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10/06/21 10:53
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With markets expecting a 25-basis point rise in Australian rates, Richard Snow, from Daily FX, looks at the risk around the announcement that rates could stay on hold. He looks at a trade for AUD/USD. Jeremy Naylor | Analyst, London | Publication date: Friday 31 March 2023 -
FTSE 100, DAX 40 and Nasdaq 100 surge higher on positive outlook Outlook on FTSE 100, DAX 40 and Nasdaq 100 as the US regulator intends to tighten up on regulations for mid-sized banks and ramp up stress tests. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 31 March 2023 FTSE 100 nears 7,708 to 7,724 resistance zone The FTSE 100 rally from last Friday’s 7,331 low has now taken it above its 22 March high on a daily chart closing basis as the UK technically avoided a recession since final fourth quarter Gross Domestic Product (GDP) came in stronger than expected at 0.1%. This and the fact that the index is on track for two consecutive quarterly gains, a pattern not seen in any bear market over the past 50 years, points towards further upside being seen and the advance since October likely being a new bull market and not a bear market rally. The 7,708 to 7,724 mid-January and early February lows represent the next upside target and need to be overcome on a daily chart closing basis for the February-to-March downtrend line at 7,852 to be reached next. Slips should find support around the 7,587 22 March high and along the one-month support line at 7,491. Source: ProRealTime DAX 40 trades within 1% of this year’s high The DAX 40 has seen two strong consecutive daily rises over the past couple of days despite German preliminary CPI coming in slightly above expectations on a year-on-year basis at 7.4% in March and despite German retail sales unexpectedly falling by 1.3% month-on-month in February versus an estimate of a 0.5% rise and following a 0.3% drop in February. The index is thus fast approaching its February and March highs at 15,656 to 15,709, a rise above which would target the November 2021 and January 2022 highs at 16,288 and 16,298. Support can be found around the 15,304 22 March high and along the 55-day simple moving average (SMA) at 15,290. Now that two consecutive daily chart closes above the 15,304 level have occurred, the resumption of the October-to-March medium-term uptrend seems to have been confirmed. Source: ProRealTime Nasdaq 100 is trading at levels last seen in October 2022 The fact that the Nasdaq 100 managed to close above its previous 12,947 March peak on a daily chart closing basis on Thursday as the US government urged the country’s financial regulator to tighten up recently relaxed legislation in regards to mid-sized banks and undertake more rigorous stress testing of these, is a blessing for the bulls. The August 2022 high at 13,206 represents the next upside target, ahead of the 13,722 peak. Support comes in at previous resistance, namely at the February-to-March highs seen between 12,947 and 12,896 as well as along the March uptrend line at 12,748. Source: ProRealTime
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Early Morning Call: UK economy officially avoids recession, but housing market decline worsens The UK economy grew 0.1% in Q4 compared to the previous quarter, while the Nationwide house price index fell 3.1% in March year-on-year. Jeremy Naylor | Analyst, London | Publication date: Friday 31 March 2023 Indices overview European equity markets are hesitant this Friday, but are nonetheless poised to post their second weekly gains in a row. Overnight in Asia, Japan stocks were the best performers, boosted by a set of macroeconomic indicators. Industrial production rose 4.5% in February compared to January. Leading the rise was car production, up 15.4%, as the shortage in semiconductors eased last month. Retail sales increased by 6.6% in February from a year earlier, logging a 12th straight month of gains, and above the median market forecast for a 5.8% gain. The International Monetary Fund (IMF) said the Bank of Japan (BoJ) should avoid a premature exit from monetary easing and outline conditions for raising its negative interest rate in order to improve its communication. In China, manufacturing activity expanded in March for a third straight month, although at a slower pace than in February. The official NBS manufacturing PMI came in at 51.9, after 52.6 in February, exceeding expectations of 51.5. The services sector was stronger, with activity expanding at the fastest pace in nearly 12 years. Non-manufacturing PMI jumped to 58.2 versus 56.3 in February. In the UK, the economy grew 0.1% in the fourth quarter (Q4) compared to the previous quarter, according to the final estimate published at 07:00. The Nationwide house price index fell 3.1% in March year-on-year (YoY). In Germany, retail sales decreased by 1.3% in February month-on-month (MoM), more than the 0.5% decline expected. A bit later this morning, the unemployment rate is forecast to remain at 5.5%. Yesterday Germany's consumer price index (CPI) came higher than expected. Even though CPI in the EU's largest economy decelerated to 7.8% in March YoY from 9.3% the previous month, it was nonetheless higher than the 7.5% anticipated by the market. This sent EUR/USD higher. France also announced a higher than anticipated CPI for March at 5.6%. Equities Elsewhere on the equity market, Netflix is restructuring its film group to make fewer movies each year and centralise decision-making. Bloomberg reports that the group will combine units that produce small and midsize pictures, a change that will result in a handful of layoffs and the departure of two of its most experienced executives. Commodities Oil prices are little changed this Friday. Reuters, citing five delegates, revealed earlier that OPEC+ is likely to stick to its existing deal to cut oil output. The organisation is set to meet virtually on Monday. Last November, OPEC+ reduced its output target by two million barrels per day. The same reduction is likely to apply for the whole of 2023, according to Saudi Arabia's Energy minister. On the soft commodities market, sugar's rally continues, now at its highest since July 2021. Earlier this week we were talking about how sugar production in the Indian state of Maharashtra, Thailand and Southern China, three of the world's top four producers, was in decline due to unfavourable weather conditions. Now, the European Union says it expects a decline in production of sugar beet this season, and a fall in the planted area for the 2023/24 season. This could lead to a rise in imports. Also rising, New York cocoa now trades at a two-year high, continuing a rally that started in mid-March, leading to gains of more than 11%, so far. The rise is partly due to tight supplies from the world's largest cocoa producer Ivory coast, where port arrivals have been running behind last year's pace. As we said here earlier this week, this is not a production issue. In fact, Ivory Coast expects a good mid-crop, and Ghana, the world's second largest producer, is poised to produce a larger crop this season. 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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