FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT

27 Oct

FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 27 October 2022

/ CSFX Analytics

Dollar sells off on speculation of less hawkish Fed

Asian stock markets rose on Thursday. The Shanghai Composite is down 0.45% at 2,985.91. Overall, the Singapore MSCI is up 0.24% at 270.10. Over in Hong Kong, the Hang Seng Index is up 1.70% at 15,592.00. In Japan, the Nikkei 225 is down 0.36% at 27,340.00, while the Topix index is down 0.65% at 1906.00. South Korea’s Kospi is up 1.73% at 2,288.57. Australia S&P/ASX 200 up 0.50% at 6845.10.

Top News of the Day:

The U.S. dollar sank more than 1% against a basket of peers on Wednesday as weakening economic data firmed views that the Federal Reserve will slow the pace of its rate hiking cycle, sending the euro back above parity with the greenback for the first time in a month.

The dollar’s decline came as the benchmark 10-year U.S. Treasury yield continued its descent from last week’s multi-year high of 4.338%, and was last down four basis points at 4.0317%

Market Summary as per 26/10/2022:

European equities Wednesday closing. The DAX futures contract in Germany traded up 1.09% at 13,195.81, CAC 40 futures up 0.41% at 6276.32 and the UK 100 futures contract in the U.K. up 0.61% at 7056.08.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 0.01% at 31839.12. The S&P 500 down 0.74% at 3830.59 and the Nasdaq 100 down 2.26% at 11405.90, NYSE closes up 0.63% at 14531.69.

Top Market News Today:

In the Forex market, GBPUSD up 0.13% at 1.1630. The USDJPY down 0.70% at 145.314. The USDCHF down 0.03% at 0.9856. EURUSD down 0.04% at 1.0076, EUR/GBP down 0.02% at 0.8664. The USD/CNY up 0.53% at 7.2093 at the time of writing.

In the Commodity market U.S. Gold futures up 0.33% at $1,669.45. Elsewhere, Silver futures up 0.30% at $19.623 per ounce, Platinum flat at $950.50 per ounce, and Palladium up 1.20% at $1984.00.

Crude Oil down on Thursday; Brent Crude Oil down 0.23% at $93.89 per barrel while U.S. West Texas Intermediate (CLc1) down 0.29% at $87.56.

In the Cryptocurrency Markets, Bitcoin at 20925.00 up 0.70%, Ethereum up 0.19% at 1570.00, Litecoin at 56.62 up 0.37%, at the time of writing.

Top Market Segment to Watch Out Today:

Lufthansa: Germany’s Lufthansa gave an upbeat forecast for the air travel market on Thursday, saying it expected air travel demand to remain strong, with high average yields. It plans to offer around 80% of its pre-pandemic capacity at its airlines in the fourth quarter, which should help it achieve a quarterly operating profit, it said as it published full quarterly financial results.

Economic News:

US: U.S. auto retail sales are expected to rise in October as supply chain snags ease, making more vehicles available at dealerships amid higher demand, an industry report from consultants J.D. Power and LMC Automotive showed on Wednesday.

An improvement in new vehicle inventories bumped up the sales activity in the United States at a time when consumers are ready to spend more to own a personal vehicle.

Customers have been unaffected by higher vehicle prices and a lack of incentives or discounts from automakers, who have been taking advantage of strong demand and tight inventory.

“Even with a modest increase in inventory, strong demand continues to allow manufacturers to maintain a low level of discounting,” the report said, adding that average transaction price for new vehicles is expected to reach record levels in October.

Retail sales of new vehicles are expected to rise 12.1% to 1,008,200 units in October, compared with a year earlier, the report showed.

Euro Zone: The European Central Bank will raise interest rates again on Thursday and likely reel in a key subsidy to commercial banks, taking another huge step in tightening policy to fight off a historic surge in inflation.

Fearing that rapid price growth is becoming entrenched, the ECB has already raised rates at the fastest pace on record, and there is little let-up in sight as unwinding a decade worth of stimulus could take it well into next year and beyond.

The ECB is almost certain to raise its 0.75% deposit rate by 75 basis points – for a cumulative 2 percentage-point increase in three meetings – and signal that it is not yet done, even if the size of subsequent moves remains open to debate.

But in a potentially more important decision, the bank is also likely to take the first steps in reducing its 8.8 trillion-euro balance sheet, bloated by years of debt purchases and ultra-cheap loans extended to banks.

Top Economic Releases Today:

U.S. Core Durable Goods Orders (MoM) (Sep) today at 8:30 this time estimated 0.2%, previously which was 0.3%.
15 this time estimated 2.00%, previously which was 1.25%.
JAPAN Tokyo Core CPI (YoY) (Oct) today at 19:30 this time estimated 3.1%, previously which was 2.8%.

AUSTRALIA PPI (QoQ) (Q3) today at 20:30 previously which was 1.4%.
NEW ZEALAND ANZ Business Confidence (Oct) today at 20:00 previously which was -36.7.