Technical Analysis Report By Our Expert

08 Sep

Technical Analysis Report By Our Expert – 08 September 2022

/ CSFX Analytics

Fed anticipates “weak” growth as consumer prices rise

             Asian Pacific made broad gains on Thursday. The Shanghai Composite is down 0.15% at 3,241.41. Overall, the Singapore MSCI is up 0.94% at 288.90. Over in Hong Kong, the Hang Seng Index is down 0.32% at 18,940.00. In Japan, the Nikkei 225 is up 1.97% at 28,000.00, while the Topix index is up 0.78% at 1933.00. South Korea’s Kospi is up 0.35% at 2,384.77. Australia S&P/ASX 200 up 1.58% at 6835.80.

Top News of the Day:

The outlook for future economic growth remains “generally weak” at a time when rising food and rent prices have forced consumers to switch spending to essentials, according to the Federal Reserve’s Beige Book released Wednesday.

While there have been signs of a “moderation” in the pace of inflation, price levels remained “highly elevated,” according to the report.

Market Summary as per 07/09/2022:

European equities Wednesday closing. The DAX futures contract in Germany traded up 0.35% at 12,915.97, CAC 40 futures up 0.02% at 6105.93 and the UK 100 futures contract in the U.K. down 0.86% at 7,237.84.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 1.40% at 31581.29. The S&P 500 up 1.83% at 3979.88 and the Nasdaq 100 up 2.07% at 12259.39, NYSE closes up 1.46% at 14844.56.

Top Market News Today:

In the Forex market, GBPUSD down 0.19% at 1.1509. The USDJPY up 0.13% at 143.946. The USDCHF up 0.02% at 0.9766. EURUSD down 0.07% at 0.9994, EUR/GBP up 0.17% at 0.8683. The USD/CNY down 0.03% at 6.9643 at the time of writing.

In the Commodity market U.S. Gold futures down 0.13% at $1,715.53. Elsewhere, Silver futures up 0.28% at $18.478 per ounce, Platinum down 0.36% at $863.84 per ounce, and Palladium down 0.15% at $2035.93.

Crude Oil up on Thursday; Brent Crude Oil up 1.04% at $88.59 per barrel while U.S. West Texas Intermediate (CLc1) up 1.25% at $82.31.

In the Cryptocurrency Markets, Bitcoin at 19220.00 up 1.56%, Ethereum up 0.47% at 1637.90, Litecoin at 56.76 down 0.84%, at the time of writing.

Top Market Segment to Watch Out Today:

Tencent Holdings Ltd.: Shares of Tencent fell more than 2% on Thursday after a report showed a stake worth roughly $7.6 billion in the Chinese internet giant may be due for sale.

Tencent Holdings Ltd (HK:0700) shares fell 2.2% to HK$304.80 by 23:28 ET (03:28 GMT) and were trading around their lowest levels in three weeks. They were also among the biggest weights on the Hang Seng index, which fell 0.5%.

Economic News:

US: The U.S. unemployment rate may need to reach as high as 7.5%, double its current level, to end the country’s outbreak of high inflation, according to new estimates from a team of researchers including two staff economists from the International Monetary Fund.

That would entail job losses of perhaps 6 million people, but the research found that only under “quite optimistic assumptions” about the behaviour of the U.S. job market and inflation would the U.S. Federal Reserve be able to tame current price pressures with a smaller blow to employment.

As of June, Fed officials at the median projected unemployment would need rise to only 4.1% by the end of 2024 for inflation to drift back towards the central bank’s 2% target. The jobless rate in August was 3.7%.

Fed officials insist this time is different – their preferred measure of inflation may have peaked already at just over 6%, for instance – and still feel inflation can be beaten without a substantial rise in unemployment or a recession.

Eurozone: The European Central Bank will raise interest rates again on Thursday to fight runaway inflation and, with a big move and a record one under consideration, the only question is by how much.

Concerned that sky-high inflation is getting increasingly entrenched, policymakers are scrambling to keep a lid on the bloc’s most damaging bout of price growth in nearly half a century as it eats up household savings and weighs on business output.

Ultimately, the choice will be between a 50 and a 75-basis point increase in the zero percent deposit rate.

The latter would be the biggest ever hike of the ECB’s benchmark rate, but regardless of the outcome the bank’s direction of travel will be clear.

More hikes are factored in for coming months as price pressures already expected to usher in a winter recession consistently exceed even the most pessimistic forecasts.

Top Economic Releases Today:

U.S. Crude Oil Inventories today at 11:00 this time estimated -0.250M, previously which was -3.326M.
EURO ZONE ECB Interest Rate Decision (Sep) today at 08:15 this time estimated 1.25%, previously which was 0.50%.
U.S. Initial Jobless Claims today at 8:30 this time estimated 240K, previously which was 232K.
CANADA Initial Jobless Claims today at 11:25.
RUSSIA Central Bank reserves (USD) today at 09:00 previously which was 566.8B.