Q1 GDP contracted, real wages in May dropped at their steepest pace in nearly two years, and political uncertainty is rising ahead of the July 20 House of Councillors election. Recent polls suggest the ruling LDP-Komeito coalition may struggle to retain its majority, further dampening investor confidence. 

These developments have led traders to scale back expectations of a rate hike by the Bank of Japan this year. The combination of domestic headwinds and external pressure is weakening the JPY, while the US Dollar continues to gain on expectations that rising tariffs will stoke inflation and prompt the Federal Reserve to maintain a hawkish stance. 

The Fed’s June decision to hold interest rates steady, along with a strong US jobs report, has reinforced the belief that rate cuts may be delayed until at least October. The FOMC meeting minutes, due later today, will be closely watched for insights into the Fed’s policy trajectory. Markets currently anticipate up to 50 basis points in rate cuts by year-end. 

Technical Outlook: Bullish Momentum Builds 

Technically, USD/JPY’s break and close above the 100-day Simple Moving Average (SMA) — for the first time since February — signals potential for further gains. Positive momentum on the daily chart supports a move toward the 147.60–147.65 resistance area, with the 148.00 handle, a key June high, in sight. 

On the downside, immediate support lies near 146.50, with the 100-day SMA just below 146.00 acting as a critical pivot. A decisive break below this level could shift momentum in favor of bears, opening room for deeper losses. 

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NZD/USD gains ground to near 0.5700 on weaker US PMI data

During the early Asian session on Thursday, the NZD/USD pair was trading slightly higher at 0.5690. The Greenback falls against the New Zealand Dollar (NZD) as US economic data disappoints. Investors will keenly monitor developments in the rekindled trade battle between the United States and China, the world’s two largest economies. 

The weaker US Services Purchasing Manager Index (PMI) could weigh on the Greenback and generate a tailwind for the pair. The US ISM Services PMI fell to 52.8 in January from 54.0 (revised from 54.1) in December. This reading came in below the market consensus of 54.3.

On the other hand, New Zealand’s fourth-quarter employment report will put the RBNZ on pace to decrease the Official Cash Rate (OCR) by 50 basis points (bps) to 3.75% this month. Statistics New Zealand said on Wednesday that the country’s unemployment rate increased to 5.1% in Q4, up from 4.8% the previous quarter. This result was a four-year high and exceeded the 25-year average of 4.8%. Rising expectations that the Reserve Bank of New Zealand (RBNZ) may decrease interest rates may further impact on the New Zealand Dollar (NZD).

“In line with RBNZ guidance, markets continue to imply another 50bps rate cut to 3.75% at the February 19 meeting and the policy rate to through around 3.00% over the next 12 months. Bottom line: NZ-US 2-year bond yield spreads can further weigh on NZD/USD,” noted Société Générale’s FX analysts. 

On Tuesday, the finance ministry in China unveiled a package of tariffs on various US products such as crude oil, farm equipment, and some autos in a sharp response to an announcement made by US President Donald Trump imposing a 10% tariff on Chinese imports. Further, China served notice to several companies including Google for potential sanctions in response to Trump’s tariffs. Any sign of uncertainty or a rising trade war tension may see the China-proxy Kiwi being dragged lower, as China remains one of the major trading partners to New Zealand.

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JPY Recovers Losses vs. USD, Bullish Outlook Intact

Japanese Yen Recovers Some Losses Against USD; Bullish Outlook Remains Intact

The Japanese yen (JPY) cut some of its intraday losses against the US dollar (USD) on Monday, bringing the USD/JPY pair back below the mid-155.00s during the early European session. The Bank of Japan’s (BoJ) Summary of Opinions showed conversations about the possibility of further hikes in interest rates. Furthermore, Tokyo’s core inflation increased at the quickest annual rate in nearly a year, raising expectations of further policy tightening by the BoJ, which supports the JPY.

Beyond monetary policy, narrowing interest rate differentials between Japan and other major economies, including the US, alongside a broader risk-off sentiment, provide additional support to the safe-haven JPY. However, concerns over the economic impact of US President Donald Trump’s newly announced trade tariffs limit the yen’s upside. Meanwhile, the USD remains broadly strong, allowing the USD/JPY pair to maintain its positive momentum for a second consecutive day, ahead of the upcoming US ISM Manufacturing PMI report.

Yen Gains Traction Amid BoJ Rate Hike Bets and Trade War Fears

US President Donald Trump signed an executive order on Saturday to impose 25% tariffs on imports from Canada and Mexico and 10% tariffs on Chinese goods, effective Tuesday.

Canada’s Prime Minister Justin Trudeau, Mexico’s President Claudia Sheinbaum, and China’s foreign ministry all replied quickly, indicating probable retaliation. The US Dollar continues to climb, approaching a two-year high last hit in January, supporting the USD/JPY pair’s upward trend.

The Bank of Japan’s latest Summary of Opinions, released on Monday, showed that policymakers are thinking about additional rate hikes, though this has failed to appreciably lift the JPY.

Board members of the Bank of Japan stressed the need of continuing to raise interest rates if economic conditions and inflation remain stable.

Japan’s Finance Minister Katsunobu Kato stated that the government is closely monitoring the impact of Trump’s tariffs on the yen amid concerns over potential economic fallout.

Economy Minister Ryosei Akazawa reiterated Japan’s commitment to achieving the BoJ’s 2% inflation target while implementing measures to offset rising living costs.

The US-Japan yield spread remains near a multi-week low, which, coupled with risk aversion, could help stabilize the yen in the near term.

Investors now turn their focus to key US economic data, starting with today’s ISM Manufacturing PMI, followed by the highly anticipated Nonfarm Payrolls (NFP) report on Friday.

USD/JPY Faces Resistance Near 156.25; Bears in Control Below This Level

From a technical standpoint, last week’s strong rebound from the 50% Fibonacci retracement level of the December-January rally and the subsequent upside move favor bullish traders. However, additional gains beyond 156.00 may encounter resistance near last week’s swing high at 156.25. A sustained break above this level could spark a short-covering rally, pushing the pair towards:

  • 156.70-156.75 resistance
  • 157.00 psychological mark
  • 157.60 horizontal barrier
  • Potential extension towards 158.00, with an ultimate target at the 158.85-158.90 multi-month high from January 10

Conversely, on the downside:-

  • 155.00 serves as immediate support
  • Below this, watch for key levels at 154.55-154.50 and 154.00
  • A break below the 153.70 January low could accelerate the decline towards 153.30 and eventually 153.00

While the JPY is exhibiting some resilience, the overall trend remains unpredictable, with market participants intently watching economic indicators and geopolitical developments.

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Australian Dollar Drops as RBA Rate Cut Bets Rise, Fed Decision Looms

Australian Dollar Slides Amid Rising Odds of RBA Rate Cuts, Fed Decision in Focus

The Australian Dollar (AUD) extends its losing streak for a third consecutive session against the US Dollar (USD), weighed down by softer-than-expected inflation data from Australia.

Australia’s Consumer Price Index (CPI) rose by 0.2% quarter-on-quarter in Q4 2024, matching the previous quarter but missing the expected 0.3%. On an annual basis, CPI eased to 2.4% from 2.8% in Q3, below the market forecast of 2.5%. Despite December’s monthly CPI ticking up to 2.5% YoY, inflation remains within the Reserve Bank of Australia’s (RBA) 2%-3% target range. Meanwhile, the RBA’s Trimmed Mean CPI slowed to 3.2% YoY, its weakest pace in three years, slightly under the anticipated 3.3%.

Australian Treasurer Jim Chalmers expressed confidence that “the worst of the inflation challenge is behind us” and that a “soft landing” is increasingly likely. The cooling inflation strengthens the case for an RBA rate cut in February. The central bank has held the Official Cash Rate (OCR) steady at 4.35% since November 2023, emphasizing the need for inflation to “sustainably” return to target before considering a rate reduction.

AUD Pressured by Risk Aversion, Trump’s Tariff Threats

The AUD faces additional headwinds from risk-off sentiment following tariff threats by former US President Donald Trump. On Monday, Trump announced plans to impose tariffs on imports of key commodities, including computer chips, pharmaceuticals, steel, aluminum, and copper, aiming to boost US manufacturing.

Meanwhile, the US Dollar Index (DXY) holds firm around 108.00 as traders turn their attention to the upcoming Federal Reserve (Fed) interest rate decision. Market expectations, per the CME FedWatch tool, indicate near-certainty that the Fed will maintain its policy rate at 4.25%-4.50%. Investors will closely watch Fed Chair Jerome Powell’s press conference for guidance on future policy shifts.

Concerns over the potential inflationary impact of Trump’s trade policies add another layer of uncertainty. US Bank chief economist Beth Ann Bovino noted, “A number of White House proposals appear inflationary, which could keep the Fed in check.” Additionally, Treasury Secretary Scott Bessent has proposed universal tariffs on US imports starting at 2.5%, with Trump reportedly favoring even higher rates.

China’s Economic Slowdown Adds Pressure on AUD

The Australian Dollar remains vulnerable to China’s economic struggles. China’s NBS Manufacturing PMI dropped to 49.1 in January from 50.1, missing expectations, while the Non-Manufacturing PMI slipped to 50.2 from 52.2. As Australia’s largest trading partner, China’s weak data weighs heavily on the AUD.

Despite China’s recent stimulus measures, including a $7.25 billion investment in index products and long-term stock investments, concerns persist. Industrial profits fell 3.3% YoY in 2024, marking a third consecutive year of contraction, driven by weak demand, deflationary pressures, and a prolonged property sector slump.

Technical Outlook: AUD/USD Turns Bearish Below 0.6250

The AUD/USD pair trades near 0.6230 on Wednesday after breaking below the ascending channel on the daily chart, signaling a shift toward a bearish bias. The 14-day Relative Strength Index (RSI) has dropped below 50, reinforcing downside momentum.

A decisive break below key support at the lower boundary of the ascending channel strengthens the bearish outlook, potentially pushing AUD/USD toward 0.6131—its lowest level since April 2020. On the upside, immediate resistance lies at the nine-day Exponential Moving Average (EMA) at 0.6256. A rebound above this level could reintroduce a bullish bias, with the next upside target near 0.6360.

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US Dollar Surges as Trump Revives Tariff Threats

US Dollar Surges as Trump Revives Tariff Threats

The US dollar strengthened significantly against all major currencies after President Donald Trump and his Treasury Secretary reignited concerns about potential tariffs, raising fears that trade policies may return to the forefront. Risk-sensitive currencies, particularly those tied to China, saw sharp declines, while the euro weakened amid speculation that the European Union could soon face tariff pressures. Simultaneously, the Japanese yen took a hit as traders hedged against potential US inflation spikes and rising Treasury yields.

This market turbulence followed a Financial Times report indicating that Scott Bessent, the newly appointed Treasury Department official, supports a phased approach to implementing universal tariffs on US imports. The initial proposal suggests starting with a 2.5% tariff rate. However, President Trump hinted at a much broader scope, potentially targeting a range of imports from steel to semiconductor chips and suggesting higher tariff rates over time.

The administration’s “moderate” proposal involves a gradual increase in tariffs, reaching 20% over eight months in increments of 2.5% per month. This timeline has triggered speculation about more extreme scenarios and raised questions about the global trade concessions needed to halt these measures. Bessent’s approach, which allows businesses time to adjust, could also spark a rush of imports and exports to avoid higher future costs.

Amid these developments, financial markets are grappling with the potential outcomes. Traders are assessing whether the proposed tariff measures are fully priced in and evaluating the likelihood of de-escalation through negotiation.

On the positive side, any concessions or agreements that delay or reduce tariffs could stabilize markets. However, the risks of escalating tariffs, particularly if negotiations fail, remain a significant concern. Higher tariffs could disrupt global trade and have far-reaching implications for currency valuations.

While we initially favored long positions on the dollar, the unfolding tariff narrative has introduced significant uncertainty. Staying prepared for sudden shifts in policy and market dynamics is now crucial as the situation continues to evolve.

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Australian Dollar Weakens Amid Concerns Over Trump’s Trade Policies and Mixed Chinese Data

Australian Dollar Weakens Amid Concerns Over Trump’s Trade Policies and Mixed Chinese Data

The Australian Dollar (AUD) ended its three-day winning streak against the US Dollar (USD) on Monday, with the AUD/USD pair trading flat following the release of mixed Chinese Purchasing Managers’ Index (PMI) data. As a close trade partner, Australia’s economy is heavily influenced by China’s economic performance.

China’s National Bureau of Statistics (NBS) reported that the Manufacturing PMI fell to 49.1 in January, down from 50.1 in December, missing market expectations. Similarly, the Non-Manufacturing PMI dropped to 50.2 from the previous month’s 52.2. These weaker-than-expected figures suggest a slowdown in China’s economic recovery, weighing on the risk-sensitive Australian Dollar.

Despite fresh stimulus measures from China aimed at revitalizing its equity markets, the AUD struggled to gain momentum. The China Securities Regulatory Commission (CSRC) announced a second round of long-term stock investment pilot programs valued at 52 billion Yuan ($7.25 billion). However, these measures have done little to alleviate investor concerns about China’s economic challenges.

Risk Aversion Rises Amid Trump’s Trade Tariff Push

Broader market sentiment took a hit as reports emerged that US President Donald Trump’s advisers are pushing to impose 25% tariffs on Mexico and Canada as early as February 1, bypassing negotiations. According to the Wall Street Journal, Trump’s willingness to move swiftly on tariffs follows similar actions taken against Colombia, raising fears of escalating trade tensions and dampening demand for riskier assets like the Australian Dollar.

Adding to the negative outlook, China’s Industrial Profits declined by 3.3% year-over-year in 2024 to CNY 7,431.05 billion, marking the third consecutive year of contraction. This downturn highlights ongoing economic headwinds, including weak demand, rising deflationary pressures, and a prolonged slump in the property sector.

Technical Analysis: AUD/USD Eyes Key Resistance Amid Bullish Setup

The AUD/USD pair is trading near 0.6290 on Monday, showing signs of upward momentum within an ascending channel on the daily chart, indicating a potential bullish bias. The 14-day Relative Strength Index (RSI) remains slightly above 50, reflecting mild optimism in the market.

On the upside, the pair could retest the psychological resistance level at 0.6300, with the next target near the channel’s upper boundary around 0.6350.

Support levels are found at the nine-day Exponential Moving Average (EMA) of 0.6265, followed by the 14-day EMA at 0.6254. A stronger support lies near the channel’s lower boundary around 0.6240, which could act as a safety net in case of a downside correction.

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NZD/USD Struggles

NZD/USD Struggles Below 0.5700 Amid Trump’s Tariff Plans and Dovish RBNZ Expectations

The NZD/USD pair remains under pressure, trading near 0.5675 during the early Asian session on Friday. The New Zealand Dollar (NZD) faces headwinds due to uncertainty surrounding US President Donald Trump’s proposed tariffs on China and the dovish outlook of the Reserve Bank of New Zealand (RBNZ).

New Zealand’s Consumer Price Index (CPI) for the fourth quarter of 2024 indicated a continued decline in underlying inflation, strengthening expectations of additional rate cuts by the RBNZ. Swap markets now estimate a nearly 90% chance of a 50-basis-point (bps) rate cut on February 19, building on the two cuts already implemented in this cycle. The RBNZ is projected to deliver a total of 100 bps in rate cuts through the remainder of 2025.

Meanwhile, the downside for the pair could be capped by recent comments from Trump. Speaking at the World Economic Forum in Davos on Thursday, Trump called for immediate interest rate cuts by the US Federal Reserve (Fed). “With oil prices going down, I’ll demand that interest rates drop immediately, and likewise, they should be dropping all over the world,” Trump said.

Investors are now closely watching for further details on Trump’s tariff policies, alongside key US economic data releases. The flash US S&P Global Manufacturing and Services PMI for January will be a key focus later on Friday, along with the release of US Existing Home Sales and the Michigan Consumer Sentiment Index.

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US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

The dollar strengthened on Tuesday, driven by rising U.S. yields, putting pressure on low-yielding currencies like China’s yuan and Japan’s yen, which fell to its lowest level since 1986.

Benchmark 10-year Treasury yields increased nearly 14 basis points to 4.479% overnight. Analysts attributed this rise to expectations of Donald Trump winning the U.S. presidency, which could lead to higher tariffs and increased government borrowing.

As the dollar gained, the euro reversed part of a small rally following the first round of France’s election, which aligned with polling predictions. The euro last traded at $1.0735.

The yen dropped to 161.72 per dollar on Monday, its weakest in nearly 38 years, primarily due to the significant interest rate gap between the U.S. and Japan. On Tuesday, the yen traded at 161.55 per dollar in Asia and was under pressure from yen bears wary of potential intervention by Japanese authorities. The yen also hit a lifetime low of 173.67 against the euro on Monday and remained near that level on Tuesday.

In the bond market, the 10-year yield gap between U.S. and Japanese rates stood at 340 basis points, and nearly 440 basis points at the two-year tenor. China’s yuan, which reached a seven-month low against the dollar last week, faced similar pressure, with U.S. 10-year yields more than 220 basis points higher than Chinese government bond yields.

Robust manufacturing data in China and an announcement from the central bank about borrowing bonds, likely to sell them and stabilize falling yields, provided only a brief boost to the currency on Monday. The yuan last traded at 7.3043 in offshore markets on Tuesday, close to its June low.

The New Zealand dollar slipped 0.3% in early trade and was testing support at its 200-day moving average at $0.6075. The British pound remained steady at $1.2641. The Australian dollar hovered within its recent range at $0.6650, with traders focused on central bank minutes to gauge the likelihood of future interest rate hikes. Swaps market pricing suggests a one-in-three chance of a rate hike as soon as next month.

The question remains about the trigger for such a move. ING economist Rob Carnell noted that discussions have taken place, but the specific trigger for a hike is still uncertain. There is a leaning towards forecasting a hike at the August meeting.

Overall, the strengthening dollar and rising U.S. yields continue to exert pressure on low-yielding currencies, with markets closely watching upcoming central bank decisions and geopolitical developments.

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Cryptocurrency Move Back to Support the Pack to Level

If we have a look at the bearish start to the day in the majors and the Bitcoin move back to the level by $18,500 to the support pack. The Bitcoin to USD was seemed down at the level by 1.16% on this Thursday that reversing a 1.25% gain to the Wednesday to the ended the day at the level $18,260.0. At the start of the day, the Bitcoin rose to the early morning intraday to the high at the level before hitting the reverse level.

The major resistance level goes at the level by $18,878 and the Bitcoin fell to the intraday low to the level by $17,935.0.

The close term bullish pattern stayed flawless, disregarding the most recent pullback to sub-$18,000 levels. For the bears, Bitcoin would have to slide through the 62% FIB of $10,095 to shape a close term bearish pattern.

The Bitcoin was somewhere near at the level by 1.03% to $18,072.0. A blended beginning to the day saw Bitcoin ascend to an early morning high of $18,299.0 prior to tumbling to a low of $18,070.0.

Bitcoin left the significant help and obstruction levels untested from the get-go.

Somewhere else, it was a bearish beginning to the day for the majors. The Ripple’s XRP was somewhere around at the level 2.69% to lead the route down.

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Bitcoin Slips Down Below at Level $13,000 Since the Last Rally

Bitcoin Slips Down Below at Level $13,000 Since the Last Rally

The Bitcoin seems to the low at the level of $9,813 in September that managed the bitcoin to reach at the level high at $13,868. The bitcoin price is rejected to the sequential indicators on the 3-day chart.

If we have a look at the current candlestick of the 3-day chart it will seem significantly bearish and the TD sequential indicators are presented a sell signal. The 50- SMA seems down at the level of $10,600 and the 100 SMA at the level of $9,47.

The In/Out of the Money Around Price chart shows the closest and most grounded help region to be somewhere in the range of the level at $12,687 and $13,073 with near 624,000 BTC in volume. A break below this point can drive the cost of Bitcoin down to $11,914.

Despite the fact that bears appear to have assumed responsibility for the present moment, the powerful day by day upswing stays unblemished for Bitcoin. The 50-SMA and the 100-SMA harmonize around $11,200 which will go about as a critical help level. The MACD keeps bullish and the most basic obstruction level is still at $13,863. A breakout over this point can without much of a range drive the lead digital currency towards the untouched high at the level of $20,000.

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Bitcoin Price Clear the Path and Rose to the Level $13,000

Bitcoin Price Clear the Path and Rose to the Level $13,000

Bitcoin Price of the bulls has been the full control of the market to the price at the level of $11,340 to $12,835. The cryptocurrency had the largest to the single day that put the gain. The MACD shows the increasing the bullish momentum to price the growth anticipated.

The position detector is a convenient little apparatus that causes us to imagine solid opposition and backing levels. According to the everyday conjunction detector, there is an absence of solid obstruction levels on the potential gain. This should be empowering news for the buyers as they plan to bring BTC into the $13,000-zone.

Santiment’s holder’s distribution charts show you the number of addresses having a place with a specific symbolic section. According to the chart, the number of addresses holding 10,000-100,000 tokens tumbled from 111 on October 8 to 104 on October 20. This is an intensely bearish sign as it shows that the whales are selling off their property.

Bitcoin buyers have the opportunity to bring the cost into the level at $13,000 and even the $14,000 interference. The everyday intersection finder shows a total absence of solid opposition barriers straightforward.

For the bears, the drawback is covered off at the $12,000-$12,100 uphold divider. A break below that zone will bring the value down to $11,000, which has both the 50-day and 100-day SMA

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Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

The BTC/USD traded at the level of $11,355 after the mild rejection of the top-level $11,720 that losing some of the bullish.

Ethereum USD had a similar fate at the higher risk that seeing the longer pullback than the Bitcoin. If we talk about the XRP/USD is the clear loser after breaking below the 50 SMA and the 100 SMA on the daily chart that currently trading at the level of $0.2482 after yet facing another rejection.

Bitcoin, BTC to USD, fell by 1.02% on Tuesday. Incompletely turning around a 1.55% increase from Monday, Bitcoin finished the day at the level of $11,442.0.

It was a quiet beginning to the day. Bitcoin rose to a late morning intraday high to the level of $11,574.9 before operating reverse.

Missing the mark concerning the primary significant obstruction level at $11,830, Bitcoin tumbled to an early evening intraday low of $11,333.0.

Avoiding the primary significant help level at $11,201 Bitcoin quickly returned to $11,470 levels before moving back.

The close term bullish pattern stayed perfect, upheld by the most recent move back through to $11,000 levels. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to shape a close term bearish pattern.

Bitcoin was up by 0.22% to $11,467.0. A beginning to the day saw Bitcoin tumble to an early morning low of $11,427.0 before ascending to a high at the level of $11,467.0. Bitcoin left the support and Resistance levels untested at an early stage.

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Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Let’s have a look at the cryptocurrency that hovering near to the level at $10,600 mark. The Bitcoin price is consolidating to the 50-12 Hour SMA and the 200-12 Hours SMA. The strong resistance lies at the level 50-12 SMA that repeatedly rejected the price.

This repeated dismissal may drop the value down to the level at  $10,400 uphold level, which is by all accounts the main observable help level on the drawback. If case this level doesn’t hold firm, at that point you can anticipate that the cost should plunge below $10,000. For this situation, one can anticipate that BTC should tumble to the level of $9,700 before it experiences another solid help.

While this may not appear to be a huge number, remember that every one of these addresses holds a great many dollars worth of Bitcoin. The fishes using the stale value activity to merge their positions look good for the general market.

With respect to the top 50 digital forms of money, the greatest failures incorporate Compound, down 12% over the most recent 24 hours, UMA down 12%, OMG Network down at the level 13%, Yearn.finance down 16%, and Aave down 18%. The main bull among the sloths of bears is EOS, which broke out greatly as covered Tuesday.

Ethereum has since September 23, been holding inside a rising equal channel. Recuperation towards $400 flamed out marginally above $360 a week ago. On the drawback, the misfortunes that followed grasped uphold at the level of $335 throughout the end of the week, permitting the shrewd agreement sign to revitalize, making strides above $350.

The Ethereum selling pressure in the market halted the increase at the 50 SMA and 100 SMA. Ether fell below the climbing channel, confirming a bear banner.

The downside of a significant help zone shows that Ethereum is at grave risk of spiraling to the level at $300. Other than the various simple help zones, the most significant one lies somewhere in the range of $298 and $309. Previously, around 879,000 locations purchased almost 2 million ETH.

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Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

The Bitcoin moves back and shows the bearish to the start of the day with the support level at $10,900 to the broader market.

The Bitcoin BTC to USD is rose by the level at 1.33% this Tuesday and reversing the loss at the level of 0.83% on Monday.

It was a mixed start to the day. Bitcoin fell to an early morning low $10,674.2 before finding support.

Steering clear of the major support levels, Bitcoin struck a late morning high at the level of $10,815.4 before operating reverse.

Coming up short of the major resistance levels, Bitcoin slid to a late afternoon intraday low $10,654.0.

Steering clear of the first major support level at $10,585, Bitcoin rallied to a final hour intraday high at the level of $10,889.0.

Falling short of the first major resistance level at $10,915, Bitcoin eased back to end the day at sub-$10,860 levels.

The near-term bullish trend remained whole, in contempt of the latest pullback. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to form a near-term bearish trend. At the hour of composing, Bitcoin was somewhere around 0.28% to the level of $10,826.0. It was a blended beginning to the day. Bitcoin rose to an early morning high $10,866.0 before tumbling to a low $10,826.0.

Bitcoin started the significant help and obstruction levels untested from the get-go. Somewhere else, it was a blended beginning to the day.

Bitcoin Cash ABC (+0.54%), Bitcoin Cash SV to the level (+0.62%), and Crypto.com Coin (+0.65%) evaded the pattern right off the bat.

It was a bearish beginning to the day for the remainder of the majors, in any case. Binance Coin was somewhere around 1.18% to lead the way down.

https://xtreamforex.com/nasdaq-futures-shows-the-short/

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