Fundamental News And Technical Analysis Report – 30 January 2023

30 Jan 2023

Fed saw ending rate hikes by March as inflation slows.

Asian stock market closes in green on Friday. The Shanghai Composite is up 0.76% at 3264.81. Overall, the Singapore MSCI is neutral 0.00% at 308.55. Over in Hong Kong, the Hang Seng Index is up 0.54% at 22688.90. In Japan, the Nikkei 225 is up 0.07 at 27382.56. While the Topix index is up 0.22% at 1982.66, South Korea’s Kospi is up 0.62% at 2484.02. Australia S&P/ASX 200 is up 0.34% at 7493.30.

Top News of the Day: –

Federal Reserve policymakers are finally seeing some sustained progress in sapping high inflation, cementing their plan to raise interest rates by a quarter percentage point next week, with traders betting they’ll end their hiking campaign in March.

The U.S. central bank’s preferred gauge for inflation, the personal consumption expenditures (PCE) price index, rose 5.0% in December from a year earlier, slower than the 5.5% 12-month gain as of November, the government reported on Friday and the lowest level since September 2021.

Core PCE, which the Fed uses to gauge the underlying momentum of inflation as it strips out volatile components, rose 4.4% from a year earlier, the slowest pace since October 2021. In the most recent three-month average, it increased by around 3.2% on an annualized basis.

Market Summary as of 27/01/2023:

European equities Friday closing. The DAX futures contract in Germany traded up 0.11% at 15150.03, and CAC 40 futures up 0.02% at 7097.21. UK 100 futures contract in the U.K. is up 0.05 at 7765.15

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 0.08% at 33978.08. The S&P 500 was up 0.25% at 4070.56 and the Nasdaq 100 was up 0.95% at 11621.71, NYSE was 0.15% closed at 15962.58.

Top Market News Today:

In the Forex market, GBPUSD is down 0.07% at 1.2379. The USDJPY is down 0.16% at 129.56, and The USDCHF is up 0.20 at 0.9224. EURUSD down 0.07% at 1.0859. EUR/GBP is up 0.11% at 0.8769. The USD/CNY is down 0.43% at 6.7526 at the time of writing.

In the Commodity market, U.S. Gold futures are down at 0.09% $1,925.69. Elsewhere, Silver futures are up 0.34% at $23.64 per ounce, Platinum up 0.43% at $1013.01 per ounce, and Palladium up 1.10% at $1631.31.

Brent Crude Oil is down 0.56% at $85.92 per barrel.

In the Cryptocurrency Markets, Bitcoin is at 22641.40 down at 0.44%, Ethereum is down 1.13% at 1626.47, and Litecoin at 94.16 down 0.73%, at the time of writing.

Top Market Segment to Watch Out for Today:

OIL– Oil prices fell on Monday, giving up earlier gains, as global producers will likely keep output unchanged during a meeting this week and investors are cautious ahead of a U.S. Federal Reserve meeting that may spur market volatility.

Ahead of the Federal Reserve’s policy meeting scheduled on Jan. 31-Feb. 1, the market broadly expects the U.S. central bank to raise interest rates by at least 25 basis points, increasing concerns that the Fed’s extended increases in borrowing costs will choke fuel demand growth in the world’s biggest oil consumer.

Economic News:

US: –

U.S. Secretary of State Antony Blinken joined with counterparts from across the Americas on Friday seeking to advance efforts to forge a regional economic partnership, building on a framework President Joe Biden announced at a Los Angeles summit in June.

Hosting a virtual meeting with 11 other countries, Blinken predicted that the Americas Partnership for Economic Prosperity would help deepen trade ties, strengthen post-pandemic supply chains, enhance good governance, and reform regional institutions like the Inter-American Development Bank.

Blinken called it “an ambitious high-standards initiative” and said it remained open to other countries willing to meet those standards. But his address to the group was lacking in many specifics for how the partnership could function.

Jose Fernandez, U.S. under-secretary of state for economic growth, energy, and the environment, told reporters that Washington’s aim was to complete an agreement this year.

Friday’s meeting was meant to move forward on Biden’s proposal unveiled at the Summit of the Americas as part of an effort to rebuild U.S. influence and counter China’s growing economic inroads in Latin America. The Biden administration also wants to promote economic development among its poorer neighbors to help curb irregular migration at the U.S. southern border.

The 2022 summit itself was undermined by discord over the guest list, with Mexican President Andres Manuel Lopez Obrador leading several other countries in boycotting the event due to Biden’s exclusion of Cuba, Venezuela, and Nicaragua.

Mexico, however, on Friday joined what Blinken described as an event to “officially launch” the partnership. It included Canada, Barbados, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Panama, Peru, and Uruguay.

“This is just the beginning,” Biden said in a statement. “I look forward to gathering with Americas Partnership leaders to discuss ways we can continue to deepen our economic cooperation and harness our strengths.”

Euro Zone: –

British Prime Minister Rishi Sunak sacked Conservative Party chair Nadhim Zahawi on Sunday after an investigation found he committed a serious breach by not being open about a tax probe, the latest scandal to hit one of Sunak’s top ministers.

Sunak had initially stood by Zahawi before ordering an independent adviser to investigate questions over his tax affairs after it emerged Zahawi had settled a probe by Britain’s tax authority HMRC last year.

Zahawi has said the tax body ruled he had been “careless” with his declarations but hadn’t deliberately made an error to pay less tax, confirming he paid a penalty to HMRC.

Sunak’s independent adviser Laurie Magnus said that Zahawi didn’t declare that his tax affairs were being investigated when he was briefly made finance minister last year, and failed to disclose details when Sunak appointed him to his current role.

“Following the completion of the Independent Adviser’s investigation … it is clear that there has been a serious breach of the Ministerial Code,” Sunak said in a letter to Zahawi.

“As a result, I have informed you of my decision to remove you from your position in His Majesty’s Government.”

Zahawi’s response to Sunak did not mention either the HMRC or the independent adviser’s investigation. He expressed concern at the conduct of some in the media in recent weeks and said he would support Sunak’s agenda as a backbench lawmaker.

“I am sorry to my family for the toll this has taken on them,” he said.

It is a setback to Sunak’s attempt at a government reset after a chaotic year that saw three different British prime ministers. An investigation into alleged bullying by Deputy Prime Minister Dominic Raab is ongoing and could cause further headaches.

One Conservative lawmaker said sacking Zahawi was “clearly the right decision,” adding Zahawi “should have resigned to avoid the embarrassment.”

The opposition Labour Party said that Sunak had shown weakness in how he had handled the Zahawi and Raab cases.

Zahawi’s sacking comes as Sunak’s government, facing decades-high inflation and a wave of public sector strikes, trails badly in opinion polls ahead of an expected 2024 election.

Top Economic Releases Today:

NZD: Trade Balance (MoM) (Dec) Actual –475M, Forecast –1750M, Previous 1863M at 03:15
EUR: German GDP (QoQ) (Q4) Forecast 0.0%, Previous 0.4% at 14:30
EUR: German GDP (YoY) (Q4) Forecast 0.8%, Previous 1.2% at 14:30
EUR: Spanish CPI (YoY) Forecast 4.9%, Previous 5.7% at 13:30
CHF: KOF leading Indicators (Jan) Actual 97.2, Forecast 93.3, Previous 91.5 at 13:30