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Date: 28th November 2023.

Market Recap: Bonds up; Stocks weaker; DXY set for the worst month in a year.


Trading Leveraged Products is risky

Market Trends:

*Asian stocks fell in response to declines in US and European markets, triggered by hawkish signals from central banks on interest rates.
*Bonds extended gains amid growing conviction that central banks in Europe and the US have concluded rate hikes, with expectations of potential rate cuts next year.
*The US Dollar hovered near three-month lows as investors believed the Federal Reserve had completed its rate-hike cycle, with attention focused on an upcoming crucial inflation report.



Central Bank Developments:

*ECB President Lagarde noted that the central bank’s efforts to control price growth are ongoing, citing strong wage growth and an uncertain outlook despite easing inflation pressures in the eurozone.
*CME’s FedWatch indicated a 95% likelihood that the US central bank will maintain unchanged interest rates next month, but there is a growing possibility of a rate cut gaining traction in mid-2024.

Global Economic Indicators:

*Australia experienced an unexpected decline in retail sales for October, with consumers cutting spending on everything except food.
*Germany saw a slight improvement in consumer sentiment as the Christmas month approached, but it remained at a very low level, attributed to high inflation, indicating no signs of a sustainable recovery in Europe’s largest economy.

Financial Markets Performance:

*Weaker-than-expected home sales and the Dallas Fed manufacturing index weighed on Treasury yields, with the 10-year yield at 4.396%.
*JPN225 closed 0.12% lower at 33,408.39, despite being up 8% for the month, failing to surpass its highest closing level in three decades reached on July 3 in recent attempts.
*JPY gained momentum as the USDIndex hit a three-month low on weaker-than-expected data, while EURUSD dipped to 1.0937, breaching the bottom of a one-week channel with the next support at 1.0925.
*AUD rose to 0.6630, reaching a four-month high, while NZD touched a seven-week high of 0.6114.
*USOIL eased 0.13% to $74.74, and UKOIL dropped below $80 as oil prices fluctuated ahead of an OPEC+ meeting later in the week.
*Gold reached $2,013.80, hitting a fresh six-month peak of $2,017.89 earlier in the session.



Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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 FX and CFDs 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.

Date: 29th November 2023.

Market Recap: Dollar slumped; Gold & Oil supported on rising Fed rate cut bets.


Trading Leveraged Products is risky

Economic Indicators & Central Banks:

*US consumer confidence improved better than expected, but it follows big downward revisions to October. The consumer confidence rise joins a Michigan sentiment decline to a 6-month low. All the surveys face headwinds from elevated mortgage rates, tight credit conditions, and fears about developments in the Middle East.
*Fed’s Waller (the most hawkish Fed) & Goolsbee are “increasingly confident” that policy is well positioned to slow the economy and get inflation back to 2%. BUT Fed Governor Bowman reiterated she favors more rate hikes if the progress on inflation stalls.
*The RBNZ warned this morning that further policy tightening might be needed if price pressures did not ease.
*German import prices unexpectedly rose 0.3% m/m in October. However, annual import price inflation seems to have bottomed out in August and the trend of ever deeper deflation has been reversed now.



Market Trends

*Fed funds futures rallied on the dovish read. Implied rates popped to suggest about a 70% chance for a rate cut as soon as the May 1 policy meeting, versus about a 55% risk a week ago. However, a significant downturn in growth could spark the more aggressive easing posture as the market is reflecting.
*Treasury bulls took less than hawkish Fedspeak and ran with it. Short term bond yields dropped sharply, to the lowest since July and August.
*Stocks in Asia and US are fractionally higher after a mixed trade most of the session, as Treasury yields and USD hit multi-month lows. JPN225 fell at 33,321 as investors continue their pause in buying.



Financial Markets Performance:

*The US Dollar bears chased the Buck lower. USDIndex fell to 102.36, the weakest since August. – Its worst monthly performance in a year!
*EURUSD broke 61.8% Fib level on July-September downleg, breaching 1.1016. Cable is at 1.2730.
*USDZAR extended to 18.51 lows, JPY jumped to its strongest point since mid-September at 146.66. The NZD surged more than 1% to July’s high of 0.6207.
*USOIL & Gold climbed to $77 from $74 lows, and to $2051.93 per ounce, the highest since May, respectively. The weaker US Dollar, global uncertainties, and rising Fed rate cut bets supported Gold and Oil.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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 FX and CFDs 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.

Date: 30th November 2023.

Market Recap: Stocks loosing their steam; Oil rallies ahead of OPEC+.


Trading Leveraged Products is risky

Economic Indicators & Central Banks:

*The US GDP report implied a Q3 productivity growth boost to a robust 5.1% from 4.7%, after an unrevised 3.6% Q2 clip. There was a Q3 growth rate trimming for the hours-worked index to 1.0% from 1.1% due to weakness in the hours-worked data in the last employment report.
*Fed rate cut bets deepened thanks to the lack of pushback from most Fed officials, and expectations for this pivot continued to drive the markets. There was no impact from the 5.2% GDP print.
*China’s manufacturing sector contracting for a 2nd consecutive month in November and performing worse than forecast indicates weakening momentum despite increasing government efforts to boost growth.
*EU: French inflation dropped sharply & German retail sales bounced in October. It was the first real improvement since May, which is likely also related to the moderation in inflation.

Market Trends

*Treasury yields richened further, and especially at the front end. Fed funds futures brought forward an easing in the policy rate to May from June. The curve dis-inverted to -38 bps on the bull steepener.
*Bonds are set to post the best month ever. Concurrently, the rate cut frenzy has boosted EGBs too, sending the global index to its best since 2008 the financial crisis.
*Stocks traded cautiously and lost steam into the close, as several Big Tech companies offset gains. The US30 gained 0.04%, while the US100 dropped -0.16%, with the US500 off -0.09%. Asian stocks were mixed as well, with CSI300 adding 0.5%.
*Meta fell 2%, Alphabet gave up 1.6% and Microsoft dropped 1%. General Motors surged 9.4% after the company announced a big stock buyback.
*The VIX was up 2.2% to 12.97, recovering from the 12.46 low from last week that had not been challenged since January 2020.



Financial Markets Performance:

*The US Dollar steadied at 102.80, with a 102 handle for a 3rd straight day. It’s slumped from the October 3 peak of 107.00.
*EURUSD reversed below 61.8% Fib level on July-September downleg, at 1.0945. It remains well above 1.09.
*USDJPY retests a potential break of its 146.70 low for a 2nd day in a row, USDCAD extends below 1.36 confirming an ascending head and shoulders formation in the daily chart.
*Gold edged up 0.16% to $2044.18 per ounce.
*USOIL climbed 2% to $78.79 per barrel ahead of the OPEC+ meeting. The delayed meeting of the expanded OPEC+ group will be held online.
*Bitcoin still hovering near the $38,000-mark.



Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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 FX and CFDs 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.

Date: 1st December 2023.

Market Recap: A November to remember!


Trading Leveraged Products is risky

A November to remember. The markets were all over the place to end the month. While the FOMC is still the focal point, repositioning after some big moves on the month and positioning into year-end were the main drivers. The FOMC has reached peak rates, according to Fed funds futures, and rate cuts are the next action, now fully priced for May.

Economic Indicators & Central Banks:

*PCE: Data has been mixed but generally reflect progress on the FOMC’s inflation goal and has convinced markets that rate cuts are underway — core PCE fell to 3.5% y/y from 3.7% y/y previously, but is still well above the 2% target. US pending home sales declined.
*OPEC+ announced an additional 1 mln barrels in cuts. The cuts will be announced individually by members, according to delegates. The Saudi Arabia is expected to extend its down voluntary cut of 1 million barrels.

Market Trends

*Best month in 40 years! Treasuries rallied on FOMC expectations. But profit taking ahead of comments from Chair Powell today unwound some of the froth. The curve steepened to -36 bps versus -50 bps Monday.
*Stocks: Wall Street befittingly finished mixed. The US30 rallied 8.9% with the US100 up 10.7%. For the month the US30 was up 8.8%, its second best November since 1980, according to Bloomberg.
*For the S&P, 10 of the 11 sectors are higher on the month.
*Asia Stock markets were under pressure overnight, with the Hang Seng underperforming, despite a better than expected China Caixin manufacturing PMI that managed to lift above the 50 point no change mark again.



Financial Markets Performance:

*The USDIndex finished at 103.40 recovering from the slide to the 102.36 the prior two days after weaker than expected European and Chinese data.
*EURUSD broke below 1.09, indicating a possible reversal of the 2-month rally, however 1.0830-1.0860 remains the key support area.
*USDJPY rebounds to 148.30, USDCAD dips further into 1-year triangle with immediate support at 1.35, while GBPUSD settles above 1.26 despite US Dollar appreciation.
*Gold slipped about -0.4% to the $2036 area on the rise in yields and some fading of haven trades.
*USOIL slumped 2.9% to $75.59 after spiking 2.2% to $79.60 after OPEC+ announced a further production cut.
*Key Mover: EURCHF down by 1.26%. Next Support levels: 0.95, 0.9440 and 0.9375.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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 FX and CFDs 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.

Date: 4th December 2023.

Market Recap: Cryptos Rise; Oil & Gold Down; Stocks Steady.


Trading Leveraged Products is risky

The holidays got a little cheerier amid signs that the major central banks have come to the end of their aggressive tightening postures. Despite protestations from policymakers to the contrary, the markets are now building in the start of rate cuts in 1H 2024. Those hopes underpinned one of the best November’s on record for bonds and stocks, and helped boost gold to a new record high!

Economic Indicators & Central Banks:

*The market sentiment remains uncertain, as Chair Powell did not offer much pushback to expectations that rate cuts are the next move on the agenda or that there was a massive easing in financial conditions in November.
*The US November payrolls report on Friday is crucial for market expectations of rate cuts.
*Analysts anticipate a soft landing for the US economy, with positive but below-potential growth in the next six quarters.
*BofA notes a positive outlook for emerging markets, which are experiencing historically positive returns after the last Fed hike.

Market Trends

*Fed Chair Powell reminded investors the bank is not in a hurry to cut rates and yields are off Friday’s lows.
*Treasuries and Gold declined from session highs. Yields rose across various tenors in Treasuries, with the 10-year trading around 4.23%.
*Asian shares showed mixed results, with gains in Australian and Korean stocks, while Japanese equities fell. JPN225 closed down 0.6% at 33,231.27 after earlier sliding as much as 1.22%. European and US stock futures remained stable.

Financial Markets Performance:

*The USDIndex nudged higher with Treasury yields and is at 103.43.
*EURUSD broke below 1.09, indicating a possible reversal of the 2-month rally, however 1.0820-1.0865 remains the key support area.
*USDJPY dipped to 146.22, reaching a nearly 3-month high against the US Dollar. Currently though, it has reverted some gains, as speculation about an eventual unwinding of the Bank of Japan’s policies added pressure on the Yen.
*Gold down from all-time highs above $2,100, benefiting from lower yields.
*Oil prices faced challenges due to doubts about OPEC+ maintaining output cuts, high US production, and increasing rig counts. UKOIL eased to $78.37 a barrel, while USOIL fell to $73.63. Geopolitical tensions in the Middle East added to market considerations.
*Bitcoin surpassed $41,000, reaching its highest level since April 2022. Bitcoin’s rebound continued, reaching $41,746, with expectations of interest-rate cuts and potential ETF approvals. Smaller tokens like Ether and Dogecoin also experienced gains.
*Key Mover: EURJPY down by 1.92%. Next Support levels: 159 and 158.50.

This week:

*Investors are closely watching economic indicators, including Australian growth, Chinese inflation, and US non-farm payrolls data.
*The Reserve Bank of Australia is expected to maintain a hawkish stance.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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 FX and CFDs 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.

Date: 5th December 2023.

Market Recap: Fears of overbought condition prevail!


Trading Leveraged Products is risky

The markets giveth and the market taketh away. Red proliferated the screens as profit taking unwound some of Friday’s aggressive rallies. There were no real catalysts to the move, just fears that markets were overbought and rate cut bets too optimistic.

Economic Indicators & Central Banks:

*RBA held the cash rate steady at 4.35% at the final meeting of the year. The board, flagged, however, that progress in bringing inflation back to target was slower than anticipated. They noted uncertainty over the global outlook due to the Chinese economy and overseas conflicts.
*Aussie: Markets are still pricing in some risk of further tightening from the RBA, and the inflation numbers for the last quarter of the year will likely be decisive for the February 6 meeting.
*China: Services PMI expanded at a quicker pace in November, which was the highest in three months, as demand strengthened in Asia’s largest economy.

Market Trends

*Treasury yields closed just off session highs.
*Asia stock markets sold off, following on from a weaker close on Wall Street. China bourses underperformed, despite a stronger Services PMI.
*Stocks: Wall Street was underwater from the get-go and closed with modest declines. The US100 slumped -0.84% on weakness in big tech, including Meta on news CEO Zuckerberg was selling shares. Microsoft, Alphabet, and Nvidia also declined. Alaska Air dropped after announcing its acquisition of Hawaiian Air. US500 was off -0.54% and the US30 was down -0.11%.



Financial Markets Performance:

*The USDIndex was one of the few gainers on the day, rebounding to 103.642 (intraday peak of 103.852) following Friday’s drop to 103.268.
*EURUSD declined to 1.08, indicating apotential retest of 1.0760, as the buck is firmer versus all its G10 peers as rate cut speculation is keeping a lid on EUR and GBP.
*USDJPY steady above 146.50.
*Gold has corrected somewhat as the US Dollar found a footing and Treasury yields lifted. It is currently steady at $2030 – $2040 area.
*Oil remained under pressure as USOIL is currently trading below $74 as markets remain distinctly unimpressed by the voluntary output cuts announced by OPEC+. With growth data suggesting subdued demand that is leaving fears of a sizeable supply overhang through 2024 on the table.
*Bitcoin extended higher and breached $42,337 for the first time since early 2022 (roughly 153% higher this year).
*Key Mover: Copper (-0.95%), with next Support at 3.75.



Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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 FX and CFDs 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.

Date: 6th December 2023.

Market Recap: The wait is on for Friday’s jobs report!

Economic Indicators & Central Banks:

*Treasury yields extended lower after the larger than expected decline in job openings. The data added to beliefs that the labor market is cooling and that the FOMC is done hiking, with the next move a cut in the coming months.
*Fed funds futures are reflecting about a 65% bet for a 25 bp March cut, with May fully priced in and then some.
*German manufacturing orders plunged. Orders corrected -4.6% in the three months to October, which is flagging recession risks and ongoing weakness even going into 2024.

Market Trends

*Asian stock markets rallied, with Japanese markets leading the way. Futures are also higher across Europe and the US as markets buy in to hopes that major central banks have reached peak rates and will start to cut interest rates next year.
*GER40 is at all-time highs supported by slowing inflation and the prospect of lower interest rates next year boosting the country’s biggest stocks. It gained 8.8 % over the past month during a stock market rally on both sides of the Atlantic underpinned by growing hopes that major central banks have finished raising rates.



Financial Markets Performance:

*The USDIndex is to the upside for a 5th day, retesting the 104 level, as it found relative firmness as the markets priced in a more aggressive easing stance from the ECB than the Fed.
*EURUSD below 1.08, extending its 1-week dip, post a sharp correction in German manufacturing orders that added to concerns that growth is faltering. This is coupled with weaker than expected inflation data for November that will add to pressure on the ECB ahead of next week’s council meeting.
*Gold & Oil: The strength in the US Dollar weighed on commodities with USOIL dropping -0.88% to $72.10 and Gold falling -0.48% lower to $2009.97. Profit taking has knocked bullion from the record high of $2072.22 on December 1.
*Bitcoin hit 2022 highs at 44429. Currently it is traded at 43395 in an overbought condition, indicating a near term consolidation.



Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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 FX and CFDs 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.

Date: 7th December 2023.

Oil Hits Lowest Levels Since June 2023, Moody Downward China.

Crude Oil – Oil Declines for a Seventh Consecutive Week

The price of Crude Oil has declined to its lowest level since June 2023, marking an almost six-month low. The price of Oil has now declined for a seventh consecutive week. Economists note the decline is also improving the prospects of the stock market. Stocks are taking advantage of the lower oil prices which may trigger lower inflation and a softer monetary policy. This week alone the price has declined by 6.5%, but what is driving the bearish trend?

The main two reasons the market is witnessing a lack of demand in the oil market is China’s latest poor economic data and the latest OPEC meeting. China’s manufacturing and services PMI read significantly lower than expectations and this week Japan also announced weaker data. China is the largest importer of Oil while Japan is the fourth largest. Therefore, poor economic data in these regions are likely to trigger downward pressure for Crude Oil.

To make matters worse for the Oil market, Moody, the credit rating industry, lowered the economic outlook for China from “stable” to “negative”. Since the downgrade, economists have advised the Chinese economy is not likely to witness a recession, but more likely stagnation. OPEC, on the other hand, were unable to come to an agreement on the production levels. Again, this had a negative effect on Crude Oil prices. Lastly, yesterday’s report from the American Petroleum Institute showed inventories rose by 9.594M barrels instead of a decline of 2.267M barrels. The inventories show higher than expected supply.



In terms of technical analysis, the price of Oil is trading within a downward trend and is currently hovering within a retracement. The retracement is currently measuring 1% in line with previous pullbacks and is currently showing no major upward momentum. Therefore, most indicators continue to signal a downward trend. If the price breaks below $69.69 and $69.59, sell signals will again potentially become active.

USA100 – Only 20% of Stocks Held onto Gains!

The USA100 fell by 0.57% during yesterday’s session and was the weakest of the top 3 most popular US indices. When looking at the NASADAQ’s top ten most influential stocks, only 1 stock stayed in the “green”, this was Tesla which only slightly rose by 0.27%. Out of the top 20 most influential stocks, only 20% retained their value. The stock which saw the largest decline was NVIDIA which dropped 2.28%.

However, fundamental factors continue to point towards a positive outlook for the US tech sector. This morning the US Dollar Index is declining, 52% of market participants believe the Fed will cut rates in March 2024 and most of the components witnessed positive earnings data. The only slight concern for investors is bond yields which have risen over the past 24 hours. However, bond yields continue to remain significantly lower than in the previous months, which is positive for the stock market.



Technical analysts have pointed out that the index is not within a short-term downward trend and each time the USA100 declines, buyers re-enter the following day to take advantage of the lower price. Investors will again be monitoring if the index rebounds today. The stronger performer in the pre-market hours is Alphabet which has risen 0.82%. Alphabet stocks make up almost 6% of the overall index. Investors are currently balancing the negative effect of a weaker Chinese economy and the positive effect of a rate cut as early as March 2024. If the price increases above $15,873, the USA100 will again experience buy signals. Buy signals can be seen from the regression channel and crossovers.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

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 FX and CFDs 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.

Date: 8th December 2023.

Central Banks’ Divergent Paths: ECB Signals Caution, BoE Stays the Course


Trading Leveraged Products is risky

As the European Central Bank (ECB) and the Bank of England (BoE) gear up for their upcoming meetings, market participants eagerly await signals that will shape the economic landscape in 2024. While both banks are expected to maintain interest rates, their perspectives on future policy directions diverge.

This article explores the nuanced positions of the ECB and BoE, shedding light on their contrasting views on inflation, rate hikes, and the path forward.

ECB’s Shifting Stance:

The ECB meeting is poised to capture attention not for an anticipated rate adjustment but for the nuanced signals regarding the outlook for 2024. In the aftermath of November’s meeting, where a tightening bias persisted, recent developments, notably the unexpected drop in inflation, have prompted a shift in tone.

Market Trends

Isabel Schnabel’s Reuters Interview:

Executive Board member Isabel Schnabel’s recent Reuters interview marked a departure from previous sentiments. While she emphasized the need for caution, Schnabel hinted that the ECB is prepared to confirm that interest rates have peaked. Contrary to market optimism anticipating rate cuts as early as March, Schnabel underscored the central bank’s patience, emphasizing the necessity of further progress in underlying inflation.

Monetary Policy Transmission Confidence:

Despite concerns about a potential credit crunch, Schnabel expressed confidence in the effectiveness of monetary policy transmission. While acknowledging signs of labor market softening, she dismissed fears of a severe and prolonged recession, aligning with the ECB’s cautious stance. The central bank seems poised to confirm the unlikelihood of further rate hikes but remains hesitant to entertain the idea of rate cuts in the near term.



Financial Markets Performance:

[b]ECB’s Path to Rate Cuts:
The timing of potential rate cuts in 2024 remains a pivotal question. Market expectations for an easing bias in March, paving the way for a second-quarter cut, appear optimistic. ECB President Lagarde, expected to be more vague on the topic, may find it challenging to temper easing expectations.

PEPP Reinvestment Discussion:
The discussion around the future of the Pandemic Emergency Purchase Program (PEPP) reinvestments adds complexity. While some suggest an early end to re-investments as a prerequisite for rate cuts, details may not emerge until early 2024. Lagarde’s confirmation of a gradual reduction could set the stage for rate cuts in the second quarter.

EURUSD has been under pressure since the lower than anticipated inflation report last week and is currently struggling to hold the 1.08 mark. The Fed may be leading the way on rate cuts next year, but markets expect that the ECB won’t be far behind. The US economy may be better equipped to deal with the marked tightening of financing conditions that is increasingly hitting the real economy.

BoE’s Steady Outlook:
In contrast, the BoE’s upcoming announcement may lack the excitement of policy shifts. With no updated forecasts and data aligning with November’s assumptions, the focus turns to the hawks within the bank. Despite concerns voiced by some, including BoE’s Greene, about the risks of doing too little, Governor Bailey maintains a steadfast position against early rate cuts.



Bailey’s Commitment to Inflation Target:
Bailey’s emphasis on completing the journey to the 2% inflation target and the potential sluggishness of that process reinforces the BoE’s commitment to a “higher for longer” approach. Deputy Governor Ramsden underscores the need for sustained restrictive policy to combat inflation effectively, signaling a likelihood of the BoE remaining on hold through the first half of 2024.

As the ECB signals caution and the BoE maintains a steady course, the central banks’ divergent paths reveal nuanced approaches to economic challenges.

Investors will closely monitor the upcoming meetings for insights into future policies, with the timing of potential rate cuts and the fate of PEPP reinvestments hanging in the balance. The evolving economic landscape will undoubtedly shape the trajectory of monetary policies in the months to come.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

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Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

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 FX and CFDs 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.

Date 11th December 2023.

US Economy Remains Strong, But All Eyes on Tomorrow’s Inflation!


Trading Leveraged Products is risky

December has not failed to surprise investors with the US employment sector outperforming expectations and sending stocks soaring. Additionally, across the Pacific the World’s second largest economy also made public interesting inflation data which is in the spotlight just as much as the US NFP. Both Chinese Consumer and Producer inflation fell below expectations. Consumer prices declined at their fastest pace in more than 3 years. China is now witnessing deflation measuring -0.5% which has not been seen since the banking crisis if we exclude COVID-19.

Last week, Moody’s downgraded China’s credit rating. Moody’s advises the costs of supporting failing local governments, state-owned companies and controlling the property crisis would pressure the economy. But the question is, what does this mean for the US and US Indices?

USA100 – Inflation To Be The Next Price Driver

The USA100 rose during the US trading session by 0.40% on Friday and by the close of day was almost 0.50% higher. The first reaction to the Non-Farm-Payroll data was negative and the instrument fell 0.38% before buyers re-entered the market. During this morning’s Asian session, the index is trading 0.10% lower but is so far forming nothing more than a retracement. Let’s discuss what the employment data means for the index as well as weak Chinese inflation.

The NFP confirms the US has 199,000 more employed individuals compared to the previous month, which is 15,000 higher than expected. However, the main shocks came from the Average Hourly Earnings and the Unemployment Rate. The Unemployment Rate declined from 3.9% to 3.7% which is considerably low considering the restrictive monetary policy. The Hourly Earnings doubled from 0.2% to 0.4%. The employment data has both positives and negatives for the stock market. However, in the past 2 years, higher employment data has meant a poorer stock market, which was not the case on Friday.

The better-than-expected employment data indicates an imbalance within the employment sector which triggered higher wages. These factors can contribute to higher consumer demand, higher investor demand, and a better performing economy. All these factors are positive for the stock market in general. However, there is a negative side also. The positive data has lowered the possibility of a nearer interest rate cut. Previously, market participants predicted a “cut” to come as early as March, but the employment data again points to “higher for longer”. The CME FedWatch Tool now has virtually no possibility of a cut in December, January and February, and now indicates a “pivot” in May 2024.

The question is, is the USA100 overpriced considering the new reality? This is something which will become clearer during Wednesday evening’s Federal Reserve Rate Decision and Press Conference. If the Fed President, Jerome Powell, suddenly becomes more hawkish and pushes a pivot further in the future, stocks can correct. Technical analysts also advise the stock market may fall into a wider price range until further clarity from the Fed.



Technical analysis shows the USA100 trading within a short-term bullish trend, but also at a significant psychological price. The asset has failed to break above this level on the past four attempts as investors fear the asset is trading above its intrinsic price. Therefore, the USA100 will require a stronger price driver. This potentially could come from tomorrow’s Consumer Price Index (inflation rate). If the CPI reads lower than 3.1%, ideally 2.9% or lower, the index could experience another surge in investor demand. However, if inflation reads 3.1% or remains at 3.2%, investors may be discouraged.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

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 FX and CFDs 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.