How to invest in Latin America’s metal reserves – the key to reaching net zero

Latin America’s base metals are crucial to stabilising global greenhouse-gas emissions, says James McKeigue. Here, he picks the best ways to invest.

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Investment Bank Outlook 18-08-2022

INGThree FX Takeaways From the FOMC MinutesReading through the FOMC minutes last night, we took away three key points for the FX market. The Fed felt that the appreciation of the dollar was helpful in suppressing import prices and contributing to the Fed's objective of bringing inflation back to its 2% target. In other words, the Fed seems to welcome dollar strength and there were no linkages of dollar strength depressing any sectors in the US economy. The Fed noted that the dollar had continued to strengthen in the inter-meeting period, especially against the euro. The Fed blamed the move on wider interest rate differentials. We see these interest rate differentials (two-year swap differentials) widening further into year-end and keeping EUR/USD pinned down near these 1.00/1.02 levels. The Fed acknowledged the risk of tightening more than necessary - a risk that in effect justified slowing the pace of rate hikes and shifting to a more data-dependent approach. Within FX markets, selective high-beta, risk-sensitive currencies may perform a little better on the view that the Fed is shifting away from the period of more forceful adjustments in the policy rates.As James Knightley notes, there are still three big event risks ahead of the 21 September FOMC meeting which will help determine whether the Fed hikes 50bp or 75bp. These are the Fed's Jackson Hole symposium (25-27 August), the August jobs report (2 September) and the August CPI data (13 September).How should FX markets trade beforehand? The surge in gas prices has been dominant in FX markets this week and the theme of energy dependence suggests the dollar remains bid against the euro and yen. The wild card of another renminbi devaluation also hangs as a spectre over most currencies (except the dollar), but many assume the People's Bank of China will not allow the renminbi to substantially depreciate ahead of the all-important National Congress sometime in November. Let's see.The more data-dependent approach from the Fed is a slight positive for the risk environment and favours selective carry. Last week we highlighted that a cross rate like MXN/JPY might perform well (MXN 3-month implied yields are near 10%) and we still like this strategy.The US data calendar is quiet today and DXY can trade near the top of a 106.50-107.00 range.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-18-08-2022"
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Market Update – USD up; European stock market down

USDIndex retests 106.81 after the better than expected Retail sales and 2-listed FOMC minutes did not lean particularly hawkish or dovish. They did not clarify the likely outcome at the September 20-21 policy meeting, leaving the door wide open for either another 75 bp increase of a 50 bp hike.  What is clear is policy is data dependent. US Treasuries Yields pulled back slightly while US Stocks closed weaker. Metals gains kept in check. Concern over China’s property sector has flared up again and the current heatwave has led to power cuts in some regions. Meanwhile Australia’s jobless rate fell to 3.4%, but an unexpected decline in employment should give the Reserve Bank more room to maneuver. Elsewhere RBNZ Governor Orr apologized to lawmakers for the bank’s contribution to high inflation saying “our core inflation is too high and that suggests at some point monetary policy was too loose for a period”.

• USDIndex chopped as the market assessed the inflation, recession, and Fed dynamics. The index was modestly firmer as the FOMC assured it is still on a rate hike path while there are doubts about how aggressive the BoE and ECB will be able to be in the face of a looming recession.
• Equities – USA500 was -0.72% lower (4,262.70). The USA100 slumped -1.25% (13,405), and the USA30 stumbled and posted a -0.50% decline (33,885). Nikkei corrected -0.96%, the ASX -0.2% and Hang Seng and CSI300 are down -0.8% and -0.7% respectively. 
• Yields – 10-year Treasury rate is down -1.1 bp at 2.89%, but rates moved higher in Australia and even more so New Zealand. Japan’s 10-year has lifted 1.1 bp to 6.19%.
• Oil – steady above $85 terittorry after the surprising draw in crude oil inventories. 
• Gold – fell to $1761.85.
• FX Markets – EURUSD dropped to 1.0152, USDJPY lifted at 135.38 and Cable slumped to 1.1995 extending losses post UK CPI at 10.1% y/y. 

Today – US Jobless claims, Philly Fed, Existing Home Sales. FOMC Member George and Kashari Speeches. Earnings: Estee Lauder, Applied Materials, Kohls.

Biggest FX Mover @ (06:30 GMT) NZDUSD (–0.27%) down to 0.6246. Fast MAs aligning lower, RSI 36 & falling, Stochastic also down, but MACD lines flattened below 0. H1 ATR 0.00152, Daily ATR 0.00796.

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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John Deere Share: Price Positive Ahead of Earnings Report

Deere & Company, also known as John Deere, is an American manufacturing company engaged in the production of heavy equipment, especially equipment for plowing, livestock, plantation and agricultural purposes, is scheduled to report its third quarter fiscal results on Friday, August 19. The company is expected to post revenue growth, due to high demand for agricultural equipment and a strong price environment.

Trefis estimates Deere’s total revenue for fiscal 2022 at around $13.0 billion, slightly higher than the consensus forecast of $12.9 billion. The strong rebound in demand for farm equipment over the past few quarters, a trend that is likely to continue over the last quarter, is expected to continue to support the company’s performance. In addition, rising agricultural commodity prices, and the above-average age of agricultural equipment are likely to contribute to the company’s top-line growth.

Deere’s revenue rose 11% y/y to $13.4 billion in the latest report, driven by a 10% increase in farm and lawn equipment sales, while construction and forestry equipment sales rose 9%. Deere’s fiscal third quarter 2022 earnings per share (EPS) is forecast at $6.70, above the consensus estimate of $6.65. Deere’s net profit of $2.1 billion in Q2 reflected a 17% increase from its $1.8 billion profit in the previous year’s quarter. The company’s operating margins remained around 20% for the quarter. Looking at the full 2022 fiscal year, EPS is forecast to be $23.45, compared to the $18.99 seen in the 2021 fiscal year.

Trefis estimates Deere’s valuation to be $410 per share, reflecting a 19% increase from the current market price of $344 representing a forward P/EBITDA multiple of 10x based on Deere’s EBITDA forecast and compared to the last two-year average of 9x. This means, if the company reports upbeat Q3 results and its full fiscal guidance is better than forecast, it is more likely that P/EBITDA will be revised upwards, resulting in higher levels for Deere shares.

In other news, Deere & Company is rumored to have made a minority investment in Hello Tractor, an ag-tech company based in Nairobi, Kenya. Hello Tractor connects tractor owners with smallholders in Africa and Asia through a farm equipment sharing app, which allows farmers to track and manage their fleet, customer orders and access financing options.

Technical Overview

The #JohnDeere price has recovered 50% from its April peak drop of $445.44. The rebound of $283.41 has yet to show any downside ripples and the bullish momentum is still being maintained above the 200-day exponential moving average. The current price position is below the $368.47 resistance. Further rebound will test the 61.8% retracement level around $385.88. And a better report would bring the possibility to test the average monthly high around $400.00 seen from the price peaks formed in May & August 2021, February & May 2022. On the downside, downside ripples are likely to test the EMA 200 days around $350.00 and a disappointing report could lead to liquidation of long positions with a possible test for the monthly average low around $330.00.

Technical indicators are broadly still validating price moves, with the 26-day EMA seen crossing the 52-day EMA and oscillation in the positive area; The RSI is at the level of 71.

Click here to access our Economic Calendar

Ady Phangestu

Market Analyst – HF Educational Office – Indonesia

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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Bitcoin Forecast: Potential Jump Ahead

Bitcoin underwent correction and dropped to the level of 23500. Bitcoin might gain the required support at this level and jump to the level of 25500. So, let’s wait and see what is about to happen next.Gold is testing the downtrend. The price of this asset might potentially grow. Should the asset’s price close with a white candle tomorrow, the asset might head north and face resistance at the level of 1880.The price of the currency pair EUR/USD broke the lower side of the wedge and pulled back to the broken trendline. It is likely to pull from the broken trendline and drop to the level of 1.0000.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/bitcoin-forecast-potential-jump-ahead-18-08-2022"
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The Ethereum (ETH) Merge

The success of Goerli, the third and last test of the Ethereum merge, makes it possible to envisage the arrival of Bellatrix on the mainnet on September 15, then of Paris, which will finalize the process.

This is a major event in its history, the objective being to migrate the blockchain from proof of work to proof of stack. This implementation once completed will pave the way for other steps such as scalability (sharding) which will allow ETH to not only reduce the cost of operations but also to process up to 100,000 transactions per second against only 15 to 20 per second currently.

Vitalik Buterin, the co-founder of Ethereum, said that once the update was complete, the blockchain would only be 55% “complete”.

According to Tim Beiko, Paris is scheduled to trigger once the Terminal Total Difficulty (TTD) reaches 58,750,000,000,000,000,000,000.

Following the success of the various mergers of Ethereum on the testnet, its price rose 100% in one month from its low around $989 to its high at $2015. (see below).

Currently the price of ETH is around $1876 supported by the Kijun span (yellow line) and the Tenkan (green line) however the resistance of the cloud persists.

It will therefore have to be punctured in order to target $2335, otherwise the price could reach the first resistance at the Tenkan level at $1503 then to its lowest around $989. (see below).

 

Click here to access our Economic Calendar

Kader Djellouli

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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Earnings Season: The Estée Lauder Companies

The Estée Lauder Companies (EL.s) founded in 1946, is the leading global beauty industry company with skin care, makeup, fragrance and hair products distributed internationally through strong and profitable digital commerce and retail channels. Estée Lauder has a portfolio of more than 25 brands such as M·A·C Cosmetics, Clinique, and La Mer. It has 60,000 employees with more than 1,600 independent stores in around 150 countries and last year it was one of the main manufacturers of beauty products, ranking 6th out of the main personal care brands with the highest annual growth rate of the main cosmetic companies worldwide in 2021. The company has a capitalization of $98.41B and is ranked #228 on the Fortune 500.

Estée Lauder Companies Inc. is expected to report its earnings results for the fourth quarter of fiscal 2022 and for the full year this Thursday, August 18, before the market opens.

EL EPS Sorpresa vs precio Fuente: https://www.zacks.com/stock/chart/EL/price-eps-surprise?icid=chart-EL-price-eps-surprise

EL.s is down -23.2% YTD, well below the SP500 at -11.5%. However, in the last quarter the company reached +7%, beating the SP500 by +4.8%.

Zacks positions the Estee Lauder Companies Rank #3 (Hold) and in the top 33% (#169/252) of the Cosmetics industry. EPS of $0.33 (-57.69% y/y) with -9.58% ESP is expected for this report, a rather murky figure when compared to most of the previous ones. A profit of $3.44B is expected, which would be a year-on-year contraction of -12.51%. The estimate has had 2 upward revisions and 3 downward revisions in the last 60 days. The company has a P/E ratio of 34.90 and a ratio PEG of 3.35. Last quarter the company reported EPS of $1.9 and revenue of $4.25B.

The Estee Lauder Companies BPA Historial por trimestre Fuente:https://www.nasdaq.com/es/market-activity/stocks/el/earnings

For fiscal year 2022, EPS of $7.14 is expected, which would be a growth of 10.7% y/y, and revenues of $17.622B, which would translate to a growth of 8.7% ($16.22B in 2021) year-on-year, although $20.88B was expected. By 2023, 22.34B is expected.

The largest share of net sales was in Europe, the Middle East and Africa with 42.84% in 2021.consumer spending

Cuota de ventas netas de Estée Lauder por región en todo el mundo 2021 Fuente:https://www.statista.com/statistics/339945/net-sales-share-of-estee-lauder-worldwide-by-region/

Management advised that there could be headwinds thanks to various factors including the pandemic and multiple outbreaks of covid causing lockdowns in Shanghai and other parts of China which wreaked more havoc on the supply chain than there already was, as well as Russia’s invasion of Ukraine that sent world inflation to levels not seen for decades and caused a change in consumer spending and outlook. The average annual expenditure on cosmetics, perfumes and bath products per consumption unit in the United States was $199.17 in 2020. The makeup market has not stopped rising; this year it expects $37.05B and expectations for future years is even higher, according to Statista.

Tamaño del mercado de maquillaje a nivel mundial entre 2020 y 2028 Fuente: https://es.statista.com/estadisticas/599074/tamano-del-mercado-del-maquillaje-de-color-a-nivel-mundial–2021/

In addition, the annual growth of the global cosmetics market has recovered in a surprising way, up 16% from its fall in 2020, far exceeding previous years that had an average of 3.6%.

Crecimiento anual del mercado mundial de cosméticos de 2004 a 2021 Fuente:https://www.statista.com/statistics/297070/growth-rate-of-the-global-cosmetics-market/

Despite the headwinds, the company has made efforts to implement a good e-commerce infrastructure supported by new technologies and digital experiences with constant updates for users, giving online reservations for each appointment in the store, omnichannel programs and high-tech services, which it has benefited from as consumers have shifted to e-commerce rather than physical in recent decades and now even more fueled by the pandemic.

Visitantes diarios de EL.s Fuente:https://www.statscrop.com/www/esteelauder.com

The main website www.esteelauder.com is ranked #82,994 in the world and #13,639 in the United States. Website ad revenue could average $165.54 per day based on traffic averaging 3k visitors/day, a minimum of 800v/day, and peaking as high as $24k on certain days, according to Statscrop. Although the majority of sales were in Europe and Asia, the site’s traffic in the month of July was mainly in the United States with 97.6% of total visits, followed by Uzbekistan with 1%. The website had a growth of +57.18% YoY with 4.03M visits in July against 2.6M last year, according to TipRanks.

Tráfico del sitio web de EL.s Fuente: https://www.tipranks.com/stocks/el/website-traffic

Technical Analysis – The Estée Lauder Companies W1 $276.39

During 2020, the price of The Estée Lauder Companies gave an upward momentum from a low of $135.50 in March to reach its current all-time high of $373.91 in January of this year. From there, the price has had a downward break that left a low of $224.98 in May, coinciding with the SMA of 200 weekly periods and the 61.8% Fibo at $226.57 and lows of 2021, where it rebounded to remain hovering for several months at the psychological level of $250.00 and the 50% Fibo at $254.70.

In recent weeks the price has broken the resistance of the 20 weekly SMA at $258.531 and is on the way to test the 38.2% Fibo at 282.84. Above it is the 100 weekly SMA at $288.862 and the 50 weekly SMA at $295,154 which is close to being crossed, although it could be just a retracement to continue the decline – if not the key psychological level and resistance would be $300 followed by $350 and then its all-time high. Support would be at the 200-period SMA currently at $233.484 in the range of the aforementioned 61.8% Fibo, followed by the $200 psychological level.

Grafica semanal de The Estée Lauder Companies

Aldo Zapien.

Fuentes: 

1. https://www.zacks.com/stock/quote/EL
2. https://www.zacks.com/stock/news/1968059/what-awaits-the-estee-lauder-companies-el-in-q4-earnings

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GBP Rallies As UK Inflation Hits 10.1% - BOE Rate Forecasts Jump

UK Inflation Rises AgainThe latest set of UK inflation makes dizzying reading for UK consumers. Headline CPI hit 10.1% in July, marking an increase on the prior month’s 9.4% level and the highest reading since 1982. Core CPI, which strips out more volatile components such as food and energy, was also seen rising to 6.2% from the prior month’s 5.8%. This latest increase marks the tenth consecutive monthly increase in UK CPI which has seen the headline reading rising from 3.1% in September 2021 to the current 10.1% highs.Transport & Food Costs SoarLooking at the breakdown of the data, the largest upside contributions came from the obvious suspects. Transportation costs were seen rising 14.8% on the month while food and non-alcoholic beverages were seen rising 12.6%. These latest increases mean that the UK is suffering its worst fall in “real pay” on record. The margin between wage growth and inflation is now at -3%, putting even more pressure on UK consumers.BOE Rate Projections JumpComing hot on the heels of the BOE activating its largest rate hike in 27 years last month (1.25% - 1.75%), the market is now widely expecting the BOE to press ahead with further hikes. OIS market pricing has jumped on the back of the data with market pricing now suggesting peak rates of around 3.4% next year, up from less than 3% projected in July.GBP Higher, FTSE SinksGBP has rallied firmly on the back of the data though the reaction has varied across FX pairs. GBPCHF, GBPAUD, GBPNZD and EURGBP seeing the strongest moves. The FTSE has come under pressure on the back of the data as traders eye further, aggressive action from BOE near-term.Inflation to Continue HigherLooking ahead, the inflation outlook for the UK remains worrying. With the ongoing fall-out from the Russia-Ukraine war continuing to drive supply-chain issues, price look set to remain elevated near-term. Energy price increases are expected to continue throughout the year, putting further pressure on UK households. With this in mind, the UK government is widely expected to introduce further measures to help alleviate some of the burden. However, the current leadership race makes it hard to peg down any concrete plans.Technical ViewsGBPNZDThe rally in GBPZND off the 1.8857 level has seen the market trading back up to retest the broken ledge of support at 1.9164. This is now a key resistance level. If price fails here, the focus will return to the longer-term down trend and the prospect of a breakdown below current support. However, a break higher here will put the focus on the bear trend line and a move higher towards 1.9651 in the medium term.

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Investment Bank Outlook 17-08-2022

BNY MellonSluggish demand from corporates and households was the feature of China's macro data in July. While M2 credit growth accelerated 12.0% y/y, the fastest pace since early 2016, similar upward momentum in lending growth was nowhere to be found: aggregate financing ticked lower, to 10.7% y/y from 10.8% y/y in June; and financial institution loan growth slid to 10.96% y/y from 11.24%. The slowing in aggregate financing growth might in part be attributable to the seasonally weak July, as well as to the diminishing of “front-loaded” support; the special government bond issuance program was unusually expedited, with the CNY 3.45trn target for government and local bonds completed ahead of schedule in July.Financial institution loans, in particular medium- to long-term loans, which are typically seen as a proxy of investor confidence, painted a bleak outlook. Household loans dropped to multi-year lows, to 7.7% y/y from 12.8% y/y at the end of 2021. Non-financial enterprise borrowing posted a marked shift in behavior, with acceleration of short-term borrowing rising to 8.1% y/y in July compared to 2.9% y/y at the end of 2021. Medium- to long-term borrowing, by contrast, declined over the same period, with the growth rate down to 11.9% y/y from 14.2% y/y. The overall decline in longer-term borrowing is in our view testament to the overall worsening in macro and credit uncertainties.INGThe dollar goes into today’s release of the 27 July FOMC minutes about 2% off the highs of the year. This particular meeting had triggered a sell-off in the dollar on the view that the Fed might have already taken the policy rate to some kind of neutral level and that future rate hikes would be undertaken on a meeting-by-meeting basis.The question is whether the Fed wants to use these minutes as a communication tool to push back against the view of a 2023 easing cycle. Post-meeting rhetoric from the Fed suggests that this is more likely to be the case – especially since the Fed funds futures price the policy rate being cut from 3.60% to 3.20% in the second half of next year.A further rejection of this market pricing should help the dollar. And bearish flattening of the US Treasury curve could pressure the commodity currencies. Here, currencies like AUD/USD could come under pressure again – hit by the Fed applying the brakes to growth at the same time as Chinese growth prospects are being revised even lower.

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Daily Market Outlook, August 17, 2022

Daily Market Outlook, August 17, 2022 Overnight Headlines Biden Signs Inflation Act, Sets 15% Minimum Corporate Tax Chipmakers Are Flashing More Warnings On The Global Economy Goldman Warns Iran Nuclear Deal Is ‘Unlikely’ After Oil Tumbles FX Activity Surges 8% As War And Inflation Risks Fuel Volatility Cheney, Republican Who Defied Trump, Loses Wyoming Race Biden Admin Weighs EU Plan To Revive The Iran Nuclear Deal BoC Governor: Inflation May Have Peaked But Still Too High UK Pay Settlements Hold At 4%, Highest Since 1992: XpertHR UK Inflation Expected To Rise To Fresh Multi-Decade High Japan August Manufacturers' Mood Rises To 7-Month High Australian Wages Pick Up In Q2, Lags Forecasts And Inflation RBNZ Hikes Another 50 Basis Points; Sees Higher Rate Peak Oil Recovers From Six-Month Lows After US Stockpiles Drop Gold Prices Flat As Investors Await Cues From Fed Minutes Asian Equity Markets Mostly Higher; Nikkei OutperformsThe Day Ahead Asian equity markets are mostly up as the global rally in equities continues. Reports that the Chinese authorities are considering further stimulus measures may have lent support. Oil prices remain under pressure. Brent crude briefly touched below $92bbl, and while it has subsequently bounced, it is still close to a six-month low. In contrast, natural gas prices continue to move higher amid concerns about supplies as autumn approaches. As expected, the New Zealand central bank raised interest rates by 50 basis points and said that rates that are currently 3% could rise to 4%. UK inflation data for July showed annual CPI inflation rose by more-than-expected to 10.1% (from 9.4% in June). The ‘core’ rate also rose by more-than-expected to 6.2% from 5.8%. Looking forward, the recent sharp fall in the oil price should put some downside pressure on inflation. However, for the UK in particular, that will be offset by the ongoing rise in natural gas prices. Consequently, headline inflation is expected to rise significantly higher in October when the next Ofgem price cap comes into effect, with the BoE calculating that it could breach 13%. Today’s Q2 GDP report for the Eurozone is a second reading. It is not expected to be revised from the initial estimate of quarterly growth of 0.7%. However, it will provide further details on the drivers of growth. Despite Q2’s upside surprise, ongoing concerns about the Ukrainian crisis and the impact on spending power from high inflation still point to downside risks for growth in the second half of the year. US retail sales growth has slowed this year and much of the rise that has taken place reflects price rises rather than firmer real terms spending. More positively, sales surprised on the upside in June and a small increase is expected in July, although once again the gain once adjusted for inflation seems set to be relatively modest. The minutes of the US Federal Reserve’s July policy meeting will be released today. These have been partially superseded by subsequent developments and updated comments from Fed policymakers have already made their latest position clear. They remain focused on bringing inflation down to target and think further interest rises will be necessary. However, some of the meeting detail may provide new insights. Fed Chair Powell has talked about wanting to see ‘compelling’ evidence that inflation was heading back to target before considering a policy pivot. So, it will be interesting to see whether there is any more detail on what ‘compelling’ means.FX Options Expiring 10am New York Cut EUR/USD: 1.0075 (297M), 1.0100-10 (1.13BLN) 1.0115-20 (336M), 1.0150 (394M), 1.0175 (367M) 1.0190-00 (727M), 1.0270 (254M) USD/JPY: 133.00 (228M), 133.50 (210M) GBP/USD: 1.2050 (441M). USD/CHF: 0.9380 (315M) AUD/USD: 0.7025-30 (556M), 0.7040 (280M) 0.7065-70 (284M), 0.7165 (254M) USD/CAD: 1.2595 (330M), 1.2855 (515M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.0410 Steady after closing up 0.1%, supported by cross demand, EUR/JPY +0.8% Post Brexit UK friction - dispute resolution over research Liz trust, likely next UK PM behind the move - expect conflict if elected 20 day VWAP bands expand - signals remain modestly negative 1.0115, lower 20 day VWAP and 1.0111 61.8% Jul/Aug rise a base Tuesday Support around 1.0100 likely resilient - potential range base 1.0150 394 mln, 1.0175 360 mln, 1.0190/00 726 mln Wednesday's close strikes 20 Day VWAP bearish, 5 Day bearishGBPUSD Bias: Bearish below 1.23 GBP/USD falls 40 pips from spike high on hot UK CPI data Cable spiked to 1.2143 on hotter than expected UK July CPI data Up 10.1% YY vs 9.8% f/c.... 1.2103 subsequent pullback low 1.2143 was six pips shy of Monday's high (1.2008 was Tuesday's low) Hot CPI data increases probability of another 50 bps BoE hike in September BoE expects CPI to peak at 13.3% in October (2% is BoE's target level) 20 day VWAP bands contract - signals show no significant bias Close below 1.2105 was bearish development Targets 1.2004 August low then 1.1963, 61.8% July-August rise 20 Day VWAP is bearish, 5 Day bearishUSDJPY Bias: Bearish below 136 Trading remains on thin side due to on-going Japan Obon holidays US yields more supportive than not, Treasury 2s @3.266%, 10s @2.820% Japan-US 2-year interest rate differential @335.3 bps, 10s @263.4 bps Japanese economic data more upbeat into August but BoJ to stay on hold Tokyo risk-on, Nikkei +0.9% @29,130, E-Minis @4306, around par Massive expiries Thursday however, 132.00 $1.4 bln, 133.90 $652 mln USD/JPY trades within the usually resilient 132.06-135.17 20 Day VWAP is bullish, 5 Day bullishAUDUSD Bias: Bullish above .7050 Under pressure on dovish tilt in RBA expectations AUD/USD fell to 0.6988 as market pricing in 25 BP RBA hike instead of 50 BP It recovered to 0.7016 when the RBNZ delivered a "hawkish" 50 BP hike AUD/NZD selling limited gains and AUD/USD slipped back to 0.6980’s Resistance is at Tuesday's 0.7040 high with sellers around 0.7050 AUD/USD vulnerable if Fed minutes lean to the hawkish side of expectations Offers eyed .7270/30, bids .6950’s 20 Day VWAP is bullish, 5 Day bearishBTCUSD Bias: Bearish below 25.3K BTC washed up after failing to cross 25k again Closing above 24,665 needed to fuel rally Will exit VWAP uptrend channel if below 24,145 FED issued further guidance for banks considering activities involving cryptocurrencies FED told firms they must notify them before and whatever they do is legally permitted 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/neutral, 5 Day bearish

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US30, H4 | Potential Bullish Continuation

Type: Bullish BounceKey Levels:Resistance: 35508.28Pivot: 34117.23Support: 33492.68Preferred Case:On the H4, with price moving above the ichimoku indicator and along an ascending trendline, we have a bullish bias that price will rise from our pivot at 34117.23 where the pullback support is to the 1st resistance at 35508.28 where the swing high resistance, 161.8% fibonacci extension and -61.8% fibonacci expansion are.Alternative Scenario:Alternatively, price could break pivot structure and drop to 1st support at 33492.68 where the pullback

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Market Update – Stocks lift, USD slips, RBNZ in line – All eyes on FOMC Minutes

USDIndex slipped from August highs at 106.80 to support at 106.20, Yields rallied and then slid into close, the yield curve still 44 bp inverted. Stocks moved higher after better than expected results from WMT (+5.11%) and HD (+4.06%) lifted sentiment. The DOW gained +0.71% and the  S&P500  closed over 4300 for the first time since April. Asian markets followed through too, (Hang Seng +0.84%, Nikkei +1.16%) on mixed data. Oil pushed to 6-mth low at $85.50, Gold sank to $1780 and BTC moved back to $24K area. 

AUD fell after Q2 wages data missed, JPY fell after huge trade balance, and NZD rallied following hawkish outlook from RBNZ following expected 50 bp rate hike. NZ rates now 3%, and Governor Orr – lower GDP & growth but no recession ahead for NZ.

UK CPI – hotter again – 10.1% vs 9.8% & 9.4% last time. CORE CPI also higher at 6.2% vs 5.8% & RPI 12.3% vs. 11.8%.

• USDIndex posted an 8-day high before closing lower on the day, tested key 106.20 support and trades at 106.30 now.  NZD, AUD and JPY all in play in Asian session.
• Equities – USA500 closed up 8pts (+0.19%) to 4305, US500FUTS at 4307 now and testing key 200-day moving average. Meme stocks in play (BBBY +29.06%, GME +6.33%). MUSK tweeted (later denied) that he was looking to buy Manchester Utd.
• Yields 10-year yield rallied to 2.8730% but closed at 2.81% and trade at 2.824% now.  The 2/10yr. yield curve also remained firmly inverted by 43.95 bp.  
• Oil – is under 200-hr MA for a third day at $87.44, having dipped to 6-mth lows at $85.68, before excitement over an Iranian nuclear deal and therefore Oil exports restarting dimmed, private inventories were also higher than expected helping lift prices.
• Gold – dropped to $1771 and remains under $1800 for a 3rd day trading at $1775 now. 
• Bitcoin tested down to the 200-hr MA at $23.7K before recouping $24k to trade at 24.3k now.
• FX Markets – EURUSD down to 9-day lows at 1.0122 yesterday, back to 1.0170 now. USDJPY rallied from 133.00 yesterday to 134.50 now following trade balance miss and huge import bill (up 47.2% vs 45%). Cable spiked to 1.2140 following hot inflation data back to test 1.2100 now.

 8.Today – EZ Employment Flash, GDP, US Retail Sales, Business Inventories, FOMC Minutes, Earnings from Carlsberg, Uniper, (miss) Target & Cisco.

Biggest FX Mover @ (06:30 GMT) GBPAUD (+0.53%). Continues recovery from Fridays low at 1.7020 to over 1.7300 now.  MAs aligning higher,  MACD histogram positive & signal line rising, RSI 66.57 & rising, H1 ATR 0.00295, Daily ATR 0.01520.

 

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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 distributed without our prior written permission.

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The IndeX Files 16-08-2022

Risk Markets Higher Despite Higher US DollarRisk markets have been attempting to push on this week, despite the continued strength in the US Dollar. The benchmark global indices tracked here were mostly higher yesterday. US and Asian indices led the way with both the S&P and the Nikkei ended the day in the green. The DAX and the FTSE were a little more sticky, though both indices rallied firmly off the days lows to end the session just below their opening prices.It's an interesting environment for stocks currently given the changing backdrop we are seeing. In the US, a fallback in CPI over July has seen traders scaling back their rate-hike projections across the remainder of the year, anticipating that July’s data might mark the inflationary peak. Nonetheless, the US Dollar has remained strong, fuelled by weakness in the world’s second largest economy. Chinese retail and industrial figure, posted yesterday for July, came in sharply lower and were accompanied by a fresh 0.10% MLF rate-cut from the PBoC. With fears over a broader slowdown growing in China, USD is seeing plenty of demand from shifting capital flows.In the UK and Europe, stocks are less buoyant currently in the face of further expected tightening from the ECB and BOE. Additionally, fears over the continued fallout from the Russia-Ukraine war, higher energy prices, supply constraints and COVID and Brexit difficulties, mean that sentiment is looking a little cloudy near-term.Technical ViewsDAXThe rally off the 12462.59 lows has the potential to mark a large double bottom pattern, hinting at further upside in the longer-term. However, price is facing a big challenge here with the bearish trend line from YTD highs sitting just above market. With both MACD and RSI bullish, focus is on higher prices while 13672.31 remains as support with bulls eyeing 14170.79 next.S&P 500The rally off the 3613.50 lows has seen price breaking higher above the corrective bull channel. Price is currently testing a key area ta the 4305 level resistance and bear trend line from YTD highs. With both MACD and RSI bullish, the focus is on a breakout higher while 4153.50 holds as support.FTSEA little messier than the prior two indices, the FTSE continues to trade within a large ranging pattern. Price is sitting just under the bearish trend line marking the top of the structure, along with the 7558.7 and 7691.6 resistance levels. With bearish divergence in momentum studies, risks of a pull-back are growing, putting focus on support at the 7362.6 level.NIKKEIThe rally in the Nikkei has seen the market breaking out above the March and June highs with the market now back up to its highest level since January and fast approaching a test of the 2022 highs. With both MACD and RSI bullish, the focus is on a further push higher near-term with 29464.9 the next resistance level to watch.

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A South African adventure

From buzzy Johannesburg to big game drives, South Africa has it all, says Katie Monk

from Moneyweek RSS Feed https://moneyweek.com/spending-it/travel-and-holidays/605231/a-south-african-adventure
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