FUNDAMENTAL NEWS AND TECHNICAL ANALYSIS REPORT – 06 JANUARY 2023
06 Jan 2023
In anticipation of U.S. payrolls, the Chinese yuan rises to its highest level in four months
Asian stock market closes in green on Thursday. The Shanghai Composite is up 0.10% at 3158.48. Overall, the Singapore MSCI is up 0.99% at 290.97. Over in Hong Kong, the Hang Seng Index is up 1.25% at 21052.17. In Japan, the Nikkei 225 is up 0.40 at 25820.80. While the Topix index is up 0.40% at 1868.90 South Korea’s Kospi is up 0.38% at 2264.65. Australia S&P/ASX 200 up 0.62% at 7063.60.
Top News of the Day:
The Chinese yuan jumped to a four-month high on Friday as markets bet on a strong economic boost from China reopening its borders this month, while broader Asian currencies were flat as focus turned to key U.S. payrolls data for more cues on the economy.
The yuan was among the best performers for the day, rising 0.4% to 6.8533 – its strongest level against the dollar since late-August. The offshore yuan also added 0.5%.
Markets are hotly awaiting the reopening of Chinese borders this Sunday, following three years of lockdowns that ravaged the world’s second-largest economy.
The country said it will also open its borders with Hong Kong, allowing quarantine-free transit with the financial hub as it moves further away from its strict zero-COVID policy. Beijing began relaxing its anti-COVID rules in December, and is expected to scale back more restrictions this year.
But the move resulted in a massive spike in local COVID-19 cases, which markets fear could cause more near-term disruption.
Market Summary as per 05/01/2023:
European equities Thursday closing. The DAX futures contract in Germany traded down 0.38% at 14436.31, CAC 40 futures down 0.22% at 6761.50. UK 100 futures contract in the U.K. up 0.64 at 7633.45
In the U.S. on Wall Street, the Dow Jones Industrial Average Closed down 1.06% at 32918.75. The S&P 500 down 1.19% at 3807.07 and the Nasdaq 100 down 1.14% at 10339.86, NYSE closes 0.81% down at 15225.40.
Top Market News Today:
In the Forex market, GBPUSD up 0.08% at 1.1911. The USDJPY up 0.51% at 134.07, The USDCHF up 0.13 at 0.9367. EURUSD down 0.01% at 1.0518. EUR/GBP up 0.2% at 0.8831. The USD/CNY down 0.39% at 6.8529 at the time of writing.
In the Commodity market U.S. Gold futures up at 0.36% $1,839.25. Elsewhere, Silver futures up 0.65% at $23.39 per ounce, Platinum up 0.21% at $1062.51 per ounce, and Palladium up 1.21% at $1757.00.
Brent Crude Oil up 0.88% at $79.38 per barrel.
In the Cryptocurrency Markets, Bitcoin at 16788.50 down at 0.22%, Ethereum down 0.26% at 1247.65, Litecoin at 72.99 down 1.67%, at the time of writing.
Top Market Segment to Watch Out Today:
OIL- Oil prices rose as much as $1 on Friday, extending gains from the previous session, supported by hopes of a China demand boost and after data showed lower U.S. fuel inventories following a winter storm that hit at the end of the year.
U.S. West Texas Intermediate crude futures were up 74 cents, or 1%, at $74.41 a barrel. They had settled 83 cents higher at $73.67 in the previous session.
US: – The U.S. economy likely maintained a solid pace of job and wage growth in December, but rising borrowing costs as the Federal Reserve fights inflation could slow labour market momentum significantly by mid-year.
The Labor Department’s closely watched employment report on Friday is also expected to show the unemployment rate unchanged at 3.7% last month. The labour market has remained strong since the Fed embarked last March on its fastest interest rate-hiking since the 1980s.
Rate-sensitive industries like housing and finance, as well as technology companies, including Twitter, Amazon (NASDAQ: AMZN) And Facebook (NASDAQ: META) Parent Meta have slashed jobs, yet airlines, hotels, restaurants and bars are desperate for workers as the leisure and hospitality industries continue to recover from the pandemic.
Labor market resilience has underpinned the economy by sustaining consumer spending, but could prompt the Fed to lift its target interest rate above the 5.1% peak the U.S. central bank projected last month and keep it there for a while.
“All indications are that the labour market remains strong,” said Sung Won Sohn, a finance and economics professor at
Loyola Marymount University in Los Angeles. “Leisure and hospitality employers are not able to get anybody even after wages have been going up. That pattern has and will continue for a while, so that’s where the rubber hits the road.”
The survey of business establishments is likely to show that nonfarm payrolls increased by 200,000 jobs last month after rising 263,000 in November, according to a Reuters poll of economists. That would be the smallest gain in two years.
However, job growth would far exceed the pace needed to keep up with growth in the working-age population, comfortably in the 150,000-300,000 range that economists associate with tight labour markets.
Euro Zone: –
The worst wave of strike action to grip Britain in decades could persist deep into 2023 with no side willing to back down, a union leader said on Thursday, underlining the scale of the challenge facing Prime Minister Rishi Sunak.
A day after Sunak pledged to tackle the country’s problems, rail workers again took to picket lines as part of a week-long strike that has paralysed the network, while daily reports document the mounting pressure on hospitals, where patients routinely wait for hours and ambulances queue in car parks.
The worst bout of worker unrest since Margaret Thatcher was in power in the 1980s, combined with the return of double-digit inflation, has produced a sense of malaise in Britain, where living standards are falling at their sharpest rate since records began in the 1950s.
Mick Whelan, head of the train drivers’ union ASLEF, said it had now become difficult for the government to agree higher pay deals when so many workers across so many sectors were involved.
“Nobody wants to resolve anything because of the impact we’ll have elsewhere,” he told Reuters at a largely deserted Euston train station in north London during the morning commute.
“We’ve got so many people out on strike, and so many people suffering, only the government can change it, or a change of government … We’re in it for the long haul.”
Nurses, paramedics, border force staff and postal workers have also taken strike action, angered by inflation that is at 40-year highs and touched 10.7% in November. Workers in other sectors are balloting for future action.
Top Economic Releases Today:
- USD: Unemployment Rate (Dec) Forecast 3.7%, Previous 3.7% at 19:00
- USD: Nonfarm Payrolls (Dec) Forecast 200K, Previous 263K at 19:00
- EUR: CPI (YoY) (Dec) Forecast 9.7%, Previous 10.1% at 15:30
- GBP: Construction PMI (Dec) Forecast 49.6, Previous 50.4 at 15:00
- CAD: Ivey PMI (Dec) Forecast 51.0, Previous 51.4 at 20:30
GBPUSD TECHNICAL ANALYSIS
TRADE SUGGESTION – SELL AT 1.19080, TAKE PROFIT AT 1.18220, SL AT 1.19338
EURUSD TECHNICAL ANALYSIS
TRADE SUGGESTION – SELL AT 1.05204, TAKE PROFIT AT 1.04874, SL AT 1.05329
AUDUSD TECHNICAL ANALYSIS
TRADE SUGGESTION– BUY AT 0.67624, TAKE PROFIT AT 0.67951, SL AT 0.67298
USDJPY TECHNICAL ANALYSIS
TRADE SUGGESTION- BUY AT 133.569, TAKE PROFIT AT 134.504, SL AT 132.834
S&P 500 INDEX TECHNICAL ANALYSIS
TRADE SUGGESTION – SELL AT 3822.25, TAKE PROFIT AT 3801.89, SL 3841.41
WTI CRUDE OIL TECHNICAL ANALYSIS
TRADE SUGGESTION– SELL AT 73.42 TAKE PROFIT AT 72.44, SL 74.36
GOLD TECHNICAL ANALYSIS
TRADE SUGGESTION– GOLD AT 1833.03, TAKE PROFIT AT 1850.00, SL 1825.65
LITECOIN TECHNICAL ANALYSIS