Fundamental And Technical Analysis Report – 09 December 2022

09 Dec 2022

On the back of recession worries, the dollar declined; U.S. CPI, discussions with the central bank

Asian stock market closes in red on Thursday. The Shanghai Composite is down 0.07% at 3197.35 Overall, the Singapore MSCI is up 0.63% at 294.50. Over in Hong Kong, the Hang Seng Index is up 3.38% at 19450.23. In Japan, the Nikkei 225 is down 0.40% at 27574.43, while the Topix index is down 0.35% at 1941.50 South Korea’s Kospi is down 0.49% at 2371.08. Australia S&P/ASX 200 is down 0.75% at 7175.50.

Top News of the Day:

The dollar retreated on Friday as worries over a slowdown in the United States mounted, with traders on guard ahead of a slew of central bank meetings next week, with the Federal Reserve taking center stage.

Against the greenback, the euro rose 0.25% to $1.0581, edging toward its six-month peak hit at the start of the week and on track for a third straight week of gains.

Sterling firmed 0.27% and stood at $1.2274, not far off Monday’s six-month high of $1.2345. The Japanese yen jumped about 0.4% to 136.13.

The number of Americans filing new claims for jobless benefits increased moderately last week, data showed on Thursday, with the so-called continuing claims rising to a 10-month high in late November, adding to fears that the world’s largest economy may slide into recession next year.

“We’ve got a very awkward outlook the next year, which is playing into traders’ thought process. We’re looking…at much lower growth globally, lower growth out of the U.S. as well,” said Jarrod Kerr, chief economist at Kiwi bank.

The U.S. dollar index fell 0.23% to 104.57, after slipping 0.3% overnight.

It has fallen nearly 7% this quarter, putting it on track for the largest quarterly decline since 2010.

Market Summary as of 8/12/2022:

European equities Thursday closing. The DAX futures contract in Germany traded up 0.02% at 14264.56, and CAC 40 futures were down 0.20% at 6647.31. UK 100 futures contract in the U.K. is down 0.23 at 7472.17

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed up 0.55% at 33781.48. The S&P 500 is up 0.75% at 3963.51 and the Nasdaq 100 is up 1.13% at 11082.00, NYSE closes 0.55% up at 15399.94.

Top Market News Today:

In the Forex market, GBPUSD is up 0.17% at 1.2256. The USDJPY is down 0.32% at 136.23, The USDCHF is down 0.35 at 0.9331. EURUSD up 0.18% at 1.0573. EUR/GBP is up 0.10% at 0.8619. The USD/CNY is down 0.28% at 6.9477 at the time of writing.

In the Commodity market, U.S. Gold futures are up at 0.30% $1,794.38. Elsewhere, Silver futures are up 0.26% at $23.125 per ounce, and Platinum is up 1.02% at $1013.15. per ounce, and Palladium is down 0.27% at $1924.75.

Brent Crude Oil is up 0.72% at $76.70 per barrel.

In the Cryptocurrency Markets, Bitcoin is at 17232.00 flat at 0.00%, Ethereum is up 0.23% at 1283.00, and Litecoin is at 78.21 down 0.09%, at the time of writing.

Top Market Segment to Watch Out for Today:

Toshiba: –

Japan Industrial Partners, the preferred bidder to buy out Toshiba Corp, has moved closer to securing financing from banks, three people with knowledge of the matter said.

Concrete restructuring steps proposed by JIP have made a group of lenders, including Toshiba’s main banks Sumitomo Mitsui (NYSE: SMFG) Banking Corp and Mizuho Bank Ltd, more confident in JIP’s post-acquisition plans, said two of the people who have direct knowledge of the financing discussions.

Toshiba’s shares climbed on the news, up 3% on Friday morning.

Economic News:

US: the Biden administration levied sanctions on Thursday on prominent Turkish businessman Sitka Ayan and his network of firms, accusing him of acting as a facilitator for oil sales and money laundering on behalf of Iran’s Revolutionary Guard Corps.

The U.S. measures come at a time of strained ties between the two nations over a host of issues, including disagreement over Syria policy and Ankara’s purchase of Russian air defense systems.

Ayan’s companies have set up international sales contracts for Iranian oil, arranged shipments and helped launder the proceeds and obscured the origin of the Iranian oil on behalf of Iran’s Quds Force, an arm of the IRGC, the Treasury said in a statement first reported by Reuters.

“Ayan has established business contracts to sell Iranian oil worth hundreds of millions of dollars to buyers,” in China, Europe, and the United Arab Emirates, it said, adding that he then funneled the proceeds back to the Quds Force.

Ayan’s son Bahaddin Ayan, his associate Kasim Ostas and two other Turkish citizens involved in his business network are also designated, along with 26 companies, including his ASB Group, a Gibraltar-based holding company, and a vessel.

In an emailed response to a Reuters’ request for comment, Sitka Ayan said, “We will defend our legal rights against everyone.”

He had been involved in two business activities with Iran, he added. These were the trade of oil and petroleum products ended by sanctions in 2010, and the sale of Iranian electricity to Turkey from 2009 to 2015, which he quit overpayment problems.

“I have never worked with anyone other than Iranian official government institutions in any period of my life,” he said.

Washington maintains sweeping sanctions on Iran and has looked for ways to increase pressure as efforts to resurrect a 2015 nuclear deal with Tehran have stalled.

Euro Zone: –

The European Central Bank will take its deposit rate up by 50 basis points next week to 2.00%, despite the euro zone economy almost certainly being in recession, as it battles inflation running at five times its target, a Reuters poll found.

Since starting its inflation-fighting campaign in July, later than its peers, the ECB has been raising rates at its fastest pace on record and has already added 200 basis points to its key deposit rate, taking it to 1.50%.

According to the Dec. 5-8 Reuters poll, banks will earn 2.00% on deposits after policymakers meet on Thursday, the most since 2009. The refinancing rate will also move up by 50 basis points, to 2.50%.

The median view for the deposit rate was held by 51 of 60 economists surveyed, while two said the ECB would be more cautious and seven said it would be more aggressive.

When it last met in late October, the Governing Council topped up key rates by 75 basis points.

The U.S. Federal Reserve is also widely expected to downshift to a 50-basis point move following four consecutive 75 basis point increases at the conclusion of its policy meeting on Wednesday, the day before the ECB decision.

“The ECB’s meeting next week is one of the few meetings at which the central bank will take a decision after the Federal Reserve and not before it. A slowing of the Fed’s rate hike pace could have an impact on the ECB as well,” said Carsten Brzeski at ING.

“The drop in headline inflation, as little as it says about the impact of the rate hikes so far, could at least take away some of the urgency to continue with jumbo rate hikes.”

Prices rose a much less than expected 10.0% last month on a year earlier, suggesting inflation across the 19 countries that use the euro might have peaked and bolstered the case for the ECB to slow its pace of increases.

Top Economic Releases Today:

USD: PPI (MoM) (Nov) Forecast 0.2%, Previous 0.2% at 19:00
USD: Core PPI (MoM) (Nov) Forecast 0.2%, Previous 0.0% at 19:00
CNY: CPI (YoY) (Nov) Actual 1.6%, Forecast 1.6%, Previous 2.1% at 07:00
RUB: CPI (MoM) (Nov) Forecast 0.4%, Previous 0.2% at 21:30
NZD: Electronic Card Retail Sales (MoM) (Nov) Actual 0.3%, Previous 1.0% at 03:15