MongiIG

UK wages growth hits record high, add to BOE’s inflation concerns Wages in the UK rose at a record pace, fueling fears of a wage price spiral that will inevitably lead the BoE to raise rates further. Jeremy Naylor | Analyst, London | Publication date: Tuesday 11 July 2023 UK economy Wages in the UK rose at a record pace, fueling fears of a wage price spiral that will inevitably lead the Bank of England (BoE) to raise rates further. Just a day after BoE Gov. Andrew Bailey said inflation will start to fall measurably Average weekly wages, excluding bonuses, rose 7.3% as staff demanded more pay to keep pace with consumer price inflation, which has been running in double digits for much of the last year. Meanwhile, the unemployment rate unexpectedly rose to 4% in June from 3.8% the prior month. Economists forecast the unemployment rate to remain at 3.8%. Inflation Food inflation is still weighing on shoppers' ability to spend on nonessential items. The British Retail Consortium (BRC) retail sales monitor rose by 4.2% year-on-year (YoY) on a like-for-like basis. It is higher than the 3.7% increase recorded in May but much lower than inflation. In other words, an increase in spending but a drop in the volume of goods purchased the survey shows that so far, consumers remain resilient. Bank of England Over the second quarter, food spending was up 9.8%. But the threat of further Bank of England (BOE) rate hikes and the prospect of a slower-than-expected economic recovery mean consumers remain cautious. Non-food spending only grew by 0.3% in the period. On Thursday, a shock could come with the monthly gross domestic product (GDP) data. The British economy is expected to have contracted by 0.4% in May month-over-month (MoM). This would take the three-month average to -0.1%. We are nowhere near talking about a recession yet, but it is a scenario that economists keep in mind, as many see rates rising a further 150 basis points this year. The Federal Reserve The Federal Reserve (Fed) might still need to raise interest rates further, but the tightening cycle is coming to an end. Yesterday, several Fed officials expressed their views. For San Francisco Fed President Mary Daly, the Fed is nearing "the last part" of its hiking cycle. For Fed Vice Chair for Supervision Michael Barr, "I'll just say for myself, I think we're close." Of course, not all Fed members agree. Cleveland Fed President Loretta Mester told reporters yesterday that "if it was just me alone, I would have moved the rates up, but I understood the rationale for not moving in June." Australia inflation In Australia, consumer sentiment improved in July. The Westpac consumer sentiment index rose 2.7% in July to 81.3, the biggest gain since April. It reflects an improvement on the consumer inflation front and the fact that the Reserve Bank (RBA) held rates at 4.1% at its last meeting. However, the index remains well below 100, which means that pessimists still outnumber optimists for the 17th month running. Australian business conditions also improved. National Automotive Board (NAB) business confidence rose to 0 in June from -4 in May. Major banks Major banks are to undergo a major overhaul in the way they are assessed for their operational risks. If it goes through, it will be one of the biggest regulatory overhauls since the financial crisis. The top US banking regulator, Michael Barr, says he wants the big banks to start using a standardised approach for estimating credit, operational, and trading risks rather than relying on their own estimates. The Fed's annual stress tests should be reassessed to better capture the dangers faced and to better align Wall Street with international standards known as Basel III. It may set up a clash over the amount of capital required to cover increased risks, as the banks have long fought against higher capital requirements. The announcement comes just days before the largest banks begin posting their second-quarter results, starting on Friday with JPMorgan, Citigroup , and Wells Fargo. 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.

Asian stocks staged a recovery overnight, continuing the rebound seen in Europe and the US yesterday. Bond yields fell after last week's surge, and the dollar was weaker as well. In the stock market, Alibaba's shares rose due to the belief that a $984 million fine for Ant Group could indicate the end of a long-term regulatory crackdown on the Chinese tech industry. The U.S. Treasury Secretary, Janet Yellen's visit to Beijing didn't seem to significantly impact U.S.-China relations, with no clear signs of improvement or deterioration. It was perhaps an 'anti-Goldilocks' set of UK employment figures this morning; the claimant count was higher than expected and the unemployment rate rose in May to 4%, while average hourly earnings rose by 6.9% including bonuses, putting more pressure on the Bank of England to keep raising rates.

Look Ahead to 11/7/23: US CPI; UK retail sales; Australia consumer confidence; ZEW Ahead of the key US inflation reading on Tuesday, watch out for potential market moving events including UK retail sales, and consumer confidence figures out of Australian and Germany. Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Monday 10 July 2023

Charting the Markets: 10 July European stocks indices to open lower on sluggish Chinese economy. EUR/USD and GBP/USD stall while USD/JPY slips at start of week. And gold, crude oil and natural gas prices move higher. Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 10 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.

Thanks for sharing @THT All the best - MongiIG

The Reserve Bank of New Zealand is expected to keep interest rates unchanged, while the Bank of Canada is seen raising rates by a quarter point. IGTV’s @AngelineOng takes a look at what’s driving the moves by both central banks. Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Monday 10 July 2023 (Video Transcript) Central banks on rates Central banks continue to hog the spotlight this week with interest rate decisions from New Zealand and also Canada. RBNZ Let's start off with New Zealand. Ater hiking by 25-basis points at its last meeting and taking the official cash rate (OCR) to its highest level 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 position the bank said it was seeing soaring costs peaking at that level. BoC Now the situation is different in Canada. The Bank of Canada (BoC) unexpectedly hiked by 25-basis points in June and on Wednesday the bank is seen adding another quarter of a percentage point to its overnight rate, taking it to 5%. Concerns about inflation have risen in recent weeks, and if headline inflation has been almost constantly falling since June last year, well, core inflation appears to be stickier. Core CPI has also been falling, but at a slower rate than the main index. For more videos from us here at IGTV, join us on Twitter at IG.com, Instagram and subscribe to our YouTube channel.

All the best - MongiIG

The gold price might be at a crossroads with potentially conflicting signals; the US dollar appears vulnerable, but US Treasury yields remain high and US CPI this week could provide some directional clues. Source: Bloomberg Forex Shares Commodities Gold Consumer price index Inflation Daniel McCarthy | Strategist, | Publication date: Monday 10 July 2023 The gold price has started the week holding onto the gains seen on Friday when the US dollar slid lower across the board. The dollar weakened despite Treasury yields continuing their march higher with the benchmark 10-year bond trading near 4.10%, a long way from the low of 3.25% seen in April. The policy-sensitive 2-year note yielded over 5.10% last Thursday for the first in 16 years before dipping to 4.75% on Friday. It is now back above 4.90%. The bumpy ride was indicative of the data points along the way as well as the Federal Open Market Committee (FOMC) meeting minutes revealing a more hawkish board than the market had previously perceived to be the case. The interest rate market now weighs a 25-basis point hike by the Fed on the 26th of July at over 80% probability. Of potential concern for gold bulls is the run-up in US real yields. The real yield is the nominal yield less the market-priced inflation rate derived from Treasury inflation-protected securities (TIPS) for the same tenor. The 10-year inflation-adjusted return for Treasuries yielded over 1.82% on Friday. The last time it traded at these levels in 2009, spot gold was below US$ 1,000. A rising real yield in Treasuries offers an increasing return against the prospect of holding a non-yielding asset, like gold. Of course, a lot has changed since then but US CPI on Wednesday will be closely watched to see if the Fed’s tightening continues to have the desired impact on inflation. A Bloomberg survey of economists is looking for year-on-year CPI to print at 3.1% to the end of June, against 4.0% prior. The driving force pushing real yields higher has been the increase in nominal yields, with inflation expectations appearing to remain anchored for now, as shown in the chart below. For gold traders, keeping an eye on US yields might be worthwhile for clues on possible directional signals. GC1 (gold front futures contract) against US 10-year Treasury note, 10-year breakeven inflation rate and 10-year real yield 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.

US markets end the week on shaky ground amidst bond market volatility and central bank liquidity concerns. Despite a dip in employment rates, inflation fears persist as the focus shifts to the start of the Q2 earnings season. Source: Bloomberg Indices Shares Inflation S&P 500 Federal Reserve Consumer price index Tony Sycamore | Market Analyst, Australia | Publication date: Monday 10 July 2023 US equity markets concluded the week on a shaky note, troubled by escalating volatility in the bond market and a liquidity drain of an aggregate -$687.2bn last week from central banks. Market volatility amid central bank concerns The declines occurred despite a softer-than-expected non-farm payroll figure as the US economy added 209k jobs last month, missing forecasts of 225k. Although the economy added the fewest jobs since December 2020, the cooling wasn't sufficient to halt the unemployment rate falling back to 3.6% from 3.7% in May. It also failed to prevent average hourly earnings from rising by 0.4% in June, leading the annual rate to increase to 4.4% versus 4.2% expected. Payroll and unemployment figures: An overview The pivotal events for this week will be US inflation data on Wednesday night, previewed below. Keep an eye out for Federal Reserve speakers, including Daly, Mester, Bostic, and Kashkari, who will be active before the Fed's blackout period begins the following week. Q2 earnings season commences on Friday with reports from JPMorgan, Citigroup, and Wells Fargo. A peek into the week: Inflation data and Fed talks CPI Last month, headline CPI eased to 4% from 4.9% in April, driven by a decline in energy prices. Core CPI, which excludes volatile items such as food and energy, eased to a one and a half year low of 5.3% from 5.5% in April. This month US headline and core CPI are both forecast to rise by 0.3%. This would see the headline rate fall to 3.1% YoY from 4% in May, with base effects and declines in energy and food prices playing leading roles in the deceleration. Inflation Core inflation is expected to fall to 5.0% YoY from 5.3% in May. Shelter inflation is expected to continue its downward trajectory, as are airfares and medical inflation, following a reset in health insurance inflation in October last year. While inflation has likely peaked, core inflation remains sticky, and the Fed will want to see more confirmation that a downside progression is continuing to be made on core inflation to ease market fears of further tightening. S&P 500 technical analysis At the start of last week, our view was that seasonal strength in July would see the S&P 500 and other US indices extend their gains. However, by Friday morning, as noted on Twitter, we had changed our tune based on "the rally in yields and the possibility of a double top at 4500ish in the S&P 500." While below 4500, we expect last week's pullback to extend towards 4368. Should the S&P 500 see a sustained break below 4368, the next layer of support is not until 4300. Be aware that a sustained break above 4500 indicates the uptrend has resumed towards 4600/4630. S&P 500 daily chart Source: TradingView Nasdaq technical analysis The sharp rally in bond yields last week undercut support for the Nasdaq, leaving a potential double top in place at 15,475ish. While the Nasdaq remains below 15,475, we expect last week's pullback to extend towards 14,853. Should the Nasdaq see a sustained break below 14,850, the next layer of support is not until 14,500. Be aware that a sustained break above 15,475 indicates the uptrend has resumed towards 16,000. Nasdaq daily chart Source: TradingView Dow Jones technical analysis The Dow Jones chart is strewn with several highs this year between 34,250 and 34,600, each a failed attempt to break above the December 34,712 high. After its latest failure last week at the 34,465 high, risks to the downside are mounting. Should the Dow Jones break below support at 33,600/50, it will likely see the decline extend towards the 200-day moving average, currently at 32,976. This level needs to hold to avoid a deeper pullback towards the May 32,586 low with the possibility to the banking crisis March 31,429 low. Dow Jones 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.

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

Great prediction and analysis @phillo Thanks for sharing! All the best - MongiIG

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.