Why solar panels could lower the cost of your energy bill

Solar-panel installation firms are reporting a four-fold increase in orders this year compared with 2021. Ruth Jackson-Kirby explains how solar can help keep your energy bill down.

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Why China is still on course to remain an emerging economic powerhouse

Some analysts think China is on a path to economic disaster. They are kidding themselves, says Matthew Lynn. He explains why China is not in any type of serious economic trouble.

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Is the Australian economy weakening?

Tighter monetary policy is weighing on several parts of the Australian economy, but commodities is providing some respite. Alex Rankine reports.

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How to harness the power of best ideas in your portfolio

Fund managers’ top picks beat the market, but the rest of their portfolios often add little value, says Chris Sholto Heaton.

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Events to Look Out for Next Week

The central banks are now pretty much in holiday mode, except RBNZ and FOMC. Yet, the data next week from UK, Canada and US could clarify whether central banks will keep policy on a tightening path through year-end, and possibly beyond or whether tightening forecasts will cut. Across the Eurozone governments are very much preparing for energy shortages over the winter, and on both sides of the channel energy costs are likely to continue to rise in the coming months.The week ahead is expected to be another busy one, as inflation from UK and Canada will dominate along with  Retail Sales readings from the globe.

Have a look at the most important events of the coming days in our usual weekly publication.

Monday – 15 August 2022

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• Retail Sales & Industrial Production (CNY, GMT 02:00) – Chinese July Retail Sales and Industrial Production are expected to show a growth to 5% y/y, and 4.5% y/y respectively.

Tuesday – 16 August 2022

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• Average Earnings (GBP, GMT 06:00) – Average Earnings including bonus for June are expected to increase steady at 6.7% (3Mo/Yr). The ILO unemployment rate is seen unchanged at 3.8% since March .
• German ZEW (EUR, GMT 09:00) – The key topic for the Eurozone’s biggest and most important economy. Data is expected to show August’s ZEW econoomic sentiment is seen contracting further at -56.9 from -53.8.
• Building Permits & Housing Starts (USD, GMT 12:30) – Housing starts are expected to rise 1.3% to a 1.580 mln pace in July from 1.559 mln in June. Permits are expected to tick up to 1.700 mln from 1.696 mln in June. Pending home sales plunged -8.6% in June to a 2-year low, after rising 0.4% in May. The MBA purchase index fell -8.9% in July to a 2-year low, before a likely August drop in the -0.7% area.
• Consumer Price Index and Core (CAD, GMT 12:30) – In July, the BOC surprised with a whopping 100 bp rate hike, bringing the policy rate to 2.50%. It also indicated more increases are needed. The reaction is in response to the run up in CPI to a 7.7% y/y pace in May, the hottest since 1983, as well as the drop in the June unemployment rate to a record low of 4.90%. The BoC noted that inflation has been higher and more persistent than expected and is likely to run in the 8% area over the next few months. 

Wednesday – 17 August 2022

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• Rate Statement & Interest Rate Decision (NZD, GMT 02:00) – The RBNZ is seen boosting rates another 50 bps on the heels of the 50 bp hike in July. The RBNZ had increased rates 50bps in June and another 50bps in May. It will be the third consecutive rate hike while the markets anticipate also a fourth one.
• Consumer Price Index and Core (GBP, GMT 06:00) – UK inflation expected to hit 9.9% highs y/y in July. This will be another fresh 40 year high and another clear warning that the cost of living crisis is getting worse. For the BoE the numbers will add to the arguments in favour of an acceleration in the pace of the tightening cycle. The BoE has done the expected with a 50 basis point hike, the biggest move since 1995, which brought the policy rate to 1.75%. The new projections predict recession later in the year, but keep the focus firmly on inflation, which is now expected to top out slightly over 13%. The updated policy report projects inflation to fall back to just 0.8% in the third quarter of 2025, which suggests that markets have been too aggressively pricing in additional tightening.
• Retail Sales (USD, GMT 12:30) – July Retail sales are anticipated flat with a -0.1% drop for the ex-auto measure, after June gains of 1.0% for both. A July pullback in prices will depress nominal sales. Sales will face a headwind going forward from a likely inability for the savings rate to fall much further, and we expect an uptick to 5.3% after a price-led June sales surge drove the savings rate down to a new 13-year low of 5.1%. The lift from 2020-21 stimulus has faded, as the public rotates toward fears of recession.
• FOMC Minutes (USD, GMT 18:00) – The FOMC Minutes report provides the FOMC Members’ opinions regarding the US economic outlook and any views regarding future rate hikes.

Thursday – 18 August 2022

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• Employment and Unemployment Rate (AUD, GMT 01:30) – The Australian jobs market is expected to show a moderate employment report, with 25k jobs in July and unemployment unchanged at 3.5%.
• Philly Fed Index (USD, GMT 12:30) –The Philly Fed manufacturing index is expected to rise to -6.0 after falling to -12.3 in July, versus a 48-year high of 50.2 in April of 2021. The various producer sentiment measures have moderated through 2022 from remarkably lofty peaks for most measures last November, with readings for some measures in contraction territory, though with most of the component indexes still at respectable levels. Producers are facing big headwinds from rising interest rates and moderating economic growth, but have benefited from higher prices despite rising input costs, and the need to rebuild inventories into 2022 after stimulus-induced 2021 sales surge.
• FOMC Member George Speech (USD, GMT 17:20)

Friday – 19 August 2022

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• RBNZ Statement of Intent (NZD, GMT N/A) – This report includes the RBNZ’s objectives for the next three years and the budget for the first year of that period.
• Retail Sales (GBP, GMT 06:00) – UK core retail sales for July is expected to declined to -6.3% y/y from -5.9% y/y.
• Retail Sales (CAD, GMT 06:00) – Canadian retail sales for May rose to 2.2% m/m and core at 1.9% m/m.

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 distributed without our prior written permission.

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BTCUSD, H4 | Potential Bullish Continuation

Type: Bullish BreakoutKey Levels:Resistance: 27155.57Pivot: 24690.67Support: 22394.6Preferred Case:On the H4, with price moving within a bullish channel as well as above the ichimoku indicator and RSI moving along an ascending trendline, we have a bullish bias that price will rise to our pivot at 24690.67 where the pullback resistance, 50% fibonacci retracement and 61.8% fibonacci projection are. Once there is upside confirmation that price has broken pivot structure, we would expect bullish momentum to carry price to 1st resistance at 27155.57 where the 61.8% fibonacci retracement, -61.8% fibonacci expansion, 161.8% fibonacci extension and 100% fibonacci projection are.Alternative Scenario:Alternatively, price could drop to 1st support at 22394.6 where the pullback support, 61.8% fibonacci retracement and 61.8% fibonacci projection are.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/btcusd-h4-or-potential-bullish-continuation12"
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Daily Market Outlook, August 12, 2022

Daily Market Outlook, August 12, 2022 Overnight Headlines UK Economy Contracts Slightly Less Than Feared At 0.6% Fed’s Daly: Base Case Is 50Bps Hike In September, Open To 75Bps Biden Plots A 2024 Presidential Run — And A Trump Rematch EU Proposes Significant Concession To Iran To Revive Nuclear Deal China To Partially Renew Medium-Term Policy Loans, Keeping Rate Steady Shanghai Finds First Covid Cases In Week; Hainan Stays Elevated RTRS POLL: Japan July Core CPI Seen Rising 2.4%, Near 8-Year-High Japan PM Kishida Pledges New Steps To Deal With Rising Fuel, Food Prices New Zealand’s Manufacturing Activity Expands In July Australian, NZ Dollars Buoyed By Softer Federal Reserve Hike Views Yields Soar In Australia And NZ As World Rethinks Slower Rate Hikes Oil Prices Slip On Cloudy Demand Outlook, But Poised For Weekly Gain German Chancellor Scholz Backs Proposal For New European Gas Pipeline Asia Stocks Mixed, Japan Stocks Outperforming As US Yields Dip SlightlyThe Day Ahead Equities across the Asia Pacific are mostly trading higher with most major indices in the region set to end the week up. Sentiment has been buoyed by prospects of less aggressive interest-rate increases from the US Federal Reserve. However, comments overnight from US Fed member Daly said that further interest rate increases were still warranted, albeit noting that the welcome news from the July US CPI report may mean that a 50bp interest rates increase is more appropriate than another 75bp rise. Just released UK GDP data showed the economy contract by 0.1% in Q2, largely due to a 0.6% m/m decline in June activity on account of the double Jubilee bank holiday. The past few days have seen some welcome news on the US inflation front. Most notably, on Wednesday, the latest US CPI print, saw the headline rate drop from 9.1% in June to 8.5% in July, softer than market expectations of a fall to 8.7%, while the ‘core’ rate confounded expectations of a rise to 6.1% and printed unchanged at 5.9%. Yesterday’s Producer Prices report for July, meanwhile, also printed below expectations with both the headline and ‘core’ rates, pulling back more sharply and pointing to some ‘unanticipated’ easing in pipeline price pressures in the US manufacturing sector. The softening in inflation pressures seen in both reports primarily reflected the recent fall in the oil price, but there were also some signs that an easing in supply bottlenecks may also be pushing down on goods price inflation more generally. However, given indications that domestic pressures are pushing up services inflation the Fed will probably want much more evidence before it changes course on monetary policy. More importantly for the US Fed, will be how these developments are impact upon inflation expectations. Later today, the University of Michigan will be releasing its preliminary estimate for July US consumer sentiment, which is expected to show a modest improvement from 51.5 in July to 52.0 this month on account of the recent fall in gasoline prices. The report will also provide a gauge on US consumers’ expectations for inflation 1yr ahead and 5-10yrs ahead. The reading for the latter fell 0.2% points in July to 2.9% but the distribution remained wide, pointing to ongoing risks that inflation expectations could de-anchor. While the 1yr ahead measure is expected to moderate further, on account of the recent decline in gasoline prices, the greater focus will be on the 5-10yr measure for signs on how longer-term inflation expectations are reacting to recent trends in inflation, although the downside surprise in the July CPI report is likely to have come after the cut-off date for today’s reading. Elsewhere, it is a quiet day for economic data releases with no major reports due in the UK. For the eurozone, the latest industrial production report is due at 10:00 (BST). On balance, already-released regional reports from Spain, Italy, Germany and France have been better than expected and point to upside risks to the market consensus expectation of 0.2% riseFX Options Expiring 10am New York Cut EUR/USD: 1.0050-55 (2.11BLN), 1.0200-05 (1.2BLN) 1.0225-30 (675M), 1.0265 (326M), 1.0300-10 (2.86BLN) 1.0325 (814M), 1.0350 (841M), 1.0400 (410M) USD/JPY: 133.98-00 (1.61BLN), 135.00 (266M), 135.45 (300M) GBP/USD: 1.2100 (462M), 1.2300 (576M) USD/CHF: 0.9400 (325M), 0.9550 (260M), 0.9700 (300M) AUD/USD: 0.6950 (358M), 0.7100 (689M) USD/CAD: 1.2700 (1.45BLN), 1.2795-00 (1.1BLN)), 1.2850 (311M) 1.2975 (425M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.0410 Steady after leading the USD lower on Thursday, closing up 0.25% EUR was stronger across the board, EUR/JPY +0.35%, EUR/GBP +0.4% Little news, so EUR strength likely short covering in thin summer markets 1.0300/05 2.62 BLN. 1.0325 700mln and 841 mln 1.0350, Friday's close strikes Resistance 1.0410, support 1.0290 20 Day VWAP bullish, 5 Day bullishGBPUSD Bias: Bearish below 1.23 Heavy in Asian trade but signals remain constructive -0.2% after closing -0.1%, capped by EUR/GBP demand, cross closed +0.4% BoE - weakening regulators would undermine market reforms Drought could be the next hurdle for the UK economy Offers sited at 1.2280/1.23 bids 1.2060 20 Day VWAP is bullish, 5 Day bullishUSDJPY Bias: Bearish below 136 Touch firmer, as Fed policy expectations lead +0.2% at 133.30 amid a 132.89-133.50 range - USD firmer on Fed comments Fed's Daly, 50pt September hike "makes sense", but open to 75pt Foreign investors net buyers of Japan shares for last week USD may settle in broad 130.00-135.00 range ahead of Jackson Hole Aug 25-27 Bears target a test of 130 Offers seen at 136.20 20 Day VWAP is bearish, 5 Day bullishAUDUSD Bias: Bullish above .7050 Recovers from early dip in quiet Asian session AUD/USD opened +0.34% at 0.7104 after trading as high as 0.7136 It dipped to 0.7090 early Asia when USD firmed and AUD/NZD was sold Buyers emerged and it firmed to 0.7105/10 heading into the afternoon Offers eyed .7270/30, bids .7040’s 20 Day VWAP is bullish, 5 Day bullishBTCUSD Bias: Bearish below 25.3K Bitcoin fails at key chart pivot; bulls may lose confidence BTC turned south late Thurs, flashing warning light to bulls Ended tad lower for the day after rising as much as 4.0% UNable to capture pivotal 25k level If it ends Fri below sub 24k, will exit uptrend channel Fed's Daly says 50bps is her base case for Sept Bulls need a close above 25k to gain significant upside momentum Closing below 21k would be a noteworthy downside development 20 Day VWAP is bullish, 5 Day bullish

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-august-12-2022"
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Market Update – August 12

USDIndex lifted to 105 after dropping to a low of 104.50 after the early data, but is still heading for a weekly loss amid trimmed back expectations for the Fed’s tightening path. Yields down, but the curve inverted further as the short end underperformed, and Stocks rallied (NASDAQ +2.89%, now +20% from June lows). Cooler US CPI was the catalyst and expectations the FED is less likely to have to raise rates by 75 bp in September. Asian markets followed through too, (Hang Seng +2.08%,  Nikkei closed). European FUTS also higher. Oil pushed up to the $92 handle, Gold sank to $1786 and BTC moved higher again to breach $24K area.

Fedspeak – voiced caution – Kashkari now a BIG HAWK talked of being “far, far away from declaring victory over inflation” and wants at least another 140 bp this year and sees rates topping at 4.4% in 2023, Evans (centrist  sees rates at 3.4% by December and Daly “not anywhere near done with inflation battle”. Cleveland Fed – “inflationary pressures remain broad based”.

• USDIndex plunged -1.6% as broad based USD selling took hold. More hawkish Fed comments helped lift the index to 105.20 now. AUD underperformed in Asian session.
• Equities – USA500 closed up 87.77pts (+2.13%) (4210), US500FUTS at 4227 now. DIS Big beat, Disney+ bigger than NETFLIX! & will raise prices from December – Shares up 3.98% on Wednesday & 6.85% after hours. Big tech all closed up 2%+.
• Yields 10-year yield sank but recovered to 2.78% at close. The 2/10yr. yield curve also remained firmly inverted at 43.8 bp.  
• Oil – rallied to test 200-hr MA at $92.00, holds the zone now.  
• Gold – rallied & spiked to $1800 resistance again before declining back under to support at $1788, 20-day MA now $1766.
• Bitcoin has surged to $24.5K now from $22.6k lows yesterday.
• FX Markets – EURUSD breached 1.0350 trades at 1.0300, USDJPY tanked from 135.00 pivot to 132.00 back to 132.70 now and Cable did the same rallying from 1.2080, pivot to 1.2260 resistance & back to 1.2215 now. 

 8.5% y/y.

Today – US Weekly Claims & PPI, IEA OMR, OPEC MOMR, Banxico Policy Announcement.

 

Biggest FX Mover @ (06:30 GMT) NZDCHF (+0.51%). Recovery from spike lower yesterday continues, back to 0.6040 now from 0.5945.  MAs aligning higher,  MACD histogram now positive & signal line neutral, RSI 61.57 & rising, H1 ATR 0.00080, Daily ATR 0.00558.

 

Click here to access our Economic Calendar

Stuart Cowell

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 distributed without our prior written permission.

from HF Analysis /503234/
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Three solar stocks to invest in

A professional investor tells us where he’d put his money. This week: Nicholas Mersch of the HANetfS&P Global Clean Energy Select HANzero UCITS ETF

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Share tips of the week - 12 August

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.

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EURUSD Breaks the Bearish Channel on the CPI Report Signaling about Possible Medium-Term Reversal

Equity markets made another leap upwards amid a buildup of expectations of a slight dovish shift in the Fed policy. This was facilitated by the release of the US July CPI, which showed that inflation in July decelerated faster than expected. Core inflation remained unchanged at 5.9% (despite expectations of acceleration), headline inflation slowed down by 60 bp to 8.5%. The main contribution to the easing in headline inflation was expectedly made by fuel and gasoline prices:The decline in gasoline prices eased inflation pressure in transportation services as well, where prices declined by 0.5% MoM. Some cooling of consumer demand occurred in the market of used cars, where a monthly deflation of 0.4% was observed. Clothing prices inched lower by 0.1%.The dollar lost about 1% yesterday against a basket of major currencies as the CPI report dented prospects of a 75 bp rate hike in September. The odds, according to rate futures, have fallen below 40%, the base case is now a 50 bp rate hike. In the Treasury market, the shift in expectations did not last long, largely thanks to the comments from Fed officials (Evans and Kashkari), who, after the release of the CPI, continued to develop the recent line of rhetoric of the Fed - the chances of a US recession are low, the fight against inflation is not over and policy easing is not expected next year. Yield to maturity on two-year US bonds fell by 20 bp after the release but recovered 15 bp towards the end of the day. Today the short-term bond trades at around 9 bp below the yield, which was before the release of CPI (3.28%).A real shift in market expectations and the Fed policy should probably be expected after two key indicators of the inflation trend - shelter prices and wages - show signs of slowing down. The first one is important because it is the most "sticky" among all inflation components, the second - because it is a leading indicator of consumer demand cooling. As long as the imbalance in the US labor market persists, and it generates wage inflation, the Fed is unlikely to change its rhetoric, given how the central bank damaged its reputation with a belated start of tightening and a huge underestimation of inflation persistence in the first half of 2022.The next major event for those who follow the Fed's policy will be the Jackson Hole Symposium in August 25-27, which is famous for central bank officials sharing their strategic views on how monetary policy should be conducted.On the technical side of the EURUSD chart, as expected, market made a breakout from the bearish channel following the formation of the wedge pattern, and today a test of the key resistance line took place, which until the beginning of July acted as support (1.04). The prospect of a EURUSD movement further up will be determined by a potential breakout of the line and the possibility of fixation above it:

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/eurusd-breaks-the-bearish-channel-on-the-cpi-report-signaling-about-possible-medium-term-reversal"
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ETHUSD, H4 | Potential Bullish Continuation

Type: Bullish BreakoutKey Levels:Resistance: 2022.93Pivot: 1919.44Support: 1785.62Preferred Case:On the H4, with price moving within an ascending channel and above the ichimoku indicator, we have a bullish bias that price will rise to pivot at 1919.44 where the 161.8% fibonacci extension, -27.2% fibonacci expansion and swing high resistance are. Once there is upside confirmation that price has broken pivot structure, we would expect bullish momentum to carry price to 1st resistance at 2022.93 in line with swing high resistance and 100% fibonacci projection.Alternative Scenario:Alternatively, price could drop to 1st support at 1785.62 where the pullback support is.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/ethusd-h4-or-potential-bullish-continuation11"
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Daily Market Outlook, August 11, 2022

Daily Market Outlook, August 11, 2022 Overnight Headlines Dollar Bruised After US Inflation Comes In Below Expectations Nasdaq Rallies More Than 20% From Recent Lows After US Inflation Eases Fed’s Daly: Early To ‘Declare Victory’ On Inflation, But Sees Smaller Sept Hike Fed's Kashkari: More Rate Hikes Ahead, And Possible Recession Fed’s Evans: Fed To Hike To 3.25%-3.5% By Year-End, 4% Next Year US Rethinks Steps On China Tariffs In Wake Of Taiwan Response Pelosi: House Will Pass The Inflation Reduction Act On Friday New Zealand House Prices Fall On Year For First Time Since 2011 Oil Edges Lower As Market Tightness Eases, Pipeline Restarts Asian Shares Join Global Rally On Softer-Than-Expected US InflationThe Day Ahead Asian equity markets are up sharply overnight on the back of yesterday’s rise on Wall Street that followed a lower-than-expected outturn for July US CPI inflation. Comments from two US Federal Reserve policymakers that inflation is still unacceptably high and that interest rates can be expected to rise further appeared to have had little immediate impact. Meanwhile, Bank of England Chief Economist Pill said that their aim was to guide inflation down to an acceptable level while causing the least possible damage to the economy. The rest of today’s economics calendar is light with nothing of note in either the UK or the Eurozone. However, there are a couple of US releases. Producer price data for July are expected to show some further easing in pipeline inflationary pressures following yesterday’s lower-than-expected outturn for CPI inflation. That will probably be primarily because of the recent fall in the oil price but there are also signs that an easing of supply bottlenecks may be pushing down on goods price inflationary more generally. However, given indications that domestic pressures are pushing up services inflation the Fed will probably want much more evidence before it changes course on monetary policy. Meanwhile, weekly jobless claims will provide an update on labour market trends. Claims have nudged up of late but the strong monthly employment report for July suggested that the jobs market nevertheless remains buoyant. The June UK GDP report, due early Friday, may be seen as some as evidence that the economy is already in recession as we expect it to show a monthly fall in output of 0.9%. However, that decline is primarily due to the impact of the Jubilee, which was marked with an extra bank holiday and the moving of the usual late May bank holiday into June. The effective removal of two working days for many industries is likely to have been enough to result in a considerable fall in monthly output. It is also forecast to result in a drop in GDP for Q2 of 0.1%. The Bank of England is anticipating a decline and also expects a corresponding rebound in Q3, which is partly why it is not forecasting a recession to start until Q4. The expenditure breakdown of the quarterly GDP report will also have been distorted by the Jubilee but nevertheless may still provide some useful detail. Retails sales were weak in Q2 but it remains unclear whether that is due to consumers cutting back in response to the cost of living ‘squeeze’ or switching more of their spending towards services. So, the report may provide some clarification on this.FX Options Expiring 10am New York Cut EUR/USD: 1.0095-05 (1.97BLN), 1.0125 (607M), 1.0150 (507M) 1.0200 (700M), 1.0235 (524M), 1.0245-55 (737M), 1.0265 (300M) 1.0275 (518M), 1.0300 (716M), 1.0315 (406M), 1.0350 (251M) 1.0400 (643M) USD/JPY: 130.00 (1.64BLN), 130.40 (281M), 132.00 (530M) 133.00-05 (506M), 133.44-45 (310M), 133.70-75 (375M) 134.00 (422M), 134.25-30 (735M), 134.97-00 (1.15BLN) GBP/USD: 1.2140-50 (538M), 1.2155-65 (703M) 1.2200 (288M). EUR/GBP: 0.8350 (780M), 0.8650 (716M) USD/CHF: 0.9500 (325M). EUR/CHF: 0.9700 (225M) AUD/USD: 0.6975-85 (664M), 0.7000 (1.12BLN) USD/CAD: 1.2800 (275M), 1.2900 (275M), 1.3200 (825M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.0410 EUR/USD supported USD slid in the wake of softer US CPI Break above top of recent range (1.0294) sent EUR/USD to 1.0369 The 50% of 1.0787/0.9952 at 1.0369 validated by subsequent pullback Key will be the shaping of Fed expectations ahead of Sep 21 FOMC After softer US CPI market priced out chance of a 75 BP hike in September Fed officials still vigilant on inflation pressures Resistance 1.0410, support 1.0290 20 Day VWAP bullish, 5 Day bullishGBPUSD Bias: Bearish below 1.23 Steady after jumping 1.2% against the softer USD after lower U.S. CPI BoE's Pill says rate hikes won't hit economy until late 2023 UK housing soft on higher interest rates and cost of living Offers sited at 1.2280/1.23 bids 1.2060 20 Day VWAP is bullish, 5 Day bullishUSDJPY Bias: Bearish below 136 USD/JPY offered after closing 1.6% lower Wed on softer than expected US CPI Declined from day high of 135.30 to 132.03 as aggressive Fed rate bets reset Fed funds futures show 42% chance of 75 bps Sept hike, down from 68% earlier Recovers from low as Fed policymakers say more rate hikes needed USD may settle in broad 130.00-135.00 range ahead of Jackson Hole Aug 25-27 Bears target a test of 130 Offers seen at 136.20 20 Day VWAP is bearish, 5 Day bullishAUDUSD Bias: Bullish above .7050 Relatively hawkish Fed comments after softer US CPI may be resonating Support for the AUD/USD is at former resistance at 0.7045/55 Resistance is at at 0.7152 Risk assets bid in Asia with AXJ index +1.0% and E-minis +0.25% While risk appetite remains buoyant - AUD/USD losses likely to be limited 20 Day VWAP is bullish, 5 Day bullishBTCUSD Bias: Bearish below 25.3K BTC targeting a 25k test Breaking two week range of 23-24k Risk assets rallied on hopes for slower Fed hikes Data corroborates belief that inflation peaking Bulls need a close above 25k to gain significant upside momentum Closing below 21k would be a noteworthy downside development 20 Day VWAP is bullish, 5 Day bullish

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-august-11-2022"
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Market Update – August 11 – USD & Yields tank, Stocks rally as US CPI cools

USDIndex tanked to 104.50 from 106.20, before recovering, Yields & the VIX dropped to 4 mth lows and Stocks rallied (NASDAQ +2.89%, & now +20% from June lows). Cooler US CPI was the catalyst and expectations the FED is less likely to have to raise rates by 75 bp in September. Asian markets followed through too, (Hang Seng +2.08%,  Nikkei closed). European FUTS also higher. Oil pushed up to the $92 handle, Gold sank to $1786 and BTC moved higher again to breach $24K area. 

Fedspeak – voiced caution – Kashkari now a BIG HAWK talked of being “far, far away from declaring victory over inflation” and wants at least another 140 bp this year and sees rates topping at 4.4% in 2023, Evans (centrist  sees rates at 3.4% by December and Daly “not anywhere near done with inflation battle”. Cleveland Fed – “inflationary pressures remain broad based”.

• USDIndex plunged -1.6% as broad based USD selling took hold. More hawkish Fed comments helped lift the index to 105.20 now. AUD underperformed in Asian session.
• Equities – USA500 closed up 87.77pts (+2.13%) (4210), US500FUTS at 4227 now. DIS Big beat, Disney+ bigger than NETFLIX !will raise prices from December – Shares up 3.98% on Wednesday & 6.85% after hours. Big tech all closed up 2%+.
• Yields 10-year yield sank but recovered to 2.78% at close rose. The 2/10yr. yield curve also remained firmly inverted at 43.8 bp.  
• Oil – rallied to test 200-hr MA at $92.00 band holds the zone now.  
• Gold – rallied & spiked to $1800 resistance again before declining back under to support at $1788, 20-day MA now $1766.
• Bitcoin has surged to $24.5K now from $22.6k lows yesterday.
• FX Markets – EURUSD breached 1.0350 trades at 1.0300, USDJPY tanked from 135.00 pivot to 132.00 back to 132.70 now and Cable did the same rallying from 1.2080, pivot to 1.2260 resistance & back to 1.2215 now. 

Overnight – JPY  PPI missed  (8.6% vs 9.4%), China CPI & PPI both weaker too (2.7% vs 2.9% & 4.2% vs 6.1%) respectively. German CPI (Final) in line 0.9% m/m & 8.5% y/y.

Today – US Weekly Claims & PPI, IEA OMR, OPEC MOMR, Banxico Policy Announcement.

Biggest FX Mover @ (06:30 GMT) NZDCHF (+0.51%). Recovery from spike lower yesterday continues, back to 0.6040 now from 0.5945.  MAs aligning higher,  MACD histogram now positive & signal line neutral, RSI 61.57 & rising, H1 ATR 0.00080, Daily ATR 0.00558.

 

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Stuart Cowell

Head Market Analyst

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