Daily Market Outlook, May 31, 2022

Daily Market Outlook, May 31, 2022 Overnight Headlines• China's factory activity falls at slower pace as COVID curbs ease• CN May NBS Manufacturing PMI 49.6, 47.4 prev; Composite 48.4, 42.7 prev, NBS non-Mfg PMI 47.8, 41.9 prev• China’s cabinet issues a series of policies to stabilize the economy- cabinet document• China’s cabinet: Will guide actual lending rates lower• EU, resolving a deadlock, in deal to cut most Russia oil imports• Japan's April factory output slumps in worrying sign for economy• JP Apr Industrial O/P Prelim MM SA, -1.3%, -0.2% f’cast, 0.3% prev; YY SA -3.3%, -0.8% prev• JP Apr Retail Sales YY, 2.9%, 2.6% f’cast, 0.9% prev, 0.7% rvsd• JP Apr Unemployment Rate, 2.5%, 2.6% f’cast, 2.6% prev; Jobs/Applicant Ratio 1.23, 1.23 f’cast, 1.22 prev• Biden highlights Fed inflation role ahead of Powell meeting on Tuesday• Fed's Waller backs 50 bps rate hikes until "substantial" reduction in inflation• POLL-U.S. house price inflation to cool as buyers sidelined by higher rate• Australia Q1 GDP up in the air as strong demand sucks in imports• AU Q1 Current Account Balance SA, 7.5 bln, 13.4 bln f’cast, 12.7 bln; Net Exports Contribution, -1.7%, -1.4% f’cast, -0.2% prev• AU Apr Building Approvals, -2.4%, 2.0% f’cast, -18.5% prev• AU Q1 Business Inventories, 3.2%, 1.0% f’cast, 1.1% prev• New Zealand business sentiment worsens as inflation remains intense, -55.6, -42.0 prevThe Day Ahead Asian equity markets are mixed this morning after yesterday’s gains. The easing of lockdown in Shanghai and better-than-expected PMI data underpinned Chinese stocks, but concerns about global central bank policy responses to inflation weighed on the broader market. Yesterday saw German May inflation rise significantly more than forecast to 8.7% on the EU-harmonised measure. Brent crude oil has risen above $124 a barrel, reflecting a partial EU ban on Russian oil imports. US 10-year Treasury yields increased by 10bp to 2.84%. The Lloyds Bank Business Barometer’s overall business confidence in May rose for the first time in three months, since Russia’s invasion of Ukraine, but it weakened in consumer-related sectors. The confidence index gained 5 points to 38%, while hiring intentions picked up and price and wage pressures remained elevated. Despite the confidence uplift, nearly half of businesses expressed concern about inflation or rising costs and about a third were worried about an economic slowdown. Later this morning, the Bank of England will release its latest credit data. Mortgage approvals may have edged lower in April from around 70k in recent months. Secured lending has continued to grow, while there has been a notable pickup in consumer credit, according to the BoE data. The BRC shop price index will be released in the early hours of tomorrow. The focus in the Eurozone will be on the flash estimate for CPI inflation in May. Yesterday’s surge in German inflation points to upside risks for Eurozone headline inflation to rise to a new high of 7.7%. The ECB is still doing QE but, in response to sharply rising inflation, President Lagarde has indicated that asset purchases will end in early July and that interest rate lift-off is likely to occur at its 21 July meeting with a 25bp increase, but more hawkish members will be calling for a larger rise. In the US session, markets will be looking for a fourth fall in five months in the Conference Board consumer confidence index. Expect the headline index to fall to 106.0, while the consensus forecast is for a deeper decline. Although the US labour market remains strong, real incomes are being dented by high inflation. US house price data will also attract attention as rising interest rates curtail activity in the sector.FX Options Expiring 10am New York Cut EUR/USD: 1.0590-00 (8.31BLN), 1.0625-30 (1.57BLN) 1.0645-50 (1.3BLN), 1.0725-30 (490M), 1.0740-50 (650M) 1.0760 (854M), 1.0775-80 (590M), 1.0800 (1.12BLN) 1.0880 (1.12BLN) USD/JPY: 127.75-85 (740M), 129.65 (250M) GBP/USD: 1.2450 (878M), 1.2500 (258M), 1.2520-25 (615M) 1.2545-50 (3.82BLN), 1.2645 (2.29BLN), 1.2680 (835M) 1.2710 (303M) EUR/JPY: 133.50 (659M), 135.24 (240M) EUR/GBP: 0.8475 (270M), 0.8500 (551M), 0.8525 (205M) 0.8565-75 (570M, 0.8650 (244M)) AUD/USD: 0.7000 (615M), 0.7090 (261M), 0.7120-25 (660M) 0.7150 (238M) USD/CAD: 1.2660-65 (286M), 1.2700 (407M), 1.2800 (329M) NZD/USD: 0.6475 (426M), 0.6515 (233M) 0.6600 (797M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.07 Bullish above EUR/USD traded to the exact point to fulfill a tech correction then dropped A 38.2% retracement drop from 2022 high 1.1495 to 2022 low 1.0349 is 1.0787 The target for a minimum technical correction of the down move was achieved May 30 EUR/USD reached 1.0787, then dipped, May 31 range 1.0734-77 EBS EUR/USD VWAP has turned bullishGBPUSD Bias: Bearish below 1.26 Bullish above. GBP/USD has rallied from May's 1.2156 low to 1.2666 in June This is a minor correction of a major decline GBP/USD previously dropped from 2022 high at 1.3749 The drop that followed taper talk last year is 1.4250-1.2156 Targets for resumption that decline: 1.20 Daily VWAP has turned bullishUSDJPY Bias: Bullish above 127 Bearish below USD/JPY up 0.4%, rises to a more than 1-week high; Asia range 127.53-128.35 Boosted by higher UST yields; 10 year yield jumps 11 bps on inflation fears German inflation, oil rally raises specter of aggressive global rate rises Fed's Waller backs 50 bps hikes until "substantial" reduction in inflation EU agrees to cut 90% of Russian oil imports by year-end Resistance 128.30-35, 128.50-60, support 127.75-80, 127.50-55AUDUSD Bias: Bullish above .7200 Bearish below Muted reaction to improved China PMI AUD/USD little changed around 0.7170/75 following improved May China PMI AUD/USD fell as low as 0.7163 before the data as USD broadly moved higher Rise in US yields and month-end USD buying flows weighed on AUD/USD

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-may-31-2022"
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Three funds to cash in on today’s real-estate megatrends

Professional investor Matthew Norris of the VT Gravis UK Listed Property Fund picks three real-estate investment trusts that track long-term themes.

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Transferring out of your final salary pension could cost you dear

Thinking about transferring out of a final salary pension? It could cost you a lot more than you might think, says David Prosser.

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Buy this ports operator and get a free hedge fund

This investment company is valued at less than its Brazilian ports and logistics assets alone

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GBPUSD, H4 | Potential Bullish Continuation

Type: Bullish BounceKey Levels:Resistance: 1.26674Pivot: 1.26036Support: 1.25573Preferred Case:On the H4, with price moving above the ichimoku indicator and the RSI indicator moving in an uptrend momentum, we have a bullish bias that price will rise from our pivot at 1.26036 where the horizontal overlap support is to our 1st resistance at 1.26674 in line with the 61.8% Fibonacci retracement, 100% Fibonacci projection and swing high resistance.Alternative Scenario:Alternatively, price may break pivot structure and head for 1st support at 1.25573 where the horizontal overlap support and 23.6% Fibonacci retracement are.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/gbpusd-h4-or-potential-bullish-continuation30"
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GC1!, H4 | Potential Bullish Continuation

Type: Bullish BounceKey Levels:Resistance: 1867.9Pivot: 1847.2Support: 1833.5Preferred Case:On the H4, with prices moving above the ichimoku cloud and breakout from descending trendline, we have a bullish bias that price will rise from our pivot at 1847.2 where the horizontal pullback support is to our 1st resistance at 1867.9 in line with the horizontal swing high resistance,61.8% Fibonacci retracement and 38.2% Fibonacci retracement.Alternative Scenario:Alternatively, price may break pivot structure and head for 1st support at 1833.5 where the horizontal overlap support and 38.2% fibonacci retracement are.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/gc1-h4-or-potential-bullish-continuation30"
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WTICOUSD, H4 | Potential Bullish Continuation

Type: Bullish BounceKey Levels:Resistance: 130.356Pivot: 118.018 Support: 105.984Preferred Case:On the H4, price is moving above the ichimoku cloud and within the ascending trend channel, which supports our bullish bias that price will rise from the pivot at 118.018 in line with the swing high and with the 78.6% fibonacci projection to the 1st resistance at 130.356 at the swing high . Additionally, presence of bullish presence pressure on the MACD indicator further supports our bullish bias.Alternative Scenario:Alternatively, price may break the support structure at the pivot and drop to the 1st support at 105.984 in line with the swing low and 50% fibonacci retracement.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/wticousd-h4-or-potential-bullish-continuation"
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SILVER FUTURES, H4 | Potential Bullish Continuation

Type: Bullish BounceKey Levels:Resistance: 23.504 Pivot: 21.943Support: 20.413Preferred Case:On the H4, with price moving above the ichimoku cloud, it supports our bullish bias that price will rise form the pivot at 21.943 in line with the overlap support and 23.6% fibonacci retracement to the 1st resistance at 23.504 in with the 50% fibonacci retracement. Additionally, the presence of bullish pressure at current price on the MACD indicator further supports our bullish bias.Alternative Scenario:Alternatively, price may break the support structure at the pivot and drop to the 1st support at 20.413 at the swing low.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/silver-futures-h4-or-potential-bullish-continuation"
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EURUSD, H4 | Potential Bullish Continuation

Type: Bullish BounceKey Levels:Resistance: 1.0857Pivot: 1.07082Support: 1.05373Preferred Case:On the H4, with price moving above the Ichimoku cloud and within the ascending trend channel, we have a bullish bias that price will rise to our 1st overlap resistance at 1.0857 where the 61.8% Fibonacci retracement is from our pivot 1.07082, where price has recently bounced off.Alternative Scenario:Alternatively, price may break pivot structure and head for 1st support at 1.05373 in line with the 23.6% fibonacci retracement.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/eurusd-h4-or-potential-bullish-continuation30"
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Has the chancellor done enough to save the UK from recession?

UK Chancellor Rishi Sunak announced a new package last week to ease the cost of living crisis. John Stepek explains whether the risk of a UK recession still remains.

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Chase Coleman: star hedgie hits the panic button

Chase Coleman got off to a sizzling start in the hedge-fund industry and became one of the biggest winners of the tech bull market. His fall from grace has been brutal.

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How the West can win Putin’s war on food

The West could easily make up the shortfall if it let the free market rip, says Matthew Lynn.

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Weekly Wrap-up with Stuart!

The US advance indicators report revealed a huge April pullback in the goods trade deficit from an all-time wide in March that shattered the prior record in January. We saw a big import drop after an outsized March surge and a big gain for exports, alongside an upside wholesale inventory surprise that more than offset a auto-restrained retail inventory gain. The trade figures faced an energy price pull-back in April after a massive March lift with the war in Ukraine.

Click here to access our Economic Calendar

Stuart Cowell

Head 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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Which companies will lose the most from the energy windfall tax?

The government’s new energy windfall tax has muddied the waters for investors and companies alike. Rupert Hargreaves explains how it might affect some of the sectors’ biggest companies.

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