Get started

Index

Are we close to peak China pessimism?President Xi Jinping’s New Year address put paid to hopes of much larger stimulus. In his address, President Xi pointed to the consolidation and enhancement of the economic recovery and no signs of a boost from policy coming. Furthermore, China’s economic growth for 2023 came out at 5.2%, above the central government’s 5% forecast, which it boasted it was able to achieve without relying on large stimulus. China’s real GDP growth to slow further in 2024. Investors' pessimism towards China’s economy could be nearing a peak given recent efforts by policymakers to stabilize sentiment. Policymakers acting to stabilize sentiment: China’s policymakers are feeling the need to stabilize investor sentiment and this week have taken two steps in this direction. First, following a recent State Council meeting, Premier Li Qiang suggested help is on the way for China’s beleaguered stock market. Newswire reports suggest this help could include CNY 2.3trn of funds (mainly from SOEs) to buy Chinese equities to prop up the market. Such a measure could help put a bottom on investors’ China pessimism. However, such purchases would not address their underlying concerns including a weak residential property market, local government debts, the lack of policy easing, and the risk of another regulatory clampdown. Second, the PBoC surprised with an RRR cut as well as a cut to its re-lending and discount rates. While I was expecting cuts to both, the size and timing were surprising given the recent disappointment of the PBoC keeping its MLF on hold. The PBoC also sounded dovish suggesting further room to ease policy given the gap between actual and target prices and the Fed’s pivot towards easing. Check out my other ideas:
TVC:HSILong
by Elite_Forex
JPY: Tokyo driftThe sharp falls in Tokyo inflation for January remind investors of the ending of the BoJ’s YCC and/or NIRP in 2024 are not set in stone. Tokyo inflation is a very good leading indicator for the nationwide inflation data. Tokyo inflation excluding fresh food as well as headline inflation plunged below the BoJ’s 2% target to 1.6% YoY; well below the consensus forecasts. January is the first time Tokyo inflation excluding fresh food is below the 2% target in a bit over 18 months. Tokyo inflation excluding fresh food and energy dropped to 3.1% YoY; also well below the consensus forecast. The Tokyo inflation data will challenge the increased confidence expressed by BoJ Governor Kazuo Ueda in his post-meeting press conference that the central bank will meet its inflation goal. This confidence helped the JPY stage a modest rally this week as JGB yields moved higher in anticipation of the formal ending of YCC as well as NIRP in the coming months. The Minutes to the BoJ’s December meeting continue to feed this speculation as Board members shared the view that deepening discussion on the timing and pace to raise rates was required. Another factor that can give ground to the Yen is the BOJ intervention in the Forex market which had already happened a couple of times in 2023. They are closely tracking the USDJPY rate and tend to intervene around the 150.00 level which is about to be tested soon. For now, BOJ prefers FX interventions as they are effective so far and not damaging the already deflating economy as real interest rate increases would do. The Japanese Governor Ueda is also using his words wisely as we can see, only speaking about potential interest rate hikes affects the currency as if they increased them already although getting out of the ultra-loose policy is highly unlikely in 2024. Check out my other ideas below:
PEPPERSTONE:JPYXShort
by Elite_Forex
Rate-cut discussions are prematureThe ECB left its monetary policy unchanged, in line with expectations. The information available since the December meeting has largely confirmed the central bank’s assessment of the medium-term inflation outlook, leaving the Governing Council (GC) in a wait-and-see mode. ECB President Lagarde confirmed her Davos comments, hence indicating that she still expects the first rate cut to come in summer, but the market is not convinced, and dovish remarks here and there actually fueled meaningful rate-cut expectations already for the April meeting. While the ECB’s GDP and CPI forecasts will likely be revised down in March, the GC seems absolutely determined to play it safe on inflation, and this will continue as long as the labor market holds up. I still expect the first rate cut in June, followed by a gradual reduction at a pace of 25bp per quarter towards a broadly neutral level of 2%. Despite ongoing weakness in indicators of economic activity, the GC appears relatively relaxed about the growth outlook, largely thanks to ongoing resilience in the labor market. The statement mentions signs of recovery in some leading indicators, despite most of them still pointing to broad stagnation in GDP. Did Ms. Lagarde want to signal that the GC is warming up to the idea of an “early” start to the easing cycle? Probably not. Her rhetoric was mainly aimed at strengthening the message that the ECB is data-dependent, as opposed to calendar-driven.
TVC:EXYLong
by Elite_Forex
EU faces pressure to defuse mounting anger as farmers protest aGiven the mounting anger and protests by farmers across Europe, there appears to be a significant challenge stemming from contradictory and potentially detrimental agricultural policies. The grievances include increased costs for agricultural diesel, additional fees for water consumption, complex regulations, and objections to bans on pesticides and herbicides mandated by the EU's Green Deal. The farmers are also concerned about the import of beef from countries like Brazil and Argentina, which they argue have laxer rules on animal welfare, making competition difficult. This unrest, originating in France but spreading to neighboring countries, signals a broader issue with unpredictable government decisions affecting agriculture. In the Netherlands and Germany, similar protests have arisen over regulations to cut nitrogen emissions and phase out fuel subsidies, respectively. In Germany, there is also resentment over what is perceived as the unfair application of environmental policies. With protests extending to Poland, Romania, Slovakia, Hungary, and Bulgaria, concerns range from unfair competition from cut-price cereals to high taxes and tight regulations. The impact of droughts, floods, and wildfires, combined with the squeeze from green policies, has fueled discontent. For investors, this could be a pivotal moment to consider commodities such as cereals, soybeans, and copper. The disruptions in European agriculture may create fluctuations in the market, making these commodities potentially attractive for investment. However, it is crucial to monitor developments closely as tensions continue to grow, and the agricultural sector shapes up to be a major issue in the upcoming European Parliament elections in June.
AMEX:DBCLong
by Maximus20000
JSE 40 Index | Daily | Speculation Looking at the JSE 40 all-share Index on the daily chart we can take note that the index has been trading downwards since peaking sometime during Feb 23, now looking to the left again we can take note that after the release of the 1st quarter Dividend & Earnings release the JSE drop on both accounts. Now looking to the right, we can take note that the JSE has been hovering/consolidating on our 8,988 level for the past few days ahead of this weeks CPI, PPI & SARB Interest Rate announcements. Looking further to our right we can expect the JSE to push up from 8,988 to around 9,843 or 10,017 before heading down to 8,229. Else we can expect the JSE to just tumble down to 8,229 if it closes below 8,988. Potential Market Movers: CPI (MoM) - Apr :: 24 May 2023 PPI (MoM) - Apr :: 25 May 2023 SARB Interest Rates :: 25 May 2023
JSE:JSE
by mosa_moshka
2024 US Recession | Key Factors2000 DOT-COM CRISIS The dot-com crisis, also known as the "dot-com bubble" or "dot-com crash," was a period of economic turbulence that affected the technology and telecommunications sectors in the late 1990s and early 2000s. Here are some key points: Euphoria Phase: In the 1990s, there was a boom in the technology and dot-com industry fueled by irrational investor euphoria. Many companies secured significant funding, even if they had weak or nonexistent business models. Excessive Valuations: Valuations of technology companies skyrocketed, often based on exaggerated growth projections and unrealistic expectations. This led to rampant speculation in financial markets. Bubble and Collapse: In 2000, the dot-com bubble began to burst. Many investors realized that numerous technology companies were unable to generate profits in the short term. This triggered a massive sell-off of stocks and a collapse in tech stock prices. Economic Impacts: The crisis had widespread economic impacts, with the loss of value in many technology stocks and the bankruptcy of numerous companies. Investors suffered heavy losses, and this had repercussions on the entire stock market. Economic Lessons: The dot-com crisis led to a reassessment of investment practices and taught lessons about the importance of carefully analyzing companies' fundamentals and avoiding investments based solely on speculative expectations. Following this crisis, the technology sector experienced a correction but also contributed to shaping the industry in a more sustainable way. Many companies that survived the crisis implemented more realistic and sustainable strategies, contributing to the subsequent growth and development of the technology sector. 2007-2008 FINANCIAL CRISIS The 2007-2008 financial crisis was a widespread event that had a significant impact on the global economy. Here are some key points: Origins in the Subprime Mortgage Crisis: The crisis originated in the U.S. real estate sector, particularly in subprime mortgages (high-risk). An increase in mortgage defaults led to severe losses for financial institutions holding securities tied to these loans. Spread of Financial Problems: Losses in the mortgage sector spread globally, involving international financial institutions. Lack of transparency in complex financial products contributed to the crisis's diffusion. Bank Failures and Government Bailouts: Several major financial institutions either failed or were on the brink of failure. Government interventions, including bailouts and nationalizations, were necessary to prevent the collapse of the financial system. Stock Market Crashes: Global stock markets experienced significant crashes. Investors lost confidence in financial institutions, leading to a flight from risk and an economic contraction. Impact on the Real Economy: The financial crisis directly impacted the real economy. The ensuing global recession resulted in the loss of millions of jobs, decreased industrial production, and a contraction in consumer spending. Financial Sector Reforms: The crisis prompted a reevaluation of financial regulations. In response, many nations implemented reforms to enhance financial oversight and mitigate systemic risks. Lessons Learned: The financial crisis underscored the need for more effective risk management, increased transparency in financial markets, and better monitoring of financial institutions. The 2007-2008 financial crisis had a lasting impact on the approach to economic and financial policies, leading to greater awareness of systemic risks and the adoption of measures to prevent future crises. 2019 PRE COVID In 2019, I closely observed a significant event in the financial markets: the inversion of the yield curve, with 3-month yields surpassing those at 2, 5, and 10 years. This phenomenon, known as an inverted yield curve, is generally considered an advanced signal of a potential economic recession and has often been linked to various financial crises in the past. The inversion of the yield curve occurred when short-term government bond yields, such as those at 3 months, exceeded those at long-term, like 2, 5, and 10 years. This situation raised concerns among investors and analysts, as historically, similar inversions have been followed by periods of economic contraction. Subsequently, in 2020, the COVID-19 pandemic occurred, originating in late 2019 in the city of Wuhan, Hubei province, China. The virus was identified as a new strain of coronavirus, known as SARS-CoV-2. The global spread of the virus was rapid throughout 2020, causing a worldwide pandemic. Countries worldwide implemented lockdown and social distancing measures to contain the virus's spread. The economic impact of the pandemic was significant globally, with sectors such as tourism, aviation, and hospitality particularly affected, leading to business closures and job losses. Efforts to develop a vaccine for COVID-19 were intense, and in 2020, several vaccines were approved, contributing to efforts to contain the virus's spread. In 2021, the Delta variant of the virus emerged as a highly transmissible variant, leading to new increases in cases in many regions worldwide. Subsequent variants continued to impact pandemic management. Government and health authorities' responses varied from country to country, with measures ranging from lockdowns and mass vaccinations to specific crisis management strategies. The pandemic highlighted the need for international cooperation, robust healthcare systems, and global preparedness to address future pandemics. In summary, the observation of the yield curve inversion in 2019 served as a predictive element, suggesting imminent economic challenges, and the subsequent pandemic confirmed the complexity and interconnectedness of factors influencing global economic health. 2024 Outlook The outlook for 2024 presents significant economic challenges, outlined by a series of critical indicators. At the core of these dynamics are the interest rates, which have reached exceptionally high levels, fueling an atmosphere of uncertainty and impacting access to credit and spending by businesses and consumers. One of the primary concerns is the inversion of the yield curve, manifested between July and September 2022. This phenomenon, often associated with periods of economic recession, has heightened alarm about the stability of the economic environment. The upward break of the 3-month curve compared to the 2, 5, 10, and 30-year curves has raised questions about the future trajectory of the economy. Simultaneously, housing prices in the United States have reached historic highs, raising concerns about a potential real estate bubble. This situation prompts questions about the sustainability of the real estate market and the risks associated with a potential collapse in housing prices. Geopolitical instability further contributes to the complexity of the economic landscape. With ongoing conflicts in Russia, the Red Sea, Palestine, and escalating tensions in Taiwan, investors are compelled to assess the potential impact of these events on global economic stability. The S&P/Experian Consumer Credit Default Composite Index, showing an upward trend since December 2021, suggests an increase in financial difficulties among consumers. Similarly, the charge-off rate on credit card loans for all commercial banks, increasing since the first quarter of 2022, reflects growing financial pressure on consumers and the banking sector. In this context, it is essential to adopt a prudent approach based on a detailed analysis of economic and financial data. The ability to adapt to changing market conditions becomes crucial for individuals, businesses, and financial institutions. Continuous monitoring of the evolution of economic and geopolitical indicators will be decisive in understanding and addressing the challenges that 2024 may bring.
TVC:US03MYEducation
by Forex48_TradingAcademy
1
S&P500: Last rally before correction.S&P500 may be overbought on the 4H timeframe (RSI = 72.835, MACD = 15.590, ADX = 49.520) but not yet on the 1D technical outlook as the price hasn't yet made a HH on the two month Channel Up. The 4H RSI does show us though that it is starting that HH peak sequence as it can start a LH trendline like December 14th. We are expecting this wave to peak on a +5.55% rise at 4,920 like the Higher High of December 27th, where we will short and target the 0.5 Fibonacci level and 4H MA200 (TP = 4,800) like the index did on the January 5th HL. ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
CAPITALCOM:US500
by InvestingScope
European Central Bank is holding rates untill Q3 Market Insight: ECB policymaker Francois Villeroy de Galhau has emphasized that the decision on rate cuts in 2024 will be data-driven, rejecting a fixed timeline. ECB President Christine Lagarde, while suggesting a potential rate cut in the summer, emphasizes the importance of data in timing the decision. Central bank officials are cautious about immediate easing but acknowledge a long-term trajectory of lowering borrowing costs. Rationale: Anticipating the likelihood of a delayed rate cut by the European Central Bank (ECB), potentially impacting businesses' cost of borrowing and consumer spending, which could lead to lower revenues for companies in the European stock index. Trade Strategy: Short Position on European Stock Index: Consider initiating a short position in the European stock index (e.g., Euro Stoxx 50). Entry Point: Look for technical signals indicating a reversal or weakness in the index. Stop-Loss: Place above a recent significant peak to manage potential upward movements. Take-Profit: Target the next support level, considering potential downward pressure on index components.
FXOPEN:ESX50Short
by Elite_Forex
Inflation Higher = Stock Market LowerWhile higher inflation should be an indicator of a booming stock market since the consumers are spending more and the companies make more profit, this time the case is different. The simple macroeconomics behind it: Higher Inflation=Higher Interest Rates, which=Higher Borrowing Costs for the S&P companies And as you have already connected the dots higher borrowing costs mean less profit, so that is indeed what we are expecting to see in the stock market. The Seasonality for January for the S&P tends to be neutral to slightly bullish which is another confluence that we can see some pain in the coming weeks. This is our second trade on the S&P as the first one was with half of the risk and tight stop loss which was triggered, so now is the perfect opportunity for our second part of the trade. REMEMBER- Patience is the key for being consistently profitable . . . Comment your opinion below:)
VANTAGE:SP500Short
by Elite_Forex
2
Navigating Market Moves Amidst Geopolitical TensionsRecent geopolitical tensions triggered a 'flight to safety' impacting Asian equities. Japan's Nikkei fell by 0.6%, while Chinese equities, including the Shanghai Composite and Hong Kong's Hang Seng, experienced declines of 0.6% and nearly 2%, respectively. Exercise caution regarding potential short squeezes, especially with markets at all-time highs. Keep an eye on Japanese economic indicators influencing the yen. Stay tuned for any announcements from Chinese authorities impacting market sentiment. In times of geopolitical tension, a balanced approach is crucial. Watch equities and currencies, stay updated on economic indicators, and be prepared for short-term market fluctuations.
SPREADEX:NIKKEIShort
by Elite_Forex
EURUSD|The probability of breaking the support zoneHello friends, I hope you are doing well, let's go to the popular currency pair EURUSD. In EURUSD, the selling pressure seems to be more, we can understand this from the powerful candles, broken trends. For this reason, short positions have a higher winning percentage. By reaching the supply area (1.1015), we can enter a sell position with confirmation until the price (1.90). In the future, if it can break the demand area, we expect the price of 1.080 to continue falling
Short
by Golden_Star1994
1