Long

Updated

NVIDIA LONG

Cloud computing and artificial intelligence (AI) are two of the hottest trends in tech, and will likely remain so for a while. And Nvidia is already successfully tapping into both of them with its graphics processing units (GPUs).

Tech companies of all sizes rely on high-powered GPUs for some of the most complex cloud-computing processing, and many of them choose Nvidia's chips. The company's data center business has expanded as a result and now accounts for about 60% of the company's total sales. In the most recent quarter, data center revenue rose 11% to $3.6 billion, nearly doubling the segment's sales from two years ago.

Just as data center sales slowly became the largest narrative in Nvidia's growth story, AI is now beginning to play a larger part as well. When OpenAI's ChatGPT burst onto the tech scene months ago, it showed not just how far along AI large-language models are, but it also shined a light on the fact that tech companies will soon need massive processing power for AI-focused services.

The good thing is that Nvidia has already been working with tech businesses, including Amazon, Alphabet's Google, and Microsoft, to use its hardware for AI purposes. And that focus will build on its long-term prospects.

The company believes it has a total addressable market of billion in the AI space, and the popularity of ChatGPT -- which amassed 100 million monthly active users in just two months -- helped show that AI isn't just a theoretical market anymore.

M< STRATEGY

SET UP LONG

PT 541$

IF 170-190 BUY AGAIN

IF 150-170 2ND Buy

below 130
SHORT SETUP

Note

Week Ahead - May 8th

The upcoming week in the US will be dominated by news related to prices, including the inflation rate, producer prices, and export and import prices, as well as the Michigan consumer confidence CPI gauge. Additionally, CPI figures are scheduled to be released in China, Mexico, Brazil, India, and Russia. In the UK, the Q1 GDP growth data will be released, and investors will be closely monitoring the Bank of England's interest rate decision. Elsewhere, China is set to publish external trade data, and Australia will report on consumer and business confidence.

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Week Ahead: US CPI Report May Rock These 3 Markets
Even as anticipation mounts ahead of the US jobs data due later today, investors may be bracing for more volatility in the week ahead thanks to another round of risk events.

Economic Calendar for Next Week
All eyes will be on the incoming US inflation data as well as speeches from financial heavyweights and other risk events which could spark some fresh action across markets.

Monday, May 8

UK bank holiday honouring Charles III coronation
EUR: Germany industrial production, ECB Chief Economist Philip Lane speech
Tuesday, May 9

CHN: China trade, money supply
AUD: Australia consumer confidence
EUR: ECB Chief Economic Philip Lane speech (IMF)
USD: Fed New York President John Williams speech
US President Joe Biden debt ceiling talks
Wednesday, May 10

EUR: Germany April CPI (final)
USD: US April CPI
Thursday, May 11

CNH: China PPI, CPI
GBP: UK BOE rate decision & press conference
USD: US PPI, initial jobless claims
G7 finance ministers meet in Japan
Friday, May 12

GBP: UK Industrial production, Bank of England Chief Economist Huw Pill speech
USD: University of Michigan consumer sentiment, Fed speeches
The April US consumer price index (CPI) report published on Wednesday 10th May will be exactly one week after the Federal Reserve raised rates and signalled a pause in further increases.

Given how Fed Chair Jerome Powell has left the door open to further tightening if incoming economic data warrants, this could add more spice to the report.

CPI Forecasts
Markets are forecasting:

CPI year-on-year (April 2023 vs. April 2022) to remain steady at 5.0%.
Core CPI year-on-year to cool 5.4% from the 5.6% in the prior month.
CPI month-on-month (April 2023 vs March 2023) to rise 0.4% from 0.1% in the prior month.
Core CPI month-on-month to cool 0.3% from the 0.4% in the prior month.
Ultimately, further evidence of inflation slowing down could reinforce expectations around the Federal Reserve pausing and eventually cutting interest rates. Should inflation remain sticky, this could rekindle bets around the Fed leaving interest rates higher for longer.

Expectations are rising over the Federal Reserve cutting interest rates with the chance of a 25-basis point cut in July currently priced at 53%, according to Fed funds futures! It will be interesting to see how the incoming inflation data shapes market expectations around the central bank’s next move.

How Might the Markets React to the CPI Report?
With all of the above discussed, here’s how these 3 assets could react to the US CPI report

USD Index
The past few months have been rough and rocky for the dollar as investors weighed the prospects of the Federal Reserve pausing and then eventually cutting interest rates. More pain could be in store for the dollar if US inflation cools more than expected in April.

A soft inflation print may drag the USD Index toward the 100.72 level. Should prices experience a bearish breakout, this could open the doors toward 100.
A sticky inflation print could throw a lifeline to dollar bulls, propelling back above 101.50 with 102.34 acting as a key level of interest.
SPX500_m
After being trapped within a range for the past few weeks, could a breakout be on the horizon for the SPX500_m?

If the inflation numbers beat expectations, this may trigger a bearish breakout on the SPX500_m – taking prices below the 4050-support level.
Should the inflation numbers come in lower than market forecasts, SPX500_m bulls could be injected with renewed confidence as expectations intensify over the Fed ending its rate cycle. This could send the index back toward the 4180 resistance level and beyond.
Gold
It may be wise to fasten your seatbelts for potential volatility on gold due to its high sensitivity to inflation data and US interest rate expectations. The precious metal remains bullish on the daily charts despite prices pulling back from near-record highs.

A soft inflation report could sweeten appetite for the zero-yielding asset as bets rise over the Fed cutting rates in 2023. This development could push the metal back towards the 2023 high of $2063 with bulls eyeing $2070 and the all-time high at $2075.
A stronger-than-expected inflation number could drag gold prices back toward the psychological $2000 level.

Note

6D BAR SETUP LONG
DAILY
LONG
4H LONG
2H SHort

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Nvidia boasts a year-to-date return of more than 88%, making it the S&P 500's second-biggest gainer in 2023.
Nvidia's commitment to AI applications is driving investor and analyst enthusiasm about the company's future prospects.
At the end of fiscal year 2023, Nvidia had $7.23 billion remaining under its share repurchase authorization through December of this year.
Nvidia is up nearly 53% from a January breakout at $188.

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Nvidia stock is benefiting from enthusiasm about the company’s commitment to AI applications.

Nvidia pioneered accelerated computing, with an early focus on PC graphics. That’s expanded to include the gaming market, where the company carved out a sizeable niche. Other business segments now include scientific computing, artificial intelligence, data science, autonomous vehicles, robotics, metaverse, and 3D Internet applications.

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NVIDIA Fundamental Analysis
Now, let’s dive into fundamentals. NVIDIA has had double-digit 3-year sales growth, and the future earnings outlook is solid too. Take a look:

3-year sales growth rate (+38.1%)
1-year EPS growth estimate (+33.9%)
Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, NVDA has been a top-rated stock at MAPsignals for years. That means the stock has had buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this every week.

It’s made the rare Top 20 report numerous times since 2015.

Note

The potential impact of rising interest rates on the stock price of NVIDIA (NVDA) can be analyzed from multiple perspectives:

Borrowing Costs: Rising interest rates generally lead to increased borrowing costs for companies, which can impact their profitability. If NVIDIA needs to borrow funds for expansion, research and development, or other business activities, higher interest rates could result in higher costs, potentially impacting their bottom line and, in turn, the stock price.

Market Sentiment: Changes in interest rates can influence overall market sentiment. When interest rates rise, it may signal tighter monetary policy and potentially dampen investor sentiment. This broader market sentiment can impact the stock price of companies like NVIDIA, even if the direct financial impact is minimal.

Sector Rotation: Rising interest rates can prompt investors to rotate their investments out of high-growth sectors, such as technology, and into sectors that are more sensitive to interest rate changes, such as financials or utilities. This sector rotation can result in a shift in investor demand and potentially impact the stock price of NVIDIA.

Discounted Cash Flows: When interest rates rise, the discount rate used to value future cash flows also increases. This can have an impact on the valuation of companies, including NVIDIA. Higher discount rates can lead to lower present values for future cash flows, potentially impacting the stock price.

Economic Growth and Demand for Technology: Rising interest rates can be an indicator of a stronger economy. A stronger economy may drive increased corporate spending, technological advancements, and demand for NVIDIA's products and services. If the positive impact of economic growth outweighs the negative impact of rising interest rates, it may support the stock price.

It's essential to note that the relationship between interest rates and stock prices is complex, and there can be various other factors at play. Additionally, the exact impact on NVIDIA's stock price will depend on the company's specific circumstances, financial performance, and market conditions at the time of interest rate changes. Conducting thorough research and analysis, and monitoring the company's performance and market trends, can help in assessing the potential impact on NVIDIA's stock price.

Note

NVIDIA, a prominent technology company, has achieved considerable success and growth in the field of graphics processing units (GPUs) and artificial intelligence (AI) technologies. While the specific factors contributing to NVIDIA's success can be complex and multifaceted, some key elements have played a significant role:

Innovative GPU Technology: NVIDIA has a strong focus on developing cutting-edge GPU technology, which has become a vital component in various industries. Their GPUs are renowned for their performance, efficiency, and capabilities, making them highly sought after by consumers, professionals, and data centers.

Market Leadership: NVIDIA has established itself as a leader in the GPU market, holding a dominant market share. This has enabled the company to benefit from economies of scale, maintain a strong competitive edge, and invest heavily in research and development.

Strategic Partnerships: NVIDIA has formed strategic partnerships with leading technology companies, software developers, and researchers. Collaborations with companies like Microsoft, Amazon, and various autonomous vehicle manufacturers have allowed NVIDIA to expand its reach and influence across different sectors.

AI and Machine Learning Focus: NVIDIA recognized the potential of AI and machine learning early on and invested heavily in developing GPU architectures optimized for these applications. Their GPUs are widely used in AI training and inference, driving the adoption of NVIDIA technology in industries such as healthcare, finance, and self-driving cars.

Developer Support: NVIDIA has created developer programs and resources to support software developers in optimizing their applications for NVIDIA GPUs. This has fostered a vibrant ecosystem of GPU-accelerated applications, further solidifying NVIDIA's position in the market.

Strong Research and Development: NVIDIA allocates significant resources to research and development to continuously improve its GPU technology and explore new areas. This commitment to innovation has allowed NVIDIA to stay ahead of its competitors and deliver high-performance solutions.

Acquisitions and Strategic Investments: NVIDIA has made strategic acquisitions and investments in companies that complement its core technologies and expand its market reach. Notable acquisitions include Mellanox Technologies and ARM Holdings, enabling NVIDIA to strengthen its presence in high-performance computing and mobile computing, respectively.

It's important to note that success in the technology industry is influenced by a combination of factors, including timing, market conditions, strategic decision-making, and a talented workforce. NVIDIA's success can be attributed to a combination of these factors, as well as the company's ability to anticipate and adapt to industry trends.

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Selling Pressure,Weakenning of UsDollar, thats good for Euro. Strong Euro is GOOD,no VERY GOOD for SP500;NASDAQ;DOW JONES; GOLD;BITCOIN;CRYPTOS: Everything against Dollar.

Look also my NVIDIA Forecast Chart performed: Nailed it! Weak US DOllar also good for Tech Stocks, Bio Pharma and Tech have Highly positive correltions with Bitcoin and Ethereum, and vice versa. NVIDIA : Top Performer

Friday is the Big Day of the Week: aND IT WILL BE VERY BUISY. RGHT AFTER THE bELL PMI and Inflation DATA!

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Market UpDATES:
NASDQ100 US100 and Indices Sky Rocketing after FED pivot reates cooling
Nasdaq breaking 14055 easily as forecasted in my analysis : Next Target 14350
NVIDAI Sky ROCKETING(Watch als my other Forecasts USD/US100/USDJPY/GOLD/EURO- Related Markets)
Godl Found More Buyers on support.More Bullish Delat coming in nEXT TO 2000USD)
Medium-term price action on the daily chart exhibits scope to extend losses. The longer-term ascending channel is interesting (drawn from $1,641 and $1,959). Note that price action FAILED to touch gloves with the upper boundary in recent trading, pencilling in highs just ahead of the all-time high of $2,075.
Investment Sentiment rising higher from Lows:More Bulls
The Key Fed Inflation Rate Is Cooling At Pivotal Time For The S&P 500
EURO/USD Taking Profits +More Bulls Accumulation and Buying Pressure /Support 1,4075

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AI tokens add $17 billion in 24 hours as Nvidia market cap hits $1 trillion

Nvidia market capitalization touched $1 trillion before NVDA declined to $401.
Nvidia became the fifth company in the US to achieve this milestone after Apple, Microsoft, Amazon and Alphabet.
AI crypto tokens, including The Graph and Ocean Protocol, rose significantly, with the latter noting a 12% rally

The Nvidia stock, NVDA, and Artificial Intelligence (AI) hype continue to power gains across the Traditional Finance (TradFi) and the Crypto market. With the US-based company hitting a major milestone over the last 24 hours, AI tokens also enjoyed the ensuing bullishness.

Nvidia nears the big leagues
Nvidia’s stock NVDA is still continuing its rise nearly a week after the historic rally observed on May 25. The company’s share price soared by more than 4% during the intra-day trading hours on May 30, which resulted in the market capitalization of Nvidia crossing the $1 trillion mark.

This rally was short-lived, however, as the stock came back down to close at a 3% increase at $401 from the highs of $419 and was still losing value in the after-hours, falling to $398 at the time of writing.

For a brief moment, Nvidia became only the fifth publicly traded company in the United States to hit the trillion dollar market cap, following Apple, Microsoft, Amazon and Google’s parent company - Alphabet.

The main reason behind this phenomenal rally was the response to its positive financial reports and ongoing AI hype over the last couple of days. This led to the 24% increase on May 25, subsequently impacting the crypto market as the bullishness was not just limited to the TradFi market.

The cross-market effects of Nvidia’s achievement could still be seen on May 30 when AI tokens observed a rally following the news of NVDA’s $1 trillion market cap.

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Asian Stock Market: Bulls and bears jostle at monthly top ahead of central bank decisions
Asia-Pacific shares grind near one-month highs amid cautious mood.
Softer Japan inflation, hopes of no PBOC rate hike underpin mildly positive risk appetite.
Holidays in Australia, light calendar elsewhere join pre-Fed anxiety to limit market moves.

Gold price is looking to extend Friday’s pullback from five-day highs of $1,973 on Monday. Despite the retreat, Gold price maintains its last week’s range, as investors turn cautious ahead of a big week, with eyes on the United States (US) Consumer Price Index (CPI) and US Federal Reserve policy announcements

USD/JPY strengthens beyond mid-139.00s on modest USD uptick, lacks bullish conviction

Bank of Japan's Dovish Line Pushes Yen Down

USD/CHF Price Analysis: Bounces off 200-SMA but recovery remains elusive below 0.9100

USDCHF BEARISH Meets monthly Low and Support

GBPUSD SHORT on hawkish FED
SHORT

DAX40 Will Rise much more Higher
LONG

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Earnings are forecast to grow 30.92% per year

RISK ANALYSIS
Profit margins (18.5%) are lower than last year (32.1%)

Significant insider selling over the past 3 months

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Have profit margins improved over the past year?

Profit margins (18.5%) are lower than last year (32.1%)

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Has there been substantial insider selling in the past 3 months?

Significant insider selling over the past 3 months

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Are they forecast to achieve profitability?

The company is currently profitable

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Are revenue and earnings forecast to grow?

Earnings are forecast to grow by an average of 30.9% per year for the next 3 years

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Is their dividend sustainable?

Dividend is too low to be a concern

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Do they have sufficient financial data available?

They have sufficient analyst coverage

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Do they have meaningful levels of revenue?

Revenue is meaningful ()

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Do they have a meaningful market capitalization?

Market cap is meaningful (959B)

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Brokers Just Made Major Increases To Their NVIDIA Corporation (NASDAQ:NVDA) Earnings Forecasts

Celebrations may be in order for NVIDIA Corporation (NASDAQ:NVDA) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. NVIDIA has also found favour with investors, with the stock up an impressive 25% to US$389 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the latest consensus from NVIDIA's 45 analysts is for revenues of US in 2024, which would reflect a major 66% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 221% to US$6.23. Previously, the analysts had been modelling revenues of US30b and earnings per share (EPS) of US$3.29 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Note

Jun 02
Independent Director recently sold US38m worth of stock
On the 26th of May, Tench Coxe sold around 100k shares on-market at roughly US$379 per share. This transaction amounted to 2.4% of their direct individual holding at the time of the trade.
This was the largest sale by an insider in the last 3 months.
Insiders have been net sellers, collectively disposing of US159m more than they bought in the last 12 months.

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Jun 10
Independent Director recently sold US28m worth of stock
On the 2nd of June, Harvey Jones sold around 70k shares on-market at roughly US$405 per share. This transaction amounted to 7.0% of their direct individual holding at the time of the trade.
In the last 3 months, there was an even bigger sale from another insider worth US38m.
Insiders have been net sellers, collectively disposing of US188m more than they bought in the last 12 months.

Note

Return vs Industry: NVDA exceeded the US Semiconductor industry which returned 39.3% over the past year.

Return vs Market: NVDA exceeded the US Market which returned 8.2% over the past year.

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US Dollar Index: DXY fades recovery below 104.00 on downbeat Fed bets, US inflation eyed
US Dollar Index struggles to extend the previous day’s corrective bounce off three-week low, snaps two-day winning streak.
Markets remain nearly sure of witnessing no rate hike from Fed in June but concerns about July stay dicey.
Bond market moves, challenges to sentiment prod DXY bears ahead of the key US CPI.
Core CPI will be closely observed as high inflation can allow FOMC to remain hawkish despite no rate hike decision.
US Dollar Index (DXY) remains pressured around 103.60 as it fades the previous two-day winning streak on Tuesday as the key US inflation data looms. That said, the greenback’s gauge versus the six major currencies rose in the last two consecutive days amid the market’s positioning for the Federal Reserve’s (Fed) pause to the rate hike trajectory. However, the recently mixed concerns about the US central bank’s future moves join the challenges to the sentiment to prod the DXY buyers ahead of an important data point for the markets.

It’s worth noting that a study from the San Francisco Fed about the correlation between wage growth and inflation could be cited as the reason for the US central bank to remain less hawkish, which in turn weighs on the DXY, apart from the pre-data anxiety. The survey concluded that wage growth has a very small impact on inflation, which in turn raises doubts about the central bankers’ emphasis on wage cost numbers as a source of information to gauge inflation pressure.
Talking about the latest challenges to sentiment, a trade dispute is developing after the US expands its ban on imports from Xinjiang. China vows to protect China firms against any US sanctions, per Reuters. Recently, Bloomberg released prepared remarks of US Treasury Secretary Janet Yellen’s scheduled Testimony in front of the House Financial Services Committee as she said that the International Monetary Fund (IMF) and the World Bank (WB) serve as important counterweights to nontransparent, unsustainable lending from others, like China.
Additionally, the increase in the bets favoring the Federal Reserve’s (Fed) 0.25% rate hike in July also prod optimism and put a floor under the US Dollar Index. It should be noted that the CME’s FedWatch Tool suggests nearly limited scope for the US central bank to act on Wednesday’s Federal Open Market Committee (FOMC).
Looking ahead, the US Consumer Price Index (CPI) figures for May will be in the spotlight as the Fed decision looms on Wednesday. That said, the market forecasts of witnessing no change in the Core CPI MoM figure of 0.4% gain major attention as softer figures could push back the July rate hike concerns and may not allow the Fed to sound hawkish, which in turn can drown the US Dollar.

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Fed Chair. Powell reiterated at the ECB Forum on Central Banking that interest rates will rise further and that he wouldn’t take moving in consecutive meetings off the table at all, but noted that a recession in the US is not the most likely case. Nvidia was down by over 2% and Advanced Micro Devices by 1% after the Wall Street Journal reported that the US government is considering new restrictions on exports of artificial intelligence chips to China. The Fed is also due to release the results of its annual stress tests to banks, and more details on Basel III Endgame and changes to bank supervision will be in the spotlight.
The Dow Jones was down over 100 points and the S&P 500 dipped by 0.1% on Wednesday afternoon, on the prospect of further interest rate hikes following the Federal Reserve's chair Powell Speech at the ECB Forum. He said he does not see inflation reaching the Fed's 2% target any time soon. He reiterated that interest rates will rise further and did not rule out a boost in the cost of borrowing at the next policy meeting scheduled for the end of July. Meantime, the Nasdaq was up 0.2% powered by megacap momentum stocks. Among stocks, shares of Nvidia and Advanced Micro Devices were down by 2% and 1%, respectively, after the US government is considering new restrictions on exports of AI chips to China. Intel, Applied Materials and Qualcomm fell more than 2% each. On the other hand, Apple hit an all-time high of $189.8 during the session, while shares of Tesla and Alphabet advanced 1.4% and 2.5%. The Fed is due to release the results of its annual stress tests to banks.

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Wall Street Edges Higher on Shortened Monday Session

US stocks closed with marginal gains on a shortened Monday session, setting the stage for caution in the second half of the year as markets continued to assess the economy’s resilience to further monetary tightening from the Federal Reserve. The Dow added 10 points, while the S&P 500 and the Nasdaq edged 0.1% and 0.2% higher, respectively. Shares from rate-sensitive sectors edged lower after ISM PMI data showed that US manufacturing contracted more than expected for an eighth consecutive month in June, reigniting concerns that restrictive borrowing costs will hamper economic activity to a large extent. Apple closed 1% down to set the pace for tech giants, pressured by news that the company cut production forecasts for the mixed-reality Vision Pro headset. On the other hand, Tesla rallied 6% as the company beat deliveries and production estimates for Q2. Stock exchanges in the US will be closed on Tuesday for the Independence Day holiday.

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Wall Street Ends in the Green

The Dow Jones closed more than 209 points higher on Monday, while the S&P 500 and the Nasdaq added 0.2% each, as investors awaited the US consumer and producer inflation reports later this week and braced for the start of the second quarter earnings season. The upcoming inflation report is expected to offer additional evidence regarding inflationary pressures and provide insights into the Federal Reserve's future actions. Traders are currently pricing in a nearly 92% chance for a 25bps increase in the fed funds rate this month, but the odds for another quarter point hike later in the year have been swinging, currently standing at 22% for September and 33% for November. Healthcare shares were among top performers of the session including Amgen (+2.5%). Also, Inter (+2.8%), Honeywell (+2.2%) and Home Depot (2.5%) outperformed while mega cap shares dragged as Apple (-1.1%), Tesla (-1.7%), Microsoft (-1.6%), Alphabet (-2.5%) and Amazon (-2%) ended in the red.

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US 10-Year Treasury Yield Down for 2nd Session

The yield on the US 10-year Treasury note fell below 4%, retreating for the second consecutive session after hitting its highest since November 2022 at almost 4.1% as investors turned cautious ahead of key economic data that could influence the Federal Reserve’s next interest rate policy moves. The CPI report on Wednesday is expected to show headline annual inflation fell to 3.1% in June from 4% in the previous month, while the core index probably decreased to 5% from 5.3%. Markets are now pricing in a 94.9% chance of rates being hiked again during the central bank’s upcoming meeting on July 25-26 but uncertainty remains for the other three Fed meetings scheduled for later in the year. In the latest Fed commentary, Fed President Mary Daly said that she expects two further rate hikes to be announced this year to lower inflation, in line with early comments from Fed Chairman Jerome Powell.

Americans Become More Pessimistic in July
The IBD/TIPP Economic Optimism Index in the US unexpectedly fell to 41.3 in July 2023, the lowest since November last year, compared to 41.7 in June and market forecasts of 45.3. It also marks a 23rd month the reading stands below 50, indicating Americans remain pessimistic. “The economy continues to be the number one issue for Americans as we prepare for earnings season and new inflation data. The Six-Month Economic Outlook was the lone bright spot for July, as optimism slightly increased for the long-term, but it’s still a long way from positive. Expect some more twists and turns before consumers trust that the economy has stabilized”, said Ed Carson, IBD's news editor. The Personal Financial Outlook, a measure of how Americans feel about their own finances in the next six months, fell to 50 from 51.9 and the gauge for Confidence in Federal Economic Policies edged lower to 38.5 from 38.6. On the other hand, the Six-Month Economic Outlook rose to 35.5 from 34.5.

Note

Bond Yields Continue to Fall
Government bond yields around the world fell for a third day on Wednesday, with the US 10-year Treasury note yield retreating to 3.74%, a fresh low since late June. Investors are getting increasingly convinced that major central banks, and specially the Fed will soon end their tightening campaign. Bets for a 25bps hike in the fed funds rate next week currently stand at 97% but investors remain divided on the need of further increases, with chances for a September increase currently standing at 12% and for November at 23%. Meanwhile, the ECB is also set to raise rates by 25bps again next week while there is just a 70% chance of a further rate rise in September. In the UK, another increase in borrowing costs is seen as certain next month, but a smaller-than-expected inflation reading for June lowered bets on further BOE rate hikes. On the other hand, traders are increasingly speculating the Bank of Japan could adjust its ultra loose monetary policy next week.

European Markets Head for Higher Open
European equity markets were headed for a higher open on Wednesday as investors reacted to data showing the annual consumer inflation in the UK stood at 7.9% in June, the lowest reading since March 2022 and below forecasts of 8.2%. Investors also await final euro zone inflation figures later on Wednesday to guide the economic and monetary policy outlook in the region. Moreover, markets look ahead to the latest earnings report from Dutch chip industry giant ASML, as well as from major US firms such as Tesla, Netflix and Goldman Sachs. DAX and Stoxx 600 futures rose 0.2% in premarket trade, while FTSE 100 futures jumped 0.8%.

Note

This trade is stil open and active

relevant market wraps
European Markets Head for Muted Open

European equity markets were headed for a muted open on Thursday as investors braced for the start of the earnings season in the region. Major European firms slated to report earnings today include SAP, EasyJet, Volvo Car, Publicis, ABB and Nokia. Investors also turned cautious after shares of key technology names in the US dropped in post-market trade on disappointing quarterly results. DAX, Stoxx 600 and FTSE 100 futures all fluctuated around the flatline in premarket trade.
Gold Hits 2-Month High on Fed Pause Bets
Japan 10-Year Yield Steadies Around 0.46%
Japan’s 10-year government bond yield steadied around 0.46% as a dovish outlook on Bank of Japan monetary policy kept the benchmark yield below the upper limit of the target range. BOJ Governor Kazuo Ueda recently stated that there was still some distance to sustainably and stably achieve the central bank’s 2% inflation target, indicating the BOJ’s commitment to ultra-easy monetary policy. Last month, the central bank held its short-term interest rate target at -0.1% and that of 10-year bond yields at around 0% by a unanimous vote, in line with expectations. Falling bond yields in other major economies also reduced upward pressure on JGB yields, as easing inflationary pressures raised hopes that the end of the current monetary policy tightening cycle is close.

Japan Raises This Year’s Price View to 2.6% Ahead of BOJ Meet
The Japanese government raised its overall inflation forecast to 2.6% for the current fiscal year ahead of the central bank’s policy decision meeting next week, the Cabinet Office said Thursday. The upward revision from the previous forecast of 1.7% shows stronger-than-expected inflationary pressure. Japan saw that trend holding up even after accounting for government price-relief measures, which the Cabinet Office says shaves 0.5 percentage points off this year’s price reading. For fiscal 2024, the government expects overall inflation to slow to 1.9%.

Note

trade is open

DaveBrascoFX

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DaveBrascoFX

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