Technical Analysis Report – 22 August 2022

22 Aug 2022

OIL PRICES FALL AFTER THREE DAYS OF GAINING LEAGUE

Asian Pacific shares slipped on Monday. The Shanghai Composite is up 0.57% at 3,276.76. Overall, the Singapore MSCI is up 0.17% at 296.00. Over in Hong Kong, the Hang Seng Index is down 0.04% at 19,714.00. In Japan, the Nikkei 225 is down 0.76% at 28,710.00, while the Topix index is down 0.38% at 1988.00. South Korea’s Kospi is down 1.21% at 2,462.50. Australia S&P/ASX 200 down 0.95% at 7046.90.

Top News of the Day:

Oil prices slumped on Monday, ending three days of gains, as investors were concerned aggressive U.S. interest rate hikes will weaken the global economy and dent fuel demand while a strengthening dollar also added to pressure.

Both Brent and WTI climbed for a third straight day on Friday, but fell about 1.5% for the week on a stronger dollar and demand fears.

Market Summary as per 19/08/2022:

European equities Friday closing. The DAX futures contract in Germany traded down 1.12% at 13,544.52, CAC 40 futures down 0.94% at 6495.84 and the UK 100 futures contract in the U.K. up 0.11% at 7,550.38.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed down 0.86% at 33706.75. The S&P 500 down 1.29% at 4228.49 and the Nasdaq 100 down 1.95% at 13242.90, NYSE closes down 1.11% at 15588.31

Top Market News Today:

In the Forex market, GBPUSD down 0.05% at 1.1817. The USDJPY up 0.08% at 137.013. The USDCHF up 0.10% at 0.9597. EURUSD down 0.15% at 1.0023, EUR/GBP down 0.03% at 0.8483. The USD/CNY up 0.18% at 6.8284 at the time of writing.

In the Commodity market U.S. Gold futures down 0.27% at $1,742.43. Elsewhere, Silver futures down 0.12% at $18.996 per ounce, Platinum down 1.17% at $886.00 per ounce, and Palladium up 0.35% at $2132.00.

Crude Oil down on Monday; Brent Crude Oil down 0.54% at $95.23 per barrel while U.S. West Texas Intermediate (CLc1) down 0.66% at $88.87.

In the Cryptocurrency Markets, Bitcoin at 21300.00 up 0.33%, Ethereum down 2.06% at 1584.10, Litecoin at 53.77 down 3.15%, at the time of writing.

Top Market Segment to Watch Out Today:

VODAFONE: Britain’s Vodafone (NASDAQ:VOD) will sell its Hungarian business for 715 billion forints ($1.8 billion) in cash, it said on Monday, in a deal that will create a locally-owned telecoms leader in the central European country. The British mobile phone and broadband group said it had agreed non-binding terms with the buyers, Hungarian 4iG and state-run Corvinus Zrt.

Economic News:

US: The U.S. Federal Reserve will raise rates by 50 basis points in September amid expectations inflation has peaked and growing recession worries, according to economists in a Reuters poll, who said the risks were skewed towards a higher peak.

Still around a four-decade high, inflation eased last month, driving Fed funds futures to narrowly switch their pricing to a 50-basis point hike in September after 75 basis point moves in June and July.

Most economists in an Aug. 16-19 Reuters poll predicted a half percentage point hike next month, the same as in the last poll, which would take the key interest rate to 2.75%-3.00%.

Eighteen of the 94 surveyed expected the Fed to go for 75 basis points.

A cumulative 225 basis points of hikes since March and with more to come have brought a recession closer and the survey showed a 45% median probability of one over the coming year, up from July’s 40%, and a 50% chance of one within two years.

Eurozone: The European Central Bank must keep raising interest rates even if a recession in Germany is increasingly likely, as inflation will stay uncomfortably high all through 2023, Bundesbank President Joachim Nagel told a German newspaper.

The ECB raised interest rates by an unexpectedly large 50 basis points to zero percent last month and promised more rate hikes to come, arguing that fears over excessive inflation now trumps growth concerns.

The inflation outlook has deteriorated further, however and price growth in Germany, the euro zone’s biggest economy, could even exceed 10% in the coming months, Rheinischen Post quoted Nagel as saying on Saturday.

The ECB is forecasting a rapid decline in price growth next year but its projections have been notoriously inaccurate in recent quarters, leading policymakers to question the bank’s models, which are not well equipped to factor in dramatic shifts in the economy.

Top Economic Releases Today:

U.S. Chicago Fed National Activity (Jul) today at 8:30 previously which was -0.19.
CANADA New Housing Price Index (MoM) (Jul) today at 8:30 this time estimated 0.3%, previously which was 0.2%.
AUSTRALIA Manufacturing PMI today at 19:00 previously which was 56.2.
JAPAN Manufacturing PMI (Aug) today at 20:30 this time estimated 51.00, previously which was 52.10.
GERMANY 12-Month Bubill Auction today at 5:30 previously which was 0.515%.