IC Markets Asia Fundamental Forecast | 22 April 2024

What happened in the US session?

UK retail sales missed market expectations of an increase of 0.3% by coming in flat for the month of March – this latest reading marked the second consecutive month of poor sales. Despite the disappointing result, the Pound strengthened following this news release as GBP/USD rose as high as 1.2468 during the US session before reversing sharply to end the week at 1.2369. Demand for the dollar returned last Friday as the dollar index (DXY) rebounded from 105.85 to close out the week at 106.11 to register a second weekly gain for the greenback – the DXY has gained nearly 1.85% or 180 pips over this period.

What does it mean for the Asia Session?

The DXY slid lower at today’s open with this index dipping under 106 while spot prices for gold also headed lower. This precious metal was trading around $2,375/oz and could continue to drift lower in the initial part of the new trading day. The dollar and gold are exhibiting positive correlation today, something that usually does not occur regularly – traders should be aware of this correlation and take note when normalcy resumes i.e. dollar and gold expressing negative correlation once again.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

The DXY slid lower at today’s open with this index dipping under 106. The dollar and gold are exhibiting positive correlation today, something that usually does not occur regularly – traders should be aware of this correlation and take note when normalcy resumes i.e. dollar and gold expressing negative correlation once again.

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

No major news events.

What can we expect from Gold today?

After hitting the all-time high of $2,432.02/oz in the second week of April, prices for spot gold were retreating at today’s open. This precious metal gapped lower to open at $2,382/oz and edged lower to trade around $2,375/oz at the beginning of the Asia session.

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?

Demand for the Aussie picked up strongly at the open as it bounced strongly off the 0.6410-level. This currency pair was rising towards 0.6460 as Asian markets came online and it could continue to retrace higher as the day progresses.

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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Demand for the Kiwi was strong at the open causing it to bounce strongly off the 0.5880-level. This currency pair was rising towards 0.5930 at the beginning of the Asia session and it is expected to remain elevated today.

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 Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Despite the Bank of Japan (BoJ) hiking its key policy rate at the previous central bank meeting and inflationary pressures starting to take root in Japan, the yen remains weak as USD/JPY hit a high of 154.83 last week. This currency pair gapped lower this morning to open at 154.38 but it rebounded above 154.70 as Asian markets came online. Tailwinds remain for USD/JPY but traders should watch out for any potential intervention measures by the BoJ which could cause sharp drops for this currency pair as well as the yen crosses.

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

Weak Bullish

The Euro (EUR)

Key news events today

ECB President Lagarde Speaks (3:30 pm GMT)

What can we expect from EUR today?

ECB President Christine Lagarde is due to speak at Yale University in the US where she could drop further clues on the direction of future monetary policy action in the Euro Area. The Euro has shed almost 1.8% or 190 pips over the last couple of weeks as demand for the dollar jumped significantly. This currency pair opened at around 1.0650 to climb higher towards 1.0670 at the beginning of the Asia session.

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 strengthened significantly last week causing USD/CHF to tumble as low as 0.9011, losing almost 100 pips before reversing sharply to erase nearly all the initial loss. This currency pair closed at 0.9101 last Friday and opened to edge higher this morning and is likely to remain elevated today.

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

No major news events.

What can we expect from GBP today?

After falling 2.1% over the last couple of weeks, the Pound looks to have found support around 1.2360 as it bounced quite strongly off this level at today’s open. GBP/USD was trading around 1.2390 as Asian markets came online and could continue to climb higher as the day progresses.

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

IPPI (12:30 pm GMT)

RMPI (12:30 pm GMT)

What can we expect from CAD today?

The Industrial Product Price Index (IPPI) – which measures factory gate and producer prices – and the Raw Materials Price Index will provide further insight into the level of inflation in Canada’s manufacturing and industrial production sectors. Although inflation has retreated quite steadily over the past ten to twelve months, inflationary pressures are beginning to take root as evident in the recent month-over-month IPPI and RMPI. Should these indices beat market expectations, it could function as a near-term bullish catalyst for the Loonie and potentially cause USD/CAD to pull back further today.

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 Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Prices for crude oil declined over the last couple of weeks with WTI oil losing 4.3% over this period. WTI oil dropped as low as $81.70 per barrel last week and this downward slide looks to have resumed at today’s open. Despite the ongoing geopolitical tensions in the Middle East, downward pressures are building due to weaker crude demand in the US as observed in the inventory builds reported by the API and EIA in recent weeks.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Asia Fundamental Forecast | 22 April 2024 first appeared on IC Markets | Official Blog.

Tech Stocks Tumble Ahead of Earnings – Nasdaq Down 2% 

Tech Stocks took a hit in trading on Friday as investors looked ahead to a raft of earnings reports from major players this week. The Dow bucked the trend, closing the day up 0.56%, but the S&P and Nasdaq both took strong hits into the weekend, finishing down 0.88% and 2.05% respectively. US Treasury yields dropped off recent highs, the 2-year losing 1.5 basis points to trade at 4.975% and the 10-year falling 3 basis points back to 4.617%. The dollar finished slightly below previous levels but remains well-bid against most of the majors. Oil drifted higher with Middle East tensions still very much at the forefront of trader’s minds, Brent adding 0.21% to trade at $87.29 and WTI gaining 0.5% up to $83.14 a barrel. Gold pushed higher again as well, trading up 0.7% and closing around the $2,390 level.  

This Week’s Earnings Numbers Crucial  

This week’s earning numbers in the US could be crucial for the next few months trading in stock markets. The major US indices are off recent historic high levels but remain relatively strong and the data coming out of major tech companies this week is seen by many investors as being more important this time around. Tesla, Meta, Alphabet, and Microsoft are all set to release their quarterly numbers and with all having a heavy weighting in the index, traders are braced for more volatility in the days ahead, especially in the New York trading sessions. The price action ahead for this week could be pivotal and will soon tell us if recent corrective moves have been driven by changes in fundamentals from the Fed or if some harder moves are coming.  

Quiet Start to a Busy Week

The week kicks off with a relatively muted calendar day although risk trades are expected to start the bid as tensions appear to be easing in the Middle East. The Asian session sees the main data release of the day when we have the Chinese Prime Loan rates released to the market, the expectation is for no change in the key 1-year and 5-year numbers, but investors will be hoping for signs of further stimulus for the market. The calendar is relatively quiet for the other two sessions of the day although Euro traders will be paying close attention to comments from ECB President Christine LaGarde when she speaks at Yale University during the US session.  

The post General Market Analysis 22/04/2024 first appeared on IC Markets | Official Blog.

Traders are bracing themselves for another busy week ahead as volatility looks set to remain high. A mixture of key data releases, geopolitical concerns, and central bank calls is combining to hit markets at fragile levels. In addition to the above, earnings season in the US is really picking up this week with some big tech companies due to report quarterly data.

Here’s our usual day-by-day breakdown of the major economies’ scheduled risk events:

The week kicks off with a muted event calendar, but traders are still expecting lively sessions ahead after the volatile action of the previous week. The main data focus of the day will come in the Asian session when China updates the market on its Prime Loan rates. Investors once again hope for some stimulus. The other two sessions are relatively quiet, although Euro traders will be paying close attention to comments from ECB President Christine Lagarde later in the day.

There’s little on the calendar in the APAC session, but we have a plethora of Flash Services and Manufacturing PMI numbers throughout the rest of the day. Data is set to come from France, Germany, the Eurozone, the UK, and the US. New Home Sales and the Richmond Manufacturing Index numbers are also due out later in the New York session.

One of the key data points of the week is due early in the Asian session with the Australian CPI numbers set for release. The London session is relatively quiet with just the German Ifo number due out. The New York session could be livelier with Retail Sales numbers from Canada and Durable Goods from the US set to hit the market early in the day.

A quieter start to the trading day is expected in Asia on Thursday with both Australian and New Zealand markets closed for ANZAC Day. There’s little else on the calendar for the remainder of the session and indeed into the European day. However, the US session should see some more action. The weekly unemployment claims numbers are due out early in the day, alongside the latest GDP update, and later the Pending Home Sales data is also set to hit the screens.

The week looks set to finish on a high note with two major events bookending the day. First up in the Asian session is the latest rate call from the Bank of Japan, which could see some strong moves in the market given the level of the Yen. The London session is set to be quieter, although Swiss traders will be paying close attention to comments from the SNB’s Thomas Jordan early on. The week’s major data release is scheduled for the final session with the Core PCE Price Index update due out early in the US session. Acknowledged as the Fed’s favoured inflation indicator, we could see strong moves in the market leading into the weekend.

The post The Week Ahead – Week Commencing 22 April 2024 first appeared on IC Markets | Official Blog.

With the Bitcoin halving event less than a day away, the crypto community is buzzing with anticipation. This pivotal event is scheduled to occur on April 20, 2024, at precisely 01:54 GMT+2. Such events, which happen approximately every four years, have historically been turning points for the currency’s value, often leading to substantial price increases in the months that follow.

What is Bitcoin Halving?

Bitcoin halving refers to the reduction of the reward for mining new blocks by half. This mechanism, embedded in Bitcoin’s code, effectively reduces the rate at which new bitcoins are created and thus limits the total supply, creating potential for price increase due to supply scarcity.

Historical Impact

Looking back at the previous halvings, each has been followed by a notable rise in Bitcoin’s price. This pattern suggests a bullish outcome, though it’s important to approach with cautious optimism. The crypto market is notoriously volatile, and past performance is not indicative of future results.

How to Prepare

For those looking to capitalize on the halving event, here are a few tips:

Stay Informed: Keep up with the latest market trends and news. The crypto landscape can change rapidly, and staying informed will help you make educated decisions.

Assess Your Investment Strategy: Consider how the halving may impact your long-term investment strategy. Some investors may see it as a time to buy, while others might view it as an opportunity to sell into a potentially bullish market.

Risk Management: Always consider your risk tolerance and ensure your investment does not expose you to undue financial hardship.

Final Thoughts

As the countdown to the halving continues, the next few hours could be crucial for those looking to leverage the halving event. Whether you’re a seasoned trader or new to the crypto world, now is the time to scrutinize your strategy and decide how best to move forward.

Remember, while the potential for profit exists, it’s important to approach with caution and to make decisions based on thorough analysis and sound financial principles.

The post Bitcoin Halving Is Imminent: What You Need to Know and How to Prepare first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei down 2.14%, Shanghai Composite down 0.29%, Hang Seng down 1.05% ASX down 1.14%
• Commodities : Gold at $2405.5 (0.36%), Silver at $28.57 (0.62%), Brent Oil at $87.93 (0.98%), WTI Oil at $83.67 (1.14%)
• Rates : US 10-year yield at 4.58, UK 10-year yield at 4.27, Germany 10-year yield at 2.458

News & Data:

• (USD) Natural Gas Storage 50B vs 54B expected

Markets Update:

Market losses rippled across Asia on Friday, spearheaded by Taiwan’s Weighted Index plunging 3.81% to its lowest in over a month at 19,527.12. This decline was fueled by escalating tensions in the Middle East, prompting sell-offs in major regional markets.

Reports of Israel’s limited strike in Iran intensified the downturn, triggering a sell-off in stocks and risk assets, while safe-haven assets like gold surged. The Japanese yen strengthened, contrasting sharply with bitcoin’s significant drop.

Oil prices surged over 3%, with Brent crude futures briefly topping $90 a barrel before settling just above $89. Meanwhile, U.S. stock futures dipped over 1% before a slight recovery.

Japan’s Nikkei 225 fell 2.14%, closing at 37,068.35, while the broader Topix index declined 1.91% to 2,626.32, marking a weekly drop of 3.65%. Japan’s March inflation data showed a headline rate of 2.7%, with the core inflation rate remaining at 2.6%.

South Korea’s Kospi index closed 1.63% lower at 2,591.86, with the Kosdaq falling 1.61% to 841.91. Australia’s S&P/ASX 200 index lost 1.14%, marking its sixth decline in seven days. Hong Kong’s Hang Seng index dropped 1.05%, while the mainland Chinese CSI 300 slipped 0.77%. On Wall Street, the S&P 500 recorded its fifth consecutive day of losses, while the Nasdaq Composite fell 0.52%, and the Dow Jones Industrial Average added a marginal 0.06%, closing just above its 2024 flatline.

Upcoming Events: 

• 2:15 PM GMT – GBP MPC Member Breeden Speaks
• 2:15 PM GMT – GBP MPC Member Ramsden Speaks

The post Friday 19th April 2024: Asian markets tumble amid Middle East tensions first appeared on IC Markets | Official Blog.

The post Ex-Dividend 22/04/2024 first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 19 April 2024

What happened in the Asia session?

Japan’s National Core CPI rose 2.6% YoY in March which was slightly lower than the forecast of 2.7% as well as the previous month’s reading of 2.8%. Although the latest figure was ‘softer’ than originally anticipated, it does suggest that inflationary pressures are beginning to take root n.b. core CPI was 2% YoY in January and the data over the last couple of months indicate a significant jump in prices which could strengthen the Japanese yen and thus add downward pressure on USD/JPY. In addition, a potential escalation between Israel and Iran has triggered strong demand for safe-haven assets such as the dollar, gold, Japanese yen and Swiss franc today.

What does it mean for the Europe & US sessions?

Demand for the dollar has been robust this week with the DXY is all set to register a second consecutive week of gains – it was climbing strongly towards 106.50 at the beginning of the Asia session as a potential escalation between Israel and Iran has prompted strong demand for safe-haven assets today.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

Demand for the dollar has been robust this week with the DXY is all set to register a second consecutive week of gains – it was climbing strongly towards 106.50 at the beginning of the Asia session as a potential escalation between Israel and Iran has prompted strong demand for safe-haven assets today.

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

Strong Bullish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

A potential escalation between Israel and Iran has prompted strong demand for safe-haven assets this week as gold prices jumped as high as $2,420/oz as Asian markets came online – this precious metal is all set to register its fifth consecutive week of robust gains.

Next 24 Hours Bias

Strong Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Huge demand for the dollar caused the Aussie to tumble at the beginning of the Asia session. This currency pair fell under 0.6370 and is likely to remain under pressure today.

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

Strong Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Intense demand for the dollar caused the Kiwi to dive as Asian markets came online. This currency pair fell under 0.5870 and is likely to remain under pressure today.

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

Strong Bearish

The Japanese Yen (JPY)

Key news events today

National Core CPI (11:30 pm GMT 18th April)

What can we expect from JPY today?

Japan’s National Core CPI rose 2.6% YoY in March which was slightly lower than the forecast of 2.7% as well as the previous month’s reading of 2.8%. Although the latest figure was ‘softer’ than originally anticipated, it does suggest that inflationary pressures are beginning to take root n.b. core CPI was 2% YoY in January and the data over the last couple of months indicate a significant jump in prices which could strengthen the Japanese yen and thus add downward pressure on USD/JPY.

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

Strong Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Huge demand for the dollar caused the Euro to tumble at the beginning of the Asia session. This currency pair fell under 1.0620 and is likely to remain under pressure today.

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

Strong Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Robust demand for safe-haven assets such as the Swiss franc have caused USD/CHF to dive strongly as Asian markets came online. This currency pair fell under 0.9060 and is likely to remain under pressure today.

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

Strong Bearish

The Pound (GBP)

Key news events today

Retail Sales (6:00 am GMT)

What can we expect from GBP today?

Retail sales in the UK have been mixed over the past four months indicating sporadic spending habits by the British consumer. After a flat reading in February, the estimate of 0.3% points to a minor increase in March. Should sales surprise the upside, it could function as a bullish catalyst for the pound and provide a much-needed lift for GBP/USD.

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

Strong Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Intense demand for the dollar caused USD/CAD to spike as Asian markets came online. This currency pair jumped as high as 1.3800 and is likely to remain elevated today.

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

Strong Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Prices for crude oil spiked at the beginning of the Asia session as a potential escalation between Israel and Iran hit the news wires. WTI oil jumped nearly 4% this morning as prices hit $86 per barrel – this commodity is all but certain to end the week on a high note.

Next 24 Hours Bias

Strong Bullish

The post IC Markets Europe Fundamental Forecast | 19 April 2024 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Factors contributing to the momentum is that price is: Above the bullish Ichimoku cloud

Price could potentially make a: Bullish continuation towards 1st resistance

Pivot: 105.94

Supporting reasons: An Overlap support, indicating a significant level where buying interest might be present, potentially providing a foundation for further upside movement.

1st support: 105.10

Supporting reasons: An Overlap support, suggesting a level where buyers might step in to support the price, potentially providing a foundation for a bounce or temporary halt in the bullish momentum.

1st resistance: 106.89

Supporting reasons: An Overlap resistance combined with a 161.80% Fibonacci Extension, representing a level where selling pressure might increase, potentially acting as a barrier to further upside movement within the context of the overall bullish trend.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Factors contributing to the momentum is that price is: Below the bearish Ichimoku cloud

Price could potentially make a: Bearish break off pivot and drop towards 1st support

Pivot: 1.0610

Supporting reasons: Pullback resistance, indicating a significant level where selling pressure might intensify, potentially leading to a reversal or temporary halt in the bearish momentum.

1st support: 1.0550

Supporting reasons: 161.80% Fibonacci Extension, representing a level where buyers might step in to support the price, potentially providing a foundation for a bounce or temporary halt in the bearish momentum.

1st resistance: 1.0689

Supporting reasons: Swing high resistance, representing 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/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a: Bearish break off pivot and drop towards 1st support

PIvot: 163.57

Supporting reasons: Pullback resistance, indicating a significant level where selling pressure might intensify, potentially leading to a reversal or temporary halt in the bearish momentum.

1st support: 162.53

Supporting reasons: An Overlap support, suggesting a level where buyers might step in to support the price, potentially providing a foundation for a bounce or temporary halt in the bearish momentum.

1st resistance: 165.14

Supporting reasons: Swing high resistance, representing 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: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a: Bullish continuation towards 1st resistance

Pivot: 0.8549

Supporting reasons: An Overlap support combined with a 38.20% Fibonacci Retracement, indicating a significant level where buying interest might be present, potentially providing a foundation for further upside movement.

1st support: 0.8531

Supporting reasons: Multi-swing low support, suggesting a level where buyers might step in to support the price, potentially providing a foundation for a bounce or temporary halt in the bullish momentum.

1st resistance: 0.8582

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

GBP/USD:

Instrument: GBP/USD

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a: Bearish break off pivot and drop towards 1st support

Pivot: 1.2424

Supporting reasons: Pullback resistance, indicating a significant level where selling pressure might intensify, potentially leading to a reversal or temporary halt in the bearish momentum.

1st support: 1.2338

Supporting reasons: Multi-swing low support combined with a 161.80% Fibonacci Extension, suggesting a level where buyers might step in to support the price, potentially providing a foundation for a bounce or temporary halt in the bearish momentum.

1st resistance: 1.2484

Supporting reasons: Multi-swing high resistance, representing 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/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a: Bearish break off pivot and drop towards 1st support

Pivot: 191.58

Supporting reasons: Pullback resistance, indicating a significant level where selling pressure might intensify, potentially leading to a reversal or temporary halt in the bearish momentum.

1st support: 190.08

Supporting reasons: An Overlap support, suggesting a level where buyers might step in to support the price, potentially providing a foundation for a bounce or temporary halt in the bearish momentum.

1st resistance: 192.79

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

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a: Bearish break off pivot and drop towards 1st support

Pivot: 0.9089

Supporting reasons: Pullback resistance, indicating a significant level where selling pressure might intensify, potentially leading to a reversal or temporary halt in the bearish momentum.

1st support: 0.9024

Supporting reasons: An Overlap support, suggesting a level where buyers might step in to support the price, potentially providing a foundation for a bounce or temporary halt in the bearish momentum.

1st resistance: 0.9148

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

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a: Bearish continuation towards 1st support

Pivot: 154.81

Supporting reasons: Multi-swing high resistance, indicating a level where selling pressure might intensify, potentially leading to a reversal or temporary halt in the bullish momentum, supported by the 78.60% Fibonacci Projection.

1st support: 151.93

Supporting reasons: Pullback support, suggesting a level where buyers might step in to support the price, potentially providing a foundation for a bounce or temporary halt in the bearish momentum.

1st resistance: 157.04

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

USD/CAD:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support 

Pivot: 1.3828

Supporting reasons: Acts as a pullback resistance that aligns close to a 78.6% Fibonacci projection level, suggesting an area where price could potentially stall and pull back before resuming the uptrend.

1st support: 1.3753

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 that aligns close to a 127.2% Fibonacci extension level, marking a significant barrier that could cap further upward movements.

AUD/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 0.6397

Supporting reasons: Previously functioned as a pullback support which now has been broken due to the strong bearish 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: 0.6447

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

Pivot: 0.5863

Supporting reasons: Previously functioned as a pullback support which now has been broken due to the strong bearish momentum.

1st support: 0.5779

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

1st resistance: 0.5930

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

US30 (DJIA):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 37,672.13

Supporting reasons: Previously functioned as a pullback support which now has been broken due to the strong bearish 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: 38,025.73

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

Pivot: 17,666.40

Supporting reasons: Previously functioned as a pullback support which now has been broken due to the strong bearish momentum.

1st support: 17,431.30

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 to halt further downward movement.

1st resistance: 17,901.10

Supporting reasons: Identified as a pullback resistance that aligns with 23.6% Fibonacci retracement level, potentially functioning as a barrier that could cap any upward movements.

US500 (S&P 500): 

Potential Direction: Bearish

Overall momentum of the chart: Bearish

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

Pivot: 4,953.70

Supporting reasons: Previously functioned as a pullback support which now has been broken due to the strong bearish momentum.

1st support: 4,848.25

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: 5,006.20

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 could potentially make a bullish reaction off the pivot and rise towards the 1st resistance

Pivot: 59,525.62

Supporting reasons: Acts as a pullback support that aligns with the 61.8% Fibonacci retracement and the 161.8% Fibonacci extension levels, 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 support: 52,866.49

Supporting reasons: Acts as a pullback support, 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: 64,275.47

Supporting reasons: Marked by a pullback resistance that aligns close to a 38.2% Fibonacci retracement, indicating a significant barrier that could cap further upward movements.

ETH/USD (Ethereum):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

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

Pivot: 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 for a potential rebound.

1st support: 2,685.96

Supporting reasons: Identified as an overlap support that aligns close to 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: 3,111.04

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: Bullish

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

Pivot: 82.68

Supporting reasons: Previously functioned as an overlap resistance which now has been broken due to the strong bullish momentum.

1st support: 81.01

Supporting reasons: Identified 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 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: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a: Bullish bounce off pivot and heads towards 1st resistance

Pivot: 2404.73

Supporting reasons: Pullback resistance, indicating a level where selling pressure might intensify, potentially providing a barrier to further upside movement.

1st support: 2363.29

Supporting reasons: An Overlap support, suggesting a level where buyers might step in to support the price, potentially providing a foundation for a bounce or temporary halt in the bullish momentum.

1st resistance: 2431.00

Supporting reasons: Swing high resistance, representing a level where selling pressure might increase, potentially acting as a barrier to further upside movement.

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The post Friday 19th April 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 19 April 2024

What happened in the US session?

Unemployment claims in the US printed lower than its forecast for the second consecutive week as 212K claims were filed versus the estimate of 215K. Lower-than-anticipated claims highlight the ongoing strength in the labour market while inflation remains persistent – factors which are likely to keep markets waiting for that first elusive interest rate cut by the Federal Reserve. The recent economic data have nudged several FOMC policymakers such as Fed Governor Michelle Bowman to publicly adopt a more hawkish tone this week.

After dipping under 105.80 yesterday, the dollar index (DXY) reclaimed 106 to climb as high as 106.18 overnight – this bullish uptrend continued as Asian markets came online with the DXY rising towards 106.50.

What does it mean for the Asia Session?

Japan’s National Core CPI rose 2.6% YoY in March which was slightly lower than the forecast of 2.7% as well as the previous month’s reading of 2.8%. Although the latest figure was ‘softer’ than originally anticipated, it does suggest that inflationary pressures are beginning to take root n.b. core CPI was 2% YoY in January and the data over the last couple of months indicate a significant jump in prices which could strengthen the Japanese yen and thus add downward pressure on USD/JPY. In addition, a potential escalation between Israel and Iran has triggered strong demand for safe-haven assets such as the dollar, gold, Japanese yen and Swiss franc today.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

Demand for the dollar has been robust this week with the DXY is all set to register a second consecutive week of gains – it was climbing strongly towards 106.50 at the beginning of the Asia session as a potential escalation between Israel and Iran has prompted strong demand for safe-haven assets today.

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

Strong Bullish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

A potential escalation between Israel and Iran has prompted strong demand for safe-haven assets this week as gold prices jumped as high as $2,420/oz as Asian markets came online – this precious metal is all set to register its fifth consecutive week of robust gains.

Next 24 Hours Bias

Strong Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Huge demand for the dollar caused the Aussie to tumble at the beginning of the Asia session. This currency pair fell under 0.6370 and is likely to remain under pressure today.

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

Strong Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Intense demand for the dollar caused the Kiwi to dive as Asian markets came online. This currency pair fell under 0.5870 and is likely to remain under pressure today.

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

Strong Bearish

The Japanese Yen (JPY)

Key news events today

National Core CPI (11:30 pm GMT 18th April)

What can we expect from JPY today?

Japan’s National Core CPI rose 2.6% YoY in March which was slightly lower than the forecast of 2.7% as well as the previous month’s reading of 2.8%. Although the latest figure was ‘softer’ than originally anticipated, it does suggest that inflationary pressures are beginning to take root n.b. core CPI was 2% YoY in January and the data over the last couple of months indicate a significant jump in prices which could strengthen the Japanese yen and thus add downward pressure on USD/JPY.

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

Strong Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Huge demand for the dollar caused the Euro to tumble at the beginning of the Asia session. This currency pair fell under 1.0620 and is likely to remain under pressure today.

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

Strong Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Robust demand for safe-haven assets such as the Swiss franc have caused USD/CHF to dive strongly as Asian markets came online. This currency pair fell under 0.9060 and is likely to remain under pressure today.

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

Strong Bearish

The Pound (GBP)

Key news events today

Retail Sales (6:00 am GMT)

What can we expect from GBP today?

Retail sales in the UK have been mixed over the past four months indicating sporadic spending habits by the British consumer. After a flat reading in February, the estimate of 0.3% points to a minor increase in March. Should sales surprise the upside, it could function as a bullish catalyst for the pound and provide a much-needed lift for GBP/USD.

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

Strong Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Intense demand for the dollar caused USD/CAD to spike as Asian markets came online. This currency pair jumped as high as 1.3800 and is likely to remain elevated today.

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

Strong Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Prices for crude oil spiked at the beginning of the Asia session as a potential escalation between Israel and Iran hit the news wires. WTI oil jumped nearly 4% this morning as prices hit $86 per barrel – this commodity is all but certain to end the week on a high note.

Next 24 Hours Bias

Strong Bullish

The post IC Markets Asia Fundamental Forecast | 19 April 2024 first appeared on IC Markets | Official Blog.

Data and Fed Expectations Continue to Pressure Stocks  

US Stock markets remain under pressure as data and more Fed speak continue to push rates to remain at higher levels for longer. Last night more hawkish rhetoric from FOMC and strong data led to more pressure on the major indices, the Nasdaq lost another 0.52%, the S&P dropped for a fifth straight session, the first time since October, losing 0.22% and the Dow managed a tiny 0.06% improvement. The Dollar pushed slightly higher, the Dxy gaining 0.2% on the day as yields once again edged north, the 2-year adding 5.6 basis points to 4.988% and the 10-year up 5.2 basis points to 4.637%. Oil was relatively quiet as traders continued to monitor updates from the Middle East closely, with Brent down 0.2% to $87.11 and WTI up 0.1% to $82.73 per barrel. Gold gained 1% to trade back to the $2,385 level but remains in recent ranges.  

Yen Levels Still in Focus for FX Traders 

FX Traders are continuing to focus on key UsdJpy levels as we approach the weekend and enter lower liquidity trading conditions later in the day. Japanese officials have been ‘jawboning’ throughout the week and the pair is sitting just below the crucial 155.00 level and a break here could see them enter the market as they have been threatening to do. Midweek talk of concerted efforts from the US, South Korea, and Japan to smooth FX volatility clearly didn’t make it to the notepads of Fed officials, who once again turned more hawkish overnight which could prompt more topside moves for the UsdJpy from an interest rate differential point of view. Expect traders to become more nervous into the New York session today if the pair is anywhere near 155 and the dollar is appreciating across the board. 

Markets on the Alert into the Weekend 

It has been a tough week for investors this week with stocks and overall risk trades under pressure after a more hawkish Fed and strong data hit US markets. The macroeconomic event calendar is pointing to quieter last few sessions of the week, but traders are aware that fresh tensions in the Middle East could spark at any point and Yen traders are wary that it is sitting at historically low levels against the dollar. There is nothing of note due out in the Asian session, but the London session once again has a focus on the UK with the latest Retail Sales numbers due out. The New York session yet again has a focus on central bankers with MPC members Breedon, Ramsden, and Mann all scheduled to talk as well as German Buba President Joachim Nagel. 

The post General Market Analysis 19/04/2024 first appeared on IC Markets | Official Blog.

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IC Markets Europe Fundamental Forecast | 18 April 2024

What happened in the Asia session?

Australia released its labour force report for the month of March which showed some weakness for this segment of the economy. Employment change contracted for the second time in four months, shedding 6.6K jobs versus the estimate of a gain of 7.2K while the unemployment rate edged higher from 3.7% to 3.8%. Surprisingly, the Aussie actually climbed higher following the release of this data point to hit a high of 0.6456 but this currency pair then stalled around this level before pulling back towards 0.6440 by Asia midday.

What does it mean for the Europe & US sessions?

Unemployment claims have been relatively stable over the last seven weeks with readings averaging around 213K claims on a weekly basis. The latest forecast of 215K points to a slight increase from the previous week’s reading of 211K – should claims print higher than market expectations, it could add downward pressure on the dollar.

Federal Reserve Governor Michelle Bowman is due to participate in a virtual fireside chat at the Securities Industry and Financial Markets Association Basel 3 Endgame Roundtable where audience questions are expected. Although the topic is not focused on monetary policy, her recent comments have shown her to be leaning more on the hawkish side of policy action. Any rhetoric on “higher for longer” could potentially lift the dollar later today.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (12:30 pm GMT)

FOMC Member Bowman Speaks (1:15 pm GMT)

What can we expect from DXY today?

Unemployment claims have been relatively stable over the last seven weeks with readings averaging around 213K claims on a weekly basis. The latest forecast of 215K points to a slight increase from the previous week’s reading of 211K – should claims print higher than market expectations, it could add downward pressure on the dollar.

Federal Reserve Governor Michelle Bowman is due to participate in a virtual fireside chat at the Securities Industry and Financial Markets Association Basel 3 Endgame Roundtable where audience questions are expected. Although the topic is not focused on monetary policy, her recent comments have shown her to be leaning more on the hawkish side of policy action. Any rhetoric on “higher for longer” could potentially lift the dollar later today.

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

Unemployment Claims (12:30 pm GMT)

FOMC Member Bowman Speaks (1:15 pm GMT)

What can we expect from Gold today?

Unemployment claims have been relatively stable over the last seven weeks with readings averaging around 213K claims on a weekly basis. The latest forecast of 215K points to a slight increase from the previous week’s reading of 211K – should claims print higher than market expectations, it could add downward pressure on the dollar and boost gold prices.

Federal Reserve Governor Michelle Bowman is due to participate in a virtual fireside chat at the Securities Industry and Financial Markets Association Basel 3 Endgame Roundtable where audience questions are expected. Although the topic is not focused on monetary policy, her recent comments have shown her to be leaning more on the hawkish side of policy action. Any rhetoric on “higher for longer” could potentially lift the dollar later today and temper any gains in this precious metal.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

Labour Force Report (1:30 am GMT)

What can we expect from AUD today?

Australia released its labour force report for the month of March which showed some weakness for this segment of the economy. Employment change contracted for the second time in four months, shedding 6.6K jobs versus the estimate of a gain of 7.2K while the unemployment rate edged higher from 3.7% to 3.8%. Surprisingly, the Aussie actually climbed higher following the release of this data point to hit a high of 0.6456 but this currency pair then stalled around this level before pulling back towards 0.6440 by Asia midday.

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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Following yesterday’s inflation print in New Zealand which showed CPI edging higher from 0.5% in the previous quarter to 0.6% in the first quarter of 2024, the Kiwi has halted its downward slide since the second week of April and retraced above the 0.5900-level. This currency pair was currently trading around 0.5920 as Asian markets came online but it could come under pressure should its Pacific neighbour disappoint with a weak labour force report.

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 Bullish

The Japanese Yen (JPY)

Key news events today

National Core CPI (11:30 pm GMT)

What can we expect from JPY today?

After accelerating sharply from 2% to 2.8% YoY in February, Japan’s core CPI reading is expected to remain elevated at 2.7% in March. Inflationary pressures appear to be taking a foothold in the land of the rising sun and should we see prices continue to rise higher, the Bank of Japan is likely to raise its key policy rate once more – a move that is likely to strengthen the Japanese yen and potentially cause USD/JPY to pull back from its 34-year highs. This currency pair was hovering around 154.40 at the beginning of the Asia session and could drift lower in the initial part of the day.

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

Weak Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

There was no surprise to the final consumer inflation readings for the month of the March in the Euro Area as both headline and core CPI continue to moderate further – the former edging lower from 2.6% to 2.4% while the latter eased from 3.1% to 2.9% on an annualised basis.

Meanwhile, during her speech at the International Monetary Fund/World Bank Spring meetings, ECB President Christine Lagarde hinted that it was too early for the ECB to review its inflation target of 2% because the battle against inflation has yet to conclude. Lagarde stated that “the game is not over and recalled her previous comment that one should not change the rules of the game halfway through”.

The Euro rose to an overnight high of 1.0680 but it pulled back to dip under 1.0670 as Asian markets came online – this currency pair is likely to drift higher as the day progresses.

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 remains one of the weakest currencies in 2024 causing USD/CHF to climb above the threshold of 0.9100 in early April. However, with no additional catalysts, this currency pair has remained bounded between 0.9100 and 0.9150 since the second week of April and it is a range that is likely to extend further today.

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

No major news events.

What can we expect from GBP today?

Consumer inflation in the UK eased further in March as headline CPI edged lower from 3.4% to 3.2% while the core reading fell from 4.5% to 4.2%, both on an annualised basis. However, both readings printed higher than their respective estimates pointing to a certain level of stickiness. The Pound initially spiked following this news release as GBP/USD went from 1.2420 to as high as 1.2480 during yesterday’s European trading hours. However, this currency pair almost gave up all of its prior gains to dip under 1.2430 during the US session and was trading around 1.2455 at the beginning of the Asia session.

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 has weakened significantly since the beginning of April, driving USD/CAD past the threshold of 1.3800 but it looks to have run into resistance around the region of 1.3850 at the beginning of this week. This currency pair fell under 1.3800 overnight and could continue to slide lower today.

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?

Following Tuesday’s higher-than-anticipated increase in API stockpiles, the EIA inventories also followed suit by adding 2.7M barrels of crude versus the estimate of just 1.6M. This marked the fourth consecutive week where EIA inventories levels increased and came in higher than the respective forecasts. Despite the ongoing conflicts in the Middle East, demand concerns – as seen in the recent API and EIA stock levels – outweigh any geopolitical risks for now.

Prices for crude oil tumbled hard yesterday with WTI oil shedding nearly 3.1% to dive under $83 per barrel and mark the second largest daily decline of this year. This commodity was trading around $82.70 as Asian markets came online and is likely to resume its downward slide as the day progresses.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 18 April 2024 first appeared on IC Markets | Official Blog.