The post Ex-Dividend 17/04/2024 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei down 1.88%, Shanghai Composite down 1.63%, Hang Seng down 2.31% ASX down 1.81%
• Commodities : Gold at $2388.5 (0.06%), Silver at $28.47 (0.72%), Brent Oil at $90.3 (-0.38%), WTI Oil at $85.67 (-0.38%)
• Rates : US 10-year yield at 4.65, UK 10-year yield at 4.26, Germany 10-year yield at 2.43

News & Data:

• (USD) Core Retail Sales m/m 1.1% vs 0.5% expected
• (USD) Retail Sales m/m 0.7% vs 0.4% expected

Markets Update:

In Asia-Pacific markets, concerns over Israel’s response to Iran’s recent air assault triggered a sell-off, with most major markets in the region dipping around 2%. China’s first-quarter economic growth exceeded expectations at 5.3%, compared to the forecasted 4.6%.

South Korea’s Kospi and Kosdaq plunged 2.37% and 2.24%, respectively, leading regional losses. Japan’s Nikkei 225 and Topix indices both tumbled over 2%, with the yen weakening against the U.S. dollar to its lowest level since June 1990.

Australia’s S&P/ASX 200 dropped 2.05%, while Hong Kong’s Hang Seng index and the CSI 300 fell by 1.93% and 1.18%, respectively, following GDP announcements.

In the U.S., stocks retreated as rising yields and Middle East tensions overshadowed strong Goldman Sachs earnings and retail sales data. The Dow Jones Industrial Average marked its sixth straight day of losses, shedding 0.65%, while the S&P 500 slipped 1.2%, and the Nasdaq Composite tumbled 1.79%. Higher rates also weighed on the market, with the 10-year Treasury yield reaching its highest level since mid-November.

Upcoming Events: 

• 12:30 PM GMT – CAD CPI m/m
• 12:30 PM GMT – CAD Median CPI y/y
• 12:30 PM GMT – CAD Trimmed CPI y/y
• 12:30 PM GMT – CAD Common CPI y/y
• 12:30 PM GMT – CAD Core CPI m/m
• 12:30 PM GMT – USD Building Permits
• 12:30 PM GMT – USD Housing Starts

The post Tuesday 16th April 2024: Asian markets tumble amid global tensions first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 16 April 2024

What happened in the Asia session?

China’s GDP grew more than anticipated in the first quarter of 2024 as the economy expanded 5.3% YoY versus the forecast of 4.8%. This latest reading showed the economy was on track to meet the government’s GDP target of 5%, largely due to sustained stimulus measures and some improvements in consumer spending. 

However, industrial production and retail sales figures both failed to beat their respective forecasts as they increased at a much slower pace on an annualised basis. The miss in industrial production output was offset by stronger GDP figures which could continue to prop up prices for crude oil amidst the ongoing geopolitical tensions in the Middle East.

What does it mean for the Europe & US sessions?

The claimant count change increased sharply in February, spiking to 16.8K from just 3.1K in the previous month. The forecast of 17.2K for March points to a second consecutive month of higher claims which could potentially signal a softening of the labour market. The average earnings index – which tracks wage growth – has moderated significantly lower since mid-2023 which potentially reduces the spending power of the UK consumer – an effect that could nudge inflation lower in the coming months. Should the latest data indicate a further slowdown in wage growth and higher-than-expected claims, it could potentially cause the Pound to come under heavy selling pressure once more.

Federal Reserve Bank of Richmond President Thomas Barkin will be speaking on the economic outlook at the Rotary Club of Winston-Salem in North Carolina where audience questions are expected followed by Fed Chair Jerome Powell’s participation in a fireside chat about economic trends at the Wilson Center’s Washington Forum in Washington DC. Following last week’s hotter-than-anticipated CPI and PPI data as well as the overnight robust consumer spending, markets will be keeping a close ear to any remarks from these two Fed officials.

The Dollar Index (DXY)

Key news events today

Industrial Production (1:15 pm GMT)

FOMC Member Barkin Speaks (5:00 pm GMT)

Fed Chair Powell Speaks (5:15 pm GMT)

What can we expect from DXY today?

Industrial production has been mixed over the past six months with February’s data showing a very minor gain of 0.1% MoM following two months of large declines. The estimate of a 0.4%-growth points to an improved reading and should production come in higher than market expectations, it could function as a potential bullish catalyst for the dollar.

Federal Reserve Bank of Richmond President Thomas Barkin will be speaking on the economic outlook at the Rotary Club of Winston-Salem in North Carolina where audience questions are expected followed by Fed Chair Jerome Powell’s participation in a fireside chat about economic trends at the Wilson Center’s Washington Forum in Washington DC. Following last week’s hotter-than-anticipated CPI and PPI data as well as the overnight robust consumer spending, markets will be keeping a close ear to any remarks from these two Fed officials.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the fifth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are moving into better balance.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks; inflation has eased over the past year but remains elevated.
• Recent indicators suggest that economic activity has been expanding at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and 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%.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.
• Next meeting runs from 30 April to 1 May 2024.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

Industrial Production (1:15 pm GMT)

FOMC Member Barkin Speaks (5:00 pm GMT)

Fed Chair Powell Speaks (5:15 pm GMT)

What can we expect from Gold today?

Industrial production has been mixed over the past six months with February’s data showing a very minor gain of 0.1% MoM following two months of large declines. The estimate of a 0.4%-growth points to an improved reading and should production come in higher than market expectations, it could function as a potential bullish catalyst for the dollar and limit the recent gains in gold.

Federal Reserve Bank of Richmond President Thomas Barkin will be speaking on the economic outlook at the Rotary Club of Winston-Salem in North Carolina where audience questions are expected followed by Fed Chair Jerome Powell’s participation in a fireside chat about economic trends at the Wilson Center’s Washington Forum in Washington DC. Following last week’s hotter-than-anticipated CPI and PPI data as well as the overnight robust consumer spending, markets will be keeping a close ear to any remarks from these two Fed officials.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Following yesterday’s stronger-than-expected retail sales from the US, the Aussie tumbled hard as it fell from 0.6485 to as low as 0.6440 by the end of the US session. This currency pair resumed to the downfall to trade around 0.6425 as Asian markets came online.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
• The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated, and is moderating at a more gradual pace.
• The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
• While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 7 May 2024.

Next 24 Hours Bias

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

CPI (10:45 pm GMT)

What can we expect from NZD today?

Inflation in New Zealand has been trending lower on a quarterly and annualised basis since mid-2023. However, both headline and core CPI readings – at 4.7% and 4.4% respectively – are well above the Reserve Bank of New Zealand’s (RBNZ) target of 2%. Should the latest inflation print come in hot, it could provide some much-needed tailwind for the Kiwi after diving sharply from 0.5950 overnight – this currency pair was trading around 0.5890 at the beginning of the Asia session.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the sixth meeting in a row.
• The Committee remains confident that the current level of the OCR is contributing to an easing in capacity pressures to ensure inflation returns to target.
• However, current consumer price inflation remains above the Committee’s 1 to 3% target range. A restrictive monetary policy stance remains necessary to further reduce capacity pressures and inflation.
• The Committee discussed upside risks to the inflation outlook: persistent services inflation remains a risk and goods price inflation remains elevated while anticipated near-term increases to local government rates, insurance, and utility costs, could also further slow the decline in headline inflation.
• The Committee discussed downside risks to the inflation outlook: ongoing restrictive monetary policy in an environment of weak global growth could lead to a more rapid decline in inflation than expected. Business and consumer confidence remain particularly weak which could lead to more unemployment and financial stress than expected while structural challenges facing the economy in China remain a concern given its importance for the global economy and for New Zealand’s trade.
• Next meeting is on 10 July 2024.

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Robust consumer spending in the US drove USD/JPY to surge past 154 and hit an overnight high of 154.45. This currency pair pulled back slightly as Asian markets came online but it remained elevated above this 154-level – powerful tailwinds are likely to nudge this pair higher as the day progresses.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
  2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
• Underlying CPI inflation is likely to increase gradually toward achieving the price stability target of 2%, as the output gap turns positive and as medium- to long-term inflation expectations and wage growth rise.
• Japan’s economy is likely to continue recovering moderately for the time being, supported by factors such as the materialization of pent-up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies.
• Next meeting is on 26 April 2024.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

ZEW Economic Sentiment (9:00 am GMT)

What can we expect from EUR today?

The ZEW Economic Sentiment for the Euro Area has increased steadily since November 2023 as overall sentiment for economic growth rebounded over this period. April’s forecast of 37.8 points to another month of higher sentiment – a result that could provide some much-needed lift for the Euro.

Central Bank Notes:

• The ECB kept the three key interest rates unchanged for a fifth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
• Inflation has continued to fall, led by lower food and goods price inflation with most measures of underlying inflation easing, wage growth is gradually moderating, and firms are absorbing part of the rise in labour costs in their profits.
• Financing conditions remain restrictive and the past interest rate increases continue to weigh on demand, which is helping to push down inflation but domestic price pressures are strong and are keeping services price inflation high.
• The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and if the Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.
• Next meeting is on 6 June 2024.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Despite stronger consumer spending in the US, the jump in USD/CHF was short-lived as it hit an overnight high of 0.9152 before reversing quite sharply to touch the threshold of 0.9100 by the end of the US session. This currency pair retraced higher as Asian markets came online to trade around 0.9130 but it could edge lower as the day progresses.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, going from 1.75% to 1.50% in March.
• For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability.
• According to the new forecast, inflation is also likely to remain in this range over the next few years.
• The forecast puts average annual inflation at 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026, based on the assumption that the SNB policy rate is 1.5% over the entire forecast horizon.
• Swiss GDP growth was moderate in the fourth quarter of last year and it is likely to remain modest in the coming quarters.
• Overall, Switzerland’s GDP is likely to grow by around 1% this year.
• Next meeting is on 20 June 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

Claimant Count Change (6:00 am GMT)

Average Earnings Index (6:00 am GMT)

What can we expect from GBP today?

The claimant count change increased sharply in February, spiking to 16.8K from just 3.1K in the previous month. The forecast of 17.2K for March points to a second consecutive month of higher claims which could potentially signal a softening of the labour market. The average earnings index – which tracks wage growth – has moderated significantly lower since mid-2023 which potentially reduces the spending power of the UK consumer – an effect that could nudge inflation lower in the coming months. Should the latest data indicate a further slowdown in wage growth and higher-than-expected claims, it could potentially cause the Pound to come under heavy selling pressure once more.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-to-1 to maintain its Official Bank Rate at 5.25% for the fifth consecutive meeting.
• One member preferred to reduce the Bank Rate by 25 basis points to 5.0%.
• Twelve-month CPI inflation fell to 3.4% in February from 4.0% in January and December while Services consumer price inflation has declined but remains elevated, at 6.1% in February.
• CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.
• In the February Report projection, CPI inflation had been expected to fall temporarily to the 2% target in 2024 Q2 before increasing again in Q3 and Q4, to around 2.75%.
• Having declined through the second half of last year, UK GDP and market sector output are expected to start growing again during the first half of this year while the fiscal measures in Spring Budget 2024 are likely to increase the level of GDP by around 0.25% over coming years.
• Next meeting is on 9 May 2024.

Next 24 Hours Bias

Medium Bearish

The Canadian Dollar (CAD)

Key news events today

CPI (12:30 pm GMT)

What can we expect from CAD today?

Inflation in Canada has moderated lower for both headline and core CPI over the past ten months or so. However, the monthly headline CPI is expected to rise 0.7% MoM which would mark the highest increase since April 2023. Should inflation readings in Canada come in hot, it could strengthen the Loonie and potentially reign in the recent gains for USD/CAD.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0% for the fifth meeting in a row while continuing its policy of quantitative tightening.
• Canada’s economy stalled in the second half of last year and the economy moved into excess supply but economic growth is forecasted to pick up in 2024. Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026.
• CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs.
• Core measures of inflation, which had been running around 3.5%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2.5% in the second half, and reach the 2% inflation target in 2025.
• The Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months and the Council will be looking for evidence that this downward momentum is sustained.
• Next meeting is on 5 June 2024.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

API Crude Oil Stock (8:30 pm GMT)

What can we expect from Oil today?

After briefly dipping under $84.50 per barrel overnight, prices for WTI oil rebounded as geopolitical tensions in the Middle East heightened. Tensions rose as Israel weighed a response to the attack by Iran over the weekend. Further escalation in this latest conflict is bound to keep crude prices elevated this week. The API will release its inventory levels for last week and should stockpiles indicate a higher-than-anticipated drawdown, it could function as an additional bullish catalyst for this commodity.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Europe Fundamental Forecast | 16 April 2024 first appeared on IC Markets | Official Blog.

Stocks Hit Again as Yields Surge – Nasdaq Down 1.8% 

US Stocks were hit, treasury yields surged, and Middle East tensions continued to simmer during the trading day yesterday and investors are preparing for more volatile conditions ahead. US Retail Sales smashed expectations overnight with the Core number printing at +1.1%, well above the expected 0.5% leading to more corrective moves. The Nasdaq again took the brunt of the pain, dropping 1.79%, followed by the S&P and Dow Jones which fell 1.20% and 0.65% respectively. US treasury yields jumped higher with the benchmark 10-year gaining 12.9 basis points to hit 4.628%, its highest level since November and the dollar pushed further north. Oil prices dropped without any further escalation in the Middle East, Brent losing 0.39% and WTI falling 0.29% and gold drove higher again, notching up 1.8% on the day to close around the $2,385 per ounce level. 

Yen Continues to Weaken with No Official Action… Yet! 

The Yen hit its weakest level against the dollar yesterday since 1990 as strong US Retail Sales numbers took the greenback higher against most of the majors. Traders have been keenly watching the pair as the Yen continues to drop and Japanese officials keep warning of potential intervention. The 152.00 level was originally seen as a bit of a line in the sand, but that broke nicely, and they have let the move continue with some investors now looking at the 155.00 level as the next clear target. Fundamentals are still pointing to further topside potential for UsdJpy and traders have noted that the Yen has strengthened, a bit, on the crosses. However, still, the big money is on ‘when’ they will intervene and not ‘if’, if this is the case expect some very volatile sessions ahead this week. 

Busy Day Ahead for Global Markets 

Today has the potential to be the busiest day of the week for traders, with several key data releases due across the session as well as a multitude of central bankers speaking later in the day from the US. The Asian session will see investors focus firmly on Chinese markets with some key data updates due out midway through the session, Industrial Production, Retail Sales, and GDP numbers are all due out in China, and investors will be hoping for some positive news to turn markets around. The European session sees key employment data out of the UK, with the unemployment rate predicted to edge higher to 4%, but the major focus for the day will again be on the New York session. The Initial focus will be north of the border with the release of the Canadian CPI number. Still, then the focus moves south to the US where we are set to hear from a plethora of central bank big hitters, including the Fed Chair, Jerome Powell as well as the Governors of both the Bank of England and the Bank of Canada.  

The post General Market Analysis 16/04/2024 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could potentially make A bullish bounce-off pivot and head toward 1st resistance

Pivot: 105.96

Supporting reasons: An Overlap support, indicating a significant level where buyers might step in to support the price, potentially leading to a reversal or temporary halt in the bullish momentum.

1st support: 105.09

Supporting reasons: An Overlap support, representing another significant level where buyers might enter the market to support the price within the context of the overall bullish trend.

1st resistance: 106.85

Supporting reasons: An Overlap resistance with a 100% Fibonacci Projection, suggesting a level where selling pressure might intensify, potentially acting as a barrier to further upside movement within the context of the overall bullish momentum.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially make A bullish bounce off pivot and heads toward 1st resistance

Pivot: 1.0614

Supporting reasons: Swing low support with a 161.80% Fibonacci Extension and 78.60% Fibonacci Projection indicating Fibonacci confluence, suggesting a significant level where buying pressure might intensify, potentially leading to a reversal or temporary halt in the bearish momentum.

1st support: 1.0526

Supporting reasons: Swing low support, indicating a level where buyers might step in to support the price, potentially providing a foundation for a bullish reversal or price stabilization within the context of the overall bearish trend.

1st resistance: 1.0696

Supporting reasons: Pullback resistance, representing a level where selling pressure might intensify, potentially acting as a barrier to further upside movement within the context of the overall bearish momentum.

EUR/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make A bearish continuation towards 1st support

Pivot: 164.18

Supporting reasons: An Overlap resistance, indicating a significant level where selling pressure might intensify, potentially leading to a continuation of the bearish trend.

1st support: 162.59

Supporting reasons: Swing low support, representing a level where buyers might step in to support the price temporarily, potentially providing a foundation for a minor rebound within the context of the overall bearish momentum.

1st resistance: 165.42

Supporting reasons: Swing high resistance, suggesting a level where selling pressure might increase, potentially acting as a barrier to further upside movement within the context of the overall bearish trend.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make A bearish reaction off pivot and drop to 1st support

Pivot: 0.8542

Supporting reasons: An Overlap resistance with a 61.80% Fibonacci Retracement, indicating a significant level where selling pressure might intensify, potentially leading to a continuation of the bearish trend.

1st support: 0.8529

Supporting reasons: Multi-swing low support, representing a level where buyers might step in to support the price, potentially providing a foundation for a minor rebound within the context of the overall bearish momentum.

1st resistance: 0.8553

Supporting reasons: Swing high resistance, suggesting a level where selling pressure might increase, potentially acting as a barrier to further upside movement within the context of the overall bearish trend.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially make A bullish bounce off pivot and head toward 1st resistance

Pivot: 1.2428

Supporting reasons: Swing low support, indicating a significant level where buyers might step in to support the price, potentially leading to a reversal or temporary halt in the bearish momentum.

1st support: 1.2385

Supporting reasons: 161.80% Fibonacci Extension, suggesting a level where buyers might enter the market, potentially providing support for the price or a temporary reversal within the context of the overall bearish trend.

1st resistance: 1.2499

Supporting reasons: An Overlap resistance, indicating a level where selling pressure might intensify, potentially acting as a barrier to further upside movement within the context of the overall bearish trend.

GBP/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially make A bullish bounce-off pivot and head toward 1st resistance

Pivot: 191.35

Supporting reasons: Pullback support with a 50% Fibonacci Retracement, indicating a significant level where buyers might step in to support the price, potentially leading to a reversal or temporary halt in the bearish momentum.

1st support: 190.29

Supporting reasons: Multi-swing low support, representing a level where buyers have previously entered the market, potentially providing a foundation for a bullish reversal or price stabilization within the context of the overall bearish trend.

1st resistance: 192.78

Supporting reasons: Swing high resistance, indicating a level where selling pressure might intensify, potentially acting as a barrier to further upside movement within the context of the overall bearish trend.

USD/CHF:

Potential Direction: Neutral

Overall momentum of the chart: Bullish

Price could potentially make a: Fluctuate between the 1st resistance and 1st support level.

1st support: 0.9089

Supporting reasons: An Overlap support, indicating a significant level where buyers might step in to support the price, potentially leading to a bounce or temporary halt in the bullish momentum.

1st resistance: 0.9148

Supporting reasons: Multi-swing high resistance, representing a level where selling pressure might intensify, potentially acting as a barrier to further upside movement within the context of the overall bullish trend.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make A bearish reaction off pivot and drop to 1st support

Pivot: 154.81

Supporting reasons: 78.60% Fibonacci Projection, indicating a significant level where selling pressure might intensify, potentially leading to a reversal or continuation of the bearish trend.

1st support: 151.93

Supporting reasons: Pullback support, suggesting a level where buyers might step in to support the price temporarily within the context of the overall bullish momentum.

1st resistance: 157.04

Supporting reasons: 100% Fibonacci Projection, representing a level where the price might encounter selling pressure, potentially acting as a barrier to further upside movement within the context of the overall bullish momentum.

USD/CAD:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price is rising towards the pivot and could potentially stall around this level before pulling back towards the 1st support

Pivot: 1.3832

Supporting reasons: Acts as a swing-high resistance where price has previously found strong resistance.

1st support: 1.3733

Supporting reasons: Identified as a pullback support, suggesting an area where price could find strong buying interest to provide a foundation for potential price stabilization.

1st resistance: 1.3888

Supporting reasons: Identified as a swing-high resistance, marking a significant barrier that could cap further upward movements.

AUD/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price has made a bearish reaction through the pivot and could potentially drop towards 1st support

Pivot: 0.6452

Supporting reasons: Previously functioned as a pullback support which now has been broken, suggesting further downward momentum.

1st support: 0.6348

Supporting reasons: Acts as a swing-low support, suggesting a significant area where price has previously found strong support and could provide a basis to halt further downward movement.

1st resistance: 0.6488

Supporting reasons: Identified as a pullback resistance, marking a barrier that has previously capped upward movements.

NZD/USD

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price is exhibiting strong bearish momentum and could potentially break below the pivot to continue the downtrend towards the 1st support

Pivot: 0.5863

Supporting reasons: Acts as a breakout level, highlighting a potential for further bearish movement.

1st support: 0.5799

Supporting reasons: Acts as a pullback support, suggesting a potential area for price stabilization or a minor rebound within the bearish context.

1st resistance: 0.5944

Supporting reasons: Identified as an overlap resistance, marking a barrier that has previously capped upward movements.

US30 (DJIA):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price has made a bearish reaction through the pivot and could potentially drop towards 1st support

Pivot: 37,791.80

Supporting reasons: Previously functioned as a pullback support which now has been broken, suggesting further downward momentum.

1st support: 37,164.30

Supporting reasons: Identified as a pullback support, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movement.

1st resistance: 38,315.01

Supporting reasons: Identified as a pullback resistance, indicating a potential barrier that could cap any upward movements.

DE40 (DAX):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price has made a bearish reaction through the pivot and could potentially drop towards 1st support

Pivot: 17,847.70

Supporting reasons: Previously functioned as an overlap support which now has been broken, suggesting further downward momentum.

1st support: 17,658.40

Supporting reasons: Acts as a pullback support that aligns with a 50.0% Fibonacci retracement level, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movement.

1st resistance: 18,152.00

Supporting reasons: Identified as a pullback resistance that could potentially function as a barrier that could cap any upward movements.

US500 (S&P 500): 

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price is exhibiting strong bearish momentum and could potentially break below the pivot to continue the downtrend towards the 1st support

Pivot: 5,054.60

Supporting reasons: Acts as a breakout level, highlighting a potential for further bearish movement.

1st support: 4,953.70

Supporting reasons: Acts as a pullback support suggesting a significant area where price has previously found strong buying interest, providing a solid foundation to halt further downward movement.

1st resistance: 5,115.50

Supporting reasons: Marked by a pullback resistance, which could function as a potential barrier and cap any upward movements.

BTC/USD (Bitcoin):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish reaction off this level to rise higher towards the 1st resistance

Pivot: 61,498.75

Supporting reasons: Acts as a pullback support where price has reversed strongly in the past to rise higher.

1st support: 59,233.37

Supporting reasons: Acts as a pullback support that aligns close to a 61.8% Fibonacci retracement level, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation for potential price stabilization or a rebound.

1st resistance: 66,701.11

Supporting reasons: Marked by a pullback resistance, indicating a significant barrier that could cap further upward movements.

ETH/USD (Ethereum):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price is is trading close to the pivot and could potentially make a bullish reaction off this level to rise higher towards the 1st resistance

Pivot: 3,032.85

Supporting reasons: Acts as an overlap support where price has reversed strongly in the past to rise higher.

1st support: 2,847.25

Supporting reasons: Identified as an overlap support that aligns close to a 61.8% Fibonacci retracement level suggesting a significant area where price has previously found support, providing a strong foundation to halt further downward movements.

1st resistance: 3,436.46

Supporting reasons: Identified as an overlap resistance, marking a significant barrier that could cap further upward movements.

WTI/USD (Oil):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price has made a bullish reaction off the pivot and could potentially rise towards the 1st resistance

Pivot: 84.99

Supporting reasons: Marked by a pullback support, indicating a significant level where buying interest has increased recently.

1st support: 83.52

Supporting reasons: Identified as an overlap support that aligns close to a 38.2% Fibonacci retracement level, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movements.

1st resistance: 87.77

Supporting reasons: Identified as a pullback resistance, marking a significant barrier that could cap further upward movements.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make A bearish reaction off pivot and drop to 1st support

Pivot: 2386.02

Supporting reasons: An Overlap resistance with a 61.80% Fibonacci Retracement, indicating a significant level where selling pressure might intensify, potentially leading to a reversal or continuation of the bullish trend.

1st support: 2347.46

Supporting reasons: Multi-swing low support, representing a level where buyers might step in to support the price, potentially providing a foundation for a minor rebound within the context of the overall bullish momentum.

1st resistance: 2431.53

Supporting reasons: Swing high resistance, suggesting a level where selling pressure might increase, potentially acting as a barrier to further upside movement within the context of the overall bullish trend.

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The post Tuesday 16th April 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 16 April 2024

What happened in the US session?

US retail sales grew strongly in March as both headline and core sales beat their respective estimates. Headline sales rose 0.7% MoM versus the forecast of 0.4% while the core jumped 1.1% MoM versus its forecast of 0.5%. Sales were led by segments such as non-store retailers, gasoline stations, miscellaneous store retailers, and building materials and garden equipment – eight out of 13 categories posted major increases to highlight robust consumer spending. 

Meanwhile, the Empire State Manufacturing Index declined more than originally anticipated as the business conditions index registered a reading of -14.3 which was a much sharper drop than the forecast of -5.2. Once again, new orders and shipments both declined significantly while unfilled orders continued to shrink. In addition, labour market conditions remained weak and optimism was subdued.

The dollar index (DXY) traded below the 106-level in the initial period on the first trading day of the week but it rose strongly following the release of retail sales figures – this index hit a high of 106.25 overnight.

What does it mean for the Asia Session?

China will release a slew of economic data points with GDP, industrial production and retails sales figures taking centre stage. This latest data will provide better insights on the progress of economic growth in the world’s second largest economy and could potentially drive the direction of crude oil prices during this session.

The Dollar Index (DXY)

Key news events today

Industrial Production (1:15 pm GMT)

FOMC Member Barkin Speaks (5:00 pm GMT)

Fed Chair Powell Speaks (5:15 pm GMT)

What can we expect from DXY today?

Industrial production has been mixed over the past six months with February’s data showing a very minor gain of 0.1% MoM following two months of large declines. The estimate of a 0.4%-growth points to an improved reading and should production come in higher than market expectations, it could function as a potential bullish catalyst for the dollar.

Federal Reserve Bank of Richmond President Thomas Barkin will be speaking on the economic outlook at the Rotary Club of Winston-Salem in North Carolina where audience questions are expected followed by Fed Chair Jerome Powell’s participation in a fireside chat about economic trends at the Wilson Center’s Washington Forum in Washington DC. Following last week’s hotter-than-anticipated CPI and PPI data as well as the overnight robust consumer spending, markets will be keeping a close ear to any remarks from these two Fed officials.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the fifth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are moving into better balance.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks; inflation has eased over the past year but remains elevated.
• Recent indicators suggest that economic activity has been expanding at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and 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%.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.
• Next meeting runs from 30 April to 1 May 2024.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

Industrial Production (1:15 pm GMT)

FOMC Member Barkin Speaks (5:00 pm GMT)

Fed Chair Powell Speaks (5:15 pm GMT)

What can we expect from Gold today?

Industrial production has been mixed over the past six months with February’s data showing a very minor gain of 0.1% MoM following two months of large declines. The estimate of a 0.4%-growth points to an improved reading and should production come in higher than market expectations, it could function as a potential bullish catalyst for the dollar and limit the recent gains in gold.

Federal Reserve Bank of Richmond President Thomas Barkin will be speaking on the economic outlook at the Rotary Club of Winston-Salem in North Carolina where audience questions are expected followed by Fed Chair Jerome Powell’s participation in a fireside chat about economic trends at the Wilson Center’s Washington Forum in Washington DC. Following last week’s hotter-than-anticipated CPI and PPI data as well as the overnight robust consumer spending, markets will be keeping a close ear to any remarks from these two Fed officials.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Following yesterday’s stronger-than-expected retail sales from the US, the Aussie tumbled hard as it fell from 0.6485 to as low as 0.6440 by the end of the US session. This currency pair resumed to the downfall to trade around 0.6425 as Asian markets came online.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
• The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated and is moderating at a more gradual pace.
• The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
• While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 7 May 2024.

Next 24 Hours Bias

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

CPI (10:45 pm GMT)

What can we expect from NZD today?

Inflation in New Zealand has been trending lower on a quarterly and annualised basis since mid-2023. However, both headline and core CPI readings – at 4.7% and 4.4% respectively – are well above the Reserve Bank of New Zealand’s (RBNZ) target of 2%. Should the latest inflation print come in hot, it could provide some much-needed tailwind for the Kiwi after diving sharply from 0.5950 overnight – this currency pair was trading around 0.5890 at the beginning of the Asia session.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the sixth meeting in a row.
• The Committee remains confident that the current level of the OCR is contributing to an easing in capacity pressures to ensure inflation returns to target.
• However, current consumer price inflation remains above the Committee’s 1 to 3% target range. A restrictive monetary policy stance remains necessary to further reduce capacity pressures and inflation.
• The Committee discussed upside risks to the inflation outlook: persistent services inflation remains a risk and goods price inflation remains elevated while anticipated near-term increases to local government rates, insurance, and utility costs, could also further slow the decline in headline inflation.
• The Committee discussed downside risks to the inflation outlook: ongoing restrictive monetary policy in an environment of weak global growth could lead to a more rapid decline in inflation than expected. Business and consumer confidence remain particularly weak which could lead to more unemployment and financial stress than expected while structural challenges facing the economy in China remain a concern given its importance for the global economy and for New Zealand’s trade.
• Next meeting is on 10 July 2024.

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Robust consumer spending in the US drove USD/JPY to surge past 154 and hit an overnight high of 154.45. This currency pair pulled back slightly as Asian markets came online but it remained elevated above this 154-level – powerful tailwinds are likely to nudge this pair higher as the day progresses.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
  2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
• Underlying CPI inflation is likely to increase gradually toward achieving the price stability target of 2%, as the output gap turns positive and as medium- to long-term inflation expectations and wage growth rise.
• Japan’s economy is likely to continue recovering moderately for the time being, supported by factors such as the materialization of pent-up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies.
• Next meeting is on 26 April 2024.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

ZEW Economic Sentiment (9:00 am GMT)

What can we expect from EUR today?

The ZEW Economic Sentiment for the Euro Area has increased steadily since November 2023 as overall sentiment for economic growth rebounded over this period. April’s forecast of 37.8 points to another month of higher sentiment – a result that could provide some much-needed lift for the Euro.

Central Bank Notes:

• The ECB kept the three key interest rates unchanged for a fifth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
• Inflation has continued to fall, led by lower food and goods price inflation with most measures of underlying inflation easing, wage growth is gradually moderating, and firms are absorbing part of the rise in labour costs in their profits.
• Financing conditions remain restrictive and the past interest rate increases continue to weigh on demand, which is helping to push down inflation but domestic price pressures are strong and are keeping services price inflation high.
• The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and if the Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.
• Next meeting is on 6 June 2024.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Despite stronger consumer spending in the US, the jump in USD/CHF was short-lived as it hit an overnight high of 0.9152 before reversing quite sharply to touch the threshold of 0.9100 by the end of the US session. This currency pair retraced higher as Asian markets came online to trade around 0.9130 but it could edge lower as the day progresses.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, going from 1.75% to 1.50% in March.
• For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability.
• According to the new forecast, inflation is also likely to remain in this range over the next few years.
• The forecast puts average annual inflation at 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026, based on the assumption that the SNB policy rate is 1.5% over the entire forecast horizon.
• Swiss GDP growth was moderate in the fourth quarter of last year and it is likely to remain modest in the coming quarters.
• Overall, Switzerland’s GDP is likely to grow by around 1% this year.
• Next meeting is on 20 June 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

Claimant Count Change (6:00 am GMT)

Average Earnings Index (6:00 am GMT)

What can we expect from GBP today?

The claimant count change increased sharply in February, spiking to 16.8K from just 3.1K in the previous month. The forecast of 17.2K for March points to a second consecutive month of higher claims which could potentially signal a softening of the labour market. The average earnings index – which tracks wage growth – has moderated significantly lower since mid-2023 which potentially reduces the spending power of the UK consumer – an effect that could nudge inflation lower in the coming months. Should the latest data indicate a further slowdown in wage growth and higher-than-expected claims, it could potentially cause the Pound to come under heavy selling pressure once more.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-to-1 to maintain its Official Bank Rate at 5.25% for the fifth consecutive meeting.
• One member preferred to reduce the Bank Rate by 25 basis points to 5.0%.
• Twelve-month CPI inflation fell to 3.4% in February from 4.0% in January and December while Services consumer price inflation has declined but remains elevated, at 6.1% in February.
• CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.
• In the February Report projection, CPI inflation had been expected to fall temporarily to the 2% target in 2024 Q2 before increasing again in Q3 and Q4, to around 2.75%.
• Having declined through the second half of last year, UK GDP and market sector output are expected to start growing again during the first half of this year while the fiscal measures in Spring Budget 2024 are likely to increase the level of GDP by around 0.25% over coming years.
• Next meeting is on 9 May 2024.

Next 24 Hours Bias

Medium Bearish

The Canadian Dollar (CAD)

Key news events today

CPI (12:30 pm GMT)

What can we expect from CAD today?

Inflation in Canada has moderated lower for both headline and core CPI over the past ten months or so. However, the monthly headline CPI is expected to rise 0.7% MoM which would mark the highest increase since April 2023. Should inflation readings in Canada come in hot, it could strengthen the Loonie and potentially reign in the recent gains for USD/CAD.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0% for the fifth meeting in a row while continuing its policy of quantitative tightening.
• Canada’s economy stalled in the second half of last year and the economy moved into excess supply but economic growth is forecasted to pick up in 2024. Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026.
• CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs.
• Core measures of inflation, which had been running around 3.5%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2.5% in the second half, and reach the 2% inflation target in 2025.
• The Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months and the Council will be looking for evidence that this downward momentum is sustained.
• Next meeting is on 5 June 2024.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

API Crude Oil Stock (8:30 pm GMT)

What can we expect from Oil today?

After briefly dipping under $84.50 per barrel overnight, prices for WTI oil rebounded as geopolitical tensions in the Middle East heightened. Tensions rose as Israel weighed a response to the attack by Iran over the weekend. Further escalation in this latest conflict is bound to keep crude prices elevated this week. The API will release its inventory levels for last week and should stockpiles indicate a higher-than-anticipated drawdown, it could function as an additional bullish catalyst for this commodity.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Asia Fundamental Forecast | 16 April 2024 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 16/04/2024 first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 15 April 2024

What happened in the Asia session?

The dollar index (DXY) pulled back slightly from last week’s high of 106.10 to trade around 105.95 for most parts of this session. With no major catalysts to drive market direction, it was a relatively quiet period where most currency pairs and commodities such as gold and crude experienced a narrow trading range.

What does it mean for the Europe & US sessions?

Industrial production in the Euro Area declined sharply in January as it fell 3.2% MoM to mark the sharpest contraction in activity since March 2023. The estimate of a 0.8%-growth points to a slight rebound for this sector but production levels continue to remain depressed.

US retail sales have been mixed over the past five months but now appear to have stabilized. After rising 0.6% MoM in February, the estimate of 0.4% for March points to another steady month of growth. Meanwhile, manufacturing activity in the state of New York continues to decline as new orders and shipment declined significantly in March. The latest report for April points to another month of decline albeit at a slower pace.

The Dollar Index (DXY)

Key news events today

Key news events today

Retail Sales (12:30 pm GMT)

Empire State Manufacturing Index (12:30 pm GMT)

What can we expect from DXY today?

Retail sales have been mixed over the past five months but now appear to have stabilized. After rising 0.6% MoM in February, the estimate of 0.4% for March points to another steady month of growth. Meanwhile, manufacturing activity in the state of New York continues to decline as new orders and shipment declined significantly in March. The latest report for April points to another month of decline albeit at a slower pace – the mixed data could inject some volatility into the DXY during the US session.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the fifth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are moving into better balance.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks; inflation has eased over the past year but remains elevated.
• Recent indicators suggest that economic activity has been expanding at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and 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%.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.
• Next meeting runs from 30 April to 1 May 2024.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

Retail Sales (12:30 pm GMT)

Empire State Manufacturing Index (12:30 pm GMT)

What can we expect from Gold today?

Retail sales have been mixed over the past five months but now appear to have stabilized. After rising 0.6% MoM in February, the estimate of 0.4% for March points to another steady month of growth. Meanwhile, manufacturing activity in the state of New York continues to decline as new orders and shipment declined significantly in March. The latest report for April points to another month of decline albeit at a slower pace – the mixed data could inject some volatility into gold during the US session.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After declining 1.8% last week to lose nearly 120 pips, the Aussie rose strongly at today’s open rising from 0.6463 to as high as 0.6485. This currency pair could continue to rise higher during the initial part of the day but overhead pressures remain.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
• The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated, and is moderating at a more gradual pace.
• The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
• While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 7 May 2024.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi fell 1.3% last week shedding 70 pips in the process. This currency pair closed at 0.5936 last Friday but it could retrace higher on the first day of the new trading week. The Kiwi was trading around 0.5940 as Asian markets came online.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the sixth meeting in a row.
• The Committee remains confident that the current level of the OCR is contributing to an easing in capacity pressures to ensure inflation returns to target.
• However, current consumer price inflation remains above the Committee’s 1 to 3% target range. A restrictive monetary policy stance remains necessary to further reduce capacity pressures and inflation.
• The Committee discussed upside risks to the inflation outlook: persistent services inflation remains a risk and goods price inflation remains elevated while anticipated near-term increases to local government rates, insurance, and utility costs, could also further slow the decline in headline inflation.
• The Committee discussed downside risks to the inflation outlook: ongoing restrictive monetary policy in an environment of weak global growth could lead to a more rapid decline in inflation than expected. Business and consumer confidence remain particularly weak which could lead to more unemployment and financial stress than expected while structural challenges facing the economy in China remain a concern given its importance for the global economy and for New Zealand’s trade.
• Next meeting is on 10 July 2024.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Significant weakness in the Japanese yen caused USD/JPY to surge past 153 last week. The strong bullish momentum resumed as markets reopened today as the currency pair raced past 153.50 at the beginning of the Asia session and is anticipated to remain elevated today.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
  2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
• Underlying CPI inflation is likely to increase gradually toward achieving the price stability target of 2%, as the output gap turns positive and as medium- to long-term inflation expectations and wage growth rise.
• Japan’s economy is likely to continue recovering moderately for the time being, supported by factors such as the materialization of pent-up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies.
• Next meeting is on 26 April 2024.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

Industrial Production (9:00 am GMT)

What can we expect from EUR today?

Industrial production declined sharply in January as it fell 3.2% MoM to mark the sharpest contraction in activity since March 2023. The estimate of a 0.8%-growth points to a slight rebound for this sector but production levels continue to remain depressed. The Euro could face some selling pressures should the result for February miss market expectations.

Central Bank Notes:

• The ECB kept the three key interest rates unchanged for a fifth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
• Inflation has continued to fall, led by lower food and goods price inflation with most measures of underlying inflation easing, wage growth is gradually moderating, and firms are absorbing part of the rise in labour costs in their profits.
• Financing conditions remain restrictive and the past interest rate increases continue to weigh on demand, which is helping to push down inflation but domestic price pressures are strong and are keeping services price inflation high.
• The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and if the Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.
• Next meeting is on 6 June 2024.

Next 24 Hours Bias

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The Swiss franc continues to severely underperform the dollar over the past three weeks causing USD/CHF to surge towards 0.9150. This currency pair could pull back in the initial part of the day but is anticipated to remain elevated.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, going from 1.75% to 1.50% in March.
• For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability.
• According to the new forecast, inflation is also likely to remain in this range over the next few years.
• The forecast puts average annual inflation at 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026, based on the assumption that the SNB policy rate is 1.5% over the entire forecast horizon.
• Swiss GDP growth was moderate in the fourth quarter of last year and it is likely to remain modest in the coming quarters.
• Overall, Switzerland’s GDP is likely to grow by around 1% this year.
• Next meeting is on 20 June 2024.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

MPC Member Breeden Speaks (11:15 am GMT)

What can we expect from GBP today?

Last Friday’s monthly GDP growth came inline with estimates, eking out a minor gain of 0.1% for the month of February. However, the Pound closed sharply down last Friday as it fell below 1.2450. This currency pair was climbing higher at today’s open but overhead pressures remain.

Bank of England (BoE) Deputy Governor Sarah Breeden will be speaking at the Innovate Finance Global Summit in London on the implications of new technologies for digital money, retail and wholesale payments. Although the theme is not related directly to monetary policy, she could pass some remarks on the BoE’s outlook for future monetary policy action.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-to-1 to maintain its Official Bank Rate at 5.25% for the fifth consecutive meeting.
• One member preferred to reduce the Bank Rate by 25 basis points to 5.0%.
• Twelve-month CPI inflation fell to 3.4% in February from 4.0% in January and December while Services consumer price inflation has declined but remains elevated, at 6.1% in February.
• CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.
• In the February Report projection, CPI inflation had been expected to fall temporarily to the 2% target in 2024 Q2 before increasing again in Q3 and Q4, to around 2.75%.
• Having declined through the second half of last year, UK GDP and market sector output are expected to start growing again during the first half of this year while the fiscal measures in Spring Budget 2024 are likely to increase the level of GDP by around 0.25% over coming years.
• Next meeting is on 9 May 2024.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

The Loonie was amongst the worst-performing currencies against the dollar last week as USD/CAD surged past the 1.3700-threshold to hit 1.3750. This currency pair could continue to climb higher as strong tailwinds remain in place.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0% for the fifth meeting in a row while continuing its policy of quantitative tightening.
• Canada’s economy stalled in the second half of last year and the economy moved into excess supply but economic growth is forecasted to pick up in 2024. Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026.
• CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs.
• Core measures of inflation, which had been running around 3.5%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2.5% in the second half, and reach the 2% inflation target in 2025.
• The Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months and the Council will be looking for evidence that this downward momentum is sustained.
• Next meeting is on 5 June 2024.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Despite the Iran-Israel escalation over the weekend, prices for crude oil were falling as markets re-opened today. WTI oil was trading around $85.30 per barrel but should this latest conflict escalate further, it could lift this commodity higher as the week progresses.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Europe Fundamental Forecast | 15 April 2024 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei down 0.90%, Shanghai Composite up 1.11%, Hang Seng down 0.67% ASX down 0.43%
• Commodities : Gold at $2373.5 (0.06%), Silver at $28.57 (0.72%), Brent Oil at $90.13 (-0.38%), WTI Oil at $85.17 (-0.38%)
• Rates : US 10-year yield at 4.55, UK 10-year yield at 4.16, Germany 10-year yield at 2.36

News & Data:

• (USD) Import Prices m/m 0.4% vs 0.3% expected
• (USD) Prelim UoM Consumer Sentiment 77.9 vs 79.0 expected

Markets Update:

Asian-Pacific markets slipped on Monday as traders assessed the fallout from Iran’s extensive drone and missile attacks on Israel over the weekend. President Joe Biden labelled the assault as “unprecedented,” prompting U.S. intervention to help intercept most of the incoming projectiles. Oil prices remained stable, with Brent crude futures down 0.14% at $90.32 per barrel and U.S. West Texas Intermediate futures 0.32% lower at $85.39.

Investors also awaited key economic data from China and Japan later in the week. India was set to release wholesale inflation figures for March, while China would announce first quarter GDP numbers on Tuesday. Japan would follow with March trade data and inflation figures on Wednesday and Friday, respectively.

Market movements reflected caution, with Japan’s Nikkei 225 declining 1.27% and South Korea’s Kospi sliding 1.19%. Australia’s S&P/ASX 200 saw a more modest decline of 0.67%. In contrast, Hong Kong’s Hang Seng index fell 1.5%, while mainland China’s CSI300 index gained nearly 1%.

U.S. stock futures saw a slight uptick on Sunday as investors digested the geopolitical tensions and heightened market volatility following last week’s substantial downturn. Dow Jones Industrial Average futures rose by 90 points, or 0.2%, while S&P 500 futures and Nasdaq-100 futures increased by 0.2% and 0.3%, respectively.

Upcoming Events: 

• 12:30 PM GMT – USD Core Retail Sales m/m
• 12:30 PM GMT – USD Retail Sales m/m

The post Monday 15th April 2024: Asian Markets React to Geopolitical Tensions first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish reaction off pivot and drop to 1st support

Pivot: 106.13

Supporting reasons: An Overlap resistance with a 78.60% Fibonacci Projection, indicating a significant level where selling pressure might increase, potentially leading to a reversal in the bullish momentum.

1st support: 105.04

Supporting reasons: Pullback support, representing a level where buyers might step in to support the price temporarily within the context of the bullish trend.

1st resistance: 107.11

Supporting reasons: Multi-swing high resistance, suggesting a level where the price has previously encountered selling pressure from multiple highs, potentially acting as a barrier to further upside movement within the context of the overall bullish momentum.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce-off pivot and head toward 1st resistance

Pivot: 1.0618

Supporting reasons: Pullback support with a 161.80% Fibonacci Extension and 100% Fibonacci Projection indicating Fibonacci confluence, suggesting a significant level where buying pressure might intensify, potentially leading to a reversal in the bearish momentum.

1st support: 1.0499

Supporting reasons: Overlap support, indicating a level where the market has previously found support, potentially providing a foundation for a bullish reversal or price stabilization.

1st resistance: 1.0707

Supporting reasons: Pullback resistance, representing a level where selling pressure might increase, potentially acting as a barrier to further upside movement within the overall bearish trend.

EUR/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish break off pivot and drop toward 1st support

Pivot: 162.88

Supporting reasons: Pullback resistance, indicating a level where selling pressure might intensify, potentially leading to a breakout and continuation of the bearish trend.

1st support: 160.14

Supporting reasons: An Overlap support with a 38.20% Fibonacci Retracement, suggesting a significant level where buyers might enter the market, potentially providing support for the price or a temporary reversal within the context of the overall bearish momentum.

1st resistance: 165.21

Supporting reasons: Multi-swing high resistance, representing a level where the price has faced selling pressure from multiple highs, potentially acting as a barrier to further upside movement within the context of the overall bearish trend.

EUR/GBP:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce-off pivot and head toward 1st resistance

Pivot: 0.8533

Supporting reasons: Multi-swing low support, indicating a level where buyers might step in to support the price, potentially leading to a reversal or continuation of the bullish momentum.

1st support: 0.8503

Supporting reasons: Swing low support, representing a level where the price has previously found support and reversed higher, reinforcing the bullish bias.

1st resistance: 0.8581

Supporting reasons: Multi-swing high resistance, suggesting a level where the price has faced selling pressure from multiple highs, potentially acting as a barrier to further upside movement within the context of the overall bullish trend.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce-off pivot and head toward 1st resistance

Pivot: 1.2379

Supporting reasons: An Overlap support, suggesting a significant level where buyers might step in to support the price, potentially leading to a reversal or temporary halt in the bearish momentum.

1st support: 1.2237

Supporting reasons: Pullback support, indicating a level where buyers might enter the market to support the price within the context of the overall bearish trend.

1st resistance: 1.2530

Supporting reasons: Pullback resistance, representing a level where selling pressure might intensify, potentially acting as a barrier to further upside movement within the overall bearish momentum.

GBP/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support

Pivot: 190.29

Supporting reasons: Pullback resistance, suggesting a level where selling pressure might intensify, potentially leading to a continuation of the bearish trend.

1st support: 188.34

Supporting reasons: An Overlap support with a 161.80% Fibonacci Extension, indicating a significant level where buyers might step in to support the price, potentially leading to a reversal or temporary halt in the bearish momentum.

1st resistance: 193.00

Supporting reasons: Swing high resistance, representing a level where the price has previously encountered selling pressure, potentially acting as a barrier to further upside movement within the context of the overall bearish momentum.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish reaction off pivot and drop to 1st support

Pivot: 0.9080

Supporting reasons: An Overlap support, indicating a significant level where buyers might step in to support the price, potentially leading to a reversal or temporary halt in the bullish momentum.

1st support: 0.9144

Supporting reasons: Multi-swing high resistance with a 61.80% Fibonacci Projection, suggesting a level where selling pressure might intensify, potentially leading to a reversal or continuation of the bearish trend.

1st resistance: 0.9352

Supporting reasons: 100% Fibonacci Projection, representing a level where the price might encounter selling pressure, potentially acting as a barrier to further upside movement within the context of the overall bullish momentum.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a: Bearish reaction off pivot and drop to 1st support

Pivot: 153.71

Supporting reasons: Swing high resistance with a 161.80% Fibonacci Extension, indicating a significant level where selling pressure might intensify, potentially leading to a reversal or continuation of the bullish trend.

1st support: 151.77

Supporting reasons: Pullback support, suggesting a level where buyers might step in to support the price temporarily within the context of the overall bullish momentum.

1st resistance: 154.79

Supporting reasons: 127.20% Fibonacci Extension and 78.60% Fibonacci Projection indicating Fibonacci confluence, suggesting a significant level where selling pressure might intensify, potentially acting as a barrier to further upside movement within the context of the overall bullish momentum.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price has made a bullish reaction through the pivot and could potentially rise towards the 1st resistance

Pivot: 1.3755

Supporting reasons: Previously functioned as a pullback resistance which now has been broken, highlighting a potential bullish breakout.

1st support: 1.3665

Supporting reasons: Identified as a pullback support that aligns with a 38.2% Fibonacci retracement level, suggesting a significant area where the market has previously found strong buying interest and could provide a foundation for potential price stabilization.

1st resistance: 1.3854

Supporting reasons: Identified as a pullback resistance, marking a significant barrier that could cap further upward movements.

AUD/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price has made a bullish reversal close to the pivot and could potentially rise towards 1st resistance

Pivot: 0.6447

Supporting reasons: Acts as a swing-low support, suggesting a potential area where buying interest has increased recently.

1st support: 0.6360

Supporting reasons: Acts as a swing-low support, suggesting a significant area where price has previously found strong support and could provide a basis to halt further downward movement.

1st resistance: 0.6537

Supporting reasons: Identified as a pullback resistance that aligns close to a 38.2% Fibonacci retracement level, marking a significant barrier that has previously capped upward movements.

NZD/USD

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price has broken below the pivot and could potentially drop lower towards the 1st support

Pivot: 0.5953

Supporting reasons: Previously functioned as a pullback support which now has been broken, highlighting a potential bearish breakout.

1st support: 0.5872

Supporting reasons: Acts as a pullback support, suggesting a potential area for price stabilization or a minor rebound within the bearish context.

1st resistance: 0.6059

Supporting reasons: Identified as a pullback that aligns close to a 50% Fibonacci retracement level, marking a significant barrier that could cap further upward movements.

US30 (DJIA):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price has made a bullish reversal close to the pivot and could potentially rise higher towards the 1st resistance

Pivot: 37,861.80

Supporting reasons: Acts as a pullback support where price has found strong buying interest in recent weeks.

1st support: 37,093.10

Supporting reasons: Identified as a pullback support that aligns with a 38.2% Fibonacci retracement level, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movement.

1st resistance: 39,045.66

Supporting reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement level, indicating a potential barrier that could cap further upward movements.

DE40 (DAX):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price has made a bullish reversal close to the pivot and could potentially rise higher towards the 1st resistance

Pivot: 17,758.00

Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement level, suggesting a potential zone where price has found strong buying interest in recent weeks.

1st support: 17,004.20

Supporting reasons: Acts as an overlap support that aligns with a 38.2% Fibonacci retracement level, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movement.

1st resistance: 18,306.30

Supporting reasons: Identified as an overlap resistance that aligns with a 61.8% Fibonacci retracement level that could potentially function as a significant barrier that could cap further upward movements.

US500 (S&P 500): 

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price has made a bullish reaction off the pivot and could potentially rise higher towards the 1st resistance

Pivot: 5,117.40

Supporting reasons: Acts as a pullback support where buying interest has increased in recent weeks.

1st support: 4,956.50

Supporting reasons: Acts as a pullback support that aligns close to a 23.6% Fibonacci retracement level suggesting a significant area where price has previously found strong buying interest, providing a solid foundation to halt further downward movement.

1st resistance: 5,263.47

Supporting reasons: Marked by a pullback resistance close to the all-time high, which could function as a potential barrier and cap further upward movements.

BTC/USD (Bitcoin):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish reaction off this level to rise higher towards the 1st resistance

Pivot: 63,289.43

Supporting reasons: Acts as a pullback support where buying interest has increased in recent weeks.

1st support: 52,565.55

Supporting reasons: Acts as a pullback support that aligns with a 61.8% Fibonacci retracement level, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation for potential price stabilization or a rebound.

1st resistance: 73,285.14

Supporting reasons: Marked by a pullback resistance that aligns close to the all-time high, indicating a significant barrier that could cap further upward movements.

ETH/USD (Ethereum):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price has broken below the pivot and could potentially drop lower towards the 1st support

Pivot: 3,224.00

Supporting reasons: Previously functioned as a pullback support which now has been broken, highlighting a potential bearish breakout.

1st support: 2,609.35

Supporting reasons: Identified as an overlap support that aligns with a 78.6% Fibonacci retracement level  suggesting a significant area where price has previously found support, providing a strong foundation to halt further downward movements.

1st resistance: 3,693.53

Supporting reasons: Identified as a pullback resistance that aligns with a 61.8% Fibonacci retracement level, marking a significant barrier that has previously capped further upward movements.

WTI/USD (Oil):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a bullish reaction off the pivot and resume the uptrend to rise towards the 1st resistance

Pivot: 85.57

Supporting reasons: Marked by a pullback support, indicating a significant level where buying interest has increased recently.

1st support: 83.22

Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement level, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movements.

1st resistance: 90.40

Supporting reasons: Identified as a swing-high resistance, marking a significant barrier that could cap further upward movements.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish reaction off pivot and drop to 1st support

Pivot: 2373.82

Supporting reasons: Pullback resistance, indicating a level where selling pressure might intensify, potentially leading to a reversal or continuation of the bullish trend.

1st support: 2196.97

Supporting reasons: Pullback support, suggesting a level where buyers might step in to support the price temporarily within the context of the overall bullish momentum.

1st resistance: 2504.97

Supporting reasons: 100% Fibonacci Projection, representing a level where the price might encounter selling pressure, potentially acting as a barrier to further upside movement within the context of the overall bullish momentum

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The post Monday 15th April 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 15 April 2024

What happened in the US session?

The University of Michigan (UoM) released its preliminary findings on consumer sentiment for the month of April which showed overall sentiment remaining relatively unchanged at 77.9. However, year-ahead inflation expectations edged up from 2.9% in the previous month to 3.1% as recent CPI and PPI data has come in hot. The dollar index (DXY) rose strongly last Friday to break above the 106-level and notched its largest weekly gain since May 2023, jumping 1.7%.

What does it mean for the Asia Session?

After last week’s robust gains, the DXY could pull back as there could be a bout of profit-taking by the dollar bulls to lock in some profit. The DXY dipped under 106 as markets re-opened today while spot prices for gold gapped higher and were rising towards $2,370/oz – this commodity could edge higher today after making a new all-time high of $2,431.52/oz last Friday.

The Dollar Index (DXY)

Key news events today

Retail Sales (12:30 pm GMT)

Empire State Manufacturing Index (12:30 pm GMT)

What can we expect from DXY today?

Retail sales have been mixed over the past five months but now appear to have stabilized. After rising 0.6% MoM in February, the estimate of 0.4% for March points to another steady month of growth. Meanwhile, manufacturing activity in the state of New York continues to decline as new orders and shipment declined significantly in March. The latest report for April points to another month of decline albeit at a slower pace – the mixed data could inject some volatility into the DXY during the US session.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the fifth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are moving into better balance.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks; inflation has eased over the past year but remains elevated.
• Recent indicators suggest that economic activity has been expanding at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and 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%.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.
• Next meeting runs from 30 April to 1 May 2024.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

Retail Sales (12:30 pm GMT)

Empire State Manufacturing Index (12:30 pm GMT)

What can we expect from Gold today?

Retail sales have been mixed over the past five months but now appear to have stabilized. After rising 0.6% MoM in February, the estimate of 0.4% for March points to another steady month of growth. Meanwhile, manufacturing activity in the state of New York continues to decline as new orders and shipment declined significantly in March. The latest report for April points to another month of decline albeit at a slower pace – the mixed data could inject some volatility into gold during the US session.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After declining 1.8% last week to lose nearly 120 pips, the Aussie rose strongly at today’s open rising from 0.6463 to as high as 0.6485. This currency pair could continue to rise higher during the initial part of the day but overhead pressures remain.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
• The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated and is moderating at a more gradual pace.
• The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
• While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 7 May 2024.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi fell 1.3% last week shedding 70 pips in the process. This currency pair closed at 0.5936 last Friday but it could retrace higher on the first day of the new trading week. The Kiwi was trading around 0.5940 as Asian markets came online.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the sixth meeting in a row.
• The Committee remains confident that the current level of the OCR is contributing to an easing in capacity pressures to ensure inflation returns to target.
• However, current consumer price inflation remains above the Committee’s 1 to 3% target range. A restrictive monetary policy stance remains necessary to further reduce capacity pressures and inflation.
• The Committee discussed upside risks to the inflation outlook: persistent services inflation remains a risk and goods price inflation remains elevated while anticipated near-term increases to local government rates, insurance, and utility costs, could also further slow the decline in headline inflation.
• The Committee discussed downside risks to the inflation outlook: ongoing restrictive monetary policy in an environment of weak global growth could lead to a more rapid decline in inflation than expected. Business and consumer confidence remain particularly weak which could lead to more unemployment and financial stress than expected while structural challenges facing the economy in China remain a concern given its importance for the global economy and for New Zealand’s trade.
• Next meeting is on 10 July 2024.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Significant weakness in the Japanese yen caused USD/JPY to surge past 153 last week. The strong bullish momentum resumed as markets reopened today as the currency pair raced past 153.50 at the beginning of the Asia session and is anticipated to remain elevated today.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
  2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
• Underlying CPI inflation is likely to increase gradually toward achieving the price stability target of 2%, as the output gap turns positive and as medium- to long-term inflation expectations and wage growth rise.
• Japan’s economy is likely to continue recovering moderately for the time being, supported by factors such as the materialization of pent-up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies.
• Next meeting is on 26 April 2024.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

Industrial Production (9:00 am GMT)

What can we expect from EUR today?

Industrial production declined sharply in January as it fell 3.2% MoM to mark the sharpest contraction in activity since March 2023. The estimate of a 0.8%-growth points to a slight rebound for this sector but production levels continue to remain depressed. The Euro could face some selling pressures should the result for February miss market expectations.

Central Bank Notes:

• The ECB kept the three key interest rates unchanged for a fifth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
• Inflation has continued to fall, led by lower food and goods price inflation with most measures of underlying inflation easing, wage growth is gradually moderating, and firms are absorbing part of the rise in labour costs in their profits.
• Financing conditions remain restrictive and the past interest rate increases continue to weigh on demand, which is helping to push down inflation but domestic price pressures are strong and are keeping services price inflation high.
• The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and if the Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.
• Next meeting is on 6 June 2024.

Next 24 Hours Bias

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The Swiss franc continues to severely underperform the dollar over the past three weeks causing USD/CHF to surge towards 0.9150. This currency pair could pull back in the initial part of the day but is anticipated to remain elevated.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, going from 1.75% to 1.50% in March.
• For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability.
• According to the new forecast, inflation is also likely to remain in this range over the next few years.
• The forecast puts average annual inflation at 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026, based on the assumption that the SNB policy rate is 1.5% over the entire forecast horizon.
• Swiss GDP growth was moderate in the fourth quarter of last year and it is likely to remain modest in the coming quarters.
• Overall, Switzerland’s GDP is likely to grow by around 1% this year.
• Next meeting is on 20 June 2024.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

MPC Member Breeden Speaks (11:15 am GMT)

What can we expect from GBP today?

Last Friday’s monthly GDP growth came inline with estimates, eking out a minor gain of 0.1% for the month of February. However, the Pound closed sharply down last Friday as it fell below 1.2450. This currency pair was climbing higher at today’s open but overhead pressures remain.

Bank of England (BoE) Deputy Governor Sarah Breeden will be speaking at the Innovate Finance Global Summit in London on the implications of new technologies for digital money, retail and wholesale payments. Although the theme is not related directly to monetary policy, she could pass some remarks on the BoE’s outlook for future monetary policy action.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-to-1 to maintain its Official Bank Rate at 5.25% for the fifth consecutive meeting.
• One member preferred to reduce the Bank Rate by 25 basis points to 5.0%.
• Twelve-month CPI inflation fell to 3.4% in February from 4.0% in January and December while Services consumer price inflation has declined but remains elevated, at 6.1% in February.
• CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.
• In the February Report projection, CPI inflation had been expected to fall temporarily to the 2% target in 2024 Q2 before increasing again in Q3 and Q4, to around 2.75%.
• Having declined through the second half of last year, UK GDP and market sector output are expected to start growing again during the first half of this year while the fiscal measures in Spring Budget 2024 are likely to increase the level of GDP by around 0.25% over coming years.
• Next meeting is on 9 May 2024.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

The Loonie was amongst the worst-performing currencies against the dollar last week as USD/CAD surged past the 1.3700-threshold to hit 1.3750. This currency pair could continue to climb higher as strong tailwinds remain in place.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0% for the fifth meeting in a row while continuing its policy of quantitative tightening.
• Canada’s economy stalled in the second half of last year and the economy moved into excess supply but economic growth is forecasted to pick up in 2024. Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026.
• CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs.
• Core measures of inflation, which had been running around 3.5%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2.5% in the second half, and reach the 2% inflation target in 2025.
• The Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months and the Council will be looking for evidence that this downward momentum is sustained.
• Next meeting is on 5 June 2024.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Despite the Iran-Israel escalation over the weekend, prices for crude oil were falling as markets re-opened today. WTI oil was trading around $85.30 per barrel but should this latest conflict escalate further, it could lift this commodity higher as the week progresses.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Asia Fundamental Forecast | 15 April 2024 first appeared on IC Markets | Official Blog.

Stocks Smashed on Middle East Escalation – Nasdaq down 1.6%

US Stock markets took a big hit in trading on Friday as tensions escalated in the Middle East, and markets are likely to open in the red today after attacks materialized. The Dow closed the day down 1.24%, the S&P dropped 1.46%, experiencing its biggest one-day loss in nearly 6 months, and the Nasdaq took a 1.62% hit. Haven products rallied, with the dollar driving higher against most of its contemporaries, contributing to a 0.7% gain for the Dxy last week. Oil prices spiked higher but have remained relatively calm on the open today, with Brent now trading up at $90.90 per barrel and WTI at $85.80 per barrel. Gold has traded higher on the open today after a very volatile session on Friday saw it make another new all-time high at $2,419.79 before closing back down near $2,340. Currently trading around the $2,356 level after settling on the Asian open. 

Middle East Tensions to Dominate Market Action Today 

Moves in the global financial markets are set to be dominated by developments in the Middle East over the next few days as traders have their eyes fixed on newswires for any fresh updates. So far it has been a bit of a case of ‘buy the rumour, not so much the fact’ as markets moved hard on Friday in anticipation of missile strikes from Iran on Israel but have been more stable on the open after the weekend’s action. Iran has said that the attacks on the weekend are the end of their ‘response’ to Israel’s initial strike on their Syrian embassy and now traders will have to watch their screens closely for the next moves. The Asian session should be relatively calm but expect things to heat up again once the Middle East wakes up and updates start again from both sides.  

Market Volatility Expected Today Despite a Quiet Calendar 

Traders are expecting to see much higher volatility in the sessions ahead as the market reacts to the current tinder box situation in the Middle East. The market open has so far been relatively calm given the weekends’ actions, but many are expecting more and harder moves, especially in haven products as the day progresses. There is nothing on the event calendar in the first two sessions of the day, but we have some key US data releases due once New York opens with the release of the latest Retail Sales data and Empire State Manufacturing Index due out early in the day. Expect these to affect markets in the short term but the bigger geopolitical situation is likely to have a much stronger effect today.  

The post General Market Analysis 15/04/2024 first appeared on IC Markets | Official Blog.