Fundamental And Technical Analysis Report

14 Dec

Fundamental And Technical Analysis Report – 14 December 2022

/ CSFX Analytics

Inflation in the UK decreased more than anticipated in November, relieving pressure on the BoE.

Asian stock market closes in green on Tuesday. The Shanghai Composite is down 0.14% at 3176.33 Overall, the Singapore MSCI is up 0.40% at 298.00. Over in Hong Kong, the Hang Seng Index is up 0.69% at 19596.20. In Japan, the Nikkei 225 is up 0.72% at 27954.85., while the Topix index is up 0.60% at 1965.68 South Korea’s Kospi is up 1.13% at 2372.40. Australia S&P/ASX 200 up 0.67% at 7251.30.

Top News of the Day: –

U.K. inflation fell by more than expected in November, easing the pressure on the Bank of England to keep raising interest rates against the backdrop of a recession.

The consumer price index rose by 0.4% on the month, down from an alarming 2.0% in October that was caused by the adjustment of regulated household energy prices. Analysts had expected an increase of 0.6% ahead of time.

That brought the year-on-year rate down to 10.7% from 11.1%.

Stripping out volatile fuel and energy components, the core CPI rate also eased by more than expected, rising only 0.3%, rather than the 0.5% forecast. In annual terms, core inflation is now running at 6.3%, down from 6.5% last month.

The figures come only hours before the Bank of England is set to announce its latest policy decisions.

Market Summary as per 13/12/2022:

European equities Tuesday closing. The DAX futures contract in Germany traded up 1.34% at 14497.89, CAC 40 futures up 1.42% at 6744.98. UK 100 futures contract in the U.K. up 0.76 at 7502.89

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed up 0.30% at 34108.64. The S&P 500 up 0.73% at 4019.65 and the Nasdaq 100 up 1.01% at 11256.81, NYSE closes 0.61% up at 15562.54.

Top Market News Today:

In the Forex market, GBPUSD down 0.07% at 1.2356. The USDJPY down 0.11% at 135.44, The USDCHF up 0.04 at 0.9289. EURUSD up 0.01% at 1.0633. EUR/GBP up 0.09% at 0.8605. The USD/CNY up 0.25% at 6.9604 at the time of writing.

In the Commodity market U.S. Gold futures down at 0.03% $1,810.90. Elsewhere, Silver futures up 0.21% at $23.77 per ounce, Platinum up 0.40% at $1035.50. per ounce, and Palladium up 0.05% at $1925.00.

Brent Crude Oil down 0.22% at $80.52 per barrel.

In the Cryptocurrency Markets, Bitcoin at 17784.00 up at 0.06%, Ethereum up 0.17% at 1322.75, Litecoin at 78.21 up 1.09%, at the time of writing.

Top Market Segment to Watch Out Today:

GOLD: – Gold prices hovered near a six-month high on Wednesday following a sharp rally in the prior session, as markets waited for the Federal Reserve to hike interest rates later in the day and also weigh in on easing inflationary pressures.

Bullion prices rallied sharply on Tuesday after data showed U.S. consumer price index (CPI) inflation eased further in November, indicating that price pressures in the country have peaked and are likely to retreat.

Economic News:

US: President Joe Biden said American families would see the impact of easing inflation during the holidays after a key gauge of US consumer prices posted the smallest monthly advance in more than a year.

“This is welcome news for families across the country, as they get ready for holiday celebrations and for family dinners,” Biden said after the data was released Tuesday.

Asked when he thought price growth would be back to normal, Biden said: “I hope by the end of next year.”

“We’re much closer. But I can’t make that prediction,” he said. “I’m convinced they’re going to continue to go down.”

US stock futures soared on the news, and yields on Treasuries tumbled across the curve. S&P 500 contracts jumped and Nasdaq 100 futures added more than 4% before slightly paring gains.

Core inflation, which strips out food and energy, rose 0.2% from the previous month, compared to an estimate of 0.3%; it rose 6% from a year earlier, compared to an estimate of 6.1%. Economists see the gauge as a better indicator of underlying inflation than the headline measure, and the latest data could indicate the worst of inflation has passed.

The levels remain well above the Federal Reserve’s target, but signal a material decline in price growth heading into next year and open up room for the Fed to ease its pace of hikes.

Read more: Fed Doves’ Case for Rate Pause Bolstered by Inflation Slowdown

“For a lot of folk’s things are still pretty rough. But there are bright spots all across America — we’re beginning to see the impact of our economic strategy,” Biden said. “My goal is simple: get price increases under control without choking off economic growth.”

Euro Zone: –

British inflation fell more sharply than expected in November to 10.7% from October’s 41-year high of 11.1%, according to official consumer prices data that may offer some comfort to the Bank of England and hard-squeezed households.

Economists polled by Reuters had forecast the consumer price inflation rate would drop to 10.9%. Both U.S. and euro zone inflation fell more steeply than expected last month, raising hopes that the current wave of inflation may have peaked.

“Prices are still rising, but by less than this time last year with the most notable example of this being motor fuels,” the Office for National Statistics’ chief economist, Grant Fitzner, said.

The BoE is battling inflation that is far above its 2% target, and has raised interest rates sharply over the past 12 months. Economists mostly expect it will raise rates again on Thursday to 3.5% from 3%.

Last month the BoE forecast Britain was heading into a long recession, with inflation not returning to target until early 2024, and the government’s budget watchdog predicted the biggest squeeze on living standards since records began in the 1950s.

Core CPI – which excludes energy, food, alcohol and tobacco prices, and which some economists think gives a better indication of longer-term price trends – dropped to 6.3% in November, down from October’s reading of 6.5%.

British inflation started to pick up last year, driven by post-pandemic bottlenecks in the domestic and global economy and accelerated when European energy prices surged after Russia’s February invasion of Ukraine.

The BoE has also highlighted labour shortages and trade and migration frictions due to Brexit as playing a role in pushing up prices.

Top Economic Releases Today:

USD: Crude Oil Inventories Forecast –3.595M, Previous –5.187M at 21:00
EUR: Industrial Production (MoM) (Oct) Forecast –1.5%, Previous 0.9% at 15:30
GBP: CPI (YoY) (Nov) Actual 10.7%, Forecast 10.9%, Previous 11.1% at 12:30
JPY: Tankan Large Non-Manufacturers Index (Q4) Actual 19, Forecast 17, Previous 14 at 05:20
NZD: Current Account (QoQ) (Q3) Actual –10.20B, Forecast –10.00B, Previous –5.22B at 03:15