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FTSE 100, Dax and Dow rebound from recent lows Indices staged a recovery on Tuesday, but morning trading so far has been cautious. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Wednesday 25 October 2023 FTSE 100 testing 7400 The index managed to rebound on Tuesday, recovering some losses. For a low to be formed, we would need to see additional gains towards 7450, which might then bolster a near-term bullish view and open the way towards the 200-day SMA. A close back below 7310 would negate this view. Source: ProRealTime Dax rebounds from low Tuesday saw the index make some headway, building on Monday’s dip below and then recovery above 14,700. While this has halted the selling for now, further gains back above 15,000 would be needed to suggest that a low is in. This might then allow the index to target trendline resistance from the August highs, as well as the 50-day SMA. A close below 14,750 might cancel out this bullish view for the time being. Source: ProRealTime Dow makes headway Like other indices, the Dow staged a recovery on Tuesday, but it is not yet certain that a low has been formed. Any continued recovery targets the 200-day SMA and then the October highs around 34,000. A close above 34,100 might signal that a broader rally was underway. A close below the September lows would signal that the sellers have regained control. Source: ProRealTime

Hi @Katanolarta Welcome to the IG community. What type of trader are you? Scalper, day trader, swing trader, position trader, algorithmic trader or event-driven trader ? If you don't mind, please share your routine when it comes to your trading analysis. All the best - MongiIG

Explore how China's surprising 3.9% GDP growth in Q3 influences global markets and investor sentiment. Understand the ongoing geopolitical risks with the US and what Australia's renewed diplomatic efforts mean for trade. IG Analyst | Publication date: Wednesday 25 October 2023 05:30 Article by Juliette Saly (ausbiz) In this week's edition of IG Macro Intelligence, we delve into China's economic recovery and why one investment firm deems Sino-American geopolitical tension as a pivotal risk for markets. Economic outlook The world's second-largest economy is evidencing signs of a fiscal rebound. Official data reveals that China's Gross Domestic Product (GDP) expanded at a quicker-than-anticipated 3.9% YoY in the third quarter. Quarter-on-quarter, GDP growth accelerated to 1.3% from 0.5% in Q2. Source: Reuters, LSEG Data The figures suggest China may attain its 5% annual growth target, buoyed by recent governmental stimuli. Nonetheless, challenges persist. Domestically, China confronts an escalating property crisis, elevated youth unemployment, and flagging private sector confidence. Globally, China faces the headwinds of a global economic deceleration and continuing tensions with the U.S. Geopolitical risks Sino-American relations in the realms of trade and technology continue to pose risks for investors. BlackRock's Geopolitical Risk Indicator has surged to its zenith in a year, signifying mounting market apprehension about geopolitical matters. Source: BlackRock BlackRock cites the “strategic competition” between Washington and Beijijng as the top geopolitical risk facing markets in its latest report. The investment firm labels the tensions as an “attention score” of 1.5; which is higher than the market risk it sees caused by a major terror attack or major cyber attack. By contrast, the attention score given to tensions in the Gulf exacerbated by the Israel-Hamas war is -0.65. An escalation in the Russia-NATO conflict has an attention score of 0.37. Source: BlackRock Taiwan as the nexus of geopolitical tensions and volatility The report authors identify Taiwan as a crucial geopolitical flashpoint. They state, "The US is offering enhanced military and economic backing to Taiwan, while China manifests a readiness to exert pressure on the island. Military action is not anticipated in the near term, yet the risk appears to be escalating. A pivotal event will be the Taiwanese presidential elections slated for January 2024." Chinese state-operated media, The Global Times, divulged over the weekend that mainland taxation authorities have executed audits and are scrutinising land utilisation by technology behemoth Foxconn. Its billionaire founder, Terry Gou, is actively campaigning for the Taiwanese presidency. Foxconn is the primary assembler of Apple's iPhones at its Chinese manufacturing plants. Equities in Foxconn's publicly-traded subsidiary, Hon Hai, experienced the most significant quarterly slump during Monday's trading session, underscoring the market volatility triggered by geopolitical discord. Ongoing endeavours to mitigate tensions between Washington and Beijing are in the pipeline, with indicators hinting at a potential summit between Presidents Biden and Xi this November. Additionally, Bloomberg disclosed that Chinese Foreign Minister Wang Yi is slated for high-level diplomatic discussions in Washington this week. Source: Bloomberg Australia-China relations Australian Prime Minister Anthony Albanese will visit China from 4 to 7 November, aiming to bolster Australia-China relations. China remains Australia's chief trading partner. Albanese's trip marks the first by an Australian leader since 2016 and coincides with the 50th anniversary of Gough Whitlam's inaugural visit in 1973. Canberra and Beijing are collaborating to dismantle trade barriers. Tariffs on Australian barley have been rescinded, and the Australian government anticipates resolving its World Trade Organization (WTO) dispute over wine tariffs with China. Prior to the tariffs, China was Australia's most lucrative market for wine, valued over $1 billion AUD in both 2018-2019 and 2019-2020, according to the Department of Agriculture. The tariff review is projected to last five months, with Canberra optimistic about a positive resolution. "If the duties are not abolished post-review, Australia will recommence the WTO dispute," states the Prime Minister's Office. Shares in Treasury Wine Estates, the proprietor of Penfold's, surged upon the market's reopening on Monday, following the announcement. Goldman Sachs reaffirms their BUY rating on TWE, projecting that the winemaker could regain $400 million AUD in pre-tariff sales. UBS maintains a BUY stance, while Barrenjoey analysts remain underweight on the stock, citing the five-month review period's potential impact on near-term earnings. Source: Department of Agriculture, Bloomberg 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.

As the war between Israel and Hamas escalates, the markets are reacting to the increased geopolitical uncertainty. Source: Bloomberg Forex Commodities Inflation Israel United States dollar Hamas Charles Archer | Financial Writer, London | Publication date: Tuesday 24 October 2023 14:06 As the war between Israel and Hamas teeters on the verge of regional escalation, local markets in Israel, Iraq, Egypt and Jordan among others are seeing both bond and stock market selloffs in response to the increased uncertainty. Of course, this was to be expected — but secondary effects could ripple through much larger swathes of the global economy. Israel-Hamas war updates Israel’s President Isaac Herzog has described Hamas’ original attacks on 7 October as ‘one of the worst atrocities of modern times’ and has also accused Hezbollah of ‘playing with fire’ in Israel’s North. The President has accused Iran of creating tensions between Hezbollah and Israel and warned that if Hezbollah drags Israel into war that ‘Lebanon will pay the price.’ Meanwhile, Israeli military spokesperson Daniel Hagari has noted that the military is now ‘ready and determined’ for the next stage of the war, having carried out limited ground raids on the Gaza Strip. The UN’s humanitarian agency, OCHA, now considers that 1.4 million — or nearly two-thirds — of Gaza’s 2.3 million-strong population is now displaced as a result of people moving from the North to the South. The agency has highlighted the shortage of drinking water and the overcrowding as the ‘major concern.’ It seems that Israel is holding off on a ground invasion while it considers how best to rescue more than 200 hostages held by Hamas in Gaza. As previously noted, it’s this potential escalation that could drag other actors into a wider regional war. 1. Oil Brent Crude remains elevated at $90 per barrel — reflecting fears that Iran could enter hostilities. This could be a huge problem as the US would then likely increase sanctions on Iranian oil. According to Cayler Capital’s founder and CIO Brent Belote, this could remove between one and two million barrels per day from the market ‘almost instantly.’ For context, while global oil supplies are now less concentrated, between October 1973 and March 1974, oil prices rose by over 300% as Arab nations imposed an oil embargo on Israel’s supporters due to the Yom Kippur War. And Iran has already called for Israel to face an embargo. Perhaps the bigger issue is the Strait of Hormuz. The world’s busiest shipping channel sees 20% of the world’s total oil consumption pass through each day. JP Morgan analysts argue its closure would ‘shut down the region's oil trade, supercharging oil prices.’ In early 2012, Iran threatened to close the Strait in response to international sanctions against its nuclear program. At the time, the US deployed naval forces to ensure the safe passage of ships, stating it would not tolerate a closure. 2. Inflation Inflation has eased significantly across western nations over the past year. CPI inflation in the UK now stands at 6.7%, down from 11.1% in October 2022 — and is expected to fall further over the next few months. However, inflation has come down due to rising interest rates, with the Bank of England base rate now at 5.25%. If oil remains elevated, inflation may become more entrenched, as the hard commodity is used across global supply chains to create thousands of products. A key aspect of renewed inflationary fears is domestic and business energy bills; both consumers and companies have seen bills fall sharply since their peaks a few months ago, but Europe is heading into winter. With sanctions already in place against Russia, energy could surge again. And for perspective, Brent rose to as high as $139/barrel in the aftermath of Russia’s invasion. 3. US Dollar In the day after the initial Hamas attacks, the US Dollar rose by 0.2% against both the Euro and the Pound, while other safe haven currencies including the Swiss Franc and Japanese Yen also rose. Of course, the dollar could be hit if the US suffers a recession, but the currency remains one of the defensive assets of choice during times of geopolitical stress. Other safe haven assets, including short-term US treasuries and gold, have also remained elevated. There is some debate to the extent to which the US Dollar remains a safe haven — while it remains the world’s reserve currency by some margin, the growing US deficit is causing some analyst concern. 4. NASDAQ tech stocks With some of the largest US tech stocks reporting back to investors today — including Microsoft and Alphabet — it’s worth framing their individual efforts against the macroeconomic backdrop. Tech shares tend to move inversely to oil and gas shares; this was the case in mid-2022 as the Ukraine war pushed up oil prices, feeding inflation, sending bonds higher. Higher inflation must be met with higher interest rate rises, and the tech stocks typically rely on the water of loose monetary policy to grow rapidly. It’s no coincidence that the NASDAQ 100 fell into a bear market for much of 2022 as rates rose; while the index has seen a large recovery through 2023, a new inflationary spike could see the tech stocks sell off once more. 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 Australian dollar found legs after CPI figures beat Q3 forecasts; both the headline and trimmed measures revealed tight price pressures and the RBA might be looking for a move. If they lift rates, will AUD/USD get a boost? Source: Bloomberg Forex Shares Inflation Consumer price index Cash Interest rate Daniel McCarthy | Strategist, | Publication date: Wednesday 25 October 2023 04:45 Australian dollar reacts to CPI figures The Australian dollar made gains in the aftermath of headline CPI of 5.4%, beating forecasts of 5.3% year-on-year to the end of September against 6.0% previously. Perhaps crucially, the September quarter-on-quarter headline CPI was 1.2% rather than the 1.1% anticipated and 0.8% prior. This represents a re-acceleration of price pressures. The RBA’s preferred measure of trimmed-mean CPI was 5.2% year-on-year to the end of September instead of estimates of 5.5% and 5.9% previously. The trimmed mean quarter-on-quarter CPI read of 1.2% was above the 1.0% forecast and prior. Today’s CPI is undeniably undesirable, especially for the RBA’s preferred trimmed mean measure. Commentary on annual and quarterly CPI Some commentators are at ease about today’s CPI, citing that the annual number has decreased. This decrease in the yearly figure is the base effect, rather than an indication of the current state of play. Quarter-on-quarter headline CPI for 3Q 2022 was 1.8%. What is the next move for RBA? The problem for policymakers is that inflation has been reignited over the third quarter. The lead-up to today’s CPI figure saw an intriguing run of commentary from the RBA. Wednesday 11th - RBA assistant Governor Chris Kent said, “Some further tightening may be required to ensure that inflation, that is still too high, returns to target.” Tuesday 17th October – RBA October meeting minutes published and stated, “The Board has a low tolerance for a slower return of inflation to target than currently expected. Whether or not a further increase in interest rates is required would, therefore, depend on the incoming data and how these alter the economic outlook and the evolving assessment of risks.” Wednesday 18th October - RBA Governor Michele Bullock said, “The problem is we’ve had shock after shock after shock. The more that keeps inflation elevated, even if it’s from supply shocks, the more people adjust their thinking.” Tuesday 24th October - RBA Governor Michele Bullock said in regards to getting inflation down, “It is possible that this can be done with the cash rate at its current level but there are risks that could see inflation return to target more slowly than currently forecast. The Board will not hesitate to raise the cash rate further if there is a material upward revision to the outlook for inflation.” She also restated, “The Board has been clear that it has a low tolerance for allowing inflation to return to target more slowly than currently expected.” The real cash rate and its implications Looking at the chart below, published by the RBA earlier this month, two aspects stand out. First is the depth of the negative real cash rate and second, the large gap between the real cash rate and the return on the 90-day Bank Bill. The real cash rate is the RBA’s cash rate target less the headline inflation rate (CPI). Negative real interest rates: who pays the price? Negative real interest rates undermine the wealth of the nation with today’s money being more valuable than cash in the future. Savers in particular are most punished by these circumstances. Of course, we know the answer is simple. The two-ways to correct the situation are by lifting interest rates or by getting inflation down. The chart reflects the recent achingly high inflation reads relative to the last 30-years, since inflation targeting was mandated by the Australian Government to the RBA. Source: ABS, AFMA, ASX, RBA Inflation target maintained That mandate went through a review process under the current government and some tinkering was undertaken. Of significance is that the inflation target has been maintained. Today’s reacceleration of price pressures depresses the real cash rate further. The longer inflation stays high and interest rates are unchanged, the more damage is done to the economy in the long run. Market expectations for RBA rate hike Going into today’s data, the interest rate futures markets ascribed close to a 0% probability of a 25 basis-point hike by the RBA at their monetary policy meeting on November 7th. The dial moved slightly toward a possible of a hike post-CPI. Then again, the market did not anticipate the first hike by the RBA in May 2022. The pandemic is mostly consigned to the history books, but inflation is still with us and growing. Former RBA Governors have previously said, in the overall sense, that 25 basis points is here nor there for monetary policy. If the RBA does not hike at either the November or December meetings, then the next opportunity will not be until February. An early insurance policy for the new Governor might be in the offing. AUD/USD short term reaction to CPI beat Source: Bloomberg 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.

Stocks in Asia were able to trade in more positive fashion, taking their cue from a better finish on Wall Street. There was a mixed reaction to Microsoft and Alphabet earnings, with the former soaring and the latter falling as investors focused on the diverging performance of their cloud computing divisions. Stronger Australian inflation data meant that markets began pricing in a higher chance of another hike from the RBA. Today's Bank of Canada rate decision and earnings from Meta are likely to be the key drivers of activity. The latter has seen a host of US states opening a lawsuit against the company's Instagram business, on accusations of causing addiction in teens.

With the Israel-Hamas war continuing to escalate, Brent is steadily rising. Where next for the FTSE 100 oil majors? Source: Bloomberg Shares Commodities Gaza Strip Price of oil Gaza–Israel conflict Israel Charles Archer | Financial Writer, London | Publication date: Monday 23 October 2023 15:49 The FTSE 100 fell sharply last week, slipping from 7,625 points on 17 October to 7,367 points today. Overall, the UK’s premier index is down circa 2.5% year-to-date, dragged down by wider macroeconomic concerns of a potential global slowdown, and more recently, fears that the Israel-Hamas war could escalate into regional conflict. Of course, the war is already seeing Brent Crude rise; the international oil price benchmark is now trading at circa $92/barrel. But if Iran enters the war, JP Morgan analysts argue that the ‘the closure of the Strait of Hormuz —the world's busiest oil-shipping channel— it would shut down the region's oil trade, supercharging oil prices.’ Of course, the bank also noted that ‘while Iran has threatened over the years to block the strait, it had never followed through.’ For context, circa 20% of the world’s total oil consumption passes through the Strait each day. Closure for any length of time could see inflation resurge and global economies wobble. But this fear, and the subsequent oil price rise, has been positive for the FTSE 100 oil majors, BP and Shell. Indeed, Shell hit a record market capitalisation last week, though has slipped back slightly. Israel-Hamas war updates Over the past 24 hours, the Hamas-run healthy ministry in Gaza has reported that 436 people have been killed by Israeli air strikes. This brings the total number of Palestinian deaths to 5,087 since 7 October — with a further 15,273 people wounded. Israel has advised it is targeting Hamas infrastructure, including tunnels, with 320 targets hit over the past day. It’s also launched ground raids into the Gaza Strip, with IDF spokesman Daniel Hagari advising that ‘during the night there were raids by tank and infantry forces. These raids are raids that kill squads of terrorists who are preparing for our next stage in the war. These are raids that go deep.’ An additional consideration of these raids is to garner information about the locations of the 222 hostages held by Hamas in Gaza (including some foreign nationals). For context, more than 1,400 Israelis were killed when Hamas attacked both civilians and soldiers in Israel at the start of the conflict. The New York Times has reported that the US has advised Israel to delay its full ground invasion of Gaza to negotiate the release of these hostages and also allow more aid to enter the Strip. According to Reuters, a third convoy of trucks recently entered Gaza through the Ragah crossing in Egypt — though the amount of aid being delivered is still far short of what the UN considers is needed. And arguably, the ground invasion could be the catalyst that draws other actors into a wider war. BP and Shell shares The FTSE 100 oil majors are already benefitting from a rising oil price that is reacting to fears of a regional war. But these fears over oil movement restrictions are nothing new — in early 2012, Iran threatened to close the Strait of Hormuz in response to international sanctions against its nuclear program. At the time, the US deployed naval forces to ensure the safe passage of ships, stating it would not tolerate a closure of the Strait. Other than the wartime developments, it’s worth noting that Chevron has just agreed to buy Hess for $171 per share in an all-stock deal. Given that BP still lacks a full-time CEO after Looney’s unceremonious exit, its contentious green investments focus, and relative underperformance — it could remain a buyout target. Meanwhile, Shell shares could see another record high this week should Brent rise to $100 and take the FTSE 100 major with it. However, this will depend on whether international efforts to de-escalate the conflict bear fruit. 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.

As McDonald's gears up to announce its Q3 2023 earnings, the market eyes how the fast-food giant will navigate rising interest rates and consumer spending pressures. Source: Bloomberg Shares McDonald's McDonaldland Interest Revenue Interest rate Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 24 October 2023 05:36 When will McDonald's report its latest earnings? McDonald's is scheduled to report its third-quarter (Q3) earnings before the market opens on Thursday, 30 October 2023. The backdrop McDonald's Corporation is a global fast-food restaurant chain operating in over 100 countries. As of the end of 2022, the company boasted more than 40,000 stores. Interestingly, more than half of the company's revenues are sourced from countries outside the US. In Q2 of 2023, McDonald's financial performance surpassed analysts' expectations, driven by rebounding sales in China and increased US visits, thanks in part to their nostalgic mascot, Grimace. "Frankly, the theme this quarter was Grimace," stated CEO Chris Kempczinski during the company's conference call. A special Grimace Birthday meal combo, which featured a visually appealing purple milkshake, gained significant traction on social media, propelled by nostalgia for the classic McDonaldland character. Key financial highlights for Q2 2023 McDonald's reported a second-quarter net income of $2.31 billion Global comparable sales rose by 11.7% for the quarter, marking double-digit growth across each segment Earnings per share: adjusted $3.17 vs. an expected $2.79 Revenue: $6.5 billion vs. an expected $6.27 billion. Source: Bloomberg What to expect? Investors are increasingly concerned about various macroeconomic factors that could adversely affect McDonald's future earnings. High on this list are rising interest rates, as well as the resumption of student loan repayments after a three-year hiatus. Both elements are likely to constrain consumer spending and footfall in McDonald's outlets. "A challenging macroeconomic environment, including climbing interest rates and heightened costs, continues to disrupt consumer confidence and put downward pressure on consumer spending," McDonald's Chief Financial Officer Ian Borden noted in a late-July conference call with analysts, following the Q2 results. This cautionary stance clarifies the rationale behind the softer financial outlook and the steep decline in McDonald's share price since July. However, it is widely believed that the fast-food chain is offsetting these headwinds through market share gains facilitated by enhanced service, competitive value offerings, and sales boosts from digital and delivery channels. Key financials Wall Street's expectations for upcoming results Earnings per share: adjusted $2.97 vs. $3.17 in Q2 Revenue: $6.53 billion vs. $6.5 billion in Q2. McDonald's revenue chart Source: TradingEconomics McDonald's technical analysis Since reaching a high of $299.35 in late July, McDonald's share price has plummeted nearly 18%, coinciding with the publication of the Q2 earnings report and a 120 basis-point rise in US 30-year yields. Recent trading sessions indicate a rally from oversold levels, with the share price recovering to $245.73. Should the stock decline further post-earnings, significant support is expected at the $240 level, in line with the 200-week moving average. McDonalds daily chart Source: IG Additional support is noted in the $230/$228 range, which aligns with lows seen in May and September of last year. Conversely, resistance is pegged at $280, anchored by the 200-day moving average and the November 2022 high of $281.67. McDonalds weekly chart Source: IG TradingView: the figures stated are as of October 23, 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.

Alphabet Inc. is set to announce its third-quarter earnings on October 24th after US markets close. What can we expect from the three pillars of the search engine king? Will the tech giant continue its rally until the year-end? Source: Bloomberg Shares Commodities Alphabet Inc. Artificial intelligence Cloud computing Revenue Hebe Chen | Market Analyst, Melbourne | Publication date: Tuesday 24 October 2023 11:11 Alphabet Inc. is set to announce its third-quarter earnings on October 24th after US markets close. What can we expect from the three pillars of the search engine king? Will the tech giant continue its rally until the year-end? Alphabet earnings date Alphabet Inc. is scheduled to reveal its third quarter 2023 financial results on Tuesday, October 24, US Eastern Time after market closes. Alphabet earnings expectation Q3 Estimate Q2 YOY Revenue $75.77 billion $74.6 billion 10.2% EPS $1.45 per share $1.44 per share 36.8% Alphabet earnings key watch Advertising revenue In the previous quarter, Google's advertising revenue increased by 3% from the same period last year, making up 77% of its total revenue. Source: Alphabet Despite a prevailing slowdown in ads spending, Google advertising is expected to enjoy modest growth during the third quarter. It is estimated that advertising income will grow by 8.2% year-over-year, generating approximately $58.94 billion in the September quarter. Cloud Following a remarkable 31% year-on-year growth in Q2 2023, Google Cloud continues to build up its robust momentum in the fiercely competitive cloud market. This momentum is primarily driven by its expanding range of cloud services and the growing number of data centers in its network. According to Zacks' estimates, Google Cloud's revenue is projected to grow by 24.3% from the prior-year quarter, reaching $8.54 billion in Q3. Source: Canalys AI Alphabet's strong commitment to integrating AI techniques into its search business is expected to boost its revenues in the search sector. Furthermore, with claims of collaborating with 70% of generative AI startups, Google Cloud's strategy of harnessing its partner ecosystem in the AI gold rush not only promises to enhance Google Cloud's profitability but also positions the search engine giant advantageously to capitalize on the opportunities emerging from the impending AI boom. Nevertheless, a significant question remains: can Google's integration of chatbot AI technology compete with the thriving specialized AI tools and platforms, and what will be the impact of this integrated search engine on its other revenue streams? Alphabet techinical analysis In the face of fierece competition in the realms of artificial intelligence and rising interest rates, Alphabet's stock price has surged by nearly 60% this year, outperforming the Nasdaq composite, which has recorded a 29% increase year-to-date. Based on the weekly chart, the price has steadily moved along an ascending trajectory since early this year. The peak from April 2022 at $142 appears to be a significant resistance level for now. A decisive break above this level would clear the path for the price to challenge its all-time high abvove $149. On the flip side, according to the daily chart, the price might seek immediate support from the 20-day MA, which is situated near $135 in case of a retreat. Source: IG.com Source: IG.com 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.

As the AUD/USD steadies after breaking a losing streak, all eyes are on upcoming Q3 inflation data. Source: Bloomberg Forex AUD/USD Inflation United States dollar Australian dollar Consumer price index Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 24 October 2023 07:06 Hawkish RBA minutes and employment data fuel AUD/USD Last week saw the AUD/USD snap a three-week losing streak, buoyed by surprisingly hawkish Reserve Bank of Australia (RBA) minutes and robust Australian employment data, offsetting risk aversion and higher US yields. RBA vs Federal Reserve: divergent monetary policies The hawkish tone of the RBA minutes was further emphasised by new RBA Governor Michele Bullock's speech on Wednesday, along with a robust labour force report on Thursday. This has led to an increase in the odds of an RBA rate hike in November to approximately 20%. This more hawkish shift from the RBA stands in contrast to recent comments from Federal Reserve speakers, who have pointed to tightening financial conditions driven by rising yields, thereby offsetting the need for future rate hikes. Diplomatic relations with China and AUD/USD In theory, the divergent outlooks from the central banks should support the AUD/USD, as should the recent improvement in Australia's strained diplomatic relations with China. This improvement is set to be highlighted by a visit to China next month by Australian Prime Minister Albanese. While geopolitical tensions in the Middle East may limit the upside for the AUD/USD, there still appears to be potential for a rally, especially if tomorrow's inflation data is stronger than expected. Q3 inflation Date: Wednesday, 25 October at 11.30 am AEDT The market anticipates Q3 headline inflation to increase by 1.1%, up from 0.8% in Q2, fuelled by escalating fuel and electricity costs. Nonetheless, annual headline inflation is projected to moderate to 5.3% year-on-year (YoY) in Q3, down from 6% in Q2. The RBA preferred metric for core inflation, the trimmed mean, is anticipated to rise by 1.0% in Q3, an uptick from 0.9% in Q2. However, the annual core inflation rate is expected to decline to 5% from 5.9% in the previous quarter. Should the inflation figures significantly exceed the above estimates, the AUD/USD currency pair is likely to find support, owing to heightened market expectations of a 25-basis point RBA rate hike in November. This would elevate the cash rate to 4.35%. AU headline inflation chart Source: TradingEconomics AUD/USD technical analysis Despite a sell-off in the DXY overnight, the AUD/USD remained a reluctant participant ahead of tomorrow's Consumer Price Index (CPI) release, as geopolitical tensions in the Middle East continue to exert pressure. From a technical standpoint, the AUD/USD exhibits a potential triple low at 0.6285, serving as a key bull-bear pivot ahead of the forthcoming CPI data. While above this level, the AUD/USD has the opportunity to test resistance at 0.6400/0.6450. Conversely, should the AUD/USD break below 0.6285 on a sustained basis, it would set the stage for a retest of the October 2022 low of 0.6170. AUD/USD daily chart Source: TradingView Source Tradingview. The figures stated are as of October 24th, 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.

Bundesbank hints that German economy likely shrunk in Q3; EUR/USD slide finds support despite a lack of clear bullish drivers and EUR/GBP encounters resistance after bullish breakout Source: Bloomberg Forex Shares EUR/USD Euro Market sentiment United States dollar Richard Snow | Analyst, DailyFX, Johannesburg | Publication date: Tuesday 24 October 2023 04:43 Bundesbank hints that German economy likely shrunk in Q3 Germany’s Bundesbank produced a monthly report pointing towards the likelihood of another quarterly contraction, as industrial production and weakening consumption plagues Europe’s largest economy. The report comes ahead of fresh German and EU PMI data for October, which is expected to show very little progress, remaining at suppressed levels. The German manufacturing PMI data set – a sector that normally produces strong results - has led the rest of Europe lower. Should a contraction be confirmed, it would result in fourth straight non-positive quarter. Negative GDP growth during Q4 2022 and Q1 2023 placed Germany into a technical recession, followed by a flat GDP growth in Q2. German GDP growth (QoQ) Source: TradingEconomics EUR/USD slide finds support despite a lack of clear bullish drivers The weekly EUR/USD chart reveals four prior weeks of consolidation, after the impressive selloff that preceded it. The US dollar, despite seeing an uptick in fundamental data, is struggling to reignite prior momentum. US GDP is likely to show a stellar 4.1% expansion according to markets and recent data has shown a tendency to surprise to the upside (FNP, CPI, US retail sales). In addition, US Treasury yields maintain elevated despite easing in recent sessions. This is in contrast with the EU where fundamental data continues to suffer. Nevertheless, EUR/USD appears to be experiencing a reprieve. The lack of clear bullish catalysts suggest that any advance may be short-lived, creating the potential for a return to range bound conditions, although, the range appears much tighter than before (1.0640 – 1.0520). EUR/USD weekly chart Source: TradingView The daily EUR/USD chart shows the period of consolidation in more granular detail. Current resistance appears via the May low of 1.0635, followed by 1.0700. The pair also trades well beneath the 200 simple moving average, but the MACD indicator favors the recent bullish momentum. EUR/USD 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 and silver edge up in morning trading while Brent crude remains under pressure Precious metals have edged higher after Monday’s losses, but oil prices continue to struggle. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 24 October 2023 11:20 Gold consolidates after gains Gold saw some of its bullish momentum ebb on Monday, halting the leg higher seen over the last week. Should this turn into a more substantial pullback then the 200-day SMA could be an initial target for any downside support. A close back above $1983 continues to target $2000 in the first instance. Source: ProRealTime Brent crude price drops back from last week’s high Oil prices suffered a further knock on Monday, falling back towards the 50-day SMA. For Brent, a close back below $88 would be a potentially bearish development, as it might then see trendline support from the October low broken. Buyers will want to see the price hold above this level and then a move back towards $92 to maintain the bullish outlook. Source: ProRealTime Silver eyes renewed attempt to clear 200-day MA The price seemed to reverse course on Monday, though a close back below $22.50 is needed to suggest that a lower high has formed. A recovery back above the 200-day SMA might help to suggest that a fresh leg higher is underway, with a close above $23.80 helping to solidify the bullish view. Source: ProRealTime

Nasdaq 100 & S&P 500 hold support, while Nikkei 225 remains above the 200-day moving average The selling has paused in indices for now, with the Nasdaq 100 and S&P 500 holding their September lows and the Nikkei 225 avoiding a close below the 200-day moving average. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 24 October 2023 11:41 Nasdaq 100 holds key support The index rallied off the 14,500 level for the second time in a month, in an echo of September’s price action. Now the bulls need to get the price back above 14,800 on a closing basis – Monday’s price action witnessed a push to this level, but momentum then faded. For the moment, the bearish case is still in the ascendant in the short-term, but a bigger pullback will require a close below 14,400, putting the price below the lows of the past month. Source: ProRealTime Nikkei 225 stays above 200-day MA Once more the 200-day SMA appears to be acting to stem losses, with a push below this indicator finding buyers on Monday and Tuesday. Now the buyers must push on, with a close above 31,300 helping to solidify a low and allowing a move back towards the 32,500 level to be contemplated. A close back below 30,700 would suggest that the 200-day SMA has been breached and a near-term bearish view prevails. Source: ProRealTime S&P 500 holds September lows The index was unable to get back above the 200-day SMA on Monday, but for the moment the 4200 lows from September continue to hold. In the event of further downside, the 4160 area, which marked the highs from February and March, would come into view. Below this the 4070 might be the next area of support. A close back above the 200-day SMA might yet provide hope that a low has formed, which could then see the price test short-term trendline resistance from the early September high. Source: ProRealTime

UK banks have had a tough six months, and despite good earnings from their US counterparts the outlook remains difficult thanks to pressure on borrowers and the likely end of the Bank of England’s rate hikes. Source: Bloomberg Shares Interest Interest rates Interest rate Loan Lloyds Bank Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 23 October 2023 13:21 UK banks face tough outlook This week marks the beginning of UK bank earnings season, with Barclays, Lloyds, and NatWest all set to report their financial results. However, it seems that US banks have outperformed their UK counterparts, as the weaker state of the UK economy makes it less likely for UK banks to achieve a similar level of success. While NatWest, Lloyds, and HSBC are expected to announce a rise in profits, Barclays is anticipated to experience a decline in earnings. This divergence in performance can be attributed to various factors, including the impact of higher borrowing costs on loan demand. The recent weakness in mortgage approvals has certainly played a role in dampening loan demand, affecting the overall profitability of banks. Higher rates a mixed blessing On one hand, higher interest rates have been beneficial for bank earnings. However, they have also placed pressure on borrowers, leading to an increase in impairments and provisions for bad loans. This dual effect of higher interest rates highlights the delicate balance that banks must navigate in order to maintain profitability while managing the risks associated with lending. Rates unlikely to keep rising Looking ahead, it is worth considering the future trajectory of interest rates. The Bank of England is likely approaching the end of its hiking cycle, which raises the question of where rates will go from here. This uncertainty adds another layer of complexity for banks, as they must anticipate and adapt to potential changes in the interest rate environment. In summary, UK bank earnings are expected to reflect the challenges posed by the weaker state of the economy and higher borrowing costs. While some banks may report a rise in profits, others may face a decline. The impact of higher interest rates on borrowers and the future direction of rates further contribute to the complexity of the banking landscape. Lloyds share price – technical analysis Lloyds has seen a steady decline since March. Lower highs in April, July and September have maintained the bearish view, though 40p has been support since June. Recent gains were capped at 44p, so a close above this level is needed to provide a short-term bullish view, but it will still face potential resistance around the July and September highs. Source: ProRealTime Barclays share price – technical analysis After the huge losses of February and March, the price rebounded, but gains were contained below 165p. Since June, buyers have stepped in around 143p to prevent any near-term downside, with sharp rallies following dips into this level. Bulls will be watching for a possible repeat performance, though trendline resistance from the September highs could come into play to cap any near-term upside. Source: ProRealTime 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.

As the Israel-Hamas war threatens to escalate into regional conflict, long-term FTSE 100 investors are facing yet more volatility. Source: Bloomberg Indices Shares China United States Volatility Israel Charles Archer | Financial Writer, London | Publication date: Friday 20 October 2023 15:43 FTSE 100 investors may be starting to get a weary sense of market fatigue. Of course, it’s not just FTSE investors — whether it’s the S&P 500, NASDAQ 100, ASX 200, CAC 40, or the DAX — it seems that the next unpredictable black swan event is always just around the corner. For context, the UK’s premier index sunk from 7,674 points in mid-January 2020 to just 5,191 points on 20 March 2020 during the pandemic mini crash. After significant volatility, the FTSE 100 recovered to break through the symbolic 8,000-point barrier by mid-February 2023. But it has since fallen back to 7,430 points today. FTSE 100 volatility abounds The FTSE’S volatility through 2023 perhaps reflects wider macroeconomic factors: the ‘big four’ banks — Lloyds, Barclays, HSBC, and NatWest — are delivering higher profits but mostly because of higher net interest margins. There comes a point where dealmaking breaks down and debt stress outweighs the higher margins. Meanwhile, FTSE 100 oil majors are benefitting from elevated oil prices — driven by post-pandemic demand, the Russia-Ukraine war, and now the Israel-Hamas war. But high oil prices also create stickier inflation — driving the rest of the index down. Meanwhile, with the Bank of England base rate at 5.25% and likely to stay elevated, the housing market, alongside the major housebuilders, is struggling compared to recent comparators. The FTSE also hosts some of the largest miners in the world — with the likes of Glencore, Anglo American and Antofagasta calling the index home. And again, these miners are working with volatile commodity prices — including gold, which as the real asset safe haven of choice is within touching distance of record highs. And ever since the pandemic began, there’s been seemingly endless volatility events. The GameStop saga, the Ukraine War, the Partygate scandal, the Pakistan crisis, the Truss mini-budget, the US election, the Capitol riots, the Myanmar coup, the crypto surge (then winter), the Afghanistan withdrawal, the inflation story, Credit Suisse, Silicon Valley Bank, the interest rates crisis, escalating Sino-US tensions, and now the Israel-Hamas War. The new fear is that the conflict, which thus far has been relatively confined to Israel and Gaza, spirals into a wider regional war involving Saudi Arabia and Iran alongside their proxy backers. Is there always a black swan? Few analysts thought that Russia would invade Ukraine, and similarly, few thought Hamas would be able to penetrate the Israeli defences that surround the Gaza Strip. You could argue that the covid-19 pandemic was a black swan (a completely unpredictable, negative market event), and yet pandemics have hit the global economy in the past. For perspective, the National Bureau of Economic Research estimates that 40 million people — representing 2.1% of the global population — died in the Influenza pandemic of 1918-1920, with the average country seeing real per capita GDP reduced by 6%. Looking beyond the Middle East, much investor attention is on the world’s second largest economy, China. For context, FTSE Russell data shows that roughly 80% of FTSE 100 corporate income is derived from overseas — and the global economy relies on Chinese growth. It’s worth highlighting that Chinese economic data appears relatively positive at present. State stimulus saw GDP grow by 4.9% in July-September compared to a year earlier, compared with analyst expectations for a 4.4% increase. But fears for the country’s real estate sector — which accounts for as much as 30% of GDP — are rising. This potential crisis has been brewing since Evergrande halted production on some projects in August 2021 due to overdue payments. Fellow real estate titan Country Garden is now in similar financial straits. And then there’s the wider Sino-US tensions to consider. Over the past year alone, there’s been regulatory problems over US-listed Chinese tech stocks, arguments over the origins of covid-19, and disputes over a potential BRICS reserve currency. There’s also worries over a possible TikTok ban in the US, tensions over Ukraine, Israel and Taiwan, spy balloon recriminations, bans on certain semiconductor exports from the US to China, and bans on the export of certain critical minerals from China to the US. Then there’s the Huawei ban in the US, followed by the iPhone ban for government employees in China, and the contested Aukus pact for Australian nuclear submarines. Putin’s recent meeting with ‘dear friend’ Xi in China highlights the geopolitical tensions — and yet after Apple CEO Tim Cook’s visit to China, Vice Premier Ding Xuexiang has enthused that China is willing to provide more opportunities for foreign funded enterprises, including Apple, to develop in China. Yesterday was the 36th anniversary of the Black Monday crash. Five years after the worst one-day crash in living memory, markets across the UK, Europe, and the US were rising by as much as 15% a year. The bear market of the 2008 Global Financial Crisis lasted just five quarters, and the pandemic recovery was even faster. Of course, there’s always a negative market event on the horizon. But over the long-term, the FTSE 100 has usually continued to deliver dividends — and investors can overlook this positive longer-term picture. As a caveat, past performance is not an indicator of future returns. 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.

Gold, oil and natural gas mostly quiet in early trading Gold is little-changed in early trading, while oil prices have fallen back from Friday’s highs. Natural Gas remains under some pressure. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 23 October 2023 11:23 Gold at three-month high Gold’s astonishing bounce finally hit some selling last week, as it neared $2000. For the moment the buyers remain firmly in control. The price closed below the summer highs around $1980, but a drop back below $1950 would be needed to signal that a bigger short-term consolidation could be underway. Further gains above $1983 would point towards another push towards the important $2000 level. Source: ProRealTime WTI stumbles but uptrend intact Oil’s gains continued on Friday, after a week in which the price moved back above the 50-day SMA. This puts the price on course for the highs of September around $94, with the price having created a higher low at the beginning of the month around $82. The bullish view is back in place after the recent gains, and it would need a drop back below $84 to suggest that another test of the October lows is in the offing. Source: ProRealTime Natural Gas pullback goes on Short-term weakness continues to prevail here, as the price drops back from its recent high. In the near-term further declines may target trendline support from the late August low. Below this the 50-day SMA. However, this would still create a higher low. Overall the bullish view remains in place unless the price drops back below the 2780 zone seen in late September. Source: ProRealTime

FTSE 100, DAX and Dow all edge higher after recent heavy losses Indices suffered heavy selling last week, but have managed to nudge their way up in cautious early trading. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 23 October 2023 11:02 FTSE 100 back to 7400 Friday witnessed the index close below trendline support from the August low, and below the early October low. Further losses now beckon towards 7300 and then down to 7215, the low from mid-August. Sellers have been firmly in control here over the previous three sessions, after the index fell back from the 7700 zone for the third time since the second half of July. Recent weakness has seen some buying emerge around 7370, with a close back above 7400 providing some hope that a short-term low has formed. Source:ProRealTime DAX sits at seven-month lows The losses of the past two weeks have finally seen the index head back towards its March lows, wiping out all the gains made since the banking crisis. The past two months has seen the index reach new lower highs and lower lows. This leaves the near-term bearish view intact. In the short-term, the index would need to rebound above 15,500 to suggest that a low has formed and that a new attempt to clear post-July trendline resistance is underway. Source:ProRealTime Dow losses pause for now The second half of last week witnessed the index lose 1000 points, and a move back to the early October low seems likely. Below this, the May low around 32,500 comes into view as possible support. Further declines then see the index target the March lows below 32,500. In the short-term, a close back above 33,500 might suggest that a low has been formed for the time being. Source:ProRealTime

Explore the impact of Middle East tensions and US economic data on equity markets, including S&P 500 and Nasdaq. Get insights into the upcoming Q3 GDP release and earnings reports from Microsoft, Alphabet, and more. Source: Bloomberg Indices Commodities S&P 500 Nasdaq GDP United States Tony Sycamore | Market Analyst, Australia | Publication date: Monday 23 October 2023 06:59 Last week's downturn US equity markets fell last week due to rising tensions in the Middle East and hotter-than-expected US economic data, which sent US yields surging to fresh highs. For the week, the Nasdaq lost 2.90%, the S&P 500 lost 2.39%, and the Dow Jones lost 543 points (-1.61%). This morning, we are observing a repetition of last Monday's session as the market unwinds some of the safe-haven flows put on ahead of the weekend. US equity futures and US yields are higher, while the US dollar, crude oil, and gold prices have all eased. The Monday anomaly Despite the prevailing uncertainty, it's worth noting that Mondays have generally not been the days to short US equity futures, with the S&P 500 closing higher on 14 out of the last 15 Mondays since 3 July. A potentially positive session on Wall Street tonight could set the stage for a mid-week rally, followed by a cautious end to the week. Turning to the calendar, it's a busy week in the US with Q3 GDP and Core PCE due for release, along with earnings reports from companies including Microsoft, Alphabet, GM, Meta, Amazon, Intel, UPS, Exxon, and Chevron. What is expected from Q3 GDP Date: Wednesday, 26 October at 11:30 pm AEDT This quarter, the US economy has shown greater resilience than expected, exemplified by last week's stronger-than-anticipated retail sales and industrial production data for September. This robust data has led to an upward revision ahead of Wednesday night's GDP release. The market anticipates a GDP growth of 4.3%, a significant jump from 2.1% in Q2. If the Federal Reserve is to maintain its current stance until year's end, a slowdown in Q4 will be necessary. US GDP chart Source: TradingEconomics S&P 500 technical analysis During September, we projected that the S&P 500 would take another leg lower into the 4250/00 support region, marking the third and final wave of a correction from the July high. While the initial rally in early October was encouraging and prompted us to adopt a positive view, the rally has since faded. The S&P 500 is now approaching the critical 4200 support area. This level must hold (on a closing basis); otherwise, we will shift to a neutral bias, given the increased likelihood of a deeper pullback towards approximately 3850. S&P 500 daily chart Source: TradingView Nasdaq technical analysis Much like the S&P 500, we noted in September that the Nasdaq lacked another leg lower as part of the correction initiated in July. The pullback in the Nasdaq has thus far fallen short of the wave equality target in the 14,200 area. This leaves questions about whether the Nasdaq has completed its correction from the July high or still needs a final push lower towards 14,200 before resuming its uptrend. What is certain is that if the Nasdaq can sustain a break above the downtrend resistance at 15,500—originating from the July high of 16,062—it will confirm that the correction is complete, and the uptrend will likely resume, targeting 16,500 by year-end. Nasdaq daily chart Source: TradingView TradingView: the figures stated are as of October 23, 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.

The Australian dollar is bumping along recent lows on US dollar strength; markets are not prepped for a possible RBA hike despite some smoke signals and Australian CPI data on Wednesday could be key. Will AUD/USD bounce? Source: Bloomberg Forex Shares Inflation Australian dollar AUD/USD Market trend Daniel McCarthy | Strategist, | Publication date: Monday 23 October 2023 05:44 The Australian dollar has been beaten about by US dollar swings in recent history, but that might be about to change if the RBA moves out of step with other central banks. The tone and messaging from the RBA shifted over the past week and a bit since the bank left rates on hold at 4.10% at the October meeting. The accompanying statement released immediately after the policy decision maintained an option for another hike and notably, the language was much the same as prior missives. This implied potential for tightening had been interpreted by the market as a ‘maybe’ for further hikes. And rightly so, the bank has left rates unchanged for four meetings. However, the pivot started with Reserve Bank of Australia (RBA) assistant Governor Chris Kent when he made comments on Wednesday 11 October 2023, as noted in this column last week. Among other things, he said, “Some further tightening may be required to ensure that inflation, that is still too high, returns to target.” Then last Tuesday, the RBA meeting minutes stood out with the language indicating that the bank was much closer to hiking than the statement accompanying the gathering specified. Specifically, the minutes stated, “The Board has a low tolerance for a slower return of inflation to target than currently expected. Whether or not a further increase in interest rates is required would, therefore, depend on the incoming data and how these alter the economic outlook and the evolving assessment of risks.” Then on Wednesday, RBA Governor Michele Bullock spoke at a summit and pointed to the problems of external events triggering inflation when they arrive one after the other. She said, “The problem is we’ve had shock after shock after shock. The more that keeps inflation elevated, even if it’s from supply shocks, the more people adjust their thinking.” Before adding, “And the more people adjust their inflation expectations, the more entrenched inflation is likely to become. So that’s the challenge.” The interest rate market is ascribing only around a 45% probability of a hike by the end of the year. If the RBA does not hike at either the November or December meetings, then the next opportunity will not be until February. This brings into view the quarterly CPI number that will be released this coming Wednesday. Ms Bullock will be speaking the following day. It might be the case that the inflation gauge will need to be quite benign to hold back a rate hike. Nonetheless, the market appears likely to get a clear picture from the RBA Governor on Thursday. Ms Bullock is unencumbered from any commentary that might have impeded her predecessor from being aggressive in stamping out inflation. The RBA has hiked by 400 basis points (bps) since the pandemic lows near zero, while the Federal Reserve has hiked by 525 bps. There is room for the RBA to catch up. If there is a tightening at the 7 November meeting, the aussie dollar might lift itself off the floor. AUD/USD technical analysis AUD/USD remains in a descending trend channel and bearish momentum might be intact for now.A bearish triple moving average (TMA) formation requires the price to be below the short-term Simple Moving Average (SMA), the latter to be below the medium-term SMA and the medium-term SMA to be below the long-term SMA. All SMAs also need to have a negative gradient. When looking at any combination of the 10-, 21-, 55- 100- and 200-day SMAs, the criteria for a bearish TMA have been met and might suggest that bearish momentum is evolving. Last Wednesday’s high of 0.6447 coincides with the 55-day Simple Moving Average (SMA) and that level may offer resistance ahead of a cluster of prior peaks in the 0.6500 – 0.6510 area. Further up, the 0.6600 - 0.6620 area might be another resistance zone with several breakpoints and previous highs there. On the downside, support may lie near the previous lows of 0.6285, 0.6270 and 0.6170. The latter might also be supported at 161.8% Fibonacci Extension level at 0.6186. AUD/USD daily chart Source: TradingView EUR/AUD technical analysis EUR/AUD appears to be in range trading mode, having been contained between 1.6200 and 1.7100 for four months. The clustering of the 10-, 21-, 34-, 55- and 100-day Simple Moving Averages (SMA) between 1.6520 and 1.6695 might support the range trading thesis. Last Friday the price stalled at a recent high just below 1.6800 and it may continue to offer resistance. Other prior peaks near 1.6900 and 1.7065 might offer resistance. On the downside, support could be at the previous lows at 1.6445 and 1.6320 ahead of a potential support zone in the 1.6235 and 1.6265. EUR/AUD 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.

The downward correction in crude oil could still be in play; natural gas is approaching major support area. What is the outlook and key levels to watch for crude oil and natural gas? Source: Bloomberg Commodities Natural gas Petroleum Oil Gas Moving average Manish Jaradi | IG Analyst, Singapore | Publication date: Monday 23 October 2023 04:59 Crude oil: correction still in force Momentum in the most recent rebound in crude oil isn’t looking strong enough to ensure a sustainable rally just yet. The implication is that the downward correction that started toward the end of September could still be in play. Oil has recovered from near quite strong converged support, including the 89-day moving average, slightly above the 200-day moving average, and the August low of 77.50. Earlier last month, oil pulled back from stiff converged barriers, including the Ichimoku cloud on the weekly charts and the October high of 93.00. This resistance remains crucial – a break above this barrier is needed to confirm that the rebound from June isn’t just a dead-cat bounce. Crude oil weekly chart Source: TradingView Earlier in September, crude broke out from the multi-month sideways zone triggering a double bottom (the March and May lows), pointing to a potential rise toward 103. The 77.00-81.00 support area continues to offer a strong cushion which could limit the immediate downside, and while the support remains in place, oil could still attempt another leg higher. Crude oil daily chart Source: TradingView Natural gas: approaches strong support Natural gas has retreated from a stiff barrier around 3.25 (the 23.6% retracement of the November 2022-February 2023 fall). In the context of a slightly zoomed-out view, the retreat isn’t surprising given the steps forward, one step back nature of recovery since early 2023. This follows a break higher from a multi-month sideway range, a further confirmation that the long road to recovery may have started, but the damage done in 2022 could take time to unwind. The break earlier this month above crucial resistance at the March & August highs of 3.03 triggered a significant break out from an eight-month-long sideways range, pointing to a rise to around 4.00-4.10, based on the price objective of the pattern. Importantly, for the first time since the end of 2022, natural gas has risen above the 200-day moving average and a decisive break above the 89-day moving average, suggesting that the base building may have taken place. Any break above 3.25 could open the door toward 4.20 (the 50% retracement). However, for the bullish view to remain intact, natural gas needs to stay above the August low of 2.40. Natural gas 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.