MongiIG

The AUD/USD battles pressure amidst RBA's decision to hold rates, while consumer confidence data and Governor Lowe's speech loom this week. The currency's trajectory is under watch. Source: Bloomberg Forex AUD/USD United States dollar Australian dollar Monetary policy Technical analysis Tony Sycamore | Market Analyst, Australia | Publication date: Monday 10 July 2023 Anticipating key data and RBA Governor Lowe's speech Under the duress of the RBA’s decision to hold rates steady and weak data from China early last week, the AUD/USD made a remarkable recovery on Friday, ending the week 0.5% higher at .6668. The key events for the AUD/USD this week will be consumer and business confidence data as well as a speech by RBA Governor Lowe on Wednesday titled 'The Reserve Bank Review and Monetary Policy'. Whilst the speech will likely focus on the potential impact of the Review on Monetary Policy, it will also be scrutinised for hints about what factors might prompt the RBA to act on its tightening bias next month and what factors might persuade the RBA to extend its pause. AUD/USD technical analysis The AUD/USD ended last week higher at .6688 (+0.50%) after a significant rebound on Friday as US non-farm payrolls increased less than anticipated, raising hopes of a cooling labour market. Over the past fortnight, the AUD/USD has oscillated between .6600c and .6700c, with the upper resistance reinforced by the 200-day moving average at .6696. In the short term, whilst the AUD/USD remains below .6700c on a closing basis, we favour a retest of support at .6600/.6575. We're mindful that should the AUD/USD rally above .6700c and hold above there for more than a day or two, it would likely see the AUD/USD extend the rally towards resistance at .6800/20. In the medium term, after a false dip to the .6458 low in May and a false surge to the .6899 high in June, the AUD/USD appears to have returned to the safety of its multi-month .6575/.6820 range. AUD/USD daily chart Source: TradingView TradingView: the figures stated are as of July 10, 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.

Hi @RolyAustin Once you have created an IG account and downloaded MT4, open the platform and log in. Autochartist can be found within MT4 by going to the ‘navigator’ window and clicking on ‘scripts’. What is Autochartist and how do you use it when trading? I hope this helps. All the best - MongiIG

The Week Ahead Read about upcoming market-moving events and plan your trading week Week commencing 10 July Chris Beauchamp's insight This week sees the start of US earnings season, which will dominate the agenda for the time being as investors look over the latest set of corporate reports. But with Chinese and US consumer price index (CPI) on the calendar too there is plenty going on. Also worth watching will be the Bank of Canada (BoC) decision and UK employment data. Economic reports Weekly view Monday 2.30am – China CPI (June): prices to rise 0.5% YoY and fall 0.1% MoM. Markets to watch: CNH crosses Tuesday 7am – UK unemployment data (May): unemployment rate to hold at 3.9% in May and claimant count to fall 22K in June. Average earnings to rise 6.7% including bonus for three months to May. Markets to watch: GBP crosses 10am – German ZEW index (July): index to fall to -13. Markets to watch: EUR crosses Wednesday 1.30pm – US CPI (June): prices to rise 3.6% YoY and 0.2% MoM, from 4% and 0.1% respectively. Core CPI to rise 5% and 0.3% respectively, from 5.3% and 0.4%. Markets to watch: US indices, USD crosses 3pm – Bank of Canada rate decision: rates expected to rise 25bps to 5%. Markets to watch: CAD crosses 3.30pm – US EIA crude oil inventories (w/e 7 July): stockpiles fell by 1.51 million barrels last week. Markets to watch: Brent, WTI Thursday 4am – China trade balance (June): exports to fall 3.1% YoY. Markets to watch: CNH crosses 7am – UK GDP (May): growth to be flat MoM from 0.2%. Markets to watch: GBP crosses 1.30pm – US PPI (June), initial jobless claims (w/e 8 July): PPI to be -0.1% MoM from -0.3%. Claims fell to 248K last week. Markets to watch: USD crosses Friday 3pm – US Michigan consumer sentiment (July, preliminary): index to rise to 64.5 from 64.4. Markets to watch: USD crosses Company announcements Monday 10 July Tuesday 11 July Wednesday 12 July Thursday 13 July Friday 14 July Full-year earnings Half/ Quarterly earnings PepsiCo, Delta JPMorgan, Citigroup, Wells Fargo Trading update* Dechra JD Wetherspoon, Tullow Oil, PageGroup Hayes, John Wood Group Burberry, Fevertree Dividends FTSE 100: British American Tobacco, Halma FTSE 250: WHSmith, Sirius Real Estate, Firstgroup, CMC, Oxford Instruments, Supermarket Income REIT 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. Index adjustments Monday 10 July Tuesday 11 July Wednesday 12 July Thursday 13 July Friday 14 July Monday 17 July FTSE 100 5.20 Australia 200 0.4 Wall Street US 500 0.07 0.10 0.47 0.15 Nasdaq Netherlands 25 EU Stocks 50 China H-Shares Singapore Blue Chip Hong Kong HS50 3.2 South Africa 40 58.5 Italy 40 Japan 225 * Please note these can change without notice * Dividend adjustments due to be posted on a bank holiday will usually be posted on the previous working day

China inflation data weighs on APAC currencies In China, consumer price index was flat in June year-on-year, after a 0.2% gain recorded in May, missing expectations of a 0.2% rise. Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Monday 10 July 2023 US overview The US dollar showed modest gains on Monday, but remained lower than where it was on Friday before the release on June non-farm payrolls (NFPs). The US economy added 209,000 jobs last month, missing market expectations for the first time in 15 months. May job creations were also downwardly revised to 306,000. GBP/USD tested the 14-month high set in June, while USD/JPY fell as low as ¥142. China In China, consumer price index (CPI) was flat in June year-on-year (YoY), after a 0.2% gain recorded in May, missing expectations of a 0.2% rise. This was the slowest pace since February 2021. Producer price index fell at the fastest pace since December 2015. The index fell for a ninth straight month, by 5.4% YoY. This latest data added to the case that the People's Bank of China (PBoC) measures have so far been insufficient. Beijing has set a target for a consumer inflation of about 3% this year. Economists see it more around 1%. Does it mean further cuts from the PBoC should be expected? The market anticipates only another 10-basis point cut this year and believes that support is more likely to come through fiscal measures. Central banks There is more to come later this week. A couple of central banks are set to decide on rates, both on Wednesday. New Zealand is up first. After hiking by 25-basis points at its last meeting and taking the official cash rate (OCR) to its highest in nearly 15 years, the Reserve Bank of New Zealand (RBNZ) is very likely to stay put this month, keeping the OCR at 5.5%. After its last decision the bank said it was seeing borrowing costs peaking at that level. The situation is different in Canada, where the Bank of Canada (BoC) unexpectedly hiked by 25-basis points in June, for the second time only this year. On Wednesday, the bank is seen to add another quarter of a percentage point to its overnight rate, taking it to 5%. Concerns about inflation have increased in recent weeks. If headline inflation has been almost constantly falling since June last year, core inflation appears to be stickier. Core CPI has also been falling, but at a slower rate that the main index. UK retail sales In the UK, the BRC retail sales monitor is expected to rise by 3.7% in June, the same pace as the previous month, as consumers continue to rein in spending on non-essential goods. Also on Tuesday, unemployment rate is seen remaining at 3.8%. On Thursday, a shock could come with monthly GDP. The British economy is expected to have contracted by 0.4% in May month-on-month (MoM). This would take the three-month average to -0.1%. We are nowhere near talking about recession yet, but it is a scenario that economists are keeping in mind, as many see rates rising a further 150 basis points this year. Corporate news On the corporate front, there is not much to expect over the next three days. It will all change on Thursday with PepsiCo and Delta Airlines' quarterly reports, followed on Friday by the first set of US banks earnings. JPMorgan Chase, Wells Fargo and Citigroup are due to report. They will be followed next week by Bank of America, Goldman Sachs and Morgan Stanley. 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.

FTSE 100, DAX 40 and S&P 500 are taking a hit amid strong US ADP jobs data Outlook on FTSE 100, DAX 40 and S&P 500 ahead of Friday’s Non-Farm Payrolls. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 07 July 2023 FTSE 100 sinks on rate hike fears The FTSE 100 is fast approaching its March low at 7,204, tracking losses in Asia and on Wall Street as strong US ADP jobs data reinforced expectations that the Federal Reserve (Fed) will hike rates further. Minor resistance can be spotted at the 7,296 December low and also at the 7,331 24 March low. Source: ProRealTime DAX 40 falls through key support The DAX 40 has now fallen through its April-to-July major support zone on the back of strong US jobs data and downwardly revised German manufacturing PMI which points to a weak economy. The fact that a daily chart close below the 16,625 to 15,710 April-to-July support zone has occurred is technically bearish as it indicates that a significant top has now been formed. Below the early April low at 14,481 lie the mid-January and late March highs at 15,305 to 15,272 ahead of the 200-day simple moving average (SMA) at 14,948 which now represents a medium-term downside target. Resistance at 15,625 to 15,710 is expected to thwart any attempt of a bullish reversal taking place today. Source: ProRealTime S&P 500 slips on strong jobs data ahead of Non-Farm Payrolls The S&P 500 dropped to a one week low at 4,384 as US ADP Non-Farm jobs data came in much stronger-than-expected at 497k versus an expected 226k in July, forcing the Fed to hike rates further and leading to a surge in global yields while equities came under pressure. The (redrawn) May-to-July support line at 4,393 is likely to be revisited on Friday around the Non-Farm Payrolls data release, below which lies Thursday’s low at 4,389 and the late June low at 4,328. A drop through and daily chart close below this level would point to a significant top being formed. Resistance can be found between Wednesday’s low and Thursday’s high at 4,430 to 4,434. Source: ProRealTime

Gold and oil hold steady but natural gas edges lower Gold and oil have both managed to make some headway this morning, but natural gas prices have fallen back. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 07 July 2023 Gold stabilises in early trading The price continued to decline on Thursday after Wednesday’s retreat from trendline resistance. A daily close below $1900 opens the way to the 200-day SMA as an initial target, while below this the March lows at $1807 come into view. Continued price action below $1930 maintains the bearish view. A move above $1940 would be needed to suggest that a short-term low is in place. Source: ProRealTime Brent holds on to gains The price moved to a two-week high on Thursday, having recovered from a brief drop below the 50-day SMA. The overall sideways trading seen since late May remains in place, so a move above $78.50 would be needed to open the way to a breakout to the upside. A reversal below $78 leaves the current trading range intact. Source: ProRealTime Natural Gas falls back towards trendline support After reaching a high a week ago the price has fallen back, but the short-term bounce from the May lows is still in place. Additional declines towards 2550 will test trendline support, while a move below 2470 would mark a resumption of the downward move. Having created a higher high at 2930 last week, the short-term bullish view would be maintained with a recovery and a move above this recent high. Source: ProRealTime

Thanks for sharing @THT Always very interesting and helpful! All the best - MongiIG

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Thanks for sharing @phillo All the best - MongiIG

The job data in the United States is poised to attract full attention this week. Will the upcoming non-farm payrolls report for June bring "surprises" or "shocks"? And how will it impact the trajectory of the US dollar? Source: Bloomberg Forex Federal Reserve United States United States dollar Inflation Unemployment Hebe Chen | Market Analyst, Australia | Publication date: Thursday 06 July 2023 The job data in the United States takes centre stage in the first week of 2H, 2023, including the non-farm payrolls report, unemployment rate and new job openings. Over the past 12 releases, the reported figures for non-farm payrolls have surpassed expectations 11 times. Will the forthcoming non-farm payrolls report bring forth further "upside surprises" or mark an "inflection point"? Furthermore, what impact will it have on the trajectory of the US Dollar? Non-farm Payrolls June Report Preview Non-farm payrolls data from the United States has consistently surpassed expectations this year, with a noticeable upward trend over the past three months (as shown in the chart below). Furthermore, the most recent data indicates that the US job market remains strong and resilient. For example, the number of initial jobless claims, announced last week, decreased by 26,000 compared to the previous week. This marked the largest drop since October 2021 and was lower than market expectations. Hence, If the upcoming data for June can reverse its uptrend in the past three months and stay close to the anticipated figure, it may provide some temporary relief for the Federal Reserve and the market. Currently, it is projected that the country will add 225,000 non-farm jobs in June, a significant decrease from May's figure of 339,000. Job data and Fed’s rate hike The increasing attention on the employment market data in the United States is primarily due to the growing realization that the extremely tight job market has clearly become the most challenging obstacle for the Federal Reserve to address in controlling inflation. From the economic projections released by the Federal Reserve in June, it is evident that the resilience of the US job market has caught them somewhat off guard. One of the most notable adjustments made by the Fed was the downward revision of the unemployment rate for the next two years. The Fed anticipates that the US unemployment rate will remain around only 4% during this period, suggesting that the heat in the job market, often accompanied by rising labor costs and elevated demand, is likely to continue supporting lingering and sticky inflation. In that case, the options available to the Fed are either to maintain a hawkish stance on tightening until inflation is convincingly under control or to be prepared to rush to adjust its rates in response to unexpected inflation flare-ups. Since June’s FOMC meeting, there has been a consistent message to the market about the Fed's determination to continue tightening. Fed Chairman Powell has even explicitly stated that the Fed plans to raise rates at least two times or more. As a result, according to CME fed watch, the probability of a July rate hike by the Federal Reserve has increased significantly to 86%, up from 50% just a month ago. July rate hike expectation US Dollar Technical Analysis Based on the daily chart, the US dollar has been steadily rising over the past three weeks and has maintained its position above the 50-day moving average, around 102.69, which can be considered as short-term support. If the upcoming job reports exceed expectations, it is likely that market participants will adjust their expectations for Federal Reserve rate hikes upward, potentially pushing the US dollar to continue challenging the 103 level. However, if the June non-farm payroll data reverses the upward trend of the past three months, the US dollar index may find support around its 20-day moving average, near 102.3. Looking at the weekly chart, despite the recent strength of the US dollar, it is evident that its upward momentum is relatively weaker compared to the earlier surge at the beginning of the year. Therefore, in the long term, even if the US dollar continues to rise following this week's data, it will likely encounter significant challenges as it approaches the high point reached in May.

SP500 is correcting from overbought territory, while the DAX40 and FTSE100 test support. Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 06 July 2023 SP500 (US500) - overbought and negative divergence signals within uptrend Source: IG The SP500 Index, while remaining in a long-term uptrend, has given some further indications that a short-term correction may be underway. The long-term uptrend is gauged by the price still trading firmly above the 200-day simple moving average (200MA) (blue line). The bearish price reversal around the high at 4450 is accompanied by an overbought signal and a bearish divergence signal with the stochastic oscillator. The low at 4330 provides an initial support target from the move lower. Trend followers might prefer to wait for weakness to play out before looking for long entry on a bullish price reversal at one of the labelled support levels on the chart above. DAX40 (Germany 40) - testing range support Source; IG The long-term trend for the DAX40 remains up, while the short to medium term trend for the index is considered sideways. The price is currently testing support of sideways range at 15715. Traders looking for long entry might prefer to see a price reversal off this level before looking for long entry and targeting a move back towards range resistance at the 16330. Should the current support level (15715) not hold and instead a downside breakout confirm (with a price close below), 15485 becomes the next support target from the move. Traders still respecting the longer-term trend bias might then prefer to look for long entry on a bullish reversal before this level. Only on a price move below the 200MA (blue line), would we reassess the long-term upward trend bias considered on the index. A move below the 200MA would instead change the assumed bias from up to sideways longer term. FTSE100 - breaking support Source: IG The FTSE100 index, after finding resistance at the 7560 level, has moved to and through support at the 7410 level. A close below this level would consider 7285 as the next support target from the move. Currently the long-term trend for the Index is considered sideways as we see the price whipsawing through the 200MA (blue line). Range traders might hope to see a bullish price reversal off this level for long entry before targeting a move back towards the 7560-resistance level. If the 7285 level is broken with a close well below, a new longer-term downtrend for the index might then be considered.

Look Ahead 7/7/23: NFP; German industrial production; UK Halifax house prices The US jobs report will be the biggest risk event on Friday. A number that is hotter than expected could suggest the US labour market is strong enough to withstand another rate hike by the Fed. Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Thursday 06 July 2023 German industrial production figures come at a time when the US vs China chip tit-for-tat puts the spotlight on global trade. Plus, Halifax house price data could point to further weakness in the UK housing market.

How will the Non-Farm Payrolls add to the evolving picture of the US Dollar and more... Join Jeremy Naylor and Axel Rudolph as they bring you all of the news and analysis live as they happen, Friday 7th July 2023 at 13:25 UK time.

WTI and silver rise but gold slips post hawkish Fed minutes and appreciating dollar Outlook on WTI, gold and silver as Fed minutes point to further US rate hikes. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 06 July 2023 WTI nears late June peak at $72.70 WTI is breaking through its May-to-July downtrend line and has also risen above its 55-day simple moving average (SMA) at $71.68, helped by Saudi Arabia’s extension of its voluntary one million barrel per day (bpd) output cut until the end of August. Together with additional Russian oil export reductions by 500,000 bpd next month it brings the total amount of output cuts by OPEC+ members to 5.16 million bpd as the group of major oil producers tries to prop up prices. The late June high at $72.70 is back in the frame, a rise above which should engage the early May and June highs at $73.82 to $73.89. Minor support sits at the 30 June high at $71.10 and at Wednesday’s $70.44 low. Source: ProRealTime Gold slips post hawkish Fed minutes The gold price is once again slipping on the back of hawkish Fed minutes and an appreciating US dollar. The precious metal short-term topped out at Wednesday’s $1,935 per troy ounce high and is seen slipping back towards the 23 June low at $1,911. If fallen through, the June trough at $1,894 may be revisited. Minor resistance for this week can be spotted between the 3 July high and the May-to-July resistance line at $1,931. Source: ProRealTime Silver nears May-to-July downtrend line Silver’s recent advance is taking it ever closer to the May-to-July downtrend line at $23.35 per troy ounce, a rise above which would target the mid-June low at $23.60. Above which the 55-day simple moving average (SMA) can be spotted at $23.90. The current upside bias should remain in play while Wednesday’s low and the 55-day simple moving average at $22.77 to $22.66 hold on a daily chart closing basis. Source: ProRealTime

Hawkish Fed minutes put pressure on Dow, Nasdaq 100 and CAC40 Indices have come under fresh pressure this morning, after Fed minutes showed a more hawkish outlook for monetary policy in the US. Source:Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 06 July 2023 Dow falls back for another day The index continues to drop back from last week’s highs, and further losses will put the 50-day simple moving average (SMA) into view as potential support, as it was in mid-June. Below this the 100-day SMA and then the 200-day SMA come rapidly into view. A move below the mid-May lows would firmly alter the medium-term view to a bearish one. Bulls will want a recovery back above 34,500 in order to suggest that the move higher is back in play. Source:ProRealTime Nasdaq 100 holds near recent highs After attempting to rally yesterday the index has fallen back again, though it remains close to its recent highs. A deeper pullback targets trendline support from late April, and then on down to the 50-day SMA. The index has not tested the 50-day SMA since early March, so a pullback to that level would not be too surprising in the near term. Above 15,260, the price will target 15,760, and then on to 16,630. Source:ProRealTime CAC40 hits one-week low The index has fallen back below trendline resistance from the April highs, and is also back below the 50- and 100-day SMAs. A move back to 7100, the support area from May and June, seems likely, and if this is broken the 200-day SMA comes into view. It would need a move back above 7320 to suggest a revived bullish view, and then a break above 7400 to confirm a move higher. Source:ProRealTime

Charting the Markets: 06 July Hawkish Fed minutes put pressure on Dow, Nasdaq 100 and CAC40.EUR/USD, EUR/GBP and EUR/JPY slide despite strong German factory orders. And WTI and silver rise but gold slips post hawkish Fed minutes and appreciating dollar. Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 06 July 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.

Looks like we might get a fight after all. Meta Platforms is planning to release a microblogging app called ‘Threads’. IGTV’s @AngelineOng takes a look at what this means for Elon Musk’s Twitter. Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Tuesday 04 July 2023 (Video Transcript) Threads Now, tech news and media platforms are expecting to launch a new app. It's called Threads, and it is a platform where users can publish, share, or like short messages. Sound familiar? Well, it's pretty much like Zuckerberg taking on this space and Elon Musk. Twitter This Twitter-like rival couldn't come at a worse time for Elon Musk. His users are growing unhappy with the management of the app. Musk has just announced a temporary cap on how many posts users can read on the social media site. The rant will be directly linked to Instagram, which means using the same username as those using Instagram. It can easily put followers across using the new application. For more videos from us here at IGTV. Join us on Twitter at @IGcom and subscribe to our YouTube channel.

Early Morning Call: JPY rises against major currencies The APAC region and Hong Kong's Hang Seng recorded a second day of heavy losses. Jeremy Naylor | Analyst, London | Publication date: Thursday 06 July 2023 FOMC The minutes of the last Federal Open Market Committee (FOMC) meeting where the US left rates on hold showed a split vote, with some still wanting to push rates up, but the final decision to hold was to buy time and assess the need for further rate hikes. The USD climbed on the news, and equity markets around the world fell. Overnight in the Asia Pacific (APAC) region, Hong Kong's Hang Seng recorded a second day of heavy losses. More economic data today, including the monthly US jobs report, automatic data processing (ADP) private payrolls, and Friday's non-farm jobs numbers, could all help determine the Federal Reserve's (Fed) rate trajectory. The Reserve Bank of Australia After Tuesday's decision to keep rates unchanged, the Reserve Bank of Australia (RBA) is expected to hike by 25 basis points. This is according to economists polled by Reuters. More than 90% of respondents, that's 23 out of 25, believe the RBA will increase its official cash rate to 4.35% at its next meeting on August 1. Also in Australia, the trade surplus unexpectedly rose in May to A$11.8 billion. Exports increased by 4.4%, while imports rose by a soft 2.5% a year earlier. Levi's Levi's has to fight battles on two fronts: on the production side, costs have been escalating with the cost of cotton, labour, and transport. Swollen inventories have also forced the group to ramp up discounts and promotions. Oil overview Oil prices rose on Wednesday. WTI briefly passed the $72 mark and hovered around that level after weekly inventories showed a larger than expected fall in crude stocks. Crude oil inventories fell by 4.4 million barrels last week, according to the API. An oil analyst anticipated a smaller drop of 1.8 million barrels. Gasoline and distillate stocks rose by 1.6 million and 600,000 barrels, respectively. UK banks Today, the big UK banks are in front of regulators at the Financial Conduct Authority (FCA), facing accusations of "profiteering" for not adequately passing through recent rate rises. The Bank of England's hefty interest rate increases have seen high-street banks such as NatWest, Barclays, HSBC, and Lloyds increase mortgage costs steeply, but savers have seen their rates rise less fast. Chancellor Jeremy Hunt has backed the FCA's request to meet the banks, saying "Increased interest rates must also be passed on to savers." Currys Elsewhere on the equity market, British electrical retailer Currys reported a 38% fall in full-year profit, hurt by the weak performance of its Nordics business, and said it would not pay a final dividend. Levi Strauss Levi Strauss is set to report earnings before the market opens. The street expects the denim maker to post earnings of 3 cents per share on revenue of $1.34 billion. That is to be compared to Earnings per Share (EPS) of 29 cents and revenue of $1.47 billion in the same quarter a year ago. Levi Strauss has seen its stock decline by nearly 21% over the past three months. 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.

Wall Street posted modest declines overnight, following its return from the holiday break. Source: Bloomberg Indices Commodities United States Federal Reserve Gold Dow Jones Industrial Average Yeap Jun Rong | Market Strategist, Singapore | Publication date: Thursday 06 July 2023 Market Recap Wall Street posted modest declines overnight (DJIA -0.38%; S&P 500 -0.20%; Nasdaq -0.18%), following its return from the holiday break. Late last week, the Fear and Greed Index has reverted back to ‘extreme greed’ territory, which may point to near-term overextended price levels. That said, seasonality over the past 20 years remains in favour for a continuation of the upward trend, with the month of July delivering the second-highest average return and positive frequency across other months. The Federal Reserve (Fed) minutes came with not too much of a surprise, largely serving as a reinforcement for the Fed’s hawkish stance, which were presented in the series of Fedspeak beforehand. The additional colour is that ‘almost all’ Fed officials indicated that further tightening is likely, but settled at a pause at the previous meeting to buy time in assessing the lagged impact of current policies. Rate expectations remain largely unswayed by the Fed minutes, with a continued lean towards an additional 25 basis-point rate hike in July to conclude the Fed’s hiking process. Nevertheless, US Treasury yields found their way higher, with the 10-year yields surging to a new three-month high. The US dollar received an uplift (+0.2%) overnight as well, seemingly heading back to retest the key 103.12 level of resistance once more. The formation of higher highs and higher lows since mid-June reflects buyers attempting to take back some control, while the Relative Strength Index (RSI) has defended its key 50 level thus far. Further upmove above the 103.12 level could place a retest of its May 2023 high in sight. Source: IG charts Ahead, the US ISM services Purchasing Managers Index (PMI) will be on the radar, which is expected to show a slight uptick to 51.0, following the surprise underperformance in May. With the Fed having their eyes on the core services ex-shelter prices, further signs of progress in the services sector’s prices data will provide more conviction for an impending rate pause. The lead-up to the US non-farm payroll report this week will also leave US job openings data in focus today, along with the initial jobless claims and ADP report. Any resilience on that front could point to strength in the US labour market which supports soft-landing hopes, but much will still revolve around a continued moderation in wage pressures, which will only be presented in the US non-farm report tomorrow. Asia Open Asian stocks look set for a negative open, with Nikkei -0.94%, ASX -0.63% and KOSPI -0.58% at the time of writing. Despite the stellar record of outperformance in the China’s Caixin services PMI since the start of the year (outperform 5 out of 6 occasions), the latest data has disappointed with a lower-than-expected read (53.9 versus 56.2 forecast). That joined the list of economic data pointing to a more lacklustre growth picture in the world’s second largest economy, which suggests more to be done in the second half of the year. The relatively quiet economic calendar in the region will leave Australia’s trade balance in focus ahead. The China A50 index continues to show a downward trend in place thus far, trading on a series of lower highs and lows since the start of the year. On the upside, a downward trendline and Ichimoku cloud resistance seems to be in the way, with the RSI still hovering below the key 50 level. Further downside may leave the 12,300 level on watch as near-term support, with any failure to hold the level potentially paving the way towards the 11,700 level next. Source: IG charts On the watchlist: Gold prices continue to show signs of exhaustion An upmove in US Treasury yields and a stronger US dollar has not been well-received by gold prices overnight, which failed to find much conviction for a move back above the US$1,940 level. Thus far, abating recession concerns have curtailed safe-haven flows, while rate expectations continue to price for rate cuts only in 2024, with the pushback in rate-cuts timeline compared to the start of the year driving some unwinding in gold from previous bullish build-up. On the technical front, its RSI continues to hover below the key 50 level as a reflection of sellers in control, reinforced by a breakdown of previous key support confluence at the US$1,940. Further downside may leave the US$1,900 level on watch, where previous dip-buying drove the formation of a bullish pin bar last week on the daily chart. Failure to hold this level could pave the way to retest the US$1,850 level next. Source: IG charts Wednesday: DJIA -0.38%; S&P 500 -0.20%; Nasdaq -0.18%, DAX -0.63%, FTSE -1.03%

The US dollar index finds itself in the spotlight as the market anticipates key labour market data releases, while simultaneously grappling with weaker-than-expected Chinese PMI and currency fluctuations. Source: Bloomberg Forex United States dollar China Renminbi United States Economy of China Tony Sycamore | Market Analyst, Australia | Publication date: Wednesday 05 July 2023 It was a quiet overnight trading session with muted trading volumes in the FX space due to US Independence Day. The US dollar index, the DXY, closed marginally higher at 103.08 (+0.09%). This morning, the USD edged higher again after China’s Caixin PMI Service and Composite PMI data came in weaker than expected. Following a better read on the Caixin Manufacturing PMI yesterday (50.5 vs 50.4 expected), both the Services (53.9 vs 56.5 expected) and the Composite PMI (52.5 vs 55.1 expected) have disappointed. The soft PMI numbers are another indication that the Chinese economy is slipping towards a double-dip slowdown and that further stimulus measures are required to reverse the spiral. Earlier this week, the Chinese currency, the CNY, gained four big figures (+0.75%) against the USD after tumbling -5.5% in the June quarter. Although the CNY is not part of the DXY, it directly influences other currencies in the DXY basket, including the JPY and the CAD, which are easing as I write. Regarding domestic data that can impact the DXY in the near future, we are looking at three key labour market data points scheduled for release later this week. What is expected from the JOLTS, ADP Employment Report and NFP? ADP employment report The ADP employment report will be released on Thursday, 06 July, at 10.15 pm AEST The ADP report isn’t an exceptionally reliable guide to Non-Farm Payrolls Nevertheless, the market expects a 240k rise in June, falling from 278k in May. JOLTS job openings JOLTS job openings are released on Friday, 07 July at 12.00 am AEST The market is looking for JOLTS job openings to fall to 9,900k in May from a red-hot rise of 10,103k in April Last month’s robust number confirms how tight the labour market still is. Unless some cooling is seen shortly, it will increase the pressure on the Fed to extend its tightening cycle. NFP Non-Farm Payrolls is scheduled for release on Friday night, 07 July, at 10.30 pm AEST The market is looking for payrolls to rise by 225k in June, slowing from 339k in May The unemployment rate is expected to ease to 3.6% in June from 3.7% in May The participation rate is expected to remain unchanged at 62.6% Average hourly earnings are expected to rise by 0.3% in June, allowing the annual rate to ease to 4.2% from 4.3%. DXY technical analysis During the first half of 2023, the US dollar index, the DXY, tested and held support at 101.00/80 on three separate occasions before bouncing to a high of 104.69 in late May. While the downside has been well protected near 101.00/80, overhead resistance is firming above 104.00, via the 200-day moving average, currently at 104.73 and the downtrend resistance that connects the March 105.88 high with the May 104.69 high, coming in at 104.30ish. Should the DXY move towards the range extremes mentioned above, we suspect that it will initially hold. Aware that if they were to break on a sustained basis, it would likely see a test of support at 97.00 on the downside or 106.00 on the topside. DXY index daily chart Source: TradingView Source: TradingView. The figures stated are as of July 5, 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

Look Ahead 6/7/23: JOLTS; Australia trade balance; Curry’s; Levi’s US jobs-related data including the JOLTS will be key ahead of the NFP report on Friday. Australia’s trade surplus is expected to narrow. Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Wednesday 05 July 2023 Watch out for what electronics retailer Curry’s and denim clothing giant Levi’s say about margins in a tough economic environment.

Charting the Markets: 05 July FTSE 100, DAX 40 and S&P 500 on a negative footing. EUR/USD, GBP/USD and USD/JPY all drop back in morning trading And Brent crude oil and natural gas prices rise while wheat prices drop like a stone. Jeremy Naylor | Analyst, London | Publication date: Wednesday 05 July 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.

FTSE 100, DAX 40 and S&P 500 on a negative footing Outlook on FTSE 100, DAX 40 and S&P 500 as the US re-opens after its Independence Day holiday. Source:Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Wednesday 05 July 2023 FTSE 100 slips on risk-off sentiment The FTSE 100 trades back in negative territory for the year as it is impacted by the knock-on effect of a five-month low for China's Caixin services PMI which hit sentiment in Asia. Last Thursday’s low at 7,459 may thus be revisited. Below it lies the May trough at 7,433. Resistance above Monday’s low at 7,514 can be seen along the 200-day simple moving average (SMA) and at this week’s high at 7,562 to 7,569. While it caps, the FTSE 100 should remain under pressure. Source: ProRealTime DAX 40 continues to slide this week The DAX 40 shot up strongly at the end of last week to finish the second quarter on a high and early this week rose to 16,211 before coming off again as sentiment deteriorated on weaker data and Germany’s trade surplus falling to a five-month low. The 8 June low at 15,886 may thus soon be tested, a fall through which would push the 15,710 late June low back to the fore. Good resistance above the 29 June high at 16,000 comes in between the late May and early June highs at 16,080 to 16,115. Source: ProRealTime S&P 500 back from Independence Day holiday The S&P 500 is expected to trade on a weaker footing as markets re-open after Tuesday’s Independence Day holiday ahead of the publication of the Federal Reserve (Fed) minutes and as China imposes export curbs on metals used in semiconductors and EVs. This points to some renewed US-China tensions. The June peak at 4,447 is to be revisited, below which there is no support to speak of until Thursday’s high at 4,405. Only a bullish continuation and rise above last week’s 14-month high at 4,458 could lead to the April 2022 high at 4,513 being reached. Source: ProRealTime

It's the release of the minutes of the Fed's last rate meeting at which it left the Federal Funds Rate on hold. The pause in rates followed a run of consecutive rate hikes at every meeting since March 2022. Jeremy Naylor | Analyst, London | Publication date: Wednesday 05 July 2023 The updated economic projections suggest rates may reach 5.6% by year-end, thus suggesting two more increases. Fed Chair Jerome Powell recently reinforced the view that the board is leaning towards two rate hikes and hasn't ruled out consecutive-meeting rate increases. The latest economic projections from the Fed indicate that the fed funds rate is expected to gradually fall to 4.6% in 2024. (Video Transcript) Fed minutes It's the release of Federal funds minutes of the last meeting show that we saw the Federal Reserve (Fed) keep interest rates on hold following the Independence Day holiday. As it does, the release today will force people back to their desks, I guess bringing them back to reality after what's a long weekend for many been. The pause in rates followed a run of consecutive rate hikes at every meeting since March 2022. The updated economic projections suggest rates may reach 5.6% by year's end, thus suggesting more rate increases. The Fed chair, Jerome Powell, seen here recently reinforcing the view that the board is leaning towards two rate hikes and hasn't ruled out consecutive meeting rate increases, The latest economic projections from the Fed indicate that the Fed funds rate is expected to gradually fall to 4.6% in 2024. USD Let's show you what's happening with the USD. This is the dollar basket up for a third day in a row today. Despite the fact we saw the US markets out yesterday, money was going into the dollar, and I think the minutes may reveal the board's intention is to keep interest rates higher for an extended period of time, with a rate hike possibly delayed until the end of the first quarter or second quarter of 2024 if inflation falls towards that desired trajectory. EUR Let's take a look at the EUR very quickly, all the way down, not quite as low as we've been in the last week or so, but at 1.77 looking weak. So, if you're selling euros at the expense of the USD, your stock goes up above the 110 level, currently trading at 1 to 876.

Brent crude oil and natural gas prices rise while wheat prices drop like a stone Outlook on Brent crude oil, Chicago wheat and natural gas amid weakening manufacturing activity in major economies. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Wednesday 05 July 2023 Brent crude oil prices continue to rise Brent crude oil is still grappling with the 55-day simple moving average (SMA) at $75.97 per barrel for the third day in a row as Saudi Arabia earlier this week announced that its voluntary output cut of 1 million barrels per day would last a month longer, until the end of August. Weakening manufacturing activity in major economies is putting pressure on the oil price, though, as did this morning’s Caixin China services PMI which fell to a five-month low. Only a rise above Monday’s $76.56 high could lead to the late June high and the May-to-July resistance line at $77.20 to $77.24 being retested. If overcome, the May and June highs at $78.17 to $78.52 may be reached as well. Minor support can be found around the late June high at $75.07. The short-term uptrend will remain in play while last week’s low at $72.28 underpins. Source: ProRealTime Chicago Wheat prices fall off a cliff Chicago Wheat’s rally to a four-month high at $7.70 in June on worries about Midwestern dryness and political instability in Russia has been followed by just as steep a decline. The reason for this slide is improving weather in the US. The wheat price is now trading back below its 55-day simple moving average (SMA) at $6.53 and nears the $6.34 mid-June low, a fall through which looks imminent. Further downside targets are the $6.31 late May high, the $6.20 early June low and the psychological $6.00 region. Resistance above the $6.56 early June high can be spotted at the $6.71 May peak. Source: ProRealTime Natural gas prices consolidate around the $2.75 mark Natural gas price rises are running out of steam. The recent decline from the $2.930 MMBtu near four-month late June high has so far taken it to last week’s low at $2.617 as Norway hopes to soon ramp up production. Since last week natural gas has been trading in a low volatility sideways trading range above its one-month tentative uptrend line at $2.686. Immediate resistance sits between the May and last Friday’s highs at $2.786 to $2.824 and support below the support line at Tuesday’s $2.661 low. Below it lies last week’s low at $2.617. Source: ProRealTime