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Nvidia shares have rocketed in 2023 as investors seek the capital growth of the AI revolution. Is this just another bubble? Source: Bloomberg Indices Shares Nvidia Artificial intelligence S&P 500 Cloud computing Charles Archer | Financial Writer, London | Publication date: Tuesday 30 May 2023 In April 2007, Microsoft CEO Steve Ballmer famously argued that ‘there’s no chance that the iPhone is going to get any significant market share. No chance.’ Of course, he wasn’t the first tech leader to make a spectacularly wrong prediction, and he certainly won’t be the last. But considering the recent trajectory of Nvidia (NASDAQ: NVDA) shares, it may well be that the NASDAQ tech company is now operating within a bubble. It’s up 172% year-to-date, more than tripled since a low of $112 in early October 2022, and has risen by 500% in five years. It’s also worth noting that it participated in the tech stock crash between November 2021 and October 2022, falling from $330 to $112 in the space of a year. A similar fall isn’t impossible in the near future. Nvidia Q1 results If you take a macro look at S&P 500 returns in 2023, Société Générale SA strategist Manish Kabra recently noted that ‘the AI boom and hype is strong...so strong that without the AI-popular stocks, S&P 500 would be down 2% this year.’ Indeed, the index is up 10% year-to-date, but entirety of this return is comprised of just seven tech-focused companies. Last week, Nvidia’s Q1 results saw it add $200 billion to its market cap in a single day of trading. For context, the proposed US debt ceiling deal involves just $50 billion in spending cuts. The company has broken through the $1 trillion market capitalisation barrier, and trades on a sky-high price-to-earnings ratio of 213. It’s worth putting this valuation in context. Full-year fiscal 2023 saw NVDA generate $26.97 billion, essentially flat on fiscal 2022. GAAP earnings per diluted share were $1.74, down 55% from a year ago. And in this most recent quarter, the AI stock delivered $7.2 billion in revenue, much higher than its previous guidance for $6.5 billion. But revenue was still 13% lower than in the same quarter last year. However, adjusted earnings rose by 28% to $0.82 per share. Much of the improved performance came from the data centre business, which saw revenue surge by 14% year-over-year to a record $4.28 billion. CFO Colette Kress enthuses that ‘Multiple CSPs announced the availability of H100 on their platforms, including private previews at Microsoft Azure, Google Cloud, and Oracle Cloud Infrastructure, upcoming offerings at AWS.’ Further, CEO Jensen Huang noted that ‘our entire data centre family of products — H100, Grace CPU, Grace Hopper Superchip, NV Link, Quantum 400 InfiniBand and BlueField-3 DPU — is in production. We are significantly increasing our supply to meet surging demand for them.’ Where next for Nvidia shares? Nvidia is issuing forward guidance of $11 billion in this current quarter, a huge increase on recent analyst estimates of circa $7.2 billion and the $6.7 billion revenue of Q2 FY23. Encouragingly, it’s also anticipating a non-GAAP gross margin of 70%, a huge improvement on the 46% margin achieved in the same quarter last year. Nvidia’s market position as the ‘picks and shovels’ AI share can look attractive. Polaris analysis estimates that generative AI could see annual growth of 34% over the next ten years and rise to $200 billion in annual revenue by 2032. McKinsey thinks that AI could add $13 trillion to the global economy by 2030, while Ark Investment thinks this could be as high as $200 trillion. FactSet research shows that management teams on 110 different S&P 500 companies discussed AI in their latest earnings calls. Many of these companies are non-tech sector, suggesting there could be about to be a huge shift in computing. Nvidia has also just announced a slew of new technologies; the Spectrum-X designed to ‘improve the performance of Ethernet-based AI clouds,’ a content engine designed to make high quality commercials at low cost, and the NVIDIA DGX supercomputer for advanced generative AI language applications. While ChatGPT and the associated buzz does appear to be a real breakthrough, I am developing a creeping sense of Déjà vu. Tech stocks love their buzzwords; in 2022, it seemed as if start-ups simply needed to mention blockchain, crypto, the Metaverse, disruptive tech, Web3, or DeFi, and investors would open up their wallets. This didn’t always end well. It was only a few short weeks ago that Silicon Valley Bank and Credit Suisse collapsed. Inflation is still uncomfortably high, and interest rates are still rising. Tech stock growth is usually restricted when monetary policy tightens, and Crunchbase data shows that 146,192 tech employees have been laid off so far this year. Many analysts are still expecting that the US will shortly enter into recession. Nvidia may be a game-changing opportunity. But it might also be in the eye of the storm.

The US debt ceiling deal has cleared the first hurdle, with the House of Representatives passing the bill to raise the ceiling. The deal now moves to the Senate, which is also expected to pass the measure, staving off a US default. Stocks in Asia made headway, and futures are pointing higher in Europe and the US. Meanwhile, in China, the Caixin manufacturing PMI sneaked back into expansion territory, allaying some of the fears about a broad slowdown in the Chinese economy. More PMIs next week, along with inflation and trade data, will provide additional insight into the Chinese economy. Expectations for a Fed move in June have dropped back sharply after vice-chair Jefferson said that he favoured 'skipping' a June hike, while softer CPI data in Europe have seen ECB tightening expectations drop too. Further eurozone inflation data is scheduled for today, along with the ADP report (delayed a day due to Memorial Day in the US), weekly jobless claims, the ISM manufacturing PMI and weekly crude oil inventories.

Look ahead to 31/5/23: China PMI; France GDP; Germany CPI Economic data is key on Wednesday. It starts in Japan with retail sales, followed by Chinese PMI. Jeremy Naylor | Analyst, London | Publication date: Tuesday 30 May 2023 IGTV’s Jeremy Naylor looks at the chances that the Chinese yuan will weaken further as it becomes more and more obvious that the recovery in China is further away than initially expected. Then in the eurozone we’re looking at the CAC 40 and DAX as growth and inflation data is released. The only corporate on the schedule is from stationers, WH Smith.

Hi @Vinter We are currently working on upgrading ProRealtime to v12, which is still in the Beta phase. We will have to wait until all the tests are completed and any bugs are addressed before releasing it. Regrettably, we cannot provide an ETA at this point. However, we will keep all clients informed once the new version is ready to be added. We appreciate your patience and understanding in this matter. All the best - MongiIG Take a quick poll and vote

Charting the Markets: 30 May FTSE 100 lower while DAX moves higher in early trading, and Dow looks to edge up following reports of debt ceiling deal. EUR/USD declining and USD/JPY holding firm, while GBP/USD begins to show signs of a higher low. Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 30 May 2023 Gold’s pullback slows down, while Brent crude turns lower and natural gas struggles to hold the 50-day MA. 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.

Artificial intelligence (AI) is the new big hot topic. Jeremy Naylor | Analyst, London | Publication date: Tuesday 30 May 2023 After NVIDIA last week reported a massive earnings and revenue beat, the company is now building Israel's most powerful AI supercomputer. It will cost hundreds of millions of dollars, but the computational power proposal is astonishing. The system, called Israel-1, is expected to deliver the performance of up to eight exaflops of AI computing. One exaflop is a standard measure of performance for a supercomputer. Exa is short for quintillion, a 1 followed by 18 zeros, which means one exaflop has the ability to perform one billion-billion calculations per second. This proposal from NVIDIA is to build a computer which can perform eight times that amount of calculations per second. The report suggests that the system will be partly operational by the end of 2023. (Video Transcript) More good news for NVIDIA NVIDIA, the artificial intelligence (AI) specialist which makes semiconductors for computers, reported some stellar earnings last week, both earnings and revenues up, and the outlook extremely robust as a result of its association with artificial intelligence or AI chips. Yesterday, NVIDIA came out with some more news. It's announced it is building Israel's most powerful AI semi-computer and the numbers are astonishing. The system is called Israel-1. It's expected to deliver the performance of up to eight exaflops of AI computing. Now, what is an exaflop? Well, that's a good question. One exaflop has the ability to perform one billion-billion calculations per second. Now, the system will cost hundreds of millions of dollars and will be partly operational by the end of 2023. This will mean that Israel through this computer will be able to engage far quicker with AI computing and it will help extra elements. Share price chart Let's take a look at what's happening in NVIDIA stock as we speak all-sessions on the IG platform. This is early trade. We are very, very close to going to a new all-time high and I suspect we could well end up seeing this creep up, even as we speak. It is currently trading at $398.74. This is a candle here where you can see we've gone at the bottom and we're currently at the top. There are no sellers in this stock. And I predict that sometime today, we will see a new all-time record high. Last week, NVIDIA stock jumped more than 25%, or around about a quarter of its total value, on the back of its quarterly earnings. And you can see at the moment we are punching higher as we speak. So, NVIDIA very much the front and center of AI computing and it's benefiting this morning from that news in Israel.

HP, all-sessions on the IG platform, is reporting its fiscal second quarter (Q2) earnings and revenue after tonight's US closing bell. Jeremy Naylor | Analyst, London | Publication date: Tuesday 30 May 2023 The Street forecasts earnings of 76 cents per share, which would be a drop of about 29% from the same quarter a year ago. Revenue is expected to decline by 21% year-on-year to just over $13 billion, a performance that reflects the continuing fall in demand for PCs. Shares of the personal computer and printer maker have lost about 13% of their value over the past 12 months. But so far this year the stock has gained about 15% thanks to two consecutive better-than-expected quarterly reports. (Video Transcript) HP earnings HP is expected to report after the closing bell tonight. The Street forecasts earnings of $0.76 per share, which will be a drop of around 29% from the same quarter this time last year. Revenue is expected to drop by 21% year-on-year to just over $13 billion, a performance that reflects a continuing fall in PC demand. Now Hewlett Packard is all-sessions on the IG platform. The personal computer and printer maker's shares have lost about 13% of their value of the last 12 months so far this year. Share price chart If we have a look at the chart here for Hewlett Packard, you can see as of Friday's all-sessions close it beat the previous high, 3116 closing at 3136, the highest close that we've seen there in this market since the 29th of August last year. It's 15% up so far this year, thanks to two consecutive better than expected quarterly reports. Now, its spinoff company, HPE, which is Hewlett Packard Enterprise. It's not all-sessions on the platform, and a very different fate over the past 12 months, broadly unchanged over the period. The stock has lost around 7% in the last five months, despite beating estimates and raising forecasts three months ago. HPE also releasing its quarterly earnings tonight after the bell. Analysts anticipate a 9% rise in its earnings per share, $0.49. We've got a chart showing you what's expected. Revenue is also expected to rise by 7% to $7.31 billion. That stock is not all-sessions on the platform. You can trade all-sessions on Hewlett Packard after the bell on its figures.

EUR/AUD: Upside could be capped for now EUR/AUD risks a retest of the 1.5950-1.6050 area (including the December high and the 89-day moving average). This follows a retreat last month from a tough barrier at the October 2020 high of 1.6825. For a more comprehensive discussion, see “Australian dollar ahead of budget”, published May 9. EUR/AUD daily chart Source: chart created by Manish Jaradi, TradingView Manish Jaradi | IG Analyst, Singapore | Publication date: Tuesday 30 May 2023. Full blog post article

Despite speculation of a minor rebound, the Euro continues to struggle against the dollar as an excess of long positions and disappointing Euro area economic figures add pressure. Source: Bloomberg Forex Euro EUR/USD Market trend United States dollar Eurozone Manish Jaradi | IG Analyst, Singapore | Publication date: Tuesday 30 May 2023 The euro is beginning to look a bit oversold at least against the US dollar ahead of key Euro area inflation data, opening the door for a minor rebound. However, the pace and the extent of the fall this month have raised the bar for a sustained move higher in the single currency. Overbought conditions, stretched positioning, and hawkish repricing in US rates triggered a pause in the euro’s two-month rally against the US dollar. Economic surprise index and FX positioning Source: chart created by Manish Jaradi, TradingView While overbought conditions have reversed, positioning remains unchanged. Despite the recent slide, long speculative EUR positioning is running around the highest since 2020 and within the major currency space (see chart), suggesting continued overcrowded conditions for the single currency. EUR/USD daily chart* Source: chart created by Manish Jaradi, TradingView From a macro perspective, Euro area macro data have been underwhelming, further weighing on EUR. The Economic Surprise Index (ESI) for the Euro area continues to slide, even as the ESI for the US appears to have stabilized recently (see chart). Key focus is now on German inflation data due on Wednesday and Euro area figures on Thursday, and US jobs data on Friday. EUR/USD weekly chart Source: chart created by Manish Jaradi, TradingView Money markets are pricing in more than two rate hikes while pushing back a peak in rates to December. In this regard, Irish central bank chief Gabriel Makhlouf said last week that more than two ECB rate hikes this year are possible given stubborn inflation. In contrast, markets are pricing in a 63% chance of a 25 bps Fed rate hike at the June meeting up from 25% a week ago, according to the CME FedWatch tool. EUR/USD: Short-term trend is down As the colour-coded candlestick 240-minute charts show, based on trending/momentum indicators, EUR/USD is in a bearish phase. However, on the daily charts, EUR/USD has moved to a consolidation phase within the bullish structure that started in late 2022 - a risk highlighted in early May. EUR/USD’s drop below the lower edge of the Ichimoku cloud on the daily chart is a signal that the upward pressure has faded slightly in the short term. A stronger cushion is at the March low of 1.0510, near the 200-day moving average, which could contain the current downtrend. On the upside, the mid-May high of 1.0900 could pose stiff resistance. EUR/USD daily chart Source: chart created by Manish Jaradi, TradingView EUR/GBP: Bias remains down The stall in the downtrend could be a sign of delayed decline, rather than a reversal in EUR/GBP’s fortunes. The cross would need to rise above immediate resistance at 0.8750 for the bearishness to fade. Until then, the bias remains for a move toward the December low of 0.8545. EUR/GBP daily chart Source: chart created by Manish Jaradi, TradingView EUR/AUD: Upside could be capped for now EUR/AUD risks a retest of the 1.5950-1.6050 area (including the December high and the 89-day moving average). This follows a retreat last month from a tough barrier at the October 2020 high of 1.6825. For a more comprehensive discussion, see “Australian dollar ahead of budget”, published May 9. EUR/AUD daily chart Source: chart created by Manish Jaradi, TradingView *Note: In the above colour-coded chart, blue candles represent a Bullish phase. Red candles represent a Bearish phase. Grey candles serve as Consolidation phases (within a Bullish or a Bearish phase), but sometimes they tend to form at the end of a trend. Note: Candle colors are not predictive – they merely state what the current trend is. Indeed, the candle color can change in the next bar. False patterns can occur around the 200-period moving average, or around a support/resistance and/or in sideways/choppy market. The author does not guarantee the accuracy of the information. Past performance is not indicative of future performance. Users of the information do so at their own risk.

Holidays in the US and UK brought about a relatively quiet start to the new trading week, while US equity futures this morning pointed to modest gains as an attempt to follow through with its rally last week. Source: Bloomberg Forex Indices United States United States dollar Market sentiment GBP/USD Yeap Jun Rong | Market Strategist, Singapore | Publication date: Tuesday 30 May 2023 Market Recap Holidays in the US and UK brought about a relatively quiet start to the new trading week, while US equity futures this morning pointed to modest gains as an attempt to follow through with its rally last week. Some resistance to the US debt deal has surfaced from a handful of Republican lawmakers overnight but broad expectations seem well-anchored for an eventual resolution. The US one-year and five-year credit default swaps (CDS) continued to narrow, as a reflection of market pricing for lower risks of a government default. For now, the extension of deadline to 5 June (from previous 1 June) seems to provide more runway for a compromise to be made among policymakers, but that also raised the chances that negotiations may potentially extend into the weekend. On the economic calendar, the US consumer confidence data to be released later tonight may provide a temporary distraction to the US debt ceiling situation. With the current market theme seemingly on “bad news for the economy is bad news on Wall Street”, resilience in consumer confidence may be on the lookout to support further relief. A hawkish repricing in rate expectations and progress over the US debt ceiling talks have lifted the US Dollar above its key 103.12 level of resistance, moving past the upper edge of the Ichimoku cloud on the daily chart. The dollar is now sitting firmly above its 100-day moving average (MA), with its sight potentially set on the 105.00 level next. Any move above the 105.00 level may be on the lookout to confirm a double-bottom pattern in place since the start of the year, which could provide some validation for a renewed bull run for the dollar. Source: IG charts Asia Open Asian stocks look set for a mixed open, with Nikkei -0.30%, ASX +0.06% and KOSPI +0.97% at the time of writing. Chinese equities continue to underperform yesterday, with the lack of positive catalysts potentially diverting some investors’ attention to the US. The official manufacturing purchasing managers’ index (PMI) may be on watch to provide some reassurances, although expectations are still largely leaning towards a subdued growth picture (49.4 expected versus previous 49.2). Closer to home, the Straits Times Index seems to be trading on a bearish flag formation, with a recent retest of the 38.2% retracement level met with a bearish engulfing daily candle yesterday. A look at the recent SGX fund flow data revealed muted net institutional inflows last week (+S$29mn), which pales in comparison to the series of net outflows since February this year (net -S$2.08 billion since 13 February). Sharp paring of exposure to the financial sector is a main contributing factor, with the local banks forming a series of lower highs and lower lows since February this year as a reflection of a downward trend. The projection of the bearish flag could leave the 3,040 level on watch for a retest over the medium term, where a series of lows in 2021 stands. Source: IG charts Source: SGX, IG On the watchlist: GBP/USD trading on a descending channel pattern on its four-hour chart A stronger US dollar on the back of a renewed hawkish repricing in Federal Reserve’s (Fed) rate expectations has translated to a drift lower in GBP/USD, with a descending channel pattern presented on its four-hour chart. A series of resistance may need to be overcome in order to provide greater conviction of renewed upside for the pair, particularly with the upper channel trendline and Ichimoku cloud resistance at the 1.240 level. The relative strength index (RSI) (four-hour) has struggled to move above the key 50 level for now, with intermittent bounces in the pair proving to be short-lived. Further downside may leave the lower channel trendline at the 1.227 level on watch as potential near-term support. Source: IG charts Monday: US markets closed for Memorial Day, DAX -0.20%, UK closed for Spring Bank holiday

Debt ceiling talks have dominated the sentiment since early May. With the "X-date" fast-approaching, what could be the impact on investment markets? Source: Bloomberg Forex Debt Default United States debt ceiling United States United States dollar Hebe Chen | Market Analyst, Melbourne | Publication date: Monday 29 May 2023 Debt ceiling talks have dominated the sentiment since early May. Recently, US Treasury Secretary Janet Yellen warned again that it’s "highly likely" her department will run out of cash, potentially leading to a debt default as early as June 1st. With the "X-date" fast-approaching, what could be the impact on investment markets? What are the debt ceiling and ‘X-date’? The debt limit, also known as the debt ceiling, refers to the maximum amount of money that the United States government is authorized to borrow in order to fulfill its legal obligations. These obligations include various payments such as Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other necessary expenditures. The X-date is a critical point at which the government's available funds may no longer be sufficient to meet these financial obligations. At time of writing, the national debt of the US Federal Government stands at approximately $31.46 trillion. It's worth noting that the current debt limit is set at around $31.4 trillion. That is to say, without raising or suspending the debt limit, the US Treasury would be unable to borrow additional funds once its available cash runs out. Source: https://www.statista.com/chart/28393/us-public-debt/ The impact of a potential default? The failure of the US government to meet its financial obligations by the X-date would have far-reaching ramifications. Directly, the shortage of available funds would force the US government to make difficult choices, such as cutting Social Security payments or reducing payrolls. These painful measures would inevitably present significant obstacles to the long-term stability of US society and the effective functioning of public institutions. In the financial market, the ripple effect of a debt limit crisis would likely result in reduced liquidity and higher borrowing costs. Fitch Ratings has projected that in the event of a default, the credit rating of the US would be graded as a "Restricted Default" status, and all relevant Treasury securities would be downgraded to a "D" rating.* Furthermore, the projected deterioration in economic conditions following a default would pose a threat to financial stability and greatly increase the likelihood of a financial crisis. According to estimates from the White House, the impact of a debt default would be felt across nearly every aspect of the economy. For instance, a protracted default could possibly lead to a 5% increase in the unemployment rate. Moreover, the real GDP growth would be significantly hindered, potentially leading to a deep recession. Source: The White House website: https://www.whitehouse.gov/cea/written-materials/2023/05/03/debt-ceiling-scenarios/ *Source: https://www.fitchratings.com/research/sovereigns/short-term-us-debt-limit-increase-would-not-prevent-future-standoffs-25-04-2023 Is it possible to resolve the debt limit crisis before the X-date? Generally, as the X-date approaches, there is typically heightened pressure on lawmakers to find a solution to avoid defaulting on the government’s financial obligations. This pressure should motivate the relevant parties to reach a compromise and raise or suspend the debt limit. It’s also worth noting that, since 1960, the US Congress has raised the debt limit 78 times to ensure the government's ability to meet its financial obligations. The most recent lift of the debt limit occurred in December 2021. According to a poll conducted among the IG analyst team, 91% of the voters believe that a deal could be reached in the debt ceiling negotiations before June 1st. However, we shouldn’t underestimate the impact of a prolonged debt crisis talk. The longer the negotiation process drags on without a clear resolution, the greater the potential for market disruptions and investor anxiety. The impact on different asset groups US Dollar The potential debt default would have a swift impact on the US Dollar, raising concerns about the US government's financial stability. Additionally, if the economic outlook deteriorates in the aftermath of such an event, the US central bank may need to adjust its current tightening policy. Both of these scenarios would lead to a significant weakening of the greenback when compared to other currencies. Looking at the weekly chart, it’s evident that the US dollar has regained its strength over the past three weeks, finding support from the 20-week moving averages. The forthcoming challenge will be the November low at approximately 103.57 before targeting the February high near 105. In the event of any pullbacks, the May low around 101.33 can be viewed as a critical mid-term support level. US Stocks Both a prolonged debt limit crisis or a default would undermine investors’ confidence and risk appetite. During such periods, risk-averse traders are likely to adjust their investment, which could cause fluctuations in the stock market. From a technical analysis viewpoint, the S&P500 is currently approaching a significant resistance level. The August high at 4200 continues to be a substantial challenge for the index. However, it’s important to note the overall trend remains bull-biased as both the mid-term trend line (March to May) and the longer-term line from October are pointing upward. In terms of immediate support, attention can be given to the 20-day moving average as a potential level of support. Gold Precious metals such as gold are often viewed as safe haven assets during periods of economic and financial instability, and investors may turn to gold as a store of value and a hedge against potential losses in other assets. Additionally, the weakening of the US dollar – as discussed above – could spark extra shine on the yellow metal. The price of gold has recently pulled back from its peak of $2082, breaching the $2000 psychological level in the past week. The current support level appears to be around $1951, which coincides with the February high. On the other hand, the current conjunction point of the 20-day and 50-day moving averages could act as a near-term resistance level.

Following a flat April for retail sales and softer wages, market expectations lean towards the Reserve Bank of Australia holding rates steady at 3.85% - pending this week's Monthly CPI Indicator. Source: Bloomberg Forex AUD/USD United States dollar Consumer price index Australian dollar Retail Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 30 May 2023 Last week, the retail sales report for April became the latest economic release during May to show that the RBA’s rate hiking cycle is having the desired impact and slowing the economy. Attention now turns to the release of the Monthly CPI Indicator on Wednesday. To recap, retail sales were flat (0.0%) in April, below market expectations looking for a 0.3% rise. The subdued retail sales number followed weaker-than-expected wages and employment data earlier this month. At its monthly board meeting in May, the RBA surprised the market and raised the cash rate by 25bp to 3.85%. The RBA warned that it could again lift rates in June, but it would depend on how the economy and inflation evolved. An inline or softer-than-expected Australian Monthly CPI indicator would become the fourth data point this month to support current market pricing the RBA will keep rates on hold at 3.85% when it meets next week. What is expected? In March, the monthly CPI indicator rose by 6.3% YoY, falling from 6.8% in February. It was the third month in a row that the indicator has fallen, extending its decline from a peak of 8.4% in December. The softer print in March was mainly due to a softer pace in the growth in housing and transport prices. For April, the monthly CPI indicator is expected to rise by 6.4% YoY, driven by price rises in food, clothing and footwear, housing, and transport costs. The range of expectations varies from 5.9% to 6.6%. A print of 6.2% or less would be welcomed by the interest rate market fully priced for the RBA to remain on hold in June and a minor negative for the AUD/USD. A print of 6.6% or higher would likely see the market increase the chances of an RBA rate hike in June and be a slight positive for the AUD/USD. AUD/USD technical analysis The AUD/USD closed lower last week at .6517 (-2.01%), at fresh seven-month lows, courtesy of soft commodity prices, surging US yields and weak eco data in Australia and China. The break of range and year-to-date lows, the .6565 area, was a bearish development and warns of further losses towards .6350. One point of bearish concern is that the latest Commitment of Traders positioning report shows that the market is short the AUD/USD to the tune of about 50k contracts. An ability to reclaim resistance at .6620/40 would likely be enough to trigger a short-covering rally in the AUD/USD. AUD/USD daily chart Source: TradingView TradingView: the figures stated are as of May 30, 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 Australian dollar busted the range last week but appears to be pausing; building approvals came in soft for April but AUD seems to be shrugging it off and the technical conditions might set up the next move for the Aussie. Source: Bloomberg Forex Shares AUD/USD Australian dollar Volatility United States dollar Daniel McCarthy | Strategist, | Publication date: Tuesday 30 May 2023 The Australian dollar remains buoyed on Tuesday despite some soft domestic data. Building approvals for April fell 8.1% month-on-month, below estimates of a 2% rise and -1.0% prior. The data may support the interest rate markets’ view that the RBA will leave rates unchanged at its monetary policy meeting next week. AUD/USD technical analysis AUD/USD broke out of the 0.6565 – 0.6818 range that it had been in for 3 months on its way to making a 6-month at 0.6490 last week. Prior to piercing the lower edge of that range, the Aussie had several attempts to break the topside but failed. These false breaks can be frustrating for traders trying to play the range. The run lower also saw the price move below the lower bound of the 21-day Simple Moving Average (SMA) based Bollinger Band. A break like this is sometimes viewed as a volatility breakout and the price action following such a move can provide clues for near-term direction. If the price remains outside the band, it might suggest that momentum is evolving in that direction, in this case, bearishness. However, a close back inside the band may indicate that there is a pause in the bear run or a possible reversal. AUD/USD closed back inside the band on Friday and saw modest gains to start this week. What is clear is that realised volatility has increased as evidenced by the widening of the Bollinger Band. Looking at the 1-month At-The-Money (ATM) implied volatility options price, the market has barely moved, currently trading a touch over 10%. This may suggest that currency markets are not overly concerned with this dip in the Aussie. Support could be at the recent low of 0.6490. Further down, support may lie at the prior low of 0.6387 and the nearby Fibonacci level of 0.6381. The latter is the 78.6% Fibonacci Retracement of the move from the low of 0.6170 to the peak of 0.7158. On the topside, resistance could be at the nearby breakpoints of 0.6565 and 0.6575 or the previous peaks of 0.6675 and 0.6710. Further up, the 0.6780 – 0.6820 area might offer a more significant resistance zone with several prior highs and breakpoints. 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.

Faltering Euro Area data fuels economic slowdown fears, even as UK's robust growth battles unyielding inflation. Source: Bloomberg Forex Indices Inflation United Kingdom FTSE 100 Euro Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 30 May 2023 The release of key economic data last week has increased suspicions that the European economy’s expansion is slowing while the UK continues to grapple with stubborn inflation. Euro Area data signals a slowing economy Last week, following the release of soggy industrial production data earlier this month, the Euro Area Composite PMI fell to 53.3 in May from 54.1 in April, mainly due to a deepening contraction in manufacturing (44.6 from 45.8). The Services PMI ticked lower to 55.9 from 56.2. Further fuelling slowdown suspicions last week, the German Ifo Business climate indicator fell to 91.7 in May from 93.6 in April. The fall was the index’s first monthly decline in six months. Expectations for the coming months were also more pessimistic, falling to 88.6 from 91.7 in April. UK's strong growth marred by stubborn inflation In the UK, activity this year has been stronger than most expected, supported by falling energy prices, a robust labour market and an elevated savings rate. However, while growth has been stronger than expected, so has inflation. Last week, headline inflation fell to 8.7% YoY in April, significantly stronger than the fall to 8.2% expected. The core rate, which excludes food and energy, jumped to 6.8%, the highest since March 1992 and above well forecasts of 6.2%. The UK rates market is now pricing four more 25bp rate hikes from the BoE for a terminal rate of 5.50% by year-end. DAX technical analysis Weaker than expected Euro Area data and debt ceiling concerns saw the DAX retreat from its all-time 16,375 high last week towards the key 15,700 support level (coming from the highs in February and March and uptrend support from the October 11,829 low). While the DAX holds above support at 15,700, a retest and break of recent highs is possible. However, should the DAX see a sustained break of support at 15,700, a deeper decline is expected to unfold towards year-to-date lows and the 200-day moving average 14,600/500 area. DAX daily chart Source: TradingView FTSE technical analysis The release of stubbornly high inflation data last week on top of debt ceiling concerns saw the FTSE pullback toward the 200-day moving average at 7526. While the FTSE remains above 7526, a rebound towards the resistance 7800/7900 area is possible. However, should the FTSE see a sustained break of the 200-day moving average at 7526, a deeper decline is expected towards support at 7300/7200, coming from year-to-date lows. FTSE daily chart Source: TradingView TradingView: the figures stated are as of May 30, 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.

Early Morning Call: prices at UK supermarkets, retail chains reach record high in April The British Retail Consortium says prices in UK supermarkets and retail chains rose 9% in the year to May, the highest rate since industry records began in 2005. Jeremy Naylor | Analyst, London | Publication date: Tuesday 30 May 2023 US debt ceiling Equity markets were mixed in APAC overnight, as the US debt ceiling deadline approaches. President Joe Biden and his Republican opponents have announced they have agreed in principle to raise the US debt ceiling and avert a default. The president described the agreement as a "compromise", while House Speaker Kevin McCarthy said it "was worthy of the American people". A vote is now expected in Wednesday, taking the whole issue down to the wire. UK price inflation According to the British Retail Consortium (BRC), prices in UK supermarkets and retail chains rose 9% in the year to May, the highest rate since industry records began in 2005. That said, the survey shows that food price inflation slowed to 15.4% from 15.7%, largely driven by lower energy and commodity costs. While there is reason to believe that food inflation might be peaking, BRC chief executive Helen Dickinson warned that "it is vital that government does not hamper this early progress by piling more costs onto retailers and forcing up the cost of goods even further. The biggest risk comes from policies such as the incoming border checks and reforms to packaging recycling fees. "Earlier this weekend, the Daily Telegraph reported the British government is looking at plans to have retailers cap the prices of basic food items. According to the newspaper, Downing Street is in talks with supermarkets on a deal similar to one in France where major retailers charge the 'lowest possible amount'". This is not to the taste of the BRC which urged the government to simplify rules "rather than recreating 1970s-style price controls." Eurozone economic sentiment Later this morning the market awaits May economic sentiment in the eurozone. The index is forecast to fall to 98.9, from 99.3 in April. We'll also get the final reading on consumer confidence. In the US, S&P/Case-Shiller home prices are expected to fall in March. And CB consumer confidence is forecast at 99 in May, down from the 101.3 recorded in March. Earnings Last week, NVIDIA reported a massive earnings and revenue beat and pleased traders with a stronger-than-anticipated forecast. This was driven mainly by optimism stemming from the company's leading position in the market for AI chips. Yesterday, NVIDIA announced it was building Israel's most powerful AI supercomputer and the numbers are astonishing. The system, called Israel-1, is expected to deliver the performance of up to eight exaflops of AI computing. What is an exaflop you ask? Well, that's a good question. One exaflop has the ability to perform one billion billion calculations per second. The system will cost hundreds of millions of dollars and be partly operational by the end of 2023. HP is expected to report its fiscal second quarter (Q2) earnings and revenue after tonight's US closing bell. The Street forecasts earnings of 76 cents per share, which would be a drop of about 29% from the same quarter a year ago. Revenue is expected to decline by 21% year-on-year (YoY) to just over $13 billion, a performance that reflects the continuing fall in PC demand. The personal computer and printer maker's shares have lost about 13% of their value over the past 12 months. But so far this year they have gained about 15% thanks to two consecutive better-than-expected quarterly reports. Its spin-off company Hewlett Packard Enterprise (HPE) has had a very different fate over the past 12 months. Broadly unchanged over the period, the stock has lost around 7% in the last five months, despite beating estimates and raising forecasts three months ago. HPE is also releasing its quarterly earnings tonight. Analysts anticipate a 9% rise in its earnings per share to 49 cents. Revenue is also expected to rise by 7% to $7.31Bln. 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.

While the leaders of the two sides in Washington have succeeded in reaching a deal, the tricky part, convincing Congress, begins. More details are expected to emerge, but even before this happens some Republicans have said that they will vote against the deal. Stocks rose in Asia on optimism that the deal will be done, and futures are pointing higher as well. European inflation data comes through this week, although it is not expected to influence the outlook on rates. Market expectations around a June Fed hike continue to rise however, and a hike at the next meeting is viewed as being a 60% chance. This week's US jobs data, culminating as ever in the payrolls report, could be key to the Fed's next move.

Markets cheer as US avoids default, but liquidity, sovereign debt downgrade, and rising interest rates loom large. Source: Bloomberg Debt United States United States debt ceiling Government debt Market liquidity Default Tony Sycamore | Market Analyst, Australia | Publication date: Monday 29 May 2023 US averts default, sparks market relief In a collective sigh of relief, regional equity markets and US stock futures are basking in the news of a tentative deal clinched by US President Joe Biden and House Speaker Kevin McCarthy. This critical agreement, designed to raise the debt ceiling, averts a potentially catastrophic default. As the prospect of financial Armageddon loomed, default was never truly on the table. However, the danger that negotiations might overshoot the theoretical X-date was palpable. Such a scenario would've compelled the US Treasury to juggle a medley of special measures, concessions, and preferential payments, in a replay of the mid-'90s, where financial and political destruction was rife. The ball is now in Congress's court, as we anticipate the legislation's passage within the week. Fitch's warning shot: US sovereign debt under scrutiny Last week's announcement by Fitch to put the United States Sovereign Debt on credit watch negative may have been the catalyst to hasten the debt deal. Unfortunately, the terms of the deal that allow the debt ceiling to remain uncapped for two years will do little to ease Fitch's angst and may still result in a costly downgrade. "The failure of the US authorities to meaningfully tackle medium-term fiscal challenges that will lead to rising budget deficits and a growing debt burden." Another side effect of leaving a deal to the eleventh hour is that the cash balance in Treasury's account used for daily payments has fallen to less than US$50 billion and needs rebuilding. To do this Treasury is expected to issue US$1 trillion of bills over the next two months, draining liquidity from the system. Rate hike on the horizon: Market anticipates tighter monetary policy In isolation, a liquidity drain would be more manageable if not for the hotter-than-expected Core PCE Price Index print on Friday night (4.7% in April vs 4.6% exp). Fuelled also by hawkish overtones from numerous Fed speakers, the rates market is now assigning a 65% chance of a 25bp rate hike for the upcoming June FOMC meeting. The 100bp rate cuts priced into the US rates market by year-end after the banking crisis has narrowed to just 35bp. While the weekend's debt deal has enabled markets to breathe a sigh of relief, the market will likely soon focus on the impact of tighter liquidity, a sovereign debt downgrade, and higher interest rates. S&P 500 technical analysis Holding a high-conviction technical view has been impossible while debt ceiling negotiations played out. Now they are in the rear vision mirror, presuming the S&P 500 can hold above range highs 4210/4185 (closing basis), allow for the S&P 500 to rally initially towards the August 4327.50 high. Aware that a daily close below 4185 would warn the break higher has failed and likely see another round of choppy range trading unfold, with scope back to 4060ish. S&P 500 daily chart Source: TradingView Nasdaq technical analysis Post the Nvidia earnings report at the end of last week and this morning's debt deal rally, the Nasdaq is officially well and truly into overbought territory. However, as viewed during the dot com bubble in the late '90s and many others since, when animal spirits take hold, rallies can extend a lot further than expected. Dips will likely be shallow and well-met by buyers eager to participate in the current AI euphoria. Nasdaq daily chart Source: TradingView Dow Jones technical analysis The saying goes that a rising tide lifts all boats. However, the Dow Jones really needs to break above the recent 34,257 high and the 34,342 year-to-date high to re-energise its upside prospects. In this case, we would expect to see a test of the 34,712 high from December 2022 with scope to the 35,492 high from April 2022. Dow Jones daily chart Source: TradingView ASX 200 technical analysis Like its old economy counterpart in the US, the Dow Jones, the ASX 200 has languished in recent weeks due to a lack of heavyweight IT stocks within the index. That said, the debt ceiling deal has provided a lift for the ASX 200 this morning, with all sectors in positive territory apart from Consumer Discretionary. If the ASX 200 can break above downtrend resistance at 7300, coming from the February 7567 high, it would likely see the ASX 200 extend gains towards 7390/7400 in the short term. ASX 200 daily chart Source: TradingView TradingView: the figures stated are as of May 29, 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 gold price has succumbed to US dollar strength of late with the Fed in focus and Treasury yields and real yields continue to elevate and might add to dollar demand. Source: Bloomberg Forex Commodities Gold United States dollar United States Futures contract Daniel McCarthy | Strategist, | Publication date: Monday 29 May 2023 The gold price slid to a two-month low to start the week as concerns around the US debt ceiling appear to be subsiding at the same time that US yields are ticking higher. Treasury yields have been steadily climbing throughout the last few weeks across the curve, but the most notable changes have been seen at the short end of the curve. The benchmark 2-year bond made a run above 4.60% on Friday after having dipped to 3.66% earlier this month. The 1-year note also made a 23-year high on Friday when it nudged 5.30%. It touched 4.03% in early March and the higher rate of return reflects the markets’ perception that the Federal Reserve is less likely to be cutting rates this year. Interest rate swaps and futures markets have kicked that concept into 2024. The higher return from US dollar denominated debt seems to have broadly supported the ‘big dollar’. It is making multi-month peaks against many currencies and the commodity complex is generally lower but silver managed to notch up a decent rally on Friday. Although it still finished down for last week and it is steady to start this week near US$ 23.30 an ounce. Undermining the yellow metal is the rise 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 widely watched US 10-year real yield is approaching 1.60%, a level not seen since the regional banking crisis unfolded back in March. When the inflation-adjusted return is rising, investors are left to ponder the outlook for non-interest-bearing commodities such as gold. The US dollar has been on a steady run higher of late and the direction in the DXY (USD) Index might lead the precious metal on its next move. At the same time, gold volatility has been slipping and this may indicate that the market is at ease with the current pricing. GC1 (gold futures), US 10-year real yield, DXY (USD) index, GVZ (gold volatility) Source: TradingView GC1 (gold front futures contract) technical analysis Gold remains in an ascending trend channel that began in November last year but is currently testing the lower bound of that channel. The early May high of 2085.4 eclipsed the March 2022 peak of 2078.8 but was unable to overcome the all-time high of 2089.2. This failure to break new ground to the upside has created a Triple Top which is an extension of a Double Top formation. This has set up a potential resistance zone in the 20280 – 2090 area but a snap above those levels may indicate evolving bullishness. The next level of resistance could be at the upper ascending trend channel line that is currently near 2160. On the downside, the price is at an interesting juncture with the ascending trend line being questioned. At the same time, there are two prior lows near that trend line as well as the 100-day Simple Moving Average (SMA). A clean break below 1930 might see a bearish run unfold but if these levels hold, it may suggest that the overall bull run could continue. In this regard, the price action in the next few sessions might provide clues for medium-term direction. Gold futures 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.

Crude oil is holding above tough support, keeping alive the capitulation view; natural gas has fallen sharply, but the downside could be cushioned and what are the key levels to watch? Source: Bloomberg Commodities Petroleum Natural gas Gas OPEC United States Manish Jaradi | IG Analyst, Singapore | Publication date: Monday 29 May 2023 Crude oil: Boxed in a range Crude oil recouped some of last week’s losses as investors cheered a weekend deal in Washington to raise the government’s debt ceiling, potentially averting a disruptive government default. Oil has managed to hold recover despite Russia’s Deputy Prime Minister Alexander Novak’s comments late last week that OPEC+ wasn’t likely to take further measures to change production levels at its meeting on June 4. This followed Saudi Energy Minister Price Abdulaziz bin Salman warning that speculators should ‘watch out’ for pain – a sign that the group was preparing to cut output. Crude oil monthly chart Source: TradingView Still, the upside in oil could be capped as the US Federal Reserve is expected to hike interest rates further at its June meeting and demand concerns given the uneven post-Covid recovery in China. The market is pricing in a 60% chance of a 25-basis-point Fed rate hike on June 14 Vs a 17% chance a week ago and see no rate cuts until the end of the year. Crude oil daily chart Source: TradingView On technical charts, crude oil’s hold above 64.00 could be a sign that oil may have capitulated following a multi-month decline. However, there are no signs of a reversal of the downtrend yet. In this regard, oil would need to break above the April high of 83.50 for the downward pressure to fade. Until then, the path of least resistance is sideways to down. Natural gas: Down but not out Natural gas prices dropped sharply on Friday, before recovering slightly on Monday morning in Asia, weighed by milder US weather and a rebound in Canadian natural gas exports to the US. Natural gas daily chart Source: TradingView Reports suggest the weather in the Lower 48 states would switch from cooler than normal From May 26-29 to mostly near normal from May 30 - June 10. Furthermore, earlier this month, wildfires forced Canadian producers to cut natural gas exports to the US. However, last week, exports appear to be recovering to levels seen before the wildfires. Still, the downside in natural gas prices could be limited by declining drilling activity on oversupply conditions and tighter credit conditions. On technical charts, so long as natural gas stays above the February low of 1.97, some more upside can be expected, potentially toward the March high of 3.03. Natural gas monthly chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

The Week Ahead Read about upcoming market-moving events and plan your trading week Week commencing 29 May Chris Beauchamp's insight A quieter week lies ahead for the most part, though US job numbers on Friday provide the potential for some volatility. But with the debt ceiling now nearly reached, investors will be watching to see if US politicians can sort a deal before the 1 June ‘X Day’. Economic reports Weekly view Monday UK, US, German and French bank holiday Tuesday 3pm – US consumer confidence (May): index to weaken to 100 from 101.3 Markets to watch: USD crosses Wednesday 2.30am – China mfg & non-mfg PMI (May): mfg index to rise to 49.8 and non-mfg to fall to 55. Markets to watch: China indices, CNH crosses 8.55am – German unemployment (May): unemployment rate to hold at 5.6%. Markets to watch: EUR crosses 1pm – German CPI (May, preliminary): prices to rise 0.4% MoM and 6.7% YoY, from 0.4% and 7.2% respectively. Markets to watch: EUR crosses 1.30mp – Canada GDP (Q1): QoQ rate to rise to 0.5% from 0%. Markets to watch: CAD crosses 2.45pm – US Chicago PMI (May): index to fall to 47.3. Markets to watch: USD crosses 3pm – US JOLTS job openings (April): openings to fall to 9.2 million from 9.59 million. Markets to watch: USD crosses Thursday 2.45am – China Caixin mfg PMI (May): index to rise to 50 from 49.5, back into expansion territory. Markets to watch: CNH crosses 10am – eurozone inflation (May, flash), unemployment rate (April): inflation to slow to 6.5% from 7% YoY. Unemployment to hold at 6.5%. Markets to watch: EUR crosses 1.15pm – US ADP employment report (May): 200K jobs expected to have been created, from 296K a month earlier. Markets to watch: US indices, USD crosses 1.30pm – US initial jobless claims (w/e 27 May): Markets to watch: US indices, USD crosses 3pm – US ISM mfg PMI (May): index to fall to 47 from 47.1. Markets to watch: US indices, USD crosses 4pm – US EIA crude oil inventories (w/e 26 May): Markets to watch: Brent, WTI Friday 1.30pm – US non-farm payrolls (May): payrolls to fall to 180K from 253K, and unemployment rate to rise to 3.5% from 3.4%. Average hourly earnings to rise 4.4% YoY and 0.4% MoM. Markets to watch: US indices, USD crosses Company announcements Monday 29 May Tuesday 30 May Wednesday 31 May Thursday 1 June Friday 2 June Full-year earnings Pennon Half/ Quarterly earnings HP Broadcom, Dell Trading update* WHSmith Dividends FTSE 100: Informa, Assoc. British Foods, Sage, Scottish Mortgage Inv Trust, National Grid, Severn Trent FTSE 250: Keller, Hill & Smith, Marshalls, Centamin, Hilton Food, JTC, Alliance Trust, LondonMetric Property, Great Portland Estates, Law Debenture Corp 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 29 May Tuesday 30 May Wednesday 31 May Thursday 1 June Friday 2 June Monday 5 June FTSE 100 6.91 Australia 200 0.0 0.3 Wall Street 4.6 30.3 12.3 US 500 0.28 0.88 0.76 0.25 0.07 0.12 Nasdaq 0.28 1.03 1.75 0.44 0.61 0.04 Netherlands 25 0.28 0.43 EU Stocks 50 6.4 China H-Shares 0.3 0.8 2.0 0.4 Singapore Blue Chip Hong Kong HS50 0.6 3.6 3.8 1.6 South Africa 40 Italy 40 Japan 225

Where next for EUR/USD as it breaks support? With the 61.8% Fibonacci retracement support broken the EUR/USD trade now looks set to use the 76.4% retracement at 106.54 as the next line of defence. Jeremy Naylor | Analyst, London | Publication date: Thursday 25 May 2023 Fundamentally, the US economy is growing with inflation moving lower. Conversely, in Europe, the German economy has gone into recession and there’s no indication that prices are under control. This is the worst of all worlds as the European Central Bank must continue to raise rates in the face of weak or contracting growth. IGTV’s Jeremy Naylor looks at the chart and the levels to watch. (Video Transcript) US growth We've just seen somewhat better than expected economic data coming through in the US economy on growth. It's not wildly exceeding expectations, it's just showing that there is growth, continues to bubble in the US economy and there's extra reasons there to continue to buy the US dollar. The other added reason is that the dollar provides some sort of safety away from the turmoil of the markets as these negotiations continue about the US debt. The irony of course on that is that should there be a default, you want to steer clear of the dollar anyway. EUR/USD At the moment, the dollar is a safe haven and I thought I would pick up on this trade here, which is the euro/dollar trade because it's disappeared below what we've been following is a significant line in the sand. In terms of its retracement, the euro is on the way down. We've got the stronger dollar looking as though we're going to close below this 10739. And if you get that close there, it will then be cementing the trade. We/ve been talking about in the Early Morning Call, about a short trade bringing your stock losses in as we go. And this trade at the moment at 10718, at the next down downside price target is this 76.4% retracement at 10654. That would be your next stop off point if you don't have a trade on this and you're tempted into the short trade. It's not a recommendation, it's just a positioning in the market. And I think where we are at the moment is worth looking at. Your stock would go at around about the 10770 level - 10715 is where we are. 10654 is a price target. If you see a continuation of trade beyond there, then the next trade and stop off point is a total replacement down to 10516. But at the moment, at least certainly the euro is weaker against that stronger US dollar and the short trade at the moment at least is making money.

Hi @Agarwal Thanks for sharing your overview of EURUSD. Great analysis. All the best - MongiIG Take a quick poll

Crude oil ran to a three-week peak overnight after speculators were warned; US inventory data did an about-face, dropping significantly after a large add prior and can the cartel cut production to boost WTI crude oil prices? Source: Bloomberg Shares Commodities Forex Price of oil OPEC WTI Daniel McCarthy | Strategist, | Publication date: Thursday 25 May 2023 Crude oil staged a rally going into Thursday despite the US dollar roaring higher alongside Treasury yields. Comments from Saudi Arabia Minister of Energy Abdulaziz bin Salman, assisted the bounce when he rattled the sabre, saying, “speculators, like in any market, they are there to stay. I keep advising that they will be ouching. They did ouch in April. I don’t have to show my card, I’m not [a] poker player… but I would just tell them, watch out.” In early April, OPEC+ announced that they would cut production by 1.1 million barrels per day. This news saw crude gap higher to levels not seen since November 2022. The reality is that OPEC+ is notorious for not being able to meet their production target and regularly overshoot. Source: Bloomberg. Chart created by Ilya Spivak at Macro Money The weekly US Energy Information Agency (EIA) data released overnight saw stockpiles drop dramatically, overcompensating for last week’s run-up in inventory. 12.456 million fewer barrels were stored in the week ending May 19th. The week prior saw 5.04 million barrels added. Elsewhere, the Canadian wildfires appear to have been contained to a certain extent for now and it’s being reported that production and supply are back to normal levels. For now, it appears that the shorts have been squeezed but it seems there is a lack of follow-through at this point. WTI crude oil technical analysis WTI overcome resistance making a high of 74.73 overnight. The 34- and 100-day Simple Moving Averages (SMA) are just above the market and may lend resistance near 75.15 and 76.92 respectively. On the downside, support might be at previous resistance levels down toward 73.60. Further down, support may lie at the breakpoints and prior lows of 69.41, 66.82, 66.12, 64.36, 63.64 and 62.43. 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.

Outlook on Brent crude oil, orange juice and gold as the US dollar continues to appreciate. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 25 May 2023 Brent crude oil trades in near one-month highs Brent crude oil prices have risen for three consecutive days on supply tightening worries, gaining nearly 4% and rising to a near one-month high. This rally occurred on the back of comments by Saudi Arabia’s energy minister who warned short sellers to “watch out” for potential consequences, raising speculations that OPEC+ could envisage further output cuts at a meeting on June 4. Technically speaking, Brent crude oil is approaching its 55-day simple moving average (SMA) at $78.76 which, together with the $79.04 February low, is likely to act as resistance this week. Slips should find support between the 10 May high at $77.51 and last week’s high at $77.42. Source: ProRealTime Gold revisits support The price of gold is slipping back towards last week’s low at $1,952 per troy ounce following Wednesday’s US Federal Reserve (Fed) minutes which showed a split between "some" wanting more rate increases versus "several" who did not on expectations of a slowdown in growth, even if the decision to raise rates to 5.00%-5.25% was a unanimous one. Failure at $1,952 would engage the late March lows at $1,945 to $1,935. Further down sit the $1,901 to $1,897 mid- to late January lows. Immediate downside pressure should be maintained while Wednesday’s high at $1,985 isn’t bettered on a daily chart closing basis. Source: ProRealTime Orange juice trades in new all-time record highs Front month orange juice futures have risen to a new all-time record high as ongoing supply concerns following the worst orange crop in Florida since the 1920s pushes prices higher. Unless Brazil increases its supply, the citrus fruit price is expected to rally further and might soon reach the psychological $3 per pound mark. The all-time record high set on Wednesday was made around the $2.87 level. Minor support below the April peak at $2.8038 lies around the 8 May high at $2.5348 and further potential support at this week’s $2.6663 to $2.6430 price gap. Source: ProRealTime