MongiIG

With American Airlines slated to release its Q3 earnings on 19 October, the market braces for impact. From lowered earnings estimates to climbing operational costs and market sentiment, delve into what investors should watch for. Source: Bloomberg Shares Forex Revenue American Airlines Profit Operating margin Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Monday 16 October 2023 18:16 When will American Airlines announce its Q3 earnings? American Airlines Group (NASDAQ:AAL) is scheduled to unveil its quarterly financial results on Thursday, 19 October at 10 pm AEDT, prior to the opening bell of the stock market. What does 'The Street' expect from American Airlines' Q3 earnings? After a bullish Q2 outlook, American Airlines has dramatically scaled back its Q3 earnings per share projections from an initial range of $0.85 to $0.95 to a revised estimate of just $0.20 to $0.30. According to a consensus from analysts and brokers polled by Refinitiv as of October 16, 2023, the forthcoming Q3 results are anticipated to be: Revenue: $13.515 billion, marking a modest 0.39% YoY increase Earnings Per Share: $0.25, representing a significant 63.47% YoY decline The airline has faced operational headwinds that have led to this downgrade in earnings forecasts. Key contributing factors include escalating fuel and labour expenses, coupled with muted demand. Notably, the company incurred a $230 million cost in August, settling with the Airline Pilots Association. Source: Bloomberg What should you know? American Airlines is set to unveil its quarterly earnings on October 19, amid a climate of reduced expectations for Q3 performance Both the company and financial analysts have lowered their forecasts for the quarter, attributing the downgrade to a combination of escalating fuel and labor expenses, as well as revised, softer demand projections Despite holding a 'neutral' broker rating, American Airlines' shares are trading below the company's long-term average price target Currently in oversold territory, the share price of American Airlines Group faces bearish prospects in the short to medium term. Q3 2023 financial forecast overview Netflix Inc. has recently provided insight into its financial forecast for the third quarter of 2023. As a prominent player in the entertainment sector, key financial metrics for the company include revenue growth and operating margin, which serves as a measure of profitability. The company aims to accelerate revenue growth, expand operating margins, and generate increasing positive free cash flow. The market is likely to evaluate the forthcoming results against these metrics, as well as subscriber growth. Confidence boost: the role of paid sharing The company has conveyed heightened confidence in its financial outlook, owing to the successful roll-out of paid sharing. This initiative is projected to spur revenue growth in the latter half of 2023 as it is extended to nearly all remaining countries and continues to bolster the company's ad-supported plan. Q3 2023 financial forecast For Q3, the forecast indicates an expected revenue of $8.5 billion, marking a year-on-year increase of 7% on both a reported and currency-neutral basis. This represents a minor acceleration from Q2 2023's currency-neutral revenue growth rate of 6%. The revenue upswing in Q3 is anticipated to be propelled by an increase in average paid memberships. Challenges: ARPU and price increases However, the currency-neutral Average Revenue Per User (ARPU) is forecasted to remain flat or experience a slight dip year-on-year. This is attributed to the lapping of price hikes implemented in 2022 and the absence of price increases in the company's largest revenue markets since the first half of 2022. Earnings from advertising and additional member features are not yet substantial enough to counterbalance these elements. Subscriber growth: Q3 vs. Q2 In terms of subscriber growth, Q3 2023 paid net additions are expected to align with Q2 2023 figures. The company anticipates a more significant acceleration in revenue growth during Q4 2023, driven by further monetisation of account sharing between households and a steady increase in advertising revenue. Profitability: looking beyond revenue On the profitability front, Netflix projects a Q3 operating income of $1.9 billion, up from $1.5 billion in Q3 2022, and an operating margin of 22%, an increase from 19% in the corresponding period last year. For the full year of 2023, the company is targeting an operating margin of between 18% and 20%, based on forex rates as of 1 January 2023, marking an uptick from 17.8% in FY 2022. Strategic outlook: future growth strategies Netflix is concentrated on fuelling growth and enhancing profitability through leveraged strategies such as paid sharing and advertising. How to trade the American Airlines Q3 2023 results Based on IG's TipRanks Smart Score, American Airlines Group is rated as a 'Hold,' featuring a long-term average price target of $16.17 per share as of October 16, 2023. While public sentiment leans bullish, it's noteworthy that hedge funds have been net sellers of the stock in the past quarter. American Airlines smart score chart Source: IG TipRanks American Airlines echnical analysis From a technical analysis standpoint, the momentum for the short-to-medium term trend is currently bearish, with the stock price testing the critical support level at 11.85. Should the price close below this level, the next downside target would be 10.95. In such a scenario, traders considering a short position might look at a close above 12.85 as a key stop-loss point. The 10.95 mark becomes pivotal if tested, given the lack of substantial historical support until reaching the 9.05 level. For those traders inclined toward a long position, a bounce back from the current oversold status and a closing price above the 12.85 resistance level would be the indicators for potentially establishing new long positions. American Airlines daily chart Source: IG This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Operating conditions for the American Airlines Group have deteriorated, leading to the downgrade in earnings expectations. Source: Bloomberg Shares American Airlines Price American Airlines Group Technical analysis Market trend Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Monday 16 October 2023 18:16 Key Takeaways: American Airlines is scheduled to release its quarterly earnings results on October 19 The company and analysts have downgraded Q3 earnings expectations Several factors, including rising fuel and labor costs, as well as softer demand assumptions, have contributed to the deterioration of American Airlines' operating conditions. American Airlines has an average broker rating of ‘neutral’ although trades at a discount to the long-term average price target for the company The share price of American Airlines Group is oversold currently, although the short to medium term trends are considered down When are American Airline results expected? American Airlines Group (NASDAQ:AAL) is set to release its quarterly earnings results on Thursday, October 19th, before market open. American Airlines earnings preview, what does ‘The Street’ expect? While the American Airlines Group provided an optimistic outlook for third quarter earnings per share of between $0.85 and $0.95 after their Q2 2023 results, these figures have since undergone a sharp downward revision by the company to between +$0.20 and $0.30. A consensus of analyst and broker expectations as per a Refinitiv data poll (as of the 16th of October 2023) suggest the following from the upcoming Q3 results: Revenue $13.515bn (+0.39% year on year) Earnings per share $0.25 (-63.47% year on year) The operating conditions for American Airlines have deteriorated, leading to the downgrade in earnings expectations. Several factors have contributed to this, including rising fuel and labour costs and softer demand assumptions. For example, in August, the company recognized a $230m cost in settling with the Airline Pilots Association. How to trade the American Airlines Q3 2023 results Source: IG TipRanks IG’s TipRanks smartscore (available on the IG platform) suggests that American Airlines Group is a ‘hold’ with a long-term average price target of $16.17 a share, as of the 16th of October 2023. Public sentiment is considered bullish although over the last quarter there has been some net selling of the stock by hedge funds. Source: IG From a technical analysis perspective, the short to medium term trend momentum is down now, with the price now testing the 11.85 support level. A close below this level would suggest 10.95 as short-term downside target from the move. In this scenario, traders who find short entry, might consider using a close above 12.85 as a stop loss consideration for the trade. 10.95 becomes a critical support level should it be tested, as there is not much in the way of historical support thereafter until the 9.05 level. Traders who prefer looking for long entry might instead hope to see a rebound from oversold territory and move / close above the 12.85 resistance level before considering new positions. 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.

After former CEO Bernard Looney’s exit, BP shares could be ripe for a takeover. Here’s why. Source: Bloomberg Indices Shares BP FTSE 100 Big Oil Takeover Charles Archer | Financial Writer, London | Publication date: Friday 13 October 2023 BP (LON: BP) shares have fallen by 10.5% over the past five years and sunk from 568p in mid-February 2023 to 499p today. The FTSE 100 oil major is a significant component of the index but could now be a buyout target. As ever, there’s always a bigger fish. BP shares: Q2 results and Looney exit In Q2 earnings, BP’s profits fell sharply by 70% year-over-year to $2.6 billion — missing analyst estimates due to falling oil trading income and refining margins. However, this underperformance was widely mirrored by competitors faced with the same comparators (the immediate aftermath of the start of the Ukraine War). And BP was still able to boost its dividend by 10% to 7.27 cents per share — and it also promised to repurchase $1.5 billion of shares over Q3. But for context, in May the company slowed its quarterly buyback programme from $2.75 billion to $1.75 billion, sending BP’s share price down the most in one day since 2020. Former CEO Bernard Looney enthused that the company’s ‘underlying performance was resilient with good cash delivery - during a period of significant turnaround activity and weaker margins in our refining business.’ But shortly after this mixed set of results, Looney was forced to admit that he had not been ‘fully transparent’ over intimate relationships with employees — and this was followed with allegations that he had promoted women who he had had a relationship with — leading to a shock resignation. January FTSE 100 speculation Earlier this year, Citigroup analysts speculated that Exxon Mobil or Chevron might consider a buyout offer for the FTSE 100 oil major — with a megamerger looking attractive on valuation terms. The analysts argued that the comparatively lower valuations suffered by European oil and gas sector stocks couldn’t be closed organically — that ‘markets are unlikely to close the gap themselves.’ They added ‘we look at the strategic imperative, financial accretion and political headwinds of either of the two US IOCs (Exxon or Chevron) potentially looking to try and acquire one of their key European competitors (BP, Shell or TotalEnergies).’ This was a view shared by M&G head of equities Michael Stiasny, who in January noted that he ‘would not be shocked to see a big name in the oil and gas or mining sectors subject to a bid, with companies like BP trading at a significant discount to their US peers.’ Further to this, BP shares have underperformed during Looney’s tenure — even if this was due to the investment needed for the start of its green strategy. Indeed, Bloomberg data indicates that the FTSE 100 company’s shares rose by 15%, while Shell’s market capitalisation increased by 29% in this time. Much of this lower growth has been laid at BP’s increased focus on the green transition compared to peers — arguably solid long-term investments, but which have left the company trailing the competition. RBC Capital Markets analysts have previously argued that the former CEO sold oil and gas assets (including Alaskan operations) ‘at poor points in the cycle and at relatively low valuations’ in order to fund renewables projects. With Looney out and interim CEO Murray Auchincloss now needing to project calm — including a need to balance BP’s strategic pivot away from greener energy in February with some investor disquiet — Q4 could see the American titans consider a move. Auchincloss argued in Abu Dhabi a few days ago that ‘one person leaving does not change the strategy’ set out in February — but not everybody is convinced. While acquiring the £85 billion company would be difficult even for a supermajor, it’s worth noting that the entire industry is one built on gigantic mergers; BP itself bought Amoco for $48 billion in 1998. Of course, new 2021 takeover rules allow the government to block a buyout on national security grounds — and it’s hard to see the government keen to allow yet another important UK company to leave London without a fight. FTSE 100 oil major takeover? But the macroeconomic picture could make a BP takeover an attractive prospect for the American firms. OPEC+ members Russia and Saudi Arabia have cut production to the end of the year, and the cartel’s secretary general argues that demand could grow by ‘about 2.4 million barrels a day.’ Al Ghais has called underinvestment in the sector ‘dangerous’ — arguing that the industry will need close to $14 trillion of investment by 2045 to support the energy transition. With Brent still trading at elevated levels of circa $84/barrel, BP shares could well be a top FTSE 100 takeover target. 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.

As Israel considers the path of escalation, both BP shares and Shell shares could send the FTSE 100 higher this week. Source: Bloomberg Indices Israel Hamas Iran Saudi Arabia Israel Defense Forces Charles Archer | Financial Writer, London | Publication date: Monday 16 October 2023 01:11 FTSE 100 oil investors may be getting an eerie sense of déjà vu. Russia’s invasion of Ukraine — in reality an escalation of pre-existing hostilities — echo the intensifying war between Israel and Hamas. Oil and gas prices shot up in the immediate aftermath, and a similar scenario could be about to play out. Of course, this new escalation is nothing new. Fighting has been ongoing in this corner of the Middle East going as far back as the 1948 Arab Israeli War when Israel was found, or even a millennium further back during the crusades. Accordingly, the caveat with any analysis of the Middle East is that it’s almost impossible to understand every facet of any conflict. Different actors with different motivations proliferate through every country — whether Lebanon, Yemen, Syria — or the power players in the region including Israel, Saudi Arabia, and Iran. But the key point, where analysts concur, is that escalation is where the real danger lies. And where investors had hoped that de-escalation would happen over Sunday, the opposite seems to have occurred. FTSE 100: Israel-Hamas War It is not possible to cover all developments, but some of the key issues include: More than 1,400 people were killed by Hamas in Israel when fighters crossed the border, including both soldiers and civilians More than 2,450 people have been killed by Israel’s bombing of Gaza Israeli troops are massing on the Gaza border ahead of an expected ground attack Israel has told 1.1 million Palestinians in North Gaza to evacuate to the south Israel has turned the water back on in southern Gaza The UN argues that Gaza is seeing an ‘unprecedented human catastrophe’ Five US Senate members are in Tel Aviv to meet with top officials, and have been forced to shelter from Hamas rockets US Secretary of State Anthony Blinken has asked Israel to avoid harming civilians as much as possible Clearly, there are huge ethical queries over the extent to which Israel can respond to the attacks on its soil — and pressingly, whether this next step could escalate relatively localised fighting into a regional war, backed by multiple proxy agents. For some context, consider the Syrian war — Russia and Iran supported President Bashar al-Assad, while the west and Saudi Arabia supported various rebel groups. Then there’s Yemen, which is under continual conflict as the Saudi Arabia-backed government comes under attack from Iranian-backed Houthi rebels. In the milieu, Egypt is still trying to recover from the 2014 military coup, Lebanon remains in economic crisis, and then there’s Iraq, Iran, and Turkey to consider. It’s not hard to see why escalation could become a problem — with Israel also vowing to ‘destroy’ Lebanon if the war spreads. Over the weekend, two members of Hamas and Hezbollah told the Wall Street Journal that the attack had been planned in meetings with the Islamic Revolutionary Guards Corps of Iran — and the witnesses claim that the final go-ahead was given by Iran in Beirut last Monday. Iran has denied any involvement. Key actors At present: Israel — Israel Defence Forces (IDF) plan to enter the Gaza Strip, with Lt Gen Herzi Halevi arguing that the ‘responsibility now is to enter Gaza, to go to the places where Hamas is preparing, acting, planning, launching. Attack them everywhere, every commander, every operative, destroy infrastructure’ The US — The Pentagon has ordered two aircraft carrier strike groups to the eastern Mediterranean near Israel to deter Iran or Hezbollah from joining the Israel-Hamas conflict. White House national security adviser Jake Sullivan has warned that ‘there is a risk of an escalation of this conflict, the opening of a second front in the north and, of course, Iran's involvement.’ US President Biden is reportedly considering a visit to Israel Saudi Arabia — the foreign ministry has denounced Israel as ‘occupation forces’ and said that Hamas acted as a ‘result of the continued occupation and deprivation of the Palestinian people of their legitimate rights’ Iran — foreign minister Hossein Amir-Abdollahian has made several dire warnings, including that ‘if the Zionist aggressions do not stop, the hands of all parties in the region are on the trigger.’ Hamas leader Ismail Haniyeh met with the minister on Saturday in Qatar, where they ‘agreed to continue cooperation’ to achieve the group's goals, Hamas said in a statement FTSE 100 oil major implications There are many markets that could be affected by the war — but the most immediate are oil and gas. For context, European wholesale gas prices had already hit a seven-month high on Friday — and Brent Crude remains elevated at circa $91 per barrel. Blinken had noted that thawing relations between Saudi Arabia and Israel could have been a motivator behind the original Hamas attacks. For perspective, a US-backed plan for Saudi Arabia to formally recognise the state of Israel and increase its oil production, in exchange for increased US military aid and increased political support, could now be essentially sunk. Had Saudi, which had previously agreed to restrict its oil production alongside other OPEC cartel members, agreed to increase oil production, then the rest of the OPEC cartel could have followed. There is now an opportunity for the cartel to squeeze prices even higher. Further, the tentative nuclear deal being drawn up between the west and Iran may now break down, making increased oil output from the country unlikely as well. The bigger problem is the Strait of Hormuz — which contains eight major islands — seven of which are controlled by Iran. The EIA considers the Strait to be the world’s most important oil chokepoint, with the Strauss Center thinking that oil tankers carry 17 million barrels of oil, representing 20-30% of global daily consumption, through the Strait each day. Any disruption could see oil rise sharply. In addition, the Baltic-connector gas pipeline between Finland and Estonia was damaged late last week with investigators finding the rupture was caused by mechanical force. Russian President Putin has denied involvement, but Finnish officials cannot rule out state actor involvement. NATO has promised a ‘determined’ response — and the timing is clearly questionable. Oil prices, and the FTSE 100 oil majors BP and Shell could well rise on Monday. 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.

Retail trader bias shifts from majority buy to the middle, CoT speculators not far off from extreme sell territory. Source: Bloomberg Shares Federal Reserve Revenue Interest Assets under management Interest rates Monte Safieddine | Market Analyst, Dubai | Publication date: Monday 16 October 2023 08:16 Upside surprise for pricing data Starting with the data, and it’s been mostly about pricing as of late. Last Thursday’s consumer price index (CPI) readings were hotter than anticipated for the headline while as anticipated for its core. Trade pricing data on Friday with ongoing year-on-year (y/y) negative prints are recovering and there is month-on-month (m/m) positive growth for both exports and imports. Preliminary figures out of the University of Michigan (UoM) show consumer inflation expectations jumping to 3.8% for the 12-month and five-year rising to 3%. Its consumer sentiment reading a clear miss falling to 63. Fed speak softens, yields pull back There was more central bank speak on offer, the Federal Reserve’s (Fed's) president Patrick Harker believing they “are at the point where we can hold rates where they are”, that policy is now restrictive and “holding rates steady will let monetary policy do its work”, though uncertain of how long rates will need to remain where they are. Treasury yields finally suffered a red week and so too in real terms on the flight to safety after the rise in geopolitical risk and softer comments from some Fed officials managed to offset other factors including a weak auction late last week. Earnings recap of the financial heavyweights As for earnings from the financial heavyweights last Friday, JPMorgan Chase are enjoying an increase in revenue thanks to “over-earning” on net interest income that was stronger than anticipated with credit provisions lower, and Citigroup’s core businesses “each posting revenue growth”. Also on the earnings front, Wells Fargo’s revenue growth thanks to net interest income and investments, and BlackRock suffering a drop in net inflows and its total assets under management (AUM) falling from the second quarter. Week ahead For the week ahead, impactful data from the US will be deferred until tomorrow when we receive retail sales figures for the month of September, following a 0.6% growth in the previous month (figures are not adjusted for inflation). However, it is the data for the final months of this year that are expected to reveal a more challenged consumer. Attention then shifts to the housing sector with the release of the National Association of Home Builders' (NAHB's) housing market index, which previously missed expectations with a figure indicating a negative outlook. This will be followed by building permits and housing starts for September; the August data showed a clear beat for the former and a clear miss for the latter. Also on the agenda are weekly mortgage applications and Thursday's existing home sales data, which have missed expectations three times consecutively. Little surprise there, as those locked into lower rates are inclined to hold. There will be numerous Federal Reserve member speeches this week, including one from Chairman Powell. In the earnings landscape, financial sector updates will continue with Bank of America and Goldman Sachs releasing their reports tomorrow. Tesla, the first among the 'Magnificent Seven,' will report on Wednesday. Netflix is also scheduled to release its figures on the same day, as are ASML and Lam Research, providing early insights into the performance of the semiconductor industry. Dow technical analysis, overview, strategies, and levels Starting with the weekly time frame, the asset's previous weekly 1st Resistance level did manage to hold on multiple occasions, at least once triggering cautious, conformist sell orders following significant reversals. The overall sentiment here remains one of 'cautious consolidation'. On the daily time frame, the asset has been struggling, exhibiting a 'bear average'. Late last week, it moved below Thursday's 1st Support level as well as its S/L (stop-loss), initially favouring daily conformist sell-breakouts. However, a subsequent recovery triggered contrarian buy-after-reversals, which on net balance had more positive outcomes. Source: IG IG client* and CoT** sentiment for the Dow Price gains have enticed retail traders to shift from what was majority buy 58% at the start of last week to the middle, ending what has been a relatively brief period of majority buy bias. CoT speculators were and still are heavy to the sell side, a drop in longs and a simultaneous rise in shorts taking the bias closer to extreme short territory. Source: IG Dow chart with retail and institutional sentiment Source: IG *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of the start of this week for the outer circle. Inner circle is from the start of last week. **CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior. This information has been prepared by IG, a trading name of IG 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. CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

The trading opportunities widen next week as we see more corporates report earnings, but the event which Daily FX's Warren Venketas is watching is UK inflation. And the trade to watch is a short GBP/USD position. Jeremy Naylor | Analyst, London | Publication date: Friday 13 October 2023 17:09 (Partial Video Transcript) Risk event centres on UK economy JN: Welcome! Time now for Risk Event for the week starting Monday 16 October 2023. As we see a continuation of the earnings heat up, we’ve also got some economic data that could be of interest. Let’s go now to Warren Venketas from IG’s Johannesburg office. Warren, what have you got for us for next week’s risk event? WV: Hi Jeremy and thanks for having me. The risk event for next week that I will be focused on is centred around the UK economy and that’s via the UK jobs report. More specifically, the UK consumer price index release. […] 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.

USD/JPY flirts with the psychological 150 mark; EUR/JPY continues to be capped at key resistance; AUD/JPY is holding above key support; and the outlook and key levels to watch in select JPY crosses. Source: Bloomberg Japanese yen USD/JPY AUD/JPY EUR/JPY Forex Shares Manish Jaradi | DFX Strategist, Singapore | Publication date: Monday 16 October 2023 07:30 USD/JPY technical analysis USD/JPY’s rally has stalled recently as it hovers around stiff resistance at the psychological 150 mark, not too far from the 2022 high of 152.00. However, there is no sign of a reversal of the uptrend. The price action so far this month can be at best described as sideways with the lower edge beginning supported around the 200-period moving average (MA), around the early-October low of 147.35.  USD/JPY technical analysis With USD/JPY within last year’s intervention zone, it could be tough to clear 150.00-152.00, especially given some Fed officials have indicated a peak in rates. On the other hand, any fall below 147.00-147.50 would confirm that the broader upward pressure had faded. Such a fall could open the way toward the early-September low of 144.50. USD/JPY 240-minute chart Source: TradingView EUR/JPY technical analysis EUR/JPY has been capped by quite strong resistance on a horizontal trendline since September (at about 158.50). Despite the recent sideways price action, the cross continues to hold above a vital cushion on the 89-day moving average, coinciding with the lower edge of the Ichimoku cloud on the daily charts, near the early-October low of 154.50. This support area is strong and could be tough to crack, especially in the context of the broader uptrend following the break earlier this year above strong resistance at the 2014 high of 149.75.    EUR/JPY daily chart Source: TradingView AUD/JPY technical analysis AUD/JPY has been unable to sustain gains recently, but while it continues to hold above quite strong converged support at the 89-day moving average, the February high, and the lower edge of the Ichimoku cloud on the daily charts, the broader bias continues to be up. At the same time, unless the cross clears the June high of 97.70 the path of least remains sideways at best.  AUD/JPY weekly 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.

As Middle Eastern tensions stabilise, US equity markets show signs of resilience. With a light economic calendar but key Retail Sales data on the horizon, here's what investors should focus on this week. Tony Sycamore | Market Analyst, Australia | Publication date: Monday 16 October 2023 07:26 Geopolitical tensions ease With diplomatic efforts and bad weather preventing a further escalation in Middle Eastern geopolitical tensions over the weekend, we are seeing a reversal of the safe-haven flows put in place ahead of the weekend. US equity futures and yields are higher. The US dollar, crude oil, and gold prices have all eased during cautious trading in the early hours of the new week. There remains a great deal of uncertainty hovering over the markets, as there has been all year, with the tragic events in the Middle East adding to the complexity. Potential upsides However, there are some positives, including the ones listed below, that may help the market climb a "wall of worry," especially if events in the Middle East remain contained. We recommend staying open-minded and flexible. Monetary policy The rise in long-end yields and the tightening of financial conditions have removed the need for further Federal Reserve rate hikes Earnings season The earnings season appears stable, showing signs of stabilisation Seasonal and technical factors Seasonal and technical factors are positive Inflation trends While inflation is trending lower, last week served as a reminder that it will be a bumpy descent Market leaders The "Magnificent Seven," which comprises 30% of the S&P 500 by market capitalisation, has been, and continues to be, a driving force for the S&P 500 this year Upcoming economic indicators and retail sales The US economic calendar is light this week. The main event to watch is the release of retail sales data for September on Tuesday night at 11:30 pm, which will be closely monitored to assess the health of the US consumer. Retail Sales are expected to increase by 0.3% in September, easing from 0.6% in August. Retail Sales, ex volatile Autos and Gas are expected to increase by 0.1% in September from 0.2% in August. S&P 500 technical analysis During September, we forecasted that the S&P 500 would experience another downturn towards the 4250/4200 support region as the third and final wave (Wave C of an ABC correction) to complete a correction from the July 4607 peak. Following the indicators of consolidation that emerged within the 4250/4200 support zone in early October and subsequent to last Monday's close above the August 4335 high, we believe the correction is finalised and have shifted to a bullish stance, seeking a retest and breach of the July peaks. Be aware that if the S&P 500 were to experience a sustained breach below the 200-day moving average at 4220/4200, it would serve as a warning that a more substantial pullback is in progress. S&P 500 daily chart Source: TradingView Nasdaq technical analysis Much like the S&P 500, during September we noted that the Nasdaq was lacking another downturn as part of the correction that commenced in July. The original articles can be found here and here. While the pullback in the S&P 500 met our retracement target, the pullback in the Nasdaq fell short of our preferred wave equality objective in the 14,200 area. As we pointed out last week, this leaves the question open as to whether the Nasdaq has finalised its correction from the July peak or still requires a final downturn towards 14,200 before the uptrend resumes. What we do know is that if the Nasdaq can achieve a sustained breach above the downtrend resistance at 15,350, stemming from the July 15,932 peak, it would confirm that the correction is complete and the uptrend has recommenced—anticipating a push towards 16,500 by year-end. Nasdaq daily chart Source: TradingView TradingView. the figures stated are as of October 16, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

The Hang Seng index’s rebound ran out of steam toward the end of last week; China data released last week showed the economy is yet to witness a solid recovery; outlook for and key levels to watch in the HSI and the CSI 300. Source: Bloomberg Hang Seng Index China Indices Shares Ichimoku Kinkō Hyō Investment Manish Jaradi | IG Analyst, Singapore | Publication date: Monday 16 October 2023 07:23 Hang Seng index runs out of steam The Hang Seng index’s rebound early last week ran out of steam towards the end of the week, suggesting that a meaningful upward momentum is lacking in Hong Kong/China equities despite the support/stimulus measures in recent months.  Economic data in recent weeks have raised hopes that economic growth in China could be bottoming – the Economic Surprise index has shown steady improvement since July. However, those hopes were dented after data last weeks showed persistent anaemic domestic demand and deflation. Consensus economic growth for the current year is yet to turn around after being downgraded since Q2-2023. Chinese policymakers have responded with a string of support/stimulus measures in recent months in an attempt to revive the faltering post-Covid recovery and a weak property sector. Most recently, media reports suggest China is considering creating a state-backed stabilisation fund to shore up confidence in equity markets. Moreover, the world’s second-largest economy is considering raising its budget deficit for 2023 as the government prepares a fresh round of stimulus to boost the economy. Hang Seng index monthly chart Source: TradingView Hang Seng index technical analysis On technical charts, the Hang Seng index has rebounded in recent sessions, but it is too early to say if this time is different compared to the rebounds since Q2-2023. At a minimum, the index needs to cross through a vital ceiling at the September high of 18,900, coinciding with the 89-day moving average and the upper edge of the Ichimoku cloud on the daily charts.  Such a break would reduce the immediate downside risks and clear the way toward the June-July highs of around 20,300. For a reversal of the broader downtrend, it is important for the index to stop making new lows and break above 20,300. Until then, risks remain toward the downside, initially toward the early-October low of 17,000, followed by the lower edge of a declining channel since early 20,300.  Hang Seng index daily chart Source: TradingView CSI 300 technical analysis From a broader trend perspective, the CSI 300 index continues to be weighed by stiff converged resistance, including the 89-week moving average, coinciding with the upper edge of the Ichimoku cloud on the weekly charts. There is a distinct shift in the trend compared with 2019-2022, where the index was holding above the cloud and the moving average (MA).  For the immediate downward pressure to fade, the index needs to break above 4,000-4,270, including the February high of 4,270, the cloud and the MA, the bias remains weak. Any break below strong support on a horizontal trendline since 2019 (at about 3,500) could clear the path toward the 2019 low of 2,935.  CSI 300 index weekly 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.

S&P 500 and NASDAQ 100 remain broadly biased higher; but near-term trends are also bearish, offering a neutral view and what are the key levels to watch for in the week ahead. Source: Bloomberg S&P 500 Nasdaq Indices Shares Forex Market trend Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Monday 16 October 2023 04:58 S&P 500 technical analysis The S&P 500 completed a second weekly gain, finishing almost 0.4% higher over the past five trading days. That said, the index relinquished some gains heading into the end of the week, making for overall cautious upside performance. Still, the broader technical outlook remains broadly biased to the upside. Let us take a closer look at why. All you have to do is look at the rising range of support from October 2022 to see why. This zone has been maintaining the dominant upside focus. Another key support zone is the 4235 – 4277 range established in September. That said, there is an argument for a near-term bearish bias considering losses since July. Key resistance is 4430.5. Clearing higher exposes the September peak of 4566. Otherwise, clearing support offers an increasingly bearish bias towards the April low of 4062.25. S&P 500 daily chart Source: TradingView NASDAQ 100 technical analysis The NASDAQ 100 faces a similar situation as the S&P 500. Losses later in the week meant that the tech-heavy index finished little changed. That said, the broader bullish bias is being upheld by a rising range of support from the beginning of this year. Coupled with the 14589 – 14853 support zone, the NASDAQ may find it difficult to breach meaningfully lower. At the same time, losses since July have been offering a short-term bearish technical bias. A falling trendline from then (blue line below) is also holding as resistance, maintaining the downside focus. Clearing lower exposes the June low of 14251 before the 13740 inflection zone kicks in. On the other hand, reversing higher may open the door to revisiting the July peak. NASDAQ 100 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.

Euro plunges most since early October on US CPI data; in response, retail traders boosted upside EUR/USD bets and prices also rejected the key falling trendline from July. Source: Bloomberg EUR/USD Euro IG Group United States dollar Shares Market sentiment Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Friday 13 October 2023 05:11 The euro plunged over 0.8% against the US dollar on Thursday after a higher-than-expected US CPI report, which boosted Treasury yields. That was the worst single day drop since early October. EUR/USD’s drop pushed retail traders to boost upside exposure, which can be seen by looking at IG Client Sentiment (IGCS). The latter tends to function as a contrarian indicator. With that in mind, will the euro continue lower from here? EUR/USD sentiment outlook – bearish The IGCS gauge shows that about 69% of retail traders are net-long EUR/USD. Since most of them remain biased higher, this continues to hint that prices may fall down the road. This is as upside bets increased by 10.46% and 5.62% compared to yesterday and last week, respectively. With that in mind, the combination of overall exposure and recent changes offers a stronger bearish contrarian outlook. IG client sentiment for EUR/USD chart Source: DailyFX EUR/USD's technical analysis Focusing on the daily chart below, EUR/USD has turned lower following a rejection of the falling trendline from July. This has reinstated the broader downside focus following cautious gains since the beginning of this month. Now, immediate support is the March low of 1.0516. Below that is the 100% Fibonacci extension level of 1.0436. Breaking lower opens the door to extending the broader downtrend, exposing the 123.6% Fibonacci extension level of 1.0315. On the other hand, a turn higher and push above the falling trendline would open the door to an increasingly bullish outlook. That exposes the 61.8% level of 1.0631. Euro 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.

Crude oil has retreated from stiff resistance area; natural gas appears to be holding gains following the recent bullish break. What is the outlook for crude oil and natural gas and what are the key levels to watch? Source: Bloomberg Oil Commodities Natural gas Gas Market sentiment Technical analysis Manish Jaradi | IG Analyst, Singapore | Publication date: Friday 13 October 2023 06:12 Crude oil: holds below crucial resistance Crude oil has pulled back from a stiff converged barrier, including the Ichimoku cloud on the weekly charts and the October high of 93.00. Oil needs to cross above this resistance to be able to capitalize on the bullish breakout in September, above quite a few times tested resistance on a horizontal trendline since the end of 2022, as highlighted in the previous update. Crude oil weekly chart Source: TradingView Crude oil technical analysis The breakout from the multi-month sideway zone triggered a double bottom (the March and May lows), pointing to a potential rise toward 103. The question then comes up – given the sharp retreat in the recent session, is the rebound over? Probably not. There is no doubt that the immediate upward pressure has faded somewhat (given the fall below the resistance-turned-support at about 84.00), it is too early to say that the bullish move is over. That’s because crude oil continues to trade above the vital cushion zone, including the 200-day moving average, the 89-day moving average, and the August low of 77.50. A break below 77.00-81.00 is needed to confirm the rebound was over. Crude oil daily chart Source: TradingView Natural gas: stabilizes after breakout Natural gas is holding gains following the break earlier this month above crucial resistance at the March & August highs of 3.03. The cross above has 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. For the first time since the end of 2022, 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. Natural gas technical analysis Natural gas faces immediate resistance at 3.25 (the 23.6% retracement of the November 2022-February 2023 fall, the stronger barrier at 4.20 (the 50% retracement. As highlighted in the previous update, natural gas needs to stay above the August low of 2.40 for the bullish bias to remain intact. Immediate support is at 3.03. 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.

Gold prices turn lower following hotter-than-expected US CPI data; sticky inflationary pressures boost Treasury yields and the US dollar, creating a challenging environment for precious metals. Source: Bloomberg Commodities Gold XAU/USD United States dollar Shares Inflation Diego Colman | Market Analyst, New York | Publication date: Friday 13 October 2023 07:49 Gold prices (XAU/USD), which hit multi-month lows last week, embarked on a modest recovery in recent days. Earlier on Thursday, bullion rose to its highest point since September 27 ($1885). However, this upward momentum was abruptly halted by the release of US inflation data, which exceeded forecasts. For context, September's headline CPI increased by 0.4% month-over-month and 3.7% year-over-year, surpassing estimates by a tenth of a percent in both cases. Sticky inflationary pressures have reignited bullish momentum for US yields, following a brief period of softness, paving the way for a strong rally in the broader US dollar. Today’s events also led traders to reprice the Fed’s terminal rate higher, raising the odds of a quarter-point hike at the December FOMC meeting to 36% from 26% a day ago. Naturally, both gold and silver reacted adversely to these developments, erasing earlier gains and slipping into negative territory. Market conditions for precious metals Although prevailing market conditions will be challenging for precious metals, a glimmer of hope is beginning to emerge on the horizon. For instance, recent Fed speak, advocating patience and indicating that the US central bank will proceed carefully, suggest that policymakers are on the verge of ending their hiking campaign. With the tightening cycle winding down, both nominal and real rates will have limited upside going forward, creating a more favorable backdrop for non-yielding assets. In summary, the fundamental outlook for gold and silver appears bearish in the short term. However, the tide may turn in their favor in the coming months, especially for the yellow metal. This could mean a strong advance for XAU/USD in the latter part of the year and heading into 2024. The chance of a more significant rally could increase should unforeseen macroeconomic hurdles appear, leading the Fed to pivot to a more dovish posture for fear of a hard landing. Gold price technical analysis Gold made a move toward a technical resistance zone around $1885 earlier on Thursday, only to face a swift rejection, signaling the enduring grip of sellers on the market. That said, traders should stay attentive to how price action unfolds in the upcoming days for indications of sustained weakness, as this scenario could take XAU/USD towards $1860. While gold could find support in this area on a pullback, a breakdown could open the door to a retest of the 2023 lows. Conversely, if buyers return and spark a strong rebound, initial resistance stretches from $1885 to $1890. The bears are likely to defend this ceiling tooth and nail, but in the event of an upside breakout, we could see a move towards $1905, the 38.2% Fibonacci of the May/October decline. On further strength, the bulls could be emboldened and initiate an assault on channel resistance located in the vicinity of $1925 at the time of writing. Gold price technical 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, oil and silver make up lost ground Precious metals have made headway this morning, while oil prices have also recouped some losses from earlier in the week. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 13 October 2023 10:52 Gold reverses Wednesday fall Gold prices fell back from resistance yesterday, but have edged higher in early trading. The price returned to the $1885 support level yesterday, after rallying from the lows of the week. A close above $1885 would be a small bullish step, though with the price still below the 50- and 200-day simple moving averages (SMA), the overall outlook leans bearish. In addition, trendline resistance from the July highs may well stymie any progress in the short-term. A lower high below $1930 confirms the near-term bearish outlook. Source: ProRealTime WTI struggles below $84 Oil prices stabilised yesterday and have made small gains this morning. A low may be forming around the $81 level, though near-term upside will require a close back above Monday’s highs around $86. This might then suggest a resumption of the uptrend and a move back to the September highs around $93.50. A close back below $81 would hand the initiative to the sellers and suggest further losses towards the 100- and 200-day SMAs. Source: ProRealTime Silver recoups Wednesday’s losses The recovery from the lows of last week continues, though the steep downtrend from the highs of late August remains in place. Trendline resistance from the August highs could come into play towards $22.50, and might still result in a lower high. A close above $22.70 might suggest a bigger rally towards the 200-day SMA or the late September high at $23.80. In the short-term, any close back below $21.50 would suggest a fresh challenge of the lows seen last week. Source: ProRealTime

FTSE 100, DAX 40 and S&P 500 capped by key resistance on uptick in US inflation Outlook on FTSE 100, DAX 40 and S&P 500 as US CPI comes in slightly higher-than-expected. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 13 October 2023 11:05 FTSE 100 capped by resistance The FTSE 100 has seen six consecutive days of gains, on Thursday driven by energy and health care stocks, but has come off the 200-day simple moving average (SMA) at 7,650 as US CPI inflation came in slightly higher-than-expected and provoked a reversal lower. Further consolidation below Thursday’s high at 7,687 is expected to be seen on Friday. If a slip through Thursday’s low at 7,604 were to unfold, support between the 7,562 early July high and the 7,550 11 September high may be revisited. This week’s high at 7,687 ties in with the mid-June high at 7,688. Further up lie the July and September highs at 7,723 to 7,747. Source: ProRealTime DAX 40 rally stalls within resistance area The DAX 40 rallied into its major 15,455 to 15,561 resistance area, made up of the July to mid-September lows, and even briefly rose slightly above it on Thursday to 15,575 before heading back down again on the second straight monthly upward surprise in US inflation. A drop back towards last Friday’s high at 15,296 may now ensue. Further down lies minor support at last Tuesday’s 15,259 high. Were a rise and daily chart close above this week’s 15,575 high to be made, the 200- and 55-day simple moving averages as well as the July-to-October downtrend line at 15,664 to 15,676 would be in sight. Source: ProRealTime S&P 500 slips back into the 4,328 to 4,378 resistance area The S&P 500 has re-entered its 4,328 to 4,378 resistance area, made up of the late June to August lows and late September high, having briefly overcome it on Wednesday and Thursday by rising to 4,398 before coming off again as US CPI inflation came in slightly higher-than-expected at 3.7%. The index did find support around the lower end of the previous resistance area at 4,325, though. Were this level to give way, the early June high at 4,299 could be revisited. Were a rise above this week’s high at 4,398 to be seen, the 55-day simple moving average (SMA) at 4,218 would be next in line. Source: ProRealTime

The third-quarter earnings season for US publicly listed companies is just around the corner and, in stark contrast to the past two seasons, this time, investors are eagerly anticipating some positive figures and news. Source: Bloomberg Shares United States S&P 500 Hebe Chen | Market Analyst, Melbourne | Publication date: Thursday 12 October 2023 Q3 earnings season expectation: a brighter sky ahead Despite grappling with multiple headwinds, ranging from rising interest rates and a tight labor market to a deteriorating global economic landscape, US corporations are on the cusp of demonstrating their resilience in the upcoming earnings season, which could potentially mark the best quarterly result since Q3, 2022. According to Refinitiv, it is projected that S&P 500 companies will report a 1.3% increase in earnings per share compared to the previous year. This marks an encouraging improvement, particularly following the 2.8% decline recorded in the second quarter and three consecutive quarters of contraction. Regarding revenue growth, FactSet's estimations also indicate a positive trend, with a projected 1.3% growth, notably led by the consumer discretionary sector (+6.8%) and the real estate sector (+6.5%). Moreover, this optimism is expected to be reinforced by a brighter outlook set to commence from Q3. Looking ahead, Refinitiv's projections indicate that earnings per share for the S&P 500 are anticipated to surge into double-digit growth, marking a significant milestone not observed since Q2, 2022. Q3 earnings key watch calendar Week 1：Oct 12th-15th Oct 13th J P Morgan Chase & Co Citigroup Wells Fargo Week 2：Oct 16th-22th Oct 17th Bank of America Johnson & Johnson Goldman Sachs Group Oct 18th Tesla Netflix Oct 19th Taiwan Semiconductor Manufacturing Week 3：Oct 23rd-29th Oct 24th Microsoft Corporation Alphabet Inc Oct 25th Meta Platforms Inc Oct 26th Amazon Week 4：Oct 30th- Nov 5th Nov 2nd Apple Inc Coinbase Berkshire Hathaway 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.

Dow & Nasdaq 100 in strong form, but CAC40 sees more muted gains Indices continue to rally overall, but some signs of weakness have emerged the CAC40, while the Dow and Nasdaq 100 still look to have further bullish momentum behind them. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 12 October 2023 11:20 Dow edges above 200-day moving average The impressive rebound for the Dow has carried the index back to the 200-day simple moving average (SMA). Early trading on Thursday has seen the price edge above this indicator, though a close above it eludes the bulls for the time being. Additional upside targets the mid-August low around 34,100, and from there the 50- and 100-day SMAs come into view. A reversal back below 33,500 would signal that sellers have reasserted control. Source: ProRealTime Nasdaq 100 reaches trendline resistance The index has managed to surge above the 50- and 100-day SMAs in its rebound from the lows of late September. It has now reached trendline resistance from the July highs; in late August and September this resulted in a lower high being formed. A close back below 15,050 would mark a lower high in this instance and open the way to another test of the lows of September around 14,500. If the buyers can manage a close above trendline resistance, then a bullish view could emerge, with the price then targeting 15,500, the previous lower high. Above this, the July highs come into play. Source: ProRealTime CAC40 rally slows Like other indices, the CAC40 has succeeded in rallying off its lows, though it remains below the 200- and 50-day SMAs. The short-lived bounce in late September ran out of momentum below 7200, so a failure to close above this area would be a bearish development. This might then result in a fresh drop towards the 7000 level and the September low around 6965. Additional gains above 7200 would target the 50-day SMA, then the 200-day SMA, and then on to trendline resistance from the late July high. Source: ProRealTime

Brent crude oil drops on huge stock build, gold rallies further and Arabica coffee bounces off ten-month low Outlook on Brent crude oil, gold and Arabica coffee as US dollar retreats. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 12 October 2023 11:03 Brent crude oil tries to close price gap Brent crude oil, which rallied by over 3.5% on Monday on heightened Middle East tensions, did partially close this week’s price gap with Monday’s high at $84.54 per barrel on large US stock build. According to the EIA, US crude oil inventories increased by a huge 12.94 million barrels last week, exceeding forecasts of a 1.3 million barrel build. The price gap may still fully be closed but before this happens Tuesday’s low at $86.34 may be reached. Above it meanders the 55-day simple moving average (SMA) at $87.81 and sits the August high at $87.83. While Monday’s high at $88.46 isn’t bettered, the overall skew for the oil price remains bearish. Source: ProRealTime Gold approaches $1,885 to $1,893 per troy ounce resistance area Gold’s rally following the Israel-Gaza conflict is fast approaching the August per troy ounce low at $1,885 which, together with the $1,893 June low, is expected to act as resistance. Further up sits the mid-September low at $1,901. Minor support can now be found at Tuesday’s $1,865 high. Only if a currently unexpected fall through Monday’s low at $1,845 were to be seen, could the gap with Friday’s high at $1,835 at least partially get filled. Source: ProRealTime Arabica Coffee bounces off support Front month Arabica Coffee futures hit a ten-month low at 14,444 amid improved weather conditions in top producer Brazil before bouncing back on Wednesday. Since the low at 14,444 has not been accompanied by a lower reading of the Relative Strength Index (RSI) on the daily chart, positive divergence can be seen. More often than not it leads to at least short-term consolidation in the opposite direction of the prevailing trend which in case of Arabica coffee is a downtrend. A rise above Wednesday’s high at 14,884 would eye the early October high at 15,180. If overcome on a daily chart closing basis, at least an interim bottoming formation will have been confirmed with the July low, 55-day simple moving average (SMA) and late August high at 15,408 to 15,764 then being in focus. Intraday support can be found between the mid-August to mid-September lows at 14,761 to 14,711. Source: ProRealTime

Phoenix Group, M&G, and British American Tobacco could be the three best FTSE 100 dividend shares to watch next month. These shares are currently the highest yielding on the index. Source: Bloomberg Indices Shares Dividend FTSE 100 Dividend yield British American Tobacco Charles Archer | Financial Writer, London The FTSE 100 continues to remain volatile in 2023, having fallen to 7,412 points on 4 October but recovering to 7,601 points today. This mirrors similar peaks and troughs experienced throughout the year, perhaps reflecting the volatility not just in the UK, but in the international markets where most FTSE 100 corporate income is derived. So far this month, the best FTSE 100 dividend stocks have been affected by three key pieces of news: First, Metro Bank — which has been struggling for some time — was forced to agree a £925 million rescue package. Investors in FTSE 100 banks and perhaps the wider fintech sector may now be looking nervously for the next problem. Second, the Hamas attacks on Israel and subsequent response have driven the oil price higher for myriad complex reasons. One component is that a US-backed deal to bring Saudi Arabia and Israel closer together, which would have included increased Saudi Arabian oil output, is now unlikely to come to fruition anytime soon. Another is that Israel has been forced to suspend production at its Tamar gas field for fear of Hamas rockets. Third, the International Monetary Fund announced today that it now expects the UK to have the highest inflation and slowest growth within the G7 economy in 2024. While this prediction came with some caveats, and the outfit’s past predictions regarding the UK last year were perhaps off the mark, FTSE 100 investors may be concerned. But the best FTSE 100 dividend shares continue to pay out inflation-beating returns. As a caveat, the following three shares are simply the highest-yielding stocks and may or may not be capable of paying out these outsized returns sustainably. Past performance is not an indicator of future returns. Best FTSE 100 dividend stocks to watch 1. Phoenix Group With an 11% dividend yield, Phoenix Group shares may be tempting to value investors as the FTSE 100 insurer has fallen by 23.2% year-to-date to 473p. For context, the company paid out 50.8p to investors last year — and the average analyst expectation is for 52.6p in 2023. In H1 results, the company saw cash generation of £898 million, above expectations, allowing the company to boost its interim dividend by 5% to 26p per share. Given that the company is on track to generate £1.3 billion to £1.4 billion of cash generation for the full year, the dividend may appear safe for now — especially with its solvency II ratio of 180% at the top of the 140-180% management target. However, there are risks. Its bonds are likely falling sharply in value as rates continue to rise, and Phoenix also has its own debt pile to manage. JP Morgan analysts have cut their price target from 655p to just 430p, and downgraded Phoenix to underweight, arguing that ‘the stock has too much debt leverage relative to peers, which creates numerous capital and growth risks in the long term.’ 2. M&G M&G is fast becoming a popular FTSE 100 dividend stock among some investors. The savings and investment provider plans to generate operating capital of £2.5 billion by the end of 2024. Happily, the company has now achieved 53% of this three-year target 18 months in — remaining firmly on track. And its shareholder Solvency II Coverage ratio remains at the top end of the target range at 199%, with no defaults in the first half of the year. Yet even having risen by 4.4% year-to-date, it still boasts a double-digit dividend yield of 10%. In half-year results, the company saw positive net client inflows of £700 million — remaining positive into a third consecutive year. M&G also saw operating capital generation rise by 17% year-over-year to £505 million, driving adjusted operating profit 31% higher to £390 million. Accordingly, it also managed to increase its interim dividend by 5% to 6.5p per share. CEO Andrea Rossi enthuses that the results ‘demonstrate the underlying strength of our business model, the resilience of our balance sheet… we have made progress against all three pillars of the strategy that we launched in March – maintaining our financial strength through capital discipline; mobilising the Transformation programme to simplify our business and improve client outcomes; and delivering growth with positive net client inflows.’ 3. British American Tobacco British American Tobacco is one of the world’s largest tobacco companies, boasting a brand portfolio including Lucky Strike, Dunhill, and Pall Mall. It’s also highly defensive given the addictive nature of nicotine. And the FTSE 100 stock offers a 9.2% dividend yield after falling by 23.8% year-to-date. Despite ESG concerns, this dip may be attractive to income investors. The company is investing heavily in alternative products such as vapes as governments continue to crack down on smoking, though most profits are still derived from traditional products. In half-year results, overall revenue rose by 4.4% driven by these ‘new categories,’ whose revenue rose by 26.6%. Accordingly, BATS is making good progress on its long-standing target to generate £5 billion from this sector by 2025. New CEO Tadeu Marroco is ‘pleased with the resilient performance of BAT in the first half of 2023 and the renewed sense of energy across the organisation...I remain confident that New Categories will deliver a positive contribution in 2024. However, we do not expect contribution growth to be linear, as levels of investment will align with the phasing of our big innovation platforms.’ However, the company continues to face regulatory problems; the UK is planning to ban single use vapes and both the government and the opposition have confirmed support for a phased ban of traditional tobacco products. It also faces the wider fall in smoking worldwide, and a large debt pile as rates rise. 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.

After oil prices plummet by more than 9%, three major factors are poised to initiate a new upward cycle for the global oil market. How high could this newly formed trend potentially drive the price of crucial energy? Source: Bloomberg Price of oil Petroleum Commodities Price Interest rates United States Hebe Chen | Market Analyst, Melbourne | Publication date: Wednesday 11 October 2023 08:19 Oil price three main drivers On the eve of the 50th anniversary of the world's first oil crisis, warfare in the Middle East has once again bolstered crucial energy prices, causing them to rebound from a sharp decline in the past week. While Israel's influence on global oil supply is limited, the most fearful threat lies in the potential escalation of conflict involving both the US and Iran. Iran has become a substantial source of additional crude oil this year, which has helped mitigate what would otherwise be extremely tightening markets. The uncertainty surrounding the supply outlook has driven oil prices up by nearly 4% in just two days. Meanwhile, another unexpected driver for oil prices surfaces this week. A noticeable dovish shift among Federal Reserve members is prompting investors to bet on "no more" rate hikes for the months and year ahead. For instance, Dallas Federal President Lorie Logan made a speech on Monday, October 9th, stating that: "Higher term premiums result in higher term interest rates for the same setting of the fed funds rate. Thus, if term premiums rise, they could help cool the economy to some extent, reducing the need for additional monetary policy tightening to achieve the FOMC's objectives." While it may still be too early to definitively declare an end to the US central bank's tightening cycle, it is a reasonable expectation that the more cautious the Fed members are, the less likely interest rates will continue to rise. This scenario is undoubtedly viewed as positive news for the economic outlook and is expected to benefit oil prices as well. Thirdly, despite last week's OPEC+ meeting failing to significantly boost oil prices, the consequences of months-long supply constraints have already begun to strain major oil consumption nations. According to the EIA Petroleum Status Report released on October 4th, crude oil stocks in the US declined by 4.21 million barrels in the week ending September 29th, marking the sixth drawdown in the last eight weeks. Furthermore, on a global scale, the International Energy Agency has issued a warning that the production cuts implemented by these two major oil suppliers could result in a 'significant supply shortfall' by the end of the year. In general, it appears that the disruptions and uncertainties on the supply side, along with steady demand growth, will continue to feed into the upward trajectory of the essential energy market. WTI Technical Analysis The pullback on Tuesday suggests that traders are adopting a wait-and-see stance in response to the rapidly changing geopolitical tensions, assessing how this could potentially impact the energy market on a broader scale. From a technical standpoint, the surge over the past weekend has prompted the price to challenge its 50-day moving average, which currently sits at $85.40, with support from the August peak at $83.82. Only a breakthrough above the $85 level will allow the price to retest its previous trendline, expected to act as a near-term resistance. On the flip side, the price range between $82.30 and $83.70 should be capable of halting or slowing any further retreat. 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 Tesla gears up to release its Q3 results on 18 October and with estimates pointing towards an EPS of $0.74 and revenue of $24.21 billion, what strategies can traders employ ahead of the big reveal? Monte Safieddine | Market analyst, Dubai | Publication date: Thursday 12 October 2023 03:18 When is Tesla's results date? We can expect to receive the latest figures from Tesla on Wednesday, 18 October, after the market closes. Tesla share price: forecasts from Q3 results Past performance and sales drivers Tesla managed to outperform during its last earnings release for the second quarter in July. However, it was the incentives and discounts that primarily drove sales, resulting in a drop in operating margins to 9.6% and gross profit margins to approximately 18.2%. Production slowdown and targets During their previous earnings call, they cautioned that production would decelerate in the third quarter due to significant factory upgrades. True to their word, production has indeed slowed. Latest figures show deliveries at 435,059, falling short of expectations, and production at 430,488. Despite this, the automaker is still targeting around 1.8 million vehicles for this year. Pricing strategy and market competition There have been further price cuts for each of Tesla's models this past quarter, according to cargurus.com. These reductions amount to over a third year-on-year, maintaining the company’s approach of sacrificing margins to produce more vehicles. This strategic choice will be scrutinised by those examining short- to mid-term prospects, especially considering competition in the US and China. Meanwhile, optimists are looking forward to updates on key projects like Cybertruck production and AI development with the Dojo supercomputer, factors that led Morgan Stanley to significantly raise its share price target last month and upgrade its rating to 'Overweight'. Financial forecasts for the next quarter Estimates for the upcoming quarter forecast an earnings per share (EPS) of USD 0.74, a figure that has been revised downward after the disappointing delivery numbers. Revenue is expected to come in at USD 24.21 billion, not far from the USD 24.9 billion in the previous quarter but notably higher compared to the same period last year. Gross profit margins are also expected to improve but are likely to remain within the 18% range (source: Refinitiv). Analyst consensus and share price implications As for the analyst recommendations, the consensus appears similar to the previous quarter. There are six 'Strong Buy', 12 'Buy', a larger group of 20 'Hold', three 'Sell', and four 'Strong Sell', resulting in a slight net buy bias, which isn't as strong as the industry average. Moreover, the current share price exceeds the average price target of USD 238.79 (source: Refinitiv). Source: Bloomberg Trading Tesla’s Q3 results: weekly technical overview and trading strategies Current technical indicators Examining the chart below, the price is still hovering within a relatively expansive bullish trend channel. Moreover, it remains above all its primary weekly long-term moving averages (MA), even if the 100-week MA is not far away—these are bullish indicators. Conversely, the other weekly technical indicators are generally neutral, albeit with a tinge of slight positive technical bias. The price is near the middle band; its RSI (Relative Strength Index) is above 50 but not in overbought territory; its ADX (Average Directional Movement Index) oscillates below trending levels; and in terms of the DMI (Directional Movement Index), its +DI is above its -DI, but not by a significant margin. Long-term vs short-term trends Overall, most of the technical indicators are neutral but remain within the longer-term bullish channel, offering a technical overview that leans more towards 'bull average' than 'stalling bull.' This is consistent with the technical classification from the last time we previewed Tesla's earnings. While this doesn't guarantee gains, fluctuations from one end of a broad bullish trend channel to the other can influence key technical indicators. This is more apparent on the daily time frame, where the shift back towards a mid-term average renders the outlook more consolidative than bullish. Trading strategies: conformist vs contrarian Strategically speaking, this places 'buys' in the conformist camp and 'sells' in the contrarian camp. For those favouring the former, buying off the 1st Support is advisable only via a significant reversal, and for the latter, selling off the 1st Resistance via reversal is the strategy—always observing where the price resides within the channel. Preparing for fundamental events Additionally, technicals lose some of their importance as we approach a fundamental event, particularly if the actual results deviate significantly from expectations. Source: IG Tesla weekly chart with key technical indicators Source: IG Tesla weekly chart with IG client sentiment Source: IG IG client sentiment* and short interest for Tesla shares As for IG client sentiment, it's been characterised by a strong buy bias throughout this period (see chart above, blue-dotted line representing % long, left axis). To some extent, this reflects trading within the channel established at the start of the year. Sentiment began this week at 74%, compared to last week's 77%, which was just shy of entering extreme long territory. Regarding short interest, the reading for mid-September stood at 84,724,119, representing 2.67% of total shares and 3.07% of shares floating. This is lower than the approximately 96 million shares short when we conducted the second-quarter earnings preview (source: Refinitiv). Source: IG *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of the start of this week for the outer circle. Inner circle is from the start of last week. 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 US dollar is on the backfoot on Fed speak and FOMC minutes; Treasury yields might have assisted the Fed, but that picture could change, and PPI beat forecasts and attention now turns to CPI. Will it move the US dollar? Source: Bloomberg Federal Reserve United States dollar Federal Open Market Committee United States Forex Shares Daniel McCarthy | Strategist, | Publication date: Thursday 12 October 2023 05:47 The US dollar has been struggling this week against the euro, sterling, and swiss franc but it has fared better against the Japanese yen and commodity-linked currencies.Undermining the outlook for the ‘big dollar’ has been the notable tilt in the stance of the Federal Reserve Bank (Fed). Until this week, the debate had been symmetrically focussed on a hike or no hike scenario for the next Federal Open Market Committee (FOMC) meeting.However, in the last few days, the market has seen a shift toward the risks for policy going forward being balanced; and this has opened the prospect of a potential cut at some stage further down the track. The less hawkish rhetoric started on Monday from several Fed speakers and has continued into the middle of the week, culminating with the release of the FOMC meeting minutes from the September conclave overnight. Treasury yields technical analysis The commentary from Fed members Jefferson, Logan, Kashkari and Daly, among others, pointed to the higher yields at the back end of the Treasury curve, effectively doing some of the desired tightening for the Fed without them having to raise the short-end target rate. The benchmark 10-year bond nudged 4.88% last Friday, the highest return for the low-risk asset since 2007. It collapsed to trade below 4.55% overnight and remains near that level at the time of going to print. This is potentially undoing some of the Fed’s desired tightening. From the FOMC minutes released yesterday, the statement specifically said, “Participants generally judged that, with the stance of monetary policy in restrictive territory, risks to the achievement of the Committee’s goals had become more two-sided.” US dollar’s performance against major currencies With the Fed appearing to signal a reluctance to hike and the tumbling of Treasury yields, not surprisingly, the US dollar has been languishing against most of the major currencies. The swiss franc has seen the largest gains this week reversing the moves of last week when USD/CHF made a seven-month high. A benign inflation environment there has allowed the Swiss National Bank (SNB) to refrain from aggressive monetary policy tightening. Its target rate of 1.75% is well below that of the other major central banks other than the Bank of Japan (BoJ), which has a negative interest rate policy (NIRP). US PPI data overnight came in hotter than expected at 2.2% year-on-year to the end of September against 1.6% anticipated. Later today the focus will be on US CPI, but it appears that it would take a large miss to reshape the market’s outlook for the Fed’s rate path. A Bloomberg survey of economists is estimating that year-on-year headline CPI will be 3.7% to the end of September. Treasury yields across the curve 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.

Australian dollar makes cautious progress on USD; AUD/USD remains broadly biased to the downside and EUR/AUD uptrend in focus despite recent losses. Source: Bloomberg Australian dollar EUR/AUD Euro Market sentiment Forex Shares Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Thursday 12 October 2023 06:21 In recent days, the Australian dollar has been aiming higher of late, with some mixed progress among major currency pairs. Looking at the daily chart below, AUD/USD has turned cautiously higher as positive RSI divergence persisted. The latter indicated that downside momentum was fading, hinting that a turn higher might have been in the cards. Now, the exchange rate is sitting just under the 50-day moving average. In August, a bearish death cross emerged between the 20- and 50-period lines, offering a downward technical bias. As such, despite recent gains, the technical bias remains bearish. Besides the moving average, immediate resistance seems to be the 0.6459 inflection point. The latter was established back in May. Breaking higher exposes the 0.6568 inflection point from the March low. Otherwise, turning lower places the focus on support which is the November low of 0.6272. AUD/USD daily chart Source: TradingView EUR/AUD technical analysis Switching to the Euro, EUR/AUD has been in a cautious downtrend since August. But, the exchange rate remains in an overall uptrend. The latter seems to be upheld by rising support from the beginning of this year – see chart below. From here, immediate resistance appears to be the combination of the 23.6% Fibonacci retracement level of 1.6638 and the 50-day moving average slightly above that. Clearing these would open the door to potentially revisiting the July peak of 1.7065. Otherwise, a turn lower places the focus on rising support from the beginning of this year, which may reinstate the broader uptrend. Breaking lower opens the door to offering an increasingly bearish technical bias. 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.

Equity markets rise, dollar falls after release of Fed minutes US equity markets ended the session higher on Wednesday. Minutes of the last Federal Reserve rate meeting, in September, when rates were left on hold, showed that there was a wide variation in views on whether any additional interest rate increases would be needed. The balance indicated that one more hike would be likely, but while there were conflicting opinions on the need for more policy tightening, there was unanimity on one point – that rates would need to stay elevated until policymakers are convinced inflation is heading back to 2%. The dollar fell at the release of the minutes. Investors now await US inflation data. Economists expect at 3.6% rise in September YoY, down from 3.7% in August. The pace of core CPI growth is also expected to slow, down to 4.1% in September, from 4.3% the previous month.