Fundamental and Technical Analysis Report – 19 September 2022

19 Sep 2022

DOLLAR AT 20-YEAR PEAK ON MONDAY

Asian Pacific stock markets fell on Monday. The Shanghai Composite is down 0.68% at 3,105.20. Overall, the Singapore MSCI is down 0.27% at 290.25. Over in Hong Kong, the Hang Seng Index is down 1.06% at 18,519.00. In Japan, the Nikkei 225 is flat at 27,350.00, while the Topix index is down 0.18% at 1914.50. South Korea’s Kospi is down 1.19% at 2,354.39. Australia S&P/ASX 200 down 0.07% at 6734.60.

Top News of the Day:

The dollar lingered near a two-decade top on major peers on Monday, ahead of a week loaded with market holidays and central bank decisions from Washington to London and Tokyo.

Investors have scrambled to price in higher U.S. interest rates and a stronger dollar, as U.S. consumer price rises have proved stubbornly persistent.

Market Summary as per 16/09/2022:

European equities Friday closing. The DAX futures contract in Germany traded down 1.66% at 12,741.26, CAC 40 futures down 1.31% at 6077.29 and the UK 100 futures contract in the U.K. down 0.62% at 7,236.69.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed down 0.45% at 30822.43. The S&P 500 down 0.72% at 3873.32 and the Nasdaq 100 down 0.55% at 11861.38, NYSE closes down 1.01% at 14573.91.

Top Market News Today:

In the Forex market, GBPUSD down 0.22% at 1.1391. The USDJPY up 0.31% at 143.347. The USDCHF up 0.42% at 0.9683. EURUSD down 0.36% at 0.9975, EUR/GBP down 0.02% at 0.8756. The USD/CNY up 0.45% at 7.011 at the time of writing.

In the Commodity market U.S. Gold futures down 0.51% at $1,665.54. Elsewhere, Silver futures down 1.06% at $19.352 per ounce, Platinum down 0.66% at $899.50 per ounce, and Palladium down 1.73% at $2097.00.

Crude Oil down on Monday; Brent Crude Oil down 0.24% at $91.28 per barrel while U.S. West Texas Intermediate (CLc1) down 0.48% at $84.44.

In the Cryptocurrency Markets, Bitcoin at 18400.00 down 6.00%, Ethereum down 2.82% at 1296.70, Litecoin at 51.00 down 3.32%, at the time of writing.

Top Market Segment to Watch Out Today:

ETHEREUM: Ethereum prices sank to a two-month low on Monday as losses after the blockchain’s shift to proof-of-stake continued, while the broader crypto market weakened ahead of a Federal Reserve meeting this week.

The world’s second-largest cryptocurrency dropped 10% to $1,303 – its weakest level since mid-July. The token has now lost nearly a quarter of its value since the move to proof-of-stake (PoS), dubbed the ‘merge,’ went live last week.

Economic News:

US: Just months ago, investors worried the Federal Reserve was not fighting inflation aggressively enough. Several jumbo rate hikes later, some now fear the Fed will plunge the economy into recession by tightening monetary policy too quickly.

With markets reeling from last week’s robust inflation number, interest rate futures late Friday were pricing in a roughly 20% chance that the Fed will raise rates by 100 basis points at its Sept 21 meeting. That number was all but unthinkable earlier this month, when the market was debating whether the move would be 50 or 75 basis points. Investors are also pricing in meatier rate hikes down the road, with the terminal rate for U.S. fed funds now at 4.4%.

While earlier in the year some investors had criticized the Fed for moving too slowly, many are now more worried the frenetic pace of rate increases may not allow policymakers to gauge the effects of monetary tightening on the economy, increasing risks that they raise rates too far.

Eurozone: The European Union executive recommended on Sunday suspending some 7.5 billion euros in funding for Hungary over corruption, the first such case in the 27-nation bloc under a new sanction meant to better protect the rule of law.

The EU introduced the new financial sanction two years ago precisely in response to what it says amounts to the undermining of democracy in Poland and Hungary, where Prime Minister Viktor Orban subdued courts, media, NGOs and academia, as well as restricting the rights of migrants, gays and women during more than a decade in power.

He highlighted systemic irregularities in Hungary’s public procurement laws, insufficient safeguards against conflicts of interest, weaknesses in effective prosecution and shortcomings in other anti-graft measures.

Hahn said the Commission was recommending the suspension of about a third of cohesion funds envisaged for Hungary from the bloc’s shared budget for 2021-27 worth a total of 1.1 trillion euros.

The 7.5 billion euros in question amounts to 5% of the country’s estimated 2022 GDP. EU countries now have up to three months to decide on the proposal.

Top Economic Releases Today:

JAPAN National Core CPI (YoY) (Aug) today at 19:30 this time estimated 2.70%, previously which was 2.40%.
U.S. 6-Month Bill Auction today at 11:30 previously which was 3.465%.
CANADA RMPI (MoM) (Aug) today at 08:30 this time estimated 3.20%, previously which was -7.40%.
EURO ZONE ECB’s De Guindos Speaks today at 05:00.
AUSTRALIA RBA Meeting Minutes today at 21:30.