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Weekly Market Analysis

By Samir Al Khoury,

The most important events of the past week

United States of America

·        The headline consumer price index rose year-on-year, recording 3.2%, which exceeded expectations and the previous reading (3.1%). The core consumer price index (which excludes food and energy) recorded on an annual basis 3.8%, which was higher than expectations (3.7%) but lower than the previous reading (3.9%).

·        The Producer Price Index rose on an annual basis, recording 1.6%, which exceeded expectations (1.1%) and the previous reading (1.0%).

·        The initial jobless claims index fell to 209K, which is lower than expectations (218K) and the previous reading (210K).

·        US crude oil inventories decreased, recording 5.662 million barrels, which is lower than expectations (-1.900M) and the previous reading (-4.460M).

·        The core retail sales index (excluding car sales) recorded a monthly growth of 0.3%, which is lower than expectations (0.5%) but higher than the previous reading (-0.8%). The monthly retail sales index recorded a growth of 0.6%, which is lower than expectations (0.8%) but higher than the previous reading (-1.1%).

·        The Empire State Manufacturing Index in New York State declined, recording a contraction of 20.90 points, which is lower than expectations (-7.0) and the previous reading (-2.40).

·        The industrial production index recorded a monthly growth of 0.1%, which exceeded expectations (0.0%) and the previous reading (-0.5%).

·        The Michigan Consumer Confidence Index declined, recording 76.5 points, which is lower than expectations (77.1) and the previous reading (76.9).

 

 

Eurozone

·        The industrial production index declined on a monthly basis, recording a contraction of 3.2%, which is lower than expectations (-1.8%) and the previous reading (1.6%).

 

 

United Kingdom

·        The income rate, including bonuses, declined, recording 5.6%, which is lower than expectations (5.7%) and the previous reading (5.8%).

·        The unemployment rate rose to 3.9%, which exceeded expectations and the previous reading (3.8%).

·        The GDP index recorded a monthly growth of 0.2%, which is in line with expectations (0.2%) but higher than the previous reading (-0.1%).

·        The industrial production index declined on a monthly basis, recording a contraction of 0.2%, which is lower than expectations (0.0%) and the previous reading (0.6%).

 

 

Switzerland

·        The Producer Price Index recorded a monthly growth of 0.1%, which is lower than expectations (0.2%) but higher than the previous readin (-0.5%).

 

 

China

·        New loans fell to 1.450 billion yuan, which is lower than expectations (1.540B) and the previous reading (4,920B).

 

 

Japan

·        The GDP index rose on an annual basis (fourth quarter), recording a growth of 0.4%, which exceeded expectations (-0.4%) and the previous reading (-3.2%).

 

 

The most important events of this week

This week, financial markets are eagerly awaiting the release of several key economic indicators:

·        Today, indicators of investment in fixed assets, industrial production, retail sales, and the unemployment rate in China are released, in addition to the consumer price index in the Eurozone.

·        On Tuesday, the markets await the interest decision issued by the Reserve Bank of Australia, amid expectations that it will keep interest rates unchanged at the level of 4.35%. Markets are also awaiting the interest rate decision issued by the Bank of Japan, amid expectations that it will raise interest rates by 10 basis points from -0.1% to 0.0% for the first time since 2007.

It issues indicators of industrial production in Japan, average wages in the Eurozone, building permits in the United States of America, and the consumer price index in Canada.

·        On Wednesday, the markets are awaiting the main lending rate by the People’s Bank of China. Markets are also awaiting the interest rate decision issued by the US Federal Reserve, amid expectations that it will keep interest rates unchanged at the levels of 5.25 and 5.50% for the fifth time in a row. Attention is drawn to the dot plot, that is, the updated estimates of the members of the Monetary Policy Committee regarding the path of interest, growth, and inflation, in addition to the speech and tone of Federal Chairman Jerome Powell about the interest path during the coming period, especially about the timing of the first rate cut.

The consumer and producer price indices in Britain and the US crude oil inventories index are issued.

·        Regarding Thursday, the markets are awaiting the interest decision issued by the Swiss National Bank, amid expectations that it will keep interest rates unchanged at the level of 1.75%.

Markets are also awaiting the decision of the Bank of England, amid expectations that it will keep interest rates unchanged at the level of 5.25%.

It topped the GDP index in New Zealand, the manufacturing and services purchasing managers’ indices in Australia, Japan, the Eurozone, Britain, and the United States of America, the rates of change in employment and unemployment in Australia, the export index in Japan, in addition to the indicators of initial jobless claims, the Philadelphia manufacturing industry, existing home sales, and the American leading index in the United States.

·        Finally, the consumer price index in Japan and the retail sales index in Britain and Canada will be released on Friday.

 

 

Technical Analysis:

EUR/USD:

If the euro against the dollar breaks the pivot point of 1.0908, it may potentially target and test the support levels of 1.0852, 1.0816, and 1.0760. Conversely, if it surpasses the pivot point, it is likely to test resistance levels of 1.0944, 1.1000, and 1.1035.

 

 

GBP/USD:

The pound against the dollar, if it breaks the pivot point of 1.2777, has the potential to test the support levels of 1.2687, 1.2634, and 1.2544. However, if it exceeds the pivot point, it may test resistance levels of 1.2830, 1.2920, and 1.2973.

 

 

USD/JPY:

If the pivot point of 148.23 is broken for the dollar against the yen, there is a possibility that it will target the support levels 147.26, 145.51, and 144.55. But if it exceeds the pivot point, it is likely to target the resistance levels 149.98, 150.95, and 152.70.

 

 

GOLD:

If the pivot point of 2171 is broken for gold, there is a possibility that it will target the support levels 2146, 2131, and 2107. But if it exceeds the pivot point, it is likely to target the resistance levels 2185, 2210, and 2225.

 

 

BRENT CRUDE OIL:

If the pivot point of 84.04 for crude oil is broken, there is a possibility that it will target the support levels of 82.39, 79.43 and 77.78. If it exceeds the pivot point, it is likely to target the resistance levels 87.00, 88.65, and 91.61.

 

 

US30:

If the pivot point of 39,260 for the Dow is broken, there is a possibility that it will target the support levels 38,822, 38,491 and 38,053. If it exceeds the pivot point, it is likely to target the resistance levels 39,591, 40,029, and 40,360.

 

 

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

Taurex is the trading name of Zenfinex Global Limited, Stochastic Africa SL Ltd, Zenfinex Global LLC, and Zenfinex Limited.

Zenfinex Global Limited is registered in the Republic of Seychelles with registration number: 8428731-1 and is regulated by the Financial Services Authority of Seychelles (license number SD092). Its registered office address is F20, 1st Floor, Eden Plaza, Eden Island, Seychelles.

Stochastic Africa (SL) Limited is a company registered in Sierra Leone with Company Number: SL270319STOCH05271 and is licensed by the Bank of Sierra Leone under license number BSL/SAL/2023 and with the registered office at 148D Wilkinson Road, Freetown, Sierra Leone.

Zenfinex Global LLC is a company registered with the Financial Services Authority in Saint Vincent and the Grenadines under registered number 138 LLC 2019. Its registered office is Hinds Building, Kingstown, Saint Vincent, and the Grenadines.

Zenfinex Limited is a company registered in England and Wales under registered number: 11077380. Authorised and regulated by the Financial Conduct Authority under firm reference number 816055. Its registered office is 4th Floor, 4 Eastcheap, London, EC3M 1AE, United Kingdom.

*All trading involves risk

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