Technical Analysis Report – 23 August 2022

23 Aug 2022

GAS PRICES SURGED 13% OVERNIGHT IN THE EUROPEAN UNION

Asian Pacific shares were down for a seventh straight session on Tuesday. The Shanghai Composite is down 0.18% at 3,271.98. Overall, the Singapore MSCI is down 1.66% at 290.55. Over in Hong Kong, the Hang Seng Index is down 1.17% at 19,364.00. In Japan, the Nikkei 225 is down 1.11% at 28,390.00, while the Topix index is down 1.01% at 1968.00. South Korea’s Kospi is down 1.10% at 2,435.34. Australia S&P/ASX 200 down 1.21% at 6961.80.

Top News of the Day:

A winter with impending energy shortages is rapidly coming, inflation is on the verge of double digits, and the European Central Bank has begun a cycle of tightening financial conditions. Worryingly, this outlook is still likely to get worse before any significant improvement well into 2023.

Benchmark gas prices in the European Union surged 13% overnight to a record peak, having doubled in just a month to be 14 times higher than the average of the past decade.

Market Summary as per 22/08/2022:

European equities Monday closing. The DAX futures contract in Germany traded down 2.32% at 13,230.57, CAC 40 futures down 1.80% at 6378.75 and the UK 100 futures contract in the U.K. down 0.22% at 7,533.80.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed down 1.91% at 33063.62. The S&P 500 down 2.14% at 4138.00 and the Nasdaq 100 down 2.66% at 12890.54, NYSE closes down 1.58% at 15341.84.

Top Market News Today:

In the Forex market, GBPUSD down 0.35% at 1.1724. The USDJPY down 0.18% at 137.177. The USDCHF up 0.16% at 0.9651. EURUSD down 0.37% at 0.9904, EUR/GBP flat at 0.8446. The USD/CNY up 0.23% at 6.8643 at the time of writing.

In the Commodity market U.S. Gold futures down 0.04% at $1,735.13. Elsewhere, Silver futures down 0.28% at $18.936 per ounce, Platinum down 0.80% at $869.00 per ounce, and Palladium up 0.88% at $2013.50.

Crude Oil up on Tuesday; Brent Crude Oil up 0.68% at $97.20 per barrel while U.S. West Texas Intermediate (CLc1) up 0.82% at $91.15.

In the Cryptocurrency Markets, Bitcoin at 20975.00 up 0.05%, Ethereum down 2.50% at 1584.80, Litecoin at 54.93 down 4.12%, at the time of writing.

Top Market Segment to Watch Out Today:

ZOOM VIDEO COMM.: Zoom Video Communications Inc on Monday cut its annual profit and revenue forecasts as demand for the video-conferencing platform cools off from pandemic highs amid stiff competition from Microsoft (NASDAQ:MSFT) Teams and Cisco (NASDAQ:CSCO) WebEx.

Economic News:

US: U.S. companies borrowed 2% more in July to finance their investments in equipment compared with a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Monday.

The companies signed up for $10.1 billion in new loans, leases and lines of credit last month, compared with $9.9 billion a year earlier.

ELFA, which reports economic activity for the nearly $1 trillion equipment finance sector, said credit approvals totalled 78%, down from 78.1% in June.

The Washington-based body’s leasing and finance index measures the volume of commercial equipment financed in the United States.

The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index in August is 50%, an increase from 46.1% in July. A reading above 50 indicates a positive business outlook.

Eurozone: British consumer price inflation is set to peak at 18.6% in January, more than nine times the Bank of England’s target, an economist at U.S. bank Citi said on Monday, raising his forecast once again in light of the latest jump in energy prices.

Consumer price inflation was last above 18% in 1976.

The front-runner to become Britain’s next prime minister, Liz Truss, is likely to come up with measures to support households hit by surging energy prices, which might slightly lower the peak rate of inflation, Nabarro said.

Energy regulator Ofgem is due to set out new maximum tariffs for households on Friday, which will take effect in October.

The last tariff increases in April raised the annual bill for a typical household to 1,971 pounds ($2,322) from 1,278 pounds, following a surge in natural gas prices after Russia’s invasion of Ukraine.

The next increases are likely to be steeper still, after a 15% rise in natural gas prices over the past week.

Citi forecasts Ofgem will raise the tariff cap to the equivalent of 3,717 pounds from October, with further increases to 4,567 pounds in January and 5,816 pounds in April 2023.

Top Economic Releases Today:

EURO ZONE Services PMI (Aug) today at 4:00 this time estimated 50.50, previously which was 51.20.
U.K. Composite PMI today at 4:30 this time estimated 51.30, previously which was 52.10.
GERMANY Manufacturing PMI (Aug) today at 3:30 this time estimated 48.20, previously which was 49.30.
SINGAPORE CPI (YoY) (Jul) today at 01:00 this time estimated 7.0%, previously which was 6.7%.
U.S. New Home Sales (Jul) today at 10:00 this time estimated 575K, previously which was 590K.