Hfmarkets (hfm.com): Market Analysis Services.

Date: 26th November 2024.

Trump’s tariff threats boosted Dollar; Peso, Loonie, Gold & Oil Lower.


The Trump trade picked up steam as investors cheered his pick for Treasury Secretary, Scott Bessent. Beliefs he will be a steadying voice in the administration’s fiscal measures, while still following President-elect Trump’s tariff and tax commitments, underpinned.

Asia & European Sessions:

• Trump threatened on Monday to impose sweeping new tariffs on China, Canada and Mexico on his first day as US President to crack down on illegal immigration and drugs. He would impose a 25% tax on all products entering the country from Canada and Mexico, and an additional 10% tariff on goods from China as one of his first acts as president of the US.
• Bessent’s 3-3-3 plan aims to cut the deficit to 3% of GDP, boost growth to 3%, and increase oil production to 3 mln barrels.
• Treasury yields dove in a curve flattener, extending their drops through the session, on expectations inflation will decelerate. A strong 2-year auction also supported.
• The Dow led the charge, climbing 0.99% to 44,736, a new record peak as the rally broadens. The S&P500 climbed to 6020, a session peak, but finished with a 0.3% gain to 5987. The NASDAQ closed 0.27% higher.
• Today, stock markets in Europe are posting broad losses, with the DAX down -0.6%, the FTSE 100 0.4%, after a largely weaker close across Asia.
• ECB: Lane suggests ECB must be open-minded on speed of rate cuts. The ECB’s Chief Economist said in a speech on Monday evening that “remaining open-minded about the speed and scale of adjustments is in fact a valuable strategy across various environments, as different situations may necessitate distinct approaches.” This careful, step-by-step strategy enables us to observe the responses of the economy to our decisions and continuously refine our understanding of their impacts.” The comments leave the door open to a 50 bp move in December, but also tie in with our expectation that the central bank will deliver a 25 bp while tweaking the forward guidance and commit to additional moves.

Financial Markets Performance:

• The USDIndex hit a session high of 107.50 and is currently lower at 106.85.
• Mexican peso and Canadian dollar slumped as the dollar is being viewed as a haven after the comments of President-elect Donald Trump on tariffs on Canada, Mexico and China. USDCAD spiked to 1.4177 and USDMXN rallied to 20.74.
• Oil and Gold lost ground, in part on cooling geopolitical risks, and on Trump trades. Oil dropped -3.03% to $69.09 per barrel, in part on the Trump trade and on talk of a potential cease fire between Israel and Hezbollah. Similarly, gold fell -3.26% to $2605 per ounce.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

Date: 27th November 2024.

S&P500 at its 52nd new peak for 2024; USD Firmer, Kiwi & Yen Up.


Asia & European Sessions:

• Wall Street rallied into the close with the S&P500 and Dow registering more record highs with the S&P500 climbing 0.57% to 6045, its 52nd new peak for 2024. The Dow rose 0.28% to 44,860.3 for its 46th record of the year. The NASDAQ advanced 0.63%.
• Trump named Jamieson Greer as the US Trade Representative and Kevin Hassett to direct the National Economic Council. Greer was intimately involved in Trump’s first-term trade policy decisions.
• President Biden announced Israel and Hezbollah have reached a cease fire. Over the next 60 days the Lebanese army and state security will take control of their own territory and Israel will gradually withdraw its forces.
• FOMC minutes: Minutes from the Fed’s latest policy meeting revealed officials leaning toward a cautious approach to future rate cuts. All agreed to cut the rate by -25 bps and nearly all thought risks between achieving employment and inflation goals were “roughly in balance.” Upside risks to the inflation outlook were little changed, and while inflation had eased, it remained elevated. The implied December rate continues to hover around a 50-50 bet as we await the PCE price data Wednesday and the crucial jobs report on December 6. The January 2025 rate is priced for a total of 20 bps in cuts, with -75 bps by January 2026.
• RBNZ cut its cash rate by 50 bps, yet the Kiwi gained as traders analyzed the central bank’s rate outlook and the governor’s remarks.
• Chinese government approved a 500 billion yuan ($69 billion) bond quota, enabling two state-owned asset managers to issue bonds for funding projects aimed at spurring economic growth.
• Today: US inflation and economic growth may provide clues to the Federal Reserve’s next policy move.

Financial Markets Performance:

• The USDIndex has dropped to currently 106.459.
• The Yen climbed with USDJPY pulling back to 151.82, while NZDUSD jumped to 0.5900 despite the RBNZ’s 50 bps rate cut.
• Oil prices stabilized at $68.84, with optimism over delayed OPEC+ output increases balancing the reduced geopolitical risk stemming from the ceasefire.
• Gold rebounds to 2653.54, with next Resistance at 2660-2664.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

Date: 2nd December 2024.

Dollar Strength Ahead of Key Employment Data Pressures Gold!


Trading Leveraged Producys is Risky

• Analysts expect the US Unemployment Rate to rise from 4.1% to 4.2%. The US Dollar Index opens higher on Monday after declining for 5 consecutive days.
• According to experts, there is a 67% chance of a rate cut in December from the Fed. However, the decision depends on the NFP and next week’s inflation rate.
• France’s parliament clash on Prime Minister Michel Barnier’s tweaks to the 2025 budget. Le Pen threatens to support a vote of no confidence. European indices decline.
• Oil prices drop back below $70 per barrel supporting US stocks.

Gold – A Stronger US Dollar Pressures Gold!

The price of Gold sharply fell over 1.00% in the opening hours of the Asian and European session taking the price down to Thursday’s support level. The main reason for the decline is the rise in the price of the US Dollar. The US Dollar Index opened on a 0.30% bullish price gap and rose a further 0.23% thereafter. The price of Gold this week will largely be dependent on the US employment data and its effect on the Federal Fund Rate.



Employment data will be made public throughout the week, marking the final update before the US Federal Reserve’s December meeting. This includes tomorrow’s JOLTS Job Openings, Wednesday’s ADP Employment Change and Friday’s NFP data. Notably, the personal consumption expenditures (PCE) price index rose from 2.1% to 2.3%, with the core index climbing from 2.7% to 2.8%. Strong employment figures could strengthen the case against further monetary policy easing, casting doubt on the likelihood of a 25-basis-point interest rate cut in December.

While most experts currently anticipate this adjustment, they expect regulators to pause early next year to evaluate the potential impacts of trade policy decisions announced by newly elected President Donald Trump’s administration. If the likelihood of a rate cut remains high, the price of Gold is likely to find support. Whereas, strong employment data and a pause will pressure Gold and support the Dollar further.

Due to today’s decline, the price of gold shows a bearish bias as the price falls below the trend-line and the 100-bar Moving Average. However, the current momentum will determine whether the price obtains a short-term signal indicating a correction or decline. If the price increases above $2632.62 a short-term signal indicating a correction is likely to arise. If the price falls below $2,626.45, the signal will indicate the continuation of downward momentum.

EURUSD – The Euro Falls As European Politics Trigger Lower Confidence.

The worst performing currency of the day is the Euro which is declining against all currencies. The Euro index currently trades 0.58% lower mainly due to political tension in France and Germany.



Finance Minister Antoine Armand dismissed Marine Le Pen’s push for artificial budget deadlines, even as the far-right leader signaled readiness to topple the government this week. Le Pen’s party has threatened a no-confidence vote against Prime Minister Barnier. This is due to the PM adjusting the 2025 budget to include inflation-linked pension indexing and other demands.

S&P Global’s Manufacturing PMIs are expected to stay the same in Germany (43.2 points) and the eurozone (45.2 points). Meanwhile, markets are awaiting October’s data on the Eurozone unemployment rate, currently at 6.3%, along with a speech by ECB President Christine Lagarde, who may provide updates on the central bank’s monetary policy plans.

While experts believe the ECB is unlikely to make a sharp policy easing, some board members, including Bank of France Governor François Villeroy de Galhau, have suggested that a 50-basis-point rate cut in December remains a possibility.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

Date: 3rd December 2024.

High Bond Yields Boost Euro, But ECB Signals December Cut!

• The French government is close to collapse due to the French Prime Minister’s persistence on the latest budget.
• French bond yields rise to their highest since 2012 and the Euro attempts to correct upwards during this morning’s session.
• According to state central banks, the ECB will continue cutting interest rates in December. Is the current bullish Euro temporary?
• The SNP500 renewed its highs for a second consecutive day mainly due to gains from Meta, Tesla and Microsoft.

EURUSD – ECB Members Indicate Cut For December!

The US Dollar is declining in value against most currencies this morning after significant gains on Monday. However, the performance throughout the week will depend on the JOLTS Job Openings, ADP Employment Change, NFP and US Unemployment Rate.



Positive dynamics have been unfolding amid Trump’s warning to BRICS nations against creating a currency alternative to the US Dollar, threatening 100% tariffs on their exports. Experts fear this signals a potential trade war with China, India, Russia, and others. Moscow countered that forcing reliance on the Dollar could erode its appeal as a reserve currency.

Meanwhile, investors await November employment data. With private consumption rising (2.1% to 2.3%) and core inflation increasing (2.7% to 2.8%), further labor market strength could challenge a December rate cut of 25 basis points. Most experts still expect the Fed to proceed, but a pause in rate cuts is anticipated early next year.

Currently, the Euro is the second best performing currency of the day behind the Australian Dollar. Many believe this is partially due to the competitive price and high Bond Yields. However, this can quickly change as the ECB’s dovishness and France’s political and budget crisis continue. ECB Governing Board member Yannis Stournaras indicated today that interest rates are likely to be cut further in December, with experts anticipating a 25 basis point reduction.

For the Euro to maintain a buy signal in the short-term, the price will need to rise above $2,647.92 and this afternoon’s JOLTS Job Opening to fall below expectations.

SNP500 – Stocks Reach All-Time High!

The SNP500 so far this year is trading 27.50% higher and is at an all time high. This is mainly due to gains from Meta, Tesla and Microsoft. On Monday, 59% of the most influential stocks rose in value.

Wedbush Securities reaffirmed an “Outperform” rating on Apple shares with a $300 target, citing a potential record 240 million iPhone sales in fiscal 2025, driven by the new Apple Intelligence AI feature. Last month, Apple reported $94.9 billion in revenue and $1.64 EPS, beating forecasts and last year’s figures.

The performance of the SNP500 will depend on this week’s employment data, similar to the US Dollar. Most analysts believe the ideal scenario for the stock market is for the data to come in as expected.




Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

Date: 4th December 2024.

Australian Dollar Dives To Significant Support Level!


Trading Leveraged Products is Risky

• US JOLTS Job Openings beat expectations but remains below 8 million job vacancies.
• Australia’s Gross Domestic Product increases to a 5-month high but does not reach previous expectations.
• The Australian Dollar significantly declines during this morning’s trading session due to the GDP miss.
• US stocks shot up after the release of the latest US Job Vacancies and the NASDAQ rose to an all-time high.
• The Euro and the US Dollar continue to move sideways as investors await further US employment data and clarity of the French political crisis.

NASDAQ Rises To An All-Time High, But Risks Remain!

The NASDAQ rose to a new all-time high at 5:40 GMT, during this morning’s Asian session. The bullish price movement seems to be due to the JOLTS Job Openings which painted a picture of resilience but was not high enough to indicate a pause in December from the Federal Reserve. According to economists, the Fed most likely would have drawn the line at 8 million vacancies. However, traders should note that the spotlight remains on NFP, the US Unemployment Rate and the inflation rate. Yesterday’s JOLTS Job Vacancies rose to 7.74 million.



Investors should also note that the above release is the second positive economic data for the US after Monday’s ISM Manufacturing PMI which rose to a 5-month high (48.4). Another positive factor is the NASDAQ remaining above the Volume-weighted average price, as the VIX index falls again and the High Low Index also continues to increase.

However, investors should note that risks still remain. Positive economic and employment data could pressure the Federal Reserve to keep the Fund Rate unchanged. This will particularly become possible if we do not see a sizable decline in inflation. Bond yields did fall towards the end of November which signals a cut from the Fed, but the 10-year bond yields are slowly rising this week.

The NASDAQ has been increasing in value for five consecutive days, and the index is trading at an all-time high. If the index fully forms a bullish candlestick throughout today’s session, investors will become vigilant of a selloff and retracement. Nonetheless, technical analysis and indicators continue to provide buy signals due to the bullish momentum. Currently, the RSI indicates the index is overbought on the 2-hour chart on a period of 18.

AUDUSD – Poor Economic Data Drives The Australian Dollar To 4-Month Low!

The AUDUSD exchange rate is trading at a 4-month low after the positive JOLTS Job data, but when analyzing each currency individually, it is clear the main driver is the Australian Dollar. The worst performing currency of the day is the Australian Dollar while the US Dollar is unchanged. What’s driving the AUD lower?



The decline is largely due to the Gross Domestic Product which rose from 0.2% to 0.3%, but fell short of the 0.5% which traders were expecting. Last Thursday, Australia’s Senate approved amendments to the Reserve Bank Act, creating a Monetary Policy Committee and a separate Board for operational management. Treasurer Jim Chalmers said the reforms would enhance the RBA’s independence, clarify its mandate, modernize its structure, and align it with regulators like the Bank of England.



The price of the US Dollar will depend on the upcoming employment data and on the Fed’s monetary policy move. The Federal Reserve has already done the unexpected on one occasion this year, if they decide to pause in December, the US Dollar is likely to significantly rise.

The AUDUSD has fallen 9 of the past 10 weeks and the price is now considerably close to a major support level at 0.63470.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

Date: 5th December 2024.

French Government Collapses as ECB Signals Another Rate Cut!

• The French government collapses after a vote of no confidence in Prime Minister Michel Barnier. The French government has not collapsed like this in 62 years!
• Economists warn of potential Euro weakness due to ongoing political uncertainty in France and Germany. To pile on the pressure, analysts expect the ECB to cut rates on the 12th.
• US and European indices continue to rise to all-time highs. NASDAQ +1.24%, Dow Jones +0.69%, DAX +1.08% and the CAC40 +0.66%.
• The Federal Reserve Chairman advises the US economy is in a “remarkably good shape”.

EURUSD – Will The EURUSD Find Resistance at 1.05417?

The EURUSD continues to move within the price range between 1.04714 and 1.05417 established over the past 3 days. During this morning’s Asian session the EURUSD moved upwards towards 1.05417 due to the decline in the US Dollar Index. The US Dollar Index traded 0.19% lower this morning but is at the 106.04 support level. Is the EURUSD likely to regain bearish momentum in favor of the USD?



Currently, the exchange rate is not obtaining any clear indications pointing towards bearish price movement. However, as the EURUSD rises to the 1.05417 resistance level, traders will monitor if this price will trigger bearishness throughout the European session which is due to open soon. In order for there to be clearer indications of the EURUSD’s possible decline, traders will be looking for 65% of the current bullish to be regained. This level can be seen at 1.05163, or for the price to fall below the 200-bar Simple Moving Average on the 5-minute timeframe.

European Instability & Political Crisis

Analysts believe the price of the EURUSD is likely to decline in the medium to longer term. This is due to the political crisis in France, Germany as well as the potentially upcoming interest rate cut by the European Central Bank. The French government collapses following a vote of no confidence against Prime Minister Michel Barnier, marking the first such event in 62 years! Germany will also hold snap elections in February 2025.

Pressure on the Euro increases after the ECB President MrsLagarde highlighted the region’s economic weakness and declining services sector activity. Croatian National Bank Governor Mr Vujičić said the ECB’s plan to continue cutting interest rates but with smaller gradual cuts. Analysts widely expect a fourth rate adjustment amid deteriorating European business sentiment, though only 20% foresee a 50 basis point cut. Vujičić also warned of growing uncertainty as the ECB adopts more flexible policies, with recent economic data aligning with forecasts, except for November’s inflation, which rose to 2.3% year-on-year due to lingering energy price impacts.

US Economic Strength and Fed Potential Hawkishness

On the other hand, the tone in the US is very different. The Federal Reserve Chairman advises the US economy is in a “remarkably good shape”. After Mr Powell’s speech yesterday evening analysts advised the Chairman had a slightly hawkish tone, but nonetheless, 77.5% of the market believe the Fed will cut 0.25%. If the Fed surprises the market as they did in September, the US Dollar can quickly regain momentum.



The weakness seen during yesterday’s US session and this morning’s Asian session was largely due to the ADP Employment Change and the ISM Services PMI. The ISM Services PMI fell short of expectations, reading 52.1 points. The ADP Employment Change read 146,000, very close to the average expectation of 153,00.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

Date: 6th December 2024.

How Will NFP Impact The Trading Markets?

• The Euro increased in value against most currencies on Thursday, but investors remained cautious over the ECB President’s comments.
• According to economists, the ECB is almost certain to cut interest rates next week. President Lagarde advises the Eurozone is likely to witness lower economic growth than previously expected.
• Analysts changed expectations for the US Unemployment Rate to rise to 4.2%. Most experts now expect the US rate of unemployment to remain unchanged.
• Poor US employment data can increase the potential for a December rate cut and further fuel the bullish trend in the stock market.

EURUSD – Will The Fed Cut Interest Rates?

The EURUSD rose in value on Thursday ignoring resistance levels but now moves closer to a stronger resistance point. This key level can be seen at 1.05969, but in order for the EURUSD to find bearish momentum at this level investors will be hoping for poor employment data.



Economists expect the NFP Employment Change to read 215,000 and for the Unemployment Rate to remain at 4.1%. Analysts also continue to expect the growth in salaries to continue. If these three releases indicate a resilient and strong employment sector, the chances of a Federal Reserve rate cut fade. However, if the data is poorer, the US Dollar can potentially decline as a rate cut this month becomes more certain.

Regarding the Euro, market participants are turning their attention to macroeconomic data from the Eurozone. Retail sales declined by 0.5% MoM, slightly worse than the expected ˗0.4%. Additionally, Germany’s industrial orders for October decreased by 1.5%, following a 4.2% rise in the previous month. This indicates weak domestic demand in both the German and broader European economies, potentially prompting the European Central Bank (ECB) to consider further interest rate cuts.

A recent Reuters poll of leading economists suggests the ECB may lower borrowing costs by ˗25 basis points next week and by at least ˗100 basis points over the next year. Supporting this outlook, ECB President Christine Lagarde stated yesterday that economic growth in the Eurozone could be weaker than expected in the coming months, with risks of further deterioration likely to dominate in the medium term.

The US Dollar Index is the best performing currency index so far today, but is not seeing significant gains. The Euro Index remains unchanged. The worst performing currency of the day is the Australian Dollar and the Japanese Yen.

NASDAQ – How Will NFP Affect The NASDAQ?

The NASDAQ retraced after gaining in value for 5 consecutive days and rising to an all-time high. So far in 2024, the NASDAQ has almost risen 30% but the short to medium term price action will depend on the upcoming employment data and next week’s consumer and producer inflation.



Employment data for last week was released yesterday, showing that initial jobless claims rose by 224,000, surpassing both the forecast of 215,000 and the previous figure of 215,000. However, the total number of individuals receiving state assistance decreased from 1.896 million to 1.871 million, defying expectations of an increase to 1.910 million.

Commenting on the situation, Federal Reserve Chair Jerome Powell noted that the US economy is performing better than anticipated, with declining risks of labor market deterioration. In this context, Powell suggested that the Federal Reserve could adopt a more cautious stance on monetary policy, aiming to achieve a neutral position for interest rates.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

Date: 6th December 2024.

How Will NFP Impact The Trading Markets?

• The Euro increased in value against most currencies on Thursday, but investors remained cautious over the ECB President’s comments.
• According to economists, the ECB is almost certain to cut interest rates next week. President Lagarde advises the Eurozone is likely to witness lower economic growth than previously expected.
• Analysts changed expectations for the US Unemployment Rate to rise to 4.2%. Most experts now expect the US rate of unemployment to remain unchanged.
• Poor US employment data can increase the potential for a December rate cut and further fuel the bullish trend in the stock market.

EURUSD – Will The Fed Cut Interest Rates?

The EURUSD rose in value on Thursday ignoring resistance levels but now moves closer to a stronger resistance point. This key level can be seen at 1.05969, but in order for the EURUSD to find bearish momentum at this level investors will be hoping for poor employment data.




Economists expect the NFP Employment Change to read 215,000 and for the Unemployment Rate to remain at 4.1%. Analysts also continue to expect the growth in salaries to continue. If these three releases indicate a resilient and strong employment sector, the chances of a Federal Reserve rate cut fade. However, if the data is poorer, the US Dollar can potentially decline as a rate cut this month becomes more certain.

Regarding the Euro, market participants are turning their attention to macroeconomic data from the Eurozone. Retail sales declined by 0.5% MoM, slightly worse than the expected ˗0.4%. Additionally, Germany’s industrial orders for October decreased by 1.5%, following a 4.2% rise in the previous month. This indicates weak domestic demand in both the German and broader European economies, potentially prompting the European Central Bank (ECB) to consider further interest rate cuts.

A recent Reuters poll of leading economists suggests the ECB may lower borrowing costs by ˗25 basis points next week and by at least ˗100 basis points over the next year. Supporting this outlook, ECB President Christine Lagarde stated yesterday that economic growth in the Eurozone could be weaker than expected in the coming months, with risks of further deterioration likely to dominate in the medium term.

The US Dollar Index is the best performing currency index so far today, but is not seeing significant gains. The Euro Index remains unchanged. The worst performing currency of the day is the Australian Dollar and the Japanese Yen.

NASDAQ – How Will NFP Affect The NASDAQ?

The NASDAQ retraced after gaining in value for 5 consecutive days and rising to an all-time high. So far in 2024, the NASDAQ has almost risen 30% but the short to medium term price action will depend on the upcoming employment data and next week’s consumer and producer inflation.




Employment data for last week was released yesterday, showing that initial jobless claims rose by 224,000, surpassing both the forecast of 215,000 and the previous figure of 215,000. However, the total number of individuals receiving state assistance decreased from 1.896 million to 1.871 million, defying expectations of an increase to 1.910 million.

Commenting on the situation, Federal Reserve Chair Jerome Powell noted that the US economy is performing better than anticipated, with declining risks of labor market deterioration. In this context, Powell suggested that the Federal Reserve could adopt a more cautious stance on monetary policy, aiming to achieve a neutral position for interest rates.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

Date: 17th December 2024.
GBPUSD: Strong UK Data Fuels Expectations of BoE Hawkishness!

Trading Leveraged Producys is Risky
*UK salaries increased to 5.2%, up from 4.3% the previous month and significantly higher than analysts’ expectations.
*Analysts expect the Bank of England to keep interest rates unchanged on Thursday. Higher UK salaries to prompt a hawkish BoE.
*The Great British Pound Index trades 0.13% higher this morning as the UK only adds 300 unemployment claims.
*The Australian Dollar loses gains from Monday’s trading session. The AUD and NZD are the day’s worst performing currencies so far.
*Traders continue to expect 0.25% by the Federal Reserve. The USD remains pressured while stocks rise.
GBPUSD - Strong Employment Data for the UK Boosts GBP Demand!
The GBPUSD is trading 0.21% higher as we edge closer to the London open. Traders should note that the price of the GBPUSD rose almost 0.30% as the UK’s employment data was made public. Prior to this the exchange rate was trading 0.10% lower. The upward price movement this week is primarily related to the upcoming Bank of England interest rate decision where investors believe the BoE will vote for a pause.

After the release of the UK’s employment data for November the chances of a pause have increased. The UK’s Unemployment Claimant Count Change saw only 300 more unemployed individuals making claims. This is the lowest Claimant Count Change since June 2023. In addition to this, the UK’s Quarterly Average Salary Index rose to 5.2%, 0.6% higher than the previous month. The announcement will further prompt the BoE to take a more hawkish stance and less adjustments in the upcoming quarter.
The hawkishness of the Bank of England is one of the reasons the GBP has performed well in the past 24 hours. Although, the expected upcoming Federal Reserve 0.25% cut is also supporting the GBPUSD. However, if the Federal Reserve decides to make a shock decision and not cut interest rates, the GBPUSD could quickly decline. Most analysts believe the Federal Reserve will adjust 0.25%, but most have not completely withdrawn the possibility of a pause after the US increase rose to 2.7%.
GBPUSD - Technical Analysis and Upcoming News
On a 2-hour timeframe, the GBPUSD is trading with a slight bullish bias as the price is trading above the 75-Bar EMA and the RSI’s neutral level but below the 100-Bar SMA. In order for the GBPUSD to witness strong bullish signals ideally today’s US Retail Sales data will read lower than expected and the Fed will announce its 0.25% cut. If the Federal Reserve does not cut interest rates, the GBPUSD could correct back down to 1.26075. Otherwise, the Cable could rise to the previous price rate which saw an average price at 1.27464.

The significant economic release for the next 24-hours will be the US Retail Sales this afternoon. Analysts expect Retail Sales for the US to rise 0.6% MoM and the Core Retail Sales 0.4%. Tomorrow morning traders' attention will turn to the UK’s inflation rate. Analysts expect the UK inflation rate to increase from 2.3% to 2.6%, the highest since April 2024 but not significantly higher than the BoE’s target of 2.00%.
Gold and the US Dollar
Gold's price has also significantly declined over the past 2 days which may give the interpretation of a hawkish Fed. Individuals trading the GBPUSD are also closely monitoring the price of Gold and the US Dollar Index for clarity and confirmation of their signals.
However, the market is undergoing a local correction: according to the US Commodity Futures Trading Commission (CFTC) report, net speculative positions in gold rose significantly last week, reaching 275.6 thousand compared to 259.7 thousand the previous week. Investors are actively increasing long positions, anticipating further price growth. Therefore, order flow analysts in Gold are also potentially indicating a 0.25% cut in interest rates.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HFM Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 

Date: 18th December 2024.

UK Inflation Climbs: All Eyes on the Fed’s Next Move!

• US Retail Sales increase by 0.7% in November surpassing expectations of +0.6%.
• The US Dollar Index rose in value on Tuesday after starting the day with a bearish price gap. This week the US Dollar Index trades sideways as traders await the Fed’s rate decision.
• The Federal Reserve will confirm their rate decision this evening with most experts expecting a 0.25% adjustment.
• The UK’s inflation rate increases from 2.3% to 2.6% meeting the market’s previous expectations. The GBP quickly increases in value against all currencies.
• Analysts expect the Bank of England to pause but expect at least 2 monetary policy members to vote for a rate cut.

GBPUSD - Both The Fed and BoE Are Scheduled To Announce Their Interest Rate Decisions!
The GBPUSD rose up to 0.40% in value on Tuesday before slightly retracing and closing the day with a 0.21% gain. The increase in value is primarily due to the UK’s employment data which shows signs of stability and salary growth. The Bank of England is concerned the growth in salaries will continue to provide support for inflation. As a result, the BoE will likely pause in today’s rate decision.




During this morning's Asian session, the GBP saw a sudden bullish spike after the UK made public its inflation rate. The UK’s inflation rate increased from 2.3% to 2.6% which is an 8 month high. The higher rate of inflation along with high salary growth is likely to prompt the Bank of England to keep the rate unchanged at tomorrow’s meeting and for the upcoming months thereafter.

During this morning's Asian session, the GBP saw a sudden bullish spike after the UK made public its inflation rate. The UK’s inflation rate increased from 2.3% to 2.6% which is an 8 month high. The higher rate of inflation along with high salary growth is likely to prompt the Bank of England to keep the rate unchanged at tomorrow’s meeting and for the upcoming months thereafter.

October's labor market data, which came in positive, continues to improve sentiment towards the Pound and UK. The unemployment rate held steady at 4.3%, employment rose by 173,000 instead of the expected drop of 12,000. Average wages, both with and without bonuses, grew by 5.2%, beating forecasts of 4.6% and 5.0%, respectively.

On Tuesday, the GBP rose in value against the US Dollar, Swiss Franc and the Euro, but fell in value against the JPY. During this morning’s Asian session, the GBP is increasing in value against all currencies except against the Euro. However, traders will monitor if the GBP is able to maintain momentum against the US Dollar.

Bank of England Supporting The GBP!
As inflation in the UK over the past 3 years rose to a level substantially higher than the US and the Eurozone, the Bank of England is aiming to cut interest rates at a slower pace. The UK’s inflation peak was at 11.1%, the US inflation peak was 2% lower and the EU 0.5% lower. As a result, the GBP is maintaining its value and has been supported by this factor over the past 2 days.

All experts currently believe the Bank of England will keep its base rate at 4.75% and cut rates at a slower pace than the Federal Reserve. However, investors believe that of the 9 members within the Monetary Policy Committee, 2 will vote for a rate cut. If more than 2 vote to cut rates, the Pound may come under short term pressure.

Federal Reserve
The Federal Reserve is due to make a decision on the Federal Fund Rate. Currently, the market believes the FOMC will vote to adjust rates by 0.25%. The CME FedWatch Tool indicates there is a 95% chance of the Federal Reserve opting to cut to 4.25-4.50% and the slightly lower bond yields also indicate a cut.

However, when taking into consideration the rise in consumer and producer inflation, resilient employment sector and yesterday’s strong retail sales data, the possibility of a pause remains. The US Retail Sales increased by 0.7% in November surpassing expectations of +0.6%. The increase was the strongest in 4 months, however, Core Retail Sales only rose by 0.2%.

One of the main elements which traders will be monitoring is if the Fed will indicate 2 or 3 cuts. Currently, the market is pricing in another 2 rate cuts. If the Chairman, Mr Powell, indicates the central bank could cut up to 3 times, the US Dollar is likely to come under pressure.

Some traders fear that the Fed may suggest a full pause in the easing cycle or a significant slowdown in 2025. This concern has arisen because of inflation and newly elected US President Donald Trump's trade tariff policies on imports. If traders sense this hawkish tone within the Chairman’s Press Conference this evening, the US Dollar could see significant gains. Particularly as this will trigger higher bond yields which are already trading close to 6 month highs.

For further information on the Federal Reserve and Bank of England’s rate decision traders can join HFM’s Live Analysis on YouTube (Today at 12:00 GMT).




GBPUSD - Technical Analysis
In terms of technical analysis, the GBPUSD maintains its slightly bullish bias as per yesterday’s market analysis article. However, even though the price has risen since yesterday, the GBPUSD has yet to hit the 1.27464 level mentioned earlier. The price movement will depend strongly on the Federal Reserve’s rate decision and the guidance they provide for the upcoming 1-2 quarters.

If the GBPUSD is able to maintain bullish price movement and rise again back up to the day’s high (1.27264), the exchange rate may maintain its buy indications from Moving Averages, RSI and price action.




Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HFM Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.