Hello, dear forum members,
This thread is to inform all forum members of announcements from FreshForex broker.
We wish you luck in trading.
FreshForex Team
US CONTINUES TO REDUCE OIL RESERVES
Dear clients,
Today, on September 1 at 14:30 GMT, the US Department of Energy will publish a new report on oil reserves in the country. This is an important indicator showing the level of demand and prices for black gold.
Leading analyst of FreshForex gives the following recommendations on this matter:
The American Petroleum Institute reported on the reduction of black gold reserves in the US storage facilities by 4 million barrels. Stocks are declining for the sixth week in a row, which is favorable for oil prices. Today consider buying #WTI, #BRENT, #Continenta, #Exxon.
Monitor closely the situation on the market together with Fresh Forecasts and earn on the key economic events!
HOW TO EARN ON THE UPCOMING NFP?
Dear clients,
On September 3 at 12:30 GMT August Nonfarm Payrolls will be released. This report shows changes in number of people employed in the USA nonfarm sector. Total number of people employed in this sector is about 80% of workers producing USA GDP.
That is why NFP offers the best economics review and causes high volatility in markets!
Find out what results to expect in trading forecast of leading FreshForex expert:
Leading employment indicators from ISM and ADP indicate that Non-Farm Employment data is coming out worse than consensus. Against this background, traders do not expect the Fed to cut stimulus measures, which will provoke a sell-off in the dollar and an increase in stock markets. On Friday consider buying GBPUSD, AUDUSD, #SP500, #DAX30, #Alcoa.
In the meantime, you can profitably make deposit with cryptocurrency to prepare for this event!
GAS PRICE RENEWS A HISTORICAL RECORD!
Dear traders,
Today, on September 28, the gas price (#GAZ) broke through the incredible $6 per MMBtu (British Thermal Unit) level. Since the beginning of the day, the gas price has already risen by more than 5%. Such value was recorded last time in December 2009.
Why is the gas price going up?
The main pusher of gas prices is the fuel deficit in European storage facilities. Last winter was tough, it negatively affected gas supplies. Due to interruptions in supplies over the summer, the storage facilities managed to fill only by 75%, and the new heating season is already starting.
The global decline in production and a decrease in supplies from the United States and Russia have also affected the gas price.
Why to trade gas?
Gas is the third most popular energy source in the world. Fuel is used for heating, cooking, electricity, chemicals, cultivation and more. Gas prices are constantly fluctuate, and offer traders huge opportunities to make decent profit.
BOLLINGER BANDS IN DAY TRADING
Dear clients,
Every trader choose and combine different strategies for effective and profitable trading. In the upcoming webinar we’ll tell you about classical strategy that you can use in your work — these are Bollinger Bands.
Join us on September 29 at 12:00 GMT to learn everything about it. It will be useful webinar for everyone who intrested in day trading.
You may also ask FreshForex analyst any questions about the market situation or discuss the latest analytical news on the webinars.
You can also see all the previous webinars.
OIL REACHED A 2018 HIGH!
Dear traders,
Oil prices are rising for the fourth day in a row. On September 24 trades, the Brent price reached its maximum since 2018.
According to analysts, the price rise is influenced by negative data on oil reserves from the United States and an increased import of black gold from Japan. As well as, recent Gulf of Mexico hurricanes caused disruptions in oil production, in this way pushing prices higher. Oil optimism is rising, new highs are ahead!
Open trades now and set your own records: trade with a volume of 0.11 lots and above — and we’ll double your profit or refund your losses under the Maximum Profit contest terms.
Take part in the epic Battle of volume!
Dear clients,
A hot time is coming for the markets as we launch the Battle of Volume! Open your most record positions, trade to the maximum, and get a big prize on your account.
You can spend funds on trading or withdraw without restrictions. Increase your chances of success and use any FreshForex deposit promotion!
Invest in the future today. Tesla stock split.
Dear clients,
In June, Tesla’s board of directors proposed a 3-to-1 share split. In August, this decision was approved by the company’s shareholders. The company held the first 5:1 stock split at the end of August 2020. Since then, by April 2022, the value of securities has increased by 102.8%.
Tesla at the end of last month reported it’s results for the second quarter of 2022. The company doubled it’s net profit and 1.4 times it’s revenue! Moreover, the company wants to produce up to 2 million electric vehicles per year. The company has reported that they already have sufficient capacity to produce more than 1.9 million electric vehicles per year at four plants.
And now the shares of the world’s leading manufacturer of electric vehicles become 3 times more affordable!
The split will take place on August 24, and from August 25, trading on the #Tesla instrument will open at a new price.
Please note that on August 24, 2022:
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the #Tesla instrument will be in Close only mode;
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all open positions on #Tesla must be closed no later than 22:55 server time in accordance with clause 10.7 of the Regulations for trading operations;;
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the remaining open trades will be forcibly closed by the company at session closing prices.
Tesla (formerly Tesla Motors) is an American manufacturer of electric vehicles and electrical energy storage solutions. The company was founded in July 2003 by Martin Eberhard and Mark Tarpenning, co-founded by Elon Musk, Jeffrey Brian Straubel and Ian Wright.
In 2019, Tesla becomes the largest electric vehicle manufacturer in the world. The Tesla Model 3 sedan has become the best-selling electric car in history, breaking the 800,000 mark.
In 2021, Tesla came out on top in terms of capitalization among automotive companies, overtaking the Japanese manufacturer Toyota. At the end of October 2021, Tesla’s capitalization exceeded $1 trillion for the first time, putting it on a par with corporations such as Apple, Microsoft, Amazon and Alphabet.
Now’s a good time to build up your trading potential — get a triple benefit with a deposit bonus 300%!
How to manage your risks: a profitable strategy for beginners
Dear clients,
When trading, considering your losses is as important as counting profits. Risk evaluation is something anyone can struggle with, both pro and new traders. This time, we’ll continue the topic of risk management.
Join us on August 24 at 12:00 GMT.
During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.
If you missed the previous webinars, you can always find them on our site.
BEHIND THE WALLS: WALL STREET ON THE DECISION OF THE FED
Dear clients,
Wall Street was stumped by the Federal Reserve on Wednesday.
In a statement accompanying a quarter-point rate hike, the central bank ditched previous language that said “some additional policy tightening” might be warranted. Chairman Jerome Powell then said banking sector conditions had “generally improved” since early March.
But investors still had many questions. Despite Fed officials’ forecasts of a mild recession, Powell expects the US economy to grow at a modest pace this year. And while he said rates are “maybe at” a fairly restrictive level, getting back to the 2% inflation target won’t be a “smooth process.”
As Powell spoke, the S&P 500 went up and down, then closing down 0.7%. Treasury revenues fell.
The fact that the stock market is having a hard time figuring out where to go next is evidence that this has already been priced in, experts say. Looking ahead, investors want to know what value the Fed will place on tightening lending conditions caused by stress in regional banks.
Powell’s speech failed to reassure the market, investors heard what they expected, but not exactly what they wanted; the lack of clear guidance from the Fed is also worrisome. The general mood is quite calm, no revelations from Powell have been made and the situation is still developing according to market forecasts. A number of analysts note that the Fed is still set to tighten: they will need confirmation from the data that the monetary policy stance is quite restrictive.
The prospects for a pause or rate cut are viewed very cautiously, with particular attention to the possibility of a recession. At the same time, few people believe in further increases, according to analysts, this will require catastrophic inflation.
Fed futures showed that the likelihood of a rate hike in June had dropped to around 2%.
TRADING SIGNALS: US FEDERAL RESERVE MEETING
Dear clients,
On May 3, a meeting of the US Federal Reserve System, the body that performs the functions of the Central Bank of America, will take place. The decision on the interest rate will determine the further movement of the market, which draw attention of traders.
How the situation with rates will develop now, our expert tells:
The Fed may raise the rate by 0.25% and signal to the market that it will not raise the rate at the next meetings, as inflation is declining, which is favorable for economic growth. On Wednesday consider buying AUDUSD, GBPUSD, #NQ100, #SP500.
A reversal can quite shake up the market — be ready with a 300% deposit bonus!
ELECTIONS IN TURKEY
12 May 2023
Elections in TurkeyDear traders!
We would like to draw your attention to the fact that presidential elections in Turkey will be held on May 14, 2023. This event may provoke a sharp increase in volatility of Turkish Lira instruments and, as a consequence, lead to increased trading risks.
As we care about our clients, we strongly recommend all traders to be more attentive and also:
Maintain a margin level of at least 500%;
Use protective Stop-loss orders;
to adjust the volume of current open positions at their own discretion, if necessary.
It should be noted that in case of significant increase of volatility on financial markets with changing conditions at the liquidity providers of the company the following is possible: increase of spreads and levels of orders setting, change of margin requirements for any instruments both for previously opened positions and for new ones, introduction of “Close only” mode or suspension of trading in accordance with the regulatory documents of the company.
Please consider this information when planning work on the financial markets.
DOWNWARD SPIRAL. A LONG DROP IN OIL PRICES
A long drop in oil pricesDear clients,
Oil prices fell Friday, setting a fourth weekly decline, as renewed economic troubles in the U.S. and China revived worries about fuel demand growth in the world’s two largest oil consumers.
Brent crude futures fell 48 cents, or 0.64%, to $74.50 a barrel by 06:35 GMT. U.S. West Texas Intermediate, on the other hand, lost 39 cents, or 0.55%, to $70.48.
Both benchmarks will fall about 1.1% over the week, marking the longest streak of weekly declines since November 2021.
With negotiations over the U.S. government debt ceiling deadlocked and renewed fears that another regional bank is in crisis, fears that the U.S. will enter a recession are growing. A decline in new corporate loans in China and weaker economic data released there earlier in the week raised doubts again about the stimulation of oil demand growth as the country recovers from COVID restrictions.
The price rose earlier Friday, after falling during the previous two sessions, on some demand expectations following comments from the U.S. Secretary of Energy that the States might buy oil for the Strategic Petroleum Reserve (SPR). The U.S. government has said it will buy oil when prices are at or below $67-72 a barrel at all times.
However, negotiations to raise the $31.4 trillion U.S. federal debt limit may not reach an agreement in time to prevent a default on the national debt, which could cause serious market turmoil. China’s consumer price data for April rose slower than expected and factory price deflation has deepened, suggesting more stimulus is needed.
The oil market largely ignored the Organization of the Petroleum Exporting Countries (OPEC) global oil demand forecast for 2023, which projected demand growth in China, the world’s biggest oil importer.
HERE WE GO AGAIN: THREATS TO THE TECHNOLOGY SECTOR
Dear clients,
A prolonged period of economic downturn in the U.S. will cause tech stocks to plummet at a time when they are attracting a lot of investor money, strategists at Bank of America Corp. say.
Michael Hartnett’s team expects the recession to “crack credit and tech” just as it did in 2008, according to Friday’s note.
Investors poured $3.8 billion into technology stocks in the week ended May 10, the largest inflow since December 2021, BofA reported, citing data from EPFR Global. On the other hand, $2.1 billion was pulled out of financial stocks, the biggest buyout since May 2022, amid turmoil at regional U.S. banks.
The tech-heavy Nasdaq 100 index is up 22% this year as investors expect the Federal Reserve to begin easing monetary policy soon, easing pressure on the rate-sensitive sector. And while earnings in this sector will continue to fall from last year, traders already expect a recovery in 2024.
Hartnett, who correctly predicted last year that recession fears would cause stocks to pull back, warned that the U.S. central bank was unlikely to pause rate hikes amid high inflation, as well as low unemployment and presidential approval. That echoes the views of Bloomberg Intelligence strategists, who view the likelihood of weakening tech, media and telecom stocks as they “face the reality of longer-term interest rate hikes and a softening of the earnings outlook.”
Hartnett thinks negative wage data will be a buying signal for cyclical economic-related stocks, such as tech stocks, in 2023. The U.S. labor market has proven resilient, with hiring and worker wage growth accelerating in April.
Other notable flows over the past week included a slowdown in cash inflows - $13.8 billion went into that asset class. At the same time, Treasuries saw the largest inflows in the past six weeks, with $6.3 billion. U.S. and European equity funds bought $2.7 billion and $2.2 billion each, respectively.
CHIPPIN’ IN: NVIDIA’S POWER BOOST
Dear clients,
Nvidia Corp on Wednesday forecast second-quarter revenue more than 50 percent above Wall Street forecasts and said it was increasing shipments to meet growing demand for its artificial intelligence chips, which are used to run ChatGPT and many similar services.
Shares in Nvidia, the world’s most expensive semiconductor company, soared 28 per cent after the signal to a record high of $391.50. That boosted the market value of Nvidia stock by about $200 billion to more than $950 billion, extending the Silicon Valley-based company’s lead as the world’s most expensive chip maker and the fifth most valuable company on Wall Street.
Nvidia is forecasting revenue of $11bn for the current quarter, with analysts polled by Refinitiv citing a figure of $7.15bn. They note that amid a gold rush of generative artificial intelligence, demand for Nvidia chips is secure for the rest of the year.
Adjusted revenue for the quarter ended April 30 was $7.19bn on revenue expectations of $6.52bn. The company’s data centre chip sales were $4.28bn, beating analysts’ forecasts of $3.89bn, according to FactSet.
Nvidia faces competition in AI chips from traditional rivals such as Advanced Micron Devices Inc and Intel Corp, as well as from startups such as Cerebras Systems and its own AI chip efforts at companies such as Google and Amazon.
According to FactSet, revenue from gaming chip sales exceeded Wall Street expectations, coming in at $2.24 billion against forecasts of $1.97 billion. Net income rose to $2.04 billion, or 82 cents per share, from $1.62 billion, or 64 cents per share, a year earlier. Excluding items, the company earned $1.09 per share in the first quarter, beating estimates of 92 cents.
THE STRUGGLE FOR DEPENDENCY. OPENAI AND EU CONFLICT
Dear clients,
Sam Altman, CEO of OpenAI, has spent the last week travelling around Europe, meeting leading politicians in France, Spain, Poland, Germany and the UK to discuss the future of AI and the progress of ChatGPT. On Wednesday, he warned that the company could leave the EU if the bloc becomes “over-regulated”.
By February, ChatGPT had set a record for the fastest user base growth of any consumer app in history. More than six months after OpenAI unveiled its AI-powered chatbot to the world, concerns about its potential sparked excitement and anxiety - and led to conflict with regulators.
“The current EU bill on artificial intelligence would be over-regulatory, but we have heard that it is going to be pushed back,” Altman said on Wednesday. EU lawmakers responsible for drafting the AI law have disputed Altman’s claims. EU industry chief Thierry Breton also criticised the threat, saying the draft rules were non-negotiable. Dutch MEP Kim van Sparrentak, who also worked on the EU bill, said she and her colleagues “should not allow themselves to be blackmailed by US companies”.
“If OpenAI cannot meet the basic requirements of data management, transparency, security and protection, then their systems are not suitable for the European market,” she said.
OpenAI first clashed with regulators in March, when Italian data regulator Garante shut down the app domestically, accusing OpenAI of breaching European privacy rules. ChatGPT returned to the web after the company introduced new privacy protections for users.
Meanwhile, EU lawmakers have made new proposals to the Artificial Intelligence Act, which would oblige companies using generative tools such as ChatGPT to disclose all copyrighted material used to train systems. EU parliamentarians agreed a draft law earlier this month. Member states, the European Commission and Parliament will finalise the final details of the bill.
The departure of OpenAI is seen as an unlikely outcome as the European market is too valuable economically. Experts note that some legislative relieves are still possible, but the overall trajectory has already been set.
UNPAUSABLE. FUTURE OF FED RATES
Dear clients,
Federal Reserve policymakers received a dose of unexpectedly strong US economic data on Friday, which bolstered the case for further monetary policy tightening to reduce persistently high inflation.
A 0.8% rise in consumer spending last month compared with March was good news, showing that the economy is not on the brink of recession, but discomfort for policymakers waiting for a slowdown that could ease rising pressure on prices. And the increase in core inflation to 4.7%, up from 4.6% in March, underlined the Fed’s less-than-steady progress in fighting inflation. The US central bank’s inflation target is 2%.
Combined with seemingly some progress on a deal to raise the debt ceiling and avert a catastrophic US default, the latest data raises doubts that the Fed will indeed “pause” its campaign to raise rates, as Chairman Jerome Powell signalled earlier this month.
Interest rate futures traders are seeing less subtlety in the numbers and are now expecting an 11th consecutive interest rate hike in June, a reversal of the June pause bets made after the last hike on May 3.
Next month’s rate hike is not a definitive decision: Key labour market data from next Friday and fresh inflation data expected on 13 June are still to be announced before the Fed meeting on 13-14 June. However, there are growing expectations that even if the Fed leaves rates unchanged in June, it will hit the brakes in July. In the futures markets the odds are three to one in favour of a rate hike until then.
Fed Governor Christopher Waller — one of the Fed’s most hawkish voices — made this point earlier last week. He said that while key data in the coming weeks as well as uncertainty over credit conditions could support a temporary rate halt, the lack of progress on inflation points to the need for further tightening.
BIG AND TECH. S&P 500’ FINEST
Dear clients,
Never before in the history of US equities has a small group of companies from one industry had such an impact on the entire market. Six companies — Apple, Microsoft, Alphabet, Amazon, Nvidia and Meta Platforms — now have a combined valuation of around $10 trillion and account for more than a quarter of the total market capitalisation of the S&P 500.
All of these stocks have doubled in value in 2023 — and Nvidia and Meta more than doubled — thanks to the dawn of artificial intelligence and expectations that the Federal Reserve will soon halt interest rate hikes. The benchmark index is up 8% in 2023, but its return is down to just 2% if technology companies are excluded. The S&P 500 is also well behind the technology-heavy Nasdaq Composite, which has entered bull market territory, jumping 22% this year.
Historically, it is rare for a handful of stocks from one sector to make up such a large proportion of the S&P 500. The last time the five largest valuation companies accounted for a quarter of the total market value of the index was in the 1960s, according to Schroders. It is also the first time in history that all five of the largest publicly listed companies represent the same industry.
However, this is not all good news for investors.
It is tempting to view the dominance of the technology sector as a good thing. But single-industry stocks tend to be vulnerable to the same macroeconomic factors — such as rising interest rates, which often hit technology stocks harder than other companies because they are more reliant on borrowing cash.
The overall size of the S&P 500 market is so concentrated around technology companies that it is more vulnerable to sharp price swings than before, Minerva Analysis said. When there is a narrow group of leaders, there is a big risk if something bad happens to technology. If interest rates rise to 7%, it will be bad news for the whole market.
So while the tech giants have provided a surprise rally in equities in 2023, their rising market capitalisation could end up being more of a curse than a blessing for investors.
TRADER’ STARTER PACK
Dear clients,
When you are at the start of your trading path, you might want some boost, something to get ahead. This time we’ll be looking at some strategies which can help a beginner to gain an egde.
Join us on May 31 at 12:00 GMT.
During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.
If you missed the previous webinars, you can always find them here.
BREAK TILL DAWN. FED RATE PAUSE
Dear clients,
The US Federal Reserve left interest rates unchanged on Wednesday, but made it clear in new forecasts that borrowing costs may have to rise by half a percentage point by the end of this year as the US central bank responded to a stronger-than-expected economy and a slower decline in inflation.
In a press conference at the end of the central bank’s latest meeting, Fed Chairman Jerome Powell said that US economic and labour market growth was better than expected under the weight of aggressive monetary tightening last year, which will likely lengthen the Fed’s fight to reduce inflation, but also allow it to pass with less economic damage.
According to Powell, the pause was made out of caution to allow the Fed to gather more information before determining whether to raise rates again, with the pace of rate hikes now less important than finding the right endpoint that will slow price growth while minimising unemployment growth.
After a year in which many economists and analysts argued that recession was inevitable and the economy was about to crack, according to the Fed’s latest quarterly outlook “growth estimates have gone up slightly, unemployment estimates have gone down slightly, inflation estimates have gone up,” Powell said.
The Fed’s rate hike coincides with an improved view of the economy and hence slower progress in returning inflation to the central bank’s 2% target. It is currently more than double that target.
Wednesday’s decision interrupted a string of 10 consecutive rate hikes adopted by the Fed in response to the worst inflation outbreak in 40 years with a corresponding set of aggressive moves, including four excessive hikes of three-quarters of a percentage point last year.
THE UPSIDE GAME. BUILDING GROWTH OF OIL PRICES
Dear clients,
Oil prices rose on Tuesday as markets weighed on supply cuts in August by leading exporters Saudi Arabia and Russia amid an uncertain global economic outlook.
Brent crude futures were up 34 cents, or 0.46 per cent, to $74.99 a barrel by 0618 GMT. US West Texas Intermediate crude was at $70.12 a barrel, up 33 cents, or 0.47%.
Saudi Arabia on Monday said it would extend a voluntary production cut of 1 million barrels per day (bpd) until August, the kingdom’s state news agency said. Russia will also cut oil exports by 500,000 bpd in August, Deputy Prime Minister Alexander Novak said.
The cuts would amount to 1.5% of global supply and bring the total number of cuts promised by OPEC+ oil producers to 5.16 million bpd, as Riyadh and Moscow seek to support prices.
US crude stocks were expected to fall by around 1.8m barrels in the week to 30 June, marking the third consecutive week of decline. Industrial stockpile data will be released on Wednesday and official data on Thursday, both of which will be delayed by a day due to a US holiday.
On the macroeconomic front, analysts’ forecasts were mixed after business surveys showed a decline in global manufacturing activity due to sluggish demand in China and Europe, and US manufacturing activity fell further in June, reaching levels last seen during the initial wave of the COVID-19 pandemic.
WRITE CLUB. NEW MESSENGER FROM META
Dear clients,
Mark Zuckerberg on Wednesday directly challenged Twitter with the Threads service, amassing millions of users in a matter of hours, as it seeks to take advantage of the position of its competitor, which is in a significantly weakened state after a series of chaotic decisions by its owner Elon Musk.
“Let’s do this. Welcome to Threads,” Zuckerberg wrote in his first message on the app, along with a fiery emoji. According to him, 5 million people signed up to the app in the first four hours. Analysts say Threads’ tie-up with Instagram could give it a built-in user base and advertising machine. This could siphon off advertising dollars from Twitter at a time when its new CEO is trying to revive its struggling business.
Although Threads launched as a standalone app, users can log in using their Instagram credentials and follow the same accounts, potentially making it an easy addition to the existing habits of Instagram’s more than 2 billion monthly active users. According to experts, investors can’t help but get excited at the prospect of Meta actually having a “Twitter killer”.
Like Twitter, the app contains short text messages that users can tag, repost and reply to, although it does not have the ability to send direct messages. Messages can be up to 500 characters long and include links, photos and videos lasting up to five minutes, according to Meta’s blog.
Meta shares rose 3% on Wednesday ahead of the launch, outpacing the rise of rival tech companies.
BITCOIN SUPPORT FUND
Dear clients,
Bitcoin reached its highest level in 13 months on Thursday, rising 3.28% to $31,500.
The world’s largest cryptocurrency recently found support thanks to plans by fund managers, including BlackRock — the world’s largest asset manager — to launch a US-registered spot bitcoin exchange-traded fund (ETF).
Nasdaq has reapplied to list BlackRocks’ ETF, according to a statement released on Monday, after the US securities regulator raised concerns about the initial applications.
The US Securities and Exchange Commission has rejected about 30 applications for exchange-traded funds over the past decade. However the BlackRock Inc. initiative has ignited interest, and a flurry of new applications and amendments to existing offerings has followed.
TRADING SIGNALS: NFP FOR JUNE
Dear clients,
On July 7, the Non-farm Payroll, a measure of US industrial employment, is expected to be published. The report greatly influences the movement of American dollar and related instruments.
We will find out what figures are expected this time from our expert:
Strong employment growth in the service sector — the biggest contributor to the US economy — signals positive Non-Farm Employment data, which is favourable for the American dollar and negative for equity indices, as it leaves the Fed with no choice but to continue its policy of raising interest rates. On Friday consider buying USDZAR, USDCHF and selling AUDUSD, XAUUSD, #SP500, #NQ100.
[Removed for Forums Policy Violation]
THE CALM BEFORE THE SWARM?
Dear traders!
Oil prices fell in Asian trading on Monday as investors are cautious ahead of fresh economic data from top consumers in the United States and China this week, although an expected drop in crude supplies from Saudi Arabia and Russia capped losses.
Brent crude futures fell 55 cents, or 0.7%, to $77.92 a barrel by 0630 GMT, while U.S. West Texas Intermediate was at $73.31 a barrel, also down 55 cents, or 0.7%.
Factory prices in China fell in June at the fastest pace in seven years, government data showed on Monday, as the pace of economic recovery in the world’s second-largest economy slowed.
Oil prices rose more than 4% last week to their highest levels since May, climbing for a second straight week after the world’s biggest oil exporters, Saudi Arabia and Russia, pledged to deepen supply cuts in August.
Experts believe market volatility is fueled by the ongoing tug-of-war between concerns about demand controls by Western economies and OPEC’s supply control strategies, affecting the delicate balance of the oil market.
Non-OPEC+ supply is keeping pace with global demand, JPMorgan analysts said in a note, adding that OPEC+ needs to deepen production cuts by another 700,000 bpd in the second half of the year on top of the announced cuts and extend them to 2024.
THE СASTLING OF NASDAQ 100
Dear clients,
Shares of Apple, Microsoft and other heavyweights fell on Monday after Nasdaq Inc said it intends to rebalance the Nasdaq 100 index to eliminate “over-concentration.”
Apple’s market capitalization fell 1.1% to $2.967 trillion, after surpassing the $3 trillion threshold for the first time on June 30. Shares of Alphabet and Amazon fell more than 2%, while Microsoft and Tesla fell more than 1%.
Wall Street’s most expensive stocks declined after Nasdaq said late Friday that it would conduct a “special rebalancing” of the index to “eliminate excessive concentration in the index by reallocating weightings.”
The adjustment will be based on shares outstanding as of July 3, and the changes will be announced July 14 and take effect before the market opens July 24.
WHAT’S IN THE NEWS? TIPS FOR A SUCCESSFUL NEWS TRADING
Dear clients,
News are fundamental element of trading and should be treated accordingly. This time, we’ll be looking for the best approach in news trading.
Join us on July 12 at 12:00 GMT.
During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.
If you missed the previous webinars, you can always find them here.
TRADING SIGNALS: JUNE INFLATION IN THE U.S.
Dear clients,
A closely watched US inflation report may help address one of the most pressing questions among traders: whether the market has correctly identified the short-term trajectory of interest rates. Belief in lower rates has driven bond yields lower, supporting giant tech and growth stocks that have exposure to broad stock indexes.
What to expect this month, our expert explain:
The market is expecting US inflation to fall 0.9 pp to 3.1%, but the final figure could be above consensus forecast on the back of a strong labor market, as job and wage growth has always kept inflation high in the past. On Wednesday, consider buying USDTRY, USDZAR and selling #NQ100, AUDUSD.
Any market shift will prove easier with a 202% drawdown bonus.
DEEP DIVE. THE DOLLAR’S BIGGEST DROP IN A YEAR
Dear clients,
The dollar fell to its lowest level in more than a year on Wednesday after data showed U.S. consumer price growth slowed in June, indicating the Federal Reserve may raise interest rates only one more time this year.
The dollar index fell to 100.54, the lowest since April 2022, and was last down 1% to 100.55, the biggest daily decline since early February.
Following the inflation report, the dollar also hit its lowest against the Swiss franc since early 2015. It was last down 1.3% to 0.8675 francs, having previously fallen to a session low of 0.8660, the lowest since the Swiss National Bank de-pegged the Swiss currency in January 2015.
Data showed that U.S. core consumer prices rose just 0.2% in June, compared with forecasts for a 0.3% rise. The monthly increase in core prices was the smallest since August 2021. On an annualized basis, the core U.S. CPI rose 4.8%, below market expectations for a 5% increase. It was the lowest annualized gain in more than two years.
U.S. rate futures continue to show traders overwhelmingly expect a quarter-point increase in the discount rate, to the 5.25%-5.5% range, at the Fed’s July 25-26 meeting, but the probability of another rate hike before the end of the year is now around 25%, down from around 35% before the report.
CHALLENGE ACCEPTED. A TECH STARTUP FROM ELON MUSK
Dear clients,
Billionaire entrepreneur Elon Musk launched his long-sought artificial intelligence startup xAI on Wednesday, unveiling a team made up of engineers from the very large U.S. tech companies he hopes to challenge in his quest to create an alternative to ChatGPT.
The startup will be led by Musk himself, who has repeatedly stated that the development of artificial intelligence should be put on hold and that the sector needs to be regulated. Musk has repeatedly voiced concerns that AI could lead to “civilizational destruction.”
On Wednesday night on Twitter Spaces, Musk outlined his plan to create safer AI. Instead of explicitly programming morality into its AI, he said, xAI will seek to create an AI that is “as curious as possible.”
“If it tries to understand the true nature of the universe, that will be the best I can come up with in terms of AI safety,” Musk said. “I think he will be in favor of humanity from the standpoint that humanity is much more interesting than non-humanity.”
Musk’s new company is separate from X Corp but will work closely with Twitter, Tesla and other companies, according to its official website.
CHARGING AHEAD: TESLA’S NEW SUCCESSES
Dear clients,
Tesla’s strategy of boosting sales by lowering prices probably led to its strongest revenue growth in five quarters, while profitability fell to a three-year low in the April-June quarter.
Since late last year, the Elon Musk-led electric car maker has launched a price war to stimulate demand and stifle competition from older automakers such as Ford Motor and Chinese rivals including BYD.
Tesla is expected to report on Wednesday that gross margins fell to 18.9% in the second quarter, according to 19 analysts surveyed by Visible Alpha. That’s down from 20.2% in the previous quarter and 25.9% a year earlier.
With electric car sales slowing, Tesla has been aggressively trying to capture a bigger share of the U.S. charger market in an effort to diversify its revenue streams. It has entered into agreements with companies such as Ford Motor and General Motors to use its North American Charging Standard (NACS), allowing its market value to more than double to $880 billion this year. Following these partnerships, several charging companies have announced their intention to adopt Tesla’s standard.
While this will not contribute much to second-quarter revenue, which is expected to grow 45.2% to $24.59 billion, analysts predict it will significantly boost the company’s earnings going forward.
“IT’S NOT SO BAD”: GOLDMAN SACHS ON POSSIBLE US RECESSION
Dear clients,
Goldman Sachs chief economist Jan Hatzius said on Monday that the bank is lowering the probability of a US recession starting in the next 12 months to 20%, down from its previous forecast of 25%.
“The main reason for our downgrade is that recent data have reinforced our confidence that a decline in inflation to an acceptable level will not require a recession,” the bank said in a research note.
Market expectations for a so-called “hard landing” - a scenario in which interest rate hikes by the U.S. Federal Reserve drive the economy into recession - were recently challenged by data showing consumer and manufacturing price inflation slowed in June. Slowing inflation is likely to lead to looser monetary policy in the future. Meanwhile, economic activity remains resilient despite the significant increase in borrowing costs since the Fed’s rate hike campaign began in early 2022.
As for the current inversion of the Treasury yield curve, which is generally seen as a harbinger of an impending recession, Hatzius said it reflects and simultaneously confirms “overly pessimistic” economic forecasts.
An inverted yield curve usually signals that the Fed will cut rates to stimulate the economy. However, according to a Goldman Sachs economist, there is a “plausible path” for the Fed to cut interest rates just because of lower inflation.
ANALYST EX MACHINA: A CONTEST FROM FRESHFOREX
Dear clients,
The development of artificial intelligence is moving by leaps and bounds; from drawing to weather forecasting, it seems that there is practically no limit to AI capabilities.
But does the machine understand trading? That’s what we about to find out, and while we at it, have a bit of a competition.
From 24th to 30th July, register and trade on signals from the AI. The three participants with the largest number of open positions will get $50 to their accounts.
All details are on the contest page.
And keep in mind: the AI only advises, you decide.
Trade intelligently!
A ROUND THE WORLD. CRYPTOCURRENCY FROM THE CREATOR OF CHATGPT
Dear clients,
On Monday, the Worldcoin cryptocurrency project, founded by OpenAI CEO Sam Altman, will launch. The company creating Worldcoin is Tools for Humanity, based in San Francisco and Berlin.
The core offering of the project is the World ID, an account that only real people can get. To get a World ID, a customer registers and personally undergoes an iris scan with a Worldcoin “orb” — a silver ball about the size of a bowling ball. Once the iris scan confirms that the person is real, a World ID is created.
The project has 2 million users during its beta testing period, and with Monday’s launch, Worldcoin is expanding its “orbing operations” to 35 cities in 20 countries. As an incentive, those who sign up in certain countries will receive a Worldcoin WLD cryptocurrency token.
The cryptocurrency aspect of World IDs is important because cryptocurrency blockchains allow World IDs to be stored in such a way that privacy is preserved and they cannot be controlled or disabled by any entity.
According to the authors of the project, World IDs will be necessary in the era of generative chatbots with artificial intelligence, such as ChatGPT, which create remarkably similar speech to human speech. World IDs will be able to be used to distinguish real people from AI bots on the Internet.
Major cryptocurrency exchange Binance said it will list Worldcoin, with a tentative opening of trading expected at 09:00 GMT on Monday.
TRADING SIGNALS: US FED MEETING
Dear clients,
On July 26, a meeting of the US Federal Reserve System, the body that performs the functions of the Central Bank of America, will take place. The decision on the interest rate will determine the further movement of the market, which draw attention of traders.
How the interest rate situation will develop now, our expert explain:
The US Fed may raise the rate by 0.25 p.p. to 5.5% and will signal to the market that the current cycle of rate hikes is coming to an end. Since inflation is falling in the US, we will see the Fed’s real interest rate rise, which has always had a favourable impact on the value of the dollar in the past. On Wednesday consider buying USDTRY, USDZAR and selling XAUUSD, XAGUSD.
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WEEKLY OUTLOOK: BTCUSD, ETHUSD, XRPUSD
Dear clients,
Ripple effect has jumpstarted the cryptomarket for the altcoin and even lend a shoulder to bitcoin itself. This time, we’ll be looking at the cryptocurrencies, their positions and further movements.
Join us on July 26 at 12:00 GMT.
During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.
If you missed the previous webinars, you can always find them on our site.
THE ECONOMIC PENDULUM IS IN MOTION
Dear clients,
Global stocks rose on Tuesday thanks to a rally in Asia, where the yuan jumped after China pledged to step up support for its gasping economy, while evidence of slowing growth in Europe weighed on the euro.
On Monday, China’s top leaders pledged to step up aid to an economy struggling to recover from the crisis and signalled more measures to boost the property industry were on the way.
The MSCI All-World Index rose 0.2% on the back of gains in China’s stock market, with the mainland index (.SSEC) up 1.9% and Hong Kong shares (.HSI) up 3% thanks to gains in property stocks, which have been falling due to debt repayment problems.
However, the positive momentum did not carry over to Europe, where stocks and the euro struggled to stay in positive territory as recession fears resurfaced after regional surveys the previous day showed business activity contracted much more sharply than expected in July.
Purchasing managers’ indices published on Monday came in below expectations both in the eurozone as a whole and in key countries such as France and Germany, prompting traders to rethink what the European Central Bank might signal about the prospects for a rate hike at its meeting on Thursday.
Macroeconomic data released on Tuesday showed business confidence in Germany deteriorated this month and eurozone loan demand hit a record low in the second quarter as interest rate hikes took their toll, according to an ECB survey.
The US Federal Reserve will announce its monetary policy decision on Wednesday.
Markets are expecting a 25 basis point rate hike from both the Fed and the European Central Bank this week, but after that, pricing diverges from the rhetoric of policymakers, so the focus will be on their tone and outlook.
THRILL RIDE: BITCOIN’S EXTRAORDINARY FALL
Bitcoin’s extraordinary fallBitcoin hit a new two-month low on Friday, breaking out of its recent narrow range amid a wave of negative sentiment sweeping global markets.
Bitcoin fell 7.2% last Thursday, the biggest one-day drop since November 2022, when the leading FTX exchange collapsed.
It then fell to a two-month low of $26,172 in Asian trading on Friday, the lowest since 16 June.
A wave of sell-offs gripped global markets, with major Wall Street indexes closing lower on Thursday and Asian stocks starting a third week of losses due to concerns about the health of China’s economy and fears that US interest rates will rise longer given the economy’s resilience.
Ether, the second-largest cryptocurrency, remained steady at $1,685.20, also falling sharply on Thursday.
Some analysts attributed the cryptocurrencies’ fall to a Wall Street Journal report that Elon Musk’s SpaceX sold its bitcoin holdings, writing down their value by $373 million. Musk is influential among crypto-enthusiasts, and bitcoin prices have previously fluctuated in response to his tweets.
Bitcoin has held near the $30,000 mark in recent months, gradually recovering this year after a sharp drop in 2022 when various cryptocurrency companies collapsed, leaving investors with heavy losses.
Cryptocurrency markets got a boost in June as BlackRock applied to launch a spot bitcoin exchange-traded fund (ETF) in the US. Some investors took the move as a sign that the US Securities and Exchange Commission would approve applications to launch a spot bitcoin ETF from various asset managers, including Grayscale.
THE SUSPENSE OVER JACKSON HOLE
Dear clients,
A sharp rise in US Treasury yields is sending shivers through risky areas of the market, leaving investors wondering how bad the damage will be to a rally that has lifted everything from equities to bitcoin this year.
Strong economic growth has fuelled expectations that the Federal Reserve will raise rates for longer, pushing Treasury yields this month to their highest level since 2007. The rise has made it harder for holders of stocks and other speculative assets to ignore their gains, which have continued for most of the year even as yields have steadily risen.
The S&P 500 index lost 4% this month as the yield on 10-year U.S. Treasuries rose to a more than 15-year high of 4.35% on Monday. At the same time, the S&P 500 technology sector fell 5.7%, bitcoin fell more than 10%, and the ARK Innovation ETF, a bastion of many high-growth companies, fell 18.5%. Stocks generally rose on Monday, with the S&P 500 index up 0.7% for the day.
Rising Treasury yields, which change inversely with Treasury bond prices, can take the gloss off speculative assets by offering investors attractive payouts on investments that are considered essentially risk-free because they are backed by the U.S. government. Rising rates also raise the cost of capital in the economy, making it harder for everyone from individuals to companies to service debt.
The most important test for markets will be the annual meeting of central bankers in Jackson Hole. On Friday, Fed Chairman Jerome Powell is scheduled to give a speech on the economic outlook.
According to the latest weekly Refinitiv Lipper data, US investors were net sellers of equity funds for the third consecutive week in the seven days to 16 August. At the same time, they were attracted by strong returns in money market funds, which attracted about $32.5bn in the past week, the largest inflows since 5 July.
Investor positioning in the equity market fell for a fourth straight week to a two-month low, according to Deutsche Bank data.
However, bets against equities have been losing ground this year. Many investors believe equities will hold strong this year, which has seen them rebound from widespread fears of recession and turmoil in the banking sector. The S&P 500 index has gained 14.6% over the past year. Goldman Sachs strategists said Monday that the volume of stocks held by retail and institutional investors is below historical norms, suggesting the bull market may have additional fuel left if the economy remains strong.
EXPLORING THE NEW NATIONAL CURRENCIES
Dear clients,
More choices never hurt and just recently FreshForex introduced new Asian and African options. This time, we’ll be checking out new national currencies.
Join us on August 23 at 12:00 GMT.
During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.
If you missed the previous webinars, you can always find them here.
UNARTIFICIAL VALUATION: NVIDIA’S QUARTERLY REPORT
Dear clients,
Nvidia’s strong quarterly earnings forecast met Wall Street’s high expectations on Wednesday, sending a host of artificial intelligence-related stocks soaring and adding momentum to the stalled recovery of the U.S. stock market.
Following the signal, Nvidia shares jumped nearly 10% to a record high of $516, boosting the company’s market value by about $110bn to $1.27 trillion and cementing its lead as the world’s most expensive chip maker.
That came after the company posted a fiscal third-quarter earnings forecast that exceeded analysts’ expectations, helped by growing demand for its high-end chips that power much of the world’s major artificial intelligence technology.
Nvidia’s additional $25 billion share buyback announced on Wednesday came amid a stock that has already tripled this year, making it the first trillion-dollar chip business in history, as investors bet Nvidia will be a key beneficiary of the artificial intelligence boom.
Everyone from AI startups to major cloud service providers such as Microsoft are keen to get their hands on more Nvidia chips. Demand from China is also on the rise, as companies there place rush orders to stock up on chips before further restrictions on U.S. exports take effect.
S&P 500 E-Mini futures rose 0.5% and Nasdaq E-Mini futures climbed 0.9%, suggesting Wall Street is likely to open higher on Thursday. Investors had been awaiting Nvidia’s earnings report this week as a potential spark for renewed gains in the sluggish U.S. stock market.
Nvidia shares have more than tripled this year as the chipmaker is at the centre of a rally in technology stocks fuelled by optimism about the potential of artificial intelligence. Nvidia’s forecast added to investor optimism. Following the report’s release, the value of shares in big tech companies related to artificial intelligence increased by more than $70bn, in addition to the value of Nvidia’s stock.
Nvidia expects third-quarter revenue to be around $16bn, plus or minus 2%. Analysts polled by Refinitiv on average expected $12.61bn.
FOOT OFF THE PEDAL. THE ECB AND THE COMING RATES
Dear clients,
According to eight sources with direct knowledge of the discussions, European Central Bank policymakers are increasingly concerned about the deteriorating growth prospects for the economy and, while the discussion remains open, the idea of holding off on rate hikes is gaining momentum.
The ECB has raised rates at each of its last nine meetings in a bid to rein in price growth, most recently on July 27 when it left open the choice of its next meeting in September, with policymakers divided between a pause and further tightening.
Talks with eight policymakers in Europe and on the sidelines of the US Federal Reserve’s symposium in Jackson Hole suggest proponents of a “pause” are growing stronger after key economic indicators over the past six weeks have come in below expectations, suggesting a recession has become likely.
Several sources said the odds were evenly split between a rate hike and a pause, while some said a pause was more likely. But none of the sources said they thought a rate hike was the most likely outcome, even if that was their preference.
That’s markedly different from six weeks ago, when a rate hike in September was still considered the most likely outcome. However, all sources agreed that even in the event of a pause, the ECB would have to make it clear that its work is not yet done and that further policy tightening may be needed.
They said it could take several months, possibly until early 2024, to be sure that eurozone inflation, now at 5.3%, is moving towards the 2% target.
The sources also agreed that the discussion remains open and nothing will be decided until the next inflation figure on August 31 and the ECB’s new economic forecasts. The next ECB meeting will be held on September 14.
Markets are currently split between the chances of a rate hike in September and a pause, but expect the ECB to still go for a final rate hike of 25 basis points to 4% at some point later this year.
IN THE PURSUIT OF PROFIT. MARATHON OF VOLATILE INSTRUMENTS
Dear clients,
The market is frozen waiting for a new push, but is it a reason for us to slow down?
We are launching the volatility marathon; during the week you will be presented with a selection of the most profitable instruments that have already proved themselves in trading.
Signals will be published from 7:30 GMT on our social networks and Telegram channel.
Forwards to success!
“UNTIL THE JOB IS DONE.” JEROME POWELL’S SPEECH IN JACKSON HOLE
Dear clients,
Fed Chairman Jerome Powell said on Friday that the Federal Reserve may need to raise interest rates once again to bring down still too high inflation and promised caution at upcoming meetings, noting both the progress made in easing price pressures and the risks posed by the unexpected strength of the U.S. economy.
While Powell’s statements weren’t as hawkish as a year ago at the annual economic policy symposium in Jackson Hole, they were still quite sharp, and investors now see another rate hike before the end of the year as more likely.
“We will proceed cautiously in deciding whether to tighten policy further or, conversely, to keep the rate unchanged and await further data,” Powell said in his keynote speech. “The Fed’s objective is to bring inflation down to its 2% target, and we will do so.”
The Fed has raised rates by 5.25 percentage points since March 2022, and inflation at the Fed’s preferred rate has fallen to 3.3% from a peak of 7% last summer. While the decline was a “welcome development,” Powell believes inflation “remains too high.”
“We are prepared to raise rates further, if appropriate, and intend to keep policy at a restrictive level until we are confident that inflation is moving steadily downward toward our target,” he said.
However, given “signs that the economy may not be cooling as expected,” including “particularly strong” consumer spending and a “possible recovery” in the housing sector, Powell said that above-trend growth “could jeopardise further progress on inflation and warrant further monetary tightening.”
His speech showed the Fed struggling with conflicting signals from the economy, with inflation reportedly slowing strongly without much cost to the economy — a good outcome, but one that raised the possibility that Fed policy is not tight enough to finish the job.
Unlike last year’s closely watched speech at a conference organised by the Federal Reserve Bank of Kansas City — in which Powell warned in stark terms of impending policy tightening — Powell did not talk about the coming “pain” for the public caused by further policy tightening.
But he also didn’t make it clear that a rate cut was imminent, nor did he hint, as some policymakers have done, at the need to adjust rates downward once inflation becomes more sustainable.
At the end of the day, futures contracts tied to the Fed’s discount rate estimated the probability of a rate hike in September at just under 20%, but the odds of the rate ending the year in the 5.5%-5.75% range, a quarter point above the current range, were higher than the 50% probability. The yield on two-year Treasuries ended the day at 5.08%, the highest since June 2007.
Powell said it is difficult to accurately gauge how high above the “neutral” interest rate the current base rate is, and therefore difficult to gauge how much the Fed is restraining growth and inflation.
Powell reiterated what has become the Fed’s standard diagnosis of inflation progress: easing goods inflation and declining housing inflation are “on track,” but concerns that continued consumer spending on a wide range of services and a tight labour market may make a return to 2% difficult.
Recent declines in measures of core inflation, excluding food and energy prices, “are welcomed, but two months of good data is just the beginning of what will be needed to build confidence in a sustained decline in inflation,” Powell emphasised.
Although Powell’s tone was not as harsh as last year, when he dispelled market perceptions in very blunt terms that the Fed at the time was nearing the end of its rate hike cycle and would cut rates before the end of this year. Nevertheless, it was clear that he did not want to discard any options.
Powell ended his remarks Friday with almost the same phrase he used last year in Jackson Hole: “We’re going to keep at it until the job is done.”
“ATTENDRE ET ESPÉRER”. CHINESE STOCKS RALLY
Dear clients,
Chinese stocks led the rally in Asian equities on Tuesday as investors welcomed Beijing’s efforts to support markets, while bonds rose and the dollar declined amid possible softening in U.S. data.
MSCI, the broadest index of Asia-Pacific shares besides Japan, rose 1%, Hong Kong’s Hang Seng was up more than 2% and mainland China’s blue chips (.CSI300) were up 1.5%.
In recent days, China has halved stamp duty on share trading, relaxed margin lending rules, slowed new listings and approved new retail funds, at least signalling a determination to stabilise the market.
And while foreign investors sold their shares on Monday on an initial bounce after the measures were announced over the weekend, they net bought about $500 million worth of Chinese stocks on Tuesday, perhaps in the hope that more substantial relief would follow.
“We doubt that these policies alone can change confidence or determine the direction of the market,” Bank of America analysts said.
“Financial markets are merely a reflection of the underlying economy, and we need policies that can address the underlying economic fundamentals … In our view, the next 2-3 weeks are still an important window for policy action.”
Shares in Hong Kong were led by shares in China’s struggling Country Garden and electric car maker BYD, which reported a threefold increase in first-half profit.
TIME TO COUNT THE CHICKEN. NON-FARM PAYROLL REPORT
Dear clients,
Nonfarm Payrolls report is the indicator that shows the change in the number of employed in the US non-farm sector. This time we’ll be looking at the report, how it reflects on the market and the way to trade on it.
Join us on August 30 at 12:00 GMT.
During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.
If you missed the previous webinars, you can always find them on our site.
SAVED BY THE GAVEL: BITCOIN’S STARK REVERSAL
Dear clients,
Bitcoin’s gains from a U.S. court ruling bolstering the future prospects of funds targeting retail investors saved the cryptocurrency from a disappointing month and instilled renewed optimism about its long-term prospects.
The Securities and Exchange Commission’s rejection of Grayscale Investments’ proposal was “arbitrary and prejudicial”, a federal court said Tuesday, giving the crypto asset manager a landmark victory.
The cryptocurrency surged more than 7% on the news, setting the course for its best day since March and cutting some of the heavy losses suffered over the summer.
Plagued by lower demand for risky assets caused by rising U.S. Treasury yields and a drop in volatility during quiet summer trading, bitcoin was on track for its worst month since November 2022 before the ruling, when confusion reigned following the liquidation of the FTX exchange. Its monthly losses are now around 5%.
Investors said Grayscale’s victory will likely now factor into future SEC rulings on spot bitcoin fund ETFs filed by several major financial firms this year, including the world’s largest asset manager BlackRock.
The emergence of spot bitcoin ETFs could help the cryptocurrency industry tap into a large amount of previously untapped funds from retail investors, which in turn would help boost the bitcoin price.
TRADING SIGNALS: NFP FOR AUGUST
Dear clients,
On September 1, we are expecting the publication of data on Nonfarm Payroll, a measure of U.S. manufacturing employment. The report significantly affects the movement of the US dollar and related instruments.
What indicators are expected this time, let’s find out from our expert:
The leading employment indicators from ADP and ISM point to the release of weak Non-Farm Employment data, which is negative for the US dollar, as this situation allows the US Fed to keep interest rates at the current level. On Friday, consider selling USDZAR, USDCAD and buying AUDUSD, XAUUSD.
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CAUSE AND EFFECT: GRADUAL RECOVERY OF THE OIL MARKET
Dear clients,
Oil prices were about to break a two-week losing streak as they rose for the fourth consecutive session on Friday on the back of supply cuts and expectations that the OPEC+ group of oil producers will extend production cuts until the end of the year.
West Texas Intermediate (WTI) crude rose 21 cents, or 0.3%, to $83.84 a barrel, while Brent crude was up 26 cents, also up 0.3%, to $87.09 a barrel as of 0605 GMT. For the week, WTI is up more than 5% and Brent is up about 3%.
Analysts expect Saudi Arabia to extend a voluntary oil production cut of 1 million barrels a day for October, adding to cuts by the Organization of the Petroleum Exporting Countries.
“We continue to expect production cuts to be extended and prices above $90 per barrel (on a sustained basis) will be required to attract OPEC supply to the market, as well as incentivize U.S. shale oil producers to increase drilling activity,” National Australia Bank said in a client note on Friday.
U.S. crude inventories fell by a more-than-expected 10.6 million barrels last week, government data showed Wednesday. Commercial crude inventories have fallen by 34 million barrels since mid-July.
Traders and investors often view changes in U.S. inventories as a proxy for changes in the balance of global production and consumption, and spot prices and quotes may rise if inventories continue to deplete.
“Signs of increased demand have also been evident in the commodities market, with implied gasoline demand rising for the first time in three weeks,” ANZ said in a research note on Friday.
A weakening US dollar, which looks set to end a six-week winning streak, also helped prices. A stronger dollar puts pressure on demand for oil, making the commodity more expensive for buyers holding other currencies.
A survey showing renewed growth in Chinese factory activity and Beijing’s measures to support China’s weakened housing market also helped boost oil prices on Friday as traders hoped it would stimulate demand in the world’s second-largest oil-consuming country.