Bitcoin broke the level of 21000. Currently, the asset is consolidating. Bitcoin is likely to pull away from the broken level of 21000 and target the level of 22500 next.Having formed a bullish flag, Brent oil has jumped. The asset is about to face resistance at the level of 102.50. Oil might pull back from this level and drop to the level of 90. The candlestick formations will demonstrate the future price movements of this asset.The price of the American stock index S&P 500 has pulled from the downtrend and dropped to the supporting zone formed between the levels of 3578 and 3510. The index might potentially pull away from the zone and head up. So, let’s observe what is about to happen next.
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Monday, November 7, 2022
Market Update – November 7 – USD subdued & Commodities hold onto gains
- The mixed NFP data on Friday, the rumours of China removing Zero Covid restrictions and comments from FED member Evans all combined to see a bounce in stock markets, a cooler USD and a gargantuan leap in Commodity prices. NFP head line beat at 261K vs 200k and last month was revised higher to 351k, Earnings slipped to 4.7% from 5.0% but Unemployment rose to 3.7% from 3.5%, suggesting the interest rate hike are beginning to have an impact. The USD Index slumped to 110.70, from 112.75 highs. Stocks rallied +1.25% on Friday, but declined -1.39% to -5.65% last week. Yields moved higher, (10-yr 4.163%). The major beneficiaries was the Commodity Complex which leaped between 3.36%-8.00%. Evans suggested that the FED may start “thinking” about pausing, even if that did not happen until Q423. Asian stocks are firmer today despite Chinese Covid infections hitting a 6-mth high, Beijing reaffirming strict pandemic rules and a big miss for Chinese trade.
- EUR – rallied from close to hit 8-day lows on Friday at 0.9730 over 200 pips to 0.9960. Villeroy: It could take 2-3 years for inflation to return to target & rate hikes need to continue.
- JPY – has retaken 147.00 and trades at 147.40 from 146.60 NFP lows.
- GBP – Sterling tested 1.1150 again following the immediate NFP announcement but closed at 1.1370 and trades back to 1.1300 now.
- Stocks – Wall Street were higher with big moves for Tech stocks again (MSFT +3.33%, GOOG +3.85%, Alibaba +7.05%, JD.com +9.74%). US500 closed +50.02 (+1.36%) at 3770, (a loss of -3.34% for the week) FUTS trades at 3763 now. Berkshire Hathaway posted a Q3 loss of $2.69b, but operating profits beat estimates by 20% and stock investments increased by $3.7b.
- USOil – charged from from $87.75 lows on Friday to test the $93.00 zone, rallying over 5%, following all the “China opening” gossip. back to $91.00 now.
- Gold – gained over 3.4% on Friday closing at $1680 and breaching key levels. back to $1670 now.
- BTC – rallied with the weaker USD and risk on mood on Friday to top at $21.2k, back to $20.6k now, but holding above the key $20K level.
Today – EZ Sentix, Speeches from ECB’s Lagarde, Panetta, BoE’s Pill, Fed’s Barkin, Mester & Collins. COP27 sees world leaders in Egypt this week and US clocks moved back 1 hour so the difference between London (GMT) & New York (ET) back to 5 hours.
Biggest FX Mover @ (06:30 GMT) NZDUSD (-0.72%) reversing some of Friday’s rally to 0.5935, from 0.5740 on Thursday, and trades at 0.5875 now. MAs unaligned & flat, MACD histogram & signal line positive but falling, RSI 50.00 & neutral, H1 ATR 0.00198, Daily ATR 0.01077.
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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Friday, November 4, 2022
Book now! Everything you need to know about investing in the year ahead in one handy package
Andrew van Sickle runs through the speakers and topics under discussion at the upcoming MoneyWeek Wealth Summit.
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Events to Look Out For Next Week
- Gross Domestic Product, Industrial Production and Trade Balance (GBP, GMT 07:00) – A plethora of data from the UK should confirm a continued stuttering recession. The UK final GDP for Q3 is expected to confirm a contraction rate of -0.2% q/q, and headline from 4.4% y/y, falling to 2.8% y/y. Industrial Production for September is expected at -0.2% from 1.8%. The trade deficit is seen at -20.40B. The BOE’s predicts a long-lasting recession, with activity expected to decline by around 3/4% in the second half of this year, and to continue to fall throughout 2023 and the first half of 2024 “as high energy prices and materially tighter financial conditions weigh on spending.” In this environment the unemployment rate is seen rising to just under 6.5% by the end of the forecast period and aggregate slack to hit 3% of potential GDP.
- Consumer Price Index (EUR, GMT 07:00) – German inflation for October is expected unchanged at 0.9% m/m and 10.4% y/y.
- Michigan Consumer Sentiment & New Home Sales (USD, GMT 15:00) – Michigan Consumer Sentiment rose to 59.9 in the final October print, inching up from the 59.8 preliminary and rising 1.3 points from the 58.6 in September. This is the highest since April’s 65.2 and has improved from the record nadir of 50.0 in June.
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
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What could be in the Autumn Statement on 17 November?
After dismantling most of Kwasi Kwarteng’s mini-Budget, the new chancellor Jeremy Hunt will reveal his Autumn Statement on Thursday, 17 November. We look at what could be announced, and the potential impact on your finances.
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The Rising Wedge has been broken. Is this an early indication for GBPJPY?
GBPJPY, H4
The Bank of England appeared to rule out the idea of giving in to previous derivatives market pricing, which implied that the Bank Rate could reach 5% in the months ahead, crippling the Pound’s exchange rate against most other currencies and putting it at further risk.
Thursday’s decision to increase the Bank Rate by ¾ of a percentage point to 3% met market expectations, despite disappointment over the BoE’s latest economic predictions and warnings about indications for the interest rate outlook going forward.
Meanwhile, Japanese Finance Minister Suzuki warned, that Japan could intervene in the currency market “at any time” to support the Yen. Trading activity in the Yen was weak on Thursday, with Japanese markets closed for the Culture Day holiday.
Technical Analysis
GBPJPY fell more than -1.7% in Thursday’s trading, the 4th day of the decline that started at the beginning of this week. Price was seen breaking the lower line of the Rising Wedge pattern, to equate to a weekly low around 165.00. The divergence bias on the H4 period is clearly visible. On the downside, further declines could test the 159.72 support, while on the upside the 168.41 price level might be a re-test area, to bring another decline in the short term. Currently, the price is below Kumo with Tenken-sen and Kinjun-sen crosses on the upside.
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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Share tips of the week – 28 October
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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Market Update – November 4 – A Cooler USD to start NFP Day
- The BOE rose rates by the as expected 75 bp (highest since 1989; 33 years) from 2.25% to 3%, and suggested the UK was already in recession and that it would last until mid-2024, (the longest on record). 2 of the 9 members of the MPC only wanted 25 or 50bp. The peak for Inflation was reduced from 13.3% to 11% but still over 5 x times the 2% target rate. However, Governor Bailey said that they expected interest rates to peak at 4.75%, below the current consensus level of 5.25%. Unemployment is likely to rise to 6.4% from current decade lows at 3.5%. Lending and Mortgage rates will also likely rise to between 4.5-5.5% from 2.5-3.0% a year ago. Sterling tanked as UK stock markets rallied.
- USDIndex – Dipped from a at test of 113.00 to trade at 112.40 ahead of the NFPjobs news. ISM Services PMI (54.4 vs 55.5) data missed but Weekly Claims were better (217k vs 220K) than expected. Stocks fell (NASDAQ -1.73% once again underperformed again). 10-yr yields rallied closing at 4.124%. Asian markets have rallied (Japan is closed) on more speculation that China is about to ease it’s zero-covid policy, Chancellor Schultz is also in Beijing today. (Hang Seng +6.54%, Shanghai +3.75%)
- Overnight – AUD Retail Sales in line (0.6%)
- EUR – hit 8-day lows at 0.9730 yesterday, back to 0.9780 now.
- JPY – pushed to 148.50 yesterday back to 148.00 now. Suzuki once again said BOJ intervention was “stealth” and that there is no intention of guiding FX to certain levels.
- GBP – Sterling tanked from a pivot at 1.1400 lifted to 1.1150 following the the Bank of England announcements and Bailey’s suggestion that the terminal rate will be lower than expected.
- Stocks – Wall Street were lower with big moves for Tech stocks again (APPL -4.24%, GOOG -4.11%, COIN -8.09%) in particular. US500 closed -39.80 (-1.73%) at 3719, FUTS trades at 3735 now.
- USOil – rallied from $87.75 lows again yesterday and earlier today to breach $90.00, following all the “China opening” gossip.
- Gold – again tested the key support (Sept, Oct. & now Nov. lows) at $1620 yesterday, before fallowing Oil higher to test $1650 now.
- BTC – recovered back to the $20.5k, pivot from the test of 20k yesterday.
Today – EZ Composite/Services PMI (Final), US & Canadian Labour Market Reports, Speeches from Fed’s Collins, ECB’s Lagarde & de Guindos.
Biggest FX Mover @ (06:30 GMT) AUDUSD (+0.72%) reversing some of this weeks declines to 0.6270 now up to 0.6335 and testing 0.6350. MAs aligned higher, MACD histogram & signal line negative but rising & testing 0 line, RSI 56.00, H1 ATR 0.00156, Daily ATR 0.01077.
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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Thursday, November 3, 2022
Best regular savings accounts – November 2022
You can earn an attractive rate on the best regular savings accounts. We tell you the best on the market to take advantage of right now
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BoE Announcement – November 3 2022 – A Dovish Hike
GBPUSD, H1
BoE hiked key rate by 75 bp to 3.00% – as expected¹. At the same time the BoE said the peak interest rate is “likely to be lower” than implied by markets, which should keep a lid on future tightening expectations. The exact opposite of what the FOMC said last night. It is the largest increase in UK interest rates since 1992 when the Major/Lamont government were forced to respond to the debacle of Black Wednesday and the now famous dumping of the Pound from the ERM and the Soros “£1 billion” profit trade.
The MPC vote was 7-2, with one member opting for 50 bp and another for just 25 bp, which likely also reflects the prospects of an austerity budget from the new government, which will keep a lid on demand and inflation pressures further out. A dovish hike then, as the new projections predict a -1.5% contraction in activity next year, followed by -1% in 2024. A 2-year recession. Under the assumption that the Bank Rate will remain at 3%, inflation would slip below target in the fourth quarter of 2025, while under the assumption that the Bank Rate follows market expectations, inflation would slip to just 1.4% in 2024 and to zero by the end of 2025. That implies that in order not to undershoot the inflation target, the BoE will have to peak earlier and at a lower level than markets expect and will likely have to cut rates again over the course of the forecast horizon. Not surprising then that Sterling extended losses in the wake of the initial announcement, with Cable breaching 1.1200 to 1.1175, EURGBP spiked to 0.8700 and GBPJPY trades at 166.50, when Monday the pair was as high as 172.00.
PM Sunak and Chancellor Hunt are working on a plan to fill a sizeable hole in the government’s finances and Truss’ and Kwarteng’s plans of unfunded tax cuts are a thing of the past. Hunt has pushed back the presentation of the full fiscal plan to November 17, but there is little doubt that austerity measures and spending cuts are high on the agenda.
¹https://www.bankofengland.co.uk/monetary-policy-report/2022/november-2022
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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Bank of England hikes rates to 3%
The Bank of England has raised interest rates yet again - the biggest hike seen in three decades. Here’s what the central bank’s latest move could mean for you and your money.
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Invest in Brazil as the country gets set for growth
It’s time to invest in Brazil as the economic powerhouse looks set to profit from the two key trends of the next 20 years: the global energy transition and population growth, says James McKeigue.
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EURUSD – Suffering from the double-edged message of the FED
EURUSD,Daily
EURUSD, like many other assets, had a mixed reaction to the Fed meeting last night. Indeed, the US Central Bank’s statement sent the pair surging to a high of 0.9976 before falling during Jerome Powell’s press conference to hit a low of 0.9810. The double-edged message of this sent EURUSD volatility skyrocketing. Today the pair trends lower and currently holds north of 0.9750 support.
Indeed, the American Central Bank is preparing for a gradual slowdown in rates, causing a depreciation of the US Dollar, which has automatically been interpreted as a clear signal in favor of a rise in the EURUSD pair.
However, during Fed Chair Jerome Powell’s press conference, EURUSD reversed its gains and more. Indeed, the Governor of the Central Bank has repeatedly declared that inflation is too high, emphasizing that price stability is essential to the American economy and reaffirming that the FED will maintain its current position “until the job is done”.
More importantly, he said “the ultimate level” of benchmark policy rates will be higher than previously estimated. According to some experts, this data could push the final interest rate above 5%, thus driving the Dollar higher and EURUSD lower. (See below)
To put it simply, during his speech, the Fed Chairman did not say what the market players who had anticipated a less hawkish monetary policy wanted to hear. On the other hand, the statistics on American employment which are expected today and especially tomorrow (NFP) could be the vector of a completely different dynamic, especially if the data are extremely far from the consensus, so paradoxically bad news would become good news for the markets.
Technical Analysis
The EURUSD price is currently at 0.9760, below its cloud, its Kijun (LV) and its Tenkan (LJ), while the Lagging Span (LB) is below its cohorts, but will have to cross the Prices to confirm a return to the downside. If confirmed it would first test the support which is at the level of 0.9629 then reach 0.9534. Conversely if the course recovers there could be a return towards parity (1.0000) initially then towards 1.0094.
Kader Djellouli
Market Analyst
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Bitcoin is on the Rise Again
Bitcoin broke the level of 20500. Currently, the asset is testing this level, trying to form the engulfing. Bitcoin is heading up. The asset is likely to face resistance at the level of 22500, break it and target the level of 25500 next.American stock index S&P 500 has pulled from the downtrend and the level of 3900, which is also a 50% Fibonacci retracement level. Hence, it might potentially drop to the level of 3578 soon.Silver is targeting the upper boundary of the range, that is, the level of 20.90. Silver is likely to pull from this level and drop inside the range.
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