2023 Market Forecast by Solidecn.com

Commercial Content Analysts
681

The Decline in US 10-Year Treasury Note Yield

Recently, there has been a significant shift in the US financial market, specifically concerning the 10-year Treasury note. Its yield has dipped below 4.4%, a level not seen in the past two months. This change reflects the evolving expectations among investors regarding the Federal Reserve’s monetary policy.

Factors Influencing Investor Expectations

Investors are increasingly of the view that the Federal Reserve might soon pause its monetary tightening measures. This sentiment is largely driven by recent economic indicators suggesting a slowdown in the US economy. For instance, the number of initial unemployment claims has unexpectedly reached a near three-month high. Additionally, the ongoing increase in continuing claims, which have hit a two-year peak, implies that people who are out of work are finding it harder to secure new jobs.

Looking at other economic indicators, there’s a clear sign that inflationary pressures are easing. Measures such as the Consumer Price Index (CPI), Producer Price Index (PPI), and import prices are all indicating a deceleration in inflation. Furthermore, the consistent drop in oil prices, marking a downward trend for the fourth week in a row, strengthens the belief that inflation could remain low for an extended period.

Implications for the Economy

The falling yield on the 10-year Treasury note can be seen as a mixed bag for the economy. On one hand, it suggests that investors are less worried about rampant inflation, which can be good news for borrowers as it may lead to lower interest rates on loans and mortgages. On the other hand, the reasons behind this decline – such as rising unemployment claims and a general economic slowdown – are causes for concern.

The easing inflation, as evidenced by various indices, can offer some relief to consumers facing high costs of living. However, the job market data indicate potential challenges in employment, which could have a broader impact on economic growth and consumer spending.

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GBPUSD Market Outlook

In recent trading sessions, the GBPUSD pair saw a reduction in downward pressure at the R1 level, aligning with the central line of the ongoing bullish flag pattern. Notably, the 4-hour chart of GBPUSD revealed a hammer candlestick formation, indicating a potential shift towards an upward movement. The chart analysis points towards an anticipated push towards the R2 resistance mark.

The bullish outlook is further reinforced by the support at 1.237. However, if this support fails, it’s likely that the downward trend that began on November 15th may extend, targeting the 1.228 level as an immediate goal.

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EURUSD Technical Analysis

The EURUSD currency pair experienced a rise from the 1.083 pivot point, aligning with expectations. The Average Directional Index (ADX) is currently above the level of 30, demonstrating the strength of the bullish market. The next target for the EURUSD bulls is the R1 resistance level, which stands at 1.1. This target is attainable if the price can sustain itself above the pivot point.

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GBPUSD Technical Analysis

In line with expectations, the GBPUSD currency pair experienced a bounce back from the top boundary of its bullish flag pattern. This upward movement was further supported by the ADX indicator surpassing the 20 level, indicating an intensifying trend. As the pair holds above the flag’s upper line, the bulls targeting GBPUSD are now likely setting their sights on the 50% Fibonacci retracement level as their next goal.

On the flip side, if the pair falls below the 1.24 threshold, it would negate the current bullish outlook, potentially leading to a downward trajectory towards the lows seen in October.

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Analyzing GBPJPY Forex Pair: Key Levels and Market Trends

The GBPJPY pair presents a notable scenario as it approaches the S1 support point at 184.89. This particular level gains additional significance due to its association with the Ichimoku cloud, which serves to strengthen the support indication. Recently, the GBPJPY pair has slipped beneath the level of a previously surpassed bullish flag, hinting at a possible shift towards a bearish trend in the near term. For this bearish trend to gain traction and draw in more sellers, it’s crucial for the pair’s price to settle and remain consistently below the cloud.

Conversely, maintaining a position above 184.6 could signal a different turn for the GBPJPY pair, possibly indicating the start of a market correction phase. In this event, traders might expect the pair to reach the 38.2% Fibonacci retracement level, with a further possibility of advancing to the 50% Fibonacci level.

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USDJPY

In our latest review of the USDJPY currency pair, we’ve noticed a continued downward movement, going past the 23.6% Fibonacci level. The ADX indicator shows low market volatility, but the Super trend indicator points to a further drop in USDJPY.

SolidECN analysts believe this downward trend could reach the 38.2% Fibonacci level, indicating a short-term bearish outlook for the pair.

687

UK Public Sector Borrowing Hits Near-Record High in October 2023

In October 2023, the UK’s public sector borrowing (excluding banks) rose to £14.9 billion, a significant jump from last year’s £10.5 billion in the same month and surpassing the anticipated £13.7 billion. This represents the second-highest borrowing for October since records started in 1993. There was a 7.7% increase in total spending, reaching £99.8 billion, mainly due to higher expenses like increased benefit payments, despite the end of energy price-related payments from October 2022. On the revenue side, there was a modest 3.3% increase to £85.2 billion, largely driven by a £2.7 billion increase in central government tax receipts.

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USDCAD

The USDCAD currency pair is trading close to the lower line of the bullish flag. The market is ranging in this area, as indicated by the ADX indicator hovering below the 20 level on the daily chart. The bullish trend is supported by the super trend indicator and the flag, as depicted in the image below.

As long as the pair is ranging above 1.3678, the bullish trend is valid, and the pair may rise to test the 78.6% of the Fibonacci level again. Please note, if the ADX rises above the 20 level, this scenario will gain more credibility.

On the flip side, if the bears cross down the bullish flag, the ranging area may extend to the Fibonacci 0 level. If this level breaks down, the bullish trend can be considered over, and we would witness a trend reversal in the USDCAD pair.

689

Canadian Bond Yields Stabilize Amid Economic Shifts

In November, the Canadian 10-year government bond yield stabilized below 3.7%, marking its lowest point in over two months. This trend reflects growing beliefs that both the Bank of Canada and the Federal Reserve might pause their rate hike cycles. Recent statistics reveal a drop in domestic inflation to 3.1% in October, surpassing expectations. This decline is a notable improvement from the Bank of Canada’s initial projection of CPI inflation lingering around 3.5% until the latter half of 2024.

Such data reinforces the notion that the central bank may hold back on increasing its policy rate. This comes as the unemployment rate reaches its highest in almost two years, coupled with early indications suggesting a continued stagnation of the Canadian GDP throughout the third quarter.

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USDCHF

The USDCHF pair shows a pronounced bearish trend, with the pair drawing close to the 61.8% Fibonacci retracement mark. This particular level might serve as a pivotal support point, likely to decelerate the current downward trend. This slowdown is further hinted at by the RSI indicator approaching the oversold area.

If the pair successfully stays above the 61.8% threshold, we could see USDCHF entering a phase of correction, aiming for the 50% Fibonacci level, a known zone of resistance. At this juncture, the resistance could become a crucial point for bearish traders to consider new entries, especially in a market that’s heavily leaning towards short positions.

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Positive Outlook for European Markets

European stock markets are poised to kick off Wednesday’s trading session on a positive note, buoyed by an uptick in risk appetite. Market participants are still digesting the implications of the recent Federal Reserve meeting minutes. The US central bank has hinted at maintaining a tight monetary policy, with no immediate plans to reduce interest rates.

Key Events to Watch

In the UK, all eyes will be on Chancellor of the Exchequer Jeremy Hunt, who is set to present his “Autumn Statement”. This important announcement will outline the government’s economic strategy moving forward. Meanwhile, Russia is due to release data on producer inflation, which could influence market trends.

Market Indicators

In the premarket trade, futures for the Euro Stoxx 50 and FTSE 100 indices were seen slightly higher, both showing a modest increase of around 0.1%. This suggests a cautiously optimistic start to the trading day in Europe.

692

Bitcoin

Examining today’s Bitcoin technical analysis reveals that the cryptocurrency, often dubbed ‘digital gold’, is currently exhibiting a bullish flag pattern. Notably, Bitcoin’s price has positively responded to the flag’s lower boundary, with the market’s bulls now challenging a critical threshold at $36,712. Should they successfully breach this mark, it could amplify the upward trend, potentially elevating the next target to R1, valued at $38,665.

On the flip side, the S1 mark plays a crucial role as a supportive base within this bullish context. However, if this support level were to be broken, it could signal a continuation of the downtrend that initiated on November 16, possibly leading the price towards the S2 level, located near $33,483.

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Oil

The price of crude oil has recently experienced a decline, reaching the median line of its bearish channel. This downward trend aligns with expectations set when a bearish engulfing pattern emerged close to the bullish flag’s upper boundary.

It’s anticipated that the oil price may stabilize somewhat near the bearish flag’s central line. Nevertheless, the projected target appears to be the S1 level, corresponding to a support point around $72.

694

European Markets Edge Higher as ECB Minutes Loom

In European financial circles, there was a modest uptick in stock values on Thursday. The STOXX 50 index saw a slight increase of 0.1%, reaching 4,355 points—a peak not observed since August 10th. Similarly, the broader STOXX 600 index climbed by 0.2%, marking a new two-month high. Contributing to this trend, recent PMI surveys indicated a slower contraction in Eurozone business activities for November. Notably, there was a downturn in employment for the first time since early 2021, alongside a six-month peak in input cost inflation. The financial community is now keenly awaiting the ECB’s October meeting minutes.

On the corporate front, notable developments included Virgin Money’s annual profits falling short of expectations, Jet2’s operating profit soaring by 19%, and Endesa revising its profit forecast downwards. Outside of the immediate financial sector, political developments in the Netherlands captured attention, particularly the exit polls suggesting a significant rise in support for Geert Wilders’ right-wing populist Freedom Party.

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FTSE MIB Index: A Snapshot of Italian Market Stability

The Italian stock market, specifically the FTSE MIB index, showed minimal changes on a recent Thursday, hovering around the 20,200 level. This steady trend mirrored the overall cautious sentiment prevailing in European markets at the time. Investors and traders were in a phase of evaluating new information, particularly the latest PMI surveys. These surveys revealed that the rate of contraction in the Eurozone’s business activities for November was slowing down, a detail that held significant interest for market participants.

Influence of Political Developments

Additionally, the financial world was closely monitoring political events, notably the victory of a right-wing populist party in the Dutch elections. Political events like these can have far-reaching impacts on the stock market, influencing investor confidence and future economic policies.

Leonardo’s Strategic Moves

One of the standout performers in the Italian market was Leonardo, which saw its stocks increase by 1.2%. This rise came after Mariani, the co-director general of Leonardo, confirmed the company’s active pursuit of partnerships in the land armaments sector. Such strategic alliances often indicate growth potential and can positively affect a company’s stock price.

Challenges for Diasorin and Prysmian

Conversely, companies like Diasorin and Prysmian experienced a downturn, each losing about 1% in their stock value. Fluctuations like these are common in the stock market and can result from various factors, including company performance, sectoral trends, or broader market sentiments.

Effect on the Economy

The stability of the Italian stock market, as seen in this instance, generally indicates a balanced economic environment. While modest movements in major indexes like the FTSE MIB don’t signal significant growth, they also suggest that the market isn’t facing immediate instability or decline. This kind of stability can be reassuring for investors and beneficial for long-term economic planning.

The Bigger Picture

The interaction of corporate performance and political events with stock market trends provides crucial insights into the health and direction of the economy. For instance, Leonardo’s growth in stock value might signal a strengthening in the defense sector, whereas the losses for Diasorin and Prysmian could point to challenges in their respective industries.

696

South Africa Holds Repo Rate Steady Amid Inflation Concerns

In a move that aligned with broad expectations, the South African Reserve Bank (SARB) decided to keep its key repo rate steady at 8.25% on November 23rd, 2023. This decision marks the third consecutive time the rate has been held at this level, reflecting the bank’s strategy to stabilize inflation expectations in the country.

Governor Kganyago noted that inflation risks are still perceived as high. Meanwhile, the balance of risks regarding the medium-term domestic growth outlook remains even. Notably, headline inflation in South Africa saw a significant rise to 5.9% in October, reaching a five-month peak. This rate is inching closer to the upper limit of the central bank’s target range of 3% to 6% and moving away from the 4.5% midpoint, which is the bank’s preferred level for anchoring inflation expectations.

The central bank has adjusted its inflation forecast slightly downward to 5.8% for this year, a small decrease from the previous estimate of 5.9%. Looking ahead to 2024, the forecast is set at 5%, a minor revision from the earlier prediction of 5.1%. The forecasts for 2025 and 2026 project a stabilization of the inflation rate at 4.5%.

In terms of economic activity, the SARB has also revised its GDP growth forecasts. For 2023, the growth forecast has been increased from 0.7% to 0.8%, and for 2024, it has been adjusted from 1% to 1.2%.

Assessing the Impact on the Economy

The decision to maintain the repo rate can be seen as a cautious yet optimistic approach towards managing inflation without hindering economic growth. By keeping the rate steady, the SARB aims to ensure that inflation doesn’t spiral out of control while also supporting economic recovery and growth. This balance is crucial for maintaining economic stability and fostering a favorable environment for investment and development.

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What is the relationship between SolidECN and Zforex, please?

Do you have the same owners, managers, directors, office, and/or address? Are you “sister companies”? Does one of you own the other?

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XAGUSD

FxNews - In our Silver analysis, a bearish long-wick pattern was observed. The silver price has been fluctuating between the 78.6% and 61.8% Fibonacci levels.

The 4H chart shows a bearish engulfing pattern. The $23.4 support level is crucial. If breached, the target is the $23 threshold. The analysis is based on the price staying below $24.1. If this level is breached, the bearish scenario is invalidated.

699

Analyzing the Shift in Colombian Business Confidence

In Colombia, the business landscape has recently seen a notable shift. October 2023 marked a decline in the country’s industrial confidence indicator, falling to -3.7. This figure represents a significant drop from the previous month’s reading of 0.84 and is the most considerable decrease observed since May 2023. The industrial confidence indicator is a crucial measure, as it reflects the overall sentiment of manufacturers and their expectations for the future.

A key element of this change is the diminished optimism among manufacturers regarding their production forecasts for the next quarter. The expectation for output has worsened, with a decline to -16.5%, a steep fall from -10.3% in September. This downward trend suggests that manufacturers are anticipating a slowdown in production.

However, it’s not all negative. There’s a silver lining in the form of an increase in new orders, which rose to 4.6 from a previous -2.8. This improvement indicates that demand for products may be on the rise, which could potentially offset some of the pessimism about future output.

Additionally, there was an increase in finished goods inventory, moving up to 1.4 from -4.5. An increase in inventory levels could mean that manufacturers are preparing for anticipated demand or facing slower sales than expected.

Economic Implications

The decline in industrial confidence can have mixed implications for the Colombian economy. On one hand, reduced optimism about future output might lead to cautious investment and hiring decisions by manufacturers, potentially slowing economic growth. On the other hand, the rise in new orders suggests there is still robust demand, which could drive future economic activity.

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But could you please respond to my perfectly polite, very reasonable questions just above, as well?

What’s the relationship between SolidECN and Zforex, please? Do you have the same owners, managers, directors, office, and/or address? Are you “sister companies”?

Is there some reason you don’t want to reply? It looks very peculiar! :angry: