Daily analysis 31 October

  • Indices from Asia-Pacific traded mixed during the first trading session of the week. Indices from ex-China gained, responding to solid Wall Street session on Friday, while indices from China moved lower after poor PMIs and news of new Covid outbreaks
  • European index futures point to a slightly higher opening of the cash session on the Old Continent
  • Wall Street index futures trade flat after Friday’s rally
  • Reports surface about a number of facilities in China closing due to Covid outbreaks. Those include Disney resort in Shanghai, casinos in Macau or massive Foxconn plant in Zhengzhou
  • Wall Street Journal reported that Fed may decide to hold onto higher rates for longer
  • Wheat trades over 5% higher at the beginning of a new week. Move higher comes after Russia withdrew from a deal on Ukrainian grain exports
  • Luiz Inacio Lula da Silva defeated incumbent Jair Bolsonaro in the second round of presidential elections in Brazil
  • ECB’s Knot said that he will opt for a 50 or 75 basis point rate hike at December meeting. He also said that ECB is not yet half-way done with tightening
  • Chinese manufacturing PMI dropped from 50.1 to 49.2 in October (exp. 50.0). Services PMI dropped from 50.6 to 48.7 (exp. 50.2)
  • Australian retail sales increased 0.6% MoM in September (exp. 0.6% MoM)
  • Japanese industrial production dropped 1.6% MoM in September (exp. -1.0% MoM)
  • South Korea industrial production dropped 1.8% MoM in September (exp. -0.3% MoM)
  • Energy commodities trade lower at the beginning of a new week with WTI dropping around 1.5% and trading near $87 per barrel
  • Precious metals trade mostly lower. Gold drops 0.1%, silver trades 0.5% lower and platinum declines 1.1%. Palladium gains 1.3%
  • NZD and AUD are the best performing major currencies while CHF and EUR lag the most

WHEAT jumped at the beginning of a new week and is trading at the highest level since mid-October. Russia withdrew from a UN-brokered deal on Ukrainian grain exports following weekend strikes on a military port in Sevastopol, Crimea.

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Daily analysis 28 October

  • US indices finished yesterday’s trading mixed. S&P 500 dropped 0.61%, Dow Jones added 0.61%, Nasdaq plunged 1.63% and Russell 2000 ticked 0.11% higher
  • US index futures moved lower in the after-hours trading, following disappointing earnings release from Amazon
  • Amazon shares dropped 12% in the after-market. Company reported 15% revenue growth in Q3 2022 to $127.1 billion (exp. $127.5 billion). However, company reported a weakish guidance for Q4 expecting sales to grow 2-8% YoY and reach $140-148 billion, while market expected $155.1 billion guidance
  • Apple traded little changed in the after-hours following the release of Q3 2022 earnings report. Company reported EPS of $1.29 (exp. $1.27) and revenue at $90.15 billion (exp. $88.9 billion). Beat in Mac revenue offset misses in iPhone and iPad revenue. Services revenue also missed expectations. Company did not provide guidance for Q4 2022
  • Indices from Asia-Pacific traded lower during the final trading session of the week. Nikkei dropped almost 1%, S&P/ASX 200 moved 0.9% lower and Kospi traded 0.7% down. Indices from China traded up to 3% lower
  • DAX futures point to a lower opening of the European cash session
  • The Bank of Japan left policy settings unchanged at a meeting today. The Bank said it expects inflation to slow by mid-2023. BoJ said that it will review its ETF buying programme
  • International Monetary Fund cut its forecast for Chinese GDP growth in 2022 from 4.4 to 3.2%
  • The Japanese unemployment rate ticked higher from 2.5 to 2.6% in September (exp. 2.5%)
  • French GDP growth reached 0.2% QoQ in Q3 2022 (exp. 0.2% QoQ)
  • Cryptocurrencies are trading lower. Bitcoin drops 0.8%, Etehereum trades 0.9% lower and Ripple is 0.7% down. Dogecoin plunges over 7%
  • Oil is trading lower amid broad pullback in risk assets. Brent trades 0.6% lower while WTI drops 0.7%
  • Precious metals trade mixed – gold and silver drop while platinum and palladium gain
  • NZD and EUR are the best performing major currencies while GBP and JPY lag the most

Amazon provided a disappointing guidance for Q4 2022, triggering another pullback on US100 in the after-hours trading yesterday. Index tested local low from October 21 in the 10,940 pts area before recovering slightly during the Asian session.

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Daily analysis 27 October

  • US indices finished yesterday’s session lower, with tech shares underperforming the most as disappointing earnings from Microsoft and Alphabet dented moods towards the sector. S&P 500 dropped 0.74%, Dow Jones finished flat while Nasdaq slumped 2.04%. Russell 2000 bucked the trend and gained 0.46%
  • Meta Platforms plunged almost 20% in the after-hours trading after the release of the Q3 earnings report. Company reported EPS of $1.64 (exp. $1.89) and revenue at $27.71 billion (exp. $27.38 billion), marking a second straight quarter of declining revenue. On top of that, the company reported a $3.67 billion loss in its metaverse division. Meta Platforms also said that it expects operating losses in metaverse division to increase significantly in 2023
  • Indices from Asia-Pacific traded mixed today. Nikkei dropped 0.3%, S&P/ASX 200 gained 0.5%, Kospi added 1.8% while indices from China traded slightly lower
  • DAX futures point to a more or less flat opening of the European cash session today
  • Chinese President Xi Jinping said that his country wants to have a good relationship with the United States
  • RBNZ Governor Orr said that inflation remains way too high and that monetary policy will be review in mid-November
  • According to Telegraph report, new UK Prime Minister Sunak is reconsidering whether tax hikes are needed as he believes economic outlook will improve going further
  • Media reports surfaced saying that the United States will rework plans on Russian oil price cap but no details were offered
  • Chinese industrial profits dropped 2.3% YoY in the first 9 months of 2022
  • Energy commodities are trading a touch lower with Brent and WTI being 0.1% down at press time
  • Precious metals gain – gold and silver trade 0.2% higher while palladium rallies 0.8%. Platinum is an exception with a 0.3% drop
  • JPY and NZD are the best performing major currencies while EUR and USD lag the most

While EUR is one of the worst performing major currencies today, so is the US dollar. As a result, EURUSD holds above 1.00 handle. A key event for the pair will come at 1:15 pm BST today – rate decision from ECB (exp. +75 bp).

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Daily analysis 26 October

 

  • US indices finished yesterday’s trading higher, marking a third bullish session in a row. S&P 500 gained 1.63%, Dow Jones moved 1.07% higher and Nasdaq added 2.25%. Small-cap index Russell 2000 rallied 2.80%
  • US indices, however, gave up some of the cash session gains in the after-hours trading as Q3 earnings reports from Alphabet and Microsoft disappointed
  • Shares of Alphabet moved around 6.5% lower in the after-hours trading. Company reported Q3 EPS at $1.06 (exp. $1.25) and revenue at $69.09 billion (exp. $70.58 billion). YouTube ad revenue came in at $7.07 billion, missing the $7.42 billion estimate. Company’s executives noted that a drop in ad spending is becoming visible
  • Microsoft dropped over 6% in the after-hours trading. While the company managed to beat expectations with $2.35 EPS (exp. $2.30) and $50.12 billion revenue ($49.61 billion), it has disappointed with current quarter guidance. Microsoft expects calendar Q4 2022 revenue to reach $52.35-53.35 billion – much less than $56.05 billion expected by the market
  • Indices from Asia-Pacific traded higher today, following lead from US indices. Nikkei gained 0.8%, S&P/ASX 200 added 0.2% while Kospi traded 0.6% higher. Indices from China gained 0.8-2.2%
  • DAX futures point to a more or less flat opening of the European cash session
  • Reuters reports that major state-owned Chinese banks stepped into markets early in the US session on Tuesday and sold US dollars to support weakening yuan
  • According to the Times report, new UK Prime Minister is mulling delaying medium-term budget statement that was expected to be made on Monday, October 31
  • Australian CPI inflation came in at 1.8% QoQ in Q3 2022 (exp. 1.6% QoQ)
  • API report pointed to a 4.52 million barrel build in US oil inventories (exp. 0.2 mb)
  • Cryptocurrencies trade mixed – Bitcoin drops 0.3%, Ethereum trades 0.2% lower, Ripple trades flat while Dogecoin gains almost 5%
  • Precious metals advance – gold adds 0.4%, silver rallies 1.1% while platinum gains 0.9%
  • Energy commodities trade slightly lower with both Brent and WTi pulling back around 0.2% at press time
  • AUD and CHF are the best performing major currencies while NZD and JPY lag the most

Nasdaq-100 (US100) jumped above the upper limit of the market geometry and 200-period moving average on H4 interval yesterday. However, advance was halted at 38.2% retracement of the downward impulse launched in mid-August and the index pulled back to 11,500 pts area following disappointing earnings reports from Microsoft and Alphabet.

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Daily analysis 25 October

  • US indices finished yesterday’s trading higher with Dow Jones leading gains. S&P 500 gained 1.19%, Dow Jones moved 1.34% higher and Nasdaq added 0.86%. Russell 2000 traded 0.35% higher
  • Indices from Asia-Pacific traded mostly higher today. Nikkei gained 1%, S&P/ASX 200 traded 0.3% higher while Kospi dropped 0.1%. Indices from China erased declines after so-called ‘National Team’ intervened and bought stocks in the market
  • DAX futures point to a more or less flat opening of the European cash session
  • Offshore yuan dropped to a record low against US dollar as China attempts to weaken its currency in order to support exports. USDCNH briefly traded above 7.36 mark
  • According to a Bloomberg report, UK and Swiss involvement may be needed to effectively implement EU price cap on natural gas and power prices
  • Allianz sees a chance that China will lift its Covid-zero policy in the next six months
  • USDJPY holds relatively stable today, dropping around 0.1% at press time. Verbal interventions were made today by BoJ Governor Kuroda and finance minister Suzuki but those did not have any impact on the markets
  • Goldman Sachs sees current Japanese policy mix as unsustainable and sees high chance of USDJPY moving higher again
  • Japanese Prime Minister Kishida said that an additional stimulus package will be drafted by the end of October
  • BoE Ramsden said that disappointing PMIs for October are consistent with scenario of UK being in a recession
  • RBNZ Chief Economist Conway said that there are already indications that economy has cooled but that he is also hopeful that inflation has peak
  • Precious metals are trading lower – gold and silver drop around 0.1% while platinum takes a 0.7% hit
  • Brent and WTI drop around 0.2%, trading near $91.20 and $84.60 per barrel, respectively
  • NZD and AUD are the best performing major currencies while CHF and CAD lag the most

US indices finished higher for the second day in a row. Nasdaq-100 (US100) continues to test a key resistance zone marked with the upper limit of the Overbalance structure in the 11,470 pts area but no decisive break has been made yet.

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Daily analysis 24 October

  • Indices from Asia Pacific traded mixed during the first session of the week. While indices from Australia, Japan and South Korea traded 0.5-1.5% higher, indices from China plunged over 1%.
  • Chinese Hang Seng slumped over 5%, following the CCP congress, that saw President Xi reinforce his grip on power and signalled continuation of his policies
  • European index futures point to a higher opening of the cash session on the Old Continent
  • US index futures are trading little changed on the day
  • USDJPY had a wild start of the week, following another Japanese intervention. While Japanese officials declined to confirm whether it took place, USDJPY slumped from around 149.70 to around 145.50 in a matter of minutes. Pair recovered later on and is now trading just shy of 149.00 mark
  • Rishi Sunak is emerging as a favorite to become next UK Prime Minister after Boris Johnson withdrew from leadership race
  • South Korea fired warning shots after a North Korean boat crossed the maritime border. North Korea responded  by firing warning shots from rocket launchers
  • RBA Kent said that interest rate in Australia are likely to be raised further in the coming months
  • China released delayed Q3 GDP and September’s activity data. Chinese GDP grew at a pace of 3.9% QoQ in Q3 2022 (exp. 3.5%)
  • Chinese retail sales increased 2.5% YoY in September (exp. 3.3% YoY), industrial production was 6.3% YoY higher (exp. 4.5% YoY) while urban investments increased 5.9% YoY (exp. 5.9% YoY)
  • Chinese exports increased 5.7% YoY in September (exp. 4.1% YoY) while imports were 0.3% YoY higher (exp. 1.0% YoY)
  • Japanese manufacturing PMI dropped from 50.8 to 50.7 in October (exp. 51.3)
  • Strong US dollar is putting pressure on commodity prices with oil trading around 1% lower. Gold manages to hold flat on the day
  • USD and CHF are the best performing major currencies while AUD and NZD lag the most

USDJPY slumped from around 149.70 to around 145.50 in a matter of minutes on a likely Japanese intervention. However, the pair recovered most of the drop since.

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Daily analysis 21 October

  • US indices deepened Wednesday’s declines yesterday and finished lower for the second day in a row. S&P 500 dropped 0.80%, Dow Jones moved 0.30% lower and Nasdaq was 0.61% down. Russell 2000 dropped 1.24%
  • Indices from Asia-Pacific traded lower today. Nikkei dropped 0.5%, S&P/ASX 200 moved 0.8% lower and Kospi traded 0.2% down. Indices from China traded mixed
  • DAX futures point to a lower opening of the European cash session today
  • Germany dropped its opposition and agreed to an EU-wide natural gas price cap plan. Plan will be discussed at the EU summit that begins today
  • Bank of Japan announced that it will increase the amount of bonds it is buying, following a recent pick-up in yields
  • Japanese core CPI inflation accelerated from 2.8 to 3.0% YoY in September (exp. 3.0% YoY). Headline CPI remained unchanged at 3.0% YoY
  • Shares of Snap plunged 27% in the after-hours trading, after the company missed Q3 revenue estimate. Poor performance of Snap also served as a drag on other stocks dependant on ad revenue, like Meta (-4.0%), Pinterest (-7.1%) or Alphabet (-1.9%)
  • Oil is trading lower this morning and so are precious metals as USD strengthening is exerting pressure on commodity prices
  • USD and EUR are the best performing major currencies while NZD and AUD lag the most

EURUSD halted an overnight pullback at 200-hour moving average (purple line) and is attempting to launch a recovery move.

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Daily analysis 20 October

  • Wall Street indices moved lower yesterday as the early-week rally was stopped. S&P 500 dropped 0.67%, Dow Jones moved 0.33% lower and Nasdaq traded 0.85% down. Russell 2000 dropped 1.72%
  • US equity futures dipped further after the close of the Wall Street session, following mixed earnings release from Tesla. However, much of those losses has been recovered throughout the Asian session
  • Tesla reported $21.45 billion in Q3 revenue (exp. $21.96 billion) and EPS of $1.05 (exp. $1.00). Musk said that demand for Q4 remains strong but transportation bottlenecks remain. Tesla shares dropped over 6% in the after-hours trading
  • Indices from Asia-Pacific traded mostly lower today. Nikkei dropped 0.8%, S&P/ASX 200 moved 1.0% lower and Kospi declined 0.7%. Indices from China traded mixed
  • DAX futures point to a flat opening of the European cash session today
  • Fed’s Evans said that beginning the rate hike cycle half a year earlier would make sense. He also said that he still sees 4.5-4.75% range as appropriate for interest rates and that he does not believe US is entering wage-price spiral
  • People’s Bank of China left 1-year lending rate unchanged at 3.65%, in-line with expectations
  • Bloomberg reports that China is mulling reducing quarantine times for inbound travelers from 10 to 7 days, in a sign that country may be relaxing its strict zero-Covid policy
  • Australian employment increased by 0.9k in September (exp. +25.0k) while unemployment rate remained unchanged at 3.5%
  • Japanese exports increased 28.9% YoY in September (exp. 27.1% YoY) while imports were 45.9% YoY higher (exp. 45.0% YoY)
  • Cryptocurrencies are pulling back with Bitcoin dropping 0.3% while Ethereum and Ripple trade 0.1% lower. Dogecoin bucks the trend and gains 0.7%
  • Oil is trading around 1% higher while gold adds 0.2%
  • GBP and EUR are the best performing major currencies while NZD, CHF and JPY lag the most

Oil caught a bid on news saying that China may relax Covid rules. Brent (OIL) broke above the resistance zone marked with 38.2% retracement of the upward move launch in late-September and is looking towards 200-hour moving average (purple line)

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Daily analysis 19october

  • Wall Street indices finished another session higher but the scale of gains was nowhere near as big as on Monday. S&P 500 gained 1.14%, Dow Jones moved 1.12% higher and Nasdaq added 0.90%. Russell 2000 gained 1.16%
  • Indices from Asia-Pacific traded mixed today. Nikkei gained 0.4%, S&P/ASX 200 moved 0.3% higher while Kospi dropped 0.5% and indices from China traded up to 1.7% lower
  • DAX futures point to a higher opening of the European cash session today
  • Fed’s Kashkari said that rates may go to mid-4% next year if there is no progress on combating inflation. He also said that he does not see any evidence that core inflation has peaked yet
  • According to a Reuters report, White House wants to replenish strategic petroleum reserve at a price of $67-72 per barrel. Reuters also said that additional release of 15 million barrels in December will be part of already announced 180 million barrel release
  • Telegraph reports that some Conservative Party members asked Labour Party members for help in ousting UK Prime Minister Liz Truss
  • BoJ Governor Kuroda said that the recent sharp weakening of JPY was one-sided and undesirable for the economy. However, he also said that central bank’s monetary policy does not directly target FX rates
  • Netflix rallied over 14% in the after-hours trading following the release of stellar Q3 2022 earnings. Netflix said it added 2.41 million net subscribers during the quarter – more than doubling the company’s projections. EPS came in at $3.10 (exp. $2.13) while revenue reached $7.93 billion (exp. $7.84 billion)
  • API data showed a 1.27 million barrel drop in US oil inventories (exp. +1.5 mb)
  • Cryptocurrencies trade lower – Bitcoin drops 0.2%, Ethereum trades 0.7% down and Ripple declines 0.8%
  • Oil is trading slightly lower – Brent drops 0.4% while WTI trades 0.1% down
  • Precious metals are pulling back with gold dropping 0.3%
  • GBP, USD and NZD are the best performing G10 currencies while EUR and CHF lag the most

Nasdaq-100 (US100) jumped in the after-hours trading, following the release of solid earnings from Netflix. However, the move failed to gain traction and the index erased most of this gain later on.

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Daily analysis 18october

  • Wall Street rallied yesterday with all major US indices posting big gains. S&P 500 added 2.65%, Dow Jones gained 1.86% while Nasdaq rallied 3.43%. Russell 2000 jumped 3.17%
  • Indices from Asia-Pacific followed into US peers’ footsteps and also posted big gains today. Nikkei jumped 1.5%, S&P/ASX 200 moved 1.7% higher while Kospi traded 1.2% up. Indices from China traded up to 1.3% higher
  • DAX futures point to a higher opening of the European cash session today
  • Bloomberg reports that White House may make another SPR announcement this week
  • According to Financial Times report, Bank of England may delay start of QT further to make sure that stability on gilt market has been restored
  • New Zealand inflation data accelerated from 1.7% to 2.2% QoQ in Q3 2022 (exp. 1.6% QoQ) Higher than expected reading boosted NZD as bets on 75 bp RBNZ rate increase during November meeting increased
  • USDJPY jumped above 149.00 overnight, triggering a verbal intervention from Japanese officials. Finance minister Suzuki said that country will not tolerate excessive FX moves driven by speculators. BoJ Governor Kuroda said that the Bank is closely monitoring developments on FX market
  • AUD ticked higher after RBA minutes for October noted that rates are not especially high
  • RBA Deputy Governor Bullock said she still believes there is a path to lowering inflation without causing a recession
  • Release of Chinese GDP data for Q3 2022 and monthly activity data for September, which was initially scheduled for today, was postponed until after Communist Party National Congress
  • Cryptocurrencies are trading mostly higher but scale of moves is relatively small. Bitcoin and Ethereum gain 0.3% while Ripple trades 0.1% higher
  • Commodities benefit from USD weakness – oil trades 0.6% higher while gold gains 0.5%
  • AUD and NZD are the best performing major currencies while USD and JPY lag the most

USDJPY jumped above 149.00 mark today, triggering verbal interventions from finance minister Suzuki and BoJ Governor Kuroda. The pair has pulled back in response but remains at elevated levels. Verbal interventions in Japan are now being made on almost a daily basis.

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