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MongiIG

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  1. European traders may face a sell-off on Friday as equity markets in Asia declined, with investors adjusting their expectations for fewer and later Federal Reserve rate cuts this year. Declines were steeper in markets like Hong Kong and South Korea, over 1%, compared to a 0.3% drop on Wall Street yesterday. Japan's tech sector was the only declining sector, but its chip giants' heavy weighting led the Nikkei index to a 0.3% loss. With many markets near all-time highs, and having rallied so strongly, there remains the potential for short-term weakness. The focus remains on Fed rate cut timing speculation, with US producer price data overnight following hot consumer inflation, eroding expectations of a June cut. The Fed's dot plot after next week's meeting will be crucial for gauging their cautiousness. Other central banks like the BoE, SNB and especially the BoJ, with a potential stimulus exit, also meet next week. US Empire State manufacturing and the preliminary Michigan confidence survey are released today.
  2. DAX and S&P 500 moving higher, while Nikkei 225 pullback pauses The Dax has hit a new record high today, and the S&P 500 isn’t too far behind, while the Nikkei 225’s retreat from its peak has paused for now. Source: Bloomberg Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Thursday 14 March 2024 11:54 DAX hits a new peak The index hit a new record high in early trading on Thursday, extending its rally and widening the gap with the 50-day simple moving average (SMA). For the moment, it seems like the Dax’s steady progression higher will continue. In the short-term, trendline support from mid-February is close by, and then comes trendline support from October. A move back to the 50-day SMA would mark a 5% drop from current levels, and would feel like a dramatic event given the current gentle rally. Source: ProRealTime S&P 500 targets new highs Early trading has seen futures push back to record highs for the index, as the quiet rally continues once more. Indeed, this has been the case all year, and those hoping for a pullback have been continually disappointed. This will not go on for ever, but as yet there is no sign of a pullback. The price continues to trade above trendline support from both early January and the October low. If these are broken, then a pullback may develop. Source: ProRealTime Nikkei 225 pullback halted The pullback from the highs has been stayed for now, buyers entering around 38,300. A close back above Tuesday’s high at 39,220 might help to suggest that the pullback has run its course, though with the Bank of Japan decision next week some skittishness may persist. Source: ProRealTime
  3. Silver and WTI crude prices rally, while natural gas price struggles While silver and WTI have made gains, the former to a three-month high, natural gas prices remain under pressure. Source: Bloomberg Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Thursday 14 March 2024 11:40 Silver at new three-month high Silver surged yesterday, rallying to its highest level since early December and continuing the bounce from the low at the end of February. December’s peak at $25.77 continues to be the next upside target, now that the price has breached the late December high around $24.55. Source: ProRealTime Natural Gas keeps falling Renewed losses on Wednesday maintained the bearish view here, targeting the lows from the middle of February around 1600. If the price can manage a close back above 1800 then a short-term positive view might emerge, especially if a higher low can be established. Then the price may target the early March high at 2000, and then on to the 50-day simple moving average (SMA). Source: ProRealTime WTI rallies through $80 After a strong up day yesterday, the price has made further gains in early trading this morning. This put it above the $80 level, which has marked resistance since November. Additional upside targets $81 and then $83.40. A short-term rally since early February has seen any weakness towards $76.50 met by buying. Source: ProRealTime
  4. Retail traders’ majority sell sentiment drops out of heavy short territory, while CoT speculators shift to the middle from a previous slight buy bias. Source: Bloomberg Indices Nasdaq Futures contract Technical analysis Nasdaq-100 Recession Written by: Monte Safieddine | Market analyst, Dubai Publication date: Thursday 14 March 2024 07:16 Tech sector retreats; Tesla suffers a downgrade Most sectors managed to end yesterday's session in the green, yet tech found itself leading the pack in the red this time. While consumer discretionary experienced limited losses and communication saw modest gains, the overall result was a downturn for the tech-heavy Nasdaq 100. In percentage terms, it suffered more than the S&P 500 and contrasted sharply with the Dow 30's positive finish. Closing performance highlighted a decline in Nvidia's share price, partially undoing Tuesday's impressive gains, with Tesla facing even larger losses following a downgrade by Wells Fargo. The US offered little in terms of economic data yesterday, though the weekly mortgage applications, reported by the MBA, showed a notable increase of 7.1%. However, the economic calendar is set to become busier later today with the release of producer prices and retail sales for February, alongside the weekly claims and January's business inventories. Treasury yields ended the session higher, reflecting positively in real terms after a strong 30-year auction (following the previous night's disappointing 10-year auction). Market pricing (CME's FedWatch) continues to indicate a hold-hold-cut trajectory for the Federal Reserve's meetings in March, May, and June. Nasdaq Technical analysis, overview, strategies, and levels The Nasdaq's previous first Support level held firm on several occasions, ultimately benefiting conformist buy-after-significant reversal strategies as the key level was maintained, providing more advantage than contrarian sell-breakout strategies. Despite yesterday's movements, the Nasdaq's 'bull average' technical overview remains intact. However, price-indicator proximity on the daily timeframe has led to a few at-risk technical indicators adjusting somewhat effortlessly. Source: IG IG client and CoT sentiment for the Nasdaq In terms of sentiment, retail traders have moved away from a heavy sell stance, with shorts capitalising on yesterday's price drop to decrease their sell bias to 61% from 66% in the morning. The shift is particularly significant among institutional traders, as CoT speculators moved from a slight buy bias of 54% to a neutral stance in the latest report released last Friday. This marks the first instance of a net sell bias among them since October of the previous year. Source: IG Nasdaq chart with retail and institutional sentiment Source: IG *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the previous trading day. **CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior. 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.
  5. The Nikkei 225 continued to lose ground overnight, while Chinese markets made further strong gains, in a change from the prevailing trend earlier in the year. Investors are keenly watching today's US economic data releases, including the producer price index (PPI) and retail sales numbers on Thursday, for fresh clues on the direction of Federal Reserve rate policy. Economists expect a rebound in February retail sales after a surprise drop in January. The PPI data feeds into the Fed's preferred inflation gauge. Strong consumer spending and inflation could reduce pressure on the Fed to cut rates soon. Bond market moves suggest expectations for higher rates to persist, though the dollar has weakened.
  6. Gold price and natural gas price falls back but Brent crude moves higher Gold’s huge rally has finally stalled, while natural gas is also falling once more. Meanwhile, Brent crude is attempting to clear the 200-day moving average again. Source: Bloomberg Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Wednesday 13 March 2024 12:57 Gold’s rally finally hits a bump Gold prices finally fell back yesterday after a huge rally from the February low that carried them to a record high. In the short-term, the price may drop back towards the previous record high at $2121. Below this comes the late December high at $2088. Source: ProRealTime Natural Gas heads lower Losses have continued here, with yesterday’s price action seeing the price ending up near the lows of the day. Additional declines now take the price on towards the late February lows around 1600. It would require a close back above last week’s highs at 2000 to suggest a new attempt to push higher. Source: ProRealTime Brent edges higher around 200-day moving average The price continues to struggle around the 200-day SMA, with an indecisive day yesterday giving way to fresh gains in early trading today. Once more a dip towards $80 has found buyers, but a longer-term move to the upside would need a close above $84. Source: ProRealTime
  7. The US CPI data came in hotter than expected for the second straight month, proving that there is still some persistence in pricing pressures. Source: Bloomberg Forex Consumer price index Inflation United States Federal Reserve United States Consumer Price Index Written by: Yeap Jun Rong | Market Strategist, Singapore Publication date: Wednesday 13 March 2024 04:42 Market Recap The US consumer price index (CPI) data came in hotter than expected for the second straight month, proving that there is still some persistence in pricing pressures and that the final stretch of bringing inflation to the 2% Federal Reserve (Fed)'s target remains a challenging process. The US headline inflation came in higher at 3.2% versus previous 3.1%, while the core aspect was down to 3.8% from previous 3.9%, but lacks the progress expected by markets (3.7% consensus). Month-on-month, the core inflation rose 0.4%. The data will support the view for the Fed to exercise more patience in its rate-cut process, but Wall Street stood unfazed, potentially with the firm belief that its previous recalibration for the Fed’s first rate cut to be in June will suffice. Growth sectors recovered from its last Friday’s losses, with the S&P 500 delivering yet another record close. The Magnificent Seven stocks are once again the heavy-lifters for market gains, with notable performance in Nvidia (+7.2%), Microsoft (+2.7%), Meta (+3.3%) and Amazon (+2.0%). Treasury yields reacted higher to the stronger inflation print, with the US two-year yields briefly touching the 4.6% handle, while the US dollar firmed slightly (+0.1%), albeit a lacklustre reaction to the high-for-longer rate narrative. That is sufficient to trigger a downside move in gold prices (-1.1%) however, with the profit-taking amplified by its extreme near-term overbought technical conditions. Look-ahead: PPI data on Thursday, FOMC meeting next week We will have the US producer price index (PPI) release coming Thursday, but with markets being so forgiving for the February CPI data, there is a possibility that any higher-than-expected read in producer prices may be shrugged off as well. The key risk to watch may be the upcoming Federal Open Market Committee (FOMC) meeting next week, where the odds are surely raised for policymakers to revisit their dot plot projections. A potential revision to two cuts this year from the initial three cuts could be likely, as persistence in pricing pressures could feed into higher inflation forecast in its Summary of Economic Projections. If that plays out, market rate expectations may be due for some recalibration once more, as current pricing still leans towards three to four 25 basis point (bp) rate cuts by the end of this year. What to watch: US dollar sees more muted response to hotter-than-expected CPI Initial gains in the US dollar in reaction to the hotter-than-expected CPI were pared throughout the overnight trading session, with the US dollar still hovering around the lower edge of its daily Ichimoku cloud support. Failure to defend the cloud support could reinforce the current downward bias, potentially paving the way to retest the 101.80 level next. For now, its daily relative strength index (RSI) has dipped below the key 50 level for the first time since January this year, which puts sellers in broader control. On the upside, a move above yesterday’s high may pave the way for some near-term relief to retest the 103.63 level next. Source: IG charts This information has been prepared by IG, a trading name of IG Markets Limited. 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. See full non-independent research disclaimer and quarterly summary.
  8. FTSE 100 at three month highs, while Dow and Nasdaq 100 move higher despite hotter US inflation The FTSE 100 has enjoyed a solid start to the week, while even a hotter US inflation reading has not been able to stop the rally in US markets. Source: Bloomberg Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Wednesday 13 March 2024 12:29 FTSE 100 back at December highs Two days of gains have carried the price back towards the 7770 highs from December. The past two weeks have seen the index rally off 7600, establishing a higher low. The index may now continue to push higher, with a near-term target being 7800. Source: ProRealTime Dow moves higher despite US inflation data The stronger-than-expected US CPI reading failed to halt the Dow’s advance, with the price breaking through trendline resistance from the February highs. This could now set the stage for a move back to those record highs, and potentially higher. Support has appeared around 38,500, while below this the 50-day simple moving average has yet to be tested. Source: ProRealTime Nasdaq 100 moves back above 18,000 The price has pushed back above 18,000, and a move to a new record seems likely. The move comes despite a higher CPI figure than expected. For the moment support from early January continues to provide an underpinning for further gains. Source: ProRealTime
  9. Tuesday's robust U.S. CPI data sends USD/JPY soaring, sparking speculation on interest rate shifts. Will the momentum continue? Expert analysis and technical insights reveal potential trading opportunities ahead. Source: Bloomberg Forex Shares USD/JPY United States dollar IG Group Inflation Written by: Diego Colman | Market Analyst, New York Publication date: Wednesday 13 March 2024 05:33 USD/JPY, already on an upward trajectory Tuesday morning, accelerated higher after February’s US consumer price index figures surpassed projections, an event that boosted US Treasury yields across the curve. For context, both headline and core CPI beat forecasts, with the former coming in at 3.2% y-o-y and the latter at 3.8% y-o-y, one-tenth of a percent above estimates in both instances. Source: DailyFX While Tuesday’s data failed to materially alter the odds of the first FOMC rate cut arriving in June, the report unearthed a troubling revelation: inflationary pressures are proving highly resistant and are running well above pre-Covid trends. This will not give the Fed the confidence it necessitates to begin policy easing. Markets may not agree with this assessment right now, but they have been wrong many times. Source: CME Group For further clarity on the outlook for consumer prices, it is important to keep an eye on Thursday's PPI numbers. Another upside surprise like today's could be the wake-up call Wall Street needs to recognise it has been underestimating inflation risks. This could fuel a hawkish repricing of interest rate expectations, propelling bond yields and the US dollar upwards in the process. Source: DailyFX USD/JPY technical analysis USD/JPY rebounded on Tuesday, pushing past resistance around the 147.50 level. If this breakout is confirmed on the daily candle, prices could start consolidating higher over the coming days, setting the stage for a possible move toward 148.90. On further strength, the spotlight will be on 149.70. On the other hand, if sellers return and drive the exchange rate back below 147.50, the pair could slowly head back towards confluence support spanning from 146.50 to 146.00. Below this technical zone, all eyes will be on the 145.00 handle. USD/JPY price action 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.
  10. Amidst fluctuating market sentiments, gold's net-short bias hints at potential upside, while silver's bullish trend faces scrutiny. Explore insights on oil, equities, and EUR/USD forecasts to grasp the pulse of financial markets. Source: Bloomberg Forex Indices Shares Commodities Market trend Gold Written by: Diego Colman | Market Analyst, New York Publication date: Wednesday 13 March 2024 06:10 Gold price forecast Retail trading activity reveals a net-short bias towards gold, with the ratio of bearish to bullish positions currently sitting at 1.47 to 1 as of late afternoon on Tuesday. In aggregate, bullish bets on the precious metal are 9.67% lower than yesterday and 12.80% below prevailing levels one week ago. Meanwhile, bearish wagers are 0.31% down compared to the previous session and 13.15% higher from last week. Our analysis often adopts a contrarian stance on crowd sentiment. With that in mind, the current net-short positioning suggests continued upward potential for gold prices in the near term. Source: IG Silver forecast Retail trader data shows 81.60% of traders are net-long silver, with the ratio of long to short at 4.44 to 1. The number of traders net-long is 7.08% lower than yesterday and 12.23% lower than last week, while the number of traders net-short is 6.86% higher than yesterday and 21.81% higher than last week. From a contrarian perspective to crowd sentiment, silver's overwhelmingly bullish positioning among retail investors raises the possibility that prices will soon begin a downward trajectory. Source: IG US crude oil forecast IG proprietary client data from today shows that 69.87% of retail investors are net-long US crude oil, with the ratio of bullish to bearish positions currently standing at 2.32 to 1. Upon further examination, the number of traders net-long has decreased by 8.58% compared to yesterday and 17.45% relative to last week. Meanwhile, net-short positions have increased by 17.58% from the previous session, though they have fallen slightly by 0.48% from last week’s levels. We often adopt a contrarian stance towards crowd sentiment, and the prevailing net-long position among traders hints at a possible decline in oil prices in the near future. This observation underscores the importance of leveraging market insights to navigate potential market movements effectively. Source: IG S&P 500 forecast Retail trader data shows 33.09% of traders are net-short, resulting in a bearish to bullish ratio of 2.02 to 1. Comparatively, the number of traders holding net-short positions has increased by 4.42% since yesterday but has slightly decreased by 0.03% from last week. On the other side of the coin, the number of traders holding net-long positions has risen by 2.89% since yesterday and by 4.76% compared to last week. Taking a contrarian approach to prevailing sentiment, the current net-short stance of among the retail crowd implies that there might be room for S&P 500 to continue their upward trajectory. Source: IG EUR/USD forecast IG retail client data from today shows 43.27% of traders are net-short, with the present ratio of bullish to bearish bets standing at 1.31 to 1. Taken together, bullish positioning is down 0.73% versus the previous session and 19.44% lower than levels registered last week. Meanwhile, the number of traders net-short is 2.10% lower than yesterday and 0.28% higher than last week. Our strategy often diverges from prevailing sentiment, and the current net-short positioning of traders indicates that EUR/USD may encounter minimal resistance on the upside. Source: IG 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.
  11. Recent data has laid the grounds for some speculations for an end to its NIRP as soon as the upcoming meeting, with the odds of a March rate move now seen as almost a coin flip. Source: Bloomberg Forex Indices Japanese yen Interest rate Japan Inflation Written by: Yeap Jun Rong | Market Strategist, Singapore Publication date: Wednesday 13 March 2024 09:01 What to expect at the upcoming Bank of Japan (BoJ) meeting? At the previous meeting, the BoJ discussed the possibility of exiting from its negative interest rate policy (NIRP), with growing views among policymakers that the wage and inflation conditions for a policy pivot have ‘increasingly been met’. Since then, economic data has further validated the BoJ’s stance, with markets witnessing higher-than-expected Japan’s wage growth for January (2.0% versus 1.3% consensus), while Japan’s economy managed to skirt a technical recession in its updated 4Q gross domestic product (GDP). That has laid the grounds for some speculations for an end to its NIRP as soon as the upcoming meeting, with the odds of a March rate move now seen as almost a coin flip. This suggests that either outcome from the BoJ meeting next week may likely trigger a huge wave of volatility for both the JPY and the Nikkei, as divided rate expectations realign. Any policy inaction or indication of little urgency from the BoJ could suggest that markets have gotten ahead of themselves, which may tame hawkish rate bets and potentially weigh on the JPY. But given that policy normalisation remains a story of when and not if, any near-term pullback could still be a temporary move. The Nikkei has also seen an outsized downside reaction to any slightest hint of a policy pivot lately, declining by more than 5% over the past week. With that, any delayed unwinding of the BoJ’s ultra-accommodative policy settings will be well-received by equity investors, at least in the near term. Source: Refinitiv, as of 12 March 2024. BoJ Governor’s language, policy guidance on close watch as well Economic projections from the BoJ will be absent at the upcoming meeting, which will leave rate expectations highly sensitive to the Governor’s language at the press conference. His latest comments have offered mixed views by acknowledging that the economy was recovering but weak consumption remains a concern, which will leave markets seeking for more clarity on how the BoJ sees current economic climate. Focus will also be on how policymakers will address its current yield curve control policy, although subdued moves in the 10-year Japanese government bonds (JGB) VIX seems to suggest little surprise being priced for the upcoming meeting. The BoJ has also previously emphasised the importance of the spring wage negotiations (Shunto) in its policy thinking and preliminary data has been encouraging thus far. Unions demanded average wage increase of 5.85% versus 4.5% last year, the highest in 30 years. Along with Japan’s core inflation touching the BoJ's 2% target in January, how all of these will feed into the BoJ’s conditions of ‘sustainable and stable inflation, accompanied by wage increases’ will be sought. USD/JPY: Near-term bearish bias remain Recent narrowing in the US-Japan bond yield differentials has pushed the USD/JPY to its one-month low, following a brief consolidation around its key psychological 150.00 level. A switch to near-term bearish momentum seems to be in place, with the daily relative strength index (RSI) dipping below the key 50 level for the first time this year, while its daily moving average convergence/divergence (MACD) eyes for a potential cross into negative territory. Since its January 2023 low, retracements in the USD/JPY within its broader upward trend has been met with retracements at the 50% or 76.4% Fibonacci levels. Therefore, given recent retracement, potential support to watch may be at the 145.54 level, where a 50 % Fibonacci retracement level coincides with the lower edge of its daily Ichimoku cloud support. Source: TradingView Source: IG charts Nikkei 225: Dipped to two-week low as hawkish bets brew The Nikkei 225 has come under some downward pressure lately, as speculations brew for a quicker BoJ’s stimulus exit. The index has dipped more than 5% to its two-week low, although one may note that it is still up more than 16% year-to-date. For now, its daily RSI is back to retest its key 50 level for the first time since January this year, which may have to see some defending from buyers. Ahead, immediate support to watch may potentially be at the 38,200 level, where a 23.6% Fibonacci retracement level stands. The broader upward trend may remain, with the index still trading above its daily Ichimoku cloud support, along with various moving averages (50-day, 100-day, 200-day). Source: IG charts This information has been prepared by IG, a trading name of IG Markets Limited. 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. See full non-independent research disclaimer and quarterly summary.
  12. How to hedge bitcoin risk As cryptocurrencies continue to gain attention, traders have begun finding ways of protecting their bitcoin holdings from risk. Find out how to hedge bitcoin risk – including three cryptocurrency hedging strategies. What are the risks of trading cryptocurrencies? There are a variety of reasons that cryptocurrencies, such as bitcoin (BTC), are considered risky. These include: Lack of regulation. As cryptocurrencies are decentralised, banks and governments have yet to understand how best to protect traders and investors who choose to buy and sell the assets. The decentralised nature of bitcoin has thrilled its supporters, but it could create legal and taxation issues as it grows in popularity Susceptibility to hacking. A considerable number of cryptocurrencies are stolen from digital wallets every year. In 2018 alone, it is estimated that $1.7 billion worth of cryptos were stolen and there is rarely a way to retrieve these losses Reliance on technology. Bitcoin and other cryptos are completely digital assets, which means that they are essentially worthless without access to technological resources. With gold, real estate or even shares, you are gaining ownership over something that can be exchanged, whereas cryptocurrencies have no collateral backing them up Market volatility. Cryptocurrencies are notoriously volatile, both in intraday trading and over longer periods. For example, bitcoin’s price experienced a sharp spike in December 2017, reaching a high of $19,763.50, before falling to a low of $3126.29 in December of the following year However, for those keen enough to learn, there are ways to reduce the risk you take on, at least to a known amount. This is where risk management tools, such as stop-losses, and strategies, such as hedging come in.
  13. Chinese indices once again surged overnight, as the rebound in sentiment there continued. Japanese stocks fell back as pay negotiations concluded with companies conceding worker demands in full. This suggests the Bank of Japan will be more likely to end its negative-rate regime as early as its meeting next week. US stocks made headway despite a stronger CPI reading, with the S&P 500 making a new record high and Nvidia gaining 7%, as six of the Magnificent 7 recorded gains. A quieter day lies ahead, with just US crude oil inventories on the calendar for the session.
  14. Asian stocks continued their upward momentum on Tuesday, reaching seven-month highs. Many traders were awaiting key US inflation data due later in the day for further direction. Currency markets were largely subdued in Asian hours, except for the Japanese yen which has firmed over the past week on speculation the Bank of Japan could exit negative rates. However, BOJ Governor Ueda struck a cautious tone, saying the economy showed signs of weakness despite recovering. European bourses were poised for a strong open. The US inflation report is the main macro focus, with expectations for a 0.4% monthly rise in the headline CPI and a 3.1% annual rate. Core inflation was seen rising 0.3% to a 3.7% annual pace. In the UK the unemployment rate rose to 3.9% in January, while wage growth in the three months to January slowed to 5.6%.
  15. It’s only March, but so much has changed on the interest rate front. Analysing the current stance of the Fed, ECB and BoE, and how FX traders should position themselves, given the current consensus surrounding interest rates. Written by: Angeline Ong | Financial Analyst, Presenter and Content Editor, London Publication date: Monday 11 March 2024 15:30 (AI Video Summary) Important changes with interest rates The head of the Federal Reserve, Jerome Powell, has been doing what was expected and there's some mixed economic data in the US that makes it more likely for interest rates to be cut in June. As a result, the value of the US dollar has gone down. On top of that, the European Central Bank (ECB) has also hinted at the possibility of cutting interest rates in both June and July. All of this makes it seem more likely that the Fed and the ECB will cut rates compared to the Bank of England (BoE). And because of this, the British pound has been doing really well against the weakening dollar. GBP's growing value Angeline Ong shows a chart with a red line that goes up to show how the pound's value has been growing since September 2022. This red line is backed up by three points where it touches, which confirms that the value of the pound is really going up. With the pound still on the rise and the interest rates suggesting that the Bank of England might delay any rate cuts, Ong suggests investing in the pound and betting that it'll keep doing well against both the dollar and the euro. So basically, everything points to the British pound getting stronger and the US dollar and euro getting weaker. This means it's a good idea to put your money on the pound right now and hope it keeps growing. This information has been prepared by IG, a trading name of IG Markets Limited. 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. See full non-independent research disclaimer and quarterly summary.
  16. Bitcoin Hits a New All-Time High Mar 11, 2024 10:57 AM +02:00 | Nick Cawley, Senior Strategist Bitcoin has started the week with a surge, dragging the rest of the cryptocurrency space higher with it. Late last week Bitcoin tried and failed to make a fresh all-time Bitcoin demand remains high, but this morning a new ATH was achieved with ease as buyers took control of the market. Bitcoin demand remains highs, driven primarily by the new ETF providers, while new supply is limited. The supply side of the equation will soon get tighter when the Bitcoin halving event takes place in mid-April. News also out earlier that the LSE plans to accept applications for Bitcoin and Ethereum ETNs in Q2 may have also helped today’s push higher. The Next Bitcoin Halving Event – What Does it Mean? Bitcoin is now in price discovery mode as it trades ever higher. Ongoing demand could see the $75k level tested soon although a sharp reversal lower cannot be discounted. Cryptocurrencies remain highly volatile, highlighted by the March 5th daily candle that showed BTC/USD hitting $69k and $59k in the same session. BITCOIN DAILY PRICE CHART
  17. These five FTSE 100 dividend shares could be some of the best to watch next month. They are currently the highest yielding on the index. Source: Bloomberg Indices Shares FTSE 100 Dividend Stock Dividend yield Written by: Charles Archer | Financial Writer, London The FTSE 100 continues to underperform comparable international indices, sliding by 0.6% year-to-date to 7,673 points. While investors in some of the high yielding dividend stocks on the index have of course benefitted from company payouts, improving the life of the London markets has been a central theme of 2024. In today’s budget, Chancellor Jeremy Hunt has — among many measures — introduced the ‘British ISA,’ which will allow UK-based investors an additional £5,000 allowance on top of the current £20,000, which can only be invested specifically in ‘UK companies.’ Quite how this might work, and how long it might be until the account is widely available, will be common questions over the next few days. But the key takeaway is that the government is trying to spur internal investment, in an attempt to stem UK delistings, the IPO drought, and continued private equity bids for ‘undervalued’ businesses listed in London. On the macroeconomic front, the base rate remains at 5.25%, while CPI inflation stands at 4%, double the official target. While inflation is now expected to hit 2% within the next few months, the Bank of England has warned it will then resurge due to moving comparators with energy bills. While rates may start to fall later in the calendar year, Governor Andrew Bailey has previously warned he wishes to see sustained low inflation before beginning cuts. This all makes investing in FTSE 100 dividend stocks complex. In particular, the highest dividend yields can be hostage to economic policy — where individual investment cases and changing financial landscapes can create value traps or payout irregularities. Best FTSE 100 dividend stocks to watch These shares are the highest yielding on the index as of 1 March 2024. They may not be the best investments and the dividends and capital itself are not guaranteed. Vodafone Phoenix Group British American Tobacco Imperial Brands M & G Vodafone Vodafone's recent Q3 results saw total organic revenue grew by 4.7%, a significant improvement on the 1.8% growth of a year ago. Meanwhile, global services revenue rose by 8.8% while the B2B division grew by 5% year-over-year. The company remains one of the largest telecoms companies in Europe, and the current strategy may be delivering. For context, the all-important German sales rose by 0.3% in the quarter. However, the company is actually losing customers in the region, with the revenue growth driven by price increases. The key risk could remain the debt mountain, which remains multiples of Vodafone’s market capitalisation. However, the company has made several asset disposals to counter this risk — and is actively considering further sales of its Italian arm. Vodafone remains confident in previous guidance for future underlying earnings — and with a price to equity ratio of just 2 (despite this figure being affected by asset sales), it may be attractive to value investors. Dividend Yield: 10.94% Phoenix Group Phoenix Group's recent trading update saw the company deliver £1.5 billion of new business long-term cash generation in 2023, achieving its 2025 target much earlier than expected. For context, new business net fund inflows rose by circa 80% year-on-year to £7 billion, driven by improved performances at the Standard Life branded Pension & Savings and Retirement Solutions segments. CEO Andy Briggs remains ‘delighted that Phoenix Group has delivered another year of strong organic growth in 2023, with increased new business net fund flows supporting us… we have achieved our 2025 new business long-term cash target two years early, reflecting the focus and investment we have put into our growth strategy.’ Within pensions and savings, Phoenix’s workplace business saw net fund flows nearly double year-over-year to circa £4.5 billion. According to Briggs, this included ‘the transfer of one of the largest workplace schemes tendered in the UK market in recent years.’ Dividend Yield: 10.49% British American Tobacco British American Tobacco full-year results saw the FTSE 100 dividend company’s revenue fall by 1.3% at constant currency rates, though rise by 3.1% on an organic basis at constant rates. This was driven by ‘new categories’ growth with revenue from non-combustibles now worth 16.5% of group revenue. CEO Tadeu Marroco enthuses that ‘2023 was another year of resilient financial performance and delivery in line with our guidance, underpinned by our global footprint and multi-category strategy, despite a challenging macro-environment. New Categories delivered continued volume-led revenue growth and increased profitability.’ However, the FTSE 100 tobacco company will have to pivot fast, having written off £27.3 billion of its US brand portfolio after acknowledging they have ‘no long-term future.’ Compounding the weak combustibles growth, the UK recently announced a ban on disposable vapes which could hit BATS’ long-term ambitions in non-combustible categories — and is also imposing a specific vaping tax as well. This could hit margins if similar legislation is adopted more broadly. Positively, the titan and competitor Philip Morris International have finally agreed an eight-year long resolution to long running patent disputes on their cigarette alternatives technology. Dividend Yield: 10.22% Imperial Brands Imperial Brands is the second FTSE 100 tobacco stock — and faces many of the same issues as BATS: regulatory clampdowns and changing consumer habits. However in recent results, the company saw adjusted operating profit grow in line with its five year plan, including 10 basis points aggregate market share growth in its top-five priority combustible tobacco markets. Further, next generation product net revenue rose by 26% — and increased by a whopping 40% in Europe. Accordingly, the dividend was hiked by 4% alongside a 10% increase in share buybacks, leaving investors with total FY24 returns of £2.4 billion. CEO Stefan Bomhard enthuses that ‘means we are well placed to deliver on our commitment to enhance returns to investors, with increases to both our dividend and buyback programme. Looking ahead, we expect the continuing benefits of our transformation to enable a further acceleration in our adjusted operating profit growth in the final two years of our five-year strategy.’ Dividend Yield: 8.81% M&G In September’s half-year results, M&G increased its interim dividend by 5% to 6.5p per share. For context, it saw positive net client inflows of £700 million — remaining positive into a third consecutive year. M&G also saw operating capital generation rise by 17% year-over-year to £505 million, driving adjusted operating profit 31% higher to £390 million. M&G plans to generate operating capital amounting to £2.5 billion by the end of 2024 and had achieved more than 50% of this three-year target, 18 months in. Moreover, its shareholder Solvency II Coverage ratio remains at the top end of the target range at 199%, with no defaults in the first half of the year. CEO Andrea Rossi enthused that the results ‘demonstrate the underlying strength of our business model, the resilience of our balance sheet… we have made progress against all three pillars of the strategy that we launched in March.’ Full-year results will be released on 21 March 2024. Dividend Yield: 8.71% How to invest or trade in FTSE 100 shares with us Learn more about FTSE 100 shares Open an account with us or practise on a demo Select your opportunity Choose your position size and manage your risk Place your deal and monitor your trade You can either invest in shares directly or trade using spread betting or CFDs to benefit from leverage. Keep in mind, leverage means you can gain or lose money faster than expected. Because your position size is far greater than your deposit, you could lose more money than you put in. Be aware also that past performance is not an indicator of future returns. Learn more about the differences between trading and investing here. This information has been prepared by IG, a trading name of IG Markets Limited. 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. See full non-independent research disclaimer and quarterly summary.
  18. Greggs, ITV, Ocado, Greencoat UK Wind and Direct Line could be the best FSTE 250 shares to watch next month. These shares have been selected for recent market news. Source: Bloomberg Indices Shares Dividend FTSE 100 United Kingdom Ocado Written by: Charles Archer | Financial Writer, London The FTSE 250 is now essentially flat, both over the past year and year-to-date, at 19,592 points. Unlike its older brother — the FTSE 100, whose constituents derive the majority of their income from overseas — the FTSE 250 is far more domestically focused. And the economic trajectory of the UK remains perhaps as uncertain as it looked throughout 2023. CPI inflation remains at 4% and is expected to fall to 2% relatively soon — though analysts then expect the crucial measure to start rising thereafter. With the base rate at 5.25%, investors are looking to rate cuts in 2024. However, Bank of England Governor Andrew Bailey has previously noted that ‘we need to see more evidence that inflation is set to fall all the way to the 2% target, and stay there, before we can lower interest rates.’ This implies rate cuts may come later than the market currently expects — though central banks do pivot as evidence changes. With an election likely coming within the next few months after the budget which saw another, potentially unaffordable long-term, two percentage points cut from National Insurance, the winds of political and economic change continue to blow for the best FTSE 250 shares. Best FTSE 250 shares to watch These shares have been selected for recent market news. Greggs ITV Ocado Greencoat UK Wind Direct Line Greggs Greggs has once again impressed the market — full-year results saw the baker’s profit before tax rise by 27% year-over-year to £188.3 million — with a year-end cash position of £195.3 million. Accordingly, the FTSE 250 operator is paying a 40p per share special dividend on top of the ordinary 46p special dividend. The company opened a record 220 new shops in 2023, a net increase of 145 to 2,473 locations. And looking forward, it expects to open between 140 and 160 net shops in 2024, with a target to have more than 3,000 Greggs locations open by 2026. With inflationary pressures ‘reducing,’ the company also saw total sales rise by 19.6% year-over-year to £1.8 billion. CEO Roisin Currie enthused that ‘we are very much on track to deliver our bold five-year growth plan to double sales by 2026 and to have significantly more than 3,000 shops in the UK over the longer term.’ ITV ITV shares have jumped a couple of times recently. To start with, it announced that it has sold its stake in BritBox to BBC Studies for £255 million — with the £235 million net of loan repayments and tax to be used to fund share buybacks. Then the media company delivered mixed full-year results; 2023 revenue fell by 2% to £4.3 billion as advertising revenue dipped by 8% to £1.6 billion. Accordingly, pre-tax profits crashed by 41% to just £396 million — with the ‘challenging advertising market’ blamed for the financial adversity. However, production arm ITV Studios saw revenue rise by 4% to a record £2.2 billion — while adjusted EBITDA increased by 10% to £286 million. And having disposed of BritBox, investors were also cheered by growth in ITVX. And the company is also delivering on its cost cutting promises. It had originally planned to deliver £150 million of savings by 2026 and hit £130 million by the end of 2023. At the end of this calendar year, ITV expects to have generated annualised gross savings of al least £50 million per annum. Ocado Ocado also enjoyed some mixed results; adjusted earnings came in at £51.6 million, up from a £74.1 million loss in 2022. Importantly, this was driven by a maiden £15.4 million underlying profit from Ocado’s Technology Solutions segment — where the investment in robot-operated warehousing is finally delivering. Indeed, CEO Tim Steiner noted that opening these customer fulfilment centres were key to cost efficiencies. The Joint Venture with Marks & Spencer — which is now subject to some legal issues — returned to positive adjusted EBITDA of £10.4 million. However, the FTSE 250 company still generated a loss before tax of £393.6 million — while a £100 million improvement, this includes the £187 million settlement received from Sweden’s AutoStore. While Steiner argues, perhaps fairly, that the business has made ‘tangible steps forward,’ there remains some way to go to group profitability. Greencoat UK Wind Greencoat UK Wind has delivered strong results; increasing its dividend to 10p per share against a target of 8.76p, and informing investors it is now confident it will pay the same dividend in 2024. As one of the UK’s largest windfarm operators — it generated 1.5% of total UK demand last year — the trust saw total shareholder return hit 5.4%. On the other hand, net asset value fell by 3p per share to 164.1p, in common with many renewable energy trusts. But cash generate hit £405 million — and the dividend is covered more than two times over. Chair Lucinda Riches enthuses that ‘with our continuing strong cash flow and dividend cover, we can confidently target a dividend of 10p per share with respect to 2024, extending our track record of attractive dividends and returns. We are now delivering net returns to investors of 10% on NAV, and we remain confident in our ability to continue to meet our objectives of dividend growth in line with RPI and capital preservation in real terms.’ The company invested £821 million into windfarms in the year, increasing its net generating capacity by 397MW and taking the gross value of its portfolio to some £6.2 billion. Direct Line Direct Line shares recently surged after reports that Belgium-based insurer Ageas has made a bid for the FTSE 250 company. While management has rejected the advance, it is the latest in a line of potentially undervalued UK companies which have received offers in the recent past — including Hotel Chocolat and Currys. Indeed, Ageas is potentially considering a follow-up bid worth some £3.1 billion. For context, Direct Line has suffered through several profit warnings and a CEO exit in 2023. But recent quarterly results may demonstrate an improvement in the business, with motor insurance growing by some 115%. And the company is shortly set to welcome ex-Aviva stalwart Adam Winslow as CEO — though if the takeover occurs, this may be a moot appointment before long. This information has been prepared by IG, a trading name of IG Markets Limited. 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. See full non-independent research disclaimer and quarterly summary.
  19. The AUD/USD pair soared to an 11-week peak, buoyed by positive economic indicators from Japan and the US. Upcoming US inflation data and the NAB Business Confidence survey are set to influence future market directions. Source: Bloomberg Forex Shares AUD/USD United States dollar Australian dollar Inflation Written by: Tony Sycamore | Market Analyst, Australia Publication date: Monday 11 March 2024 07:26 Last week witnessed the Australian dollar against the US dollar marking its most significant ascent in over eleven weeks, finishing 1.52% higher at .6625. This upward trajectory was fueled by the Australian dollar capitalising on the momentum of the surging Japanese Yen. The impetus came from robust Japanese wage data, which bolstered investor confidence in the Bank of Japan potentially concluding its Negative Interest Rate Policy (NIRP) during its 19 of March meeting. Additional support for the AUD/USD pair was provided by the US Non-Farm Payrolls report on Friday. The report indicated a moderating labor market, evidenced by revised lower job gains for the preceding two months and an uptick in the unemployment rate to 3.9% from 3.7%. These developments lent credibility to the market's anticipation of three Federal Reserve rate cuts in 2024, aligning with the Federal Reserve's own forecasts. Looking ahead, the forthcoming US inflation report on Tuesday night holds critical importance for the future direction of currency pairs. Meanwhile, domestic focus will shift to the upcoming release of the NAB Business Confidence survey, which promises to provide fresh insights into the business sentiment within Australia. What is expected from NAB Business Confidence Index (Tuesday, 12 March at 11.30am) In January, the NAB Business Confidence index increased to +1, back in positive territory after rebounding from -8 in November to 0 in December. Business Confidence remains subdued but is expected to rise marginally in the coming months as the focus shifts towards RBA rate cuts during the second half of 2024, and as inflationary cost pressures continue to ease. NAB Business Confidence Survey chart Source: TradingEconomics AUD/USD technical analysis Following last week's rally, the AUD/USD, as viewed on the weekly chart below, appears to have gained the upper hand for now, with room to push towards downtrend resistance at .6800c However, it is important to note that in the bigger picture, last week's rally appears to be part of an ongoing choppy correction from the October 2022 .6170 low, which does warn of further choppy price action ahead. Particularly around the middle of the range, which is where the AUD/USD is currently trading. AUD/USD weekly chart Source: TradingView AUD/USD daily technical analysis On the daily chart below, the AUD/USD was able to show a clean pair of heels to the resistance provided by the 200-day moving average at .6560, and that now becomes near-term support. Taking some of the shine off last week's rally after its reversal from Friday night's .6667 high, the AUD/USD starts the week trading in congestion .6625 area. This is a level that the AUD/USD needs to clear if it is to challenge weekly resistance at .6800c. AUD/USD daily chart Source: TradingView Source: TradingView. The figures stated are as of 11 March 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. This information has been prepared by IG, a trading name of IG Markets Limited. 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. See full non-independent research disclaimer and quarterly summary.
  20. A mixed February jobs report and Nvidia's sell-off have US equity markets on edge before the CPI announcement. With the Fed's rate decisions in the balance, all eyes are on the upcoming data. Source: Bloomberg Indices Consumer price index S&P 500 United States Stock market Federal Reserve Written by: Tony Sycamore | Market Analyst, Australia Publication date: Monday 11 March 2024 05:07 US equity markets took a hit last week, sliding from record highs in the wake of a mixed jobs report. Investors in Nvidia, seeing a 5.55% drop, raced to sell off their shares before the upcoming U.S. CPI report. The details of the non-Farm payrolls report showed that the US economy added 275k jobs in February, beating forecasts for 200k. However, the upside surprise to the headline number was more than offset by a downward revision in job gains over the prior two months of 167k, and a rise in the unemployment rate to 3.9% from 3.7% prior. Average hourly earnings slowed to 0.1% MoM, which saw the annual rate ease to 4.3% YoY from 4.5%. The jobs report revealed sufficient signs of moderation to maintain, for the time being, the anticipation of three Federal Reserve rate cuts this year, aligning with the Fed's projections. However, the continuation of these projections into the Fed's March summary of economic forecasts hinges largely on Tuesday's CPI report. What is expected from US CPI (Tuesday, 12 March at 11.30pm) The expectation is for headline CPI to rise by 0.4% MoM in February, which would see the annual rate remain stable at 3.1%. Core CPI is expected to rise by 0.3% MoM, which would see the annual rate cool to 3.7%. If the core CPI number is much hotter than outlined above because the January New Year price rise effects don’t fall out as expected, there is a chance that three dots could become two dots in the Feds March SEP. This outcome would likely be poorly received by equity markets. Core CPI chart Source: TradingEconomics S&P 500 technical analysis Last week, a "loss of momentum" candle formed in the Nasdaq cash and the S&P 500 cash. While this occurrence in isolation certainly doesn't guarantee a pullback, we note that it occurred at new highs, on bearish divergence, and in the area of a possible Wave V high within our preferred Elliott Wave Framework. A combination that piques our interest. From here, if the S&P 500 cash were to see a sustained break of uptrend support at 5090ish, and then below recent lows at 5060/40ish, it would warn that a deeper pullback initially towards 4900 is underway. Until then, the path of least resistance will remain higher. S&P 500 daily chart Source: TradingView Nasdaq technical analysis Last week, a "loss of momentum" candle formed in the Nasdaq cash and S&P 500 cash. While this occurrence in isolation certainly doesn't guarantee a pullback, we note that it occurred at new highs, on bearish divergence, and in the area of a possible Wave V high within our preferred Elliott Wave framework. A combination that piques our interest. From here, if the Nasdaq cash were to see a sustained break of uptrend support and recent lows at 17,800/750ish, it would warn that a deeper pullback initially towards 17,000 is underway. Until then, the path of least resistance will remain higher. Nasdaq daily chart Source: TradingView Source: TradingView. The figures stated are as of 11 March 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. This information has been prepared by IG, a trading name of IG Markets Limited. 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. See full non-independent research disclaimer and quarterly summary.
  21. Wall Street ended last week in the red, with some unwinding in tech stocks on Friday while the VIX touched its highest level in two weeks. Source: Bloomberg Indices Shares United States Consumer price index Wall Street United States Consumer Price Index Written by: Yeap Jun Rong | Market Strategist, Singapore Publication date: Monday 11 March 2024 08:12 Market Recap Wall Street ended last week in the red, with some unwinding in tech stocks on Friday while the VIX touched its highest level in two weeks. The highlight was the US February job report, which saw cooling US labour conditions as the main takeaway. The US unemployment rate rose to its highest since January 2022 at 3.9% (versus 3.7% consensus), while wages grew at the slowest rate in two years at 0.1% month-on-month. Job additions did come in above expectations (275,000 versus 200,000 consensus), but the strength was stifled by downward revisions in previous readings. The figures could be what the Federal Reserve (Fed) hopes to see, with a softer labour market supporting an earlier timeline for rate cuts, but market participants seem to take the opportunity for some profit-taking instead. Treasury yields were broadly lower, paving the way for the US dollar to weaken further. Gold prices took comfort in that, extending its gains for the eighth straight trading day to hang around the US$2,186 level. Look-ahead: US CPI Ahead, the new week may kick off on a more cautious tone as markets look towards the US consumer price index (CPI) release on Tuesday. Given the hotter-than-expected inflation data in January, traders will be closely watching this month’s CPI to be convinced that previous data is just a one-off. Expectations are for headline inflation to remain steady at 3.1%, while the core aspect may ease to 3.7% from previous 3.9%. If it holds true, this will be the lowest year-on-year core reading since April 2021, which may further bolster earlier rate cut bets. What to watch: Nasdaq 100 The Nasdaq 100 index is back to flirt with its 18,000 level, leaving a near-term upward trendline on watch for some immediate defending from buyers. Failure for the trendline support to hold may pave the way for the index to retrace further to the 17,390 level, where a 23.6% Fibonacci retracement level stands. For now, its daily relative strength index (RSI) has also edged back to the mid-point level of 50, which buyers have successfully defended since November 2023. Any dip below the mid-point this week could bring about a near-term downward bias, suggesting further cooling in the recent risk rally. Source: IG charts IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed. The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. Please see important Research Disclaimer. Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
  22. The Asian session saw a divergence between rallying Chinese markets, which continue their recovery from the lows of the year so far, and the rest of the region which came under fresh selling pressure. The Nikkei 225 in particular dropped sharply as the yen strengthened following news that Japan's economy did not contract in Q4, following GDP revisions that indicated growth of 0.1% instead of the previous 0.1% contraction. This bolsters the case for the Bank of Japan to shift rates at its meeting next week, with a 53% chance of a move priced in. Today sees a quiet start to the week, but tomorrow's US CPI reading will be the main event to watch. Friday saw market leader Nvidia suffer a sharp reversal, coming after huge gains since 1 January, and a stronger reading on inflation might yet tip markets into at least a short-term pullback.
  23. The Week Ahead Read about upcoming market-moving events and plan your trading week ESTABLISHED 1974313,000+ CLIENTS WORLDWIDE17,000+ MARKETS Week commencing 11 March Chris Beauchamp's insight US consumer price index (CPI) data dominates the week, as investors await the latest set of price figures for the US economy and assess its impact on the Federal Reserve bank's (Fed) moves in coming meetings. UK employment data is also worth watching, along with full-year figures from housebuilder Persimmon. Please note: US Daylight Savings Time begins 10 March, so all US data is one hour earlier for UK traders. Economic reports Weekly view Monday None Tuesday 12.30am – Australia NAB business confidence (February): index forecast to fall to -1 from 1. Markets to watch: AUD crosses 7am – UK employment data (January): unemployment rate to hold at 3.8% and average earnings expected to rise 5.8% for the three months to January, in line with December. Markets to watch: GBP crosses 12.30pm – US CPI (February): prices expected to rise 0.3% month on month (MoM) and 3.1% year-over-year (YoY), from 0.4% and 3.1% respectively. Core CPI forecast to rise 0.4% MoM and 3.9% YoY, compared to 0.3% and 3.7%. Markets to watch: US indices, USD crosses Wednesday 7am – UK GDP (January): growth expected to be 0% in January, compared to 0.1% in December. Markets to watch: GBP crosses 2.30pm – US EIA crude oil inventories (w/e 8 March): Markets to watch: Brent, WTI Thursday 12.30pm – US initial jobless claims (w/e 9 March), PPI, retail sales (February): claims …. while producer price index (PPI) expected to rise 0.3% MoM, in line with January. Retail sales to rebound 0.3% in February from January’s 0.8% fall. Markets to watch: USD crosses Friday 12.30pm – US Empire State manufacturing index (March): index forecast to rise to 10 from -2.4. Markets to watch: USD crosses 2pm – US Michigan consumer confidence (March, preliminary): index to rise to 78 from 76.9. Markets to watch: US crosses Company announcements Monday 11 March Tuesday 12 March Wednesday 13 March Thursday 14 March Friday 15 March Full-year earnings Persimmon, Domino's Pizza Metro Bank, Balfour Beatty, Volkswagen Savills, Vistry Half/ Quarterly earnings Oracle Adobe Trading update* Assoc. British Foods AO World Moonpig Berkeley Group Dividends FTSE 100: NatWest, Segro, Anglo American, Haleon, Entain FTSE 250: Dunelm, Abrdn, Tritax Big Box, Apax Global, Lancashire Holdings Dividends are applied after the close of the previous day’s session for each market. So, for example, the FTSE 100 goes ex-dividend on a Thursday, but the adjustment is applied at the close of the previous day, e.g. Wednesday. The table below shows the days in which the adjustment is applied, not the ex-dividend days. Index adjustments Monday 11 March Tuesday 12 March Wednesday 13 March Thursday 14 March Friday 15 March Monday 18 March FTSE 100 7.15 Australia 200 0.3 1.5 0.6 0.4 0.3 1.1 Wall Street 2.6 9.6 US 500 0.19 0.21 1.31 0.17 0.07 0.30 Nasdaq 0.35 2.36 3.28 Netherlands 25 EU Stocks 50 0.8 China H-Shares 1.0 Singapore Blue Chip Hong Kong HS50 2.2 9.2 South Africa 40 196.8 17 71 Italy 40 36.9 Japan 225 0.5
  24. The US dollar is facing its steepest weekly decline in nearly three months, with a 1% fall ahead of today's key U.S. jobs report. Unless the data is exceptionally strong, it is unlikely to alter expectations for upcoming Fed rate cuts, as Jerome Powell has signaled a willingness to reduce rates if inflation keeps cooling despite low unemployment. Economists forecast a more moderate 200,000 nonfarm payroll gain in February after January's spike, which analysts attribute to seasonal factors. The dollar's recent weakness reflects easing expectations, boosting currencies like the Australian dollar and euro to multi-month highs against the greenback. US stocks also recovered on Thursday, and the S&P 500 hit a fresh record high. Meanwhile, Japan appears poised for tighter monetary policy. Officials have struck a hawkish tone, citing progress toward the 2% inflation target ahead of the March policy meeting. Substantial private sector wage hikes also support a potential rate increase, driving a recent rally in the yen and Japanese banking stocks.
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