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Asian indices were broadly lower overnight, with just the ASX 200 eking out a small gain. Chinese markets once again led the way lower as worries about the property sector and the prospect of new security laws in Hong Kong dampened sentiment. Markets face a wave of key data from today onwards, with eurozone GDP and earnings from Microsoft and Alphabet the big events of the session. US indices finished up the day with fresh gains, and the Dow hit a new record high, but with earnings, a Fed decision and payrolls all taking place this week stocks may struggle to hold their gains in the short-term. While oil prices dropped yesterday, the world continues to await a US response to the deaths of three of its soldiers in Jordan at the weekend, raising fears of an escalation in the situation in the Middle East.

McDonald’s Q4 2024 earnings preview: what to expect amid Middle East boycott. Source: Bloomberg Shares McDonald's Price Inflation United States Middle East Written by: Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 29 January 2024 15:58 When will McDonald's report its latest earnings? McDonald’s is set to release its fourth quarter (Q4) 2023 results on 5 February 2024. The results are for the quarter ending December 2023. Key financial highlights for Q4 2023 Key financial highlights for the upcoming results are as follows: Revenue of $6.452 billion : +8.86% year-on-year (YoY) Earnings per Share (EPS) : $2.82: +8.88% (YoY) Price-to-earnings (P/E) ratio: 25.75 Restaurant margin : 15.48% (versus 5.00% Q4 2022) Dividend yield: 2.29% McDonald’s Q4 earnings impacted by Middle East boycott McDonald's is currently facing challenges from a boycott in the Middle East due to false accusations of supporting Israel. This boycott has had a meaningful impact on the company's business, and analysts will be interested in learning more about the sales impact and how long it is expected to last. During the earnings call on the 5 February, analysts will also be looking for updates on the sustainability of operating margins in light of last year’s cost inflation. McDonald's has maintained stable margins in recent years through menu price increases and technology initiatives, and investors will want to see evidence that this can continue. Furthermore, there will be interest in an update on McDonald's business in China, which is its third largest market globally. Restoring operations in China to full capacity is crucial for the company's momentum. McDonald's has strong business fundamentals and a strong brand, which should help it navigate through the difficulties, especially if inflation in the US continues to subside and the country’s economy manages the soft landing analysts currently forecast. If inflation were to flare up again due to an escalation in the Middle East and the Suez Canal being de facto closed to non-Russian containerships, and perhaps soon oil tankers as well, McDonald's has in the past been successful in passing on price increases without significantly affecting demand and may well do so again. There are limits to its pricing power, though, especially in a potential recession which would negatively affect consumer spending while input and labour costs may increase once more. If market conditions were to worsen, McDonald's could implement discounting strategies to capture market share through value offerings and leveraging its size advantage. Despite the challenging environment in the Middle East, McDonald's has maintained a strong appetite for its food and beverages. The company is expected to benefit from increased US same-store sales and a larger share of the quick-service market in 2023, driven by the growth of digital orders and value offerings. McDonald's loyalty program, with approximately 25 million active members, has the potential to drive digital sales and increase customer frequency, contributing to the growth of US comparable sales. The company planned to expand its global franchise in 2023 with 400 openings in the US and 1,500 globally, including 900 in China. These new restaurants were expected to contribute around 1.5% to sales growth in 2023. The upcoming results should shed more light on these expansion plans. How to trade McDonald’s into the results Source: Refinitiv Refinitiv data shows a consensus analyst rating of ‘buy’ for McDonald’s – 11 strong buy, 21 buy and 8 hold - with the median of estimates suggesting a long-term price target of $323.20 for the share, roughly 10.68% higher than the current price (as of 29 January 2024). McDonald’s technical view The McDonald’s 23% share price gain from its October $245.73 low to last week’s $302.39 all-time record high has given way to some profit taking ahead of its Q4 results. The fall through the October-to-January uptrend line at $295.36 puts the mid-December to current January lows at $287.20 to $285.72 back on the plate. As long as this support zone holds, the medium-term uptrend remains intact. McDonald’s Daily Chart Source: Tradingview A fall through and daily chart close below the $285.72 mid-December low would most likely lead to the 200-day simple moving average (SMA) at $283.66 being revisited. Provided that the next lower late-November low at $278.06 isn’t being fallen through, though, the overall technical picture for the McDonald’s share price remains long-term bullish. A rise above the current January all-time high at $302.39 would bring the minor psychological $350 region to the fore. 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.

The first Fed decision of 2024 takes place this week. While no change is expected this time around, will the FOMC indicate rate cuts are on their way? Source: Bloomberg Shares Federal Reserve Inflation Interest rate Interest Interest rates Written by: Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 29 January 2024 14:37 First Fed decision of 2024 looms As we approach the end of the first month of the year, the Federal Reserve's Open Market Committee (FOMC) meeting is a focal point for traders and investors alike. The anticipation of maintaining the current federal funds rate target range of 5.25-5.5% has set a tone of cautious optimism in the market. For traders, understanding the implications of the Federal Reserve's (Fed) stance on interest rates is crucial. Interest rates are a fundamental driver of economic activity, influencing everything from consumer borrowing costs to corporate investment decisions. When interest rates are high, it can dampen economic growth as loans become more expensive, potentially leading to reduced spending by both consumers and businesses. Rate hikes give way to cuts in 2024 In 2022 and 2023, the Fed implemented aggressive rate hikes in response to heightened inflation. This monetary tightening was aimed at cooling off an overheated economy and bringing inflation down to manageable levels. Since July, however, the Fed has held rates steady, which has been interpreted as a sign of confidence that inflation is beginning to moderate. For traders, this period of stability offers a chance to reassess their portfolios and strategies. In particular, it provides an opportunity to look for companies that are well-positioned to benefit from stable interest rates. For example, financial institutions such as JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) might see a more predictable interest margin environment, which can help in planning their lending and investment activities. Quantitative tightening replaces easing Furthermore, the Fed's decision to continue allowing up to $95 billion per month of asset roll-offs from its balance sheet will have implications for liquidity in the financial system. This gradual reduction of the Fed's holdings, often referred to as quantitative tightening, can impact the availability of credit and the performance of various asset classes. Despite the aggressive measures taken to combat inflation, recent data suggests that the U.S. economy remains resilient. Solid job growth and consumer strength indicate that a recession in 2023 now seems less likely. For traders, this resilience could translate into opportunities within the equity markets. Stocks have performed well over the past year, and sectors such as technology, represented by companies like Apple and Microsoft or consumer discretionary, where giants like Amazon lead the way, might continue to offer growth potential in a stable-rate environment. Decision watched for clues on future policy Investors are also closely monitoring the Fed's communications for any hints of future policy actions. The possibility of rate cuts starting in March or later in the year could signal a shift in the economic outlook and strategy. The timing of these cuts will be critical for traders, as markets typically react swiftly to any changes in monetary policy. The Fed's forecasts for slower U.S. economic growth in 2024-2025, with higher unemployment and inflation still above target, present a mixed picture for traders. On one hand, slower growth and higher unemployment could signal caution, leading traders to seek shelter in more defensive stocks or asset classes. On the other hand, the continued strength of inflation above the Fed's target may maintain pressure on the central bank to keep interest rates higher for longer, which could benefit sectors like utilities or consumer staples, traditionally seen as less sensitive to economic downturns. In the face of these economic projections, investors remain hopeful that the Fed can achieve a "soft landing" by bringing down inflation without severely damaging growth. This delicate balancing act by the Fed would be a best-case scenario, allowing the economy to adjust gradually to the new interest rate environment without tipping into recession. 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.

Quiet day for FTSE 100, DAX 40 and S&P 500 ahead of key macro data and earnings Outlook on FTSE 100, CAC 40 and S&P 500 amid Fed and BoE meetings and as five of the ‘magnificent seven’ US stocks report their earnings ahead of Friday’s US Non-Farm Payrolls. Source: Bloomberg Written by: Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 29 January 2024 12:19 FTSE 100 mixed after healthy gains last week The FTSE 100’s gradual advance from its mid-January low at 7,403 accelerated to the upside on Friday amid rallying luxury good stocks and general risk-on sentiment with the index gaining 1.4%. Monday morning is likely to be quieter, though, as the economic calendar looks pretty empty ahead of this week’s US Federal Reserve (Fed) and Bank of England (BoE) monetary policy meetings, earnings by five of the ‘magnificent seven’ US stocks and US employment data. A rise above Friday’s 7,653 high would engage the 11 January high at 7,694. Minor support comes in around the 12 December 7,609 high and at the 16 January 7,587 high. Source: ProRealTime DAX 40 mixed after five consecutive days of gains The DAX 40 index continues its advance towards its December record high around the 17,000 mark as investors look forward to a packed macro and earnings week. The January uptrend line at 16,872 may act as support, together with the 11 January high at 16,841 whereas the December-to-January resistance line at 16,966 and last week’s high at 16,969 should act as resistance ahead of the December 17,003 peak. Source: ProRealTime S&P 500 consolidates below last week’s record highs The S&P 500 is seen trading close to last week’s record highs made marginally above the 4,900 mark as investors await earnings by the likes of Alphabet, Amazon, Apple, Meta and Microsoft which are likely to provide additional volatility. A rise above last week’s 4,907 record high may engage the psychological 5,000 mark. Minor support below the Tuesday 23 high at 4,877 comes in at Friday’s 4,871 low. Source: ProRealTime

The US Federal Reserve is expected to maintain its key interest rates at current levels this week with the Funds Rate target range forecast to remain between 5.25% and 5.5% for a fourth consecutive meeting. Written by: Angela Barnes | Financial presenter/producer, London | Publication date: Monday 29 January 2024 11:28 Fed funds futures currently price in a 97.4% chance of no change. Then on Thursday, the Bank of England (BoE) is also set to stay put on rates. Governor Andrew Bailey and other top BOE members have been saying until recently that a rate cut would be premature. They also warned about the risks from strong wage growth, as IGTV’s Angela Barnes explains. (AI Video Summary) The Federal Reserve The Federal Reserve, which is basically the central bank of the United States, is most likely going to keep its key interest rates the same for the fourth time in a row. This means they won't be changing how much it costs to borrow money. However, there is a good chance (around 59.7%) that when they meet in March, they might actually lower the rates by a little bit, like 0.25%. The goal of all this is to make sure the US economy grows in a nice and steady way, not too fast or too slow. They expect the economy to grow by about 1.4% in 2024 and they want the unemployment rate to be around 4.1%. At the same time, the Federal Reserve plans to shrink its balance sheet, which is basically the total amount of money and assets they have, by selling some of the things they own. Right now, they're selling up to $95 billion worth of stuff every month, but they still have a long way to go to get back to where they were before the pandemic, which was around $4.15 trillion in February 2020. The Bank of England Now, let's talk about the Bank of England (BOE), which is the central bank of the United Kingdom. They're also probably going to keep their interest rates the same for now. The top people at the bank, like Governor Andrew Bailey, have said it's too early to lower the rates. They're worried that if they do, it might lead to some problems because the wages people are getting paid are going up too quickly. However, the recent data on things like how prices are going up, how much people are getting paid, and how the economy is doing, has been not as good as they expected. So they might change their minds and decide to lower the rates after all. In short, the Federal Reserve is going to keep interest rates the same and wants the US economy to keep growing in a nice way. The Bank of England is also not planning to change interest rates, but if the economy keeps underperforming, they might change their minds. 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.

Closing January with style, Wall Street sees the S&P 500 and Nasdaq breaking winning streaks as investors eye the Core PCE data drop and await the critical FOMC interest rate decision. Written by: Tony Sycamore | Market Analyst, Australia | Publication date: Monday 29 January 2024 08:03 The S&P 500 and the Nasdaq snapped six-session winning streaks on Friday, with traders booking profits and moving to the sidelines ahead of a busy week of corporate earnings and economic data. With three trading sessions left in January, the tech-heavy Nasdaq has added 3.54% MTD, the S&P 500 has added 2.54%, and the Dow Jones is 1.11% higher. The much-anticipated December Core Personal Consumption Expenditures (PCE) fell to 2.9% versus 3% expected, the lowest rate since March 2021. Core PCE on a six-month annualised basis sits at 2%, and with the disinflation trend firmly in place, Federal Reserve rate cuts are coming. The only question is when. This week’s key economic events, the January Federal Open Market Committee (FOMC) meeting and Non-Farm Payrolls, could see the rates market pull forward or push back a first Federal Reserve rate cut currently fully priced for May. US Q4 earnings season continues this week with reports scheduled from companies including Pfizer, Alphabet, Starbucks, AMD, Microsoft Corp (previewed here), Mastercard, Boeing, Qualcomm, Meta, Apple (previewed here), Amazon, Exxon Mobil Corp, and Chevron Corp. What is expected from the FOMC interest rate decision Date: Thursday, February 1st at 6 am AEDT At its last meeting in December, the FOMC kept the Federal Funds rate unchanged at 5.25%-5.50% for a third consecutive meeting. In the accompanying statement, the Fed noted that economic growth has slowed, job gains have moderated, and inflation has eased. The all-important Fed’s “dot plots” within the Summary of Economic Projections (SEP) indicated 75 basis points of rate cuts in 2024. While the Fed will no doubt be pleased that the disinflation trend has continued against a backdrop of moderating growth, comments from Federal Reserve Board Governor Waller in mid-January indicate that the Fed is not yet ready to signal that rate cuts are imminent. As such, the FOMC is expected to keep the Federal Funds rate unchanged at 5.25%-5.50%. It will likely open the door to future rate cuts via a change in its forward guidance. This can be done by removing its out-of-date tightening bias that says “the extent of any additional policy firming” with a neutral statement that indicates the Fed's rate-hiking cycle is over. Fed fund rates Source: Federal Reserve Economic Data S&P 500 technical analysis After a strong rally for the S&P 500 towards the end of 2023, we started the New Year with a more cautious and neutral mindset. We maintain the view that the S&P 500 is in the final stages, or Wave V, of its rally from the October 2023 low. We again note the bearish Relative Strength Index (RSI) divergence on the daily chart. Bearish RSI divergence occurs when prices make new highs, but the RSI fails to reach new highs. Consequently, we remain patient, awaiting the development of a pullback in the coming weeks in the order of 5-8% — a pullback we are looking to buy. S&P 500 daily chart Source: TradingView Nasdaq technical analysis After a strong rally for the Nasdaq towards the end of 2023, we entered the new year with a more cautious and neutral mindset. We continue to believe that the Nasdaq is in the final stages, or Wave V, of its rally from the low in October 2023. This perspective is bolstered by ongoing evidence of bearish Relative Strength Index (RSI) and a 'loss of momentum' type weekly candle. In light of this, we remain patient, waiting for a pullback to develop in the coming weeks in the order of 5-10% — a pullback we are preparing to buy. Nasdaq daily chart Source: TradingView Source: TradingView. The figures stated are as of 29 January 2023. 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.

The dollar may find temporary support before the Fed builds its case for rate cuts; euro appears vulnerable heading into next week due to GDP data; and GBP/USD range likely to be tested. Meanwhile USD/JPY shows a sign of fatigue. Source: Bloomberg Federal Reserve United States dollar Euro Japanese yen USD/JPY Market trend Written by: Richard Snow | Analyst, DailyFX, Johannesburg | Publication date: Monday 29 January 2024 05:26 The dollar may find temporary support before the Fed builds its case for rate cuts In the days and weeks leading up to the next week’s FOMC meeting, prominent Fed members warned that overzealous expectations around future rate cuts were too optimistic, and that the Fed does not intend to cut the benchmark rate as quickly as markets anticipated. The chart below shows how future rate expectations for all 2024 Fed funds futures contracts have been tapered back since. The coloured lines have moved higher, signaling a reduced probability of rate cuts across the board since the end of last year. Reduced rate cut adds support to the dollar, but the bar for an extended bullish move is very high. Rate cut expectations for 2024 Source: Refinitiv Accompanying data has helped drive the Fed’s message home as hotter than expected December CPI revealed lingering price pressures, although a lot of that was influenced by base effects which are mostly behind us now. Additionally, January’s flash PMI data was strong as was the Q4 GDP print despite falling from the 4.9% growth in Q3. Equity markets soar and the unemployment rate is well below 4% now, meaning the ‘soft landing’ or ‘golden path’ gains favour once again. If the Fed sees upside risks to services inflation as a result of the strong data, it will continue to proceed with caution, but the statement in general is expected to move towards a more neutral tone which we could see as early as next week. Moving from rate hikes to rate cuts is a lot like trying to turn around a massive freight ship. You first have to reduce speed, then turn before proceeding in the opposite direction. I anticipate we’ll see more of a reduction in speed next week. The chart below shows the duration between the last rate hike, and first rate cut since the 1970s. Interestingly, the average of these plateaus can be rounded up to 6 months. Today marks exactly 6 months since the Fed last hiked the Fed funds rate. Source: ING, Macrobond Euro appears vulnerable heading into next week The EU has received lacklustre economic data recently and even sentiment indicators have lost a bit of the recent momentum. PMI data continued to contract while positive developments were seen in the US. Next week, EU and German GDP data could finally confirm a technical recession, but based off comments from ECB members today, it would appear stagnation is seen as more realistic than a recession. That is according to the ECB’s Vujcic. The weekly EUR/USD chart is on track for a second weekly close lower, extending the downtrend since the late December swing high. This week’s high failed to close above 1.0929, seeing the pair on track to close in the red. EUR/USD weekly chart Source: TradingView The daily EUR/USD chart found dynamic resistance at the 50-day simple moving average (SMA), restricting price action between the 50 and 200-day SMAs. The pair was unable to post a directional move in either direction as momentum appeared to be lacking. In the coming week, I expect the 200 SMA to come under pressure again, especially if EU data disappoints again. Immediate support remains at the 200 SMA, followed closely by 1.0830 with 1,0765 next up (the 38.2% Fibonacci retracement of the 2023 decline). Resistance remains at the 50-day SMA, followed by the zone of resistance around 1.0950. EUR/USD daily chart Source: TradingView Cable (GBP/USD) range likely to be tested due to anticipated lift in volatility GBP/USD has traded within a broad range for a number of weeks now with the little sign of sufficient momentum either to the upside or the downside. The 50-day simple moving average has tracked price action closely, acting as dynamic support. The prior swing high at 1.2736 has repelled bulls, particularly on a daily closing basis evidenced via multiple extended upper wicks. Volatility is anticipated to rise towards the middle of next week around the Bank of England and Fed meetings but that doesn’t promise there’ll be a concerted directional move. In fact, given recent directional uncertainty, the pair may experience an uptick in volatility but revert to trading sideways once the dust settles. The assumption behind the continued lack of direction is based on the January meetings perhaps not providing much, if any, new information. The January meetings seem like a moment too soon to make drastic changes to policy, allowing central banks the time to more seriously consider changes at later meetings after analysing more data. There will be a lot of new data between the January meeting and the 20th and 21st of March meetings for the Fed and BoE respectively. GBP/USD daily chart Source: TradingView USD/JPY shows sign of fatigue after strong bull run USD/JPY made a strong and swift recovery after the late December swing low, rising over 6% since then as the markets tapered aggressive rate cut bets which provided broad support for the greenback. The bullish move was helped in part by a more bearish view of the yen which became vulnerable after recent inflation data showed signs of easing. Japanese CPI has declined over the last two months at a time when the Bank of Japan is closely watching price trends and rising wage growth as the two preconditions for a policy shift. However, after the BoJ meeting, Governor Ueda’s comments continued to focus on what seemed like an inevitable policy shift and crucially admitted that “the probability of reaching the bank’s 2% target is rising gradually” – something that could see the yen reclaiming some lost ground. The weekly chart reveals a hanging man candle, which is typically viewed as a bearish continuation pattern. Since price was unable to surpass or even retest the prior high, another move lower cannot be disregarded. The major psychological level of 150 appears some distance away but one level to note to the downside is 146.56. A close below this level could see another test of channel support thereafter. While the other pairs reveal a susceptibility to dollar strength, USD/JPY may struggle to rally if broader yen appeal grows. USD/JPY weekly chart Source: TradingView Major US event risk ahead: Source: TradingEconomics 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.

AUD/USD falls for the fourth week to .6573, with upcoming q4 inflation data set to impact RBA's rate decision amid China's stimulus and Australian tax cuts. Source: Bloomberg Inflation AUD/USD United States dollar Australian dollar Australia Elliott wave principle Written by: Tony Sycamore | Market Analyst, Australia | Publication date: Monday 29 January 2024 06:47 A fourth consecutive weekly fall for the AUD/USD, as it finished the week at .6573 (-0.35%), extended its pullback from the late December .6871 high. Last week's weakness in the AUD/USD came despite the price of iron ore snapping a two-week losing streak and new stimulus announcements in China, including a cut to the Reserve Requirement Ratio. On top of this, the Australian federal government is tinkering with the stage three income take-cuts, which will boost the economy more than previously estimated by the RBA, and reduce the prospect of rate cuts in the second half of 2024. This week's key local economic event for the AUD/USD will be Wednesday's December quarter (Q4) inflation data - one of the last pieces of data the RBA will receive before its first board meeting of 2024 on Tuesday, February 6th. What is expected from Australia's December quarter (Q4) inflation data (Wednesday, January 31st at 11.30 am) In the September 2023 quarter (Q3), headline inflation rose by 1.2%, up from 0.8% in the June quarter and above expectations for a 1.1% increase. Annual Trimmed mean inflation eased to 5.2%, from 5.9% in the June quarter, but it is still well above the RBA's 2-3% inflation target. In the December quarter (Q4), headline inflation is expected to increase by 0.8% for an annual rate of 4.3%. The Trimmed mean is expected to rise by 0.9%, allowing the annual trimmed mean rate to ease to 4.3%. At this rate, inflation will be below the RBA's forecast of 4.5% (for trimmed mean) and support expectations of RBA rate cuts in the second half of 2024. Australian trimmed mean inflation chart Source: TradingEconomics AUD/USD technical analysis Looking past the price action over the past eight sessions, which has seen the AUD/USD tightly pinned to the 200-day moving average at .6581. From the October .6270 low to the December .6871 high, the AUD/USD gained just under 10% in two months. The rally unfolded in five waves (Elliott Wave), which suggests the pullback from the .6871 high is part of a correction rather than a reversal lower. This view is supported by the AUD/USD continuing to hold above a strong layer of horizontal support at .6520/00, which includes the 61.8% Fibonacci retracement of the October to December rally at .6500c. Therefore, leaning against support at .6520/00, a positive bias is in place, looking for a rebound initially towards resistance at .6700/25. The bullish view would increase in confidence on a daily close above recent highs in the .6620 area. Aware that if a sustained break of .6520/00 were to occur, it would warn that a deeper decline is unfolding towards 6400c. AUD/USD daily chart Source: TradingView Source: TradingView. The figures stated are as of 29 January 2023. 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 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.

Technical overview remains bullish ahead of the fundamental events, sentiment showing CoT speculators in heavy buy while retail traders are extreme sell. Source: Bloomberg Shares Personal consumption expenditures price index Market trend Big Tech Speculation Day trading Written by: Monte Safieddine | Market analyst, Dubai | Publication date: Monday 29 January 2024 07:47 Goldilocks economy narrative aided by data It was mostly about US pricing data last Friday, with the PCE (Personal Consumption Expenditures) price index showing a year-on-year (y/y) growth of 2.6% for December and a month-on-month (m/m) increase of 0.2%, both as anticipated. When removing food and energy, the growth showed 2.9% and 0.2%, respectively. Personal income for the same month was up 0.3%, but spending was up a stronger 0.7%, with the difference taken from savings and/or added debt. This followed last Thursday’s advance GDP for the fourth quarter of last year, showing a healthier 3.3% with the price index a welcoming miss at 1.5% (Atlanta Fed’s GDPNow estimate for this quarter is at 3%), and durable goods orders in December were unchanged. It was another week of gains for the stock market, but tech didn’t outperform this time around. As for Treasury yields, they finished the week little changed, while higher in real terms on the further end of the curve, and market pricing (CME's FedWatch) is near a coin toss on cut vs hold this March. Week ahead: FOMC, labor data, QRA, and more earnings from big tech As for the week ahead, it’s a light start in terms of data but picks up with housing price data tomorrow (from FHFA and S&P/CS), where it’s been a story of ongoing month-on-month (m/m) and year-on-year (y/y) growth, even if not matching forecasts at times. This comes after the jump in both new and pending home sales readings late last week for the month of December. We'll also see the Conference Board's (CB) consumer confidence, which improved sizably last time, and job openings from JOLTS, which missed for November but are still well above pre-pandemic levels. The labor market will remain in focus thereafter, with ADP’s non-farm estimate on Wednesday and the employment cost index for the fourth quarter. Both claims and Challenger’s job cuts will be released on Thursday, leading up to the market-moving Non-Farm Payrolls on Friday. Expectations are for growth of over 170K for the month of January, and the unemployment rate to rise a notch to 3.8%, with a focus on whether the divergence worsens between the establishment and household surveys. Manufacturing PMIs (Purchasing Managers’ Index) will be released on Thursday from both S&P Global and ISM (Institute for Supply Management). Though preliminary figures for the former showed a surprise expansion, the narrative is expected to remain one of contraction only for the latter. In terms of central bank action, don’t expect any from the Federal Open Market Committee (FOMC) this Wednesday, as they are expected to hold. However, both investors and traders will likely be searching for any clues of a further change in tone after December’s ‘pivot party’. The earnings front gets serious with tech giants releasing their figures: Microsoft and Alphabet on Tuesday, and Apple, Amazon, and Meta on Thursday. While Nvidia’s figures are still weeks away, we'll have to make do with AMD tomorrow and Qualcomm the day after. For the bond market, there are the Treasury’s quarterly refunding announcements (with funding details today and the maturity breakdown on Wednesday). Dow technical analysis, overview, strategies, and levels The intraweek highs were beneath its previous weekly 1st resistance level and meant a lack of a play on the weekly time frame for conformist and contrarian strategies, but where key technical indicators are still bullish and its overview unchanged as ‘bull average’. As for the daily time frame late last week, Friday's close above Thursday's 1st Resistance level with the intraday highs offering enough for conformist buy-breakout strategies even if it didn't reach its daily 2nd Resistance level, the overview there matching the weekly. Source: IG IG client* and CoT** sentiment for the Dow As for sentiment, CoT speculators are still in heavy buy territory raising it a notch to 70% (longs +262, shorts -516), but still below the majority long sentiment levels witnessed a few weeks ago. IG clients have generally opting not to short into price gains at these levels, and falling back from extreme sell 86% at the start of last week to 79%. Source: IG Dow 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 the start of this week for the outer circle. Inner circle is from the start of last week. **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.

A busy week for markets lies ahead. The remaining five members of the 'Magnificent 7' tech stocks, the ones that have driven the gains over the past year, report this week. These names account for around 30% of the S&P 500, making it a key period for the index. As well as these names, the Fed and Bank of England release their latest rate decisions, and the monthly US payroll report is published on Friday. Asian markets remained relatively robust overnight despite this action-packed week, though initial gains for Chinese markets faded despite the regulator saying it would suspend the lending of restricted shares. Troubled property developer Evergrande has been ordered to liquidate, which also trimmed bullish sentiment in the country. A cautious open is expected for most indices in Europe and the US.

The Week Ahead Read about upcoming market-moving events and plan your trading week ESTABLISHED 1974313,000+ CLIENTS WORLDWIDE17,000+ MARKETS Week commencing 29 January Chris Beauchamp's insight Earnings season reaches full flow this week, as the rest of the Magnificent 7 Big Tech firms report – Apple, Meta, Alphabet, Amazon and Microsoft all populate the week and will be the key focus for investors around the globe. In addition to this, the Federal Reserve (Fed) will also issue its latest rate decision, though no change is expected. The Bank of England (BoE) also gets in on the act, and after the latest UK inflation reading it might find itself having to err on the hawkish side. Gross domestic product (GDP) readings from the eurozone come through this week, with the German reading on Wednesday likely to command particular attention. Finally, the week is rounded off by the monthly US non-farm payrolls report, with the ADP report preceding it as usual. All in all, it promises to be a busy time for investors. Economic reports Weekly view Monday 11.30pm – Japan unemployment rate (December): rate to hold at 2.5%. Markets to watch: JPY crosses Tuesday 10am – eurozone GDP (Q4, flash): growth expected to be -0.1% QoQ and 0.4% YoY. Markets to watch: EUR crosses 3pm – US consumer confidence (January): index expected to rise to 111.5. Markets to watch: USD crosses Wednesday 12.30am – Australia CPI (Q4): price growth forecast to be 4.3% YoY and 0.8% QoQ, from 5.4% and 1.2% respectively. Markets to watch: AUD crosses 1.30am – China PMI (January): manufacturing PMI expected to rise to 49.2 from 49, and non-manufacturing PMI to rise to 50.5 from 50.4. Markets to watch: CNH crosses 9am – German GDP (Q4, flash): GDP forecast to shrink 0.3% QoQ and 0.8% YoY. Markets to watch: EUR crosses 1pm – German CPI (January, preliminary): prices to rise 2.3% YoY and fall -0.4% MoM, from 3.7% and 0.1% respectively. Markets to watch: EUR crosses 1.15pm – US ADP employment report (January): 130K jobs expected to have been created, from 164K last month. Markets to watch: US indices, USD crosses 2.45pm – US Chicago PMI (January): index expected to rise to 47. Markets to watch: USD crosses 3.30pm – US EIA crude oil inventories (w/e 26 January): stockpiles fell by 9.2 million barrels in the previous week. Markets to watch: Brent, WTI 7pm – FOMC rate decision: rates expected to remain at 5.5%, but any hints around future policy direction could drive market volatility. Markets to watch: US indices, USD crosses Thursday 1.45am – China mfg PMI (January): PMI forecast to hold at 50.8. Markets to watch: CNH crosses 10am – eurozone inflation (January, flash): prices expected to rise 2.2% YoY and fall 0.9% MoM, from 2.9% and 0.2% respectively. Core CPI to slow to 3.3% from 3.4%. Markets to watch: eurozone indices, EUR crosses 12pm – Bank of England rate decision: no change in policy expected, and with the recent rise in UK inflation the MPC votes may reflect renewed caution on the prospect of any rate cuts in the near future. Markets to watch: GBP crosses 1.30pm – US initial jobless claims (w/e 27 January): claims to rise to 218,000. Markets to watch: USD crosses 3pm – US ISM manufacturing PMI (January): index expected to shrink to 47.6. Markets to watch: USD crosses Friday 1.30mp – US non-farm payrolls (January): payrolls to grow by 162,000, down from 216,000 last month. Unemployment rate to hold at 3.7% and average hourly earnings to rise 0.3% MoM and 4% YoY, from 0.4% and 4.1%. Markets to watch: US indices, USD crosses Company announcements Monday 29 January Tuesday 30 January Wednesday 31 January Thursday 1 February Friday 2 February Full-year earnings Sthree GSK, H&M Roche, Deutsche Bank, BNP Paribas Half/ Quarterly earnings Ryanair Diageo, Pfizer, General Motors, AMD, Microsoft, Alphabet Boeing Apple, Peloton, Meta, Amazon Chevron, Exxon Mobil Trading update* Smith & Nephew Pets at Home, Diversified Energy Co, AO World, Saga Entain BT, Shell, Glencore, Anglo American Dividends FTSE 100: None FTSE 250: SSP Group, Paragon Banking, Edinburgh Inv. Trust 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 29 January Tuesday 30 January Wednesday 31 January Thursday 1 February Friday 2 February Monday 5 February FTSE 100 Australia 200 Wall Street 0.8 US 500 0.39 0.16 0.26 0.21 0.08 0.14 Nasdaq 1.58 0.30 0.60 0.46 0.71 Netherlands 25 0.3 EU Stocks 50 0.8 China H-Shares Singapore Blue Chip 0.15 Hong Kong HS50 South Africa 40 Italy 40 Japan 225 2.0

The surge in Intel’s stock price was hit by a weak outlook in the latest earnings report, though the longer-term trend is still intact. Source: Bloomberg Shares Intel Stock Share price Price Revenue Written by: Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 26 January 2024 15:53 Intel drops in wake of earnings Intel Corporation experienced a significant drop in its stock value, plunging over 10% during premarket trading after the semiconductor giant disclosed its fourth-quarter (Q4) results. While Intel surpassed earnings expectations for the quarter, its forward-looking guidance disappointed investors, signalling potential headwinds for the company. Weak outlook pressures the shares In a challenging market, Intel forecast Q1 adjusted earnings per share (EPS) of $0.13, a stark contrast to the $0.34 anticipated by analysts. Furthermore, projected revenue for the quarter is estimated to be between $12.2 billion and $13.2 billion, which is notably lower than the anticipated $14.2 billion. This conservative outlook has raised concerns among traders and investors about the company's near-term growth prospects. Despite the cautious outlook, Intel's Q4 performance was robust, with adjusted EPS of $0.54, ahead of the expected $0.44. Revenue was also higher than expected, at $15.4 billion. Intel's Client Computing Group, however, reported a successful quarter with sales amounting to $8.8 billion, surpassing the $8.4 billion forecast by analysts and marking a 33% increase from the previous year. This performance suggests that Intel continues to hold a strong position in the personal computing market. The company is also making strides in its strategic shift to become a foundry for other chipmakers. Although the Intel Foundry Services division fell short of analyst expectations, generating $291 million in revenue as opposed to the predicted $ 43 million, this initiative represents a long-term investment in Intel's future as a diversified semiconductor industry leader. Intel stock price – technical analysis Following their solid rally over the past year or so, Intel shares have slid through their steep October-to-January uptrend line and trade back below their 200-week simple moving average (SMA) at $44.92 which now acts as resistance, together with the 55-day SMA at $45.01 and the late-November high and mid-January low at $45.34 to $45.65. Source: TradingView While this resistance area caps, downside pressure should be maintained with the December low at $41.17 representing a possible downside target. Source: TradingView For the bulls to be back in control, not only would Friday’s price gap need to get filled but a rise above Thursday’s high at $50.30 would also need to occur. This currently looks highly unlikely, though. 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.

Tesla’s stock has fallen further after a poorly-received earnings report this week, with a gloomy outlook contributing to the bearish turn in price. Source: Bloomberg Shares Tesla, Inc. Market trend Price Technical analysis Candlestick Written by: Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 26 January 2024 15:06 Tesla slumps after earnings release Tesla shares experienced a significant decline on Thursday, reaching their lowest point in eight months. The drop in share price was largely attributed to disappointment surrounding the company's latest earnings report, which led to a wave of selling. In its fourth-quarter (Q4) earnings update released on Tuesday, Tesla reported $25.2 billion in sales and earnings per share (EPS) of $0.71. These figures fell short of average analyst estimates of $25.6 billion and $0.73 respectively, according to FactSet. Price cuts drive weakness in profits One of the key factors contributing to the decline in profits was Tesla's decision to implement price cuts on its cars. This move resulted in a significant decrease in profit margins, with the company's gross margin during the Q4 standing at 17.6%, the lowest since 2019 and down over 600 basis points (bp) from the previous year. Tesla's profits for the last quarter dropped by 40% compared to the same period in 2022, while revenue only experienced a modest 3% year-over-year growth. Full-year outlook remains weak For the full year of 2023, Tesla reported EPS of vague warning of "notably lower" output in 2024. This lack of clear guidance from CEO Elon Musk and the company raised further doubts and criticism. Tesla stock price – technical analysis The Tesla share price has resumed its long-term downtrend which began in November 2021 and is now trading at levels last seen in May 2023 with the March and April 2023 lows at $163.91 to $152.37 being eyed. Tesla weekly chart Source: TradingView The fact that a daily chart, and it being Friday, also a weekly chart close will most likely be made below the October 2023 trough at $194.07 is technically bearish. Resistance now comes in at the late-October 2023 low at $194.07 and also at Thursday’s $206.77 to $193.00 price gap. Only a currently unexpected bullish reversal and rise above the last reaction high on the daily candlestick chart – a daily high which is higher than that of the preceding and following day – would lead technical analysts to question their bearish outlook. This was made on Monday at $217.80. Tesla daily chart Source: TradingView 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.

'Bitcoin's ETF approval marks its maturity as an investment' The 18% loss seen in the immediate aftermath of the approval of the ETF a few weeks ago was the market retracing back into the 200% gains seen in Bitcoin over the previous 14 months. Written by: Jeremy Naylor | Analyst, London | Publication date: Friday 26 January 2024 11:55 But, Hector McNeil, founder and CEO of HANetf, says if the pattern is repeated from the first EFT in gold two decades ago, then this is the beginning of the maturity of Bitcoin into an investment that will form part of many portfolios. He says the ‘wild west’ that was the trading environment of cryptocurrencies will increasingly be a thing of the past. Then, on from this point, is likely to come ETF approvals for other cryptos such as Ethereum. The Bitcoin ETF The Bitcoin ETF, a type of investment fund, was approved a few weeks ago. On its first day, the 10 new funds together brought in around $4.7 billion. However, the price of Bitcoin has since dropped by about 18%. Hector McNeill, who helped create the first gold ETF 20 years ago and is now the CEO of HANetf, discusses how these two types of ETFs are similar. He thinks ETFs are valuable because they allow people to invest in assets that are typically difficult to trade. Additionally, ETFs offer protections and are regulated, unlike the crypto world. McNeil hopes that the approval of the Bitcoin ETF by the SEC will encourage regulators like the UK's Financial Conduct Authority (FCA) to be more open to cryptocurrencies. One advantage of ETFs, according to McNeil, is that investors can have a regulated product and combine all their investments in one place. Currently, the FCA only allows professional investors to access Bitcoin through a special product called spot Bitcoin. However, retail investors have other options like proxies. McNeil hopes that the FCA will eventually see the value of regulated products in providing investor protection and the ability to trade cryptocurrencies. Gold ETF McNeil uses the example of the first gold ETF to explain how ETFs can make an asset more accessible. Before the gold ETF, people had to physically own gold, which was inconvenient for online businesses. The gold ETF allowed people to own gold on a shared and fractional basis, backed by good delivery bars. In the same way, McNeil believes that the Bitcoin ETF will lead to a wider adoption of Bitcoin. This will make Bitcoin less speculative and more of a long-term investment and diversifier for portfolios. Although the price of Bitcoin will still have some ups and downs due to limited supply, McNeill predicts a steadier rise over time. KOIN ETF McNeill also suggests that Bitcoin is chosen by many people as a store of value and a hedge against the conventional financial system, just like gold. He believes that the technology behind Bitcoin makes it function well as a currency, and that criticisms of Bitcoin, such as money laundering, also apply to traditional currencies. As more people adopt Bitcoin, McNeil thinks central banks and governments will need to find ways to digitise their currencies. In terms of accessing Bitcoin in the UK, McNeil mentions the KOIN ETF, which provides exposure to companies heavily influenced by the price of Bitcoin. He thinks this is a good option for retail investors and expects more ETFs for other cryptocurrencies like Ethereum in the future. Overall, McNeill sees parallels between the gold ETF and the Bitcoin ETF, and believes that the wider adoption of Bitcoin will lead to a more stable and valuable asset class. 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.

The three local banks are set to report their Q4 2023 earnings over the coming weeks. Source: Bloomberg Shares Interest Interest rates Loan Singapore DBS Bank Written by: Yeap Jun Rong | Market Strategist, Singapore | Publication date: Friday 26 January 2024 05:54 Source: Singapore Exchange The three local banks are set to report their Q4 2023 earnings over the coming weeks. Based on their one-year return, OCBC has been the outrunner, with its +8.8% gain towering above the other two banks. Returns for DBS (+0.2%) and UOB (+0%) have been largely in line with the broader Straits Times Index (STI), which only manages to eke out a 0.1% return over the past year. Source: Refinitiv Source: Refinitiv Peak interest rate cycle to see net interest margin resume its gradual tapering With further confirmation that the US Federal Reserve (Fed) is at the peak of its hiking cycle, the Singapore Overnight Rate Average (SORA) and other benchmark lending rates have seen a slight drift lower in 4Q 2023. But at least, the pace of moderation remains gradual, which may translate to a more measured tapering of the banks’ net interest margin ahead. Back in 3Q 2023, DBS continued to see an expansion in net interest margin (up 3 basis points (bp) from 2Q), but the same cannot be said for OCBC and UOB, seemingly presenting a divergence that is down to individual bank’s ability to balance loan repricing and funding costs. With that, Refinitiv estimates are looking for contraction in net interest income from UOB and OCBC this time round. While year-on-year growth in net interest income for the banks has already been slowing for three straight quarters due to a higher base effect from last year, this may mark the first time where we see a contraction. Any guidance on outlook will also be on watch. DBS CEO Piyush Gupta previously guided that higher-for-longer interest rates will be a net benefit to earnings in the coming year, but with rate expectations currently pricing for six rate cuts from the Fed through 2024, focus will be on whether his view still hold. Source: Monetary Authority of Singapore (MAS), Banks’ earnings report Slight rebound in lending activities on renewed confidence Loan volume in Singapore for October and November 2023 reflected a slight rebound in lending activities from the third quarter, overall suggesting that the slump in lending since September 2022 is stabilising. Greater conviction of a peak in the global interest rate cycle and resilient economic conditions pushing back against recession concerns could renew some confidence in 4Q 2023, and with loan demand contracting year-on-year for two previous quarters, whether it can stabilise in 4Q 2023 will be in focus. Source: Refinitiv Improvement in non-interest income may be set to continue The banks have witnessed a broad-based recovery in its net fees and commission income in 3Q 2023, which may be set to continue into the fourth quarter. For the quarter, market conditions have improved significantly amid a risk-on environment, which could aid to support an increase in wealth management activities. Air traffic statistics also point to robust travel momentum in the fourth quarter, with Singapore’s airport passenger movements surpassing 90% of the level recorded in 2019. That may help to support fee income from credit card as well. Guidance from the banks’ management in 3Q 2023 has been optimistic, with UOB CEO saying that consumer sentiment remain strong and see rising investment flows in the Southeast Asia region. DBS CEO also guided for his bank's 2024 net interest income to be around this year's level, and fee income momentum to be sustained by wealth management and cards. That said, we may expect the banks to still exercise some prudence in its loan loss provisions, given that we are still in uncharted waters around geopolitical tensions, while economic environment still faces some degree of uncertainty. A more measured build-up in provisions is likely for the fourth quarter, with OCBC and UOB already lowering their provision amount quarter-on-quarter back in 3Q 2023. Fund flow data revealed ongoing net outflows over past months The Singapore Exchange (SGX) fund flow data has revealed a trend of net institutional outflows for the financial sector in 4Q 2023, unwinding all of its net inflows of close to S$800 million in the third quarter. For the full-year 2023, the three local banks led the net institutional outflows within the STI with S$2.6 billion of net institutional selling. This is followed by the REITs sector, which saw close to S$1 billion of net institutional outflows. Source: Singapore Exchange, IG DBS share price: Technical analysis DBS seems to be trading on some broader indecision, with the formation of higher lows and lower highs keeping its share price in a symmetrical triangle pattern. Any break of the upper trendline resistance may be on watch to provide conviction of buyers in greater control. On the downside, the $31.20 level may serve as immediate support to hold, where the bottom trendline stands. Source: IG charts OCBC share price: Technical analysis OCBC has been holding up so far, with a series of higher lows formed since July 2022. Near-term upward bias remains intact, with its relative strength index (RSI) on the daily chart defending the key 50 level since December last year. Ahead, a break above the $13.00 level may see prices move to retest the $13.23 level – a key horizontal resistance in 2023. On the downside, the $12.64 level will serve as trendline support to hold. Source: IG charts UOB share price: Technical analysis UOB has been trading somewhat in a range, but with past two days seeing some renewed traction. Ahead, the $29.20 level may be a key level to watch, where a downward trendline resistance stands. On the downside, support may be found at the $27.70 level, where a retest of its Ichimoku cloud zone on the daily chart saw prices hold up. 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.

You are welcome @BillionaireFXTrader

A fifth straight record high for the S&P 500 on Thursday came even as Tesla stock tumbled following disappointing earnings. Optimism about the economy and lower interest rates, combined with AI-driven flows, has helped to push the S&P 500 to its new peak. However, poor earnings from Intel overnight cast a shadow over the end of the session on Wall Street. Meanwhile in Asia, optimism soured with a 1.3% fall for the Nikkei 225 and a 1.5% drop for the Hang Seng. Today's calendar is dominated by the release of US PCE price inflation, the Fed's preferred measure of price growth, along with pending home sales.

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