FUNDAMENTAL NEWS AND TECHNICAL ANALYSIS REPORT –04 JANUARY 2023
04 Jan 2023
Kuroda wants to maintain a lax policy in order to accomplish goals for rising prices and wages
Asian stock market closes in green on Tuesday. The Shanghai Composite is up 0.88% at 3116.51. Overall, the Singapore MSCI is down 0.11% at 289.38. Over in Hong Kong, the Hang Seng Index is up 1.84% at 20145.29. In Japan, the Nikkei 225 is flat 0.00 at 26094.50. While the Topix index is down 0.19% at 1891.71 South Korea’s Kospi is down 0.31% at 2218.68. Australia S&P/ASX 200 down 1.31% at 6946.20.
Top News of the Day:
Bank of Japan Governor Haruhiko Kuroda said on Wednesday the central bank would maintain its loose monetary policy in order to sustain inflation at its 2% target along with wage growth.
Kuroda’s comments at a New Year gathering of the Japanese bankers’ association counter lingering market speculation the BOJ may join the world’s major central banks in tightening money supply to fight decade-high inflation.
The world’s third-largest economy would grow firmly and stably this year backed by accommodative monetary conditions although uncertainties such as inflation and the COVID-19 pandemic remain, Kuroda said.
Adding to the uncertainty, the yen rebounded sharply on speculation the BOJ may start to turn away from its ultra-loose monetary policy after it widened the yield cap range on 10-year Japanese government bonds (JGBs) last month.
Market Summary as per 03/01/2023:
European equities Tuesday closing. The DAX futures contract in Germany traded up 0.80% at 14181.67, CAC 40 futures up 0.44% at 6623.89. UK 100 futures contract in the U.K. up 1.37 at 7554.09
In the U.S. on Wall Street, the Dow Jones Industrial Average Closed down 0.46% at 32994.76. The S&P 500 down 0.71% at 3812.31 and the Nasdaq 100 down 1.12% at 10394.35, NYSE closes 0.20% down at 15154.45.
Top Market News Today:
In the Forex market, GBPUSD up 0.36% at 1.2010. The USDJPY down 0.42% at 130.43, The USDCHF down 0.52 at 0.9304. EURUSD up 0.35% at 1.0584. EUR/GBP up 0.01% at 0.8811. The USD/CNY down 0.14% at 6.8872 at the time of writing.
In the Commodity market U.S. Gold futures up at 0.76% $1,852.70. Elsewhere, Silver futures up 0.94% at $24.23 per ounce, Platinum up 1.06% at $1094.00 per ounce, and Palladium up 2.32% at $1741.00.
Brent Crude Oil down 0.43% at $81.67 per barrel.
In the Cryptocurrency Markets, Bitcoin at 16851.70 up at 1.09%, Ethereum up 2.93% at 1249.83, Litecoin at 76.76 up 1.66%, at the time of writing.
Top Market Segment to Watch Out Today:
ETHEREUM: Ethereum Price Gains Momentum, Ethereum jumped by 2.24% on Wednesday morning.
Ethereum price is slowly moving higher from the $1,180 level against the US Dollar. ETH price is now trading above $1,180 and the 55 simple moving average (4-hours). There is a major bullish trend line forming with support near $1,195 on the 4-hours chart (data feed from Coinbase). The pair could start a decent increase.
US: – U.S. construction spending unexpectedly rebounded in November, lifted by gains in non-residential structures, but single-family homebuilding continued to be hammered by higher mortgage rates.
The Commerce Department said on Tuesday that construction spending climbed 0.2% in November after falling 0.2% in October.
Economists polled by Reuters had forecast construction spending would decrease 0.4%. Construction spending increased 8.5% on a year-on-year basis in November.
Spending on private construction projects advanced 0.3% after declining 0.7% in October.
Investment in private non-residential structures like gas and oil well drilling jumped 1.7%.
But outlays on residential construction fell 0.5%, with spending on single-family housing projects plunging 2.9%. Outlays on multi-family housing projects increased 2.4%, benefiting from strong demand for rental housing.
The Federal Reserve’s battle to tame inflation with the fastest interest rate-hiking cycle since the 1980s is strangling the housing market, with homebuilding and sales collapsing.
The average 30-year fixed mortgage rate, which breached 7% in October for the first time since 2002, has resumed its upward trend after briefly pulling back in late 2022, data from mortgage finance agency Freddie Mac Showed.
The rate averaged 6.42% last week, up from 6.27% in the prior week. It averaged 3.11% during the same period in 2021.
Residential investment has contracted for six straight quarters, the longest such stretch since the housing market collapse in 2006.
In November, spending on public construction projects dipped 0.1% after increasing 1.6% in October. Investment in state and local government construction projects declined 0.7%, while federal government construction spending surged 7.2%.
Euro Zone: –
UK food price inflation hit a new record high in December according to the British Retail Consortium (BRC) which predicted 2023 would be another tough year for consumers and businesses.
Annual food inflation leapt to 13.3% in December, up from 12.4% in November, according to the figures compiled by the BRC and data firm Nielsen, the highest monthly rate since it began collecting data in 2005.
The BRC said high prices for animal feed, fertiliser and energy fed into increased food prices on supermarket shelves and cautioned that consumers would probably face further hikes this year.
“It was a challenging Christmas for many households across the UK,” said the BRC’s chief executive, Helen Dickinson.
“Not only did the cold snap force people to spend more on their energy bills, but the prices of many essential foods also rose as reverberations from the war in Ukraine continued to keep high the cost of animal feed, fertiliser and energy.”
Dickinson also warned “2023 will be another difficult year for consumers and businesses as inflation shows no immediate signs of waning.”
Inflation in fresh food was even higher with growth in early December hitting 15%, another record high, although the overall annual rate of shop price inflation reported by its members – mostly large retail chains and supermarkets – dropped to 7.3% from 7.4%.
This was driven by a drop in inflation for non-food items to 4.4% from 4.8.
Top Economic Releases Today:
- USD: JOLTs Job openings (Nov) Forecast 10.000M, Previous 10.334M at 20:30
- USD: ISM Manufacturing PMI (Dec) Forecast 48.5, Previous 49.0 at 20:30
- EUR: German Services PMI (Dec) Forecast 49.0, Previous 46.1 at 14:25
- EUR: Services PMI (Dec) Forecast 49.1, Previous 48.5 at 14:30
- CHF: CPI (MoM) (Dec) Actual –0.2%, Forecast –0.2%, Previous 0.1% at 13:00
GBPUSD TECHNICAL ANALYSIS
TRADE SUGGESTION – BUY AT 1.20442, TAKE PROFIT AT 1.21015, SL AT 1.20074
EURUSD TECHNICAL ANALYSIS
TRADE SUGGESTION – BUY AT 1.05713, TAKE PROFIT AT 1.06637, SL AT 1.05463
AUDUSD TECHNICAL ANALYSIS
TRADE SUGGESTION– BUY AT 0.68139, TAKE PROFIT AT 0.68901, SL AT 0.67766
USDJPY TECHNICAL ANALYSIS
TRADE SUGGESTION- SELL AT 130.606, TAKE PROFIT AT 129.434, SL AT 131.343
HANG SENG INDEX TECHNICAL ANALYSIS
TRADE SUGGESTION – BUY AT 20447, TAKE PROFIT AT 21052, SL 20055
WTI CRUDE OIL TECHNICAL ANALYSIS
TRADE SUGGESTION– SELL AT 76.62 TAKE PROFIT AT 74.54, SL 77.66
GOLD TECHNICAL ANALYSIS
TRADE SUGGESTION– BUY AT 1849.27, TAKE PROFIT AT 1866.28, SL 1839.29
BITCOIN TECHNICAL ANALYSIS
TRADE SUGGESTION- BUY AT 16761.81, TAKE PROFIT AT 16952.22, SL AT 16605.41