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The Week Ahead Read about upcoming market-moving events and plan your trading week Week commencing 4 September Chris Beauchamp's insight US Labor Day ensures a quieter start to the week, but rate decisions from the Australian and Canadian central banks and the US ISM services purchasing managers index (PMI) will be worth watching later on. UK corporate news dominates, including earnings from Ashtead and Barratt Developments. Economic reports Weekly view Monday Labor Day – US markets closed 7am – German trade balance (July): surplus to rise to €19.1 billion. Markets to watch: EUR crosses Tuesday 2.45am – China Caixin services PMI (August): expected to fall to 54 from 54.1. Markets to watch: CNH crosses 5.30am – RBA rate decision: rates expected to remain at 4.1%. Markets to watch: AUD crosses 3pm – US factory orders (July): orders to rise 0.1% MoM. Markets to watch: USD crosses Wednesday 2.30am – Australia GDP (Q2): growth to be 0.2% QoQ and 1.5% YoY. Markets to watch: AUD crosses 9.30am – UK construction PMI (August): expected to fall to 51.2 from 51.7. Markets to watch: GBP crosses 1.30pm – US trade balance (July): deficit to increase to $68 billion. Markets to watch: USD crosses 3pm – US ISM services PMI (August): forecast to fall to 52.4 from 52.7. Markets to watch: USD crosses 3pm – Bank of Canada rate decision: rates expected to hold at 5%. Markets to watch: CAD crosses Thursday 4am – China trade balance (August): exports to fall 10%, a an improvement on July’s 14.5% drop. Markets to watch: China indices, CNH crosses 1.30pm – US initial jobless claims (w/e 2 September): claims to fall to 239,000. Markets to watch: USD crosses 3pm – Canada Ivey PMI (August): previous reading 48.6. Markets to watch: CAD crosses 4pm – EIA crude oil inventories (w/e 1 September): stockpiles fell by 10.6 million barrels in the previous week. Markets to watch: Brent, WTI Friday 1.30pm – Canada employment data (August): unemployment rate to hold at 5.5%. Markets to watch: CAD crosses Company announcements Monday 4 September Tuesday 5 September Wednesday 6 September Thursday 7 September Friday 8 September Full-year earnings Darktrace, Restaurant Group, Barratt Developments, Dechra Pharmaceuticals Half/ Quarterly earnings Ashtead Vistry, Direct Line, Beazley Computacenter Trading update* DS Smith WHSmith, Halfords Dividends FTSE 100: DS Smith, Admiral, Prudential FTSE 250: Baltic Classifieds, Greggs, Serco, CLS Holdings, Derwent London, TBC Bank Group, Empiric Student Property, Harbour Energy, Assura Dividends are applied after the close of the previous day’s session for each market. So, for example, the FTSE 100 goes ex-dividend on a Thursday, but the adjustment is applied at the close of the previous day, e.g. Wednesday. The table below shows the days in which the adjustment is applied, not the ex-dividend days.

What are the best stocks to buy in September 2023? Source: B.oomberg Shares Dividend Share Dividend yield Stock Microsoft Piper Terrett | Financial writer, London Investors continue to face a number of challenges at the moment, both in the UK and abroad. UK inflation remains high, although it has fallen back slightly –6.8% in July compared with 7.9% in June. Analysts are still pencilling in another interest rate hike by the Bank of England in September. Meanwhile, concerns about rising interest rates also remain a major concern Stateside, hitting the US tech sector for six. The so-called ‘Magnificent Seven’ tech stocks, which include Meta, Apple and Alphabet, have lost millions off their combined market capitalisations in recent weeks as investors have taken flight – providing possible long-term buying opportunities for new investors. Bearing these considerations in mind, here are some of the stocks we think could be the best to buy in September 2023. They have been selected for their market capitalisation, past performance and future growth prospects. Only invest money you can afford to lose. Imperial Brands – attractive for its dividend yield Investing in tobacco companies is not for everyone. However, dividend seekers could do worse than buy shares in Imperial Brands, which is a strong cash generator. After an initial strong run earlier this year, the shares have dipped by 6% to 1771.5p, yet they yield a chunky 8% and trade on a price earnings ratio (PE) of just 10. The company is completing its £1 billion cash return to shareholders in the second half of the year. While the traditional tobacco market may be on the wane, the vaping market is opening up and the tobacco giant is busy trying to move its customers onto these next generation products. What’s more, although cigarette volumes have fallen this year, due to the winding down of Covid-related boosts – customers smoked more during lockdown - Imperial is continuing to see strong demand in its US, Spanish and Australian markets. Half-year operating profits increased by nearly 30% (28%) to £1.5 billion (from £1.2 billion in 2022), while sales rose slightly by 0.3% to £15.4 billion (£15.3 billion in 2022). At 1771.5p, the shares are trading some way off their three-year highs of 2185p last seen in July 2022, and are worth buying for the dividend yield and growth prospects. Analysts at broker Royal Bank of Canada think the shares could reach 2,200p. Source: Bloomberg Microsoft – a solid player in artificial intelligence and cloud Microsoft is enjoying plenty of buzz from the excitement in artificial intelligence and its new products are generating definitive orders, suggesting they are living up to at least some of the hype. Chairman and chief executive officer Satya Nadella recently told investors that its customers are not just asking how they can use their AI products but “how fast”. Its Cloud products are also performing well, with sales up 30% in the recent fourth quarter results. These were strong, with group sales up 8% to $56.2 billion, while operating profits rose 18% to $24.3 billion. Full-year net income fell slightly compared with last year’s figures, however, coming in at $72.4 billion ($72.7 billion in 2022). However, one downside is that Microsoft has had to resubmit its takeover of gaming firm Activision Blizzard to UK regulators. At $322, Microsoft shares are up 16% this year but off their recent 10 year highs of $351.47. The shares aren’t cheap, on a price earnings ratio of 32, but analysts at broker Tigress Financial think they could reach $433. Next – weathering the storm Next recently posted its August update, which showed that trading continues to be strong at the clothing and furnishings retailer. Full price sales rose 6.9% in the second quarter – ahead of previous guidance of an expected increase of 0.5%. In June the company released an unscheduled trading statement revealing that trading was much better than expected, due in part to the warmer weather. Since then, full price sales have been up 3.7% on last year, better than the company’s internal forecasts. As such, Next has increased its earnings guidance for the full year by £10 million to £845 million. This is still down 2.9% on last year’s figures but better than expected given the challenging macroeconomic environment. Like Marks & Spencer, Next appears to be weathering the cost of living crisis well. The shares are up 19% this year to 6,936p but still trade on a relatively affordable price earnings ratio of 12 and remain some way off their three-year highs of 8440p, seen in December 2021. They also offer a dividend yield of 3%. Analysts at broker Liberum think the shares could reach 7,500p. Phoenix Group – strong cash generator Phoenix Group has an impressive dividend yield of 10%, which should be an attractive prospect for income seekers. The life insurer, which operates savings and pensions businesses, is a strong cash generator and has a target in place to deliver cash of between £1.3 billion and £1.4 billion in 2023 and £4.1 billion between 2023 and 2025. Shares in the company are down 14% this year to 518p – as it continues to recover from the gilts crisis last autumn and the weak UK stock market. However, analysts at broker Barclays think they could reach 765p. Past performance is not a guide to future returns This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

A surprise rebound into expansion territory for China's manufacturing sector helped to buoy sentiment in Asia overnight, as investors prepared for today's US payroll figures. After softer data from both the US and China this week, hopes of a pause on rates from the former and increased stimulus in the latter have helped risk assets to make gains in recent sessions. All eyes now turn to the payrolls, wage figures and unemployment rate to see if the softness indicated by job openings and the ADP report this week is borne out in the official US government statistics for employment.

DAX, S&P 500 and CAC40 see further strength in early trading Indices have seen further gains this morning, building on the recovery seen over the past week. Source:Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 31 August 2023 DAX sees further strength After rallying to the 50-day SMA earlier in the week, the index fell back yesterday as the euro strengthened and expectations of a fresh ECB rate hike September rose. The bounce from last week’s lows and the 15,500 level now needs to push back above 16,000 in order to open the way to further upside. An initial target would be the late July highs at 16,500. Beyond this, the index would be in new record high territory. A reversal back below 15,700 could suggest that sellers will be able to engineer a retest of 15,500, or even the 200-day SMA. Source: ProRealTime S&P 500 in rally mode into month-end While Wednesday failed to match the solid gains of Tuesday, the additional upside did help to solidify the bullish move, with a higher low having been created over the past two weeks. Having seen the price close back above the 50-day SMA, the next target becomes the highs of July around 4600. The bullish view has been supported by the MACD crossover this week, the first since early July, a sign that momentum has shifted back to the buyers for the time being. The buyers remain in control for now, and it would take a move back below 4400 to suggest that the recent low may be tested once more. Source: ProRealTime CAC40 edges up After hitting a new record high in April the index has seen a more muted performance. However, repeated dips to 7100 found buyers, helping to stem any looming bearish ivew. The latest bounce from mid-August has seen the index rally from below the 200-day SMA, and then move on back above the 50- and 100-day SMAs. Further upside from here would see the index push into the 7500 area that stifled progress in late July and early August. Above this, the highs of April at 7587 come into view. A close back below 7300 would weaken the bullish case, and suggest another test of the 200-day SMA is likely, along with the 7100 support zone. Source: ProRealTime

Brent crude oil, silver and natural gas prices probe resistance Outlook on Brent crude oil, silver and natural gas ahead of US PCE inflation and unemployment data. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 31 August 2023 Brent crude oil stalls at minor resistance Brent crude oil’s recovery off last week’s $81.68 low has encountered resistance around last week’s high at $85.54, a daily chart close above which is needed for the August peak at $87.38 to be back in the pipeline. Minor support can be found between the 8 August and this week’s lows at $83.30 to $83.20 with further support seen along the June-to-August support line at $82.86. Upside momentum should remain in play while the $82.31 early August low underpins. If not, last week’s low at $81.68 would likely give way with the 200-day simple moving average (SMA) at $80.80 being eyed in this scenario. Source: ProRealTime Silver rally runs into resistance Silver’s rally off its seven-week low at $22.23, made marginally above its $22.12 June low, has been followed by an over 11% rally to Wednesday’s high at $25.01 before it paused. If overcome, the July peak at $25.26 would next in line. Minor support is seen at last week’s highs at $24.38 to $24.36. While the next lower daily reaction Friday low at $23.92 underpins, the short-term uptrend remains intact. Natural gas prices surge once more Natural gas prices once again surged higher, to Wednesday’s high at $2.83 MMBtu, as Chevron workers at two of Australia’s largest liquified natural gas (LNG) production facilities plan to strike on 7 September which puts 10% global LNG supply at risk. Potential upside targets for front month natural gas futures are the 15 August high at $2.919 and the June peak at $2.930 ahead of the current August high at $3.050. Technically these price targets will remain in play while Tuesday’s low at $2.633 holds on a daily chart closing basis. Minor support above this level can be seen around the 21 August high at $2.765 and also along the 55-day simple moving average (SMA) at $2.688. Source: ProRealTime

After a difficult month of August for stocks will the remainder of the year turn out to be more positive? Source: Bloomberg Indices Shares Stock market index Stock United States S&P 500 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 31 August 2023 Why the August correction in equity indices is probably over? This week’s break through the August downtrend lines and daily chart close above last week’s highs point to an end of the August correction, according to chart analysis. The fact that equity indices kept rising over the past few days despite disappointing Chinese data and a cooling of the US labour market while inflation remained high in Europe seems to indicate that investors buy stocks regardless, now that they have returned from their vacations. Friday’s Non-Farm Payrolls (NFP), global central banks’ monetary policy and the China’s economy may, of course, still throw a spanner in the works but these events may happen further down the line. Will a red August for stocks be followed by a green September? Most global stock indices had a summer correction in August amid relatively low volume as investors went on holiday. This is nothing unusual but the question on investors’ minds is whether the August correction will turn into something more nasty and whether it could last until October as was the case last year when the S&P 500 slipped by over 18% in autumn. The difference with last year is that we were in a bear market then and that this year we have seen strong gains across the board in a clear bull market. It is true that historically speaking “stocks do not like September” as this chart by Yahoo Finance shows. However, it is only an average since 1960 and within that average were times when September turned out to be a positive month. S&P 500 performance by month between September and December from 1960 to 2022 Source: Yahoo Finance The fact that all four major US stock indices, that is to say the Dow, Russell 2000, S&P 500 and Nasdaq 100, alongside most European counterparts, have risen above last week’s highs and in doing so broke through their August downtrend lines, is a technically speaking positive sign. S&P 500 Daily Chart Source: Tradingview It means that, provided the August lows underpin these stock indices, a retest of the July or August highs may well ensue over the coming weeks. For the S&P 500 the technical level which needs to hold is the mid-August low at 4,335.31 with the July peak coming in at 4,607.07, around 2% higher than current levels. Weak US growth data spurs equity investors on The downwardly revised US Q2 gross domestic product (GDP) growth and softer-than-expected employment data out this week has been interpreted by investors as giving the Federal Reserve (Fed) the opportunity to keep its interest rates on hold. Bad data has in effect been turned into a good story for stocks. According to the FedWatch probabilities tool 88% expect to see no rate hike in September with the first rate cut expected to be seen by 36% in May 2024. FedWatch Tool: Probabilities Source: CME FedWatch Tool Sticky Eurozone inflation hardly dampens the mood but… Sticky Eurozone inflation at 5.3% year-on-year for the month of August, for both core and headline inflation, doesn’t seem to have done much damage to European equity indices on Thursday morning as most of these remain in the green at the time of writing. DAX 40 Daily Chart Source: Tradingview The German DAX 40 index, like several of its European counterparts, has been trading in a wide sideways trading range since April. Even though it is also expected to have formed a bottom at its 15,468.65 mid-August five-month low and to re-integrate the upper boundaries of its large sideways trading range, it is unlikely to rise above its July peak at 16,528.97 in September. For that to happen, a swift ascent like that seen from the July trough would need to occur, something which is unlikely to happen given seasonality. Historically equity markets are often volatile during the months of September and October but very rarely take out previous monthly highs. This is not to say that the Dax 40 and other European stock indices cannot rise further still but that such an advance is unlikely to be a dramatic one. Spanner in the works The moment investors start to believe that the no longer expected recession in the US could again rear its head - given the cooling of US growth and its labour market - the above-mentioned bullish outlook could rapidly unravel. Such a scenario looks to be more likely sometime next year, though, if at all, once rates have peaked in the US and the effect of rapidly raised interest rates on the US economy may be felt more strongly.

AUD rose after China manufacturing activity beat expectations and AUD/USD is attempting to break above key resistance. Source: Bloomberg AUD/USD Australian dollar Forex Shares China United States dollar Manish Jaradi | IG Analyst, Singapore | Publication date: Thursday 31 August 2023 AUD gains against USD The Australian dollar rose briefly against the US dollar on tentative signs that China's manufacturing activity could be reviving. China NBS manufacturing PMI rose slightly to 49.7 in August vs. 49.4 expected, and 49.3 in July. NBS non-manufacturing PMI slowed to 51.0 vs. 51.1 expected and 51.5 in July. While the manufacturing sector is still in contraction territory, the improvement provides comfort that the recent stimulus measures are spilling over the economy.  Thursday’s data is in line with the recent less-worse-than-expected China macro data, but still  broadly underwhelming, as the Economic Surprise Index shows. The China Economic Surprise Index has rebounded slightly recently, but it is not too far from mid-2020 lows (Covid levels) which has prompted analysts to downgrade growth estimates for the current year. China is Australia’s largest export destination and changes in the world’s second-largest economy tend to have implications for the Australian economy. China adopts targeted stimulus approach Chinese policymakers have responded with a spate of targeted stimulus measures in recent months in an attempt to revive the faltering post-Covid recovery and a struggling property sector. However, with a massive stimulus seemingly off the table (given the associated risks of creating imbalances within the economy), broader risk sentiment is likely to drive AUD in the interim.  AUD/USD 5-minute chart Source: TradingView Rate hikes unecessary now Risk appetite has been contained for now as recent soft data doesn’t suggest a resurgence in US economic growth, capping US yields and weighing on the US dollar globally. The stabilisation in risk sentiment has overshadowed the moderation in Australian inflation, lessening the need for further rate hikes by the Reserve Bank of Australia. AUD/USD weekly chart Source: TradingView AUD/USD technical analysis On technical charts, AUD/USD is attempting to break above a vital ceiling at last week’s high of around 0.6500. A decisive break above could pave the way toward the 200-period moving average on the 240-minute charts (now at about 0.6600).  Bearish pressure on AUD/USD has eased recently – a possibility highlighted in the previous update. AUD/USD 240-minute chart Source: TradingView This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. 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 prices extend gains from last week, while more retail traders are becoming bearish and investors look to the possibility of WTI clearing resistance. Source: Bloomberg WTI Commodities Shares Forex Market sentiment Petroleum Daniel Dubrovsky | Currency Analyst, DailyFX, San Francisco | Publication date: Thursday 31 August 2023 Crude continues its winning streak Crude oil prices extended higher over the past 24 hours, continuing a near-term winning streak since last week. In response, retail traders have been cautiously increasing downside exposure. This can be seen by taking a look at IG Client Sentiment (IGCS), which can at times function as a contrarian indicator. With that in mind, could WTI continue rising from here? Crude oil sentiment outlook: bullish According to IGCS, about 50% of retail traders are net-long crude oil. With the overall balance of exposure almost perfectly split between upside and downside bets, the near-term changes in positioning could offer a better outlook of how sentiment could inspire price action. In this regard, upside exposure has increased by almost +3% compared to yesterday and +6% versus last week. With that in mind, recent changes in positioning hint that the price trend may soon reverse higher. IG client sentiment: crude oil Source: DailyFX Market analysis: WTI crude On the daily chart below, WTI has climbed to the 81.56 resistance zone established earlier in August. Clearing this point, as positioning is hinting at, could open the door to revisiting the August peak of 84.84. That would also undermine the breakout under the rising trendline from late June. Meanwhile, a bullish Golden Cross remains in play between the 50- and 100-day moving averages. This has been offering an upside technical bias. In the event of extended losses, keep a close eye on the 38.2% Fibonacci retracement level of 77.96. Clearing this line would place the focus on the moving averages, which may reinstate the upside technical bias. Crude oil daily chart Source: TradingView This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

The euro bounced off a Fibonacci technical level against the US dollar this week, while the EUR/JPY has been charging north with the yen depreciation well under way and euro-wide CPI later today might signal ECB action. Source: Bloomberg Euro United States dollar Forex Japanese yen Consumer price index European Central Bank Daniel McCarthy | Strategist, | Publication date: Thursday 31 August 2023 EUR/USD macro view The euro continues to gain ground going into the Thursday session after three days of rallying off the two-month low seen last Friday against the US dollar. Against the Japanese yen, the euro traded at its highest level since 2008 overnight and the acute disparity in monetary policy appears to be playing out as the USD/JPY made a 10-month high on Tuesday with no sign of the Bank of Japan in currency markets at this stage. ECB rates to remain high At the recent Jackson Hole economic symposium, European Central Bank (ECB) President Christine Lagarde raised her concerns about inflation but was less prescriptive about the rate path. Nonetheless, she made it clear that rates will stay high for as long it takes to get inflation down. Later today the market will get the latest euro-wide consumer price index (CPI) read with a Bloomberg survey of economists estimating the headline number to be 5.1% year-on-year against 5.3% prior. The core CPI forecast is looking at 5.3%, below the 5.5% previously. Yesterday saw Spanish and German CPI come in a touch higher than anticipated and a notable miss in expectations may lead to volatility in the euro. EUR/USD technical analysis The EUR/USD broke above a descending trend line overnight on the back of three days of solid gains so far this week. In so doing, it cleared 21- and 200-day simple moving averages (SMA) and a series of breakpoints. These indicators might now provide support with the 21-day SMA at 1.0904, the breakpoints in the 1.0830 – 1.0835 area and the 200-day SMA currently at 1.0814. Support could also be near the 78.6% Fibonacci Retracement level at 1.0770. This level held last week and saw a bounce after it was tested. If it were to rally, nearby resistance could be at the 55-day SMA near 1.0970. Potential resistance might also be offered in the 1.1065 – 1.1095 area where several historical breakpoints reside along with a recent high and just ahead of the psychological level at 1.1100. Further up, resistance could be at the breakpoint from the March 2022 high at 1.1185 or the recent peak at 1.1275, which coincides with two historical breakpoints. Above those levels, resistance might be at the Fibonacci Extension of the move from 1.1095 to 1.0635 at 1.1380. Just above there are some more breakpoints in the 1.1385 – 95 area. EUR/USD daily chart Source: TradingView This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. 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.

Historically, September has been a relatively weaker month in the financial world. What are the key events and releases could potentially influence the global markets this September? Source: Bloomberg Inflation European Central Bank Bank of Japan China Central bank Federal Reserve Hebe Chen | Market Analyst, Australia | Publication date: Wednesday 30 August 2023 As August comes to a close, the financial world gears up for the final month of the third quarter. Historically, September has been a relatively weaker month in the financial world. Over the past two decades, the probability of seeing the market move higher by the end of the month has been only 60% for September, the second lowest out of the 12 months. So, what are the key events and releases that could potentially stir the global markets this September? Source: https://tradethatswing.com/seasonal-patterns-of-the-stock-market/ September 1st to 10th September 1st：US job report The US job report for August will raise the curtain for September’s economic updates, including the Non-Farm Payrolls and the unemployment rate. Over the past two months, Non-Farm Payrolls have declined to the lowest levels of the year, and it's expected that August's figure will be around 180,000, marking the smallest increase in over 12 months. However, despite recent signs of a cooling in the job market, the unemployment rate is still projected to remain historically low at 3.5%. This suggests that there is still some way to go before the US labor market reaches a more balanced level, alleviating the Federal Reserve's concerns about rising service inflation. September 5th：RBA meeting and Australia’s Q2 GDP The Reserve Bank of Australia (RBA) is scheduled to hold its interest rate meeting on the first Tuesday of September. This meeting will be the final one under the leadership of the current RBA Governor, Philip Lowe. In both the July and August meetings, the Australian central bank kept its interest rates unchanged, and the market anticipates that the RBA will likely keep the current rate of 4.1% on hold in the September meeting. At the same time, Australia’s GDP growth rate in the second quarter is anticipated to be a quarter-on-quarter increase of 0.2% and an annual rate of 1.5%. If these expectations materialize, it would signify the lowest level of economic growth in Australia since the fourth quarter of 2020. September 9th：China’s deflation China's Consumer Price Index officially dipped into deflation territory in July, and this trend is expected to persist as the August price index is projected to decline by 0.4% year-on-year. One of the most criticized factors contributing to China's lackluster economic recovery thus far is its insufficient domestic demand. The growing deflationary concerns are putting a serious damper on confidence in China's economic outlook. September 11th to 19th September 13/14th: US Inflation This gauge of consumer and producer price data will be the final set of inflation indicators before the Federal Reserve's interest rate decision in the September FOMC meeting. At the time of writing, expectations suggest that the US consumer prices will rise by 0.3% compared to the previous month, with a year-on-year increase of 3.4%, and the core inflation rate at 4.6%. Starting from July, due to base effects, the ongoing downtrend of the US’s primary inflation metric has come to an end, and it appears that the trajectory of inflation has reached an inflection point. Therefore, if this month's CPI figure exceeds expectations, it would not bode well for the Federal Reserve, signalling that inflation has entered a more sticky and challenging-to-control phase. Additionally, the Producer Price Index, which rebounded to its highest monthly increase since January 2023 last month, bakes more uncertainty into the future path of the inflation. September 13th: ECB interest rate meeting Currently, the market widely expects the European Central Bank to pause its rate hikes at the September meeting. In the August rate meeting, the European Central Bank raised rates by 25 basis points for the ninth consecutive time. Although inflation in the Eurozone has moderated somewhat, it still remains above the European Central Bank's 2% inflation target. At Jackson Hole, the ECB Governor reaffirmed her dedication to the 2% inflation target, signaling that the European Central Bank's rate hike journey is yet to reach its conclusion. As such, if ECB decides to pause in September, it will be more likely to be a hawkish pause. September 15th: China’s economic snapshot On this day, China is set to unveil a slew of economic data, including housing prices, industrial production, fixed asset investment, unemployment rates, and retail sales. At present, it is anticipated that China's housing prices will continue their downward trajectory, while the unemployment rate is expected to climb to its highest level since February of this year, reaching 5.4%. Over recent months, the majority of China's economic update have fallen short of market expectations. Concurrently, since the early days of this quarter, China has introduced a series of economic stimulus policies. Thus, these to-be-revelled economic indicators will play a pivotal role in assessing the effectiveness of these stimulus measures. September 20th to 30th This week is set to be the busiest period of September, with three major central banks scheduled to make updates to their monetary policies. The signals these central banks send following their meetings are poised to have a profound impact on global markets. September 20th: FOMC meeting After almost two months, the forthcoming FOMC meeting in September is garnering significant attention. Over the past weeks, the Federal Reserve has consistently emphasized its hawkish stance, including Powell's recent speech at Jackson Hole where he reiterated the commitment to keeping high-interest rates in place for longer to bring inflation back within the 2% target range. As of the end of August, the market only perceived a 22% likelihood of a rate hike during the September meeting. Nevertheless, with more inflation and employment data coming in, it cannot be ruled out that market sentiment may shift as the Federal Reserve meeting approaches. Source: CME September 20th: BOE meeting While there was a noticeable dip in UK inflation last month, it still remains remarkably high at 6.8%. Consequently, the Bank of England has a relatively long journey ahead in its tightening cycle. During the August rate meeting, the Bank of England raised rates by 25 basis points, reaching 5.25%. This marked the 14th consecutive rate hike by the Bank of England and pushed UK interest rates to their highest point in 15 years. As we look ahead to the September rate meeting, the prevailing market expectation is that the Bank of England will continue hiking rates with another 25 basis points. September 21th: BOJ meeting Despite Japan grappling with persistently high inflation and a yen at decades-low levels, the Governor of the Bank of Japan recently reiterated that the Bank of Japan still views "underlying inflation" as remaining below the bank's target. Therefore, it wouldn't come as a surprise to the market if the BOJ's September meeting will continues to uphold its ultra-loose monetary policy. However, the Bank of Japan did surprise the market in the previous meeting by stating that its 0.5% yield curve control ceiling should be regarded as a reference point rather than a strict limit. This was interpreted as an early signal of introducing more flexibility into its current monetary policy setting. As such, the key watch for the upcoming BOJ meeting is whether the BOJ will signal an exit from its contentious Yield Curve Control (YCC) .

A strong session for the Nikkei 225 overnight helped to brighten up an otherwise mixed Asia session, which saw stocks struggle after another contractionary reading for the Chinese manufacturing PMI. Risk appetite has recovered over the last days of August, after a month that saw equities lose ground. Inflation news dominates the day, with eurozone inflation and then the US PCE price index to be released later this afternoon. After weaker US employment figures this week, attention now turns to tomorrow's payroll report, as hopes rise that the Fed will leaves rates unchanged for the time being in order to allow the economy some breathing room. Signs of further strength in eurozone inflation have bolstered the euro, which has recouped some losses against the dollar as traders look towards the next ECB meeting and the possibility of another rate hike.

There’s been a retracement of the recent strength of the US dollar and as a result, the price of gold has recovered. The move in the dollar came after US JOLT's job openings. Jeremy Naylor | Analyst, London | Publication date: Wednesday 30 August 2023 They were expected at 9.5 million, which would have been a May 2021 low, but came in at 8.827 million. This means that the labour market slowdown is accelerating after months of unprecedented monetary policy tightening by the Federal Reserve. Questions are now circling that the Fed may now have done enough. (Video Transcript) JOLT openings Now, we've been witnessing a relatively hefty drop in the USD after the jolt openings yesterday, the job openings out in the States that were expected at 9.5 million, which would have been a low not seen since May 2021. In fact, they came in at 8.827 million. Now, what's this mean? Well, it means that the labour market slowed down after accelerating months of unprecedented monetary policy tightening by the Fed. The count peaked in March 2022 at just above 12 million job openings, then gradually slowed to 11.2 million at the end of 2022. Since the slowdown, it's been pretty much constant. The dollar The USD taking the biggest hit yesterday. I want to show you this chart, which is the dollar basket down yesterday for the second day in a row. In fact, you can see at the moment, we are absolutely on this line of support, which was the resistance that we saw twice back at the back end of June at the beginning of July at 103.20, the country trading at 103.20. The dollar hitting that news on the jolt numbers yesterday. And this sort of figure reduces the chance that further Fed interest rate rises. So that's why we're seeing a drop in the dollar. Now, as a result of this, we have seen moves in a lot of the major crosses. Yesterday, the euro up above this prior line that we'd be watching of the 61.8% retracement at 108.80. It's now trading down a little bit below that. Gold price But I think more importantly, it's been a bit of relief for the price of gold. Now, gold has risen over the last couple of weeks or so. And yesterday it traded up and stayed up above the 50 period moving average and the country trading at 19.36. This, of course, is the gold price in dollars, which when you get the dollar move like we've had, you get the country move in the price of dollar based commodities because of the currency factor. So nonetheless, gold is up as we see there at 19.36.

WTI, gold rise while Chicago wheat drops to near 3-month low Outlook on WTI, gold and wheat as the US dollar gives back some of its recent gains. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Wednesday 30 August 2023 WTI nears last week’s high WTI is once again heading up and is about to test last week’s high at $81.73 per barrel as US crude oil inventories tumbled by 11.5 million barrels last week, far exceeding expectations of a 2.9 million barrel decline. This, together with fears that a hurricane in the Gulf of Mexico might lead to supply disruptions, pushed the price of oil up. If last Monday’s $81.73 high were to be exceeded on a daily chart closing basis, the August peak at $84.39 would represent the next technical upside target, provided that last week’s low at $77.60 underpins. A currently unexpected fall through Wednesday’s low at $77.60 would put the $77.17 mid-July high on the map, below which meanders the 200-day simple moving average (SMA) at $75.98. Source: ProRealTime Gold rises to three-week high Gold’s advance from its current $1,885 per troy ounce August low has so far taken it above the 55-day simple moving average (SMA) at $1,932 towards the late July low at $1,943 ahead of the minor psychological $1,950 zone. The rise in the gold price is fueled by a slip in the US dollar from its 2 ½ month high, hit last week. Potential slips should find support along the 55-day SMA at $1,932 and below it around the mid-June low at $1,925. Provided the next lower 200-day simple moving average (SMA) at $1,914 underpins, further upside is expected to be seen in the days and weeks ahead. Source: ProRealTime Chicago Wheat prices fall to a near three-month low Chicago Wheat’s decline from its $7.85 late July high has taken it to a near three-month low around the $6.00 mark, pressured by weaker Russian domestic and export demand amid a better outlook for the country’s as well as the US’s wheat harvest. The May low at $5.82 represents the next technical downside target while the two-month downtrend line at $6.17 caps. Minor resistance below it sits at the $6.13mid-August low. Source: ProRealTime

Stocks resume their bullish run Outlook on FTSE 100, Dow and Nasdaq 100 as hopes of the Fed moving away from its tightening path grow. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Wednesday 30 August 2023 FTSE 100 has broken through its downtrend line The FTSE 100 has now broken through its July-to-August downtrend line, tracking Wall Street higher following weak US job opening data which shows that the US economy may be cooling, fuelling hopes that the Fed might stop raising rates. The 55-day simple moving average (SMA) at 7,489 is currently being tested with the minor psychological 7,500 mark remaining in sight ahead of the 10 August high at 7,624. Minor support can now be found along the breached July-to-August downtrend line at 7,450 ahead of the May, June and early August lows at 7,437 to 7,401. Source: ProRealTime The Dow Jones Industrial Average continues its long-term uptrend The Dow Jones Industrial Average’s rise and daily chart close above last week’s high at 34,696 points towards the August corrective phase lower having ended with the July peak at 35,690 being back in sight. The first upside target is the minor psychological 35,000 region. Slips should find support between last week’s high and the 55-day simple moving average (SMA) at 34,696 to 34,658. Key support remains to be seen between the October-to-August uptrend line at 34,100 and the late June low at 33,605. While it underpins, the bullish long-term trend remains intact. Source: ProRealTime Nasdaq 100 confirms bottoming formation with long-term uptrend to continue The Nasdaq 100’s summer correction has most likely run its course with the index now having risen and closed above last week’s high at 15,369 on Tuesday. Therefore, while the August trough at 14,554 underpins, the July peak at 15,932 will remain in focus. Minor support below last week’s high at 15,369 comes in along the 55-day simple moving average (SMA) at 15,221. Minor support below the 55-day SMA sits between last Tuesday’s high at 15,066 and the minor psychological 15,000 mark. Source: ProRealTime

Hi @Mary Thanks for sharing Crypto relief as Bitcoin ETF back on the agenda A federal court has ruled that the US securities regulator was wrong to reject an application from Grayscale Investments to create a spot bitcoin ETF. Jeremy Naylor | Analyst, London | Publication date: Wednesday 30 August 2023 Judges said the SEC failed to fully explain its reasoning when denying Grayscale's product and should review its decision. Bitcoin climbed more than 6% following the news and proxies like Coinbase were also up heavily. Grayscale’s CEO called the court decision a "historic milestone for American investors". As for the SEC it said it was reviewing the court's decision to determine next steps. It has 45 days to launch an appeal against the ruling.

Investor Spotlight reviews the results of Commonwealth Bank, Woolworths and Appen, and analyses their stock’s charts. IG Analyst | Publication date: Wednesday 30 August 2023 In this week’s bonus edition of Investor Spotlight, we review the results of three companies from the ASX reporting period and analyse their stock’s technicals. Commonwealth Bank of Australia’s better-than-expected results boost dividend The Commonwealth Bank of Australia (CBA) delivered a slightly better-than-expected set of full-year results. Revenues were in line with expectations. However, the bottom line increased by more than expected, which supported a chunkier dividend. The bank's robust results can be attributed to two main factors: continued growth in its loan portfolio and a 17-basis point increase in Net Interest Margins (NIM) compared to the previous year. Despite this, the bank did note that NIM was slightly lower compared to the first half of the year, indicating that peak margins for this business cycle have been surpassed. Key financial metrics Revenue: $27.23 billion, up 9.4% (Est. $27.1 billion) NPAT: $10.5 billion, down 6% (Est. $10 billion) Final dividend $2.40 (Est. $2.26) CEO signals cautious outlook Further, CBA's CEO Matt Comyn validated analysts' worries about potential challenges to profitability. He signaled that consumer demand is moderating and economic growth is slowing, factors which could have a dampening effect on future performance. The overall reaction from analysts was somewhat upbeat, nudging the consensus price target upwards. However, despite the strong set of results and slight increase in price targets, analysts believe that the bank is currently trading at a valuation that is higher than its intrinsic worth. Price target summary Source: Refinitiv Commonwealth Bank of Australia technical analysis CBA shares lifted following the bank’s full-year profits. However, the gains were pared, with the stock remaining range-bound. Major resistance remains at the share’s all-time high at $110. Support could be funded at an upward-sloping trendline of around $97 in the short term. Major support could emerge at $90, which coincides with the 200-week moving average. Commonwealth Bank of Australia weekly chart Source: IG Woolworths full-year results meet expectations Woolworths' annual results largely met analysts' forecasts, with only a minor shortfall in profits compared to consensus estimates. Both revenue and net profit showed growth year-over-year, culminating in a final dividend of 58 cents per share. Key financial metrics Revenue: $64.3 billion, up 5.7% (Est. $64.2 billion) NPAT: $1.61 billion, up 4.6% (Est. $1.68 billion) Final dividend $0.58 CEO points to "relative stability" amid challenges Woolworths CEO Brad Banducci noted that while the past year marked a return to "relative stability" for the company, cost-of-living pressures and persistent supply chain disruptions acted as drags on performance. As for the outlook for FY24, Banducci expects inflation to ease but concedes that the consumer landscape will "remain challenging." The markets and analysts responded in a mixed fashion to Woolworths' full-year results. The share price lifted on the day of the report; brokers' median consensus price target was pared back slightly but remains at a small premium to the current share price. Price target summary Source: Refinitiv Woolworths technical analysis In the long term, Woolworth's share price appears to be range-bound, suggesting a lack of directional conviction among investors. Recently, the stock lost its short-term trend-line support, signaling a change in momentum towards a bearish stance. While upward movements above $40 have been met with selling pressure, there seems to be substantial buying interest when the price approaches $30 per share. Woolworth weekly chart Source: IG Appen faces uphill battle Appen has once again underwhelmed investors with its half-year performance, reflecting the company's ongoing struggle to turn the business around. The numbers were far from encouraging, with both revenue and net profit after tax (NPAT) missing estimates. Key financial metrics miss the mark Revenue: $138.9 million, down 24% (Est. $143 million) NPAT: -$43.3 million, down 15% (Est. $29.6 million) CEO cites "challenging external environment" Appen's CEO and President, Armughan Ahmad, didn't mince words in acknowledging the grim results. He cited a "challenging external environment" as the major factor behind the disappointing numbers. The company's primary focus now is on reducing costs in a bid to end the year with a positive EBITDA. Analysts remain neutral with a slight bearish bias towards Appen shares. However, after the result and a subsequent plunge in the share price, brokers’ consensus price target has been sliced to $1.65. Price target summary Source: Refinitiv Appen technical analysis Appen’s share price is in a clear downtrend, having broken through psychological support of $2.00 after the release of half-year results. The next key level to watch is $1.20. Appen weekly chart Source: IG

Wall Street took comfort from several downside surprises in US macro data overnight, with the data taming some rate hike bets and saw US Treasury yields decline. Source: Bloomberg Forex Indices United States United States dollar Federal Reserve Macroeconomics Yeap Jun Rong | Market Strategist, Singapore | Publication date: Wednesday 30 August 2023 Market Recap Wall Street took comfort from several downside surprises in US macro data overnight, with the data taming some rate hike bets and saw US Treasury yields decline. The US two-year yields were down 11 basis-point (bp), reversing all of last week’s gains, while the 10-year yields were down 8 bp to deliver a two-week low. The US dollar reverses further (-0.3%), allowing major US indices to secure its third straight day of gains. Both the US job openings and consumer confidence data overnight were lower than expected, which point towards a weaker consumer spending outlook and some cooling in labour demand. US consumer confidence fell by the most in two years, while job openings touched its lowest level since March 2021. The weaker data may aid to tame the upside in pricing pressures ahead and provided room for the Federal Reserve (Fed) to consider keeping rates on hold, as compared to additional tightening. The overnight risk rally has allowed the Nasdaq 100 index to overcome its last Thursday’s sell-off, reflecting some control from buyers. This follows after finding support off the 14,630 level, where its 100-day moving average (MA) stands alongside the lower edge of its Ichimoku cloud on the daily chart. A bullish crossover is formed on its moving average convergence/divergence (MACD), with any move above the 15,400 level potentially paving the way to retest its year-to-date high at the 15,900 level next. Source: IG charts Asia Open Asian stocks look set for a positive open, with Nikkei +0.47%, ASX +0.85% and KOSPI +0.66% at the time of writing. The Nasdaq Golden Dragon China Index is up 3.7% overnight, with Chinese equities riding on the improved risk environment for a turnaround from Monday’s whiplash. Earlier stamp duty cuts on stock trades provided some lingering optimism, although its upcoming purchasing managers index (PMI) releases tomorrow will provide another reckoning for its still-weak economic conditions. This morning saw a significant downside surprise in Australia’s monthly Consumer Price Index (CPI) read, coming in at 4.9% versus the 5.2% expected, which validates current rate expectations for the Reserve Bank of Australia (RBA) to keep rates on hold into next year. This marked the first time since February 2022, where the monthly CPI indicator falls below the 5% level. But given that it is still a distance away from the RBA’s 2-3% target, the central bank may continue to maintain its hawkish-pause stance for some policy flexibility, although we are likely seeing the end of its tightening process. Improved risk sentiments and some near-term relief on the China’s front have allowed room for some recovery in the AUD/USD this week, but upside has been challenged into today’s session with the lower-than-expected Australia’s inflation number. The pair has been displaying a near-term double-bottom pattern on its four-hour chart, but resistance are currently found at its neckline at the 0.648 level, which also marked the peak of last Thursday’s sell-off. A move above this level will be much needed to support further recovery to retest the 0.660 level next, while on the other hand, further downside may leave its 0.638 level on watch. Source: IG charts On the watchlist: Paring rate hike bets brought some cooling in US dollar rally Rate expectations for the November Fed meeting have leaned back towards a rate-pause scenario, following yesterday’s weaker-than-expected US macro data. The odds for rates to be kept on hold in November currently stands at 51%, versus the 38% probability priced at the start of the week. With paring rate hike bets, the US dollar rally cooled for the third straight day, finding its way back to the 103.12 level. Its 200-day MA will be one to watch next, with the US dollar having reclaimed the MA line previously for the first time since November 2022. Any failure for the 200-day MA to hold may validate sellers in greater control and potentially pave the way back towards the 100.50 level next. Source: IG charts Tuesday: DJIA +0.85%; S&P 500 +1.45%; Nasdaq +1.74%, DAX +0.88%, FTSE +1.72%

Explaining the significance of semiconductor companies, and a rundown of some of the best semiconductor stocks to watch. These companies have been chosen for their historical earnings growth, market size, and sector dominance. Source: Bloomberg Shares Semiconductor Nvidia Artificial intelligence Integrated circuit AMD Charles Archer | Financial Writer, London Semiconductor companies are those involved in the design, manufacturing, and distribution of semiconductor devices and related technology. Semiconductors — or chips — are essential to the functioning of electronic devices and have seen particular interest in 2023 given the rise of the AI sector. Without semiconductors, there would be no computers, smartphones, gaming, film CGI, or a hundred other applications, all of which are essential to 21st century living. OpenAI’s revolutionary ChatGPT chatbot, the US ban on some semiconductor exports to China, and Nvidia’s dizzying rally are all testament to the importance of the sector. With significant growth in AI interest expected through the next decade and beyond, investing in semiconductor stocks within a diversified portfolio could be an attractive proposition. For context, giants including Intel and ASML consider that annual global spending on semiconductors will rise to $1 trillion by 2030, up from just $570 billion in 2022. But remember, past performance is not an indicator of future returns. Best semiconductor stocks to watch Before delving into some of the most popular individual semiconductor shares, it’s worth highlighting that there are many popular, diversified ETFs which offer exposure into multiple companies on a low cost basis. For example, the Vaneck Semiconductor UCITS ETF holds 25 of the world’s largest semiconductor companies and is a common choice for investors who want broad exposure to the sector without the need to conduct additional research. In addition, the ARM IPO could see the tech giant become one of the most valuable semiconductor stocks in the world when it relaunches to the public later this year. Of course, some companies will do better than others, and this is not an exhaustive list. No returns can be guaranteed. 1. Oxford Instruments While the largest semiconductor stocks are dominated by non-UK entities, London-listed Oxford Instruments is a £1.3 billion established leader and the largest semiconductor company in the country. It serves multiple markets across the sector, but the key focus is currently on its semiconductor and communications division. In recent full-year results, the company saw orders grow by 20.9% to £511.6 million, while adjusted operating profit rose by 21.4% to £80.5 million. CEO Ian Barkshire enthuses that the company ‘delivered growth in orders, revenue and profit, as well as maintaining margin, with performance strengthened in the second half as we converted our order book and realised the benefits of new pricing structures...our strong balance sheet positions us well to invest in people, infrastructure and innovation, and to make synergistic acquisitions to augment our organic growth.’ However, the company is much smaller than its stateside competitors. 2. Nvidia Nvidia shares have been on a dizzying rally this year to a $1.2 trillion valuation. The semiconductor champion is clearly the most popular semiconductor stock of 2023 — though of course, popularity does not mean it is the best investment available. However, the company once again delivered analyst-beating results in Q2 2023, with revenue up by 88% quarter-on-quarter to $13.51 billion, and its critical Record Data Center revenue up by 171% compared to Q2 2022. CEO and co-founder Jensen Huang believes that ‘a new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI... (our) leading enterprise IT system and software providers announced partnerships to bring NVIDIA AI to every industry.’ Of course, Nvidia now has a huge price-to-earnings ratio, and perhaps too much exposure to a faltering Chinese economy. 3. Taiwan Semiconductor Manufacturing Co While Nvidia is touted as the ‘picks and shovels’ semiconductor stock for 2023, this crown could arguably belong to TSMC. Most chip producers — including Nvidia — outsource actual production to the Taiwanese company, with the country responsible for making circa 90% of the world’s most advanced chips. TSMC shares have done well in 2023 given the AI-driven demand, its colossal manufacturing capacity and the wide economic moat surrounding starting up any sizeable competitor. However, Taiwan’s complex political status, including its relationship with China remains a long-term risk. 4. Qualcomm Qualcomm shares may be largely flat in 2023, but this could change soon. The NASDAQ titan returned $1.3 billion to stockholders in Q3 2023, including $893 million in dividends and $400 million through share buybacks. The company has struggled in 2023 due to low consumer demand for smartphones through the cost-of-living crisis, but it’s now pivoting towards the AI business. CEO Cristiano Amon is ‘pleased with our technology leadership, product roadmap and design-win execution, which position us well for growth and diversification in the long term. As AI use cases proliferate to the edge, on-device AI has the potential to drive an inflection point across all our products. Qualcomm remains best positioned to lead this transition given the unmatched accelerated computing performance with the power efficiency of our platforms.’ 5. Advanced Micro Devices Advanced Micro Devices — commonly abbreviated to AMD — is a distant second to Nvidia, but it has several near-term catalysts to consider. For example, in mid-June 2023, AMD rolled out its new Instinct MI300 series chips, which should become popular for customers looking to accelerate their generative artificial intelligence chip processing. While Nvidia may control circa 80% of the AI market, this new AMD chip could be a gamechanger — and its shares have climbed sharply this year as a result. Chair and CEO Dr Lisa Su notes that the company ‘delivered strong results in the second quarter as 4th Gen EPYC and Ryzen 7000 processors ramped significantly...we made strong progress meeting key hardware and software milestones to address the growing customer pull for our data center AI solutions and are on-track to launch and ramp production of MI300 accelerators in the fourth quarter.’

Thanks @Mahadev All the best - MongiIG

Stocks in Asia pushed higher for a third day as China stimulus hopes continued to underpin bullish sentiment, while weaker US jobs data gave new strength to the idea of a pause in the Fed's hiking efforts. Stocks will be glad to see the back of August, which marked a check to the strong performance of the year so far. Nonetheless, previous years with such solid gains for January - August tend to see further upside into the end of the year. An easing of US Treasury yields following job openings data helped to support risk appetite generally, especially ahead of the ADP and NFP job reports this week. Aside from today's ADP figures, German CPI and the second reading on US Q2 GDP, plus weekly oil inventory data, will be the main events to watch today.

Charting the Markets: 29 August Stock indices track Asia higher. EUR/USD, GBP/USD and USD/JPY trade in low volatility. And Brent crude oil, gold and silver prices grind higher. Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Tuesday 29 August 2023 This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

Tentative signs of stabilisation in AUD/USD’s recent slide; AUD/NZD rebounds from key support and AUD/JPY flirts with key resistance. Source: Bloomberg AUD/USD AUD/JPY AUD/NZD Australian dollar Forex China Manish Jaradi | IG Analyst, Singapore | Publication date: Tuesday 29 August 2023 AUD seeks positive catalysts The Australian dollar is looking for positive catalysts as it attempts to recoup some of its recent losses ahead of key Australian inflation data due Wednesday.  Australia's CPI moderated to 5.2% on-year in July from 5.4% previously. The ongoing disinflation trend is in tandem with the Reserve Bank of Australia’s view that the worst is probably over for inflation. The Australian central bank held rates steady at 4.1% at its previous two meetings, and markets are pricing in a high chance that the central bank will stay pat when it meets next week amid tentative signs of cooling of the labour market and a deteriorating growth outlook in China.  Struggling China not helping AUD Chinese policymakers’ additional stimulus in recent days has failed to cheer AUD bulls so far. China’s macro data continues to be underwhelming, posing downside risks to the economic growth outlook amid a struggling property sector. With a massive stimulus seemingly off the table (given the associated risks of creating imbalances within the economy), AUD would need to rely on other catalysts to get a boost. The China Economic Surprise Index is just off mid-2020 (Covid levels), and China is Australia’s largest export destination. AUD/USD daily chart Source: TradingView US economy resilient Globally, the USD remains well supported by diverging economic outlooks – a resilient US economy compared with slowing growth outside of the US, especially in China and Europe. Powell’s remarks at Jackson Hole last week were largely balanced, but with a slightly hawkish tilt, offering some support to the greenback. The market is now pricing in about a 50% chance of a November hike compared with 38% a week ago, according to the CME FedWatch tool.  AUD/USD weekly chart Source: TradingView AUD/USD: downtrend fatigue? Tentative signs of downtrend fatigue are setting in AUD/USD lower timeframe charts. This comes as the pair continues to hold above vital converged support on the median line of a declining pitchfork channel since June and a downtrend line from the end of 2023. Still, a break above Friday’s high of 0.6440 is needed for the on-month-long slide to stall. A more decisive signal for any material consolidation would be a crack above last week’s high of 0.6590. AUD/USD 240-minute chart Source: TradingView AUD/JPY: Downward bias yet to reverse  AUD/JPY has been well guided lower by the downward-sloping 200-period moving average on the 240-minute charts, a bias highlighted in the previous update. While a hold above horizontal trendline support at about 93.00 is an encouraging sign for bulls, the cross needs to clear 94.00-95.00, including the 200-period moving average and the mid-August high for the bearish pressure to fade.  AUD/JPY 240-minute chart Source: TradingView AUD/NZD: Starting to flex muscles The recent pickup in upward momentum could be a sign that AUD/NZD is beginning to flex muscles after months of remaining directionless. This follows a repeated hold above quite strong support on the lower edge of a rising channel since April. A break above the initial barrier at the July high of 1.0925 could open the way toward the June high of 1.1050.  AUD/NZD daily chart Source: TradingView This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. 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.

Wall Street gained for the second straight day, as US Treasury yields took a breather after touching their recent highs. Source: Bloomberg Forex Indices United States United States dollar GBP/USD Federal Reserve Yeap Jun Rong | Market Strategist, Singapore | Publication date: Tuesday 29 August 2023 Market Recap Wall Street gained for the second straight day (DJIA +0.62%; S&P 500 +0.63%; Nasdaq +0.84%), as US Treasury yields took a breather despite a hawkish takeaway from the Jackson Hole Symposium. Both the US 2-year and 10-year yields cooled by around 5 basis-point (bp) overnight after touching their recent highs. The VIX has also hit its two-week low, potentially as hedging bets unwind from greater clarity on the Federal Reserve (Fed)'s policy outlook. Amid the quiet economic calendar to start the week, market focus will now turn to a series of macro data ahead to justify whether a November rate hike from the Fed is warranted. Today’s schedule will leave Germany and US consumer confidence data on watch, along with the US Job Openings and Labor Turnover Survey (JOLTS), where further moderation in US July job opening numbers is expected (9.465 million forecast versus 9.582 million prior). The US S&P/Case-Shiller home price index will be in focus as well, with US home prices expected to mark its fourth straight month of year-on-year decline (-1.3% forecast versus -1.7% prior). Perhaps one to watch may be the Russell 2000, which has been attempting to defend its 200-day moving average (MA) over the past week. Further upside may validate a bullish crossover on its moving average convergence/divergence (MACD) on the daily chart, with immediate resistance to overcome at the 1,900 level. On the broader scale, the index remains stuck in a long-ranging pattern since April 2022, with any move above the 1,900 level potentially leaving its upper bound at the key psychological 2,000 level on watch for a retest next. Source: IG charts Asia Open Asian stocks look set for a positive open, with Nikkei +0.50%, ASX +0.45% and KOSPI +0.34% at the time of writing. Lower Treasury yields, a slightly weaker US dollar and the positive handover from Wall Street provide room for some relief in the region, despite lingering reservations surrounding Chinese equities. Beijing’s latest efforts to boost markets has been met with a lukewarm reaction, with gains in Chinese equities fizzling into the close yesterday. The Hang Seng Index was up as much as 3% at one point, but closed only 0.9% higher. Similar measure in 2008 eventually saw the CSI 300 move to form a new low, suggesting that a turnaround in economic conditions remains the key driving force for longer-term upside in Chinese equities. This morning saw Japan’s July unemployment rate head higher to 2.7% from previous 2.5% (forecast 2.5%), with the sharper moderation in Japan’s labour market likely to provide more room for dovishness for the Bank of Japan (BoJ) by having a taming effect on wage pressures. For now, the USD/JPY has breached the 145.00-145.80 level, where previous yen-buying intervention was executed back in September 2022. While the overall trend remains up with a rising channel pattern in place, some near-term exhaustion seems to be in place, with a flat-lined MACD and lower highs on its relative strength index (RSI) from the daily chart. The 145.00 level will be an immediate support to hold, failing which may pave the way to retest the 141.60 level next. Source: IG charts On the watchlist: GBP/USD retesting neckline of head-and-shoulder formation The GBP/USD has retraced by close to 4.5% since mid-July this year, further weighed by weaker-than-expected purchasing manager’s index (PMI) data out of the UK and some firming in the US dollar last week to retest its 1.260 level. On the broader scale, the 1.260 level seems to mark the neckline of a head-and-shoulder formation, with an attempt to stabilise after recent sell-off. Its weekly RSI continues to trade above the 50 level for now, which could still put an upward trend in place, but any failure to defend the 1.260 level over the coming days may potentially pave the way to retest the 1.231 level next. Source: IG charts Monday: DJIA +0.62%; S&P 500 +0.63%; Nasdaq +0.84%, DAX +1.03%, FTSE +0.07%

Brent crude oil, gold and silver prices grind higher Outlook on Brent crude oil, gold and silver ahead of this week’s inflation, growth and employment data. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Tuesday 29 August 2023 Brent crude oil price recovers Brent crude oil’s recovery off Thursday’s $81.68 low is once more trying to reach the August resistance line at $84.46 ahead of last week’s high at $84.70. If overcome, last Monday’s high at $85.54 could be reached next. Short-term upside momentum should remain in play while the $82.81 to $82.31 early and mid-August lows underpin. If not, last week’s low at $81.68 would likely give way with the 200-day simple moving average (SMA) at $80.82 being eyed in this instance. Source: ProRealTime Gold price continues to grind higher The gold price’s rally off its $1,885 per troy ounce one-month low is ongoing with it grinding higher towards the 55-day simple moving average (SMA) at $1,932. Above it resistance can be found between the mid-July low and 4 August high at $1,946 to $1,947. Support is likely to be offered by the 200-day simple moving average (SMA) at $1,913. Further minor support sits at last Friday’s high at $1,904 low, at the $1,893 late June low and more important support at last week’s $1,885 trough. Currently unexpected failure at $1,885 would lead to the mid-March price gap between $1,872 to $1,870 being targeted. Source: ProRealTime Silver rally stuck below last week’s $24.38 high for now Silver’s rally off its seven-week low at $22.23, made marginally above its $22.12 June low, has been followed by an over 8% rally to last week’s $24.38 high before it stalled. If overcome, the June peak at $24.52 would be targeted next, ahead of the July peak at $25.26. Minor support is seen a long way off along the 55-day simple moving average (SMA) at $23.58. Source: ProRealTime

Stock indices track Asia higher Outlook on FTSE 100, DAX 40 and S&P 500 ahead of today’s U.S. consumer confidence and job openings data. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Tuesday 29 August 2023 FTSE 100 probes downtrend line The FTSE 100 is trying to break through its July-to-August downtrend line following a prolonged Bank Holiday weekend in the UK during which Chinese authorities cut share dealing stamp duty by 50%. The 55-day simple moving average (SMA) at 7,490 represents the next upside target ahead of the minor psychological 7,500 mark. The May, June and early August lows at 7,437 to 7,401 should now offer good support. Source: ProRealTime DAX 40 probes last week’s high The DAX 40 is revisiting last week’s high at 15,895 on a globally slightly more positive outlook regarding rates following last week’s Jackson Hole symposium and weaker economic data. If 15,895 were to be exceeded despite German consumer morale unexpectedly falling, the 55-day simple moving average (SMA) at 15,973 would be eyed ahead of the 10 August high at 16,062. This high would need to be exceeded, for a medium-term bullish reversal to be confirmed. Potential slips should find support along the breached one-month resistance line, now because of inverse polarity a support line, at 15,792. Source: ProRealTime S&P 500 approaches its July-to-August downtrend line The S&P 500 is still in the process of regaining last Thursday’s sharp losses and nears resistance which sits between the July-to-August downtrend line and the 55-day simple moving average (SMA) at 4,453 to 4,457. It does so as investors look ahead to today’s U.S. consumer confidence and job openings data. The next higher high at 4,474, seen last week, would need to be exceeded for a bullish reversal to gain traction and put the July peak at 4,607 back on the map. Minor support can be found at the 4,378 July low. Further down lies major support between the June and mid-August lows at 4,337 to 4,328. Source: ProRealTime