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Surprising US PMI drops contrast with Europe’s gains in services, pushing EUR/USD higher as markets recalibrate economic outlooks and monetary policy expectations. Source: Getty Forex Euro Pound sterling European Union Inflation EUR/USD Written by: Richard Snow | Analyst, DailyFX, Johannesburg Publication date: Wednesday 24 April 2024 07:28 Flash PMI data provides unflattering US outlook, Europe improves German and EU manufacturing remains depressed but encouraging rises in flash services PMI results suggest improvement in Europe. UK manufacturing slumped well into contraction, but also benefitted from another rise on the services front. It was the US that provided the most surprising numbers, witnessing a decline in services PMI and a drop into contractionary territory for manufacturing – weighing on the dollar. EUR/USD rises after us PMI shock EUR/USD responded to lackluster flash PMI data in the US by clawing back recent losses. The euro attempts to surpass the 1.0700 level after recovering from oversold territory around the swing low of 1.0600. The pair has maintained the longer-term downtrend reflective of the diverging monetary policy stances adopted by the ECB and the Fed. A strong labour market, robust growth and resurgent inflation has forced the Fed to delay its plans to cut interest rates which has strengthened the dollar against G7 currencies. The surprising US PMI data suggests the economy may not be as strong as initially anticipated and some frailties may be creeping in. However, it will take a lot more than one flash data point to reverse the narrative. If bulls take control from here, 1.07645 becomes the next upside level of interest followed by 1.0800 where the 200 SMA resides. On the downside, 1.06437 and 1.0600 remain support levels of interest if the longer-term trend is to continue. EUR/USD daily chart Source: TradingView EUR/GBP surrenders recent gains EUR/GBP rose uncharacteristically on Friday when risks of a broader conflict between Israel and Iran subsided. In addition, the Bank of England’s(BoE) Deputy Governor Dave Ramsden stated that he sees inflation falling sharply towards target in the coming months, sending a dovish signal to the market. Today the BoE’s chief Economist Huw Pill tried to walk back such sentiment, stressing that the bank needs to maintain restrictiveness in its policy stance. He did however, echo Ramsden’s remarks by saying the committee is seeing signs of a downward shift in the persistent component of the inflation dynamic. EUR/GBP appears to have found resistance around 0.8625 and has traded lower after the PMI data, even heading lower than the 200 SMA. A return to former channel resistance is potentially on the cards at 0.8578. Prices settled into the trading range as central bankers mulled incoming data and the prospect of a first rate cut appeared a fair distance away. Longer-term, the ECB is on track to cut rates in June, meaning sterling will extend its interest rate superiority and is likely to see the pair test familiar levels of support. EUR/GBP daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. -
Dear @Dbass, Please note that the minimum transaction size is 0.1 contracts for most pairs: MT4 Forex products and differs from the minimum on commodities: MT4 Commodity products. Kindly have a look at the minimum sizes before attempting a trade. Thanks, KoketsoIG -
By Mark_Stefanski · Posted
Interpreting the Financial Report of Tesla Financial analyst Mark Stefanski delves into the latest financial data from Tesla. Despite the first-quarter revenue of Tesla declining by 9% year-on-year, marking the largest drop since 2012, Mark Stefanski believes this reflects the pressure on the entire electric vehicle industry in cost control and market expectation adjustments. The disclosed data of Tesla shows its revenue dropped to $21.3 billion, and its gross margin also decreased from 19.3% to 17.4%, indicating increased cost pressures. Investment Strategy and Risk Management For investors, Mark Stefanski suggests that while the short-term performance of Tesla may suffer setbacks, its long-term investment value remains. The stock price of Tesla surged in after-hours trading following the release of the financial report, indicating market optimism about its accelerated plans for more affordable electric vehicles. From the financial report of Tesla, it is evident that vehicle deliveries in 2024 may significantly decrease compared to 2023, and cost reduction measures are currently being actively pursued. This news serves as a warning signal to investors, indicating potential challenges for the future growth of Tesla. Although Tesla is typically seen as a leader in the lithium industry, its stock price has already surged by 42% this year, causing market astonishment and reminding people of the severe challenges of the industry.
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