Investment Bank Outlook 02-09-2022

Credit AgricoleMarket hopes for decisive official steps to prop up the EUR have been on the rise of late with investors now looking for: (1) a more aggressive rate hike at the 8September ECB policy meeting; and (2) a cap on European energy prices to be debated at the 9September EU energy ministers’ meeting. If successful, the measures can cap the EUR rate disadvantage while helping European energy prices –and thus market fears of a severe recession –recede further in a boost to EUR-denominated assets. That being said, we think that the ability of any monetary policy normalisation and energy crisis measures to support the EUR would depend crucially on the coordination and complementarity between these policies.In particular, any official support for businesses and households could avert a deep recession but ultimately prolong the period of high inflation in the Eurozone and thus could necessitate even more aggressive ECB tightening. On its own, the latter can reignite credit risks in the Eurozone periphery, test the limits of the ECB’s newly-created credit backstop facility and complicate any plans for fiscal support and monetary policy normalisation. We therefore think that any official EU intervention in the energy market could only become a durable EUR positive if it does not attenuate the short-and long-term fiscal position of the Eurozone governments. This can further enhance the credibility of the ECB’s TPI and allow the bank to stabilise the EUR by hiking more aggressively.Also next week, the RBA and BoC should continue their rate hiking cycles, with the former hiking rates by 50bp and the latter by 75bp. Local rates markets are heavily priced for these scenarios, so the central banks’ rhetoric will hold more impact for the AUD and CAD. In the UK, Liz Truss is widely expected to succeed Boris Johnson as the new prime minister. Truss’ proposals to deal with the cost of living crisis have already unsettled the UK fixed income markets and seemingly boosted the appeal of the GBP as a stagflation hedge.The relative resilience of US economic data and the FOMC’s commitment to controlling inflation have led us to raise our USD/JPY forecasts. That being said, we continue to think risks of Fed overtightening constrain upside in the exchange rate and have gone short USD/JPY. In the near term, focus will be on Fed speakers as well as the August non-farm payrolls and services ISM. With many Fed-related positives in the price, however, global risk sentiment should remain a key driver of the USD.

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Daily Market Outlook, September 2, 2022

Daily Market Outlook, September 2, 2022 Overnight Headlines Global Bond Index Fall To Bear Market On Powell Pushback US NFP Has Potential To Push Fed Toward Third Jumbo Hike UK Is Already In The Middle Of A Recession, BCC Forecasts Fed’s Bostic: ‘Work To Do’ With Inflation Long Way From 2% US Calls Iran’s Response To Nuclear Talks ‘Not Constructive’ China To Avoid Flood-Like Stimulus And Keeps Prices Stable Japan Repeat Warning On Volatility As Yen Hits 24-Year Low ECB Still Seen Playing Catch-Up As Rate-Hike Path Steepen Europe Considers Price Limits To Decrease Electricity Prices Brussels Warn Frontrunner Liz Truss On Triggering Article 16 Christmas Hiring Push Job Vacancies In Britain To New High Apple Workers In Oklahoma City Petition To Unionise StoreThe Day Ahead Investor risk sentiment remains soft ahead of today’s key US labour market data. Further increases in US Treasury yields and the dollar were attributed to a solid ISM manufacturing report yesterday and Fed officials maintaining their hawkish messaging. Oil prices, meanwhile, moved higher after the US said that Iran’s response to revive the nuclear accord was ‘not constructive’. Today’s focus is the US August labour market report due at 13:30 BST as markets assess the Fed’s next policy move in just over two weeks’ time. Expect another healthy rise in employment, but by a smaller margin of 285k compared with the surprisingly strong 528k gain in July. The unemployment rate is expected to remain unchanged at 3.5%. Look for annual earnings growth to edge up to 5.3% from 5.2% in July. The US ADP report released earlier this week, a closely watched precursor to today’s official report, was weaker than expected, showing private sector payrolls up by 132k. However, it remains to be seen just how closely the ADP data based on new methodology tracks today’s official data. The weekly jobless claims data, meanwhile, fell to a two-month low. Overall, despite GDP falling in the first half of the year, the US labour market is expected to remain solid, supportive of another significant rise in interest rates. The only notable Eurozone release today is producer price inflation data. Factory-gate prices are forecast to remain elevated above 35% in the year-on-year comparison. Focus is squarely on the ECB policy announcement next week. With another upside surprise in Eurozone headline CPI inflation to 9.1% in August, there is rising speculation that policymakers may opt for a 75bp hike. It looks like it will be a close call between a 50bp or a 75bp rate rise. There are no major UK data releases today. Sterling market focus will shift to next week’s key events, which include BoE Governor Bailey and other MPC members testifying to Parliament. The BoE delivers its policy update in the week after next with markets fully priced for a 50bp rate increase. The new leader of the Conservative Party is also expected to be announced on Monday (probably around lunchtime). Markets are keenly awaiting any further details on potential additional policy support for households and businesses.FX Options Expiring 10am New York Cut EUR/USD: 0.9850 (645M), 0.9875 (340M), 0.9900 (1.8BLN), 0.9925 (352M), 0.9950 (610M), 0.9975-80 (446M), 1.0000-05 (1.94BLN), 1.0020-25 (1.44BLN), 1.0050 (1.01BLN) USD/JPY: 138.00 (1.34BLN), 138.25-30 (380M), 138.65 (323M), 139.00 (250M), 139.25 (200M), 139.50 (300M), 140.00 (560M), 140.50 (260M) EUR/JPY: 139.57 (953M) GBP/USD: 1.1475 (252M), 1.1600 (560M), 1.1750 (291M) EUR/GBP: 0.8550 (250M) AUD/USD: 0.6795-00 (786M) USD/CAD: 1.3150 (310M), 1.3200-10 (341M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.0250 0.9900 proves resilient, but remains vulnerable Steady early after closing down 1.05%, leading the U.S. dollar higher Firm U.S. data, contrast with EZ recession risk Range likely ahead of often volatile U.S. payrolls 20 day VWAP bands track lower - bearish trending signals return 0.9900 August base proved resilient on a fourth test - pivotal support Close above 1.0089 falling 21 day moving average would be positive 0.9900 1.8 BLN, 0.9950 589 mln, 1.0000/05 1.936 BLN Friday's close strikes Weekly projected range support sited at 9830/50 20 Day VWAP bearish, 5 Day bearishGBPUSD Bias: Bearish below 1.2050 Heavy, as negative issues mount for the new PM Steady after closing -0.7% amid broad based UST led, U.S. dollar strength Cheaper BoE credit needed to finance climate friendly projects September UK rail workers to strike over pay, jobs, conditions Cost of living crisis, strikes in many sectors - new PM must make an impact Bearish trending setup targets 1.1413 March 2020 base longer-term Close above 1.1702 needed to undermine downside bias 1.1473 lower 20 day VWAP band initial support - 1.1613 resistance 20 Day VWAP is bearish, 5 Day bearishUSDJPY Bias: Bullish above 133.40 USD/JPY up another leg with US yields, through 140 USD/JPY up another leg on higher US rates overnight, to 140.22 in NY Still bid in Asia, 140.05-27 EBS so far, consolidating gains USD bid on combo of strong US mfg/labour data, hawkish Fed, downbeat EZ Japan-US rate differentials widening again on diverging CB expectations Some caution still ahead of key US jobs report tonight, NFP +300k eyed Japanese exporter offers to trail up, larger, importer bids on dips Option expiries in area - 140.00 $530 mln today, $3 bln+ at 140.00 next wk 20 Day VWAP is bullish, 5 Day bullishAUDUSD Bias: Bearish below .71 Bargain hunting, but charts suggest 0.6682 vulnerable +0.2% on bargain hunting into Thursday's 0.85% fall - USD a touch softer No AUD data or scheduled RBA speeches, so risk appetite and the USD to lead Tight range likely ahead of the often volatile U.S. jobs data 20 day VWAPi bands expand, momentum studies slip - bearish trending setup Longer term target is a test of 0.6682, the July and 2022 base Close above 0.6910, 38.2% of the August-September fall would be positive 0.6771 New York low, and 0.6846 London high initial support and resistance 20 Day VWAP is bearish, 5 Day bearishBTCUSD Bias: Bearish below 25.3K BTC rotates around 20K In a first in Oman, crypto currency to be used for payments crypto currency, pegged to the value of the Omani Rial, can be trialed for payments Regulatory roadmap for a progressive crypto industry in the UAE Collective Shift and ECOMI Partner to Bring Crypto Adoption to the Mainstream BTC supported by Jul 13 low 18.9k Aug 28's 22.2k may pull BTC higher 20 Day VWAP is bearish, 5 Day bullish

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Market Update – September 2 – USD Holds at Highs, Stocks stem losses.

• USDIndex – spiked to 109.95 highs yesterday and holds the BID @109.50 now. A strong NFP could lift the USD even higher. A weak number could prick the USD bubble from 20-yr highs. Strong Weekly Claims and PMI’s added to USD demand.
• EUR – ECB action expected next week, but EUR remains under Parity lows of 0.9910, trades at 0.9970 now.
• JPY rallies again (new 24 yr highs) breaks 140.00 & holds at 140.30 BOJ holding accommodative policy line, & yield differentials driving trend. 
• GBP new multi-year lows under 1.1500 yesterday, back to 1.1550 now. New PM next week.
• Stocks US stocks halted 4-day slide n (S&P500 3966).  Nvidia -7.67%, AMD -3% weighed again. Futs. flat at  3968 now.

• Oil down again on weak outlook,  lows at $86.25 and trades at $88.20 now.
• Gold – also down under $1700 to $1688 lows, back to $1702 now. .
• BTC – recovers 20k again today, from 19.5k lows yesterday. 

Overnight – NZD Trade Balance  missed (-2.4% vs 0.6%)  German Trade Balance  better than expected (see below).

Today – US NFP & Factory Orders, EZ Producer Prices.

Biggest FX Mover @ (06:30 GMT) EURNZD (+0.68%). Continued to recovered from weekly lows at 1.6185 on Tuesday to 1.6450 today, next resistance 1.6485.  MAs aligning higher,  MACD histogram positive & signal line rising, RSI 63.62,  H1 ATR 0.00238, Daily ATR 0.01615.

 

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 distributed without our prior written permission.

 

 

 

 

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How to tackle rising inflation and falling stockmarkets

Inflation is rising around the world. Even though inflation is widely expected to return to around 3.5% next year, it is still wreaking havoc. Merryn Somerset-Webb explains what to do about it.

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Share tips of the week – 2 September

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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The Fed bangs its fist on the table

The first two weeks of August were mild for investors around the world, surfing on the recovery of the main assets during the month of July. Moreover there was a certain recklessness due to the excellent results of the earnings season and the decline in inflation figures from 9.1% to 8.5% in July, following the report from the US Department of Labor.

The peak having been reached, all the financial players were dreaming of a more accommodating central bank and summer was in full swing, as the holidays seemed to bring a new burst of optimism.

This lightness, however, could not withstand the current economic and geopolitical reality, such as the war in Ukraine (6+ months), growing inflation in Europe coupled with an economic slowdown which is also hitting China, the soaring energy prices and persistent inflation at more than 8% in the USA. (see the US yield curve, below).

This harsh reality did not escape the Chairman of the FED, Jerome Powell, who sounded the end of recess during his speech in Jackson Hole, reminding anyone willing to listen that the main objective of the FED is to bring inflation back to 2%, stating in particular that: “the restoration of price stability will take some time and will require using the tools of the central bank forcefully'”.

He did not hesitate to be more even more combative: “We are taking aggressive and timely measures to moderate demand in order to better align it with supply and to keep inflation expectations anchored”, then ended with the following conclusion: “We will continue our efforts until we are satisfied that the job is done.” (see link below).

https://www.bnnbloomberg.ca/video/u-s-fed-chair-jerome-powell-speaks-at-jackson-hole~2508466

This “muscular” intervention that the markets feared had the expected effect. The main assets contracted during August, in particular those relating to Tech, such as AMZN (-13.5%) APPL (-10.80%); TSLA (-13.53%), followed by the US indices US100 (-10.5%); S&P500 (-8.6%); US30 (-8.18%) as well as GOLD (-5.41%) and Silver (-13.78%).

The cryptocurrency world was the big loser in a bearish rally with Bitcoin losing more than 22.5%. As for Forex stocks, they have had very little taste of the strength of the dollar, the safe haven value of which no longer needs to be demonstrated (USIndex +4.64%).

USDIndex

With the month of August over, investors will have to be patient in order to assess market intentions for the month to come, but the horizon seems to be darkening.

 

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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SPX500USD, H4 | Potential Bearish Drop

Type: Bearish ReversalKey Levels:Resistance: 4094.62Pivot: 3948.57Support: 3740.23Preferred Case:On the H4, with prices breaking out of the ascending trendline and moving below the ichimoku indicator, we have a bearish bias that price will drop to pivot at 3948.57 where the pullback resistance is. Once there is downside confirmation that price has broken pivot structure, we would expect bearish momentum to carry price to 1st support at 3740.23 where the swing low support is.Alternative Scenario:Alternatively, price could break pivot structure and rise to 1st resistance at 4094.62 where the pullback resistance is.

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AUDUSD Ends August with 1.8% Loss

The Australian Dollar is often used as a proxy for China’s economic growth. The AUD briefly rose 0.7% against the USD in Wednesday’s Asian trading to 0.6903 as the relief rally after the latest Chinese factory activity was not as bad as feared, although output contracted for the second month in a row. However the rally in the AUDUSD pair did not last long and soon dropped back to the daily opening price range. The AUDUSD pair ended August sharply lower by around 1.8% due to aggressive central bank rate hikes and slowing growth in China.

China’s official manufacturing Purchasing Managers’ Index (PMI) for August edged up to 49.4 from 49 in July. Activity took a hit from the zero COVID policy, electricity rationing amid the worst heatwave in decades, and a struggling property sector. ANZ on Wednesday lowered its 2022 GDP forecast for the Chinese economy to 3% from 4%, citing weaker demand.

Meanwhile, Australia’s Q2 construction output unexpectedly fell 3.8% on a seasonally adjusted quarter-on-quarter in the three months to June 2022, missing market expectations for a 0.9% gain. This was the second straight quarter of decline in construction activity and the steepest pace since the September 2016 quarter.

Technical Overview

The overall picture remains bear-dominated and further declines are expected to continue as long as the 0.7008 resistance remains intact. In Wednesday’s trading, the pair only moved slightly, around 60 pips, probably as the market will digest developments in the US jobs report. A move to the downside is likely to test the 0.6680 low. However, a move above 0.7008 will change the bias back to the upside for the 0.7135 resistance.

AUDUSD, H4

Technical indicators in the H4 period are still validating the downside movement, with the price below the Tenken-sen and Kinjun-sen below the Kumo and the AO histogram still in the sell zone. Markets expect the RBA to increase its benchmark interest rate by 50bp next week, taking the cash rate to 2.35%.

 

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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Investment Bank Outlook 01-09-2022

BNY MellonSwiss Franc Now Two-WayWhen the Swiss National Bank hiked its benchmark sight deposit rate by 50bp in June, it also arguably reversed over a decade of orthodoxy in pledging to sell foreign exchange reserves if necessary to support the franc. Perhaps far ahead of other G10 central banks, the SNB realised that franc strength would now be critical to combat inflation via the pass-through channel. The Riksbank has now adopted a similar stance on the krona, and various European Central Bank members also appear to have grudgingly acknowledged this transmission channel. In G10, the Bank of Japan is the only outlier in this respect. Even so, we note the past week has not been straightforward for the franc. The market appears to be having second thoughts about the currency being a one-way bet, especially against the euro. In iFlow, the franc has recently been one of the worst performers, but we suspect that much of the CHF sales were being done on the dollar leg. After all, even with its surprise hike and hawkish outlook, the SNB remains one of the few negative-rate central banks globally. Investors whose base currency is not the franc will enjoy a strong yield pick-up if their CHF-denominated investments are hedged. Conversely, hedge ratios on overseas assets for CHF-based investors could also be falling given the increasingly prohibitive cost. Fundamentally, we believe the market has acknowledged that the deteriorating outlook for the Eurozone could force the SNB to introduce greater downside risk to its current outlook. June’s rate hike pre-empted any ECB decision, but we doubt that the SNB would have taken this step without a relatively benign assessment of the Eurozone economy. This judgement was correct at the time as the subsequent June ECB staff projections signalled sustained growth. However, three months on it appears the ECB’s downside scenario entailing a near-2% contraction is now becoming the market’s base case. It is inconceivable to us that the Swiss economy can expand robustly if the Eurozone is facing a deep recession.This is where we think the SNB will need to exercise stronger guidance regarding its tolerance limits to franc appreciation. As the chart below shows, on a nominal effective exchange rate (NEER) basis the franc is now at a two-decade high. Furthermore, there has been a near-10% increase in the NEER since the end of 2019 – but that has done nothing for inflation. For much of this period, the price drivers for Switzerland have been input/supply-based. The SNB will likely remain of the view that a strong franc can help contain such pressures. The inflation trend – and by extension, inflation expectations – has firmed, resulting in the SNB’s acceptance of franc strength as a policy tool. More recently, the domestic situation has taken precedence, but the SNB clearly communicated that rates would be the main transmission mechanism to slow demand.

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Daily Market Outlook, September 1, 2022

Daily Market Outlook, September 1, 2022 Overnight Headlines Jeremy Grantham Warns Super Bubble In Stocks Has Yet To Burst Treasury Two-Year Yield Tops 3.5% For First Time Since 2007 G7 Finance Chiefs To Discuss Russian Oil Price Cap On Friday US Officials Order Nvidia To Halt Sales Of Top Chips To China Asia Factory Activity Drops On China Covid Curbs, Slowdown UN Report Accuses China of Serious Rights Abuses in Xinjiang Yen Fall To Fresh 24-Year Low As US-Japan Policy Gap Weigh Japan MOF Official: Watching Moves With ‘Sense Of Urgency’ Iran Seeks Stronger Guarantees For 2015 Nuclear Deal Revival ECB’s Villeroy: Next Rate Move Should Be ‘Orderly, Predictable’ Truss Rules Out New Taxes, Energy Rationing In Final PM Pitch UK Long-Run Inflation Expectations Hit Record, Citi/YouGov Poll UK Households Face Biggest Living Standards Shock In CenturyThe Day Ahead Asian equity markets are mostly lower after another negative close on Wall Street. US Treasury yields continued to climb on hawkish messaging from Fed policymakers who are signalling further interest rate rises and are playing down market pricing for rate cuts later in 2023. There is even speculation that the ECB could raise interest rates by 75bp next week after another record high in Eurozone inflation (headline CPI at 9.1%), although that is probably not a majority view on the Governing Council. Overnight, survey data from China warned about potential weaknesses in its manufacturing sector. The Caixin manufacturing PMI report for August fell to 49.5 (from 50.4), more than expected by analysts and indicative of a contraction in activity. Earlier this morning, Germany reported a rebound in retail sales of 1.9% in July following the drop of 1.5% in June. Compared with a year ago, however, the volume of sales is down 5.5%. In the UK, Nationwide reported annual house price growth holding up better than expected at 10.0% in August, although that was lower than 11.0% in July. The final readings of the UK and Eurozone manufacturing PMI survey for August are due this morning. The preliminary flash results showed a surprisingly sharp drop in the UK manufacturing PMI to just 46.0, partly reflecting sharper contractions in output and demand. The better news was that cost pressures, while still elevated, continued to ease. Also out is the Bank of England’s decision-maker panel business survey. The survey’s results, including inflation expectations, are closely watched by policymakers as they decide on their next move in two weeks’ time. The flash Eurozone manufacturing PMI had remained just below 50 at 49.7, although the output subindex remained firmly in contraction territory (46.5) partly reflecting difficulties in Germany. The first estimates for Italian and Spanish manufacturing PMI will be released today and are expected to remain below 50. Expect the US ISM manufacturing survey’s headline index to have slipped again in August to 52.2 from 52.8, reflecting the uncertain international environment. The price index is likely to give a similar message to the PMI survey that supply constraints are easing but that cost pressures are still above normal. US construction spending and weekly jobless claims data are also dueFX Options Expiring 10am New York Cut EUR/USD: 0.9975 (259M), 1.0000-10 (756M), 1.0090-00 (517M) USD/JPY: 137.75-80 (580M), 138.10 (740M) USD/CHF: 0.9850 (250M) AUD/USD: 0.6865 (873M), 0.6900 (381M) USD/CAD: 1.2950 (785M), 1.3000 (332M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.0250 Heavy with risk appetite, as Emini's slide Off 0.2% with risk appetite, as E-mini S&P -0.5%, 10yr UST testing 3.2000 Inflation and cost of living surge encouraged early September risk off EZ inflation at 9.1% makes a 75pt ECB hike an option next week 0.9973 European low then 0.9900 August base are initial supports Close above 1.0108 would be positive 1.0000/10 755 mln are the only close significant strikes for Thursday Weekly projected range support sited at 9830/50 20 Day VWAP bearish, 5 Day bullishGBPUSD Bias: Bearish below 1.2050 Fresh trend low, stronger USD and soured risk weigh Off 0.4%, as risk sensitive currencies lead U.S. dollar higher E-mini S&P -0.55% sparked by Nvidia -6.6% Asian stocks lower UST yields hit trend highs, 10yr +2bp 3.211%- hawkish Fed Logan Close above 1.1735 10 day moving average needed to undermine downside bias 1.1526 lower 20 day VWAP band initial support, Asian1.1617 high resistance Longer-term target remains a test of the 1.1413 March 2020 base 20 Day VWAP is bearish, 5 Day bearishUSDJPY Bias: Bullish above 133.40 USD/JPY to fresh year high, multi – year high USD/JPY spurts up to 138.49 EBS early, above 139.38 year high July 14 Highest since 1998 when it was as high as 147.64, low earlier 139.00 Though higher on stops 139.40+, further upside may be difficult Japanese exporter offers trail up and importers likely to remain cautious Importer bid eyed however on dips to, below 139.00 Higher US long yields to blame, Tsy 10s to 3.206% early, best since Jun 28 Yield on US Treasury 2s also up early Asia, to 3.508% Option expiries not a factor today, tomorrow, mostly to downside, on 138 Some pause in uptrend eyed ahead of US payrolls report tomorrow 20 Day VWAP is bullish, 5 Day bullishAUDUSD Bias: Bearish below .71 Weak headline Aus Capex adding a bit more weight on AUD AUD/USD at session low below 0.6810 after weaker than expected Aus Capex AUD/USD has been under pressure all morning due to risk-off mood in Asia Global slowdown concerns weighing on key commodities important to Australia Australia miner BHP plunged nearly 8% at one stage this morning AUD/USD support at 76.4 of 0.6682/0.7136 move at 0.6778 A break below 0.6775 opens the way for a test of the year's low at 0.6682 20 Day VWAP is bearish, 5 Day bearishBTCUSD Bias: Bearish below 25.3K BTC trades sub 20K Regulatory roadmap for a progressive crypto industry in the UAE Crypto Miner Primeblock’s CEO Has Left Firm After Canceled Spac Deal – CoinDesk FTX CEO Bankman – says his crypto bailouts had 'mixed results' – Bloomberg BTC supported by lower VWAP (20.9k) for now, then Jul 13 low 18.9k Aug 28's 22.2k may pull BTC higher 20 Day VWAP is bearish, 5 Day bearish

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The Crude Chronicles - Episode 151

Oil Traders Increase Longs AgainThe latest CFTC COT institutional positioning report shows that oil traders increased their net-long positions again last week from 214k to 246k. This marks the second consecutive weekly build in long positions with total upside bets now back up to where they were around the start of August. Despite the uptick in bullish bets, crude prices have been back on the ropes this week with crude futures reversing from initial highs, now down around 10% from their August peak on Monday.Recession Fears & Fed Expectations Hit Oil SentimentCrude sentiment has been hit this week by a double whammy of global recession fears and hawkish Fed expectations/bullish USD sentiment. On the back of Fed chairman Powell’s hawkish comments at Jackson Hole last week, we’ve heard further such hawkish comments from other Fed members this week. Both Williams and Mester have echoed Powell’s comments this week, forecasting rates to continue to rise near-term and into next year. Mester said yesterday that she sees a rate cut in 2023 as unlikely, adding further fuel to the fire.Rate-Hike ExpectationsWith the Fed signalling its intention to plough ahead with rate cuts and with hawkish expectations ahead of the ECB next week, traders are focusing once again on global growth fears. With excessive inflation across the board and aggressive central bank monetary tightening, fears of a global slow down are weighing on the oil demand outlook. Weak data out of China over recent weeks has re-sharpened concerns there and, given the risks of further lockdowns in China through year-end, crude sentiment is weakening.Russian Oil Price-Cap Oil prices have also come under pressure this week from reports that G7 finance ministers plan to discuss a cap on Russian energy prices when they meet on Friday. However, Russian has warned that it will not co-operate with such a move and will instead ship oil elsewhere. Bloomberg has been reporting this week on fears that Russian oil is reaching other countries via-back channels. China reported Malaysian oil imports of more than 800k barrels last month, more than the country actually produced, according to data. Commentators suggest that the figures are meant to mask off-book imports of Russian oil at a time when China has reported Russian oil imports as hitting 5-month lows.EIA Reports Further DrawdownIndeed, the downturn in oil prices continued this week despite the EIA reporting a larger-than-forecast drawdown in crude stores last week. The EIA reported a 3.3 million barrel decline, the same as the week before. Additionally, the EIA reported that demand for oil and gasoline products was the highest it had been since 2019 last month. However, with trader attention elsewhere, the data wasn’t enough to fuel a rally in crude prices.Technical ViewsCrude OilThe initial attempt at breaking out above the bear channel from YTD highs has seen crude prices stalling into the 95.93 level resistance. Given the downtrend, while this level holds, the focus is on a further push lower with a break of the 85.53 level top open the way for a run down to 79.21 next. To the topside, if bulls manage to break above 95.93, 103.80 is the next level to note.

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Market Update – September 1 – New Month Same Story – Dollar Bid

• USDIndex – holds at 109.00 highs from a test of 108.50 support. Yields rallied again, Dollar on the frontfoot ahead of NFP & Labor Day Holiday, ADP (following revisions to calculation) big miss 132k vs 300k.).  Chengdu (120 million) in new lockdown.
• EUR – Record Inflation (9.1%) pressures ECB action (40% of 75bp) – EUR holds at 1.0018.
• JPY rallies again (new 24 yr highs) and eyes key 140.00 trades at 139.50 BOJ holding accommodative policy line.  
• GBP new pandemic era lows under 1.1600 now, to 1.1568 lows.  
• Stocks US stocks weak again (S&P500 -31.00pts (-0.78%) 3955).  Energy & Tech stocks led the decline again weak news from Nvidia, Tencent & AMD weighed. Futs. -1%  at 3930 now.
• Oil down again on weake outlook, under $90.00 and trades at $88.90 now.
• Gold – calso down and within $1.50 of $1700 earlier, trades at $1707 now.
• BTC – under 20k again today. 

Overnight – CNY Manufacturing PMI data missed (49.5) and returns to contraction. German Retail Sales better than expected (1.9% vs. 0.0%).

Today – EZ, UK & US Manufacturing PMIs, German Retail Sales, Swiss CPI, EZ Unemployment, US ISM Manufacturing, Construction Spending, Speech from Fed’s Bostic.

Biggest FX Mover @ (06:30 GMT) EURCHF (-0.48%). Rejected 0.9830 today following 4 day rally from 0.9559, trades at 0.9786. MAs aligning higher,  MACD histogram positive but signal line falling, RSI 43.00,  H1 ATR 0.00132, Daily ATR 0.000723.

 

from HF Analysis /510275/
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What Jay Powell's Jackson Hole message means for markets

Jay Powell delivered a hawkish speech on inflation at last week's Jackson Hole meeting. Alex Rankine explains what his speech means for markets.

from Moneyweek RSS Feed https://moneyweek.com/economy/inflation/605280/what-jay-powells-jackson-hole-message-means-for-markets
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EUR/USD Forecast: Potential Correction Ahead?

Having tested the parity, the currency pair EUR/USD has pulled back from the support and reversed to jump and undergo correction. It’s clear that bears won’t be able to break the level of 1.0000 right away. Now, the asset’s price is targeting the downtrend. The price of this currency pair is likely to pull from the downtrend and drop. American stock index S&P 500 is heading down. It has closely approached the supporting level of 3900.00, which is the crossing point for several important trendlines. The asset might potentially pull back from the supporting level of 3900.00. Hence, it is likely to hit the level of 3900 and jump soon. So, let’s observe what will happen next. Bitcoin remains at the psychological level of 20000. This asset might either pull from the current level or gain the required support at the level of about 19000. Currently, the price of Bitcoin is not likely to drop to the level of 19000. Hence, potential price growth might be ahead.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/eur-usd-forecast-potential-correction-ahead"
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