Skip to main content

XtremeMarkets

Xtreme Markets Ltd

Web Trader
Register
Download App
Login
Affiliates
Xtreme Markets Logo

Market News

Japanese Yen Nears Multi-Month

Japanese Yen Recovery from Multi-Month Low Against USD Shows Limited Bullish Commitment

Japanese Yen Recovery from Multi-Month Low Against USD Shows Limited Bullish Commitment

The Japanese Yen (JPY) has gained ground for a second consecutive day, rebounding from a recent multi-month low near 153.20 against the US Dollar (USD) reached earlier this week. This recovery follows verbal interventions by Japanese authorities, which have been instrumental in supporting the Yen. Meanwhile, US Dollar bulls have turned cautious amid a modest dip in US Treasury bond yields, adding a downward bias to the USD/JPY pair.

However, doubts about further interest rate hikes by the Bank of Japan (BoJ) in 2024, compounded by uncertainty around upcoming elections in Japan and a drop in Tokyo’s core inflation rate below the 2% target, may limit further JPY appreciation. Additionally, a generally positive risk sentiment tempers aggressive bets on the Yen as a safe-haven asset. Concurrently, expectations of smaller rate cuts by the Federal Reserve (Fed) may continue to support the USD and curb losses for the USD/JPY pair.

Market Movers: Yen Supported by Intervention, Economic Concerns Persist

Friday’s data from the Statistics Bureau of Japan showed the headline Tokyo Consumer Price Index (CPI) rose by 1.8% year-over-year in October, down from 2.2% in the previous month. Core CPI, excluding fresh food prices, matched market expectations at 1.8% but remained below the BoJ’s 2% target, signaling persistent economic challenges. A private-sector survey released Thursday revealed that Japan’s manufacturing and services sectors contracted in October, pointing to weak economic conditions and raising doubts about the BoJ’s potential for further rate hikes in the near term.

Japan’s Economy Minister Ryosei Akazawa stressed the need for stable currency movements reflecting economic fundamentals, acknowledging the varied effects of a weaker Yen on the economy. Japan’s vice finance minister for international affairs, Atsushi Mimura, reiterated that the government closely monitors FX volatility, aiming to mitigate excess fluctuations.

The US Dollar, meanwhile, paused its recent pullback from a three-month high amid expectations of less aggressive policy easing by the Fed, lending some support to the USD/JPY pair. Traders will be watching Friday’s US macro data, including Durable Goods Orders and the revised Michigan Consumer Sentiment Index, as Japan’s Sunday election approaches.

Technical Outlook: Key Levels for USD/JPY

Technically, a break below the 151.60-151.55 support zone could accelerate the USD/JPY’s slide to the 151.00 level. Further declines may find support near 150.65, a confluence of the 200-day Simple Moving Average (SMA) and the 50% Fibonacci retracement level of the July-September pullback. If this level breaks, it may signal the end of the recent rally, shifting bias toward bearish traders.

Alternatively, a move beyond 152.00 could see USD/JPY testing the 152.60-152.65 region. Continued upward momentum could allow the pair to approach the 153.00 mark and, if surpassed, the 61.8% Fibonacci level at 153.20. Clearing this point would likely open the path toward further gains around the 154.00 level and the 154.30 resistance zone.

Read More
Australian Dollar Drops on Weak GDP Data and RBA Rate Cut Bets

Australian Dollar Holds Steady as US Dollar Softens Ahead of PMI Data

Australian Dollar Holds Steady as US Dollar Softens Ahead of PMI Data

The Australian Dollar (AUD) strengthened against the US Dollar (USD) on Thursday, supported by the release of domestic Purchasing Managers Index (PMI) data. The AUD/USD pair moved higher as the USD experienced a slight dip, driven by a modest pullback in US Treasury yields, with the 2-year and 10-year yields standing at 4.07% and 4.23%, respectively, at the time of writing.

The Australian Dollar’s performance is further bolstered by hawkish sentiment surrounding the Reserve Bank of Australia (RBA), underpinned by strong employment figures. Earlier in the week, RBA Deputy Governor Andrew Hauser highlighted the high labor participation rate, emphasizing that the central bank remains data-driven but not overly fixated on any single data point.

The USD, meanwhile, came under pressure following the release of the Federal Reserve’s (Fed) Beige Book on Wednesday. The report noted that economic activity across the US was “little changed in nearly all Districts,” contrasting with August’s report, which had indicated growth in three Districts and stable activity in nine.

Market participants are now closely watching the release of the S&P Global Purchasing Managers Index (PMI), a key indicator of US private sector activity in both the manufacturing and services sectors, which is scheduled for Thursday.

Market Movers: Australian Dollar Gains on RBA Hawkish Sentiment

According to the CME FedWatch Tool, there is an 88.9% chance of a 25-basis-point rate cut from the Federal Reserve, with no expectation of a larger 50-basis-point reduction.

Australia’s Judo Bank Composite PMI slightly rose to 49.8 in October from 49.6 in September, marking the second consecutive month of contraction in private sector output. The Services PMI edged up to 50.6 from 50.5, marking its ninth consecutive month of expansion, while the Manufacturing PMI slipped to 46.6 from 46.7, continuing its decline.

In a social media post, Federal Reserve Bank of San Francisco President Mary Daly noted that the US economy is in a better position, with inflation significantly lower and the labor market stabilizing. Meanwhile, Minneapolis Fed President Neel Kashkari indicated that the Fed is monitoring the labor market for signs of instability and suggested that any rate cuts will likely be gradual rather than aggressive.

China’s central bank, the People’s Bank of China (PBoC), lowered its 1-year Loan Prime Rate (LPR) to 3.10% from 3.35% and its 5-year LPR to 3.60% from 3.85%, as expected. These cuts aim to stimulate domestic economic activity in China, which could, in turn, boost demand for Australian exports.

National Australia Bank recently revised its projection for the RBA, now expecting the first rate cut in February 2025, earlier than the previously anticipated May timeline. The bank foresees gradual cuts, with rates expected to reach 3.10% by early 2026.

Technical Analysis: Australian Dollar Remains Below 0.6650

The AUD/USD pair is trading around 0.6640 on Thursday, maintaining a bearish outlook in the short term. The pair remains below the nine-day Exponential Moving Average (EMA), and the 14-day Relative Strength Index (RSI) is below 50, reinforcing the negative sentiment.

On the downside, the AUD/USD pair may retest its two-month low of 0.6614, last seen on Wednesday. The next key support lies at the psychological level of 0.6600.

On the upside, resistance is expected at the nine-day EMA at 0.6680, followed by the 50-day EMA at 0.6728. A break above these levels could pave the way for a potential move toward the psychological resistance at 0.6800.

Read More
Japanese Yen Weakens Below 152.00 Against USD, Hits Fresh Three-Month Low

Japanese Yen Weakens Below 152.00 Against USD, Hits Fresh Three-Month Low

Japanese Yen Weakens Below 152.00 Against USD, Hits Fresh Three-Month Low

The Japanese Yen (JPY) extended its losing streak against the US Dollar (USD) for a third consecutive day, pushing the USD/JPY pair above the 152.00 level for the first time since late July during Wednesday’s Asian session. This recent weakness is driven by uncertainty over the Bank of Japan’s (BoJ) ability to raise interest rates further in 2024, a key factor in the Yen’s decline since early October.

The drop below the psychological 150.00 level earlier this month sparked verbal interventions from Japanese officials, though these efforts have done little to bolster the JPY. Even the prevailing risk-off sentiment, fueled by ongoing geopolitical tensions in the Middle East, has not provided the usual support for the safe-haven currency.

Meanwhile, expectations that the Federal Reserve (Fed) will ease its pace of rate cuts have driven US Treasury yields to a three-month high, boosting the USD. This further reinforces the outlook for continued JPY depreciation and more gains for the USD/JPY pair.

Market Movers: JPY Weakness Persists Despite Intervention Warnings

  • The Japanese Yen has fallen to its weakest level in nearly three months as doubts grow over the BoJ’s rate-hike plans.
  • Verbal interventions from Japanese authorities after the JPY fell below the key 150.00 mark have failed to reverse its downward trend.
  • Slower expected rate cuts by the Fed and concerns over increased US fiscal deficits after the upcoming presidential election have triggered a bond market selloff.
  • Yields on the 10-year US Treasury bond have reached levels not seen since July, pushing the US Dollar to its highest point since early August.
  • San Francisco Fed President Mary Daly highlighted that inflation has eased and the labor market is on a more sustainable path, supporting the Fed’s cautious approach.
  • Former President Donald Trump’s rising odds in the US election have led to speculation about inflation-inducing tariffs.
  • Geopolitical risks remain high as markets eye a potential Israeli strike on Iran. Hezbollah fired rockets at two bases near Tel Aviv and a naval base near Haifa on Tuesday.
  • Diplomatic efforts to resolve the year-long Middle East conflict have thus far failed, reducing investor appetite for riskier assets.
  • Traders await the US Existing Home Sales report, while the focus remains on BoJ Governor Kazuo Ueda’s upcoming speech at the IMF-hosted “Governors Talk.”
  • Tokyo consumer inflation data, due Friday, will also be a key factor ahead of Japan’s general election on October 27 and the BoJ meeting on October 31.

Technical Outlook: USD/JPY Breakout Above 152.00 Signals Bullish Momentum

From a technical standpoint, the recent breakout above the 100-day Simple Moving Average (SMA) signals further bullish potential for the USD/JPY pair. Oscillators on the daily chart remain in positive territory, suggesting the possibility of additional gains beyond the 152.00 mark. Follow-through buying could continue to drive the pair upward in line with the ongoing uptrend seen over the past month.

However, the Relative Strength Index (RSI) is nearing overbought levels, prompting caution among aggressive bulls. A period of near-term consolidation or a modest pullback may be prudent before positioning for further appreciation.

On the downside, support is likely to be found near the 151.20-151.15 region, with a break below the 151.00 mark seen as a buying opportunity. The 150.60 level could act as a key support point, below which the pair may accelerate its decline toward the 150.00 psychological level.

Read More
Australian Dollar Supported by Hawkish RBA Outlook

Australian Dollar Supported by Hawkish RBA Outlook, But Faces Pressure from Rising US Treasury Yields

Australian Dollar Supported by Hawkish RBA Outlook, But Faces Pressure from Rising US Treasury Yields

The Australian Dollar (AUD) regained some of its recent losses against the US Dollar (USD) on Tuesday, buoyed by a hawkish stance from the Reserve Bank of Australia (RBA) and strong domestic employment data. However, the AUD/USD pair continues to face resistance due to surging US Treasury yields, which rose by over 2% on Monday amid concerns about inflation and economic strength in the US.

The Aussie Dollar’s resilience is supported by market expectations that the RBA may maintain a tighter monetary policy in the near term, given positive labor market conditions in Australia. Additionally, China’s recent interest rate cuts have provided a boost, as the nation remains Australia’s largest trading partner, and lower borrowing costs in China could stimulate demand for Australian exports.

In contrast, the US Dollar has gained strength following economic data that suggests the Federal Reserve (Fed) is unlikely to implement a large rate cut in November. The likelihood of a modest 25-basis-point cut stands at 89.1%, with no significant expectations for a more aggressive 50-basis-point reduction. Rising US bond yields, driven by stronger retail sales and a drop in initial jobless claims, further support the greenback, creating headwinds for AUD/USD.

Traders are now awaiting the release of Purchasing Managers Index (PMI) reports from both the US and Australia on Thursday, which could shed light on the health of their respective economies and influence future monetary policy decisions.

Market Movers: Australian Dollar Declines Amid Risk Aversion

  • US 2-year and 10-year Treasury yields are at 4.02% and 4.19%, respectively, reflecting rising demand for US debt.
  • Minneapolis Fed President Neel Kashkari noted that the Fed is closely monitoring the labor market, signaling that rate cuts will be gradual and moderate.
  • San Francisco Fed President Mary Daly emphasized the central bank’s data-driven approach to interest rate adjustments.
  • RBA Deputy Governor Andrew Hauser, speaking at the CBA 2024 Global Markets Conference, expressed surprise at Australia’s strong employment growth, highlighting the country’s high labor participation rate.
  • The People’s Bank of China (PBoC) lowered its 1-year Loan Prime Rate (LPR) to 3.10% and the 5-year LPR to 3.60%, which could boost China’s domestic economy and demand for Australian exports.
  • National Australia Bank revised its forecast, expecting the RBA’s first rate cut in February 2025, earlier than previously projected.

Technical Outlook: AUD/USD Faces Bearish Pressure

The AUD/USD pair is trading around 0.6660, close to eight-week lows. On the daily chart, the pair remains below the nine-day Exponential Moving Average (EMA), signaling a bearish short-term trend. The 14-day Relative Strength Index (RSI) is also below 50, further reinforcing this sentiment.

On the downside, the pair may test support at its eight-week low of 0.6622, with the psychological level of 0.6600 providing further support. Resistance is expected at the nine-day EMA around 0.6700, followed by the 50-day EMA at 0.6734. A break above these levels could pave the way for a move toward 0.6800.

Read More
Gold Price Overbought, Bulls Should Exercise Caution Amid Renewed

Gold Price Overbought, Bulls Should Exercise Caution Amid Renewed USD Strength

Gold Price Overbought, Bulls Should Exercise Caution Amid Renewed USD Strength

Gold (XAU/USD) remains near its intraday highs through early European trading, hovering close to its all-time peak of around $2,730. The continued accommodative monetary policy environment and persistent geopolitical tensions, especially from the Middle East conflicts, support the precious metal’s upward momentum. Additionally, political uncertainty in the US has contributed to gold’s rally over the past two weeks.

Despite this, expectations of modest rate cuts by the Federal Reserve (Fed) are helping keep US Treasury yields elevated, which in turn strengthens the US Dollar (USD) and invites some dip-buying interest. The USD Index (DXY) is back near its recent high, the highest since early August. Combined with slightly overbought conditions in the daily gold chart, further gains for the metal could be limited.

Daily Market Movers: Gold Holds Up Despite USD Strength

  • Geopolitical risks: The situation in the Middle East remains volatile, with rising tensions between Israel and Iran adding to concerns. Israel has intensified attacks on Lebanon and Gaza, raising fears of a broader regional conflict, which supports safe-haven demand for gold.
  • US political uncertainty: Polls show a tight race between Donald Trump and Vice President Kamala Harris, adding further risk and boosting demand for gold as a safe-haven asset.
  • Central bank actions: The European Central Bank has recently cut interest rates for the third time this year, while the Fed and the Bank of England are expected to lower borrowing costs further, adding to the support for gold’s bullish trend.

Technical Outlook: Bulls Remain Strong, But Caution Advised

Technically, gold’s sustained strength above $2,700 signals continued bullish momentum. However, with the Relative Strength Index (RSI) surpassing 70, signaling overbought conditions, traders may want to wait for consolidation or a pullback before positioning for further gains. Immediate support lies at the $2,700 level, with potential downside targets around the $2,662-2,660 range and further support near $2,647-2,646. A break below these levels could accelerate selling toward $2,600.

Read More
Japanese Yen Gains Strength Against USD Amid BoJ Policy Uncertainty

Japanese Yen Gains Traction Against USD Amid BoJ Uncertainty

Japanese Yen Gains Traction Against USD Amid BoJ Uncertainty

The Japanese Yen (JPY) is seeing an upward trend during Friday’s Asian session, partially recovering from the previous day’s losses against the US Dollar (USD), reaching its strongest level since early August. Several factors are driving the JPY’s gains, including verbal intervention from Japanese officials and stronger domestic inflation data, which could potentially prompt the Bank of Japan (BoJ) to consider rate hikes.

Contributing to the JPY’s strength is a modest pullback in the USD from its two-and-a-half-month high. However, expectations that the BoJ will refrain from raising interest rates, given signs of easing inflation and the upcoming general election on October 27, may limit the Yen’s potential gains. Additionally, the market is anticipating smaller interest rate cuts by the US Federal Reserve (Fed), which could further cap losses in the USD/JPY pair.

Key Market Movers: Verbal Intervention and Inflation Data Boost Yen

Japan’s Vice Finance Minister for International Affairs, Atsushi Mimura, expressed concern over the rapid and one-sided moves in the Yen, stating that excessive volatility in the currency market is undesirable. Furthermore, a government spokesperson emphasized the importance of stable currency movements that reflect economic fundamentals, signaling that authorities are closely monitoring the situation, particularly speculative moves in the market.

In addition to the intervention, government data showed a deceleration in Japan’s headline Consumer Price Index (CPI) to 2.5% YoY in September, while the Core CPI, excluding fresh food, eased from a 10-month high. These signs of easing inflation, coupled with opposition to rate hikes from Prime Minister Shigeru Ishiba, raise questions about how much room the BoJ has to pursue further tightening.

Meanwhile, the Chinese economy’s 0.9% growth in the third quarter of 2024, coupled with stronger-than-expected Retail Sales and Industrial Production, had little impact on market sentiment.

On the US side, strong economic data continues to support the Greenback. Thursday’s positive US data reaffirmed market bets for a less aggressive Fed rate-cutting cycle, keeping US Treasury yields elevated, which serves as a tailwind for the USD. The USD Index (DXY) remains near its highest level since August, which could limit the USD/JPY pair’s downside potential.

USD/JPY Technical Outlook: Dips Toward 149.20 Present Buying Opportunities

From a technical standpoint, the breakout above the psychological 150.00 level signals renewed bullish momentum. Indicators on the daily chart remain comfortably in positive territory, with no immediate signs of being overbought, suggesting that the USD/JPY pair could continue to climb.

Any pullbacks toward the 149.20 level may be viewed as buying opportunities, with further support at the 149.00 level. Below this, the pair could see a corrective fall toward the 148.60-148.55 region and eventually test the 148.00 mark, with a key support zone around 147.35-147.30. A break below this area could shift the market bias toward bearish traders.

On the upside, a sustained move above the overnight high of 150.30 could push the pair toward the August peak at 150.85-150.90, with potential further gains beyond the 151.00 level, opening the door to a near-term rally toward 152.00.

Read More
Crude Oil Steadies as Markets Monitor Middle East Tensions

Crude Oil Steadies as Markets Monitor Middle East Tensions and China’s Economic Outlook

Crude Oil Steadies as Markets Monitor Middle East Tensions and China’s Economic Outlook

Crude oil prices stabilized on Thursday after a four-day losing streak that resulted in a nearly 7% weekly drop. The market has found a temporary floor, with traders weighing geopolitical risks, particularly doubts over whether Israeli Prime Minister Benjamin Netanyahu will honor his pledge to the U.S. not to strike Iranian oil facilities. Further support for oil came from a surprise drawdown in U.S. stock piles, with the American Petroleum Institute (API) reporting a decrease of 1.58 million barrels for the week ending October 11, compared to expectations of a 2.3 million barrel increase.

Meanwhile, the U.S. Dollar Index (DXY), which tracks the Greenback against six major currencies, is bracing for a volatile session. In addition to a slew of U.S. economic data, markets are watching the European Central Bank (ECB), which is expected to announce a 25 basis point rate cut. With core Eurozone economies facing significant challenges, ECB President Christine Lagarde’s response to prevent further Euro weakness will be closely scrutinized.

As of this writing, West Texas Intermediate (WTI) crude oil is trading at $70.00, while Brent crude is at $74.09.

Key Market Drivers

  1. China’s Economic Stimulus: China has unveiled a plan to inject 4 trillion yuan (CNY) into its housing market, although markets reacted poorly to the lower-than-expected figure, down from an earlier 6 trillion yuan estimate. The announcement has had limited impact on oil prices so far.
  2. Middle East Tensions: Pressure continues to mount on Israeli Prime Minister Netanyahu, with growing calls within his cabinet to disregard U.S. advice and strike Iranian oil facilities. An article from an opposition leader in the Jerusalem Post urging an immediate attack has heightened tensions, according to Reuters.
  3. S. Oil Stockpiles: Later today, the Energy Information Administration (EIA) will release its weekly oil inventory data for the week ending October 11. Analysts expect a modest build of 2.3 million barrels, following a larger-than-anticipated increase of 5.81 million barrels the previous week.

Oil Price Technical Outlook: Struggle at $70.00

Crude oil is battling to hold the $70.00 level, but the path ahead remains uncertain. Geopolitical events could cause prices to spike, but absent any major developments, oil could see further declines. As markets hedge against a potential presidential win by former U.S. President Donald Trump in the November 5 elections, crude oil appears uncertain on how to factor this into pricing.

For crude oil to regain momentum, it must first close above the critical resistance at $71.46, a level that provided support earlier in the week. Beyond this, the next significant challenge lies at $75.28, where the 100-day Simple Moving Average (SMA) aligns with other key technical indicators.

On the downside, $71.46 has now flipped to resistance. If oil falls further, traders will look to the $67.11 level, which provided support in May-June 2023. A break below this could send prices toward the 2024 year-to-date low of $64.75, followed by the 2023 low of $64.38.

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More

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.

Read More

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.

Read More

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.

Read More
Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold (XAU/USD) dipped to a one-and-a-half-week low near $3,284 during the Asian trading session on Wednesday, weighed down by a stronger US Dollar and rising Treasury yields. Investors are increasingly convinced that recent US tariff hikes may fuel inflation, prompting the Federal Reserve to keep interest rates elevated for longer. 

The firmer Greenback, bolstered by expectations of prolonged Fed tightening and a robust June jobs report, has dulled the appeal of non-yielding assets like gold. Benchmark 10-year US bond yields also climbed, adding further pressure on the precious metal. 

Market participants remain cautious amid ongoing concerns about the economic fallout from Donald Trump’s aggressive tariff proposals. On Tuesday, the former US President threatened to impose duties of up to 50% on copper and 200% on foreign pharmaceuticals, unsettling global markets. However, gold’s traditional safe-haven demand has yet to see significant support in response. 

Traders are now eyeing the release of the FOMC meeting minutes later today, hoping for clues on the Fed’s rate path. Although a July rate cut appears off the table, markets are still pricing in up to 50 basis points of easing by year-end, likely beginning in October. 

Technically, a break below the $3,300 level, coupled with resistance at the 100-period SMA on the 4-hour chart, signals further downside. Momentum indicators suggest gold could slide towards the next support at $3,270, with a deeper drop towards $3,248–$3,247 not ruled out. 

On the upside, recovery attempts may face initial resistance near $3,310 and stronger barriers around $3,326 and $3,340. A decisive move above $3,360 could open the door to a short-term rebound toward the $3,400 mark. 

Read More
Gold Price Climbs Steadily

Gold Price Climbs Steadily, Eyes Record High Amid Trade War Concerns

Gold (XAU/USD) extends its intraday rally, reaching the $2,880 region during the Asian session on Monday. The gains come in response to US President Donald Trump’s plan to impose new 25% tariffs on all steel and aluminum imports, reigniting fears of a global trade war and driving demand for the safe-haven precious metal. Additionally, concerns that Trump’s protectionist policies could fuel inflation further bolster gold’s appeal as a hedge against rising prices.

Gold Supported by Trade War Fears, But Fed Policy Remains a Concern

Despite strong upside momentum, gold’s gains may face limitations due to the resilient US Dollar (USD) and expectations that the Federal Reserve (Fed) might delay further rate cuts. The strong US employment data released on Friday, coupled with inflationary concerns, has reinforced speculation that the Fed will maintain a cautious stance.

Overbought conditions on the daily chart could also deter traders from initiating fresh bullish positions, especially in the absence of key US economic data early in the week.

Trump’s Tariff Announcement Sparks Market Uncertainty

On Sunday, Trump reaffirmed plans to impose 25% tariffs on all steel and aluminum imports into the US, adding that his administration would match tariff rates imposed by other countries. These announcements have further fueled uncertainty and strengthened gold’s safe-haven appeal.

Meanwhile, geopolitical tensions remain elevated. Russian Deputy Foreign Minister Galuzin stated there are no satisfactory proposals for Ukraine peace talks, dismissing Western statements as mere rhetoric. US Vice President JD Vance is reportedly heading to Germany this week to outline US policy proposals.

Fed Policymakers Express Caution Amid Economic Uncertainty

The latest US Nonfarm Payrolls (NFP) report showed 143K jobs were added in January, falling short of the 170K estimate but offset by an unexpected dip in the Unemployment Rate to 4.0%. While the report provides mixed signals, it has reinforced the belief that the Fed will remain cautious regarding further monetary easing.

Several Fed officials have weighed in on economic policy:

  • Minneapolis Fed President Neel Kashkari stated he would consider supporting further rate cuts if inflation data remains favorable and the labor market stays strong.
  • Chicago Fed President Austan Goolsbee noted that inconsistent US government policies create economic uncertainty, making it difficult to assess inflation trends.
  • Fed Governor Adriana Kugler acknowledged steady US economic growth but warned that progress toward the 2% inflation target remains uneven and slow.

What’s Next for Gold?

A stronger US Dollar could act as a headwind for gold prices, limiting aggressive bullish momentum. Traders will closely monitor Fed Chair Jerome Powell’s semi-annual congressional testimony and the upcoming US consumer inflation figures for further market direction.

Read More
Gold Price Rally Holds Strong, But Overbought Conditions Raise Caution

Gold Price Bulls Hold Firm, But Overbought Conditions Suggest Caution

Gold (XAU/USD) continues its upward trajectory through the Asian session on Wednesday, reaching a fresh all-time high near $2,858. Concerns about the economic impact of US President Donald Trump’s trade tariffs continue to drive demand for the safe-haven metal. Furthermore, predictions that the Federal Reserve (Fed) would continue its easing cycle, backed by signs of deteriorating momentum in the US labor market, are fuelling demand for the non-yielding yellow metal.

 

Meanwhile, the US dollar (USD) remains under pressure near its weekly low, with rising expectations of further Fed policy easing, offering an extra lift to gold prices. However, Trump’s decision to suspend tariffs on Canada and Mexico has contributed to a risk-on mentality, which may restrict future gains for XAU/USD. Furthermore, gold is entering overbought territory on the daily chart, implying a short-term consolidation or minor retreat before the advance begins. Traders are now waiting for significant U.S. data releases, such as the ADP private-sector employment report and the ISM Services PMI, for new market signals.

Gold Bulls Retain Control Amid US-China Trade Tensions

Despite the positive risk tone, a further escalation in U.S.-China trade tensions continues to lend support to the upward momentum in gold. In response to President Trump’s latest tariffs, China has imposed targeted duties on US imports, and the threat of a trade war between the world’s two biggest economies has seen gold reach an all-time high on Wednesday.

On the macroeconomic front, the Job Openings and Labor Turnover Survey (JOLTS) released Tuesday revealed a decline in U.S. job openings, dropping to 7.6 million in December from a previous 8.09 million. The data signals a cooling labor market, increasing the likelihood of additional Fed rate cuts. This has kept USD bulls on the defensive and further strengthened XAU/USD.

Trump’s decision to postpone the application of a 25% tax on Canadian and Mexican imports by 30 days has revived hopes that a global trade war can be avoided. However, this has done little to undermine the positive enthusiasm toward gold.

Market players will be keenly monitoring Wednesday’s U.S. economic data, such as the ISM Services PMI and the ADP employment report, which may cause short-term changes in gold prices. However, Friday’s highly anticipated Nonfarm Payrolls (NFP) report continues to be the main focus. Furthermore, any fresh information about trade tariffs is probably going to cause financial markets to become more volatile.

Read More
WTI Crude Oil Struggles Near $72.00, 100-Day SMA Holds as Key Support

WTI Crude Oil Struggles Near $72.00, 100-Day SMA Holds as Key Support

West Texas Intermediate (WTI) crude oil prices fell from a one-week high on Tuesday, attracting sellers for the second straight session. The commodity trades at $72.00, barely above last week’s one-month low and close to the important 100-day Simple Moving Average (SMA) support. 

US Tariff Delay Weighs on Oil Prices

US President Donald Trump has announced a one-month suspension on newly imposed tariffs on imports from Canada and Mexico, easing worries about potential supply disruptions from two of the country’s main oil suppliers. This development put downward pressure on crude oil prices. Furthermore, fears of lower gasoline demand—driven by the larger economic impact of Trump’s trade policies—are contributing to gloomy sentiment in the oil market.

OPEC+ Stands Firm on Production Policy

Despite Trump’s calls for higher output to combat rising oil prices, the Organization of Petroleum Exporting Countries and its allies (OPEC+) have chosen to keep current production levels. This decision may give some support for crude oil prices, avoiding further losses in the near term.

Key Technical Levels to Watch

Traders will closely monitor the 100-day SMA, currently positioned near the $71.00 mark, which serves as a crucial support level. A decisive break below this threshold could trigger an extended pullback from the recent multi-month highs. Conversely, a bounce from this level may reinforce buying interest and help WTI recover from its recent slump.

Read More
Gold Holds Below $2,800 Despite Intraday Recovery

Gold Price Trims Intraday Losses but Remains Below $2,800 Amid Stronger USD

The gold price (XAU/USD) recovers some of its losses following the strong Asian session sell-off but remains in negative territory, hovering around $2,785, down about 0.60% for the day. The recent rise in the US Dollar (USD), fueled by President Donald Trump’s decision to impose tariffs on Canada, Mexico, and China, has pushed the greenback closer to a two-year high, weighing on gold and dragging it away from its all-time high of $2,817, hit on Friday.

However, projections that the Federal Reserve (Fed) would lower interest rates twice by the end of 2025, combined with indications about probable economic disruptions from Trump’s trade policies, contribute to gold’s safe-haven appeal. The current risk-off mentality further shields the downside, so bearish traders should exercise caution ahead of this week’s key US macroeconomic data, which begins with today’s ISM Manufacturing PMI release.

Technical Outlook: Gold’s Uptrend Intact Despite Intraday Pullback

From a technical perspective, the intraday decline found support near the $2,772 resistance-turned-support level, which now serves as a pivotal point. A decisive break below this zone could trigger further selling pressure, exposing gold to the next key support levels:

 

  • $2,755 – Initial downside target
  • $2,740 – Intermediate support
  • $2,725-$2,720 – Strong demand zone
  • $2,700 – Psychological level, a break below which could accelerate losses

Conversely, immediate resistance is seen in the $2,790-$2,800 region, followed by the record high of $2,817. Notably, momentum indicators on the daily chart remain comfortably positive, indicating that gold has not yet reached overbought levels. This provides room for additional upward momentum, confirming the broader bullish trend that began with the December swing bottom.

If gold manages to sustain a move above $2,817, it could pave the way for fresh record highs, with bulls eyeing further gains amid ongoing market uncertainty.

Market Drivers to Watch

US Dollar Strength: The impact of Trump’s tariffs on global trade could continue supporting the USD, potentially weighing on gold.

Federal Reserve Policy: Expectations of rate cuts in 2025 remain a crucial factor for gold’s long-term trajectory.

US Economic Data: The upcoming ISM Manufacturing PMI and Nonfarm Payrolls (NFP) report later this week could trigger volatility in gold prices.

Risk Sentiment: Any escalation in geopolitical or economic tensions could further boost gold’s safe-haven demand.

Overall, while gold has retreated from its highs, the larger bullish trend remains intact, with technical signals suggesting further upward movement as long as critical support levels hold.

Read More
WTI Slips to $71.00 Amid Trade Tariff Concerns and Weak China Data

WTI Slips to $71.00 Amid Trade Tariff Concerns and Weak China Data

West Texas Intermediate (WTI) crude oil prices edge lower during Wednesday’s Asian session, erasing part of the previous day’s modest recovery from a nearly three-week low. The commodity trades near $71.00, down over 0.25% for the day, and remains vulnerable to further losses amid prevailing bearish sentiment.

Investor concerns persist over US President Donald Trump’s threat to impose trade tariffs on Canada, China, and Mexico by February 1, which could weigh on global fuel demand. Additionally, weak Chinese economic data adds to downward pressure. Official PMIs released on Monday highlighted continued weakness in the world’s second-largest economy and top crude importer, raising concerns over lower consumption.

Further pressure on oil prices comes from Trump’s energy policies, which include plans to ramp up US energy production and calls for the Organization of Petroleum Exporting Countries (OPEC) to increase output to drive prices lower.

With bearish fundamentals dominating, WTI remains susceptible to further downside risks in the near term.

Read More
WTI Drops Toward

WTI Drops Toward $74.00 as Trump Pressures OPEC to Lower Oil Prices

West Texas Intermediate (WTI), the US crude oil benchmark, trades near $74.10 on Friday, continuing its downward trend after US President Donald Trump urged Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) to reduce oil prices.

Uncertainty surrounding Trump’s proposed tariffs and energy policies adds to the pressure on WTI. Speaking at the World Economic Forum in Davos on Thursday, Trump announced plans to request Saudi Arabia and OPEC to lower oil prices, saying, “I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil.”

Expectations of increased US production under Trump’s administration further weigh on oil prices. Earlier this week, Trump declared a national energy emergency, leveraging his authority to expedite the approval of oil, gas, and electricity projects that would typically require years of permitting.

Meanwhile, US crude inventories declined for the ninth consecutive week. The US Energy Information Administration (EIA) reported a drop of 1.017 million barrels in crude oil stockpiles for the week ending January 17, following a 1.962 million-barrel decline in the prior week. Market expectations had forecast a larger decrease of 2.1 million barrels.

Oil traders will closely monitor developments surrounding Trump’s energy policies and tariff announcements. Additionally, attention will shift to the preliminary US S&P Global Purchasing Managers Index (PMI) for January, set for release later on Friday. A weaker-than-expected reading could pressure the US Dollar (USD), potentially offering some support to the USD-denominated WTI price.

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More
Gold Price Struggles to Gain Momentum as Traders Await New Catalysts

Gold Price Struggles to Gain Momentum as Traders Await New Catalysts

Gold Price Struggles to Gain Momentum as Traders Await New Catalysts

The Gold price (XAU/USD) has rebounded from multi-day lows but remains under the $2,500 mark amid a renewed bid in the U.S. Dollar (USD) on Wednesday. Despite this, ongoing geopolitical risks and the potential for imminent Federal Reserve (Fed) rate cuts could support the yellow metal in the near term.

Later on Wednesday, the JOLTS Job Openings and the Fed Beige Book are scheduled for release. Investors are particularly focused on Friday’s U.S. August Nonfarm Payrolls (NFP) report, which could influence the size and pace of potential rate cuts at the Fed’s September policy meeting. A weaker-than-expected NFP reading might heighten concerns about a U.S. recession, potentially leading to faster Fed rate cuts and providing a boost to gold, as lower interest rates reduce the opportunity cost of holding non-yielding assets like gold.

Daily Digest Market Movers: Gold Price Pressured by Stronger U.S. Dollar

  • China’s Caixin Services PMI fell to 51.6 in August, down from 52.1 in July and missing the market expectation of 52.2 by a significant margin.
  • Daniel Ghali, a commodity strategist at TD Securities, noted, “Speculative positioning in gold seems maxed out for now. The pressure from the stronger dollar reflects our view on positioning.”
  • The U.S. ISM Manufacturing PMI edged up to 47.2 in August from an eight-month low of 46.8 in July, but this was below the market consensus of 47.5.
  • Traders have increased the likelihood of a more aggressive half-point rate cut to 39%, up from 31% before the release of the ISM Manufacturing PMI report, according to CME Group’s FedWatch tool.
  • The U.S. JOLTS Job Openings are anticipated to decline slightly to 8.10 million, down from 8.184 million in June.
  • The U.S. ISM Services PMI is expected to rise marginally to 51.4 in August from 51.1 in July.

Technical Analysis: Gold Price Maintains Positive Long-Term Outlook

Despite trading in negative territory for the day, gold maintains a bullish trend on the daily chart. The price remains above the key 100-day Exponential Moving Average (EMA), supported by a 14-day Relative Strength Index (RSI) that stays above the midline.

The critical resistance for gold lies between $2,530 and $2,540, corresponding to the upper boundary of a five-month-old ascending channel and the all-time high. A sustained move above this level could open the door to the psychological $2,600 mark.

Conversely, immediate support is found at $2,470, the low from August 22. A breach of this level could lead to a decline towards $2,432, the low from August 15, with further losses potentially driving the price down to $2,377, the 100-day EMA.

Read More

Pound Sterling Drops from Recent Highs as Attention Turns to US Core PCE Inflation

Pound Sterling Drops from Recent Highs as Attention Turns to US Core PCE Inflation

The Pound Sterling (GBP) has pulled back from a more-than-two-year high of 1.3266 against the US Dollar (USD) during Wednesday’s London session. The GBP/USD pair has dipped as the US Dollar regains some strength, with investors now focusing on the upcoming US core Personal Consumption Expenditure Price Index (PCE) data for July, which is due on Friday. This data release could be a key catalyst for the pair.

The US Dollar Index (DXY), which measures the Greenback’s performance against six major currencies, has found some buying interest, rebounding after reaching a new year-to-date low of 100.50.

Despite this recent recovery, the short-term outlook for the US Dollar remains bearish, as market participants are increasingly confident that the Federal Reserve (Fed) will reduce interest rates at its September meeting. The main debate among traders is whether the Fed will implement a significant rate cut or opt for a smaller reduction in borrowing costs.

According to the CME FedWatch tool, the 30-day Federal Funds Futures data indicates a 34.5% probability of a 50-basis point rate cut in September, with the remainder favoring a 25-basis point cut.

Regarding core PCE inflation, economists anticipate that the Fed’s preferred inflation measure rose at a year-on-year rate of 2.7% in July, up from 2.6% in June, with the monthly figures showing steady growth of 0.2%. Persistent inflation would likely reduce market expectations for a large Fed rate cut, while further easing in price pressures could increase the likelihood of more aggressive rate cuts.

Market Movers: Pound Sterling Guided by BoE Mann’s Speech

The Pound Sterling is showing mixed performance against its major counterparts during Wednesday’s European trading hours. The currency is expected to trade in a narrow range as investors seek new insights regarding the Bank of England’s (BoE) interest rate trajectory.

The BoE cut interest rates by 25 basis points to 5% in August, marking the end of its two-and-a-half-year-long restrictive monetary policy stance, as officials grew confident that inflation would sustainably return to the bank’s 2% target. Market participants anticipate that the BoE’s pace of rate cuts for the rest of the year will be slower compared to other central banks, given that the UK economy appears resilient, supported by the August flash S&P Global/CIPS PMI data and robust Q2 GDP growth.

For further direction on interest rates, investors are awaiting a speech from BoE policymaker Catherine Mann, scheduled for 12:15 GMT. Mann was among those who voted to keep interest rates steady at 5.25% during the August 1 policy meeting. Her remarks will be closely scrutinized for any indications of the BoE’s future rate cuts, along with perspectives on service inflation and wage pressures.

On the political front, comments from UK Prime Minister Keir Starmer about the upcoming financial budget, expected in October, have also bolstered the appeal of the Pound Sterling. Starmer suggested that the budget would involve “short-term pain for long-term gain,” with plans to increase taxes, particularly for higher-income households.

Technical Analysis: Pound Sterling Holds Key Support at 1.3200

The Pound Sterling has seen a mild correction after reaching a new two-and-a-half-year high of 1.3266 against the US Dollar. The near-term outlook for the GBP/USD pair remains positive, as it maintains the breakout from the Rising Channel chart pattern on the weekly time frame. If bullish momentum resumes, the pair could target the February 4, 2022, high of 1.3640.

The upward-sloping 20-week Exponential Moving Average (EMA), located near 1.3000, indicates a strong bullish trend. The 14-period Relative Strength Index (RSI) remains in the bullish range of 60.00-80.00, suggesting robust upward momentum, although it has reached overbought territory around 70.00, which could prompt a corrective pullback. On the downside, the psychological level of 1.3000 is expected to serve as crucial support for Pound Sterling bulls.

Read More
Rate Cuts Could Facilitate a Soft Landing

Rate Cuts Could Facilitate a Soft Landing: UBS

Rate Cuts Could Facilitate a Soft Landing: UBS

In a note released on Monday, UBS Financial Services reiterated its forecast that the U.S. economy is on track for a soft landing, despite acknowledging significant risks of a potential downturn. Consumer spending will be a critical factor in determining whether the economy can achieve this outcome.

UBS expects the Federal Reserve to begin lowering interest rates soon, potentially as early as its next meeting in September. These rate cuts are seen as a way to support the economy during this period of uncertainty.
The U.S. labor market has undergone substantial changes since the start of the year. UBS highlighted that the unemployment rate has risen quickly, moving from 3.7% in January to 4.3% in July. Historically, such an increase has been linked with economic downturns. However, UBS suggests this situation might be different, pointing out that the labor market remains robust by historical standards, even though it is no longer as overheated as it was two years ago.

Weekly jobless claims, a leading indicator of labor market health, have shown a rising trend. However, UBS advises interpreting this data cautiously, as it is often volatile and difficult to seasonally adjust. Although claims appear to be increasing, they remain low compared to historical norms, indicating that the labor market, while cooling, is not yet showing signs of a significant downturn.

Consumer spending is expected to play a pivotal role in the U.S. economic recovery. UBS notes that excess savings accumulated during the pandemic have largely been exhausted, making continued income growth crucial for sustaining consumer spending. Despite concerns, recent retail sales data for June and July have been stronger than expected, suggesting that the economic recovery is still on track.

However, the outlook is not without uncertainty. The U.S. government recently revised down its estimate of job growth for the 12 months ending in March by 818,000 jobs. Moreover, the latest labor market report showed some weakness in key income determinants such as wages and hours worked. UBS has adjusted its base case to reflect a soft landing but has increased the probability of a hard landing from 20% to 25%.

Inflation remains a central concern for the Federal Reserve and financial markets. UBS points out that inflation trends have shown some positive signs recently. While inflation was relatively high at the start of the year, more recent data has been softer, with the headline inflation rate slowing to 2.9% year-over-year in July—the lowest since early 2021.

The decline in inflation has been driven by falling goods prices and moderating services inflation. However, UBS notes that shelter inflation, a significant component of the Consumer Price Index (CPI), reaccelerated in July, rising by 0.4% month-over-month, compared to 0.2% in June. Shelter inflation is critical as it constitutes the largest portion of the CPI basket. Excluding shelter, inflation was only 1.7% year-over-year in July, suggesting broader inflationary pressures are easing. UBS remains confident that shelter inflation will eventually decline, especially given the modest increases in new rental leases since early 2023.

The Federal Reserve has indicated its readiness to begin cutting interest rates, as reflected in the minutes from the July FOMC meeting and comments from Fed officials. These rate cuts could start at the September 18 meeting, although uncertainty remains regarding their pace and magnitude.

UBS argues that the sharp rise in the unemployment rate, which the Fed had not anticipated, provides a compelling reason for the central bank to act swiftly. With real interest rates significantly above neutral, there is a case for an initial, aggressive rate cut. UBS’s base scenario involves a total of 100 basis points in rate cuts by the end of the year, potentially requiring a 50-basis-point cut at one of the remaining three FOMC meetings.

Given the Fed’s data-dependent approach, UBS cautions that various outcomes are possible. The upcoming September FOMC meeting is highly anticipated, with the Fed expected to use the meeting’s dot plot to signal its interest rate projections for the rest of the year. This will provide investors with a clearer picture of the Fed’s monetary policy direction and its efforts to guide the economy toward a soft landing.

Read More
Japanese Yen Moves Sideways Despite Hawkish BoJ Signals

Japanese Yen Moves Sideways Despite Hawkish BoJ Signals

Japanese Yen Moves Sideways Despite Hawkish BoJ Signals

The Japanese Yen (JPY) traded sideways against the US Dollar (USD) on Thursday, even as a recent Reuters poll, conducted from August 13-19 and published on Wednesday, showed that 31 out of 54 economists expect the Bank of Japan (BoJ) to raise borrowing costs before the end of the year. The median forecast predicts a 25 basis point hike, which would bring the year-end rate to 0.50%.

Despite these hawkish expectations, the USD/JPY pair gained ground as the Yen weakened following the release of a record trade deficit report on Wednesday. Traders are now eagerly awaiting BoJ Governor Kazuo Ueda’s appearance in parliament on Friday, where he is expected to discuss the central bank’s recent decision to raise interest rates.

On Thursday, the US Dollar edged higher, supported by a modest recovery in Treasury yields. However, the Greenback’s gains could be limited as the Federal Reserve is expected to implement up to 100 basis points (bps) in rate cuts throughout 2024. Market analysts remain divided on whether the Fed will opt for a 25 or 50 bps cut at its September meeting.

According to the CME FedWatch Tool, the probability of a 25 basis point Fed rate cut at the September meeting has decreased to 65.5%, down from 71.0% the previous day. Conversely, the likelihood of a 50 basis point rate cut has risen to 34.5% from 29.0%.

Market Movers: Japanese Yen Holds Steady Ahead of BoJ Governor Ueda’s Speech

Traders are exercising caution ahead of Federal Reserve (Fed) Chair Jerome Powell’s keynote address at the Jackson Hole Symposium on Friday. Powell’s remarks could provide crucial insights into the Fed’s potential interest rate cuts in the United States.

The minutes from the Fed’s July policy meeting revealed that most officials anticipated a likely rate cut in September, provided inflation continues to cool.

Japan’s Merchandise Trade Balance showed a deficit of ¥621.84 billion in July, a sharp reversal from the ¥224.0 billion surplus reported in June, and fell short of market expectations of a ¥330.7 billion deficit. Imports surged by 16.6% year-on-year in July, reaching a 19-month high of ¥10,241.01 billion, up from a 3.2% increase in June. Meanwhile, exports grew by 10.3% YoY to a seven-month high of ¥9,619.17 billion, missing market forecasts of 11.4%.

Fed Governor Michelle Bowman expressed caution on Tuesday, highlighting ongoing upside risks to inflation and warning against overreacting to individual data points, which could undermine the progress already made, according to Reuters.

The Bank of Japan (BoJ) had forecasted that strong economic recovery would help inflation sustainably reach its 2% target, justifying further rate hikes following last month’s increase as part of the BoJ’s efforts to unwind years of extensive monetary stimulus, Reuters reported.

On Sunday, Federal Reserve Bank of San Francisco President Mary Daly emphasized the need for a gradual approach to reducing borrowing costs, while Federal Reserve Bank of Chicago President Austan Goolsbee warned against maintaining a restrictive policy longer than necessary, according to the Financial Times and CNBC, respectively.

On Thursday, Kazutaka Maeda, an economist at Meiji Yasuda Research Institute, commented that recent economic reports are broadly positive, supporting the BoJ’s stance and signaling the potential for further rate hikes, though the central bank would remain cautious after the last rate increase caused a sharp spike in the Yen.

Technical Analysis: USD/JPY Holds Above 145.00

USD/JPY is trading around 145.20 on Thursday. A look at the daily chart shows the pair consolidating under a downtrend line, suggesting a bearish bias. The 14-day Relative Strength Index (RSI) is slightly above 30, indicating the potential for a correction.

On the downside, the USD/JPY pair could find support around the psychological level of 144.00. A break below this level could lead the pair toward the seven-month low of 141.69, recorded on August 5, with further declines potentially targeting the next significant support level at 140.25.

On the upside, immediate resistance could be found at the downtrend line near the nine-day Exponential Moving Average (EMA) at 146.45. A break above this level could weaken the bearish outlook, allowing the pair to test the resistance at 154.50, which has transitioned from previous support to current resistance.

Read More
WTI Crude Oil Remains Below $75.50 Amid Chinese Demand Concerns

WTI Crude Oil Remains Below $75.50 Amid Chinese Demand Concerns

WTI Crude Oil Remains Below $75.50 Amid Chinese Demand Concerns

West Texas Intermediate (WTI) crude oil prices are hovering around $75.30 per barrel during the Asian session on Monday, pressured by concerns over weakened demand from China, the world’s top oil importer.

Recent data from China revealed that Industrial Production increased by 5.1% year-on-year in July, slightly below the expected 5.2% and down from the 5.3% growth recorded in June. This marks the third consecutive month of slowing industrial output, fueling worries about reduced demand for crude oil.

However, geopolitical tensions in the Middle East could potentially support oil prices. The situation has been tense following Hamas’s rejection of a ceasefire deal on Sunday, which has raised concerns over the stability of the region. Israeli Prime Minister Benjamin Netanyahu is set to meet with US Secretary of State Antony Blinken on Monday to discuss the ongoing negotiations, with further talks scheduled in Cairo.
The potential downside for oil prices may be limited by rising expectations of a Federal Reserve interest rate cut as early as September. Recent US economic data has shown strong retail sales and easing inflationary pressures, which could lead to lower borrowing costs and potentially boost economic activity in the US.

San Francisco Fed President Mary Daly and Chicago Fed President Austan Goolsbee both emphasized a cautious approach to rate cuts, suggesting that the Fed should avoid keeping restrictive policies in place longer than necessary.

Read More
Japanese Yen Holds Losses

Japanese Yen Holds Losses as US Dollar Stabilizes Ahead of Key Economic Data

Japanese Yen Holds Losses as US Dollar Stabilizes Ahead of Key Economic Data

The Japanese Yen (JPY) continued its decline against the US Dollar (USD) on Tuesday, with safe-haven flows offering some support amid rising geopolitical tensions in the Middle East.

Japan’s parliament is set to hold a special session on August 23 to discuss the Bank of Japan’s (BoJ) recent decision to raise interest rates. This session, organized by the lower house financial affairs committee, is expected to include an appearance by BoJ Governor Kazuo Ueda, as reported by Reuters.

The USD/JPY pair found support as pressure on the US Dollar eased, following a reduction in expectations for a 50 basis point interest rate cut by the US Federal Reserve (Fed) in September. According to the CME FedWatch Tool, the probability of a 50 basis point cut in September has decreased to 50%, down from 85% the previous week. However, markets still fully anticipate at least a 25 basis point cut at the upcoming meeting.

Investors are closely watching the release of US Producer Price Index (PPI) data on Tuesday and Consumer Price Index (CPI) figures on Wednesday for signs that inflation remains under control in the US.

Daily Digest Market Movers: Yen Weakens as Fed Rate Cut Odds Diminish

Federal Reserve Governor Michelle Bowman commented on Sunday that she sees continued upside risks to inflation and strength in the labor market. Bowman suggested that the Fed may not be ready to cut rates at its September meeting, according to Bloomberg.

A Bloomberg report last week indicated that JP Morgan Asset Management (JPAM) believes the BoJ is unlikely to raise interest rates in the near term. JPAM anticipates that the BoJ may only consider further rate hikes if the Fed cuts rates and the US economy stabilizes, with additional tightening possibly occurring in 2025, provided the global economic environment remains stable.

The BoJ’s Summary of Opinions from its July 30-31 Monetary Policy Meeting revealed that several members believe economic activity and prices are evolving as expected, targeting a neutral rate of “at least around 1%” in the medium term.

BoJ Deputy Governor Shinichi Uchida also highlighted that the BoJ’s interest rate strategy could adapt if market volatility alters economic forecasts, risk assessments, or projections. Given recent market volatility, he emphasized the importance of closely monitoring the economic and price impacts of their policies, stating the need to “maintain the current degree of monetary easing for the time being.”

Minutes from the BoJ’s June meeting indicated concerns among some members about rising import prices due to the recent decline in the JPY, which could pose an upside risk to inflation. One member noted that cost-push inflation might exacerbate underlying inflation if it leads to higher inflation expectations and wage growth.

Technical Analysis: USD/JPY Tests 147.50; Next Barrier at Nine-Day EMA

The USD/JPY pair trades around 147.40 on Tuesday, with the daily chart indicating the pair remains below the nine-day Exponential Moving Average (EMA), suggesting a short-term bearish trend. The 14-day Relative Strength Index (RSI) has breached the 30 level, indicating a potential for a corrective move. If the RSI approaches the 50 level, it could signal a possible improvement in the pair’s momentum.

For support, the USD/JPY pair may test the seven-month low at 141.69, recorded on August 5, followed by the next support level at 140.25.

On the upside, the USD/JPY pair could challenge the immediate barrier at the nine-day EMA around 147.72. A breakout above this level could reduce bearish momentum and allow the pair to approach the 5-day EMA at 153.68, followed by resistance at 154.50.

Read More
Australian Dollar Advances as RBA Signals Potential Rate Hike

Australian Dollar Advances as RBA Signals Potential Rate Hike

Australian Dollar Advances as RBA Signals Potential Rate Hike

The Australian Dollar (AUD) rebounded against the US Dollar (USD) on Monday, driven by hawkish sentiment surrounding the Reserve Bank of Australia (RBA). Positive inflation data from China, a key trading partner, also provided support for the Aussie Dollar.

RBA Governor Michele Bullock emphasized the importance of vigilance regarding inflation risks, stating that the central bank is prepared to raise rates again if necessary. This follows the RBA’s decision to keep rates steady at 4.35% for the sixth consecutive meeting.

On the USD front, market expectations for a potential interest rate cut by the Federal Reserve (Fed) in September have put pressure on the USD, potentially providing further support for the AUD/USD pair. Investors will be closely watching US producer inflation data on Tuesday and consumer inflation figures on Wednesday for signs of stable price growth.

Daily Market Movers: Australian Dollar Rises on Hawkish RBA

RBA Deputy Governor Andrew Hauser attributed persistent inflation to weaker supply and a tight labor market, noting significant uncertainty in economic forecasts. However, the AUD’s gains could be limited by safe-haven flows due to rising geopolitical tensions in the Middle East. Reports suggest Iran may be preparing for a significant strike on Israel, adding a layer of risk to global markets.

Federal Reserve Governor Michelle Bowman reiterated on Sunday her concerns about ongoing inflation risks and a strong labor market, indicating the Fed might not be ready to cut rates in September.

In China, the Consumer Price Index (CPI) rose by 0.5% year-on-year in July, surpassing expectations. Westpac updated its RBA forecast, now predicting the first rate cut will occur in February 2025, moving from the previously anticipated November 2024, and raising its terminal rate forecast to 3.35%.

Last week, Treasurer Jim Chalmers challenged the RBA’s view that the Australian economy is too robust, which he believes is contributing to prolonged inflation. RBA Chief Economist Sarah Hunter also noted that the Australian economy is performing better than previously expected.

Technical Analysis: Australian Dollar Nears Key Support Levels

The AUD/USD pair is trading around 0.6590 on Monday, within an ascending channel that suggests a bullish bias. The 14-day Relative Strength Index (RSI) is consolidating below the 50 level, and a move above this threshold could signal strengthening bullish momentum.

Resistance for the AUD/USD pair is likely around the 0.6630 level, with a breakout potentially pushing the pair toward its six-month high of 0.6798. On the downside, immediate support is seen at 0.6575, with a drop below this level possibly reinforcing a bearish bias, potentially driving the pair toward 0.6540 and further to 0.6470 if pressure persists.

Read More
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.

Read More

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.

Read More

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.

Read More

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

Read More

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.

Read More

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.

Read More

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/

Read More

Popular Articles

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

Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

EUR/USD Drops Toward 1.1700 as US Dollar Strengthens

EUR/USD Drops Toward 1.1700 as US Dollar Strengthens; FOMC Minutes in Spotlight

Forex Trading

Unlocking the Power of Forex Trading: Why Xtreme Markets is Your Ultimate Trading Partner

Commodity currencies

What Are Commodity Currencies? How They Impact Your Forex Trades

AI changing Forex trading?

How is AI changing Forex trading?

Categories

,
,
,

Subscribe Now!