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We're diving into USD/JPY in the second instalment of our Technical cheat sheet video series, focusing on the FX pair at the notorious 150 'red line' – a level renowned for its volatile shifts. Forex USD/JPY Technical analysis Written by: Monte Safieddine | Market analyst, Dubai Publication date: Tuesday 20 February 2024 09:23 We delve into historical events to craft an overview rooted in past technical analyses and fundamental factors. Our discussion spans strategies for both conformists and contrarians across weekly and daily timeframes, highlighting essential levels to watch. This time around, traders are approaching the event with heightened caution compared to their previous encounters. 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.

As Japan faces recession, markets remain optimistic about a historic interest rate hike by the Bank of Japan in April, despite recent inflation trends and sharp increases in yen short positions amidst FX intervention warnings. Source: Bloomberg Forex Shares Japanese yen USD/JPY Japan Inflation Written by: Richard Snow | Analyst, DailyFX, Johannesburg Publication date: Tuesday 20 February 2024 02:04 Markets anticipate April for potential rate hike Markets have remained unfazed by Japan's recent entry into a recession, continuing to signal a high likelihood that the Bank of Japan will opt to increase interest rates by 0.1% in an effort to exit its prolonged negative interest rate policy. Source: Refinitiv The Bank's conditions for this significant hike include establishing a "virtuous relationship" between wages and prices. Inflation has stayed above the 2% target for more than a year, although it has decreased in the latest two reports, raising questions about the sustainability of price pressures above the 2% target. Wage negotiations are in progress, expected to conclude by mid-March. This is the foundation for market speculation that the April meeting will bring the crucial rate hike. CoT report indicates significant increase in yen shorts despite FX intervention warnings Recent CoT data shows a surge in yen short positions, contradicting last week's warnings from Japan's principal currency official, Kanda, and the Bank of Japan's Deputy Governor, Shun’ichi Suzuki. Both officials have voiced their concerns over sharp and volatile FX movements (yen depreciation), with Kanda even suggesting FX intervention as a potential measure. Positioning via Commitment of Traders Report (includes data up to 13 Feb) Source: TradingView USD/JPY cautiously maintains the 150 level Despite warnings of FX intervention, USD/JPY continues to hold the 150 level. Indeed, current price action is creating a pennant-like formation, indicating a possible bullish continuation under normal market conditions. However, the potential for intervention poses a significant risk, making upward movements a gamble with a low risk-to-reward ratio, as historical FX interventions have typically caused the yen to shift by approximately 500 pips, mostly downward. Should bulls manage to push prices towards 146.50, it may prompt scrutiny from the finance ministry, potentially leading to requests for FX quotes from banks. This approach has historically preceded large-scale yen purchases. Support is currently at 146.50, with resistance noted at the recent peak of 150.88, followed again by 146.50. USD/JPY daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

A short description of defensive stocks, and five of the best defensive stocks to watch in 2024. These are the five largest defensive FTSE 100 companies. Source: Bloomberg Shares GSK plc Market trend Diageo AstraZeneca Unilever Written by: Charles Archer | Financial Writer, London Defensive stocks are companies whose underlying business is expected to generate reliable revenue and profits regardless of the wider economic environment. This could be because they hold a dominant market position, hold a reputation for value for money, or even simply provide the bare necessities. Accordingly, they are usually blue-chip companies benefitting from inelasticity of demand, making them ‘safe havens.’ In other words, if they raise prices to match inflation, consumers will continue to buy the products regardless. Defensive companies rarely deliver significant capital growth, and therefore tend to underperform during bull markets, even underperforming passive investment in indices such as the FTSE 100. But in bear markets, they can appear more attractive for the consistent earnings. By contrast, cyclical stocks are businesses which tend to outperform in the good times and fall sharply during downturns. These might include consumer discretionary stocks, miners, or oilers, all of which depend on a healthy economy to thrive. Investing in defensive stocks — and particularly the timing of an investment — is not simple. If you reposition your portfolio too early, you might miss out on additional growth before a downturn becomes too severe. And when the economy recovers, defensive stocks can become undervalued as investors sell in favour of growth. This makes buying these types of shares in a bull market and then selling them in bear market a popular contrarian investing strategy; though as always, this is harder to do than it sounds. The following FTSE 100 dividend stocks can be considered to be some of the more popular defensive companies to own in the UK as many have a reliable history of paying out. But remember, past performance is not an indicator of future returns. The best defensive stocks to watch These stocks are the largest defensive stocks on the FTSE 100, if you consider defensive sector companies to be only those which deal in healthcare, consumer staples, utilities or tobacco. AstraZeneca Unilever GSK Diageo British American Tobacco AstraZeneca AstraZeneca is a multinational pharmaceutical titan which focuses on the development and commercialisation of novel prescription medicines. It works in areas such as cardiovascular, oncology, and respiratory medication — though has a presence across almost the entire development market. Healthcare sector stocks remain highly defensive, and AstraZeneca is no exception. In FY23 results, total revenue rose by 6% to $45.8 billion, despite a decline of over $3.7 billion in covid-19 medication sales. When excluding covid-10 medicines, revenue rose by 15%, with oncology revenue up by 21%. And the company boasted a core product sales gross margin of 82%. CEO Pascal Soriot enthuses that he expects ‘another year of strong growth in 2024, driven by continued adoption of our medicines across geographies. Our differentiated and growing portfolio of approved medicines, global reach and rich R&D pipeline give us confidence that we will continue to deliver industry-leading growth.’ Excitingly, the company recently reported success in its Laura Phase III trial for its Tagrisso treatment, which showed a ‘statistically significant and highly clinically meaningful improvement’ in progression-free survival. Unilever Unilever is a multinational consumer goods company which produces a wide range of products including food, drinks, cleaning agents, beauty and personal care products. Some of its well-known brands include Dove, Ben & Jerry’s, and Hellmann's. While the company has arguably underperformed in recent years, it is working at a turnaround plan. FY23 results saw underlying sales growth at the FTSE 100 defensive company rise by 7% — with a turnover of €59.56 billion. Encouragingly, the business’s underlying operating margin rose by 60bps to 16.7%. CEO Hein Schumacher notes that ‘2023 Full Year results show an improving financial performance, with the return to volume growth and margins rebuilding. We are moving with speed and urgency to transform Unilever into a consistently higher performing business.’ GSK GSK — formerly GlaxoSmithKline — is a global biopharma company which aims to positively impact the health of 2.5 billion people by the end of 2030. After spinning out consumer healthcare company Haleon, GSK’s R&D focus is on four therapeutic areas: infectious diseases, HIV, respiratory/immunology and oncology. FY23 sales rose by 5% year-over-year to £30.3 billion, and by 14% when excluding covid-19 based sales. Top vaccine patent Shingrix, which protects against shingles, generated £3.4 billion alone. Further, adjusted operating profit rise by 12%, reflecting ‘strong sales ex COVID and higher royalty income, partly offset by increased investment in R&D and new product launches.’ With 71 vaccines and specialty medicines now in clinical development, CEO Emma Walmsley notes the company is ‘now planning for at least 12 major launches from 2025, with new Vaccines and Specialty Medicines for infectious diseases, HIV, respiratory and oncology. As a result of this progress and momentum, we expect to deliver another year of meaningful sales and earnings growth in 2024.’ Diageo Diageo is a global leader in premium alcoholic drinks, controlling over 200 brands and with sales in nearly 180 countries. The company owns distilleries which produce 40% of all Scotch whisky including Johnnie Walker — and it also owns Guinness, Smirnoff, Baileys, Captain Morgan, Tanqueray and Gordon's. In recent interim results, net sales declined by 1.4% to $11 billion, driven by an unfavourable foreign exchange impact and the widely reported net sales declines in Latin America and the Caribbean. Accordingly, operating profit fell by 11.1% to $3.3 billion — though this fall was just $205 million when excluding the LAC region. CEO Debra Crew admitted that ‘the first half of fiscal 24 was challenging for Diageo and our sector, particularly as we lapped strong growth in the prior year and faced an uneven global consumer environment…looking ahead to the second half of fiscal 24, despite continued global economic volatility, we expect to deliver improvement in organic net sales and organic operating profit growth at the group level, compared to the first half.’ British American Tobacco British American Tobacco is one of the world’s largest tobacco companies, boasting a brand portfolio including Lucky Strike, Dunhill, and Pall Mall. In terms of defensiveness, tobacco is a popular investing theme given the addictive nature of nicotine — though of course there is an ESG element to consider. However, the company is contending with changing consumer preferences and government intervention. It wrote off circa £25 billion in value of its US-based cigarette portfolio in December 2023 as smoker rates fall — while the UK is planning to implement a ban on disposable vapes soon. In full-year results, revenue dropped by 1.3% (though rose by 3.1% at constant rates). For context, ‘new category’ revenue grew by 21% — and revenue from non-combustibles now makes up 16.5% of the group’s overall revenue. Importantly, new categories achieved profitability in 2023 after years of losses and two years ahead of target, contributing £398 million to the profit pile. CEO Tadeu Marocco notes that the ‘refined strategy commits us to 'Building a Smokeless World', a predominantly smokeless business, with 50% of our revenue from Non-Combustibles by 2035.I am confident that the choices we have made will drive our long-term success and create sustainable value for all our stakeholders.’ This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Microsoft, Apple, Nvidia, Alphabet and Amazon could be the best AI stocks to watch next month. These stocks are the largest AI stocks in the US based on market capitalisation. Source: Bloomberg Shares Artificial intelligence Microsoft Amazon Nvidia Apple Inc. Written by: Charles Archer | Financial Writer, London 2023 was arguably the year of AI — the NASDAQ Composite rose by 43% in the calendar year, driven by AI-fuelled bubbles in Nvidia alongside the rest of the so-called ‘magnificent seven.’ The year was immediately preceded by the launch of revolutionary — and crucially, free to use — ChatGPT, which was swiftly followed by a response from both Alphabet in the form of Bard (now Gemini) while many other tech companies soon followed. In March 2023, the more advanced GPT-4 hit the market, which was swiftly followed by multiple AI-generated imagery tools — in one case, a realistic fake image of Pope Francis wearing a certain clothing brand circulated the internet, highlighting the openness of AI to abuse. That same month, tech leaders from across the US spectrum signed an open letter urging a pause on AI development for six months to assess the risks. A couple of months later, ChatGPT gained internet connectivity — and was soon incorporated into Bing, Microsoft’s search engine. For context, Microsoft has a significant stake in ChatGPT’s parent, OpenAI. Add in the constant stories of academic controversies, and the months-long Writers Guild of America strike over concerns that AI had the potential to replace human writers, and it’s easy to see how AI is already embedded throughout the global markets. AI is already in use across a wide variety of real-world applications, including in entertainment, social media, art, retail, security, sport analytics, manufacturing, self-driving cars, healthcare, and warehousing alongside dozens of other sectors. Every Netflix recommendation, every supermarket rewards purchase, and every football match is analysed ever more relentlessly in order to provide more and better data. And analysts think the sector will only grow. Of course, there will be casualties; whether Microsoft or Meta, virtually every tech company is engaged in layoffs. While much of this can be blamed on higher interest rates, arguably AI is already replacing some workers. Best AI stocks to watch There is some disagreement on what constitutes an AI stock — and whether it must be the main focus of a company or simply be a significant growth area. Here we have listed the top AI stocks in the US based on companies where AI is a growth area and ordered by market capitalisation. Microsoft Apple Nvidia Alphabet Amazon Microsoft Microsoft is the original global computing power, so it makes sense that the US behemoth tops the list of the best AI stocks to watch — and is now the most valuable company in the world. The business already had a strong relationship with OpenAI prior to the ChatGPT launch and has invested $13 billion into the company since 2019. In Q2 results, revenue increased by 18% year-over-year to $62 billion, while net income rose by 33% to $21.9 billion. CEO Satya Nadella enthuses that ‘we’ve moved from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.’ Most recently, the US titan has agreed a decade-long partnership with Vodafone to bring generative AI, digital, enterprise and cloud services to more than 300 million businesses and consumers. Vodafone will invest $1.5 billion in customer-focused AI developed with Microsoft's Azure OpenAI and Copilot technologies and will replace its physical data centres with Azure cloud services — meanwhile, Microsoft plans to become an investor in Vodafone's managed IoT platform. On the other hand, Copilot has reportedly disappointed some early adopters. Market Capitalisation: $2.90 trillion Apple Apple is in the middle of a sea change — it’s now topped Samsung as the largest smartphone maker by volume in the world but has lost its crown to Microsoft as the largest company on the planet. Investor hopes for continued growth may lie in future innovation, and in particular, the long-awaited Vision pro headset which releases on 2 February in the US with a $3,499 price tag. For context, Meta’s Quest 3 can be reliably found on sale for circa £500. However, the release of the Apple headset has been met with mixed results — and Meta CEO Mark Zuckerberg even released an informal video arguing that the cheaper device is not only better value for money, but better overall. In better news, Apple’s Keyframer AI tool has impressed new users with its ability to animate images using text descriptions. In Q1 results, Apple saw revenue rise by 2% year-over-year to $119.6 billion, while quarterly earnings per diluted share increased by 16% to $2.18. CEO Tim Cook noted the company’s ‘all-time revenue record in Services’ and also enthused that the company’s ‘installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments.’ Market Capitalisation: $2.82 trillion Nvidia Nvidia is arguably the prime beneficiary of the AI boom, last week overtaking Alphabet in market capitalisation, and then eclipsing Amazon a day later. While this rise may be unsustainable, Q3 results saw revenue rise by 206% year-over-year and 34% quarter-on-quarter to $18.12 billion. CEO Jensen Huang now considers that ‘NVIDIA GPUs, CPUs, networking, AI foundry services and NVIDIA AI Enterprise software are all growth engines in full throttle. The era of generative AI is taking off.’ Barclays analysts remain particularly enthusiastic over the AI company, noting that ‘With supply constraints, customers are often using the entire NVDA platform in order to get priority shipments of accelerators.’ Q4 results are to be released on 21 February. Market Capitalisation: $1.39 trillion Alphabet Google parent Alphabet may control 84% of the global search market share — but Yahoo was once king of search too. In addition to launching Bard, AI is already used across many of Google’s current functions. And it’s got at least two more AI-focused projects; its coding-focused Generative Language API, and DeepMind which it acquired in 2014. In Q4 results, CEO Sundar Pichai enthused that ‘we are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter the Gemini era, the best is yet to come.’ Quarterly revenue rose by 13% year-over-year to $86 billion. Perhaps most importantly, Alphabet is now ready to launch Gemini 1.5. This is seen as the company’s serious answer to ChatGPT-4, with Pichai arguing that it ‘represents one of the biggest science and engineering efforts we've undertaken as a company.’ Then there’s its new custom-built AI chips to consider — Apple may win its crown back before too long. Market Capitalisation: $1.79 trillion Amazon Amazon is well-known as the largest e-commerce retailer in the world, but the company is also a growing operator in the AI space. It offers several cutting-edge AI tools within its AWS business, including Code Whisperer and SageMaker — and clients can customise Amazon’s own machine learning model. Of course, competitors have their owns services, but Amazon is by far the largest cloud computing company, with circa a third of the global market share. Within its e-commerce offering, Amazon uses AI to identify consumer trends, manage inventory and also make personalised product recommendations — including targeted advertising. Then there’s the smart devices, including Alexa and the Fire tablets. CEO Andy Jassy enthuses that the AI opportunity will be ‘tens of billions of dollars of revenue for AWS over the next several years.’ Q4 net sales increased by 14% year-over-year to $170 billion. Market Capitalisation: $1.58 trillion This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Hi @Muhaammaadd Welcome to the IG Community! Looking forward to your insightful posts and engagement with other members. All the best - MongiIG

Despite the People's Bank of China (PBoC) cutting its five-year loan prime rate (LPR) by 25bps to 3.95% instead of the expected 15bps Chinese stocks remained under pressure. This even though the cut represented the first rate reduction since June 2023 and the largest since that rate was introduced in 2019. The Reserve Bank of Australia (RBA) minutes of its February monetary minutes which showed that it was appropriate not to rule out another rate hike, had little impact on the Australian dollar. Following Monday's US holiday European stocks hover near their recent multi-year highs amid a light economic calendar.

Rolls-Royce on track for significantly improved operating profits. Source: Bloomberg Shares Roll-Royce Price Business jet Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Monday 19 February 2024 16:26 Rolls-Royce on track for significantly improved operating profits. British engine maker Rolls-Royce is on track to deliver significantly improved operating profits in the second half of 2022, according to forecasts. The company's major business units are all expected to contribute to the better performance, led by a recovery in commercial aerospace and defence work. Rolls-Royce's operating profit for the second half of the year will likely come in around £830 million, a major increase from £527 million in the second half of 2021. The gains are being driven primarily by the company's civil aviation segment, where wide-body flying activity has rebounded robustly. Within civil aviation, Rolls-Royce is forecasting original equipment revenue to climb approximately 7% to £1.4 billion in the second half. More importantly, higher-margin aftermarket service revenue is projected to jump 16% to £2.4 billion. The company is also benefiting from increased business jet engine deliveries. The defence unit is poised to see its operating profit hit £298 million, as military spending ramps up in Europe and the Middle East amid the conflict in Ukraine. Rolls-Royce is well-positioned to capitalise on demand for defence services, which offer superior margins. Meanwhile, the power systems division is likely to post a 31% increase in operating profit to £213 million. Growth is expected to be powered by strong gains in aftermarket activity. Across its major business units, Rolls-Royce is demonstrating an ability to translate increased demand, particularly for high-value aftermarket work, into significantly better profitability. The second half rebound solidifies a recovery story for the company after a turbulent period marked by the pandemic's impact on commercial aerospace. With its outlook brightening, Rolls-Royce appears on course to continue rebuilding its balance sheet and financial performance. Investors are likely to cheer the better-than-expected profits as a sign of the company's progress in executing its turnaround strategy. Analyst ratings for Rolls Royce Refinitiv data shows a consensus analyst rating of ‘buy’ for Rolls Royce with 4 strong buy, 10 buy, 4 hold and 1 sell – and a mean of estimates suggesting a long-term price target of 357.35 pence for the share, roughly 8% higher than the current price (as of 19 February 2024). Source: Refinitiv Technical analysis of the Rolls Royce share price Rolls Royce’s share price remains on track for its August 2018 peak at 379.0p, judging by the swift near 385% ascent it has seen from its October 2022 low. The British multinational aerospace and defence company’s share price is now grappling with its August 1997 and February 2019 peaks at 341.3p to 344.4p which may short-term, act as resistance. Rolls Royce Monthly Candlestick Chart Source: TradingView On the daily chart the Rolls Royce share price, which has risen by more than 10% year-to-date, continues to break through resistance and thus advance. Rolls Royce Daily Candlestick Chart Source: TradingView Monday’s rise above the 8 February high at 325.7p is another stepping stone towards the August 2018 high at 379.0p. While the October-to-February uptrend line at 306.3p underpins, the medium-term uptrend will remain intact. For long-term bullish momentum to be maintained, the Rolls Royce share price should ideally remain above its mid-December low at 287.3p. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

FTSE 100 probes resistance while DAX and Nikkei consolidate below last week’s highs Outlook on FTSE 100, DAX 40 and Nikkei 225 as earnings season is coming to an end and US markets are shut for President’s Day. Source: Bloomberg Written by: Axel Rudolph FSTA | Senior Financial Analyst, London Publication date: Monday 19 February 2024 12:46 FTSE 100 flirts with resistance zone The FTSE 100’s swift rally off last week’s 7,464 low amid positive earnings, softer UK inflation and much stronger-than-expected retail sales and despite the country slipping into a technical recession, has taken the index to 7,722, a near six-week high on Friday. This level remains in play on Monday which is likely to be a quiet one as US markets are shut for its President’s day. Minor support below the psychological 7,000 mark is seen along the 55-day simple moving average (SMA) at 7,618. Source: ProRealTime DAX 40 retraces lower from last week’s record high The DAX 40 index is seen coming off last week’s record high at 17,197 and nears Friday’s 17,060 low. If it were to give way, at least a minor top would be formed with the early February high at 17,020 being back in sight, together with the psychological 17,000 mark. Minor resistance above Monday’s 17,109 intraday high can be found at Thursday’s 17,123 high. Source: ProRealTime The Nikkei 225 consolidates below its 34-year high The Nikkei 225’s swift ascent to last week’s 34-year high at 38,876 is taking a breather as the index is short-term consolidating. A rise above 38,876 would put the 1989 all-time record high at 38,957 and also the psychological 40,000 mark on the cards. Slips may find support at Friday’s 38,239 low, a slip through which would put the minor 38,000 mark back on the cards. Source: ProRealTime

Gold and oil prices still rising but cocoa comes under pressure While gold and WTI have moved higher in recent sessions, cocoa prices have fallen back from record highs. Source: Bloomberg Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Monday 19 February 2024 12:30 Gold still rising The price continues to gain, rallying off the lows seen last week, and could now push higher and challenge previously-broken trendline support. Beyond this would like trendline resistance from the early December record high, which held back progress at the beginning of February. From there the price would target horizontal resistance at $2060. A reversal back below the 100-day simple moving average (SMA) might indicate that another test of last week’s low at $1984 was possible. Source: ProRealTime WTI holding above 200-day moving average Last week saw the price push on and close above the 200-day SMA for the first time in three weeks. Further gains now target the late January high at $78.94, and then on to the $80 high that marked the peak in November. A Overall a short-term bullish view continues to prevail, with the price having created higher highs and higher lows since the December low. With this in mind, a pullback towards trendline support from December could see the price head back below $74 and the 50-day SMA but leave the bullish view intact. A close below $73 might begin to suggest a fresh bearish view, targeting the February low at $71.30. Source: ProRealTime Cocoa prices drop back Cocoa prices have finally seen a pullback from their record highs, though this only takes them to a one-week low. Short-tern trendline support from the January low comes into view around 5280. A break below this could see the price head back to 4755, or on to the rising 50-day SMA. The solid uptrend seen since the end of 2022 has recently morphed into a more dramatic move higher, though the price could drop back towards 4500 without even beginning to imperil the overall move higher. Source: ProRealTime

Sentiment amongst retail traders reaches extreme sell territory, while CoT speculators opt to hold on to their heavy buy bias. Source: Bloomberg Shares Federal Reserve Federal Open Market Committee Consumer price index Inflation Commitments of Traders Written by: Monte Safieddine | Market analyst, Dubai Publication date: Monday 19 February 2024 07:28 More disappointing pricing data, and cautious Fed member speak. Quite a bit to digest late last week, with more disappointing data on the pricing front. PPI (Producer Price Index) for the month of January was hotter than anticipated at 0.9% year-on-year (y/y) headline, with its core up 2%, and anything but controlled growth month-on-month (m/m) with readings of 0.3% and 0.5%, respectively. The preliminary readings out of UoM (University of Michigan) showed consumer inflation expectations up a notch to 3% for the 12-month but held for the five-year at 2.9%, and its consumer sentiment figure rising again, if only slightly this time around, to 79.6. Trade pricing data released the day before that also showed hotter m/m growth, and with retail sales down for the same period by 0.8%, it wasn’t the narrative optimists had hoped for. In Federal Reserve (Fed) member speak, there was Daly advocating patience and three rate cuts this year, and Bostic prior on “returning our policy stance to a more neutral stance in the summer time.” Large-cap US equity indices were in for a slight retreat, undoing intraweek record highs with tech suffering, while small-cap finished higher. Over in the bond market, Treasury yields finished the week higher, and so too in real terms, breakeven inflation rates creeping up again, and market pricing (CME's FedWatch) closer to fully pricing in a Fed hold next month, via majority holding in May, and looking at the first rate cut in June. Week ahead: earnings from Nvidia, FOMC minutes, and preliminary PMIs. As for the week ahead, a light start with a US holiday today, and it’ll remain light until we get minutes out of the latest FOMC (Federal Open Market Committee) meeting on Wednesday. The weekly inventory data out of API and EIA will be pushed out a day to Wednesday and Thursday, respectively. On the latter day is when we’ll also get preliminary PMIs (Purchasing Manager’s Index) where manufacturing and services are expected to remain in expansionary territory even if only just for the former. There will be more housing data, be it the weekly mortgage applications on Wednesday, or existing home sales on Thursday, this after building permits and housing starts released last Friday for the month of January were a clear miss and down on prior readings. In earnings, there’s Home Depot and retail giant Walmart tomorrow, and the big one on Wednesday with the last of the magnificent seven to report, Nvidia, now the third-largest US company by market capitalization. The implications are far larger for the tech sector, given the investment flows that have been going into tech and AI. Dow technical analysis, overview, strategies, and levels Even after last Tuesday's CPI (Consumer Price Index) shock, and its previous weekly 1st Resistance level managed to hold, favoring conformist buy-after-significant reversals, that outperformed on the move back up, with the small weekly change keeping the technical boxes here unchanged and so too its technical overview. As for the daily time frame late last week, going well past Thursday's 1st and 2nd Resistance level before the pullback on Friday brought it back beneath the 2nd Resistance, in all conformist buy-breakouts winning out there, and contrarian sell-after-reversals stopped out. Source: IG IG client* and CoT** sentiment for the Dow CoT are on hold in heavy buy territory at 73%, with relatively small changes in both long and short positioning (longs +673 lots, shorts +114). IG clients started off the week beneath extreme sell levels and last Tuesday's price drop was an initial boon, but the recovery thereafter, even if partial, has pushed sentiment to an extreme short 80%. Source: IG Dow chart with retail and institutional sentiment Source: IG *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of the start of this week for the outer circle. Inner circle is from the start of last week. **CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior. 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 Australian dollar gains against a softer US dollar, navigating through mixed economic cues and awaiting crucial RBA insights and wage data amidst growing speculation on interest rate adjustments. Source: Bloomberg Forex AUD/USD Interest Interest rates Australian dollar United States dollar Written by: Tony Sycamore | Market Analyst, Australia Publication date: Monday 19 February 2024 06:10 Last week saw a second straight week of gains for the AUD/USD - a beneficiary of the greenback weakness, that followed softer-than-expected US retail sales data and hotter-than-expected US CPI and PPI data. The rally in the AUD/USD came despite a softer-than-expected Australian jobs report, as the unemployment rate surged to a two-year high at 4.1.% While the ABS suggested the weakness was a result of changing seasonal dynamics, we think it reinforces the underlying trend of cooling in the labour market. Therefore, increasing the chance of RBA rate cuts in the second half of the year. This week's critical local economic events for the AUD/USD are Tuesday's RBA meeting minutes, previewed below, and wages data on Wednesday, expected to increase by 0.9% in the quarter and 4.1% annually. What is expected from this week's RBA meeting minutes (Tuesday, 22 February at 11.30am) The minutes from the Reserve Bank of Australia’s February meeting are scheduled to be released on Tuesday, 22 February at 11.30am. At its board meeting in February, the RBA kept its official cash rate on hold at 4.35%, as widely expected. The RBA noted that higher interest rates were working to reduce inflation, and to achieve a better balance between supply and demand. "Higher interest rates are working to establish a more sustainable balance between aggregate demand and supply in the economy.” The RBA confirmed that it remains data-dependent and retained a weak tightening bias. "The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks, and a further increase in interest rates cannot be ruled out. " The minutes will be closely scrutinised around what options the RBA board considered at the February meeting, the factors that would prompt the RBA to act on its tightening bias in 2024, and any clues about what might see the bank offer a more neutral bias. RBA cash rate chart Source: RBA AUD/USD technical analysis Recently, we have been looking for the AUD/USD to stabilise and move higher based on the idea that the pullback from the December .6871 high is part of a correction rather than a reversal lower. However, last week's break below .6500c, to Tuesday’s .6442 low has created a degree of technical damage and cast doubt over this interpretation. While the AUD/USD remains below the .6540/65 resistance zone, which includes the 200-day moving average, the risks are for a retest of .6442 low with scope to a lower band of support at .6400/.6380. Aware that a sustained move above the .6540/65 resistance zone would negate the downside risks and open the way for a stronger recovery towards initial resistance at .6620/30 before .6700c. AUD/USD daily chart Source: TradingView Source:TradingView. The figures stated are as of 19 February 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. This information has been prepared by IG, a trading name of IG 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.

Chinese stocks have seen muted gains so far after the Lunar New Year break, despite hopes for a stronger rebound. More policy stimulus may be needed as deflation looms. Japan's Nikkei index hit near 32-year highs and is outpacing the gains in U.S. indexes. But its market cap remains below giants like Apple and Nvidia. Nvidia's upcoming earnings this week will test its high valuations. Its huge gain has accounted for over a quarter of the S&P 500's rise this year. In Europe, PMIs, sentiment surveys, wage data and inflation expectations will be in focus this week. The ECB is also eying high wage growth warily. Fed speakers and minutes are due this week. Markets have sharply scaled back bets on Fed rate cuts this year as inflation remains stubbornly high. Just 36% chance of a May cut now priced in versus fully priced in earlier. Today's US holiday for Presidents' Day means a quiet session lies ahead for European markets.

What are some of the key events to watch next week? Source: Bloomberg Inflation Federal Reserve United States Interest Interest rates Interest rate Written by: Yeap Jun Rong | Market Strategist, Singapore Publication date: Friday 16 February 2024 08:15 This week’s overview Despite some inflation jitters brought by a hotter-than-expected US consumer price index (CPI) print this week, Wall Street managed to regain its footing with the S&P 500 setting yet another record high. It seems like the risk rally has been left unscathed, as market participants recalibrated their rate expectations to be more in line with the Federal Reserve (Fed). Japan’s Nikkei stole the limelight in Asia, briefly topping the 38,800 mark for the first time since January 1990 and leaving it just than 2% away from a new record high. The ASX 200 is flirting with previous record-high territory as well, while closer to home, the Straits Times Index (STI) has also seen renewed signs of life, rebounding by close to 4% since Wednesday to reclaim its 200-day moving average (MA). As we head into the new week, here are six things on our radar. US earnings season: Walmart, Home Depot, NVIDIA, Berkshire Hathaway The US earnings releases next week will leave spotlight on Nvidia’s results as the key risk event for markets. With Nvidia accounting for the bulk of the market rally through 2023 and into 2024, high expectations are in place, which leaves little room for error. Thus far, corporate earnings momentum has been robust. As of 16 February 2024, 79% of S&P 500 companies have released their results, with 80% delivering an earnings beat. This rate of outperformance towers above both the 5-year average (77%) and 10-year average (74%). Source: Refinitiv 20 February 2024 (Tuesday, 8.30am SGT): Reserve Bank of Australia (RBA) meeting minutes In its February meeting, the RBA maintained the official cash rate at 4.35% in line with expectations. The Bank observed that elevated interest rates are effectively moderating inflation and fostering a balanced supply-demand equilibrium. "Higher interest rates are working to establish a more sustainable balance between aggregate demand and supply in the economy." The RBA highlighted its data-driven approach, maintaining a slight tightening bias. "The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks, and a further increase in interest rates cannot be ruled out." Analysts will meticulously analyse the minutes for insights into the RBA Board's deliberations in February, indicators for future policy adjustments based on its tightening stance for 2024, and any indications towards a shift to a more neutral policy outlook. Source: Refinitiv 22 February 2024 (Thursday, 3am SGT): Federal Open Market Committee (FOMC) meeting minutes In its January session, the Fed kept the Fed Funds target rate steady at 5.25%-5.50% for the fourth consecutive meeting. The Fed updated its policy stance, indicating rate cuts are on the horizon, though not immediate. "The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent." Analysts will thoroughly examine the minutes for insights into the Fed's balance sheet strategies, potential timing for rate reductions, its perspective on recent US economic data exceeding expectations, and perceived risks to the global economy. Source: Refinitiv 22 February 2024 (Thursday, 10.45pm SGT): S&P Global flash US Purchasing Managers' Index (PMI) Last month, the US PMI numbers from S&P Global have revealed a stronger upturn in economic activities, with the manufacturing sector delivering its highest read since September 2022 at 50.7. Growth in services has been robust as well, delivering its fourth straight month of increase to 52.5. Overall, this brought the US composite PMI to a six-month high at 52.0. The takeaway from the sub-components over the past months is one of lukewarm economic growth and waning cost pressures, which may be encouraging for soft landing hopes and impending rate cuts, currently priced to be leaning towards the June meeting. The upcoming read for February is expected to reinforce more of the same, with the manufacturing sector expected to ease to 50.1 from previous 50.7, while the services sector PMI may ease to 52.0 from previous 52.5. Source: Refinitiv 22 February 2024 (Thursday, 5pm SGT): Hamburg Commercial Bank (HCOB) Eurozone PMI While economic conditions in the Eurozone have been in contraction territory for the eighth straight month, there are slight signs of improvement lately. From its January PMI figures, the manufacturing sector has turned in a softer contraction at 46.6, while the services side continue to stabilise around the 47-48 range, following a sharp moderation since April 2022. The improvement is set to continue into January, with expectations for manufacturing PMI to improve to 47.0 from previous 46.6. Services PMI is expected to turn in a lesser contraction as well at 48.7 versus 48.4. The still-subdued economic conditions may likely help in the current disinflation process, potentially raising optimism about getting inflation back to the European Central Bank (ECB)’s 2% target and support upcoming cuts, potentially in June. Source: Refinitiv 23 February 2024 (Friday, 1pm SGT): Singapore’s inflation rate Singapore’s headline and core inflation rate has seen a surprise uptick in December 2023, attributed to a faster pace of increase in private transport costs and services inflation. While the persistence in pricing pressures is likely to continue into early 2024 to reflect the latest Goods and Services Tax (GST) rate increase, the Monetary Authority of Singapore (MAS) and Ministry of Trade & Industry (MTI) still expect a “gradual moderating trend” in core inflation over 2024. With that, authorities may look beyond any near-term uptick in inflation as long as it continues to fall within its projected range for 2024 (3%-4% for headline, 2.5%-3% for core). For the upcoming read, consensus is for Singapore’s headline inflation to tick higher to 3.9% from previous 3.7%. Source: Refinitiv IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed. The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer. Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

The Nikkei 225 has been performing well, trading close to its record high from 1989. Despite Japan slipping into recession and losing its position as the world's third-largest economy, the stock market has continued to rally. The weakening yen has been beneficial for large Japanese companies with global operations, boosting their profits and supporting the export-reliant economy. However, a soft yen also raises the prices of food and energy imports, impacting consumers. The Bank of Japan is facing the challenge of balancing its monetary policy to support economic growth while considering the potential risks of maintaining negative interest rates for an extended period. U.S. stocks have also been performing well, reaching record highs, driven by expectations of rate cuts later in the year and the growth of the tech and AI sectors. Today's data includes the latest US producer price inflation and the preliminary Michigan confidence survey for February.

Nice @Imam All the best

Hi @Harshad Thanks for sharing.

Upcoming mid-April Bitcoin halving: What to expect? Delve into the Bitcoin halving's impact on mining rewards and its historical trend of triggering price surges. How might this event shape Bitcoin's future market value? Source: Bloomberg Forex Shares Bitcoin Cryptocurrency Price Bitcoin network IG Analyst Publication date: Thursday 15 February 2024 05:09 The Bitcoin halving event is due in mid-April – what does this mean? Bitcoin halving is a scheduled event that occurs approximately every four years, or after 210,000 blocks have been mined. During this event, the reward for mining new blocks is halved, meaning miners receive 50% fewer bitcoins for verifying transactions. Halving is hard-wired into the Bitcoin protocol to ensure that the total supply of the currency is capped at 21 million, thereby introducing scarcity into the ecosystem. The next Bitcoin halving event is expected in mid-April this year. Bitcoin mining is a critical process that underpins the functionality and security of the Bitcoin (BTC) network. Mining involves solving complex mathematical problems to validate transactions; and add new blocks to the blockchain. This process is carried out by powerful computers, often referred to as miners, which compete to solve these problems in exchange for rewards in the form of newly minted bitcoins, and transaction fees. Balancing act: How mining difficulty and market prices shape Bitcoin's economy Mining difficulty adjusts approximately every two weeks, to ensure that the time between blocks remains around 10 minutes, irrespective of the number of miners and their computational power. This difficulty adjustment can influence miner profitability. When prices are high, more miners are incentivised to compete, increasing the hash rate (the total computational power used to mine and process transactions). Conversely, if the price drops and mining becomes less profitable, miners may exit the market, which can decrease the hash rate. If the price of Bitcoin falls below the cost of mining, miners may choose to hold onto their bitcoins rather than sell at a loss, potentially creating a supply crunch. Bitcoin halving events historically lead to bullish market behaviour. The first Bitcoin halving occurred in November 2012, reducing the mining reward from 50 BTC to 25 BTC. Following the halving, Bitcoin experienced a significant surge in value, going from around $13 to over $1,100 in the next year. The second halving took place in July 2016, when the reward dropped from 25 BTC to 12.5 BTC after the halving. Bitcoin reached a high of around $20,000 by December 2017. The third halving, in May 2020, reduced the block reward to 6.25 BTC. Bitcoin surpassed its previous all-time high and traded at just over $69,000 in November 2021. Historical Bitcoin halving price action November 28th 2012 Halving Price - $13 --- 2013 Peak Price - $1,125 July 16th 2016 Halving Price - $664 --- 2017 Peak Price - $19,798 May 11th 2020 Halving Price - $9,168 --- 2021 Peak Price - $69,000 With two months to go before the next halving event, Bitcoin is pushing higher, helped in part by the recent launch of 11 spot Bitcoin ETFs. The strong demand for these ETFs has not only underpinned the spot price of Bitcoin but is also driving the price higher as the halving event nears. Bitcoin has regained the $50k level and may look at testing the all-time-high around $69k after the halving event reduces mining rewards by 50%. Bitcoin weekly price 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.

Dive into the latest moves in the tech-heavy index following a slight pullback in yields and gains for heavyweight Nvidia. Source: Bloomberg Indices Shares Federal Reserve Inflation Nasdaq Price Written by: Monte Safieddine | Market analyst, Dubai Publication date: Thursday 15 February 2024 07:27 Light on data, Fed comments, and a slight pullback in yields There was little to process in terms of economic data out of the US, with the weekly mortgage applications from the MBA falling 2.3%. This shift meant attention was focused on Federal Reserve (Fed) members speaking. The Fed's Barr discussed the potential "bumpy" path to their 2% inflation target following Tuesday’s higher CPI (Consumer Price Index) readings, stating it's "very early to say whether we end up with a soft landing or not". Goolsbee expressed opposition to "waiting until inflation on a 12-month basis has already reached 2% before beginning to cut rates". As for Treasury yields, they closed the session lower, reversing some of Tuesday's gains and falling back in real terms, which is seen as a positive for risk appetite. Breakeven inflation rates edged slightly higher, and market pricing (CME's FedWatch) anticipates the US central bank will maintain its current policy in May, even if by a slim majority that isn’t too far from a coin toss. More Fed members are scheduled to speak today, alongside the 10-year TIPS auction, but there's also a significant amount of US data on the docket, including retail sales for January, which are forecasted to show a slight contraction. Important data is also expected tomorrow with producer prices and the University of Michigan's (UoM) preliminary readings for consumer sentiment and inflation expectations. Sector performance places tech near the top, Nvidia overtakes Alphabet Most sectors concluded yesterday's session positively, with industrials leading, closely followed by communications, technology, and consumer discretionary. This resulted in gains for the tech-heavy Nasdaq 100, which outperformed both the S&P 500 and Dow 30 for the session. By the close, component performance saw Illumina and Netflix leading, with AMD close behind. On the other end, Kraft Heinz suffered the most due to a revenue miss, and after hours, Cisco's cautious guidance sent its share price tumbling. It was a session where Nvidia surpassed Alphabet to become the third most valuable company on the US stock market, with notable gains for other major players like Meta and Tesla. Nasdaq technical analysis, overview, strategies, and levels Price eventually settled above Wednesday’s daily 2nd Resistance level favoring conformist buy-breakouts and stopping out contrarian sell-after-reversals, but that hasn’t meant caution on pullbacks in price after what was witnessed last Tuesday even if the catalyst then was a significant fundamental event. The technical overview remains ‘bull average’ in both daily and weekly time frames. Source: IG IG client* and CoT** sentiment for the Nasdaq In terms of sentiment, retail traders are predominantly short, having reduced their sell bias to 63% rather than increasing it as is typical following significant price gains. They started the week with a substantial 70% sell bias, with some traders exiting their short positions after last Tuesday's price drop. Since then, they have been cautious about selling into price gains. In contrast, CoT speculators hold a majority buy position. The latest positioning data indicates they are choosing to decrease their long bias at these price levels. Source: IG Nasdaq chart with retail and institutional sentiment Source: IG *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the previous trading day. **CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior. 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 tech-fuelled rally in Asia, led by TSMC, has given a boost to equities in the region. Taiwan stocks reached a record high, with chip shares catching up with their global counterparts. Nvidia's surge in value, surpassing Google-parent Alphabet and becoming the third-most valuable US company, has also contributed to the positive sentiment in the tech sector. TSMC, a major supplier to Nvidia, experienced a significant increase in stock price, while the IT stocks index in Asia-Pacific outside Japan jumped 3%. The Nikkei continued to climb, supported by chip stocks, despite data which showed the Japanese economy fell into recession, contracting by 0.1% after Q3's 0.8% fall. The data from Japan has raised doubts about the timing of the Bank of Japan's exit from ultra-loose policy. The yen strengthened slightly but remains in the 150 per dollar region. In Europe, the afterglow of Nvidia's rise may also lift bourses, with futures indicating a higher open. The UK economy slipped into recession in Q4, shrinking by 0.3% after Q3's 0.1% fall. Interest rate futures are currently pricing in a 50% chance of a Bank Rate cut in June, but today's data will likely push that number higher.

We’ve launched a new video series titled "Technical cheat sheet", where one of our top-traded markets is selected for an in-depth analysis of its technical aspects, including key indicators, an overview, levels, and strategies. Written by: Monte Safieddine | Market analyst, Dubai Publication date: Tuesday 13 February 2024 09:53 We examine the main fundamental events that might challenge shorter-term technicals, as well as sentiment amongst IG clients and CoT speculators. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

This month’s consumer price inflation (CPI) is expected to show a further slowing of inflation pressures, but a March rate cut is still very unlikely. Source: Bloomberg Shares Inflation Consumer price index Federal Reserve Price Interest Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Monday 12 February 2024 16:53 Price growth to slow Consumer price inflation (CPI) is projected to slow in January when the data is released on 13 February, bolstering the Federal Reserve's (Fed) view that cuts will happen this year, though it is unlikely to do much for hopes of a March rate cut. The headline CPI rate (year-over-year) is expected to dip below 3% for the first time in nearly three years (since March 2021). Most of that deceleration should come from retreating energy prices and a further slide in food inflation. Home rents drive core inflation Core CPI, excluding food and energy, is expected at 3.8% year-over-year in January, down slightly from December's 3.9%. But a disproportionate share of that increase still stems from higher home rents. Shelter cost growth will keep slowing as lower market rents gradually pass through into leases. Price increases for goods have fallen back to around zero, as the impact of severe global supply chain strains earlier continues to ease. Markets are no longer expecting any action from the Fed in March, and even weaker inflation is unlikely to push the chance of a March cut much higher. The CME Fed Watch tool shows just a 15% chance of a March cut, down from 77% a month ago: Source: CME Fed Watch In January, the CPI report is expected to show a moderation in inflation, which could instil confidence among economists. The decline in energy prices and a slowdown in food inflation are likely to contribute to a reduction in the overall inflation rate. However, the persistently high rent increases may prevent a significant drop in the "core" CPI, which excludes food and energy. Core inflation measures are important indicators for policymakers as they provide insights into future price trends. The upcoming inflation data will be crucial for financial markets, as they hope for relief from the Fed's benchmark interest rate, which has remained at a 23-year high since July. The Fed's rate hikes, initiated in March 2022, were aimed at curbing inflation but led to interest rates on various loans reaching multi-decade highs. Market participants are eagerly looking for signs of a substantial slowdown in inflation to bolster expectations that the Fed might pause or even reverse some of its aggressive tightening measures. If there is more evidence indicating that underlying price pressures are easing, it could reassure investors that the central bank will not need to maintain restrictive interest rates for as long as previously anticipated. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

An ongoing bullish technical overview in both time frames ahead of the fundamental event. Source: Bloomberg Indices Shares Consumer price index Federal Reserve Inflation S&P 500 Written by: Monte Safieddine | Market analyst, Dubai Publication date: Monday 12 February 2024 07:17 CPI revisions, Fed members speaking, and the S&P’s 5,000 breach There were a few items to digest late last week, including the revisions from the Bureau of Labor Statistics (BLS) for the Consumer Price Index (CPI), which was slightly higher for October and November but lower for December. More Federal Reserve (Fed) members speak, with Logan discussing the “tremendous progress” in bringing down inflation but “not seeing any urgency to make any additional adjustments at this time” and to “take time here to continue to look at the data”. Prior to that, Barkin also favored patience, relying on the buffer of “robust demand and a historically strong labor market”, giving “time to build that confidence before we begin the process of toggling rates down”. Key US equity indices finished higher again for the week, and this time around, small-cap also enjoyed gains, though it was the S&P 500 taking most of the attention with the breach of its 5,000 level. Over in the bond market, Treasury yields finished the week higher and, on the further end, reversing losses from the week before that, in real terms averaging closer to 2% for the 5Y through 30Y, and market pricing (CME’s FedWatch) anticipating the first rate cut out of the US central bank in May via an unhealthy majority. Week ahead: CPI, retail sales, PPI, and more earnings As for the week ahead, it starts off very light with little to get excited about later today aside from more Fed members speaking, but picks up tomorrow with a heavyweight as we get January’s CPI readings. Expectations are for year-on-year (y/y) growth to drop from 3.4% headline to 3%, month-on-month (m/m) to rise by 0.2%, and when excluding food and energy, to see increases of 3.8% and 0.3%, respectively (Cleveland Fed’s ‘nowcasts’ at 2.94%, 0.13%, 3.81%, and 0.32%). Trade pricing data will be released on Thursday, where you can expect the attention to be on retail sales, already enjoying six consecutive beats, but forecasts are for a slight drop this time around. Producer prices for the same month will be on Friday, an ongoing story of sub-2% headline and core readings y/y, and forecasts are for m/m growth of just 0.1% for both. Consumer inflation expectations out of UoM (University of Michigan) have been trending in the right direction and not too far off pre-pandemic averages, and while consumer sentiment rising has been an added plus, it still requires a climb to touch 100 as it did in early 2020. The preliminary readings will also be released on Friday, preceded by a couple of items out of the housing market. For those trading energy, the weekly API, EIA, and Baker Hughes figures will be on offer on their respective days, but add to it OPEC’s monthly report tomorrow and IEA’s on Thursday, and whether the gap in demand forecasts for this year between the two will remain wide. It’ll be relatively quieter on the US earnings front and includes Coca-Cola on Tuesday, Cisco on Wednesday, and Coinbase on Thursday. Dow technical analysis, overview, strategies, and levels The intraweek highs and lows were within its previous weekly 1st levels, lacking a play for conformist and contrarian strategies, but where key technical indicators and its overview remain unchanged in this time frame. As for the daily time frame late last week, Thursday's 1st Resistance held on Friday, causing conformist buy-breakout strategies to fail and lacking a trigger for contrarian sell-after-reversals, though nowhere near derailing the ‘bull average’ technical overview there. 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.