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10/06/21 10:53
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Brent pauses ascent as gold and natural gas prices little changed The outlook on Brent crude oil, gold and natural gas is little changed as US markets return following Independence Day. Source: Bloomberg Commodities Natural gas Brent Crude Gas International Energy Agency Gold Axel Rudolph | Market Analyst, London | Publication date: Tuesday 05 July 2022 Gold little changed Gold traded in a tiny range yesterday as the US benefitted from a prolonged weekend due to Independence Day. The precious metal is little changed today, having formed a Hammer formation on the daily candlestick chart last Friday. Such a pattern is usually followed by a bullish reversal. A rise above yesterday’s high at $1,814 would engage the April-to-July downtrend line at $1,829 and also the 29 June high at $1,833. Slips may find support around the minor psychological $1,800 mark today. Below it more significant support can be made out between the May and current July lows at $1,787 to $1,785. Source: ProRealTime Brent crude pauses advance on supply woes Brent crude oil reached its one-month resistance line at $113.55, and briefly rose to $113.88 on the back of a strike by Norwegian offshore workers. The strike begins on Tuesday and is expected to cut around 130,000 barrels of the country’s daily production, before coming off again on concerns a recession will eventually lower energy demand. While last week’s high at $116.16 isn’t bettered, sideways trading between this level and the June low at $104.92 remains to be seen. Minor support below the 55-day simple moving average (SMA) at $111.85 can be found at the $112.22 20 June low and more important support at last Friday’s $107.76 low. Above $116.16 sits the 17 June high at $119.31. Source: ProRealTime Natural gas slips back towards its 200-day SMA Natural gas futures plunged by around 15% last week to a three-month low at $5.37. This followed a report by the US Energy Information Administration (EIA) on Thursday that inventory for the week ending June 24 rose by 82 billion cubic feet, sparking fears of an oversupplied market which led to natural gas futures posting their worst month in more than three years. Since then the price of natural gas managed to heave itself back above the 200-day SMA at $5.65, around which it has held over the past three trading days. This is as Norwegian offshore workers begin to strike on Tuesday, reducing supplies, and as the International Energy Agency (IEA) in its latest quarterly market report said it expects gas usage to slip 0.5% this year as reduced economic activity in Asia and a sharp fall in European gas demand overshadows more buoyant markets in the US. Key support remains to be seen between the November 2021 and January 2022 highs at $5.51 to $5.43 and last week’s low at $5.37. If giving way, the early March high at $5.19 would be in the frame. Resistance sits at the 24 June low at $6.06. Source: ProRealTime
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FTSE 100, DAX and S&P 500 looking for gains as US returns from holiday The return of US markets from their holiday has led to some volatility in early trading. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 05 July 2022 FTSE 100 shaky in early trading Over the past two sessions the index has clambered higher, bouncing from 7100. Recovering risk appetite has helped the index to shrug off the weakness from last Thursday. The price has returned to trendline resistance from the June peak. A break above here and above 7300 would help cement the more positive view and open the way to the 200-day simple moving average (SMA) at 7366, and then on towards 7500. A failure to move on above trendline resistance points towards a fresh drop to 7100 and then 7000. Source: ProRealTime DAX continues building a base The rate of decline in the index continues to slow, although it looks too early to say with conviction that a bottom has been formed. The index tested trendline resistance from the June peak yesterday, but in a volume-light session was unable to make much headway. Further gains above trendline resistance would target 13,350, highs from late June. So far the bearish view seems to have abated as the price slows its decline, but a drop below last week’s lows at 12,625 would hand the sellers the initiative once again. Source: ProRealTime S&P 500 returns to trendline resistance The index ended the quarter on a shaky note but started to recover on Friday, and futures made gains in the quiet holiday session yesterday. Having recovered 3800 the index now targets 3920 and then the 50-day SMA (currently 3975). This last sits just below trendline resistance from the March high, something that has formed a very solid barrier to further gains in the short term. A move above this and above 4000 would be a bullish development from a technical and psychological standpoint. As yet a reversal has yet to develop, with trendline support from the June low so far preventing the losses of Thursday from turning into anything more serious. Source: ProRealTime
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Early Morning Call: RBA rate hike erases AUD gains; Sainsbury's trading statement AUD/USD holds Monday’s gains as RBA raises rates by 50bps for a second time. Earnings from Sainsbury's today; also watching all-sessions reaction on TSLA stock following poor sales data and BTC write down. Jeremy Naylor | Writer, London | Publication date: Tuesday 05 July 2022 APAC outlook Asia-Pacific (APAC) equity markets closed higher, led by the Japan 225 ending the session up 1.03%. The Australia 200 rose by 0.25%. As expected, the Reserve Bank of Australia (RBA) increased its cash rate by 50 basis points (bps) to 1.35%, back to its highest level since May 2019. The Australian dollar lost some ground against the greenback at the announcement, erasing the gains it had made prior to the decision. In China, Caixin services PMI rose to 54.5 in June, marking the first expansion in the sector in months, and the sharpest rise since July 2021. Japan Jibun bank services PMI shows the activity in the sector rose to 54 - its highest level since 2013. Later this morning, S&P Global PMI final data for May will be released in Europe. In Taiwan, the world's largest contract electronics maker, Foxconn reported an overnight jump in sales of 31% in June year-on-year (YoY), and raised its full-year business outlook, citing strong sales of smartphones and servers, despite rising inflation and slowing demand concerns. Indices European indices opened higher, after a positive session yesterday for the FTSE 100 and CAC 40. Germany’s DAX 40 fell 0.31% after the country recorded its first seasonally-adjusted trade deficit in more than 30 years. In the US, equity markets will reopen after Independence Day. At 3pm, factory orders are expected to rise by 0.5% on May month-on-month (MoM). Equities Sainsbury's trading statement shows that first quarter (Q1) like-for-like sales excluding fuel were down 4% in last 16 weeks. Clothing sales fell 5% in the last 11 weeks, after a drop of 30% in the first five weeks. There are similar patterns at Argos: down 7% in the last 11 weeks and -19% in the first five weeks of the quarter. Also watch out for Tesla at the open, at 9am on the IG all-sessions stock market. The electric carmaker reported on Saturday that it delivered 254,000 vehicles in the second quarter, its first back-to-back quarterly drop in more than two years. This was well below the 350,000 estimated by analysts. Tesla is also facing a $440 million write-downs on its bitcoin holdings after a slump in the digital currency's value. The carmaker bought $1.5 billion worth of bitcoin early last year in a radical move that made it the biggest company to move part of its cash reserves into cryptocurrency. Tesla reports earnings on Wednesday 20 July. Commodities On the commodity front, European gas supply is under added pressure. Today Norwegian offshore workers begin a strike, asking for wage hikes to compensate for rising inflation. Metal prices remain weak. Copper remains below $8,000. Zinc remains near its recent lows but is up for a second straight day, a first in five weeks. After a longer weekend than usual in the US, we'll see later on if Chicago Wheat and Corn prices continue to drop. Last week was a second straight week of heavy declines for grain prices in the US, on rising hopes that end-of-summer harvests would be plentiful, not only in the US, but in Europe and Australia. This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.
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