Daily analysis 07 DESEMBER

  • US indices have another poor session behind them with major Wall Street indices dropping over 1% for the second day in a row. S&P 500 dropped 1.44%, Dow Jones moved 1.04% lower and Nasdaq slumped 2.00%. Russell 2000 dropped 1.50%
  • China announced easing of Covid restrictions. Asymptomatic cases will now be allowed to undergo home quarantine, high-risk zones will be more accurately defined and bans on movement in non high-risk zone has been lifted. Restrictions on domestic travel were also eased
  • Chinese indices jumped following the announcement but gains were quickly pared. Currently, Chinese indices trade mixed with some dropping as much as 0.6% and some gaining as much as 0.7%
  • Moods were downbeat in other parts of Asia-Pacific. Nikkei dropped 0.7%, S&P/ASX 200 moved 0.8% lower while Kospi and Nifty 50 traded around 0.3% down
  • DAX futures point to a slightly lower opening of the European cash session today
  • Fitch expects Chinese economy to grow 2.8% in 2022 and 4.1% in 2023 – well below pre-pandemic trend
  • David Solomon, CEO of Goldman Sachs, estimates an over-60% possibility of US recession in 2023. Jamie Dimon, CEO of JPMorgan said that severe recession may ensue should high inflation persist
  • NBC reports that Democratic candidate won a run-off election in Georgia, allowing Democrats to expand their power in the Senate
  • Chinese exports in USD terms were 9.1% YoY higher in January-November period  while imports were 2.0% YoY higher. Exports in USD terms were 8.7% YoY lower in November alone and imports were 10.6% YoY lower
  • Australian GDP grew at a pace of 0.6% QoQ in Q3 2022 (exp. 0.7% QoQ)
  • API report pointed to a 6.43 million barrel draw in US oil inventories (exp. -3.5 mb)
  • Cryptocurrencies trade lower as risk-aversion is picking up. However, major coins hold rather firm – Bitcoin trades flat, Ethereum gains 0.2% and Dogecoin adds 0.9%
  • Oil trades a touch lower while US natural gas prices jump over 4%
  • Precious metals trade higher with gold adding 0.1% and silver advancing 0.6%
  • CAD and NZD are the best performing major currencies while JPY and CHF lag the most

CHNComp jumped after China announced easing of Covid curbs. However, advance was halted at 200-session moving average (purple line) and gains were quickly pared later on. Index is now trading lower on the day.

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Daily analysis 02DESEMBER

  • US indices finished yesterday’s trading lower with all major Wall Street indices dropping over 1%. S&P 500 dropped 1.79%, Dow Jones moved 1.40% lower and Nasdaq slumped 1.93%. Russell 2000 was top laggard with a 2.78% plunge
  • Jump in bond yields is seen as a reason behind the pressure on US equity market yesterday. Release of better-than-expected services ISM index sent market rates higher
  • Indices from Asia-Pacific traded mostly lower today. S&P/ASX 200, Kospi and Nifty 50 dropped, indices from China traded mixed and Nikkei gained 0.2%
  • DAX futures point to a slightly lower opening of the European cash session today
  • Reserve Bank of Australia delivered a 25 basis point rate hike, putting the main interest rate at 3.10% – the highest level since early-2013. Decision was in-line with market expectations. Statement showed that RBA Board expects interest rates to be raised further in the near future
  • AUD gained slightly following RBA decision but move was rather small as a 25 bp rate hike was expected and priced-in before the meeting
  • According to Financial Times, US Treasury is finalizing plans for a package regulating the cryptocurrency industry. Details are scarce but FT reports that it will include, among other things, limits on advertising
  • BoJ Governor Kuroda said that benefits of current easy monetary policy outweigh the costs
  • Japanese household spending increased 1.2% YoY in October (exp. 1.0% YoY)
  • Energy commodities trade mixed – oil is trading a touch higher while natural gas drops
  • In spite of a USD strengthening, precious metals trade mixed. Silver and palladium gain while gold and platinum drop
  • AUD and USD are the best performing major currencies while CHF and JPY lag the most

AUDUSD ticked higher following RBA rate decision but scale of the move was small. The pair pulled back from the upper limit of the Overbalance structure recently and the outlook looks somewhat bearish.

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Daily analysis 02DESEMBER

  • US indices finished yesterday’s trading mostly lower but the scale of moves was small. Dow Jones dropped 0.56%, S&P 500 moved 0.09% lower and Russell 2000 finished 0.11% down. Nasdaq was outperformer with a 0.13% gain
  • Indices from Asia-Pacific traded lower today. Nikkei dropped 1.6%, S&P/ASX 200 traded 0.7% down, Kospi plunged 1.8% and Nifty 50 moved 0.9% lower. Indices from China traded up to 0.5% lower
  • DAX futures point to a slightly lower opening of the European cash session today
  • G7 is said to be moving close to agreeing on a $60 per barrel price cap on Russian oil. The agreement will also include provision that will keep price cap at 5% below market price
  • Fed Bowman said that slowing of rate hike will allow Fed to assess impact of actions it has undertaken so far
  • Fed Barr said that inflation remains far too high. He also said that Fed still has some work to do on rates later this year and in 2023
  • BoJ Governor Kuroda said that global inflation is expected to gradually slow in 2023 while global growth is expected to gradually pick-up
  • RBA Governor Lowe said that policy lag in the current tightening cycle will be longer than in previous cycles
  • South Korean CPI inflation decelerated from 5.7 to 5.0% YoY in November (exp. 5.2% YoY), the lowest reading in 7 months. Core CPI accelerated from 4.2 to 4.3% YoY (exp. 4.5% YoY), the highest reading since December 2008
  • Cryptocurrencies trade mixed with major coins trading slightly lower. Bitcoin drops 0.2%, Ethereum trades 0.3% lower and Dogecoin dives 2.8%
  • Oil is trading little changed on the day while precious metals pull back slightly
  • Antipodean currencies (AUD and NZD) are top performers today while CHF and CAD lag the most

Dovish speech from Powell on Wednesday, followed by dovish remarks from Bowman yesterday, allowed EURUSD to break above 1.05 handle for the first time since end-June 2022.

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Daily analysis 01DESEMBER

  • Wall Street indices rallied yesterday as Powell paved a way for a smaller 50 basis point rate hike in December. S&P 500 gained 3.09%, Dow Jones moved 2.18% higher and Nasdaq surged 4.41%. Russell 2000 jumped 2.72%
  • Fed Chair Powell said that he does not want to over-tighten policy and moderating pace of rate hikes would make sense. However, he warned that any rate cuts are off the table in the near future
  • Indices from Asia-Pacific followed into footsteps of their US peers and also gained, although scale of moves was much smaller than on Wall Street
  • European index futures point to a higher opening of the cash session today with DAX futures trading around 200 points above yesterday’s cash close
  • US Treasury Secretary Yellen said that soft landing for the US economy remains possible
  • Chinese Vice Premier Chunlan said that coronavirus is becoming less severe and Chinese experience in fighting it may allow the country to enter a new stage of the pandemic. Those remarks were taken as a potential prelude to easing of restrictions
  • CNBC reports that White House considers release of emergency heating and crude oil reserves
  • Chinese Caixin manufacturing PMI moved from 49.2 to 49.4 in November (exp. 48.9)
  • South Korean exports plunged 14% YoY in November (exp. -11% YoY) while imports were 2.7% YoY higher (exp. 0.2% YoY). Semiconductor exports slumped 29.8% YoY
  • Cryptocurrencies jumped yesterday in the evening amid post-Powell increase in risk appetite. However, major coins are pulling back slightly today with Bitcoin dropping 0.2% and Ethereum trading 1% lower
  • Oil is trading slightly lower while precious metals benefit from USD weakening
  • JPY and NZD are the best performing major currencies while USD and CAD are top laggards

Nasdaq-100 (US100) rallied yesterday on dovish Powell and managed to break above the downward trendline.

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Daily analysis 30November

  • US indices finished yesterday’s trading mixed. S&P 500 dropped 0.16%, Nasdaq moved 0.59% lower, Dow Jones finished flat and Russell 2000 added 0.31%
  • In spite of a weaker-than-expected Chinese PMI reading, indices from Asia-Pacific traded mostly higher. Equities in Australia, India, South Korea and China gained while indices from Japan lagged
  • Chinese manufacturing PMI index dropped from 49.2 to 48.0 in November (exp. 49.0). Services gauge moved from 48.7 to 46.7 (exp. 48.0). Chinese National Bureau of Statistics noted that both production and demand continues to slow and that product orders are falling
  • DAX futures point to a higher opening of the European cash session today
  • According to Business Times, air traffic in China sits at just 35% of 2019 levels
  • According to Wall Street Journal, OPEC+ is likely to keep policy and output level unchanged at December meeting
  • Chevron plans to send the first shipment of Venezuelan crude under new license as soon as December 2022
  • Australian CPI inflation decelerated from 7.3% to 6.9% YoY in October (exp. 7.4% YoY)
  • Japanese industrial production dropped 2.6% MoM in October (exp. -1.5% MoM)
  • Australian building approvals dropped 6.0% MoM in October (exp. -1.5% MoM)
  • API report on US oil inventories pointed to a 7.85 million barrel drop (exp. -2.5 mb)
  • Cryptocurrencies trade higher. Bitcoin gains 2.2%, Ethereum adds 3.7% and Dogecoin jumps 3.2%. Fantom rallies 10%
  • Oil is trading little changed on the day with Brent price holding near $85 per barrel
  • Precious metals trade mostly higher with platinum and gold gaining 0.2% and palladium rallying over 2%. Silver is a laggard and drops 0.1%
  • AUD and NZD are the best performing major currencies while CHF and USD are top laggards

In spite of a poor PMI readings, Chinese CHNComp index extended upward move today. Index tested 6,300  pts area marked with a local high from the first half of November 2022 but has failed to break above.

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Daily analysis 29November

  • US indices finished yesterday’s session lower with all major benchmark from Wall Street dropping more than 1%. S&P 500 dropped 1.54%, Dow Jones moved 1.45% lower and Nasdaq declined 1.58%. Russell 2000 plunged 2.05%
  • Risk moods improved during the Asian session amid rumors that China may relax its coronavirus policies in response to recent protests. State Council will hold a press conference at 7:00 am GMT and some speculate that announcements may be made there
  • Chinese indices gained with CHNComp trading over 3% higher at press time. Other indices from Asia-Pacific traded mostly higher but Japanese Nikkei lagged
  • DAX futures point to a higher opening of the European cash session today
  • Fed Barkin said that if inflation remains high, rates will continue to rise. Fed Brainard said that she expects inflation to remain volatile in the coming years
  • Japanese retail sales increased 4.3% YoY in October (exp. 5.0% YoY)
  • Japanese unemployment rate remained unchanged at 2.6% in October (exp. 2.5%)
  • CPI inflation in German North Rhine Westphalia state decelerated from 11.0 to 10.4% YoY in November
  • Cryptocurrencies gain with Bitcoin adding 1.5% and Ethereum trading 2.9% higher. Dogecoin rallies almost 8%
  • Pick-up in risk appetite is supporting oil and industrial metal prices. Commodity currencies, like AUD or NZD, are also outperforming

CHNComp is rallying today as traders hope for relaxing of Covid measures to be announced. Index recovered all of yesterday’s losses and is trading at the highest level in almost 2 weeks

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Daily analysis 28November 2022

  • Asian indices as well as European and US index futures launched new week lower amid new wave of protests in China
  • Protests erupted in China as Chinese authorities continue to tighten coronavirus restrictions. Chinese people are protesting not only against Covid measures but also against Chinese Communist Party
  • People started to protest in major Chinese cities after firefighters in Xinjiang region were unable to reach fire on time due to Covid restrictions, resulting in death of 10 people
  • Indices from Asia Pacific traded lower with Nikkei dropping 0.5%, S&P/ASX 200 moving 0.4% lower and Kospi taking a 1.2% hit. Indices from China traded up to 2% lower
  • DAX futures point to a lower opening of the European cash session
  • RBA Governor Lowe said that wage growth is consistent with inflation returning to target. However, he also said that demand in the economy remains too strong compared to supply
  • RBNZ Assistant Governor Silk said that forecasts suggest that recession will be shallow. She also said that a turn in inflation would be needed to slow tightening
  • United States authorized Chevron to resume oil production in Venezuela. Chevron was earlier suspended from operating in Venezuela as part of US sanctions against Maduro regime
  • Iraq plans to increase oil export capacity by 1.0-1.5 million bpd by 2025. Export capacity will increase by around 150-250k bpd from next year
  • Oil trades almost 3% lower at the beginning of a new week. Strict Covid measure in China combined with supply boost (Chevron, Iraq) pushed WTI price to the lowest level since December 2021
  • Cryptocurrencies are trading lower amid pick-up in risk aversion. Bitcoin drops 2.4%, Ethereum trades 3.6% lower while Dogecoin slumps almost 10%
  • Precious metals are trading mixed – gold drops 0.2%, silver moved 0.9% lower while platinum gains 0.2% and palladium jumps 1.1%
  • Safe haven flows can be spotted on FX market with JPY and CHF being the best performing major currencies while AUD and CAD lag the most

Oil dropped to the lowest level since December 2021 as China continues to tighten Covid restrictions, hitting demand, and supply in other parts of the world is set to increase (Venezuela, Iraq).

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Daily analysis 18November 2022

  • US indices finished yesterday’s trading slightly lower following hawkish comments from Fed members. S&P 500 dropped 0.31%, Dow Jones moved 0.02% lower and Nasdaq declined 0.35%. Russell 2000 dropped 0.76%
  • Indices from Asia-Pacific traded mixed today. Nikkei and Nifty 50 dropped while S&P/ASX 200 and Kospi gained slightly. Indices from China traded mixed
  • DAX futures point to a slightly higher opening of the European cash session today
  • Leaders of Japan, the United States and South Korea will hold an emergency meeting after North Korea launched an Intercontinental Ballistic Missile. ICBM landed 200 km off the coast of Japan but inside a Japanese exclusive economic zone. It is said that it had enough capacity to reach US mainland
  • People’s Bank of China Advisor Liu said that China should target GDP growth of around 5% in 2023
  • Japanese CPI inflation accelerated from 3.0 to 3.7% YoY in October, reaching a 40-year high. Core CPI inflation accelerated from 3.0 to 3.6% YoY (exp. 3.5% YoY)
  • BoJ Governor Kuroda that inflation may accelerate further in the coming months before it starts to cool off
  • According to Wall Street Journal and Reuters, cryptocurrency lender Genesis sought for a $1 billion emergency loan due to a liquidity crunch before making a decision to halt transfers and withdrawals
  • Cryptocurrencies trade slightly higher this morning with Bitcoin gaining 0.3% and Ethereum trading 0.7% higher
  • Oil is trading little changed on the day while precious metals post small gains
  • NZD and GBP are the best performing major currencies while CHF and CAD lag the most

While Bank of Japan remains dovish, CPI spike to a 40-year high led to some hawkish calls from market participants. This is supporting yen today with USDJPY attempting to break back below 140.00 mark.

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Daily analysis 17November 2022

  • US indices finished yesterday’s trading lower. S&P 500 dropped 0.83%, Dow Jones moved 0.12% lower and Nasdaq slumped 1.54%. Russell 2000 dropped 1.91%
  • Indices from Asia-Pacific traded lower following a downbeat session in the United States. Nikkei dropped 0.3%, Nifty 50 traded 0.2% lower, Kospi dropped over 1% and indices from China traded 0.5-1.7% down. S&P/ASX 200 was an outperformer and posted a 0.2% gain
  • DAX futures point to a slightly higher opening of the European cash session today
  • Bloomberg reports that ECB members are inching towards a 50 bp rate hike in December instead of 75 bp rate move. However, report claims that 75 bp rate hike is still on the table should inflation surprise to the upside,
  • Fed’s Waller said the US central bank still has some way to go on rates and that the terminal level of rates will depend on the inflation. Waller said that recent data releases made him more comfortable with a 50 bp rate hike in December
  • Haitham al-Ghais, OPEC Secretary General, said that cartel is ready to intervene in the oil markets if situation requires it
  • BoJ Governor Kuroda said he expects CPI inflation to drop back below 2% in 2023/24 fiscal year as cost-push factors fade. He also said that it is important to continue with loose monetary policy in order to support Japanese economy
  • Australian employment increased by 32.2k jobs in October (exp. +15k) while the unemployment rate dropped from 3.5 to 3.4% (exp. 3.6%)
  • Japanese exports jumped 25.3% YoY in October (exp. 28.1% YoY) while imports were 53.5% YoY higher (exp. 49.7% YoY)
  • Cryptocurrencies are trading mostly lower. Bitcoin drops 0.7%, Ethereum trades 0.5% lower and Dogecoin moves 0.3% lower
  • Oil and precious metals trade lower on the back of USD strengthening
  • USD and NZD are the best performing major currencies while AUD and EUR lag the most. Overall, trading ranges on major FX pairs are narrow

In spite of better-than-expected employment data from Australia, AUDUSD is trading lower today. The pair halted recent upward impulse at a 0.6775 resistance zone and is pulling back amid USD strengthening.

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Daily analysis 16November 2022

  • US indices finished yesterday’s session higher following a jump triggered by lower-than-expected US PPI reading for October. However, part of the gains was later erased on reports saying that Russian missiles landed in Poland
  • US and other NATO officials say that it does not look like it was a deliberate strike on Poland, a NATO member country. It also remains uncertain whether it really was a Russian missile that overshoot Ukraine or Ukrainian anti-air missile that missed its target
  • NATO will, however, hold an emergency meeting today and it is expected that Poland will trigger Article 4, that means launching joint consultations on security matters
  • S&P 500 finished yesterday’s trading 0.87% higher, Dow Jones gained 0.17% and Nasdaq added 1.45%. Russell 2000 traded 1.50% higher
  • Asian session today was downbeat with major benchmarks from the region trading lower. S&P/ASX 200 dropped 0.3%, Kospi moved 0.1% lower, Nifty 50 traded flat and indices from China traded up to 1% lower. Nikkei was outperformer with a 0.1% gain
  • DAX futures point a lower opening of the European cash session
  • Former US President Donald Trump has officially entered 2024 US presidential race
  • Prices of residential buildings in China dropped 1.6% YoY in October
  • Australian wages increased 1% QoQ in Q3 2022 (exp. +0.9% QoQ)
  • Japanese machinery orders dropped 4.6% MoM in September (exp. +0.6% MoM)
  • API report pointed to a 5.83 million barrel draw in US oil inventories (exp. +1.4 mb)
  • Oil and natural gas trade lower following yesterday’s gains made on geopolitical headlines
  • Precious metals underperform – palladium drops 0.6%, platinum trade 0.1% lower, gold declines 0.3% and silver trades flat
  • EUR and GBP are the best performing major currencies while JPY and USD lag the most

Brent (OIl) jumped on increase in geopolitical tensions and briefly traded above 200-hour moving average yesterday (purple line on the chart above). However, gains started to be erased as NATO played down the incident and said it was unlikely to be a deliberate Russian attack on Poland.

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