MongiIG

Wall Street managed to stabilise overnight from its recent sell-off, despite another climb in Treasury yields and a pull-ahead in the US dollar. Source: Bloomberg Forex Indices Commodities United States Federal Reserve Petroleum Yeap Jun Rong | Market Strategist, Singapore | Publication date: Thursday 28 September 2023 04:10 Market Recap Wall Street managed to stabilise overnight from its recent sell-off, despite another climb in Treasury yields and a pull-ahead in the US dollar (+0.4%). The US 10-year yields were up another 5 basis-point (bp) to reach above 4.60%, with the yield curve presenting a prolonged bear steepening trade as market participants buy into the narrative that high interest rates will linger for longer. Perhaps one to watch over the medium term is an eventual un-inversion of the 10 year/2 year Treasury yield spread, which tends to precede a recession on the past four occasions. Ahead, the final reading for US 2Q Gross Domestic Product (GDP) will be on watch. Given that the data may be backward looking, reaction to the data may be short-lived, barring any significant deviation from the initial read. Current expectations are looking for a slight uptick in the GDP growth rate to 2.1% from previous 2%. The key focus may instead revolve around any clues on US monetary policy outlook from Federal Reserve (Fed) Chair Jerome Powell’s speech. Given the lack of key economic data from the recent Federal Open Market Committee (FOMC) meeting till now, he may likely stick to his original Fed meeting script and leave the door open for additional hike, albeit still very much dependent on upcoming data. The S&P 500 is currently back to retest the lower trendline of an ascending channel pattern in place since October 2022, providing a moment of reckoning for buyers. Its weekly Relative Strength Index (RSI) is also back at the key 50 level – a midline that may determine the broader trend ahead. Any failure to defend the lower channel trendline support may pave the way to retest the 4,150 level next. Source: IG charts Asia Open Asian stocks look set for a mixed open, with Nikkei -0.70% and ASX +0.24% at the time of writing. Korean markets are closed for Mid-Autumn Festival today and tomorrow. The relatively quiet economic calendar today may lead sentiments on a more subdued tone, while reservations on risk-taking may continue to revolve around developments on China’s property sector. Suspension of trading in China Evergrande’s shares and its chairman placed under police surveillance further reinforces the odds of liquidation, while a bailout from authorities remains unlikely, given their series of more indirect measures to support the property sector. Perhaps one to watch may be the Nikkei 225 index, which is struggling to defend the lower edge of its Ichimoku cloud on the daily chart at the 32,000 level. This level also coincides with a 23.6% Fibonacci level of retracement, with any failure to hold potentially paving the way to retest the 30,800 level next, where the lower channel trendline support resides. Near-term upward momentum still remains weak for now, with its daily Moving Average Convergence/Divergence (MACD) looking to cross below the zero line. Source: IG charts On the watchlist: Brent crude prices eyeing for a retest of its recent high Recent retracement in Brent crude prices has proved to be short-lived as prices were up more than 3% over the past two trading days, seemingly eyeing for a retest of its recent September high at the US$95.00 level. Another week of significant drawdown in US crude oil inventories overnight continues to reinforce the trend of tighter supplies (-2.17 million vs -0.32 million expected) since August this year, which far overrides worries about China’s growth conditions and a stronger US dollar. Ahead, one to watch if the September top may be overcome to form a new higher high and reinforce the prevailing upward trend since June this year. Its weekly MACD has crossed above the zero line as an indication of positive momentum in place, while its RSI above 50 also leaves buyers in control for now. Further upside may leave the US$98.00 level on watch as the next point of resistance to overcome. Source: IG charts Wednesday: DJIA -0.20%; S&P 500 +0.02%; Nasdaq +0.22%, DAX -0.25%, FTSE -0.43% IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed. The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer. Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

WTI rallies to one-year high, gold drops to six-month low and Arabica coffee slips to support Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 28 September 2023 11:28 WTI rallies to 13-month high WTI’s rally to an over one-year high on the back of a sharp decline in US crude stockpiles exacerbated concerns about tight global supplies is showing no signs of slowing down. The August 2022 peak at $97.34 per barrel represents the next upside target. Potential slips should find support around the mid-September high at $92.38. Source: ProRealTime Gold drops to six-month low Gold’s descent from last week’s $1,947 per troy ounce peak accelerated to the downside and after three consecutive days of lower prices has taken it to a six-month low at $1,873 per troy ounce. Below this level lies the early March high at $1,858 ahead of the late February high at $1,847. Resistance can now be encountered between the August low at $1,885 and the June and mid-September lows at $1,893 to $1,901. Source: ProRealTime Arabica Coffee find interim support Front month Arabica Coffee futures have slid to their 2023 uptrend line which has once again offered support as draught fears dissipate. Wednesday’s low at 14,803, right on the January-to-September uptrend line, was made marginally above the August and current September lows at 14,761 to 14,711. If fallen through, the January low at 14,288 would be in sight. Minor resistance above Tuesday’s 15,247 high can be seen between the 55-day simple moving average (SMA) and the mid-July low at 15,509 to 15,613. Source: ProRealTime

Crude oil prices all set for a fourth consecutive monthly gain; still-bearish retail trader exposure offers a bullish outlook and prices just barely break above a key zone of resistance. Source: Bloomberg Oil Price of oil Shares Commodities Market sentiment Petroleum Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Thursday 28 September 2023 04:32 Crude oil sentiment outlook: bullish Crude oil prices rocketed higher on Wednesday, soaring 3.6 percent in the most aggressive day since early June. The commodity is on course for a fourth consecutive monthly gain. Meanwhile, retail traders continue increasing bearish exposure. This can be seen by looking at IG Client Sentiment (IGCS), which tends to function as a contrarian indicator. According to IGCS, only about 30% of retail traders are net-long crude oil. Since the majority are biased to the downside, this continues to hint that prices may rise down the road. Meanwhile, upside bets have decreased by 10.3% and 16.32% compared to yesterday and last week, respectively. With that in mind, overall exposure and recent changes offer a stronger bullish contrarian trading outlook. IG Client Sentiment chart Source: DailyFX Crude oil technical analysis On the daily chart below, WTI has just barely closed above the 93.72 – 92.43 resistance zone from highs seen in November. That has opened the door to extending the uptrend since earlier this year, exposing the 100% Fibonacci extension level at 95.63. Just beyond that is the August 2022 high of 97.65, which may hold as key resistance. But, note that there is a negative RSI divergence showing that upside momentum is fading. In the event of a turn lower, dropping through the 93.72 – 92.43 former resistance zone places the focus on the 20-day moving average (MA). Just below that is the 61.8% extension at 88.75. Crude oil 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.

USD/JPY eyes 150.00 as the threat of FX intervention grows louder; BoJ minutes painted a dovish picture but market participants are pricing in a 62% chance of a rate hike in January 2024. Source: Bloomberg Japanese yen Bank of Japan Forex Shares United States dollar Euro Analyst, | Publication date: Thursday 28 September 2023 06:06 BoJ rate hike possible in Jan 2024 By Zain Vawda The Bank of Japan (BoJ) minutes were released this morning from the July meeting which indicated that members felt it was important to explain the tweaks to the Yield Curve Control (YCC) policy. Policymakers were adamant that an explanation be made so market participants do not view the tweaks as a sign that the end of accommodative monetary policy is near. Market participants, meanwhile, are now pricing in just above a 60% chance of a rate hike in January 2024 even with the BoJ not yet achieving sustainable wage growth above inflation. BoJ rate hike probability chart Source: Refinitiv/LSEG Yen struggles agains the dollar The yen itself has continued its struggle of late against the greenback in particular, but has gained some ground against both the euro and GBP. This is largely down to fears of a slowdown for both the UK and EU, which has seen both currencies weaken significantly following the recent central bank meetings. The yen continues to find support thanks to the looming threat of FX intervention. Comments from Japanese officials and BoJ policymakers continue to help the yen stave of a larger slide. Former BoJ officials had commented around the 150.00 psychological level proving pivotal for the BoJ despite insistence of late that the central bank seems to be playing on the minds of market participants. The closer we get to the 150.00 mark or break above the greater the chance of pullback in USDJPY as bulls may take profit on longs as the threat of intervention will no doubt grow louder. Risk events ahead Looking at the next week or so and the majority of risk to yen pairs will come from the US, UK and EU. There are very limited high-impact risk events and none from Japan with any market moving events likely to be in the form of comments around intervention. This has been used rather effectively by the BoJ as a means of support for the currency. Looking at the data releases expected, none jump out at me as potentially altering the current narrative of higher rates for longer. Weak data from the EU and the UK could however facilitate further weakness in the euro and the GBP while strong data from the US could keep the dollar index (DXY) advancing and thus facilitating the need for intervention by BoJ officials. Japanese yen risk events chart Source: TradingView EUR/JPY technical analysis EUR/JPY has held firm of late trading in a 200-pip range for the majority of September. This is surprising for a currency pair which usually records a 200-pip move in a day. This is just a sign of the weakness in the euro as well as the support offered to the yen through comments around FX intervention. EUR/JPY had printed a Head-and-Shoulders pattern around 12 September and looked set to invalidate the pattern a few days later. However, the failure of a daily candle close above the right shoulder swing high of around 158.70 keeps the setup alive and could be precursor to what I expect could be a significant retracement should intervention occur. The 20-day moving average (MA) is also attempting to cross the 50-day MA in a death cross pattern which could further cement the idea of a deeper retracement. Downside support will be provided by the 100-day MA which rests at the 155.00 mark before any further move can materialise. Key levels to watch Support levels: 156.74 155.00 153.90 Resistance levels: 158.70 160.00 (psychological level) EUR/JPY daily chart Source: TradingView USD/JPY technical analysis From a technical perspective, USD/JPY has continued to advance this week as the DXY found its legs once more, the US dollar benefitting from the higher for longer narrative while the carry trade opportunity continues to keep USD/JPY on the front foot. USD/JPY is now in touching distance of the 150.00 psychological mark which could be a massive one for the pair. A positive for USD/JPY bulls and those hoping that intervention does not occur soon lies in the fact that despite broad-based USD strength the rise in USD/JPY has been steady and gradual. This is something the BoJ have emphasised in comments as a key point to which they pay attention. Key levels to watch Support levels: 148.40 147.50 145.36 Resistance levels: 150.00 (Psychological level) 152.00 (2022 Highs) The IG Client Sentiment Data shows retail traders are 80% net-short on USD/JPY. USD/JPY daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Stocks in Asia went through another mixed session, with losses led by the Nikkei and Hang Seng, though the ASX 200 ended the day only slightly lower. Stocks continue to fall as yields rise, while Evergrande worries returned as shares of the developer were halted following reports its chairman had been taken away by police earlier in the month. The US Senate is expected to vote this afternoon (UK time) on a bill to avoid the government shutdown, but with markets still expecting higher rates for longer (and positive economic news only adding to this view) it seems that a resolution of the government shutdown will be a minor event. Weekly US jobless claims and pending home sales this afternoon are followed by a speech from Jerome Powell this evening.

FTSE 100 at one-year high and DAX rallies, while S&P 500 keeps struggling European indices have outpaced their US counterparts in recent days, as the S&P 500 continues to find it hard to keep rallying. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Wednesday 27 September 2023 11:41 FTSE 100 Yesterday’s push opened the door to fresh post-pandemic highs and puts the buyers firmly back on top. Expectations of a potential turn lower back towards 7200 and further down have been cancelled out, with the index now targeting 7500 and 7650 to the upside. Source: ProRealTime DAX Thursday saw the index recoup lost ground and make a new record high, and with this now achieved bullish momentum will likely carry the price to fresh highs. There is still no sign of a pullback, and with the index at a new higher high even a drop back towards 15,800 would still be more of a potential buying opportunity. Source: ProRealTime S&P 500 By contrast a small retracement continues here, with the index unable to rally back to previous highs as yet. Declines continue to target 4550 as an initial area of support. A recovery back above 4675 could easily see the buyers take control once again. Source: ProRealTime

Brent crude oil, natural gas prices rise while gold drops to one-month low Outlook on Brent crude oil, gold and natural gas as the US dollar continues to appreciate. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Wednesday 27 September 2023 11:27 Brent crude oil climbs on supply tightness The price of Brent crude oil resumed its ascent as concerns about supply tightness heading into the winter gripped markets with last week’s ten-month high at $94.97 being back in sight. Immediate resistance lurks around last Tuesday’s $93.32 low. Support below Wednesday’s intraday low at $92.60 can be found around last Thursday’s $91.37 trough. Further down sits more important support between the $90.97 early September high and Tuesday’s $90.49 low. Source: ProRealTime Gold drops to one-month low Gold’s descent from last week’s $1,947 per troy ounce high accompanied by a rising US dollar has taken it to a one-month low towards the $1,893 June low. Further down sits the August low at $1,885 which may also be reached over the coming days. Minor resistance above the mid-September low at $1,901 can be found around the 6 September low at $1,916. Source: ProRealTime Natural gas prices stabilize above support On Tuesday US natural gas futures revisited their recent low at $2.791 but managed to bounce off it with this week’s high at $2.924 being in focus as supply tightness pushes price up. A rise above $2.924 would engage the psychological $3.000 region and last week’s high at $3.021. Further up sits the August peak at $3.050. A currently unexpected slip through last week’s low at $2.791 could lead to the 200-day simple moving average (SMA) at $2.727 being reached. Source: ProRealTime

The AUD held early gains after Australia monthly CPI rose last month; AUD/USD faces still resistance ahead, while AUD/NZD is testing key support. Source: Bloomberg Australian dollar AUD/USD United States dollar Forex Inflation Consumer price index Manish Jaradi | IG Analyst, Singapore | Publication date: Wednesday 27 September 2023 05:11 Interest rates could remain higher for longer The Australian dollar held early gains after consumer price inflation accelerated last month, reinforcing the growing view that interest rates will remain higher for longer.  Australia's CPI accelerated to 5.2% on-year in August, in line with expectations Vs. 4.9% in July, and 5.4% in June. While the monthly CPI figures tend to be volatile and not necessarily a good predictor of the quarterly CPI, which holds more relevance from the Reserve Bank of Australia’s (RBA) perspective, stubbornly high inflation raises the risk that the RBA remains hawkish for the foreseeable future.  AUD/USD 5-minute chart Source: TradingView AUD/USD technical analysis Former chief of RBA Philip Lowe said earlier this month that there is a risk that wages and profits could run ahead of levels that are consistent with inflation returning to target in late 2025. RBA held the benchmark rate steady at 4.1% at its meeting earlier this month saying recent data is consistent with inflation returning to the 2-3% target range by late 2025. Markets are pricing in one more RBA rate hike early next year and have priced out any chance of a cut in 2024.  Meanwhile, risk appetite has taken a back seat, thanks to surging US yields amid the growing conviction of higher-for-longer US rates. Chicago Federal Reserve (Fed) president Austan Goolsbee highlighted the central bank’s priority, saying the risk of inflation staying higher than the Fed’s 2% target remains a greater risk than higher rates slowing the economy more than needed.  Furthermore, worries regarding the Chinese economy and geopolitical tensions continue to weigh on sentiment. While authorities have responded in recent months with several support measures, those measures have yet to trigger a meaningful turnaround in sentiment.  On technical charts, AUD/USD’s rebound has run out of steam at vital resistance at the late-August high of 0.6525. AUD/USD daily chart   Source: TradingView AUD/USD holds below crucial resistance Given the failure so far to clear 0.6525, the path of least resistance for AUD/USD remains sideways to down, given the lack of upward momentum on higher timeframe charts (see the weekly chart). Any break below the early-September low of 0.6350 would trigger a minor double top (the August and the September highs), opening the gates toward the October 2022 low of 0.6170.  AUD/USD weekly chart Source: TradingView AUD/NZD market analysis AUD/NZD is testing the lower end of the range at the July low of 1.0720. Any break below could clear the path initially toward the May low of 1.0550. However, broadly the cross remains in the well-established range 1.05-1.11 so a break below 1.0550 wouldn’t necessarily shift the bias to unambiguously bearish.  AUD/NZD 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.

Elevated Treasury yields, higher oil prices and a gridlock in the US government funding bill serve as prevailing risks for markets to digest. Source: Bloomberg Forex Indices Commodities Inflation United States Market trend Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 27 September 2023 04:17 Market Recap Wall Street saw further de-risking overnight (DJIA -1.14%; S&P 500 -1.47%; Nasdaq -1.57%) amid the absence of bullish catalysts, while elevated Treasury yields, higher oil prices and a gridlock in the US government funding bill serve as prevailing risks for markets to digest. The VIX has touched its highest level close since May 2023 as a reflection of risk-off sentiments, largely on track with its seasonal patterns to form a potential peak in early-October. Aside, the US dollar also continued on its ascent (+0.2%), with slightly hawkish Fedspeak backing the high-for-longer rate guidance. On the data front, downside surprises in US new home sales and US consumer confidence pointed towards moderating growth conditions as a trade-off to tighter policies, although one may still argue that recessionary evidence still awaits to be seen. Current level of US new home sales are still in line with pre-Covid levels, while US consumer confidence has yet to reflect the sharp declining trend that generally precedes a recession. For the Nasdaq 100 index, a break below an ascending channel pattern to a new three-month low continues to leave sellers in control, after failing to defend the Ichimoku cloud support on the daily chart and its 100-day moving average (MA) last week. The next line of support may stand at the 14,200 level, which may mark a crucial level to defend, considering that its weekly Relative Strength Index (RSI) is edging back to retest the 50 level for the first time since March this year. That may provide a key test for buyers in maintaining the broader upward trend ahead. Source: IG charts Asia Open Asian stocks look set for another downbeat session, with Nikkei -1.13%, ASX -0.42% and KOSPI -0.50% at the time of writing. The Hang Seng Index has registered a new nine-month low in yesterday’s session, as increasing risks of a potential liquidation of China Evergrande kept investors shunning. On the data front, China’s August industrial profits registered a softer decline but gains may be more lukewarm as the data still revealed a year-on-year decline while property sector risks linger. Aside, Australia’s Consumer Price Index (CPI) data this morning came in line with expectations at 5.2%. The absence of an upside surprise left rate expectations well-anchored for further rate hold from the Reserve Bank of Australia’s (RBA) next week, but there are still some indecision over the need for additional rate hike early next year. This is considering that the inflation data still revealed some persistence with an uptick in pricing pressures from previous 4.9% and further lack of progress on the inflation front over the coming months could justify more hawkish bets into play. The AUD/USD has been forced into a ranging pattern over the past month, with intermittent bounces failing to break above the 0.650 level of resistance. Sellers seem to remain in control for now, with the RSI on its daily chart struggling to cross above the 50 level, while a potential bearish crossover are displayed on its Moving Average Convergence/Divergence (MACD). Lingering risks to China’s growth and the downbeat risk environment served as immediate headwinds to keep the bulls at bay. Any breakout of the range may be on watch, with the lower consolidation range at the 0.636 level and the upper resistance range at the 0.650 level. Source: IG charts On the watchlist: Silver prices back to retest key upward trendline support Recent attempt for silver prices to bounce off an upward trendline support came short-lived, as higher bond yields and a stronger US dollar limit any positive follow-through from buyers this week. Two straight days of losses this week have unwound all of past week’s gains, with prices seemingly eyeing for a retest of the upward trendline support around the US$22.60 level once more. Thus far, its daily RSI has struggled to cross above the key 50 level. Greater conviction for sellers may come from a breakdown of the US$22.20 level, where a horizontal support stands. Failure for the level to hold may pave the way to retest the US$20.60 level next. On the upside, the recent top at the US$23.75 level has proved to be an immediate resistance to overcome. Source: IG charts Tuesday: DJIA -1.14%; S&P 500 -1.47%; Nasdaq -1.57%, DAX -0.97%, FTSE +0.02% IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed. The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer. Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Overnight in Asia, stock markets experienced a mixed trading session. The rebound in Chinese industrial profits provided some relief, but this was partially offset by a subdued handover from Wall Street. Australian CPI was also stronger than expected, dampening sentiment on fears that the RBA may have to raise rates again. Moving on to Europe, equity futures indicate a quiet open. In the US, the Senate voted to clear a procedural hurdle for the bipartisan bill aimed at avoiding a government shutdown. House Minority Leader Kevin McCarthy has indicated that a stopgap funding bill will be brought to the House floor on Friday. US durable goods orders are the main event of the session.

Why Nike shares remain in a rut? Source: Bloomberg Shares Nike, Inc. Price Share price Candlestick Profit Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Tuesday 26 September 2023 14:02 Nike earnings due Nike is set to announce its earnings this week. Analysts predict that the company will earn 74 cents for each share with a total revenue of $13billion. This is in comparison to the same period last year when earnings were 93 cents per share on total revenue of $12.69 billion. However, it's not all bad news for Nike. When compared to other companies in the same industry, Nike's profit margins are still above average, and its valuation is below the long-term average. There is also a slight recovery in China, which is Nike's second-largest market. With China relaxing some of its Covid restrictions to boost economic growth, Nike stands to benefit from the ongoing reopening. There might be some positive changes in Nike's fundamentals. But for the company's shares to increase significantly in the near term, Nike needs to find ways to boost revenue growth and increase profit margins. Poor performance so far this year Nike’s stock price hasn’t performed well this year, with a 23% drop to date. This is in stark contrast to the 13% increase in the S&P 500 index. Over the past one and three years, Nike's shares have dropped by 9% and 30% respectively, while the S&P 500 index has increased by 32% and 145% during the same periods. Nike analyst ratings, price targets and sentiment Source: Refinitiv Refinitiv data shows a consensus analyst rating of ‘buy’ for Nike. Analysts show 7 strong buy, 15 buy, 9 hold, 4 sell and 1 strong sell - with the median of estimates suggesting a long-term price target of $123.00 for the share, roughly 35% higher than the current price (as of 26 September 2023). Source: IG IG sentiment data shows that 92% of clients with open positions on the share (as of 26 September 2023) expect the price to rise over the near term, while 8% of clients expect the price to fall. Trading activity over this week shows 55% of buys and this month 52% of sells. What does the technical picture look like? Nike’s share price is currently in free fall and is fast approaching its October 2022 low at $82.22. The question is whether the share price can hold above that low after this week’s first quarter (Q1) results. If not, that is to say if a weekly chart close below the $82.22 low were to be seen, the June and August 2019 lows at $78.19 to $77.07 would be next in line. NYSE Nike Weekly Candlestick Chart Source: TradingView For the bulls to be back in control in the medium-term the last weekly reaction high – a high on a weekly candlestick which is higher than that of the week preceding it and following it – at the $111.95 early August high would need to be exceeded. NYSE Nike Daily Candlestick Chart Source: TradingView On the daily chart the last reaction high was made at $98.15 in mid-September and below it solid resistance can be spotted between the August and 13 September lows at $95.66 to $96.55. Below these levels the August-to-September downtrend line can be spotted at $95.00 and is likely to cap any short-term bullish reversal, were it to be reached at all. 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 markets face macroeconomic headwinds, explore the strength of mining service providers, including Orica, Monadelphous, and Mineral Resources, in uncertain times. IG Analyst | Publication date: Tuesday 26 September 2023 05:06 Article written by Danielle Ecuyer Macro headwinds for markets from higher bond yields Rising bond yields under the "higher for longer" narrative, which was reiterated at the Federal Reserve’s September FOMC meeting, has translated into weak equity markets and falling valuations. The expectation of more stubborn inflation and higher energy prices are supporting what is a seasonally volatile and weak period for markets, and this September is proving, thus far, to be no different. Dollar weaponisation and OPEC+ blowback America’s weaponisation of the US dollar and the accompanying sanctions against Russia’s invasion of Ukraine are now facing blowback from OPEC plus. Russia and Saudi Arabia continue to curb oil supplies. Brent Crude recently touched $95 a barrel before easing back to $93. Russia is also restricting diesel exports, which is placing strains on global diesel supplies. Against this backdrop, materials and resource companies are investing for major secular themes such as the clean energy transition (copper, lithium, critical minerals) and increased global food production (potash). Supply struggles As was evidenced in the August reporting season, labour and materials costs, as well as weather-related costs, were a headwind to the mining sector profits. However, the outlook for mining services is more upbeat and provides an alternative way to gain exposure to the resource investment theme and service providers are forecast to pass on any cost imposts. Source: Bloomberg Three stocks to watch Orica: Are earnings at an inflexion point? Orica, a global provider of explosives and blasting systems for the mining, quarrying, and oil and gas sectors, has recently seen a resurgence. Analysts returned a more upbeat tone post the company’s recent investor day update. Goldman Sachs, in particular, noted that after years of earnings downgrades via price leakage, the new management has put in place strategic changes and sees the company at an “inflexion point.” Orica weekly chart Source: IG Positive macroeconomic tailwinds This optimism is rooted in more positive macro tailwinds, including stronger commodity prices, supply chain limitations, and firm nitrogen markets. UBS also remarks that Orica is committed to a reduction in its Scope 1 and 2 emissions of at least -45% by 2030 and a near-term reduction of -26% by 2026. A greener future Equally noteworthy is Orica's exploration of a hydrogen hub with Origin in the Hunter Valley. Morgan Stanley assesses that Orica’s contract pricing beat 1H23 expectations, and the company is transitioning its Newcastle, Kooragang Island plant to renewables. Promising prospects According to FNArena, the company is trading on 15.8x FY24 earnings and a prospective yield of 3.2%. The average target price is $18, representing 16% upside. With strategic changes, eco-friendly initiatives, and a positive outlook, Orica is showing promising prospects in the mining and explosives sector. FNArena forecast chart Source: FNArena This compares to Refinitiv with a mean target price of $17.86, with 4 Strong Buys, 7 Buys and one Sell. Refinitiv forecast chart Source: Refinitiv Monadelphous: In the sweet spot for lithium contract wins Monadelphous is a $1.4 billion engineering company that provides construction, maintenance, and industrial services to the resource, energy, and infrastructure sectors. Monadelphous weekly chart Source: IG Monadelphous: A surge in new contracts Jarden recently upgraded the stock to an Overweight from Neutral with the company winning $260 million in new contracts over the last two weeks, bringing the total to $610 million in new contracts in the first three months of the 1H24. Citi expects Monadelphous will announce a total of $1 billion to $1.4 billion in new contracts with pickups in the lithium and rare earth space. Macquarie upgraded the stock to a Buy after the strong FY23 results and is looking for growth in Construction revenue in the 2H24 and Maintenance revenue, which represents 71% of total revenue. FNArena has the stock trading on a 19.6x prospective multiple and a 4.3% yield with an average target price of $14.68. FNArena forecast chart Source: FNArena Refinitiv’s mean target price is $14.35 with 3 Strong Buys, 3 Buys, and 3 Holds. Refinitiv forecast chart Source: Refinitiv Mineral Resources: It’s not all about iron ore and lithium Mineral Resources is valued at $13.4 billion and is a diversified mining services company with construction, crushing, and transport services. Although the iron ore and lithium businesses represent the main earnings drivers, the services division is nevertheless sizeable, and they specialise in Build, Own, Operate as well as Crushing Mining Services. Mineral Resources weekly chart Source: IG Prospects for Mineral Resources: Iron ore and lithium The recent FY23 results were weaker than expected, but looking forward, analysts expect iron ore and lithium, notably Onslow and the ramp-up of Wodgina, to boost earnings. Mineral Resources also recently purchased Bold Hill from receivers, which offers them a processing hub in the Eastern Goldfields of WA. According to Blackwattle Investment Management, Onslow could add as much as $35 per share, although Morgan Stanley expresses concern that earnings remain vulnerable to the vagaries of commodity prices. There are quite some discrepancies in broker price targets, and FNArena has an average target of $78.57 with Macquarie as high as $92. The prospective PER is 14.5x and a 2.9% dividend yield for FY24. FNArena forecast chart Source: FNArena Refinitiv has a mean target price of $77.35, with 3 Strong Buys, 7 Buys, 3 Holds and 2 Sells. Refinitiv forecast chart Source: Refinitiv 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.

European indices face uncertain times as central banks take divergent stances, with the DAX showing signs of a potential correction. Source: Bloomberg DAX Indices European Central Bank Recession Monetary Policy Committee (United Kingdom) Central bank Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 26 September 2023 06:19 BoE's cash rate on top of 'Table Mountain' Last week saw the Federal Reserve (Fed) and the BoE deliver hawkish holds in contrast to the European Central Bank's (ECB’s) dovish hike the previous week. The BoE was empowered to keep its official cash rate at 5.25% after the release of a cooler-than-expected August consumer price index (CPI), just a day before the Monetary Policy Committee (MPC) meeting. Unless there is an upside in inflation or wage growth from here, the BoE’s official cash rate is now on top of Table Mountain, to borrow the analogy of the BoE’s Chief economist Huw Pill. For those unfamiliar with Table Mountain, it looks exactly like the name suggests. Pill’s analogy warns that rates in the UK will need to remain higher for longer. In the current climate, where activity data is already sliding, this increases the chance of a recession in the UK. For those looking for further evidence of why the ECB delivered a dovish hike the prior week, last night's German ifo business climate index printed at 85.7 in September, the weakest level since October 2022 when fears of a European recession and European energy crisis were at their greatest. The ifo print likely confirms the ECB’s rate hiking cycle is over and that the German economy will likely lead Europe into recession. DAX technical analysis During September, the view has been that the correction in the DAX, which started from the late August 16615 high, was missing a leg lower and had further to go. The overnight close below the 200-day moving average at 15629 and break of the mid-August low at 15511 warns that the missing and final leg (Wave C) of a three-wave ABC pullback has commenced, which targets a move to wave equality at 15000. Should the pullback play out as expected and signs of basing emerge in the 15000 area, we expect to see the uptrend resume, which would see the DAX test and break the July 16615 high. DAX daily chart Source: TradingView FTSE technical analysis In early September, contrary to our expectations, the FTSE rebounded from the critically important 7200 level, initially supported by BoE Governor Andrew Bailey's dovish comments in late August and then by the dovish ECB meeting. The hawkish hold from the BoE and the Fed last week appears to have capped the rally at 7750 and prompted the FTSE to fall back within its range and below the 200-day moving average at 7637. While the FTSE remains below resistance at 7750, there is a good chance of further rotation within the 7750/7200 range. Aware that if the FTSE were to see a sustained break of support at 7200, there is scope for it to extend its decline towards 7000 before a retest of the 2022 lows 6800/6700 area. FTSE daily chart Source: TradingView TradingView: The figures stated are as of 26 September 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.

Crude oil prices paused rallying last week, while retail traders slightly increased upside bets and pondered the short-term outlook for WTI. Source: Bloomberg Shares Commodities Petroleum WTI Market sentiment Oil Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Tuesday 26 September 2023 05:09 Crude oil sentiment outlook: bearish Crude oil prices took a breather last week, leaving West Texas Intermediate (WTI) little changed by Friday. This meant a pause after weeks of consistent gains. Recent data from IG Client Sentiment (IGCS) shows that there has been a cautious increase in upside exposure in crude oil. IGCS tends to function as a contrarian indicator, with that in mind, could oil aim lower in the near term? According to IGCS, only 36% of retail traders are net-long crude oil. Since most of them are biased to the downside, this continues to suggest that prices may rally down the road. That said, upside exposure has increased by 7.73% and 1.81% from the last trading day and one week ago, respectively. With that in mind, recent changes in positioning hint that prices might soon reverse lower ahead. IG Client Sentiment chart Source: DailyFX WTI crude oil technical analysis On the daily chart below, WTI has pushed higher over the past 48 hours (trading days). This is somewhat undermining the emergence of a Bearish Engulfing from last week. This followed a rejection of the 61.8% Fibonacci extension level of 88.75, where support was reinforced. As such, this is leaving a neutral technical setting in the very short term. Key resistance is the 92.43 – 93.72 range, made up of highs from November. Meanwhile, the 20-day moving sverage is creeping higher. The latter may hold as support, maintaining the upside technical bias. Otherwise, a breakout below it subsequently places the focus on the 84.84 inflection zone. WTI crude oil daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Gold and silver prices weakened on Monday; XAU/USD inches closer to key rising support, while XAG/USD might have more room to consolidate. Source: Bloomberg Gold Silver XAG/USD XAU/USD Commodities Forex Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Tuesday 26 September 2023 07:32 XAU/USD technical analysis Gold and silver prices have continued lower amid the rise in longer-term US Treasury yields and a stronger US dollar. As a result, how is the near-term technical landscape evolving in precious metals? Gold continues to trade in a directionless flow from a near-term technical perspective. Prices are consolidating between the falling trendline from July and rising support from February – see chart below. Broadly speaking, XAU/USD remains unchanged form levels seen in mid-2020. With each passing day, the yellow metal is running out of room to consolidate between support and resistance. As such, the direction of the breakout could be key for the coming trend. Below, watch the August low of 1884.89. Above, resistance seems to be the 23.6% Fibonacci retracement level of 1971.63. Gold daily chart Source: TradingView XAG/USD technical analysis Meanwhile, silver faces a similar setting. Like gold, XAG/USD is consolidating between rising support and resistance. The difference here is that there is still plenty of room left for sideways price action. As such, XAG/USD could be left directionless for a longer period of time than gold. Silver’s drop on Monday has brought it to the midpoint of the Fibonacci retracement level at 23.02. As such, it is also sitting just above rising support from the end of last year. A meaningful breakout likely entails a push under the 61.8% Fibonacci retracement level of 22.29. That exposes the 78.6% point at 21.24. Otherwise, a turn higher places the focus on the 38.2% level at 23.75. Just above that is the falling zone of resistance since May. Silver 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.

Hi @Sureforex Thanks for sharing a great post. All the best - MongiIG

Some indices in Asia saw a modest rebound, but the ASX200 and Nikkei continued to fall, following on from yet more heavy losses in the US. Stocks continue to take a battering from the realisation that the Fed would leave US rates at their current levels for a longer period than previously thought, leading to a reversal in equities and a resumption of the losses seen in the early part of September. Today's data is dominated by flash PMIs from around the globe, in the wake of a Bank of Japan statement that left policy unchanged and maintained its dovish outlook. While US futures have recovered slightly, European markets seem set for a choppy open.

Hi @Kiaramiles Welcome to the community! Looking forward to the posts you will share engaging and learning with other members. All the best - MongiIG

In case you missed it (ICYMI), here's our live coverage of the Bank of England rate decision and what it means for the markets. Angela Barnes | Financial presenter/producer, London | Publication date: Thursday 21 September 2023 15:21 (Video Transcript) Trading the BoE announcement AB: Hello and welcome to this special IG coverage of the Bank of England (BoE) rate decision, which is in just five minutes' time. This is IGTV, here to help you trade the BoE announcement and the markets following the release. Warren Venketas, the senior market analyst at DailyFX is joining us to talk us through the charts, to look at the pound, look at the FTSE in the markets, to see how the markets are reacting. Hopefully we'll get that in before the announcement as well, but certainly post. But, firstly, what are economists expecting today in five minutes' time? Before yesterday's inflation data, all but one of 65 economists polled by Reuters predicted Andrew Baillie would raise rates by 25 basis points to 5.5%. Now the BoE could either raise interest rates for the 15th consecutive time today or it could keep rates on hold for the first time in two years. A hike is still on the cards, but as soon as consumer price index (CPI) inflation data about yesterday, investors piled into bets on the BoE actually keeping rates steady. CPI in Britain fell unexpectedly to 6.7% in August and core inflation also decreased to 6.2% would be good, wouldn't it, after staying untapped and then changed at 6.9% in July. Britain's inflation among Europe's highest The slowdown was driven by a drop in volatile hotel prices and airfares and by food prices rising less than a year ago, according to the ONS, and that was offset by a jump in fuel prices and an increase in attacks on alcoholic drinks. Although Britain's inflation has fallen from a peak above 11% last October, it still remains among the highest in Western Europe, only topped by Austria and Iceland in August. Well, Warren, our analyst, let's go over to you. So the BoE's policymakers will have been digesting the inflation data from yesterday. Those numbers likely to have pleased them, of course, but they met yesterday, so the decision they know, of course, but we're going to be finding out shortly. Do you think we should be expecting any surprises today? WV: Hi, Angela, and thanks for having me today. Yes, as you mentioned, CPI really threw a spanner in the works yesterday, shifting money market expectations from roughly 75% probability of a 25 base point hike to now 50-50, so basically a coin toss in terms of money market pricing there. But we need to remember, as you alluded to: the UK has one of the highest inflationary backdrops in the developed world. We have crude oil prices on the up, so that could then have a lagging effect on the UK economy. We also saw from that CPI print, producer price index (PPI) figures, particularly those PPI input and output figures, which are generally considered as a leading indicator whereby higher producer prices often transfer through to the consumer at a later stage. Was dovish repricing an over-reaction? So all these factors need to be taken into consideration, and I think the BoE could likely remain with that 25 basis point decision. One data point we must remember doesn't make the trend. We've seen this previously when UK inflation did soften, after which we saw an uptick in inflationary pressures. I do think the market has slightly, or possibly slightly, overreacted to the CPI news in terms of the dovish repricing there, and we've also had very mixed messaging from Bank of England officials. If we look at the voter split from the previous meeting, we saw seven members in favour of a rate hike versus two in favour of a pause, and I think that will obviously be more divided going into this particular rate announcement. Sterling sold off after hawkish US approach I just wanted to touch on a bit of the pound price action. I do have the daily cable chart on screen. We can see the pound being sold off quite drastically, particularly after that Fed rate pause, which included a very hawkish message of higher for longer. I think we could see a bit of that in the BoE messaging as well today. Now slipping through that May 2023 swing low around the 1.23 psychological level. If we do see a rate pause, I think that could definitely break down further towards 1.22. Quickly shifting over to FTSE, the FTSE's finding resistance at the 7700 level. We've seen a bit of consolidation over the last few daily candles. A lot of long wicks towards the upside alongside an overbought signal on the relative strength index (RSI). If we take technicals into consideration, we could be looking for a rate hike, which will bring the FTSE down lower, possibly chasing that 200-day moving average. AB: Okay. Warren. Interestingly, I'm waiting for those figures to drop, and I'm going to bring them to you. We'll go back to the market as soon as I get them to you any second now. Sometimes bear with the system. It can take, as we know, with breaking news, a few seconds to actually update. OPEC's action constrains global oil supplies In the meantime, Warren, oil prices, you touched on there. We've seen oil prices, both Brent and WTI rally in recent days, although they were both trading a little lower today in the red, easing a little. Of course, that will be adding to inflation concerns to oil prices, won't it? WV: For sure. For sure. Oil supply from the Organization of the Petroleum Exporting Countries (OPEC), they've mentioned that they want to maintain tight supply throughout 2023, and that's really constrained oil supplies globally. We've seen stocks definitely decline throughout. In the US as well, the rig count has been on the decline, and that's obviously impacted oil supply from the US perspective. Overall, that's contributing to global inflationary pressures. If you look at the headline reads, on many developed nations, not just the UK, we can see headlines. AB: Warren, I'm just going to stop you there. We will come back to oil prices, interestingly, but we have just got the rate decision in now. The BoE has voted to leave UK interest rate on hold at 5.25%. This is the first time since November 2021 that UK borrowing costs have stayed on hold. So, the Bank's Monetary Policy Committee voted to leave borrowing costs on hold after yesterday's surprise fall in inflation figures. So, Warren, what can you make of that? BoE's drastic change Very drastic change from the BOE's perspective. I do think the Fed had a lot to do with their decision-making, considering the Fed did decide to pause their rate cycle yesterday, factors to consider. I think the BoE officials definitely took into account insipid growth in the UK, which we saw recently. ... AB: Okay, I'm sorry, I think we have just lost Warren there, so we'll try and get him back as soon as possible. So, just to reiterate then, so the BoE has voted to leave UK interest rates on hold at 5.25%. And this is the first time since November 2021 that UK borrowing costs have stayed on hold. And the Bank's Monetary Policy Committee voted to leave borrowing costs unchanged after yesterday's surprise fall in inflation. So, interesting, because, of course, we were expecting the BoE interest rate was forecast to be 5.5%, but it's come in at 5.25%. So, when we do get Warren back, we will be going through the chart action with the pound and with the FTSE, and hopefully we'll be able to get him back shortly on that. But let's see if we have any reaction, because, of course, this comes off the back as well of Catherine Mann, a member of the Monetary Policy Committee, making some remarks last week, much more bullish ones, than the Bank of England Governor Andrew Bailey on rates. And he said, of course, as well recently, that the hiking cycle that was near the top of this rate hiking cycle, but, of course, inflation is still high. But those inflation figures yesterday, obviously digested by the Monetary Policy Committee for them to come to this decision. So, let's see if we have any more reaction from the city to this decision yet. Well, interestingly, well, experts said that leaving rates on hold, some experts are saying that it could be declaring victory too soon. For example, JP Morgan Asset Management, Kim Crawford, from there has reacted in saying that this decision could backfire, that the BoE's decision is more finely balanced as actively data weakens more clearly. But a pause at this meeting could backfire. She said, since the last meeting, there is inflation. It's coming lower than the BoE's forecast. And there has been clearly a demand-led loosening in the labour market. But wage growth does still continue to surprise to the upside. Well, last night, the US Federal Reserve delivered a hawkish pause by maintaining US interest rates on hold, but keeping the door open for future hikes. So, that has helped push the US dollar to a five-month high against the pound overnight as well. And we will be going back to the pound shortly when we have Warren back on the line soon, hopefully. And otherwise, the BoE now, central bankers also decide to pause rates following suits. So, it's been a very interesting day and not what the markets were expecting. So, let's see now if we can go back to Warren for us to go through the markets. Warren, are you there? OK, I'm afraid. OK, I'm afraid we are having technical issues and we can't get hold of Warren to go through market reaction at the moment. But, of course, we will make sure that we do put something online for you with Warren. So, let's see if we can take a closer look at the sterling to see how it has reacted and also to look at the markets more broadly to see what's happening in the markets after this reaction. Well, thank you very much for watching and good evening from Beat the Street with Angeline Ong this afternoon for the Wall Street Pre-Market Open. Thank you. 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 ECB’s hike to 4.0%, Fed’s hawkish pause and BoE’s dovish stance put pressure on stocks except the FTSE 100. Source: Bloomberg Forex Indices Shares European Central Bank Federal Reserve Inflation Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 21 September 2023 14:48 Macro picture now that ECB, Fed and BoE have announced their monetary policies Last week the European central Bank (ECB) hiked its deposit facility for a tenth consecutive time to 4.00%, to the highest level since the euro was introduced. The central bank did, however, indicate that a peak might now have been reached in its hiking cycle but that a cut in its rates is not expected until at least July of next year. EUR/USD slid to its late May low and this week even briefly to a six-month low around the $1.0600 mark while the DAX 40 and Euro Stoxx 50 indices are on track for a negative week. Following the US Federal Reserve’s (Fed) hawkish pause in which it did not hike its rates but left the door open for one more rate hike, the US dollar benefitted and is on track for its tenth straight week of gains as US yields hit multi-year highs. Such a hike would be the twelfth in a row, to between 5.50% to 5.75% for the fed funds rate with rates now not expected to be cut before the end of the summer of 2024. The Bank of England (BoE) earlier today surprised some market participants by keeping its rates on hold at 5.25%. It was a close vote, though, with five monetary policy committee members wanting to keep rates steady but four opting for a hike. Their decision was probably influenced by softer-than-expected August inflation in the UK with especially the core consumer price index (CPI), excluding volatile energy and food costs, coming in at 6.2% versus 6.9% in July. Since the UK central bank used the word 'sufficiently restrictive' in its statement it looks like they stand by their first quarter (Q1) stance of inflation heading lower fast and thus no more rate hikes might be on the horizon. The British pound continues to slide and trades in six-month lows but the FTSE 100 is buoyed by the announcement. FTSE 100 technical forecast Last week the FTSE 100 rose by over 2% - one of its strongest weeks this year - and did so as a rapidly rising oil price and rallying mining stocks boosted the blue-chip index. It seems to be the only European stock index which might be on track for its second weekly gain in a row as it is trying to overcome its 2023 downtrend line, July peak and 23.6% Fibonacci retracement of its October 2022 to February 2023 rally. FTSE 100 weekly candlestick chart Source: TradingView A weekly chart close this Friday above the July peak and 23.6% Fibonacci retracement at 7,223.20 to 7,228.50 could extend all the way to the February and April highs at 7,938.3 to 8,044.4. If the current key resistance zone were to cap, a slide back towards the 38.2% Fibonacci retracement and the 55-day simple moving average (SMA) at 7,533.70 may ensue. As long as the 61.8% Fibonacci retracement at 7,218.7 holds, though, as it did in March, July and August of this year, the FTSE 100 remains in a long-term sideways trading range. DAX 40 technical forecast The DAX index is heading down towards its 15,468.65 to 15,419.25 major support zone. It consists of the July and August lows as well as the 23.6% Fibonacci retracement of the September 2022 to July 2023 advance. DAX 40 weekly candlestick chart Source: TradingView Since from a seasonal point of view the last couple of weeks of September and October often incur a rise in volatility and falling stock prices, it is possible that the above-mentioned significant support area might be fallen through. A fundamental reason for this may be the worry that rates will stay higher for longer and that recurring inflationary pressures due to the high oil price may lead to a slowdown in growth, not just in Germany - which is already in a recession - but the Eurozone as well. If so, the area between the 55-day SMA, May-to-December 2021 lows could be reached, together with the 38.2% Fibonacci retracement at 14,982.68 to 14,739.62. As long as the March low at 14,458.39 underpins, the longer-term uptrend would nonetheless remain intact. Euro Stoxx 50 technical outlook The story for the Euro Stoxx 50 index is quite similar to that of the DAX 40 in that it has been trading in a sideways range since April of this year and stays close to its June-to-September key support zone at 4,210.69 to 4,175.37. Euro Stoxx 50 weekly candlestick chart Source: TradingView Were this support area to give way, the 55-day SMA at 4,090.94 might be revisited and perhaps also the November-to-January lows at 4,046.69 to 4,027.43. As long as the next lower March low at 3,980.94 holds, however, the long-term uptrend remains valid. 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 much IPO fanfare, ARM, Klaviyo, and Instacart’s shares took a wobble, prompting concerns that the IPO revival could fizzle out. IGTV financial analyst @AngelineOng gives us a recap of the IPO mood music so far. Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Thursday 21 September 2023 15:13 (Video summary) Instacart and Klaviyo: disappointments and doubts in the IPO market This video explores the recent performance of the IPO market, the place where companies first sell their shares to the public. It mentions some big names like Instacart and Klaviyo, which have recently gone public, meaning they now have shares that anyone can buy. This has made people hopeful that the IPO market is making a comeback after being slow for the past two years. ADR performance However, IGTV presenter, Angeline Ong, discusses how the performance of Instacart and Klaviyo has actually been disappointing, which has made some people skeptical about the market's strength. She also talks about American Depositary Receipts (ADR), which are shares of foreign companies that are made available for trading in the US. She suggests that if we want to understand how Klaviyo is doing, we should check the ADR for Klaviyo on an hourly basis. Apparently, it hasn't been doing so well recently and its shares have fallen quite a bit since Wednesday. This is not good news for the IPO market, as it adds to concerns about its strength. Despite some disappointments, Angeline mentions that the IPO market has managed to grab the attention of investors again, especially because of high-profile companies like Instacart and Klaviyo. These companies going public has made people more interested in the IPO market, which had been quiet for a while. However, there are still challenges ahead. The video points out that offering new stocks might be difficult because interest rates are going up and could stay high for a while. Additionally, the US stock market has been unstable recently, which makes people worried about IPOs. To sum it up, the IPO market has the potential for a comeback with the entry of big companies like Instacart and Klaviyo. However, the disappointing performance of some listings raises doubts about how strong the market really is. Challenges like higher interest rates and market volatility add even more uncertainty to the future of IPOs. 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.

Dow, Nasdaq 100 and Nikkei 225 all fall back after hawkish Fed decision The Fed’s ‘hawkish pause’ has sent markets into a tailspin, with stocks falling as investors contemplate the prospect of a much longer period of higher interest rates in the US. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 21 September 2023 11:43 Dow slumps following Fed decision The index saw a substantial reversal yesterday, and has moved back towards the lows of last week. The 100-day SMA could now provide some support, but below this the 34,000 level and the 200-day SMA could also see some buying emerge. A revival above 35,000 would be needed to secure a more bullish short-term view. Source:ProRealTime Nasdaq 100 gives back more gains Losses continue here, with yesterday’s drop further eating into the gains made from the August lows. The price is currently sitting on the 100-day SMA, and a close below this opens the way in short order to 14,690. Below this the August low at 14,500 comes into view. From here, the next major level to watch would be the August 2022 high at 13,722. A rally above 15,300 would be needed to suggest that the buyers have succeeded in reasserting control. Source:ProRealTime Nikkei 225 sees further losses The drift lower of earlier in the week has turned into a more dramatic move lower. This has put the sellers back in control. Below the 50- and 100-day SMAs, the price then moves on to target 32,076, and then to the August low at 31,295. Buyers will want to see a move back above 33,000 to suggest that the selling has been halted for the time being. Source:ProRealTime

Brent crude oil, gold and natural gas prices drop post hawkish Fed pause Outlook on Brent crude oil, gold and natural following Fed’s hawkish pause. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 21 September 2023 11:27 Brent crude oil comes off its ten-month high The price of Brent crude oil continues to come off Tuesday’s ten-month high at $94.97 while the US dollar once more appreciates, exerting a slight downward pressure on the oil price, and as the Fed delivered a hawkish pause. Support can be spotted around the $90.97 early September high ahead of the psychological $90.00 mark. Resistance lurks around Tuesday’s $93.32 low. Further up lies this week’s ten-month high at $94.97 and the mid-September 2022 high at $95.19. Source: ProRealTime Gold comes off yesterday’s $1,947 high Gold rallied back towards its $1,953 per troy ounce early September high but only managed to reach $1,947 before it came off again as the greenback continued to appreciate following hawkish comments at the Federal Open Market Committee (FOMC). The 200-day simple moving average (SMA) at $1,925 is currently being probed as support, below which the 6 September low at $1,915 may also act as minor support. Minor resistance above the 55-day simple moving average (SMA) at $1,932 sits at Tuesday’s $1,937 high. Source: ProRealTime Natural gas comes off this week’s six-week high Natural gas prices recently shot back up to the $3.000 mark on weather and production concerns but are currently slipping back from this week’s high at $3.021. A slip through Wednesday’s $2.857 low would put Monday’s low and the 200-day simple moving average (SMA) at $2.800 to $2.791 on the map. Immediate resistance is seen at the early September high at $2.904 ahead of last and this week’s highs at $2.973 to $3.021. Slightly further up sits the August peak at $3.050. Source: ProRealTime

The US dollar rose after the US Federal Reserve kept its interest rates in the current 5.25%-5.50% range on Wednesday night and chair, Jerome Powell, delivered his firm hawkish stance - higher for longer. Angela Barnes | Financial presenter/producer, London | Publication date: Thursday 21 September 2023 09:55 Updated quarterly projections show the central bank may still lift rates one more time this year to a peak 5.50%-5.75% range. Policymakers now see the fight against inflation lasting into 2026. IGTV’s Angela Barnes has more. The Federal Reserve The Federal Reserve announced that they would be keeping interest rates in the U.S. unchanged at a range of 5.25 to 5.50 percent. This decision had a big impact on the value of the U.S. dollar. One interesting thing to note is that Jerome Powell, who heads the Federal Reserve, took a firm stance on raising rates, which caused the value of the dollar to go up. The Federal Reserve also released their updated projections, which suggest that there may be one more rate hike this year, bringing the rate to a range of 5.50 to 5.75 percent. U.S. inflation They also predict a half percentage rate cut in 2020-24, which is different from their previous expectation of a one percent cut next year. The Fed officials believe that they can continue to fight inflation until 2026 without causing any harm to the economy. As a result of these announcements, bond yields, which are the returns on bonds, increased. The two-year Treasury note even reached a level not seen in 17 years. This caused a decline in the equity markets, as investors moved their money into bonds. The U.S. dollar At the same time, the USD became stronger and reached a six-month high. This had an impact on the dollar-yen exchange rate, which reached its highest level in 2023. Overall, these developments indicate that the U.S. dollar is doing well and is expected to continue to strengthen. This is important for traders to keep an eye on, as it can impact the value of other currencies and international trade. It will be interesting to see how the markets react in the coming days. 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 Fed hit the pause button, holding interest rates at a 22-year high; policymakers upgraded their GDP outlook and reduced the core PCE projection for the year, while gold and the US dollar went in different directions. Source: Bloomberg Forex Federal Reserve Inflation Interest Interest rates Interest rate Diego Colman | Market Analyst, New York | Publication date: Thursday 21 September 2023 06:11 Fed delivers to market predictions The Federal Reverse (Fed) today concluded its highly anticipated September meeting, unanimously voting to keep its benchmark interest rate at a 22-year high within the range of 5.25% to 5.50%, in line with Wall Street expectations and market prices. The move to uphold the present position reflects a commitment to a data-driven approach, with a focus on assessing the impact of past actions on the broader economy. In alignment with this perspective, Chair Powell has unequivocally stated recently that the central bank’s policy stance “will depend on the economic outlook as informed by the totality of the incoming data”. To provide some context, the Fed has raised borrowing costs 11 times since 2022, delivering 525 basis points of cumulative tightening to contain elevated price pressures. This strategy seems to be yielding results, albeit at a gradual pace. At its peak last year, annual inflation exceeded 9.0%, but has since slowed 3.7%, a welcome improvement, but still too high relative to the 2.0% target to declare victory. August headline and core US inflation chart Source: BLS FOMC policy statement In its communiqué, the Fed struck a positive tone on growth, noting that economic activity has been expanding at a solid pace, a subtle upgrade from the previous "moderate" characterisation. The optimism was bolstered by comments on the labour market, which underscored that job gains have slowed but remained strong. Regarding consumer prices, the statement noted that inflation remains elevated and that policymakers will be “highly attentive” towards the associated risks, mirroring comments from two months ago. Shifting the spotlight to forward guidance, the language remained the same, with the Fed noting that it would consider various factors “in determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time”. Keeping this guidance unchanged might be a strategic move to preserve maximum flexibility should additional actions become necessary in the future. Summary of economic projections GDP, unemployment rate and core PCE The September Summary of Economic Projections revealed significant revisions compared to the estimates provided in the previous quarter. First off, gross domestic product (GDP) for 2023 was upgraded to 2.1% from 1.0% previously to reflect the economy's enduring resilience and continued robustness. Looking ahead to 2024, the GDP outlook revised upwards, from 1.5% to 1.1%, thereby alleviating any concerns about an imminent recession. Directing our focus to the labor market, policymakers foresee an unemployment rate of 3.8% in 2023, down from 4.1% in June. With regard to inflation, the core PCE forecast for 2023 was marked down modestly, dropping to 3.7% from the previous 3.9%. Meanwhile, the projection for 2024 held steady at 2.6% Fed dot plot The dot plot, which illustrates the anticipated trajectory of borrowing costs across multiple years as envisioned by Fed officials, remained somewhat consistent with the version presented in June. That said, the median interest rate projection for 2023 stayed unchanged at 5.6%, implying 25 basis points of additional tightening this year. For 2024, the US central bank sees interest rates inching down to 5.1%, marking a shift from the 4.6% projection in the previous dot plot. This signals a reduced level of easing in the forecast, suggesting that interest rates are expected to persist at elevated levels for a longer period. Federal Reserve's updated macroeconomic projections chart Source: Federal Reserve Hawkish approach good for the dollar In the immediate kneejerk reaction, gold prices erased some of its session gains, as US Treasury yields and the US dollar drifted upwards. Overall, the Fed's hawkish monetary policy outlook should be positive for the greenback and rates in the near term, creating a challenging backdrop for precious metals. In any case, Powell’s press conference may offer more insight into the central bank’s future steps. Dollar, yields and gold prices 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.