GBPUSD, H4 | Potential Bullish Continuation

Type: Bullish BounceKey Levels:Resistance: 1.25452Pivot: 1.23939Support: 1.23312Preferred Case:On the H4, with prices moving above the Ichimoku indicator, we have a bullish bias that price will rise from our pivot at 1.23939 where the horizontal overlap support is to our 1st resistance at 1.25452 in line with the 61.8% Fibonacci projection.Alternative Scenario:Alternatively, price may break pivot structure and head for 1st support at 1.23312 where the horizontal swing low support and 78.6% Fibonacci projection is.

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What's behind Sri Lanka’s crippling debt crisis?

Sri Lanka has been hit by a triple whammy of economic shocks and has gone to the IMF for a bailout. It may just be the first domino to fall in a global debt crisis.

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Make uncommon profits from helping cure rare diseases

Treatments for medical conditions with only a small number of sufferers can still be very attractive for pharmaceutical companies and investors because of government incentives, says Dr Mike Tubbs.

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Flight from Risk Gains Momentum, Setting Stage for a Rally in Gold

The flight from risk assets becomes more apparent on growing concerns about global slowdown and even recession, in particular, markets appear to be pricing in that the US economy will not be able to carry out soft landing (lowering inflation while maintaining positive GDP growth) that the Fed pledged to deliver in spite of aggressive tightening cycle, which led to textbook reactions in various asset classes: stock prices fell, bonds, as safe-haven instruments, rose in price, and the dollar fell, as foreign investors apparently reduced their exposure in US papers.The magnitude of collapse in US equity markets on Wednesday (the worst in two years), which saw S&P 500 falling by 4% and Nasdaq erasing 5% from its market cap ensured proliferation of bearish momentum to Thursday trading. SPX futures broke below another key threshold of 3900, European indices suffered losses by an average of 2%. Further events are likely to unfold according to the classic scenario: the Fed will bend at some stage of equity sell-off, soften the rhetoric, which will become the main signal for a reversal. But given that most FOMC officials, including Powell, use the word "committed" in their comments regarding the short-term future of the policy, it may take quite a while for markets to see a welcomed policy shift.The speed and the magnitude of equity markets downside should also imply there are concerns about potential downbeat surprises in corporate earnings and firms’ forward guidance, which, in principle, have already started to materialize. For example, $200bn Cisco released “shocking” earnings report yesterday that fell short of expectations in many respects (including forecast of negative growth in revenue in 4Q against expectations of positive growth), which led to a price drop of 20%:The situation with covid in China remains controversial, while Shanghai gradually lifts lockdowns, an increase in the number of new cases in Beijing and Tianjin indicates a high risk of new social restrictions in these cities. In particular, a lockdown in Tianjin, a major port city in China, is a major risk for the markets, as it could exacerbate supply chain disruptions, which are well-known for their inflation effects in the countries which import China goods. As the positive trend in the reopening of Chinese economy started to show cracks oil prices were hit hard erasing 8.5% since Wednesday afternoon.The decline in oil prices and reduced investment demand for the dollar allowed EURUSD to reclaim 1.05 level. Minutes of the ECB meeting are due today, which may offer additional support to the battered Euro as based on the comments of ECB officials, the commitment to fight inflation is gaining broad support in the Governing Council, which is likely to be reflected in the Minutes today. EU money markets price in 100 bp rate hikes from the ECB this year, respectively, the ECB should soon begin to actively catch up with expectations, otherwise the Euro may quickly cede ground to the dollar as monetary policy gap will set to widen again.The rebound in demand for safe-heavens is not yet so clear, but is already visible in gold, given that we are at an early stage of factoring in recession expectations, the upside potential for gold prices, provided recession expectations take roots, is high. From the viewpoint of technical analysis, the price of gold has been in a well-formed bearish corridor since mid-April, while on May 16 we saw the first signs of a bull market. A breakout of the upper bound of the corridor (~1835-1840 dollars per ounce) could trigger extension of the rally:

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Market Update – May 19 – Fears mount

Stock markets sold off, after a slide on Wall Street, with tech stocks in Hong Kong particularly under pressure. Tencent slumped after reporting no revenue and individual company reports apart markets are concerned by the impact of China’s zero Covid policy, the Ukraine war and fear that inflation will get out of control, despite aggressive central bank action that are adding to the headwinds to the global recovery. Earnings reports from retail giants added to concerns that high inflation would slow global growth, with Target warning of a bigger margin hit due to rising fuel and freight costs as it reported its quarterly profit had halved. One day earlier, Walmart warned of similar margin squeezes. Bonds were supported in Australia and New Zealand, despite a decline in Australia’s jobless number. The 10-year Treasury yield has picked up 1.3 bp though and the Bund yield is up 0.6 bp at 1.01% in early trade. Oil rebounded to $107.90 whilst Gold appreciated to $1814. Australia’s unemployment rate fell to 3.9% – the lowest level in almost 50 years, as employment rose 4k over the month.

• USDIndex recovered to 103.88 
• Equities – Nikkei lost -1.9%, the ASX -1.7%, while Hang Seng and CSI300 are down -2.5% and -0.2% respectively. USA100 plunged cratered -4.73%, with the USA500 -4.03% lower, and the USA30 off -3.73%.
• Yields 10- and 30-year rates plunged over 11 bps intraday to lows of 2.875% and 3.065%, respectively.
• Oil down to 105.15 –Bloomberg cited “people familiar with the data” as saying that API data will report a drop of 5 million barrels in gasoline inventories for last week
• Gold up to $1830.
• FX markets – GBP and EUR falling to parity against the dollar. However, USDJPY weaken to 128.15 after surging to a 20-year peak at 130.85 in late April.

Today – The calendar includes ECB Meeting Accounts, US Jobless Claims, New Zealand trade balance and Japanese inflation.

Biggest FX Mover @ (06:30 GMT) USOIL – Gapped down to 105.14, which filled up immediately. MAs have flattened, MACD signal line & histogram are negatively confirgured, RSI 38.56, H1 ATR 1.07, Daily ATR 5.45.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distribution.

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USDJPY, H4 | Potential Bearish Continuation

Type: Bearish ReversalKey Levels:Resistance: 129.606Pivot: 128.986Support: 128.168Preferred Case:On the H4, with price moving below the Ichimoku cloud, we have a bearish bias that prices will drop to our 1st support at 128.168 where our horizontal swing low support is at from our pivot at 128.986 in line with horizontal overlap resistance and 61.8% Fibonacci retracement.Alternative Scenario:Alternatively, price may break pivot structure and head for the 1st resistance at 129.606 in line with the horizontal swing high resistance and 78.6% Fibonacci projection.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/usdjpy-h4-or-potential-bearish-continuation19"
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Investment Bank Outlook 19-05-2022

Credit AgricoleAsia overnight Investors have refocused their concerns on US households’ ability to weather rate hikes as well as rising prices. While the US retail sales data earlier in the week offered some relief on this front, weak earnings results from major US retailers reversed this relief. All Asian bourses were trading lower and S&P500 futures in the green at the time of writing. Despite soft labour market data, the AUD was the top performer in G10 FX during the Asian session closely followed by other risk[1]correlated currencies such as the NZD, NOK and SEK. The reversal of S&P500 futures led to a squeeze in short risk positions in G10 FX. The JPY was the underperformer during the Asian session.CIBCFX FlowsA comment from Fed Res Harker first echoing the same sentiment as the rest that he expects 50 bps hikes at June, July meetings and sees hikes at measured pace thereafter.The Financial Times published a report that large while Japanese have enjoyed the YEN weakness, Japan Iron and Steel Federation warned that the YEN’s fall presents a risk for Japan’s manufacturers for the first time. Benefits from weak YEN have diminished because it has caused great difficulties especially for smaller businesses who are dependent on imports of fuel and raw materials. US equity futures and Nikkei opened up weak, flight to safety propped up US Treasuries, $YEN has weakened from early move to 128.465. Macro names would probably to fading any potential rally, maybe to 128.50. Usual buyers, the Mrs. Watanabe have been adding to their long positions. I was told that importers bought this morning, pretty decent too from below 128.15, lifted $YEN into and after the fix. There are two large option strikes due Monday, $1.72bn at 128.00 and $1.3bn at 129.00.$CAD, which ended Toronto at 1.2890 slipped to 1.28675 after Reuters News flashed a headline that Chinese authorities have lifted a years-long ban on canola seed imports from two of Canada's biggest grain handlers. Confirmed by Canadian Trade Min Mary Ng and Agriculture Min Marie-Claude Bibeau, China has reinstated access to its market for two Canadian companies that China Customs had suspended from exporting canola seed to China since March 2019.Australia’s April unemployment rate improved to 3.9% as expected, lowest in 48 years but data was mixed. Part timers shifted to full time, total employment gain 4k as supposed to expectations of +30k, participation rate was lowered to 66.3% from 66.4%. Overall, it was not a weak data, AU$ slipped little but not real big deal. Market was positive towards the NZ Budget and lifted AU$ along. Intraday resistance at 0.7050 where average sized option rolls off tomorrow. RBA Kent will be speaking on Monday at the Kanga News DCM Summit; Elis will speak at the UDIA 2022 National Conference. RBA rate decision on June 7.In the cost-of-living Budget 2022, New Zealand Fin Min Grant Robertson tried to balance the immediate political and pay packet pressures created by rising prices. The government expects to spend NZ$128bn this year and will run a deficit NZ$19bn, slightly lower than forecast in December. Government to spend NZ$1bn to ease impact of faster inflation, gives cash payments to 2.1mio people. Market was optimistic over the budget and NZ$ ticked up and broke above 0.6305. Even the rising UST yields failed to deter buyers. Strong intraday resistance near 0.6380.What goes down must come up and the EUR$ climbed back on to 1.05-handle. Initial buying was linked to EUR¥ but later was because of weak US$ and higher AU$, NZ$. Nothing much to talk about in terms of option strikes.

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GBPUSD, H4 | Potential Bearish Continuation

Type: Bearish ReversalKey Levels:Resistance: 1.24944Pivot: 1.23917Support: 1.22658Preferred Case:On the H4, with price reversing off the Ichimoku indicator, we have a bearish bias that prices will drop to our 1st support at 1.22658 where our horizontal pullback support, 100% Fibonacci projection and 61.8% Fibonacci retracement is at from our pivot at 1.23917 in line with the horizontal overlap resistance.Alternative Scenario:Alternatively, price may break pivot structure and head for the 1st resistance at 1.24944 in line with the horizontal swing high resistance

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Daily Market Outlook, May 19, 2022

Daily Market Outlook, May 19, 2022 Overnight Headlines Fed’s Evans Sees Inflation Curbed With Few Hikes Past Neutral US Bidding War Show Sign Of Cooling As Mortgage Rates Hurt China Banks May Lower Lending Rates, Giving Economy Relief China Covid Cases Trend Down But Lockdown Threat Remains Shanghai To Increase Easing In Zero-Covid Areas In Early June Japanese Inc Turns Against Central Bank's Monetary Stimulus Australia’s Unemployment Hits 3.9%, Lowest Level Since 1974 UK Pledge Targeted Tax Cut For Businesses In Autumn Budget Sunak Warns Extra Cost-Of-Living Help Risks Feeding Inflation Global Bonds Switch To Rally Mode, Recession Fears Intensify Asia To Increase US Gasoline Exports As Higher Prices Beckon Melvin Capital Set To Close Funds After Heavy Equities LossesThe Day Ahead Asian equity markets are down this morning, but most are now off their lows for the day. This follows a decline of 4% in the US S&P500 equity index yesterday. US Federal Reserve policymakers continued to warn of the likelihood of further interest rises. The Australian labour market showed the unemployment rate at 3.9% in April, its lowest since August 1974. In New Zealand, the finance minister used the annual budget to promise support to low and middle income families to cope with high inflation. Meanwhile, reports suggest that Chancellor Sunak will offer targeted support to business in the UK’s Autumn budget to boost investment. Today’s CBI industrial trends survey will be watched for signs of the impact of recent international developments such as the Ukrainian crisis and the new lockdown in China on growth and price trends. Last month, orders growth fell to a six month low, while export orders contracted. More positively, selling prices eased from their March peak, although they were still high by normal standards as cost pressures remained very elevated. US April housing starts may show further signs that the ongoing rise in interest rates is already impacting on a sector that is particularly rate sensitive. Sales have fallen in three of the last four months. In contrast, weekly jobless claims data continue to point to a tight labour market consistent with buoyant overall economic activity. The latest reading is expected to continue that trend. The release today of the minutes of the European Central Bank’s May policy meeting may provide further details on the evolution of its plans. There have been growing indications of late that high inflation is prompting the ECB towards an early interest rate hike despite ongoing concerns about economic growth. Last week, ECB President Lagarde suggested that a rate rise might follow hot on the heels of an end to the asset purchase programme early in Q3. That echoed the comments of many of her colleagues, further boosting market expectations that the June policy meeting may pave the way for a rate increase at the following update on 21st July. The post-Omicron rebound in UK economic activity seems to have petered out quickly reflecting various headwinds to growth. Potentially one of the most significant is the impact of high inflation on consumer spending power. Data due early Friday might further insight into its impact. The May GfK consumer confidence measure is expected to see a further fall, suggesting that the real income squeeze is a very real concerns for households. More positively April retail sales (also Fri) may show a modest rise but that follows a sizeable decline in March and may provide only limited assuranceFX Options Expiring 10am New York Cut USDJPY - 131.00 1.02bn (C). 130.00 556m. 128.40/50 1.47bn (778m C). 128.00/10 477m. 127.50/60 746m. 125.90/126.00 547m. EURUSD - 1.0600/10 639m. 1.0540/50 831m. 1.0450/60 528m. 1.0430/40 1.64bn (1.04bn P). 1.0410/20 622m. 1.0390/1.0400 714m. 1.0320 926m. GBPUSD - 1.2300 698m. AUDUSD - 0.7150 482m. NZDUSD - 0.6620 873m. 0.6250 507m. USDCAD - 1.2740/50 843m. 1.2620/30 486m. USDMXN - 20.00 770m. USDCNH - 6.80 700m. 6.72 500m. 6.60 523m. 6.54 1.56bn (C)Technical & Trade ViewsEURUSD Bias: Bearish below 1.07 Bullish above USD was offered in Asia and the mood lifted on positive China reports A Shanghai official outlined moves to reopen Shanghai and return to normal Asian equities came off their lows and E-Minis went from -0.7% to +0.15% The buoyant mood weighed on USD and EUR/USD traded up to 1.0507 Heading into the afternoon it is trading just below 1.0500 EUR/USD VWAP trending lower Resistance 1.0620 and break would warn momentum is slowing Support seen at 1.0470/50 break would encourage a retest of cycle lowsGBPUSD Bias: Bearish below 1.26 Bullish above. A short-term Fibo supporting at 1.2329, off 1.2156-1.2501 Double day highs, 1.2498-1.2501, on top Volatility still clouding near-term direction Underlying bias remains bearish but progress has slowed Risk of a 1.2000 breach but could see 1.2630-40 first Offers at 1.25 daily VWAP remains bearishUSDJPY Bias: Bullish above 127 Bearish below USD/JPY, JPY crosses rally after early weakness, former with US yields Japanese importers on the bid from overnight lows Interest from this bloc still sub-128.00, at tomorrow's Gotobi Tokyo fix Some offers from @128.50, more from ahead of 129.00, includes exporters Some gravitational pull from $1.6 bln 128.40-60 option expiries today US yields bounce too from early lows, Tsy 10s from 2.860% to 2.917% Support at 129, daily VWAP turning bearishAUDUSD Bias: Bullish above .7200 Bearish below AUD/USD firmed early Asia and traded up to 0.6976 with Tokyo in buying mix The market shrugged off a miss in Aus jobs - as unemployment fell t0 3.9% AUD/USD received an added boost when a Shanghai official outlined reopening Equity markets recovered lost ground and E-Minis went from -0.70% to +0.15% AUD/USD soared to 0.7021 as shorts were squeezed on break above 0.7000 Support eyed at .6950 Resistance is at the the daily VWAP .7050

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Tech stock crash – dotcom bust 2.0 is upon us

It’s carnage in the tech sector as the market crashes. But that spells opportunity for canny investors, says Matthew Lynn

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Investor optimism ebbs in Indian stockmarkets

India’s BSE Sensex stockmarket index has fallen by almost 8% so far this year. Interest rates are on the rise, and foreign investors have been selling up.

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Aviva: a share for income investors to tuck away

Insurance giant Aviva is one of the highest yielding stocks in the FTSE 100 – and it’s cheap, too, making it a tempting target for income investors. Rupert Hargreaves delves into the numbers.

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Fed's Powell Warns Fed Will Keep Going With Rate Hikes

Powell Reaffirms Fed HawkishnessFed chairman Powell was back on the wires yesterday. Speaking during a livestreaminterview with Wall Street Journal Powell warned that the Fed stands willing todo whatever necessary to bring inflation down to target. Elaborating further,Powell said: “If that involves moving past broadly understood levels of neutralwe won’t hesitate to do that. We will go until we feel we’re at a place wherewe can say financial conditions are in an appropriate place, we see inflationcoming down. We’ll go to that point. There won’t be any hesitation about that.”.5% June & July Hikes Priced InYesterday’scomments mark the latest in a series of hawkish commentary from the Fedchairman who recently had his second term approved. The market is widelyexpecting the Fed to hike rates by a further .5% in June and July. However, werecently heard Powell opening the door to even larger hikes if necessary.Hard-Landing RisksWhenquestioned over the projected impact on the US economy, Powell warned thatavoiding a hard landing would be extremely difficult. However, the Fed chairsought to reassure markets explaining that because the labour market has beenso strong going into this tightening cycle, there is a decent cushion in placewhich should help offset the harsher effects of the rate hikes. On this, Powellsaid: “You’d still have a strong labor market if unemployment were to move up afew ticks.”"Some Pain" ComingNotably,Powell’s message was a little more balance and optimistic than last time.Looking ahead Powell noted “I would say there are a number of plausible pathsto have a soft as I said softish landing. Our job isn’t to handicap the odds,it’s to try to achieve that.” Ultimately, however, Powell accepted that “therecould be some pain involved to restoring price stability.”Retail Sales Hold in AprilYesterday’sUS retail sales for April were a little better than expected, showing resilienceamong the US consumer base. While headline inflation was a little lower thanexpected at 0.9% vs 1% forecast, core inflation rose to 0.6%, well above the0.4% forecast. Given soaring inflation, these figures might have been a lotworse and, month on month, saw spending outstrip inflation, which rose just0.3% last month.TechnicalViews DXYDXYcontinues to correct lower from the test of the bull channel top. With theindex now back below the 104.03 level the focus now is on whether support at102.99 can hold. Given the strong bearish divergence into recent highs, risks ofa downside break are growing. If seen, focus will be on a test of the 100.93level and channel low next.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/feds-powell-warns-fed-will-keep-going-with-rate-hikes"
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Three fast-growing, undervalued UK mid-cap stocks to buy now

Professional investor Katen Patel of the JPMorgan Mid Cap Investment Trust picks three fast-growing UK mid-cap stocks to buy now.

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