EURUSD consolidates ahead of the FOMC meeting

The dollar index started the week on a rather pessimistic note, trading below 102 points, suggesting that the market is setting low expectations for a hawkish Fed outcome on Wednesday. A moderate correction is taking place in the risk assets as a reaction to a possible turbulence due to a series of central bank meetings this week. Major European indexes and futures for US indices are in the red on Monday. The price of gold, which has been a pretty good proxy for expectations for the Fed's interest rate path since the beginning of this year, is consolidating around $1925, also indicating relatively mild expectations for a dovish Fed surprise.The dollar could come under pressure, with EUR/USD above 1.10 if the Fed makes a big surprise, in particular by saying that any additional rate hike after 25bp this week will depend on incoming data. However, the chance of such an outcome is low. It is more likely that the Fed will reject market expectations of a 50 basis point rate cut in the second half of the year, in which case the dollar will move into a short-term rally.Potential EURUSD reaction following FOMC decisionIn addition to the FOMC meeting on Wednesday, there are two important reports on the US economy on the US data calendar. First, the Fourth Quarter Labor Cost Indicator (ECI) is one of the Fed's preferred measures of price pressure in labor markets. This indicator rose to 1.4% in the first quarter of last year from the previous three months, but is expected to fall to 1.1% in the fourth quarter from 1.2% in the third. Any surprise upside here could see expectations shift towards a more hawkish FOMC decision. And on Friday, the US jobs report for January comes out.Clearly this is a busy week for FX and perhaps most of the volatility will come from the results of Wednesday night's FOMC meeting and the ECB/BoE decision on Thursday. The opening of Chinese markets after the public holiday of the Lunar New Year should also add some volatility to Asian markets price action. Investors are very optimistic about China reopening its doors and will need more data this week to see if the potential recovery momentum in the Chinese economy remains. Tomorrow we will see the Chinese PMI for January, where a significant rebound is expected to support the bullish positions on Chinese risk assets.The main view of the ECB meeting is that the central bank will remain hawkish and resist the 2024 easing. This should see EURUSD's 2-year swap differentials continue to narrow and be positive for EUR/USD. The narrowing of the swap differential is the main market factor in the EUR/USD appreciation.Before the ECB meeting on Thursday, euro zone economic confidence figures for January will be published today. They are expected to improve slightly, but any upside surprises will fuel the hypothesis of lower energy consumption and strong fiscal stimulus to ensure recessions, if any, are mild.A 50 basis point rate hike by the Bank of England could provide moderate support for the pound sterling. The base scenario for a 50 basis point upswing is not fully priced in by the market. And with wage pressures lingering and the impact of a low base not leading to a significant decline in the consumer price index until the second quarter, it looks like it's too early for the Bank of England to relax on the predictability of inflation. Depending on the state of the dollar after the FOMC meeting, by the end of the week GBP/USD may rise to 1.2500.

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Daily Market Outlook, January 31, 2023

Daily Market Outlook, January 31, 2023 Nasdaq Back At Five Week Lows, Global Stocks Still Set For First Jan Gains Since 2020Jitters on Wall Street ahead of Wednesday’s FOMC rate decision and Chair Powell’s press conference saw investors paring risk positions, with Tesla giving back over 6% of recent gains, this led to the Nasdaq retreating by over 2% to close at five week lows. Monday’s trade got off to subdued start as Spanish inflation data came in hotter than expected, after a similar print in Australia, markets mulled a return to inflation concerns, however, this mornings French inflation print came in on the soft side, which has prompted US equity futures to turn positive on the session, those gains are proving hard to maintain as of the time of writing. Asian equities remain in the red by circa 1% but are off the worst levels from the overnight session.European investors will eye flash Eurozone GDP data this morning, sentiment reads for the period imply positive inputs will provide a more upbeat number than the weaker Q4 data. In the UK political pressure mounts once again as Chancellor Hunt’s recovery plan appears to have done little to reassure markets, with the IMF confirming that the UK is the only G7 economy to receive a downgrade to their 2023 economic outlook, the IMF predicts the UK economy is set to decline by 0.6% in 2023 a stark contrast to the prior growth expectations of 0.3%In the US, the employment cost index is due late today, a favourite read for Fed officials in gauging labour market cost pressures, this will provide a final indication of inflation pressures ahead of Wednesday’s key central bank decision. Market watchers have pencilled in a rise of 1.2% in line with the Q3 print, this will confirm Fed concerns that the labour market remains too tight to take their foot of the gas with respect to the current rate cycle.Markets-wise, European bourses, FTSE & EuroStoxx are opening flat to marginally down, early indications were for weaker opens, however, the French CPI miss has provided some modest support as investors start to pair risk positions ahead of the trifecta of central bank decisions ahead with the FOMC, ECB & BoE all on deck in the next 72hrs. The dollar has caught a modest bid confirming the retreat in risk appetite to trade above the 102 handle, with the Euro looking to test 1.08, month end today FX volatility likely to be seen around London fixing at 4pm GMT as month end flows kick in (see Barclays Month End signal note below). As well as the central bank risk ahead, investors will also receive a number of significant earnings reports in the coming days with Meta, Apple, Amazon and Google all set to report, buckle up for a busy second half of the week which will be capped off on Friday with the all important Non Farm Payroll release!Overnight News of NoteAsian Stocks Slip As Investors Eye Looming Central Bank Rate DecisionsNasdaq 100 Suffers Its Biggest Drop In A MonthGold Edges Higher, On Track For Third Straight Monthly GainIMF Raises World Economic Outlook For The First Time In A YearChina Economic Activity Swings Back To Growth In JanuaryChina ForMin Seeks Stronger Economic Ties With Saudi ArabiaJapan Dec Factory Output Inches Down, Retail Sales Beat EstimatesJapan FinMin: Too Early To Consider Reviewing Gov't-BoJ StatementAustralia Dec Retail Sales Post First Fall Of 2022; Yields DropUS Treasury Increases Borrowing Estimate For The First QuarterWhite House To End Covid-19 Emergency Declarations On May 11IMF Slashes UK Growth Outlook, Adding Pressure On Chancellor HuntIsrael Drone Responsible For Strike On Iranian Weapons FacilityDollar Set For Fourth Monthly Drop As Fed Meeting LoomsYen’s Rally Comes Unstuck As Traders Eye Hawkish Fed OutcomeOil Set For Monthly Drop As Chinese Demand, Fed Meeting In FocusWhirlpool Sees Improving Profitability As Material Costs EaseWashington Halts Licences For US Companies To Export To HuaweiSamsung Electronics Q4 Profit Plummets Amid Global Chip Downturn(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Options Expiration For the New York Cut 10am EST(BOLD expiries with a value of a Billion+ more magnetic if price is within the daily trading range)EURUSD 1.0875, 1.0855, 1.0900USDJPY 130.00, 129.00 127.50AUDUSD .7075USDCNY 6.8000CFTC Data As of 27/01 ( Source Reuters)USD net spec short in the Jan 18-24 period; $IDX -0.46%EUR$ +0.86% in period, specs buy 7,365 contract long now +134,349$JPY +1.56% in period yen short cut by 1,326 contracts now -21,635GBP$ +0.44$ in period, short reduced by 763 contracts to -23,934CAD specs -3,453 contracts now -30,712; AUD specs +449 contract now -33,171BTC +7.45%, spec short increased by 810 contracts now -1,437Next week's data likely mooted by Fed, ECB, BoE meets Feb 1-2 after period closesTechnical & Trade ViewsSP500 Bias: Intraday Bullish Above Bearish Below 4040Primary support is 4000Primary objective is 4138Below 3990 opens 395020 Day VWAP bullish, 5 Day VWAP bearishEURUSD Bias: Intraday Bullish Above Bearish below 1.0820Primary support  is 1.0750Primary objective is 1.10Below 1.0730 opens 1.061020 Day VWAP bullish, 5 Day VWAP bearishGBPUSD Bias: Intraday Bullish Above Bearish below 1.2320Primary support  is 1.2180Primary objective 1.2460Below 1.2150  opens 1.210020 Day VWAP bullish, 5 Day VWAP bearishUSDJPY Bias: Intraday Bullish above Bearish Below 131.50Primary resistance is 132.30Primary objective is 125.00Above 133.00 opens 135.0020 Day VWAP bearish, 5 Day VWAP bullishAUDUSD Bias: Intraday Bullish Above Bearish below .6990Primary support is .6940Primary objective is .7250Below .6930 opens .687020 Day VWAP bullish, 5 Day bearish VWAPBTCUSD Intraday Bias: Bullish Above Bearish below 22100Primary support 21400Primary objective is 25000Below 21000 opens 2030020 Day VWAP bullish, 5 Day VWAP bearish

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-january-31-2023"
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Top 10 areas most immune to a house price crash

New research pinpoints the towns, cities and London boroughs most insulated from house price falls this year - and which are the most exposed.

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Fund platform launches low cost £4.99 a month service for small investors - we see how it compares

Aimed at investors with small investment pots of £30k or less, fund platform interactive investors has launched a low costs service - but is it any good and how does it compare to rivals?

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Market Spotlight: Computacenter Shares Jump on Profit Guidance

Better 2022 Results Shares in UK listed Computacenter, Europe’s chief independent provider of IT infrastructure services, are up over 7% today. The move comes in response to updated from the company today with 2022 results now projected to be better than initially expected. Total revenues over last year were seen 30% above the company’s own forecasts for the period (gross invoices) with Computacenter citing the benefit of a stronger US Dollar as well as an acquisition made in H2 2022.The company noted strong demand from all markets for its technology sourcing products. Additionally, the group noted decent services revenues also though did note that its services margins were impacted by the unwinding of covid-related benefits as well as the dampening effects of elevated inflation.Reduced Covid Impact Looking ahead, however, the group is confident in delivering further strong results this year, noting negative covid-related issues have now passed through. Shares are now up more than 14% on the year and look set for further gains should the BOE this week begin to steer away from aggressive monetary tightening.Technical ViewsComputacenterThe rally has seen price breaking above the 2100 level and above the bearish trend line from last year’s highs. With momentum studies turning bullish, the focus is on a continuation higher while price holds above the 2100 level. Above here, the next area to watch is the bull channel top and 2255 level (prior broken lows). A move above here will be firmly bullish for the stock medium-term.

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Precious Metals Monday 30-01-2023

Metals Rally Pauses For Now The metals complex is seeing a weaker opening on Monday with both gold and silver trading in the red as European markets open. Gold has enjoyed a strong start to the year ahead of the recent soft patch with gold futures rallying around 7% off the YTD lows, trading up to levels not seen since Q2 2022. With the US Dollar having started the year on a weak footing, the outlook for metals looks fairly clear; should USD continue lower, metals have room to break higher, any reversal higher in USD, metals are vulnerable to a reversal lower.With this in mind, the key focus for metals traders this week will be the FOMC meeting on Wednesday. The central expectation is now for the Fed to pivot further via a smaller .25% rate increase. With the move well-expected, the bigger focus will be on the Fed’s guidance. If there is any indication that the Fed will be looking to pursue a slower pace of tightening, or even bring forward the likely end point/date of tightening, this will be firmly bullish for metals, with USD likely to come under heavy selling pressure. However, should the Fed surprise by either sticking to a .5% hike, or sticking with its hawkish outlook on rates (to end above 5%, to continue through 2023), this could well see metals coming off as USD rebounds.Technical ViewsGoldThe rally in gold prices, framed by the narrow bullish channel off last year’s lows, has stalled for now with price drooping back onto the 1916.34 level, which is holding as support. While this level holds, the focus is on a continuation higher with 1973. 51 the next key upside level to note. However, momentum studies are weakening here, raising risks of a reversal lower. Should price move back under current support, focus shifts to the channel lows and 1871.04 as the next key support area.SilverThe rally in silver prices off last year’s lows has seen the market stalled firmly into a test of the 24.0073 level. This area has capped price since early December and shows no signs of letting up yet. Despite the market having broken below the rising channel off last year’s lows, the fact that 24.0073 is acting like a magnet for price reflects pent up bullish pressure, keeping the focus on an eventual break higher.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/precious-metals-monday-30-01-2023"
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Daily Market Outlook, January 30, 2023

Daily Market Outlook, January 30, 2023 Central Bank Decisions To Dominate The Data Docket For the WeekAsian markets have started the week with a mixed tone as investors prepare for major central bank decisions from the US, Europe and the UK. The paring in risk appetite comes against a backdrop that has been broadly constructive for the opening month of the year, investors continue to pin their hopes on peak inflation having passed, focus now shifts to the global growth narrative and central bank policy. Chinese markets have returned from the Lunar New year holiday in somewhat soggy spirits nursing losses of just under 2% on the session.Ahead of the trifecta of central bank decisions later in the week, European investors will eye flash German GDP this morning, sentiment reads for the period imply positive inputs will provide a more upbeat number than the weaker Q4 data. Spain released CPI figures for January which came in hotter than expected 5.8% v 4.7% expected, providing further cover for hawkishness from the ECB. In the UK the Lloyds Business Barometer was released overnight, showing a more positive tone for business in January, printing a second consecutive monthly uptick to 22%, the best levels seen in the last six months of data.In the US, the data docket is pretty sparse today, instead investors will be prepping for Tuesday’s employment cost index for Q4 ‘22, Wednesday bring the critical FOMC decision and press conference, Thursday sess ISM manufacturing data and the we is rounded out with a pivotal Non Farm payrolls release.Markets-wise, European bourses have opened with a softer tone, the FTSE and the EuroStoxx both in the red, following from a tepid session in Assia, US futures are also pointing south with losses of just under 1%. Spanish CPI released this morning has done little to help the retreat in risk sentiment with a hotter print, a concern for European investors as they mull tiger for longer ECB action and rhetoric. US 10yr yields remain steady around 3.5%, with Dollar marginally softer on the session but still rotating around the 102 handle, Crude has leaked lower overnight trading sub  $80, while Gold remains bid above 1900.Overnight News of NoteStocks Mixed In Choppy Trading With China, Fed In LimelightOil Swings As Traders Track China’s Return And Mideast StrikeChina Stocks Flirt With Bull Market On Return From HolidaysChina Central Bank To Roll Over Lending Tools To Spur GrowthChina Vows To Boost Consumption To Power Economic RecoveryChina Economy Shows Muted Improvement During Holiday PeriodBoJ Kuroda: Possible To Hit Stable Inflation With Continued EasingKey Panel Urges BoJ To Make 2% Inflation Target Long-Term GoalMcCarthy And Biden To Discuss Debt Ceiling On WednesdayScholz Doubles Down On Refusal Of Fighter Jets For UkraineSpain’s Biggest Banks Prepare To Challenge Windfall TaxUK Business Confidence Bounces Back But Interest Rates Will RiseUS Dollar Cautiously Firm Ahead Of Busy Central Bank WeekHedge Funds Boost Treasury Shorts To Record On Doubts Over RallyPension Funds In Historic Surplus Eye $1 Trillion Of Bond-BuyingStocks Poised To Hit New Lows This Year, Survey Of Investors Shows(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Options Expiration For the New York Cut 10am EST(BOLD expiries with a value of a Billion+ more magnetic if price is within the daily trading range)EURUSD 1.0950, 1.07USDJPY 131.40 130.00AUDUSD .7050CFTC Data ( Source Reuters)USD net spec short in the Jan 18-24 period; $IDX -0.46%EUR$ +0.86% in period, specs buy 7,365 contract long now +134,349$JPY +1.56% in period yen short cut by 1,326 contracts now -21,635GBP$ +0.44$ in period, short reduced by 763 contracts to -23,934CAD specs -3,453 contracts now -30,712; AUD specs +449 contract now -33,171BTC +7.45%, spec short increased by 810 contracts now -1,437Next week's data likely mooted by Fed, ECB, BoE meets Feb 1-2 after period closesTechnical & Trade ViewsSP500 Bias: Intraday Bullish Above Bearish Below 4000 - 4065 Target Hit, New Pattern DevelopingPrimary support is 3935Primary objective is 4138Below 3920 opens 389020 Day VWAP bullish, 5 Day VWAP bullishEURUSD Bias: Intraday Bullish Above Bearish below 1.0820Primary support  is 1.0750Primary objective is 1.10Below 1.0730 opens 1.061020 Day VWAP bullish, 5 Day VWAP bearishGBPUSD Bias: Intraday Bullish Above Bearish below 1.2340Primary support  is 1.2180Primary objective 1.2460Below 1.2150  opens 1.210020 Day VWAP bullish, 5 Day VWAP bullishUSDJPY Bias: Intraday Bullish above Bearish Below 131.50Primary resistance is 132.30Primary objective is 125.00Above 133.00 opens 135.0020 Day VWAP bearish, 5 Day VWAP bullishAUDUSD Bias: Intraday Bullish Above Bearish below .7060Primary support is .6950Primary objective is .7250Below .6930 opens .687020 Day VWAP bullish, 5 Day bullish VWAPBTCUSD Intraday Bias: Bullish Above Bearish below 22900Primary support 21400Primary objective is 25000Below 21000 opens 2030020 Day VWAP bullish, 5 Day VWAP bullish

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-january-30-2023"
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USDCAD, H4 | Potential reversal off a key support

To discuss this trading idea, head over to Tickmill Traders Club where you can get direct access to our team of world-class analysts.TitleTitle USDCAD, H4 | Potential reversal off a key supportTypeBullish ReversalPreference:We are seeing price rebound off the round number level and key support of 1.33. There is a chance price might reverse from here to climb toward the previous swing high and resistance level at 1.34

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/title-usdcad-h4-or-potential-reversal-off-a-key-support"
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Bitcoin Forecast: Potential Rise is Still Ahead

Bitcoin is pulling back from the level of 22500, therefore the bulls keep on pushing the coin till the resistance level of 25000. The asset is likely to head up and possibly retest the level of 22500 soon. So, let’s observe what will happen this week.American stock index S&P 500 has touched a very important weekly downtrend. Last week the index was below this downtrend. Now, the asset’s price is trying to pull back and drop. However, it would be wise to check the candlestick formations to figure out the asset’s moves. The index might also break the downtrend and jump.Oil has pulled from the broken downtrend and the horizontal level of 86.00. Oil might potentially jump and hit the level of 100 next.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/bitcoin-forecast-potential-rise-is-still-ahead"
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AUDUSD. H4 | bullish opportunity

To discuss this trading idea, head over to Tickmill Traders Club where you can get direct access to our team of world-class analystAUDUSD, H4 | Potential to swing high TypeBullish ReversalPreference:We're seeing price test a key overlap support at 0.70624. There's a chance price might reverse from here to push prices all the way down to 1st resistance at 0.71322. The 1st support at 0.68722.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/audusd-h4-or-bullish-opportunity"
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Self-assessment tax returns: what you need to know about getting your tax bill right

Understanding how self assessment works can help you ensure you pay the right amount of tax, as well as avoid penalties for missing the deadline.

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Renting a slice of heaven on Moorea

Chris Carter heads to French Polynesia in search of his own private paradise

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Preview of the Fed Meeting: Finding a Balance is a Tough Task

Last year the Fed pursued the most aggressive monetary policy in many years, but in December 2022, officials began laying the groundwork for reducing the pace of tightening to standard 25 bp hike. There are signs that the US expansion is losing momentum while risks of sharper inflation easing gradually build up which contribute to an increasingly dovish market bias regarding the Fed actions in 2023, including rate cuts.After raising fed funds rate by a total of 4.25% in 2022, which consisted of a series of 75bp and 50bp hikes, the Fed hinted in December that the tightening episode may be coming to an end. The market in response revised the peak Fed rate from 5% to 4.75%. While inflation is still well above its 2% target and unemployment near historic lows, evidence is accumulating at the Fed that policy transmission (i.e., effects of monetary tightening) is becoming more significant and therefore the risks of policy overshooting are rising. This can be seen primarily in the real estate market, where mortgage rates reacted quite quickly, limiting mortgage demand, and thereby putting pressure on prices:As a result, rental rates began to creep down, albeit with some delay. This delayed effect is expected to be fully felt by mid-2023, which creates risks of a faster than expected decline in the Core PCE index, the main inflation metric for the Fed. Against the backdrop of these fears, the "sensitivity" of market participants to a potential error in the Fed's policy has increased, and asset prices may be inclined to overreact even to slightly hawkish policy hints. An excessively dovish line, in turn, can also turn into trouble - the market may perceive this as an imminent transition to lower rates, which in turn may cause unwanted easing of credit conditions, which will only further spin the inflation flywheel.The economic data for the US, published on Friday, did not contain big surprises, Core PCE in December rose by 4.4% (in line with the forecast), consumer spending decreased in monthly terms slightly more than expected - by 0.2%. The dollar index continues to move in a narrowing triangle, trying to find a balance near the level of 102:It is clear that the US currency will likely pick direction after the Fed meeting, given that the sloping triangle in the bearish trend is a breakout figure, a bottom-up breakdown of the level of 101.50 is more likely to mean that the next market target is a round level of 100 points.The data shows that the EURUSD's six-hour reaction to last year's decisions by the Federal Open Market Committee (FOMC) caused a movement within +/- 0.7%. And the currency options market prices in a 90-pip range for the EURUSD pair over the period covering the Fed and ECB meetings next week.The decision of the Bank of Canada to stop the tightening cycle at the level of 4.50% made an interesting impression on the dollar market - the US currency was also sold based on the fact that global central banks tend to synchronize their policy, that is, as a signal that the Fed might be preparing to complete the tightening.This suggests that the FOMC meeting may be more interesting for EURUSD than the market currently expects. The base case assumes that EURUSD continues to trade around 1.08/1.09 ahead of the FOMC meeting. Any suggestion that the Fed has all but stopped the tightening could see the EURUSD move to 1.10. However, the signal from the Fed that the potential for a 50 bp rate change persists, will most likely send the EURUSD to the 1.07 level.More broadly, EURUSD is likely to continue rising this year – possibly to 1.15 in the second quarter – this will be a time when US inflation reports will likely contain more downside surprises and China’s “restart” will be a tailwind for cyclical currencies, including the Euro.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/preview-of-the-fed-meeting-finding-a-balance-is-a-tough-task"
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The High Income Child Benefit Charge - is it the most illogical, unfair and unnecessary tax?

We may not like taxes, but this one is blatantly unfair, penalises middle income earners and adds to the gender pensions gap, says Kalpana Fitzpatrick.

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