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26 Aug

Technical Analysis Report By Our Expert – 26 August 2022

/ CSFX Analytics

U.S. TREASURY YIELD SLID AHEAD OF POWELL’S SPEECH TODAY

Asian Pacific shares were cautiously higher on Friday. The Shanghai Composite is down 0.08% at 3,243.51. Overall, the Singapore MSCI is down 0.24% at 294.70. Over in Hong Kong, the Hang Seng Index is up 0.75% at 20,069.00. In Japan, the Nikkei 225 is up 0.39% at 28,620.00, while the Topix index is up 0.10% at 1979.00. South Korea’s Kospi is up 0.10% at 2,479.80. Australia S&P/ASX 200 up 0.98% at 7117.40.

Top News of the Day:

U.S. Treasury yields slid on Thursday after hitting multi-week highs the previous session, as investors balanced positions amid uncertainty ahead of Powell’s speech. The yield on benchmark 10-year Treasury notes was down 6.7 bps at 3.037%.
Investors have pared back expectations the Fed could tilt to a slower pace of rate hikes as U.S. inflation remains at 8.5% on an annual basis, well above the Fed’s 2% target. But Powell’s speech due on Friday will be scrutinized for any indication that an economic slowdown might alter the Fed’s strategy.

Market Summary as per 25/08/2022:

European equities Thursday closing. The DAX futures contract in Germany traded up 0.39% at 13,271.96, CAC 40 futures down 0.08% at 6381.57 and the UK 100 futures contract in the U.K. up 0.11% at 7,479.73.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 0.98% at 33291.79. The S&P 500 up 1.41% at 4199.11 and the Nasdaq 100 up 1.75% at 13143.58, NYSE closes up 1.32% at 15595.23.

Top Market News Today:

In the Forex market, GBPUSD down 0.21% at 1.1804. The USDJPY up 0.35% at 136.912. The USDCHF up 0.08% at 0.9639. EURUSD down 0.08% at 0.9965, EUR/GBP up 0.19% at 0.8441. The USD/CNY up 0.15% at 6.8598 at the time of writing.

In the Commodity market U.S. Gold futures down 0.01% at $1,757.77. Elsewhere, Silver futures up 0.14% at $19.259 per ounce, Platinum up 0.28% at $883.50 per ounce, and Palladium down 0.37% at $2141.00.

Crude Oil up on Friday; Brent Crude Oil up 0.47% at $100.30 per barrel while U.S. West Texas Intermediate (CLc1) up 0.60% at $93.32.

In the Cryptocurrency Markets, Bitcoin at 21295.00 down 0.93%, Ethereum down 1.94% at 1664.20, Litecoin at 55.55 down 1.89%, at the time of writing.

Top Market Segment to Watch Out Today:

CRUDE OIL: The White House says an Iran nuclear deal that’s good for the United States will be good for the Biden administration. And that was good enough to send oil tanking back to below $100 a barrel on Thursday.

Prior to the White House’s comment on Thursday, the State Department said the United States has conveyed its official response to the European Union’s proposal to salvage the seven-year-old agreement.

Economic News:

US: The U.S. economy contracted at a more moderate pace than initially thought in the second quarter as consumer spending blunted some of the drag from a slower pace of inventory accumulation, dispelling fears that a recession was underway.
That was underscored by the report from the Commerce Department on Thursday, which also showed the economy growing steadily last quarter when measured from the income side. This fits in with recent solid readings on the labor market, retail sales and industrial production.

Gross domestic product shrank at a 0.6% annualized rate last quarter, the government said in its second estimate of GDP. That was an upward revision from the previously estimated 0.9% pace of decline. The economy contracted at a 1.6% rate in the first quarter. Economists polled by Reuters had expected GDP would be revised slightly up to show output falling at a 0.8% rate.
While the two straight quarterly decreases in GDP meet the standard definition of a technical recession, broader measures of economic activity suggest a slow pace of expansion rather than a downturn.

Eurozone: British retailers reported their strongest sales in August in nine months, confounding forecasts for a fall as the cost-of-living squeeze hits households, according to figures from the Confederation of British Industry on Thursday.
The CBI’s July retail sales balance for August jumped to +37 from -4 in July. Economists polled by Reuters had mostly expected a fall to -7.

Samuel Tombs, an economist with consultancy Pantheon Macroeconomics, said the jump in sales in August was probably the result of emergency cost-of-living grants paid to people on welfare in late July, part of a package of support announced by former finance minister Rishi Sunak in May.

“With low-income households, who had to cut back severely in Q2, receiving the most support from the government, it is unsurprising that retail sales have benefited immediately,” Tombs said in a note to clients.

Consumer price inflation hit a 40-year high of 10.1% in July and is expected to continue climbing – possibly to 18%, according to analysts at Citi – as energy prices surge on the back of Russia’s invasion of Ukraine.

Top Economic Releases Today:

U.S. Core PCE Price Index (MoM) (Jul) today at 8:30 this time estimated 0.30%, previously which was 0.60%.
CANADA Budget Balance (Jun) today at 11:00 previously which was 2.66B.
SWITZERLAND Employment Level (Q2) today at 2:30 previously which was 5.227M.
U.S. Fed Chair Powell Speaks today at 10:00.
GERMANY Consumer Climate (Sep) today at 2:00 this time estimated -31.80, previously which was -30.90.