Fundamental and Technical Analysis Report

21 Sep

Fundamental and Technical Analysis Report – 21 September 2022

/ CSFX Analytics

Fed set for big rate hike

Asian Pacific stock markets sank on Wednesday. The Shanghai Composite is down 0.36% at 3,111.18. Overall, the Singapore MSCI is down 0.50% at 290.75. Over in Hong Kong, the Hang Seng Index is down 1.35% at 18,501.00. In Japan, the Nikkei 225 is down 1.20% at 27,120.00, while the Topix index is down 1.17% at 1903.50. South Korea’s Kospi is down 0.77% at 2,349.60. Australia S&P/ASX 200 down 1.60% at 6697.80.

Top News of the Day:

The Federal Reserve is expected on Wednesday to lift interest rates by three-quarters of a percentage point for a third straight time and signal how much further and how fast borrowing costs may need to rise to tame a potentially corrosive outbreak of inflation.

Market Summary as per 20/09/2022:

European equities Tuesday closing. The DAX futures contract in Germany traded down 1.03% at 12,670.83, CAC 40 futures down 1.35% at 5979.48 and the UK 100 futures contract in the U.K. down 0.61% at 7,192.67.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 1.01% at 30706.24. The S&P 500 down 1.13% at 3855.94 and the Nasdaq 100 down 0.85% at 11851.54, NYSE closes down 1.36% at 14474.72.

Top Market News Today:

In the Forex market, GBPUSD down 0.05% at 1.1374. The USDJPY up 0.17% at 143.966. The USDCHF up 0.13% at 0.9651. EURUSD down 0.04% at 0.9964, EUR/GBP up 0.01% at 0.8760. The USD/CNY up 0.34% at 7.042 at the time of writing.

In the Commodity market U.S. Gold futures down 0.01% at $1,664.52. Elsewhere, Silver futures up 0.41% at $19.315 per ounce, Platinum up 0.58% at $927.87 per ounce, and Palladium down 1.34% at $2137.51.

Crude Oil down on Wednesday; Brent Crude Oil down 0.14% at $90.70 per barrel while U.S. West Texas Intermediate (CLc1) down 0.31% at $83.85.

In the Cryptocurrency Markets, Bitcoin at 19090.00 up 0.74%, Ethereum up 0.88 at 1335.00, Litecoin at 52.37 up 0.06%, at the time of writing.

Top Market Segment to Watch Out Today:

Novartis AG: Novartis AG plans to ask the U.S. Supreme court to uphold the validity of a patent it holds on the dosing regimen for multiple sclerosis drug Gilenya after suffering a setback in a federal appeals court ruling, the Swiss drugmaker said on Wednesday.

The ruling meant HEC Pharma and other drugmakers would potentially be able to launch a generic version of 0.5mg Gilenya imminently, pending any other judicial actions, it said.

Economic News:

US: The yield on two-year U.S. Treasury notes, a rough gauge of interest rate expectations, rose to almost a 15-year high on Tuesday, a day before the Federal Reserve is likely to hike rates by 75 basis points as it continues to fight inflation.

The two-year is highly sensitive to shifts in monetary policy expectations and early on Tuesday it hit 3.992%. The last time its yield broke above 4% was Oct. 18, 2007.

The Fed is due to announce its latest policy decision on Wednesday. Money markets are fully pricing in a 75-basis point rate hike, with the chance of a larger full-point rate hike fading to just 16%, according to CME’s FedWatch tool.

Sweden’s central bank earlier raised rates by a larger-than-expected full percentage point to 1.75% and warned of more to come as it joins other central banks around the world that also are jacking up rates to tame inflation.

Yields on the benchmark 10-year Treasury shot to 3.604% before paring some gains. They were up 8.6 basis points to 3.575% after topping 3.5% for the first time in 11 years on Monday. The two-year yield rose 2.5 basis points to 3.971%.

Euro Zone: The European Central Bank may need to raise interest rates to a level that restricts economic growth in order to cool demand and combat unacceptably high inflation, ECB President Christine Lagarde said on Tuesday.

The ECB has been raising rates at the fastest pace on record but inflation is still rising and even longer-term expectations, a key focus for policymakers, are starting to move above the bank’s 2% target.

She added that if the current supply shock caused by expensive energy lowered the bloc’s potential, the ECB would also have to act to cool demand.

Policymakers have talked about pausing rate hikes once the ECB hits the so-called “neutral” level, that neither stimulates nor holds back growth, but a growing number of rate-setters now see the risk that rates will have to go higher.

The nominal neutral is seen somewhere between 1.5% and 2%, well above the ECB’s 0.75% deposit rate.

Top Economic Releases Today:

U.S. Existing Home Sales (Aug) today at 10:00 this time estimated 4.70M, previously which was 4.81M.
U.S. Crude Oil Inventories today at 10:30 this time estimated 2.161M, previously which was 2.442M.
NEW ZEALAND Trade Balance (MoM) (Aug) today at 18:45 this time estimated -500M, previously which was -1,092M.
U.K. CBI Industrial Trends Orders (Sep) today at 06:00 this time estimated -11, previously which was -7.
GERMANY 10-Year Bund Auction today at 05:30 previously which was 1.330%.