Weekly Market Outlook (25-29 March) 0 (0)

UPCOMING EVENTS:

  • Tuesday: US
    Durable Goods Orders, US Consumer Confidence.
  • Wednesday:
    Australia Monthly CPI, Fed’s Waller.
  • Thursday: BoJ
    Summary of Opinions, Australia Retail Sales, Canada GDP, US Final Q4 GDP,
    US Jobless Claims.
  • Friday: US
    Good Friday Holiday, Japan Jobs data, Tokyo CPI, Japan Industrial
    Production and Retail Sales, US PCE, Fed Chair Powell.

Tuesday

The US Consumer Confidence is expected to
remain unchanged at 106.7 in March. The last
report interrupted a three-month positive streak as the data surprised with a
big miss to the downside across the board. The commentary highlighted that “while
overall inflation remained the main preoccupation of consumers, they are now a
bit less concerned about food and gas prices, which have eased in recent
months. But they are more concerned about the labour market situation
and the US political environment”. The Present Situation Index will be
something to watch as that’s generally a leading
indicator
for the unemployment rate.

Wednesday

The Australian Monthly CPI Y/Y is expected
at 3.6% vs. 3.4% prior. The RBA focuses more on the quarterly CPI readings,
but the monthly indicator is timelier and can be a guide for the trend,
especially at turning points. The Core measures will be more important as
that’s what the RBA is more focused on. As a reminder, the RBA dropped
the tightening bias
in their recent monetary
policy decision and we got a strong
labour market
report soon after. Therefore,
unless we get a big downside surprise, the data shouldn’t change much for the
central bank and the market’s pricing.

Fed’s Waller will give a speech on the “Economic
Outlook” at the Economic Club of New York. Waller is a key FOMC member
because he’s been a “leading indicator” for changes in Fed’s policy. He was
the first one talking about QT in December 2021 and the first one mentioning
rate cuts in November 2023. Given the recent hot CPI reports and the FOMC
decision, it will be interesting to hear from him and it’s likely that he will
deliver some hawkish comments.

Thursday

The US Jobless Claims continue to be one
of the most important releases every week as it’s a timelier indicator on the
state of the labour market. This is because disinflation to the Fed’s target is
more likely with a weakening labour market. A resilient labour market though
will make the achievement of the target much more difficult. Initial Claims
keep on hovering around cycle lows, while Continuing Claims remain firm around
the 1800K level. This week, Initial Claims are seen at 215K vs. 210K prior,
while there’s no consensus for Continuing Claims at the time of writing
although the previous release saw an uptick to 1807K vs. 1820K expected and
1803K prior.

Friday

The Tokyo Core CPI Y/Y, which is seen as a
leading indicator for National CPI, is expected at 2.4% vs. 2.5% prior. We
got a Nikkei
report
recently which stated
that the BoJ was considering a rate hike in July or October.
If we start to get hot inflation data, the market might start to price in a
July hike, but the Yen might not appreciate that much if the US data continues
to surprise to the upside.

The US PCE Y/Y is expected at 2.4% vs. 2.4%
prior, while the M/M measure is seen at 0.4% vs. 0.3% prior. The Core PCE Y/Y
is expected at 2.8% vs. 2.8% prior, while the M/M reading is seen at 0.3% vs.
0.4% prior. Forecasters can reliably estimate the PCE once the CPI and PPI are
out, so the market already knows what to expect. We might see a miss though as
Fed Chair Powell during his Press Conference said this about the February PCE: „We have it well below 30bps on core PCE”.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

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Goldman Sachs has raised its forecast for USD/JPY to 155 (from 145) (3 month horizon) 0 (0)

Goldman Sachs forecasts for USD/JPY:

  • 3 months 155 (the prior forecast for 3 months out was 145)
  • 6 months 150 (prior 142)
  • 12 months 145 (prior 140)

These are from a GS note sent to client on Friday.

GS cite a “benign macro risk environment“ for its bearish view on yen. GS analysts also say they don’t expect rate cuts from the Federal Reserve to lift the yen:

  • „If anything, the anticipation of adjustment cuts has reduced the probability of the recession risks that tend to activate the yen’s safe-haven appeal.”

Over the past many, many months Goldman Sachs have been a stand out amongst analysts in not expecting a US recession, the firm has consistently had its recession probability forecast well under consensus.

USD/JPY update as of Friday afternoon, US time:

ps. Join in on Monday morning Asia time / Sunday evening US time when Asian markets react to this from Bostic:

This article was written by Eamonn Sheridan at www.forexlive.com.

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Fed’s Bostic say he now anticipates only one rate cut this year 0 (0)

Raphael Bostic is president and chief executive officer of the Federal Reserve Bank of Atlanta, he spoke late on Friday. During Asia time I noted here how late he was speaking and expressed a hope he wouldn’t be saying too much of importance …. well, he sure did!

He is now expecting one 25bp cut in 2024, down from the two he was expecting, and he expects that single cut later in the year. He says he is „definitely less confident“ than he was in December that inflation will continue to fall towards the Bank’s 2% target

Bostic’s reasoning:

  • economy has proved more resilient than anticipated so much so that he’s doubled his expected GFP growth estimate to 2%
  • sees little or no change in the current 3.9% unemployment rate
  • says 3.9% unemployment was considered an inflationary level not too long go
  • says inflation is falling but more slowly than anticipated, with many items recording outsized price increases

Bostic has concluded that the balance of risks favours waiting longer for cuts.

Bostic says just one rate cut is not a problem, but a good thing:

  • „If we have an economy that is growing above potential, and we have an economy where unemployment is at levels that were deemed to be unimaginable without pricing pressures, and if we have an economy where inflation is moderating … those are good things … That gives us space for patience.“

Bostic is an FOMC voter this year.

OK, so this will make for an interesting Monday morning in Asia / Sunday evening in the US. It’ll sap a few bids from risk assets.

This article was written by Eamonn Sheridan at www.forexlive.com.

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Forexlive Americas FX news wrap 22 Mar. USD moves higher while yield move lower. 0 (0)

The USD is ending the day mostly higher with gains vs all the major currencies with the exception of the JPY and CHF (-0.16% and -0.06 respectively).

The greenback rose the most vs the AUD (+0.84%), NZD (+0.79%) and CAD (+0.59%). Solid gains on the day (near 0.50%) were made vs the EUR and the GBP as well.

For the trading week, the USD moved higher vs ALL the major currencies. Below is those gains:

  • EUR: +0.72%
  • JPY: +1.59%
  • GBP: +1.03%
  • CHF: +1.46%
  • CAD: +0.50%
  • AUD: +0.71%
  • NZD: +1.52%

The gains in the greenback came despite declines in US yields this week indicative of either an oversold USD, an overbought condition in foreign currencies or simply a head-scratching move. It may also be a fundamental feeling that the US economy is stronger than the others. Fundamentally, the SNB did cut rates by surprise, but the BOJ raised rates for the first time in 17 years.

The RBA and BOE kept rates unchanged this week as did the Fed. The Fed did keep the dot plot at 3 cuts in 2024, BUT it did raise GDP estimates, and lowered the end of year unemployment rate.

  • 2-year yield -13.7 basis points
  • 5-year yield -14.0 basis points
  • 10-year yield -10.6 basis points
  • 30-year yield -5.0 basis points

For the trading day, yields moved lower despite the dollar rise.

  • 2-year yield 4.595%, -3.6 basis points
  • 5-year yield 4.191%, -6.2 basis points
  • 10-year yield 4.204%, -6.7 basis points
  • 30-year yield 4.381%, -6.1 basis points

US stocks today were mixed with the Dow and the S&P closing lower for the day, but still higher for the week. The Nasdaq closed at a new record high today

  • Dow fell -0.77%, but was up 1.97% for the week
  • S&P fell -0.14%, but was up 2.29% for the week (largest gains since December)
  • Nasdaq rose 0.16%, and was up 2.85% (largest gain since 2nd week in January)

Next week, Friday is a holiday in Australian, New Zealand, and Europe for Good Friday. Core PCE will be released on Friday in the US. Fed’s Powell will also speak on Friday, giving him a chance to comment on the Fed’s favored inflation gauge.

Australia CPI will be released on Wednesday (Tuesday night in the US). Advance US durable goods will be released on Tuesday at 8:30 AM ET.

In other markets at week end:

  • Crude oil is trading down $0.20 on the day. For the week, the price fell -$0.21 or -0.17%
  • Gold rose $9.97 or 0.45%
  • Silver fell -$0.50 or -2.03%
  • Bitcoin fell -$4869 or -7.1% on the week.

Thank you for your support this week. Have a great weekend.

This article was written by Greg Michalowski at www.forexlive.com.

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Nasdaq index closes at a new record high. S&P and Nasdaq close lower today 0 (0)

The major US indices are closing with mixed results today. The Dow industrial average and S&P index both closed lower. No record closes for those indices on the last trading day of the week. The NASDAQ index did close in positive territory and at a new record.

A summary of the closing levels shows:

  • Dow industrial average -305.49 points for -0.77% at 39475.91
  • S&P index-7.37.4 -0.14% at 5234.17
  • NASDAQ index rose 26.97 points or 0.16% at 16428.81.

The small-cap Russell 2012-26.56 points or -1.27% at 2071.99.

For the trading week, the major indices (and the Russell 2000) all closed higher:

  • Dow industrial average rose 1.602%
  • S&P index rose 2.29%, its best week since December.
  • NASDAQ index rose 2.85%, its best week since January 8 week
  • Russell 2000 rose 1.60%.

The NASDAQ and S&P indices has only had four down trading weeks in 2024. For the trading year:

  • Dow industrial average is up 4.74%
  • S&P index is up 9.74%
  • NASDAQ index is up 9.44%
  • Russell 2000 is up 2.216%

This article was written by Greg Michalowski at www.forexlive.com.

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Breakout or Reversal? USDJPY tests 3-Year highs and triggers sellers 0 (0)

The USDJPY bumped against three-year highs this week on both Wednesday and Friday, and found willing sellers each time. The high on Wednesday reached 151.81. The high today reached 151.85. That compares to the 2022 high at 151.95, and the 2023 high at 151.91. So over the last three years, the swing highs are within 10 pips of each other. That’s a ceiling.

Having said that ceilings are meant to be broken. If it happens, it would take the USDJPY to the highest level since 1990 over 30+ years ago.

What would give the sellers more confidence?

The swing highs from February into early March peaked between 150.71 and 150.88. If the sellers are to take more control, getting and staying below that lower ceiling would be needed to increase the bearish bias. Absent that and the sellers are not winning. The buyers are still in firm control.

In the video above, I outline the technicals for the USDJPY in more detail as you prepare for the new trading week.

This article was written by Greg Michalowski at www.forexlive.com.

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US crude futures settle at $80.63 0 (0)

Crude oil futures are settling at $80.63. That is down $0.44 or -0.54%.

The low for the day reached $80.42. The high was up at $81.45. For the trading week, the price is down -0.51% on a decline of $0.41. At session highs this week, the price was up $2.08. At session lows, the price was down $0.74.

Looking at the weekly chart below, the high price this week at $83.12 briefly moved above its 100-week moving average at $83.27 before rotating back to the downside. Buyers had a shot. They missed.

The low for the week was reached yesterday at $80.30.

The price is back below its 50% midpoint of the 2023 trading range at $81.37. Getting back above that midpoint level is needed – along with a break of the 100-week moving average -to increase the bullish bias on the weekly chart.

This article was written by Greg Michalowski at www.forexlive.com.

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MetaWin Raises the Bar for Transparency in Online Gaming 0 (0)

MetaWin, a leading
platform for online prize-winning games, has introduced a groundbreaking
initiative focused on enhancing transparency and fairness for players globally.
After extensive research, MetaWin identified inconsistencies in Return to
Player (RTP) rates among different operators, causing confusion among players.

Understanding RTP is crucial for players looking to make
informed gaming choices. In simple terms, RTP represents the percentage of
wagers that a game returns to players over time. For instance, a game with
an RTP of 97% would typically return around $97 for every $100 wagered.

MetaWin has introduced a maximum win guarantee for all its
games, aiming to maintain the highest RTP levels across the platform. According
to the team, this measure is designed to provide players with exceptional odds
and a satisfying gaming experience.

„At MetaWin, our top priorities are transparency and
player satisfaction,“ stated Rebecca Hanwell, Operations
Manager at Metawin. „Our commitment to maximising RTP isn’t just a
goal; it’s a pledge to provide our users with the best gaming experience
possible.“

A significant challenge for players is the lack of clarity
regarding the versions of games offered by operators. Many popular games, like
Gates of Olympus, come in multiple payout settings, with operators often
selecting versions that offer lower RTP without informing players.

„MetaWin aims to tackle this issue by offering easy
access to RTP information for all games on its platform, ensuring transparency
and empowering players to make educated decisions“,
emphasised Rebecca Hanwell, Operations Manager at Metawin. „With our
maximum win guarantee, players can rest assured that they always receive the
best possible odds when choosing to play with us.“

MetaWin’s dedication to transparency and fairness is
setting a new industry standard in online gaming. The team highlights that by
prioritising player interests and committing to ensuring maximum RTP across all
games, they are actively reshaping the gaming experience for millions
worldwide.

About Metawin

MetaWin (https://metawin.com),
a leading prize-winning online platform, is revolutionising the landscape of
digital competitions. Utilising blockchain technology, MetaWin ensures every
competition is characterised by transparency, fairness, and excitement. With a
proven track record of offering substantial prizes and a dedicated focus on
innovation, MetaWin is reshaping the future of online contests.

This article was written by FL Contributors at www.forexlive.com.

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ECB president Lagarde tells EU leaders that inflation decline is expected to continue 0 (0)

  • Economic growth projected to pick up during the year, mainly driven by increasing purchasing power
  • Economic resilience requires higher productivity, which needs higher capital investment
  • Capital Markets Union (CMU) will have to play a key role in that regard

Nothing on monetary policy there by Lagarde.

This article was written by Justin Low at www.forexlive.com.

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