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'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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Hi @BillionaireFXTrader ECB Leaves Interest Rates Unchanged, EUR/USD Listless Ahead of Press Conference and US Q4 GDP ECB IMPLIED RATES AND BASIS POINTS The Euro barely moved on the announcement and remained in a tight range against the US dollar. The pair has traded between 1.0870 and 1.0902 so far today and traders will hope that the upcoming ECB press conference (13:45 UK) may add some volatility to the, currently, lifeless pair. Support is seen off the 200-day simple moving average (black line on the chart) that sits just below 1.0850, while 1.0950 will be tough to break unless there is any strength in today’s US Q4 GDP figure.

The US dollar weakens despite positive data; focus shifts to Q4 GDP Report. Explore the technical outlook for EUR/USD, USD/JPY, and GBP/USD. Source: Bloomberg Forex Shares United States dollar USD/JPY GBP/USD EUR/USD Written by: Diego Colman | Market Analyst, New York | Publication date: Thursday 25 January 2024 06:48 The US dollar retreated on Wednesday despite better-than-anticipated PMI results, but the tide could turn in its favor over the coming days, especially if key US economic data continues to surprise to the upside. With that in mind, it is important to keep an eye on the fourth-quarter gross domestic product numbers set to be released on Thursday. In terms of estimates, economic activity is forecast to have expanded by 2% at an annualized rate during the fourth quarter, following a 4.9% increase in Q3. Although GDP is backward-looking, it can still offer valuable information on the health of the economy. For this reason, traders should follow the report closely, paying particular attention to household expenditures, the main engine of growth. Economic calendar Source: DailyFX With consumer spending holding up better than expected thanks in part to a strong labor market and rising confidence levels, it would not be surprising to see another buoyant GDP report. This scenario could further reduce the odds of a Fed rate cut in March and push traders to scale back overly dovish expectations for the FOMC’s policy path, creating a more constructive backdrop for the US dollar. EUR/USD technical analysis After a subdued performance earlier in the week, EUR/USD rebounded on Wednesday, bouncing off the 200-day simple moving average and approaching the 1.0900 handle. If gains accelerate in the coming days, technical resistance appears at 1.0920/1.0935, and 1.0975 thereafter. On further strength, the crosshairs will be 1.1020. On the other hand, if sentiment shifts back in favor of sellers and the pair takes a turn to the downside, the 200-day SMA near 1.0840 will be the first line of defense against a bearish assault. Prices may find stability in this area on a pullback before mounting a comeback, but in the event of a breakdown, we could see a move towards 1.0770, followed by 1.0710 (trendline support). EUR/USD daily chart Source: TradingView GBP/USD technical analysis GBP/USD also climbed on Wednesday, but failed to clear resistance at 1.2770. Traders should keep a close eye on this technical ceiling in the trading sessions ahead to see if it contains the bulls. If it does and prices are ultimately rejected to the downside, we could be looking at a possible pullback towards 1.2680. Further losses from this point onward may shift focus towards 1.2600. On the contrary, if the cable prolongs its advance and decisively surpasses 1.2770, we will have before us a bullish signal derived from the confirmation of the symmetrical triangle in development since the middle of last month. In this scenario, GBP/USD could first rally towards 1.2830 before starting the next leg of the upward trend towards 1.3000. GBP/USD daily chart Source: TradingView USD/JPY technical analysis USD/JPY sold off on Wednesday, but managed to finish the day off its worst levels and above the 100-day simple moving average located at near 147.40. There's a potential for prices to find stability in this zone in the coming days before continuing their upward trend. Yet, if a breakdown occurs, the possibility of retracement towards the 146.00 handle cannot be dismissed. On the flip side, if the bulls regain control and propel USD/JPY higher, technical resistance can be spotted at 149.00. On further strength, all eyes will be on the psychological 150.00 mark. Although a retest of the area is within the realm of possibility, the pair may not be able to sustain these levels for an extended period of time, given the risk of Tokyo intervening in FX markets to support the yen. USD/JPY daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Yen picks up late bid as markets digest Ueda’s comments; rising Japanese Government bonds spur on the yen one day after BoJ meeting and USD/JPY turns away from the 150 mark as 146.50 emerges as immediate support. Source: Bloomberg Forex Bank of Japan Japanese yen United States dollar Inflation USD/JPY Written by: Richard Snow | Analyst, DailyFX, Johannesburg | Publication date: Thursday 25 January 2024 05:07 Yen picks up a late bid as markets digest Ueda’s comments The main takeaway from yesterday’s Bank of Japan (BoJ) meeting was that Ueda still has his eye on an eventual exit from negative rates, despite inflation showing signs of slowing down. Ueda described the likelihood of reaching the 2% target as “increasing” and even said an exit from negative rates is possible in the absence of addressing the current, sub-optimal output gap (difference between potential output and current output). Markets see April as a live meeting for the BoJ, but currently price in a full 10 basis points (bps) by the June meeting. The BoJ is primarily looking for the continuation of what it refers to as the virtuous cycle between inflation and wages. The wage negotiation process is likely to roundup in March, which has led markets to naturally look to the April meeting for any movement in the interest rate. Implied basis points priced in by rate markets Source: Refinitiv Rising Japanese bond yields spur on the yen Japanese Government bond yields (10-year) continued to rise today, in the aftermath of the BoJ meeting. Yields are still a long way off the early November peak before inflation pressures revealed signs of slowing, and markets cooled expectations around any imminent rate changes. The higher yield boosts the attractiveness of the yen and typically sees a rise in the local currency. Japanese government bond yields (10-year) Source: TradingView The Yen has broadly risen against a number of major FX currencies (GBP, AUD, EUR, USD) as can be seen below in an equal-weighted index, comprising of the above-mentioned currencies: Source: TradingView USD/JPY turns away from the 150 mark as 146.50 emerges as immediate support USD/JPY found resistance ahead of the 150 marker but failed to reach the psychological level after the BoJ head pointed towards an eventual exit from negative rates with increasing probability. The short to medium term uptrend has not broken down as of yet, with 146.50 the most immediate level of support, followed by 145.00 and the underside of the longer-term rising channel (highlighted in blue). However, the US dollar may pose a challenge to the yen tomorrow and Friday with US Q4 GDP and PCE data on tap. Strong PMI data earlier today points to an economy that is growing at a decent pace and this could keep USD supported if inflation concerns build in the upcoming data prints with the resilient December CPI print still fresh in the minds of traders. USD/JPY daily chart Source: TradingView After the BoJ meeting, Japan specific data is rather scarce but US Q4 GD and PCE data on Thursday and Friday ought to provide a lift for intra-day volatility before the weekend. Better-than-expected PMI data for the month of January suggests the US economy is moving along at a decent canter, but markets will be more focused on backward looking data in tomorrow’s Q4 growth print. USD/JPY will also maintain plenty of interest next week when the FOMC meet to discuss monetary policy. Before then, US PCE data for December is expected to reveal stubborn headline pressures remain, with another welcome drop in the core measure of inflation. Economic calander Source: DailyFX 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.

Amid flat revenues and a challenging Chinese market, the tech giant's AI integration and upcoming VR headset launch are key focal points as Apple prepares to report its Q1 2024 earnings. Source: Bloomberg Shares Apple Inc. iPhone China Revenue Huawei Written by: Tony Sycamore | Market Analyst, Australia | Publication date: Thursday 25 January 2024 01:26 When will Apple report its latest earnings? Apple is scheduled to report its Q1 earnings on Thursday, February 1, 2024. The backdrop Apple's Q4 2023 earnings, reported in early November, surpassed analysts' expectations for sales and earnings per share, but the company reported a 1% year-over-year decline in quarterly revenues. Tim Cook, Apple's CEO, stated, "We now have our strongest lineup of products ever heading into the holiday season, including the iPhone 15 lineup and our first carbon-neutral Apple Watch models, a significant milestone in our efforts to make all Apple products carbon-neutral by 2030." Key financials Wall Street's expectations for the upcoming results are as follows: EPS: $2.11 vs $1.46 per share in the previous quarter Revenue: $117.95 billion vs $89.5 billion Q4 2023 highlights An all-time revenue record in services of $22.31 billion compared to the expected $21.35 billion. The services segment includes subscriptions such as iCloud storage, the App Store, and Apple Music. A September quarter revenue record for the iPhone of $43.81 billion. Moreover, the iPhone was the only hardware line for Apple to exhibit growth in the quarter, while the Mac and iPad businesses contracted during the quarter. The period only included about one week of iPhone 15 sales. The wearables section, which includes AirPods and Apple Watches, experienced a year-over-year decrease of over 3%. Net sales by category Source: Apple.com China's chill: Apple vs. Huawei Of concern to shareholders, Apple's sales in Greater China, its third largest market, were flat on the year. Chinese government officials are banned from using Apple's devices in favour of homegrown products like Huawei. Outside of the public sector, the Chinese consumer remains cautious, as the Chinese economy remains tepid. Net sale by segment Source: Apple.com What to look for in Q2? In its Q4 Earnings call, CFO Luca Maestri guided that Apple expected December quarter revenue to be similar to last year's. After a recent broker upgrade, which helped spark a sharp move higher in the Apple share price, there will be interest in commentary around the following topics: The potential for long-term gains as the company integrates AI into iPhones Prospects for the Vision Pro virtual reality headset, scheduled to launch on February 2 – a launch which seems to lack "buzz" Whether Apple continues to gain market share in a contracting Chinese market An update on iPhone 15 sales The impact of the removal of the Oxygen feature from Apple Watches after its legal setback Insights into the iPhone 16 due for release in September of this year. Apple's sale revenue 2015 to the present Source: TradingEconomics Apple technical analysis Following an almost 48% gain in 2023, Apple's share price has shrugged off some New Year nerves to trade higher in January, just 2.5% below its $199.62 all-time high. Providing Apple's share price remains above a support band near $180.00/75, including the 200-day moving average at $181.45, recent lows in the $180 area, and uptrend support, we expect Apple's shares to break above resistance at $199 in the coming months, aiming for $220.00. It's essential to note that if Apple's share price experiences a sustained break below $180/75, it would signal a deeper pullback, initially toward the $165.57 low from last October. Apple daily chart Source: TradingView Source: TradingView. The figures stated are as of 24 January 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.

Successive increases keep the technical overview bullish, while heavy sell client bias has resumed shorting into price gains. Source: Bloomberg Indices Shares Nasdaq Nasdaq-100 Personal consumption expenditures price index Market trend Written by: Monte Safieddine | Market analyst, Dubai | Publication date: Thursday 25 January 2024 07:51 Another record high, tech shines Another day, another record high for both the S&P 500 and Nasdaq 100, while the Dow 30 and Russell 2000 struggled a bit. Most sectors actually finished yesterday's session in the red, but communication and tech were outperformers, with the losses limited for consumer discretionary, and meant this tech-heavy index managed to best the rest with gains of about 1%. Mixed earnings, decent data, and a bad auction Component performance by the close put Netflix and ASML on top, following their respective earnings, AMD in third, enjoying an upgrade from New Street Research to buy. The attention in after-hours was on heavyweight Tesla, whose share price took a hit after its earnings and revenue miss; that came with a warning on growth for this year. Economic data out of the US showed preliminary Purchasing Managers’ Index (PMIs) improved and easily beat forecasts, both manufacturing and services above 50 - signifying expansion. The weekly mortgage applications showed another increase, even if by a smaller 3.7% after the week before’s 10.4%. As for treasury yields, they finished the session higher again, and the very disappointing five-year auction took some attention. Yields also closed up in real terms as breakeven inflation rates were little changed, and market pricing (CME's FedWatch) now via majority, anticipating a hold in March instead of a cut, and failing to get beneath 4% by the end of this year. More earnings and data to digest We’ve got plenty more to digest over the next two days with more of the Nasdaq 100’s components expected to release their figures including Intel. As for economic data, durables and advance Gross Domestic Product (GDP) releasing today, and closely watched pricing data tomorrow with Personal Consumption Expenditures (PCE). Nasdaq technical analysis, overview, strategies, and levels A spike in price that briefly went past its previous second resistance favoring conformist buy-breakout strategies before the pullback as of writing this morning, to its previous first resistance; in all keeping, the key technical indicators green and an overview that’s still bullish. But with any uptick in volatility comes added caution, and more so for conformist buys off its first support that ideally should only be done via significant reversal for those anticipating the overview to remain bullish. Source: IG IG client and CoT sentiment for the Nasdaq When it comes to IG client sentiment, we were in a period where price gains didn’t result in traders shorting, with the sell bias amongst them dropping. But they’ve starting to take that short bias higher once more, from a heavy 69% yesterday to a heavier 72% as of this morning. CoT speculators have been on the buy side throughout this period, opting to hold at 65% according to last Friday’s report. 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 7am 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.

Hi @BillionaireFXTrader ECB preview: caution to prevail as bank expected to leave rates unchanged While the ECB will be pleased to see a slowdown in the pace of inflation, it will want to avoid hinting at a dramatic change of policy in the near-term. European Central BankSource: Bloomberg Written by: Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 22 January 2024 16:05 No changes in ECB policy expected The upcoming European Central Bank (ECB) meeting is not anticipated to bring any significant changes in policy signals, as there has been limited new information since December. However, President Lagarde is likely to reiterate that the next policy rate change will be a cut, which could potentially occur in the summer. The June meeting holds potential importance, similar to comments made by ECB Chief Economist Philip Lane. Lagarde is expected to emphasize the significance of the new staff projections in March, which will play a crucial role in determining policy rates. Markets pricing in April rate cut According to market expectations, the first ECB policy rate cut is projected to take place in April, with a total reduction of 135 basis points (bp) by the end of 2024. The policy rates are expected to reach a trough of 2% within the next two years. Despite recent inflation prints showing a slight downside surprise compared to staff projections, the ECB has not declared victory over inflation. The disinflation process continues, supported by easing underlying inflation indicators. Economic growth concluded 2023 on a weak note, with manufacturing experiencing contractionary territory and services showing modest growth. Although growth momentum remains weak, the ECB anticipates a gradual rebound in activity throughout 2024. This rebound will be supported by rising real wages, a strong labour market, and a turnaround in the global manufacturing cycle. Cautious ECB meeting expected Central bankers are determined to avoid giving the market too much of an impression that rate cuts are imminent. Having seen such a huge rally in risk assets from the end of October, they will be uncomfortably aware that at least some rate cuts have essentially been priced in already. This week’s meeting, therefore, is likely to see a cautious Christine Lagarde appear before the world’s financial markets. Inflation is coming down from its highs, but like her peers at the Federal Reserve (Fed) and elsewhere, the head of the ECB will be unwilling to move too soon on inflation lest consumer price index (CPI) begin to rise once more. EUR/USD technical analysis EUR/USD continues to oscillate around the 55-day simple moving average at $1.0900 but remains below its December-to-January downtrend line at $1.0909. While it caps, further sideways trading between Monday’s $1.0909 intraday high and the 200-day simple moving average (SMA) and last week’s low at $1.0845 remains at hand. Failure there may kick off a more significant decline towards the late-August low and mid-September high at $1.04769 to $1.0766. A rise and daily chart close above $1.0909 would eye the 12 and 15 January lows at $1.0933 to $1.0936. EUR/USD chart EUR/USD 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.

Chinese stocks were given fresh support overnight thanks to a cut in bank reserve requirements, as well as promises of more support in the future. Tesla earnings missed on revenue and earnings per share, despite beating forecasts on vehicle deliveries, causing a check to sentiment after Netflix's numbers earlier in the week. Attention now turns to today's ECB meeting, though no change in policy is expected, and the first reading on US Q4 GDP. Boeing shares will be in focus once more after the US Federal Aviation Administration blocked the group from expanding production of its 737 Max aircraft after recent incidents.

Oil, gold and silver prices rise amid heightened Middle East tensions Outlook on TI, gold and silver ahead of key US data later this week. Source: Bloomberg Written by: Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Wednesday 24 January 2024 12:58 WTI rises on heightened Red Sea tensions Front month WTI futures continue to grind higher as investors weigh up escalating geopolitical tensions around the Red Sea with demand-side uncertainties and recovering global supply. The rise from last Wednesday’s 70.61 low has so far taken the front month futures contract to Monday’s 75.45 three-week high, a rise above which would engage the 76.20 late December peak and the 200-day simple moving average (SMA) at 77.28. The rise in the oil price is underpinned by a one-week uptrend line at 73.86 and the 55-day SMA at 73.75. While Monday’s low at 72.57 isn’t giving way, further upside should be seen. Source: ProRealTime Gold price side-lined Spot gold’s slide from last week’s $2,062 per troy ounce high amid a strengthening US dollar has taken it back to the 55-day simple moving average (SMA) at $2,023 along which it has been trading for the past week while remaining above last week’s low at $2,002. Further range trading between this low and Friday’s high at $2,039 is at hand. More resistance is to be found at last Monday’s $2,046 low. Source: ProRealTime Silver price bounces off January trough Spot silver’s descent from its mid-January $23.53 per troy ounce high rapidly took it to Monday’s $21.93 low which was made marginally above its $21.89 mid-November low. The rise above Tuesday’s daily candlestick Harami high at $22.46 points to a probable bullish trend reversal with the 4 January low at $22.69 representing the first hurdle. Once bettered, the December-to-January downtrend line at $23.14 should be back in sight. Support below Wednesday’s $22.35 low lies in the $21.93 to $21.89 region. Source: ProRealTime

FTSE 100 in recovery mode while DAX 40 and S&P 500 surge ahead Outlook on FTSE 100, DAX 40 and S&P 500 ahead of key US data out later in the week. Source: Bloomberg Written by: Angela Barnes | Financial presenter/producer, London | Publication date: Wednesday 24 January 2024 12:45 FTSE 100 in recovery mode The FTSE 100’s gradual advance from last week’s six-week low at 7,403 on pared back rate cut expectations has been helped by mining stocks rallying as optimism over demand from China pushed iron ore prices higher. A rise above Tuesday’s 7,527 high has the mid-November and early December highs at 7,535 to 7,543 and also the 55- and 200-day simple moving averages (SMA) at 7,560 to 7,565 in its sights. Minor support below Wednesday’s 7,498 intraday low sits at Tuesday’s 7,466 low ahead of the 5 December 7,459 low and last week’s 7,403 trough. Source: ProRealTime DAX 40 resumes its ascent after Tuesday’s pause The DAX 40 index continues its advance, having briefly paused it on Tuesday, and approaches the 8 January high at 16,785 with the more significant 11 and 15 January highs at 16,792 to 16,841 representing further upside targets ahead of Thursday’s European Central Bank (ECB) meeting. Minor support below Wednesday’s 16,674 intraday low can be seen at Friday’s 16,657 high and then at Thursday’s high and Tuesday’s low at 16,630 to 16,623. Source: ProRealTime S&P 500 once more trades in new record highs The S&P 500 continues its advance into new record high territory following Netflix earnings, the first of the ‘magnificent seven’ to report, which showed a new record subscriber count in the fourth quarter, better-than-expected revenue and a strong earnings guidance for the current quarter. The psychological 5,000 mark remains in focus and may be reached over the coming weeks and months but first the minor psychological 4,900 level needs to be exceeded. Minor support sits at Monday’s 4,868 high and more significant support between Friday’s high and Tuesday’s low at 4,845 to 4,844. Source: ProRealTime

EUR/USD above 200-day SMA, key levels at 1.0840 and 1.0770. USD/JPY eyes 149.00 breakout, potential retracement at 147.40. USD/CAD rebounds, eyes 1.3500 resistance, and 1.3415 support. Source: Bloomberg Shares United States dollar Japanese yen Euro USD/CAD USD/JPY Written by: Diego Colman | Market Analyst, New York | Publication date: Wednesday 24 January 2024 06:04 EUR/USD technical analysis EUR/USD has been moving lower this week, but has so far managed to hold above its 200-day simple moving average near 1.0840. For sentiment around the euro to improve, the bulls have to protect this floor at all costs; failure to do so could result in a pullback towards 1.0770. On further weakness, all eyes will be on trendline support at 1.0710. In the event of a bullish reversal ahead of the European Central Bank decision, technical resistance extends from 1.0920 to 1.0935. If history is any guide, buyers will face difficulties in clearing this barrier; however, a successful breakout has the potential to usher in rally towards 1.1020. On continued upward momentum, attention will turn to 1.1080. EUR/USD daily chart Source: TradingView USD/JPY technical analysis While the Bank of Japan’s monetary policy announcement sparked some yen’s volatility, it was ultimately a nothingburger, with the institution maintaining its ultra-loose policy settings - a decision that could pave the way for further weakness in the Japanese currency. Looking at USD/JPY, prices seem to be ready to start the next leg higher after a short period of market consolidation, as shown on the daily chart below, where the pair can be seen approaching a key ceiling near 149.00. If buyers manage to push the exchange rate above this ceiling, a retest of the 150.00 level could be just around the corner. On the flip side, if USD/JPY reverses off technical resistance, initial support is located near 147.40, near the 100-day simple moving average. Prices are likely to stabilize in this area before resuming their bullish path; however, a decisive breakdown could pave the way for a retracement toward the 146.00 handle. USD/JPY daily chart Source: TradingView USD/CAD daily chart After a sharp pullback late last week, USD/CAD has regained ground over the past two days, overcoming significant hurdles in the process, including the 200-day and 50-day simple moving averages. Should gains accelerate in the coming days, trendline resistance appears at 1.3500. Looking higher, the crosshairs will be on 1.3540, the 50% retracement of the November/December downturn. In contrast, should USD/CAD's upward momentum falter and prices turn lower, primary support below the key moving averages highlighted before looms at 1.3415, followed by 1.3380. Although the pair may bottom out in this region during a pullback, a decisive breakdown could create the right conditions for a drop toward the 1.3300 handle. USD/CAD daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Gold rebounds but faces resistance at $2,040, while GBP/USD consolidates within a symmetrical triangle. Russell 2000 encounters resistance at 2,000. Critical levels and potential trends explored in technical analyses. Source: Bloomberg Forex Shares Commodities GBP/USD Technical analysis Gold Written by: Diego Colman | Market Analyst, New York | Publication date: Wednesday 24 January 2024 05:19 Gold technical analysis After falling to multi-week lows last Wednesday, gold has recovered some ground in recent days; however, the rebound appears to be losing momentum, with prices approaching trendline resistance at $2,040. To gauge the future direction, it’s vital to see how XAU/USD reacts around this ceiling, keeping in mind that a breakout could usher in a move towards $2,065. Moving up, all eyes will be on $2,080. In case of a bearish rejection around $2,040, technical support is positioned around $2,005. The precious metal might find stability in this area during a pullback before mounting a turnaround, but should prices fall below this threshold, the bears could initiate an assault on $1,975. Additional losses from this point onward could draw attention to the 200-day simple moving average. Gold price daily chart Source: TradingView GBP/USD technical analysis GBP/USD has been in an uptrend since October of last year, but its upward impetus has faded in recent weeks, with cable entering a consolidation phase, as reflected by the pair’s coiling within what appears to be a symmetrical triangle. A symmetrical triangle, composed of two converging trend lines, an ascending one connecting a sequence of higher highs, and a descending one linking a series of lower lows, is usually considered a continuation pattern once confirmed. This setup is validated once prices breach the triangle, especially if the move is in the direction of the prevailing trend. In the case at hand, GBP/USD might rally towards 1.2775 upon successfully clearing 1.2750. With continued strength, the focus could shift to 1.2830, followed by 1.3000. On the other hand, if consolidation resolves to the downside and prices fall below support at 1.2600, the 200-day simple moving average will serve as the next line of defense against a deeper pullback. Shifting gaze downward, all eyes will be on 1.2455. GBP/USD daily chart Source: TradingView Russell 2000 technical analysis Following a sharp selloff earlier this month, the Russell 2000 has rebounded recently, though it has encountered resistance near the psychological 2,000 level. The small-cap equity index's ability to surpass this hurdle remains in question, but if a decisive breakout occurs, a retest of last year’s highs near 2,075 could be around the corner. On further strength, a move towards 2,142 should not be ruled out. On the flip side, if sellers return and regain decisive control of the market, prices could head back toward trendline support at $1,925. The Russell 2000 could bottom out around these levels during a retrenchment before staging a turnaround; however, a breakdown could intensify downward pressure, paving the way for a drop toward 1,885. Russell 2000 daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Discover how Microsoft's strategic focus on cloud services and AI technology has propelled a significant 20% increase in net income and an 18% rise in operating income in FY23 Q4. Source: Bloomberg Shares Microsoft Cloud computing Revenue Microsoft Windows Artificial intelligence Written by: Tony Sycamore | Market Analyst, Australia | Publication date: Wednesday 24 January 2024 05:07 When will Microsoft report its latest earnings? Microsoft Corp is scheduled to report its fiscal Q2 2024 results on Wednesday, 31 January at 8am AEDT, after the market closes. Key financials Wall Street's expectations for the upcoming results are as follows: Earnings per share: $2.77 vs. $2.99 in Q1 Revenue: $61.1 billion vs. $56.52 billion in Q1 The backdrop Investors cheered Microsoft's first-quarter results, reported in late October, as it beat Wall Street's estimates and promised future product offerings infused with AI. "With copilots, we are making the age of AI real for people and businesses everywhere," said Satya Nadella, Chairman and Chief Executive Officer of Microsoft. "We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers." Summary of Microsoft's Q1 2024 results Source: Microsoft Within the details, Microsoft reported the following highlights. Revenue from Microsoft's Intelligent Cloud segment was $24.3 billion, up 19%. Within that, Server products and cloud services revenue increased by 21%, driven by Azure and other cloud services revenue growth of 29%. Revenue in Productivity and Business Processes was $18.6 billion, up 13%. Within that, Office Commercial products and cloud services revenue increased by 15%, driven by Office 365 Commercial revenue growth of 18%. Revenue in More Personal Computing was $13.7 billion and increased 3%. Within that, Windows revenue increased 5%, with Windows OEM revenue growth of 4% and Windows Commercial products and cloud services revenue growth of 8%. What to look for in Q2? During Q1, Microsoft experienced a notable acceleration in its Azure cloud revenue growth, marking a significant shift after two years of slowing momentum. This uptick has captured the attention of analysts who anticipate a continuation of this trend in the upcoming Q2 Earnings Report. Additionally, there's a growing interest in the performance of the Microsoft 365 CoPilot AI add-on, which was launched last year and is available on a subscription basis. Despite its innovative approach, the add-on has so far received mixed reviews. Microsoft's recent completion of the $68.7 billion acquisition of video game publisher Activision Blizzard is set to influence Q2 earnings. This acquisition, finalised in mid-October, is expected to be a topic of discussion by Microsoft executives, particularly in regards to its impact on the financial guidance for Q3. Another point of interest is the management's perspective on the recent developments at OpenAI, along with their viewpoints on the current structure of the OpenAI board, which has been the subject of much discussion. Microsoft FY24 outlook Source: Microsoft Microsoft's revenue 2015 - 2024 Source: TradingEconomics Microsoft technical analysis Building on an almost 57% gain in 2023, Microsoft's share price has surged over 6% in the opening weeks of 2024, as investors began the new year with renewed enthusiasm for tech stocks that offer exposure to AI. The chart of Microsoft's share price is a textbook example of a market in an uptrend, putting in place a sequence of higher highs and higher lows punctuated by corrective and orderly pullbacks. The RSI is now pushing into overbought territory, which offers hope that a pullback may not be too far away, providing an opportunity to buy Microsoft shares at better levels. Near-term horizontal support comes in at $380/378 and below that at around $360, coming from July highs/ December lows. Medium-term support is strong in the $350/335 area, coming from the uptrend drawn from January 2023's $219.35 low and the 200-day moving average at $337.00. To note, a sustained break below $335 would negate the uptrend and warn that a deeper pullback is underway. Microsoft daily chart Source: TradingView Source: TradingView. The figures stated are as of 24 January 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 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.

Get the latest insights on Alphabet's anticipated Q4 2024 financial results, highlighting potential double-digit growth in Google cloud and services, the impact of generative AI on products. Source: Bloomberg Shares Alphabet Inc. Artificial intelligence Google Cloud computing Revenue Written by: Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 24 January 2024 04:00 When does Alphabet report its earnings? Alphabet Inc is set to release its fourth quarter (Q4) financial results on Wednesday, 31 January at 5am (GMT+8), after the market closes. Financial expectations For Alphabet’s upcoming results, expectations are for a broad recovery on all fronts. Double-digit growth in both its key segments (Google cloud and Google services) are expected to power a 12.1% year-on-year (YoY) growth in overall revenue to US$85.3 billion. Likewise, its 4Q 2023 earnings per share (EPS) is expected to improve to US$1.59 from previous quarter’s US$1.55, which will extend its streak of positive YoY EPS growth to the third straight quarter. Source: Refinitiv Rebound in advertising activities to continue in 4Q 2023 Advertisement revenue accounts for 78% of Alphabet's top line. Having reverted to positive YoY growth over the past two quarters, the recovery momentum for this segment is expected to continue with a stronger 11.6% growth in Q4 2023, up from 9.5% in Q3 2023. Increasing views of a US soft landing and further clarity on the peak in the Federal Reserve (Fed)'s hiking cycle in Q4 2023 may see business confidence return, potentially accelerating ad spending. Back in Q3 2023, Alphabet's management noted some 'stabilisation' in advertising spend, setting the tone for better times ahead. Source: Refinitiv Ongoing race to unlock synergies of generative AI on product offerings With the ongoing traction towards generative artificial intelligence (AI), Alphabet has previously incorporated AI-powered solutions like Search and Performance Max to help customers increase their ads' return on investment (ROI). This may allow Alphabet to maintain its edge over the broader advertising industry. Further integration of Bard with Google apps and services is also in the pipeline. However, it's a race against time against Microsoft, who has been a first mover with its ChatGPT. Microsoft's CoPilot feature, integrating AI into its office applications, poses a threat to Alphabet's cloud-based products, including Google Sheets and Google Docs. Meanwhile, further developments of Microsoft's search engine Bing could continue to vie for Google’s market share. The race to unlock synergies of generative AI in product offerings remains tight, with any progress of new features closely monitored at the upcoming earnings call. Cloud business performance will remain high on market participants’ radar In the Q3 2023 results, Alphabet topped both revenue and EPS estimates, but its share price plunged as much as 10% in a single day due to a miss in its cloud revenue. This highlights the importance market participants place on this segment as Alphabet's key growth driver, amid the rising trend of generative AI, which should translate to growing demand for public cloud services. Any lack of growth momentum could mean losing market share to Amazon Web Services (AWS) and Microsoft Azure, the other frontrunners in the highly competitive cloud computing space. A significant miss in this segment could singlehandedly drag the stock price down, given the heavy investments in its cloud unit and the high expectations for its growth. Source: Refinitiv Can YouTube continue to hold up against its competitors (eg., TikTok)? YouTube Shorts, Alphabet's short-form video feature as a response to competitor TikTok, has been performing well. In the Q3 2023 results, it reported 70 billion daily views, a significant increase from the 50 billion daily views at the beginning of 2023. Focus will be on whether the solid momentum in both YouTube's ads and subscription businesses from Q3 2023 can be mirrored in the upcoming results. Technical analysis: Alphabet’s share price eyeing for a retest of its all-time high Alphabet’s share price has been trading on a series of higher highs and higher lows since the start of 2023, fitting into a broad ascending channel pattern. Trading above its Ichimoku cloud on the daily chart, along with various moving averages (MAs) (100-day, 200-day), validates the overall upward trend. On the weekly chart, its weekly relative strength index (RSI) has been trading above its key 50 level since March 2023, briefly retesting the key level in October 2023, which saw some defending from buyers. Buyers may aim for a potential retest of its all-time high at the US$152.00 level, with current prices standing just 3% away from the target. On the downside, immediate support to defend may be at the US$142.50 level. A stronger area of support confluence may be found at the US$132.40 level, where the lower channel trendline coincides with the lower edge of its Ichimoku cloud on the daily chart. Alphabet daily chart 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. 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Netflix earnings last night provided more support for bullish sentiment, after the streaming giant announced subscriber numbers that were well ahead of forecasts. While it missed on earnings expectations, Netflix did beat on revenues. Asian markets were more positive overnight, though the Nikkei 225 slipped back. Chinese markets made some headway after the proposed stimulus announcement yesterday, though enthusiasm was muted. Alibaba stock was supported by news that Jack Ma was actively buying shares in the retailer. Global PMI figures dominate the day in Europe and the US, while Tesla takes its turn in the spotlight as it reports earnings.

DAX rebounds despite ECB's unexpected hawkish stance. This week's meeting takes center stage for insights on rates and growth. Technical analyses for DAX and FTSE highlight key levels. Source: Bloomberg Indices European Central Bank Inflation DAX FTSE 100 Monetary policy Written by: Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 23 January 2024 04:55 Overnight, the German stock market, the DAX extended its rebound, driven by gains in the tech sector. Its recovery in recent days has come despite ECB members sounding more hawkish than expected ahead of this week's meeting; despite evidence of slower growth and falls in underlying inflation. What is expected from this week's ECB meeting? At its last meeting in December, the ECB kept its deposit rate on hold at 4.00%, as widely expected. The ECB noted that with interest rates at this level, it will make a "substantial contribution" to returning CPI to its 2% goal in 2025. Inflation data for December received in early January showed core inflation cooling to 3.4%, the lowest since March 2022, and headline inflation stayed below 3%. While this shows that tighter monetary policy settings are winning the battle against high inflation, tighter monetary policy also impacts growth and activity data. Reflecting concerns that the European economy, led by Germany, will enter recession in 2024, the European rates market is pricing in 130bp of ECB rate cuts for 2024. Nonetheless, in the lead-up to this week's meeting, ECB officials, including president Lagarde, have noted that aggressive pricing of rate cuts is not "helping our fight against inflation". As such, the ECB is expected to keep rates on hold this week and reiterate that rates will be set "at sufficiently restrictive levels for as long as necessary." ECB deposit rate chart Source: TradingEconomics DAX technical analysis In our last update, we noted that a sustained break below support at 16,600/500 would increase the chances that a medium-term high was in place in the DAX at the early January 17,123 high. However, given the brief time that the DAX spent trading below the bottom of the support band and the three-wave nature of the decline, it is likely that the decline was a correction, and that the DAX can push to new highs in the 17,200/400 area. In summary, providing the DAX holds above support 16450ish, we expect a retest of the January 7,123 high before a move towards 17,200/400. DAX daily chart Source: TradingView FTSE technical analysis In the final weeks of December 2023, the FTSE broke higher above the 200-day moving average at 7570 before running into a cluster of horizontal resistance near 7750, highlighted on the chart below. Since then, the FTSE has erased all of its December gains despite a favourable tailwind from US stock indices in recent days, which isn't a particularly encouraging sign. As such, while the FTSE remains below the 200-day moving average at 7567 (sustained basis), the risks are for a deeper decline in the coming sessions towards range lows, 7300/7200. FTSE daily chart Source: TradingView Source: TradingView. The figures stated are as of 23 January 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.