Daily Market Report by GulfBrokers 2020-2021

[syamfx2020]

Global stocks and commodities fell ahead of congressional testimony by Federal Reserve Chair Jerome Powell as markets await for clues on the timing of policy tightening and the central bank's plans to tackle inflation. Powell will deliver his testimony on the economy to the Senate Banking Committee on Wednesday morning. Last week the central bank increased its benchmark interest rate by 75 basis points for the first time in nearly three decades.

EQUITIES

US futures extended the decline on Wednesday morning, the focus shifted to Powell's testimony. On the other hand, Investors also reviewing the last round of Q1 earnings to get more details on how inflation is impacting business and consumer activity.

OIL

Crude oil futures plunged to the fresh monthly lows after the buyers failed to hold the upside momentum. The strong bearish momentum is fuelled by concerns over a possible recession. Recently, The Cleveland Fed chief Loretta Mester added to concerns, saying that the risk of a recession in the United States was increasing and it would take several years to bring inflation down from four-decade highs to the bank's 2% target.

CURRENCIES

In the currency market, the Greenback, in terms of the US Dollar Index (DXY), remains in favour as a safe haven currency due to uncertainty over global growth in the face of inflation and rising interest rates. The EURUSD slightly recovered from the early session losses supported by the hawkish comments from ECB policymakers.

GOLD

The precious metal hovers near the fresh weekly lows as increased prospects of faster rate hikes by the Federal Reserve lifted the dollar. At the time of writing, the metal trades below $1825.

Economic Outlook

On the data front, the UK inflation increased to 9.1% in May, from 9% in the previous month, the highest since 1982. The Bank of England said last week that inflation was likely to remain above 9% over the coming months.

Coronavirus update:

Worldwide, more than 539 million people have been confirmed infected and more than 6.3 million have died. The United States has confirmed over 86 million cases and has had more than 1013,200 deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

EURUSD: For today, the resistance for the currency pair is around 1.0590, any break over targets 1.0640. On the downside, any meaningful pullback now seems to find some support near the 1.0470 zones, below which the slide could further get extended towards the 1.0440 regions.



The important levels to watch for today: Support- 1.0500 and 1.0470 Resistance- 1.0550 and 1.0590.

GOLD: For gold, the first nearest support level is located at 1820. In case it breaks below this level, it will head towards the next support level which is located near 1812. On the upside, 1840 will act as an immediate and strong hurdle while 1860 will be a critical resistance zone because above this, bulls are likely to dominate.



The important levels to watch for today: Support- 1820 and 1812 Resistance- 1835 and 1850.

Quote of the day - "To win in the markets, we need to master three essential components of trading: Sound psychology, a logical trading system, and an effective risk management plan.”

Read more -https://gulfbrokers.com/en/daily-market-report-514

 

[syamfx2020]

FedEx Corporation (NYSE: FDX), the global courier delivery services company is set to report financial results for the fourth quarter today after the market close. The company is expected to post quarterly earnings of $6.91 per share and revenues are expected to be $24.57 billion. For the third quarter, FedEx reported earnings of $4.59 per share on revenues of $23.64bn. During the last week, the FedEx shares bounced more than 15% after the company raised its quarterly dividend by 53%.

$FDX key technical levels to watch for today:

Support: $217 and $200

Resistance: $240 and $247

EQUITIES

US futures retreated from the previous session highs. On Wednesday, Wall Street ended slightly higher after Fed Chair Jerome Powell showed the central bank’s commitment to fighting inflation. Powell said that the U.S. economy is not at the point of a recession in the near term.

OIL

Crude oil futures fell back to near the previous session lows following the release of a weak API report. The API data showed the US Crude inventory rose 5.6 million barrels, compared with the draw of 1.43 million barrels expected.

CURRENCIES

In the currency market, the Japanese yen slightly regains the momentum against the US dollar supported by the comments from the Japanese Vice Finance Minister. He said the current weak yen is detrimental to Japan's economy and he also said that a 'possibility of FX intervention can't be eliminated.

GOLD

The precious metal remains volatile. On Wednesday, the metal rose to a fresh weekly high of $1847 after the US dollar gave back the gains. While on Thursday morning session, the metal reversed back to near $1830 area.

Economic Outlook

On the data front, Canada’s annual inflation rate skyrocketed to 7.7% in May 2022 and up from a 6.8 percent gain in April, the highest since January 1983. On a monthly basis, the CPI rose 1.4 percent in May, following a 0.6 percent increase in April.

Moving ahead today, the important events to watch:

US – Jobless claims: GMT – 12.30

US –Manufacturing PMI: GMT – 13.45

US – EIA crude inventories: GMT – 15.00

Coronavirus update:

Worldwide, more than 539 million people have been confirmed infected and more than 6.3 million have died. The United States has confirmed over 86 million cases and has had more than 1013,200 deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

EURUSD: For today, the first support for the pair appears to be around 1.0490, in the short-term any break below 1.0490 the next downside level is to watch 1.0460/40. On the other upper side, the immediate resistance is around 1.0550 any break and close above this level will open at 1.0590.



The important levels to watch for today: Support- 1.0490 and 1.0460 Resistance- 1.0550 and 1.0590.

GOLD: For today, the immediate support for the gold stands near the level of 1828. On the flip side, the first resistance at 1840 any break above this level will open 1848/50 minimum.



The important levels to watch for today: Support- 1830 and 1824 Resistance- 1842 and 1850.

Quote of the day - There is no single market secret to discover, no single correct way to trade the markets. Those seeking the one true answer to the markets haven’t even gotten as far as asking the right question, let alone getting the right answer - Jack Schwager.

Read more - https://gulfbrokers.com/en/daily-market-report-515

 

[syamfx2020]

Crude oil prices remained under pressure in the last three weeks and reached the fresh monthly lows on Wednesday as investors worried that aggressive U.S. interest rate hikes could trigger recession denting fuel demand. As of this writing, both Brent and WTI oil futures slightly recovered from the previous session losses while the overall momentum remains bearish.

During the last week, the Federal Reserve increased interest rates by 0.75% to slow rising inflation rates and the European Central Bank (ECB) has indicated plans to raise rates by a quarter-point next month. The market participants anticipate the Fed will deliver another 75-basis-point interest rate hike in July.

On the other hand, the strong bearish sentiment was fueled by disappointing API inventory data and President Biden's demands for fuel tax suspension. The API data showed the US Crude inventory rose 5.6 million barrels, compared with the draw of 1.43 million barrels expected. Moving ahead to the North American session, the focus shifted to the release of EIA crude inventory data.

On Wednesday, US President Biden called on Congress to suspend the federal gas tax for three months in a bid to lower soaring prices at the pump. Biden also urged the industry to refine more oil into gasoline and bring down gas prices.


Read more - https://gulfbrokers.com/en/why-oil-prices-plunged-to-a-fresh-monthly-low

 

[syamfx2020]

Retail sales in the UK decreased 0.5% in May, after a downwardly revised 0.4% increase in April and compared to market expectations of a 0.7% fall. The ONS said food store sales fell by 1.6% in May from April, the biggest monthly fall since January and non-food stores sales volumes were unchanged over the month. Rising food prices and the cost of living seem to be linked with the reduced spending in food stores, the ONS said.

EQUITIES

US futures and European shares extended the gains on Friday. Moving ahead to the North American session, the investors should closely monitor the release of US new home sales data and speech from St. Louis Fed President James Bullard.

OIL

Crude oil prices remain under pressure for this whole week as Investors are worried the US Fed's aggressive rate hikes may lead to a recession and dampen oil demand. Meanwhile, both the brent and WTI futures slightly rebounded from the previous session lows.

CURRENCIES

In the currency market, the EURUSD trades slightly lower on Friday after the release of weak German IFO data. However, the currency pair could see a resumption of the upside move in the coming days if the pair holds the current upside momentum and the US dollar movement will continue to play a vital role in the Euro's future direction.

GOLD

The precious metal fell to a fresh weekly low of $1821 on Friday pressured by expectations of aggressive interest rate increases after the U.S. On Thursday, Federal Reserve Governor Michelle Bowman said another 75 basis points (bps) rate increase in July and following that with a few more half-point rate hikes.

Economic Outlook

On the data front, German Business Climate Drops More than Expected the Ifo Business Climate indicator for Germany fell to 92.3 in June of 2022 from a 3-month high of 93 in the previous month, below market expectations of 92.9.

Moving ahead today, the important events to watch:

US – New home sales: GMT – 14.00

US – Michigan Consumer Sentiment Index: GMT – 14.00

Coronavirus update:

Worldwide, more than 539 million people have been confirmed infected and more than 6.3 million have died. The United States has confirmed over 86 million cases and has had more than 1013,200 deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

EURUSD: The currency pair holds steady above 1.05. The key resistance is located for the pair around 1.0640, a break above this level will confirm a possible move to 1.0700/70. On the downside, any meaningful pullback now seems to find some support near the 1.0440 zones.



The important levels to watch for today: Support- 1.0500 and 1.0460 Resistance- 1.0580 and 1.0640.

GOLD: Technically the overall momentum remains bearish. However, we can see that the metal slightly rebounded after touching the fresh weekly low. If the bearish momentum continues the next key support area to watch is 1812 then 1808. On the upper side, If the metal regains upside momentum and press back above 1830 then the key resistance area to watch is 1836/42.



The important levels to watch for today: Support- 1820 and 1812 Resistance- 1836 and 1842.

Quote of the day - In the long run, it's not just how much money you make that will determine your future prosperity. It's how much of that money you put to work by saving it and investing it - Peter Lynch.

Read more - https://gulfbrokers.com/en/daily-market-report-516

 

[syamfx2020]

Major stock markets around the world started the week on a positive note. However, many market participants continue to digest the shift of focus away from inflation and back to economic slowdown following the last week's European and US services and manufacturing reports showing a considerable growth slowdown.

This week is inactive in terms of monetary policy, with no significant central banks due to meet. However, this will be an interesting week as the European Central Bank will host a forum in Portugal. Fed Chair Jerome Powell, ECB chief Christine Lagarde and Bank of England Governor Andrew Bailey will participate in a policy panel at the ECB Forum.

On the earnings front, the companies due to release their results will be the Nike, BBBY, Walgreens and Micron will be among those reporting earnings this week.

GOLD

The precious metal ended in negative territory last week despite a slowdown in dollar gains. The metal is expected to remain under pressure in the near term as investors pricing in the adoption of a more hawkish stance from the Fed. This week the gold investors should closely focus on comments from major central banks policymakers about inflation and interest rate expectations.

For this week, $1805 remains the first immediate support level, followed by $1800. If the metal breaks below $1800, the slump will quickly extend toward the $1788/80 mark. On the flip side, the first resistance at $1836 any break above this level will open at $1848/50 minimum.

DOLLAR INDEX

The U.S. Dollar Currency Index, which tracks the greenback against six major currencies, traded slightly lower last week but the Index remained in favour as a safe haven currency as investors anticipate the US central bank will raise interest rates faster and further than other developed countries. The main attraction for the Dollar this week is the US GDP, consumer confidence and personal consumption expenditures figures.

Technically the overall momentum favored the sellers, while the bulls continued their steady near-term revival. For this week, the key resistance is located for the pair at around 105, a break above this level will confirm a possible move to 105.80/106.10. On the downside, any meaningful pullback now seems to find some support near the 103.30/20 zones, below which the slide could further get extended towards the 102.20 regions.

EURUSD

The currency pair ended last week firmly in positive territory. This week all eyes are likely to remain on the ECB forum this week with traders waiting for Christine Lagarde’s appearance at the ECB's forum. On the other hand, the inventors are also waiting for the release of the inflation data from the Eurozone, which is set to be released on Friday.

For this week, the first nearest support level is located at 1.0460. In case it breaks below this level, it will head towards the next support level which is located near 1.0400. However, a fresh demand for the pair can be anticipated once the Euro rises above the 1.0640 resistance. A break above this level will confirm a possible move to 1.0770.

DOW JONES

The Dow Jones recovered back to above 31,000 last week after it found strong buyers below the psychological support of 30,000. The global stocks rebounded as investors believe inflation may have peaked after the recent fall in oil and commodity prices.

Technically the overall momentum remained bullish last week. On the bullish side, this week the resistance stays above 32,400, and a break above this exposes the index to the 33,100/400 level. On the flip side, rejection and pullback from the 32,400 resistance allow for a dip towards 31,000 and with 30,800/600 forming additional downside targets.

READ more - https://gulfbrokers.com/en/weekly-review-gold-usd-eurusd-and-dow-jones-36

 

[syamfx2020]

EURUSD remains steady above 1.0580 following the hawkish comments from ECB President Lagarde. Lagarde speaks at the ECB Forum on Central Banking in Sintra, Portugal on Tuesday Morning. Lagarde said if the Inflation outlook doesn't improve, we will have enough information to act faster, but this commitment is data-based. Lagarde confirmed that net asset purchases will end on July 1st and interest rates will be raised by 25bps also in July.

EQUITIES

European and UK shares extended the gains while the US futures recovered from the previous session's decline. Chinese shares ended higher on Tuesday boosted by China's decision to ease some quarantine requirements for international arrivals.

OIL

Crude oil futures slightly retreat from the previous session's gains. On Monday, the oil prices ended higher amid reports that the UAE and Saudi Arabia are producing near capacity. United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazroui on Monday said that the current production of the UAE is close to the reference production ceiling for the state in the OPEC + agreement, which is 3.168 million barrels per day.

CURRENCIES

In the currency market, the safe-haven US dollar started the new week on a bearish note. For the US dollar, the main attraction for this week is Investors waiting for the US GDP and consumer confidence data, which could trigger volatility in the market.

GOLD

The precious metal struggling to find upside momentum after the UK, US, Canada and Japan announced a ban on the import of Russian gold while attending the G7 Summit on 26 June 2022. The export of gold was said to be worth £12.6 billion to the Russian economy in 2021.

Economic Outlook

On the data front, US durable goods increased by more than expected in the month of May. The May durable goods orders increased by 0.7%, a strong beat of the 0.2% estimate, and downwardly revised 0.4% prior reading.

Coronavirus update:

Worldwide, more than 543 million people have been confirmed infected and more than 6.3 million have died. The United States has confirmed over 86.9 million cases and has had more than 1015,200 deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

EURUSD: For today, the key resistance is located above the last week's high around 1.1640, a break above this level will confirm a possible move to 1.0670 and 1.0700. On the downside, if the pair loses the 1.0550 handles, then we expect a move toward 1.0500 and then 1.0480.

The important levels to watch for today: Support- 1.0550 and 1.0500 Resistance- 1.0610 and 1.0640.

GOLD: Technically the overall sentiment remains bearish. However, a fresh demand for metal can be anticipated once the index rises above the 1840/42 resistances. On the other hand, the next immediate support prevails at 1820, further breakout of 1820 can lead the pair towards 1816/10 levels.

The important levels to watch for today: Support- 1820 and 1810 Resistance- 1836 and 1840.

Quote of the day - Given the nature of the market, the chance of a crash is always greater than the chance of an overnight runaway euphoria.ea

Read more - https://gulfbrokers.com/en/daily-market-report-517

 

[syamfx2020]

The sneaker giant Nike (NYSE: NKE) delivered better-than-expected financial results for the fourth quarter on Monday after market close. Revenue and earnings came in above consensus estimates driven by solid demand for its athletic apparel and sneakers in Europe. Nike also announced a new $18 billion class B stock repurchase plan.

• Earnings per share (EPS): $0.90 vs. $0.82 expected
• Revenue: $12.23 billion vs. $12.06 billion expected

“Nike’s results this fiscal year are a testament to the unmatched strength of our brands and our deep connection with consumers," Nike CEO, John Donahoe said. “Our competitive advantages, including our pipeline of innovative product and expanding digital leadership, prove that our strategy is working as we create value through our relentless drive to serve the future of sport.” – he added.

Nike said the China division saw a decline in the fourth quarter. Sales in China slid 19 percent to $1.6 billion in the fiscal Q4 ended May 31, with a 39 percent drop in the apparel part of the business. "We are taking a cautious approach to Greater China, given the uncertainty around additional COVID disruptions," Nike CFO, Matthew Friend said.

Meanwhile, the Nike stock fell almost 3% in pre-market trading on Tuesday despite the release of better-than-expected Q4 results. The stock initially gained 2% after the earnings announcement but later the stock slipped after the company revealed weaker-than-expected revenue guidance.

Read more - https://gulfbrokers.com/en/nike-q4-earnings-and-revenue-beat-estimates

 

[syamfx2020]

Global markets remain volatile following the hawkish comments from the central bank chiefs during the European Central Bank's (ECB) annual forum in Portugal. The central bankers have warned that the era of low-interest rates and moderate inflation has come to an end.

FED chair Jerome Powell just said at the ECB Forum, there is a risk that the US central bank's interest rate hikes will slow the economy too much, but the bigger risk is persistent inflation. Powell repeated his latest pledge to battle inflation with readiness to announce another 0.75% rate hike if needed.

“I don’t think we are going to go back to that environment of low inflation,” European Central Bank President Christine Lagarde told the ECB’s annual forum in Portugal. While she hopes that in the medium term, the inflation rate will level off at the two percent target set by the central bank.

Bank of England Governor Bailey said the British monetary authority would not need to act forcefully to bring down inflation. Bailey mentioned he was “not shocked” as “the UK economic system is weakening greater than others”.

EQUITIES

US futures extended the decline on Thursday morning. On Wednesday, Wall Street ended lower driven by weaker-than-expected US GDP data and hawkish comments from FED chair Powell. Meanwhile, Chinese shares traded higher on Thursday after China’s factory activity expanded for the first time in four months. The latest data showed that China’s manufacturing purchasing managers’ index (PMI) rose to 50.2 in June from 49.6 in May, the first expansion since February.

OIL

Crude oil futures struggling to regain the upside momentum following the previous session's bearish move. The oil prices ended lower on Wednesday despite the release of better-than-expected EIA crude inventory data. The EIA data showed a 2.8-million-barrel draw from crude oil inventories.

CURRENCIES

In the currency market, the EURUSD came under heavy selling pressure and fell to a fresh weekly low on Thursday after the US dollar index climbs above the key resistance 105. The strong bearish sentiment was fueled by hawkish comments from Christian Lagarde and increasing Eurozone recession fears.

GOLD

The precious metal hovers near the weekly lows ahead of the U.S. core PCE release later today which is traditionally the Fed’s preferred measure of gauging inflation. The overall momentum remains bearish for this whole month driven by central banks’ aggressive action.

Economic Outlook

On the data front, Germany reported weaker-than-expected employment reports. Unemployment Change in Germany increased to 133 thousand in June from -4 Thousand in May of 2022. The unemployment rate in Germany increased by 5.3% in June from 5% in May.

Moving ahead today, the important events to watch:

US – Jobless claims: GMT – 12.30

US – PCE price index: GMT – 12.30

Canada – GDP: GMT – 12.30

Coronavirus update:

Worldwide, more than 543 million people have been confirmed infected and more than 6.3 million have died. The United States has confirmed over 86.9 million cases and has had more than 1015,200 deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

EURUSD: For today, If the bearish momentum continues then the downside upside level is to watch at 1.0400 and 1.0375. On the other hand, the next immediate resistance prevails at 1.0500, a break above 1.0500 can lead the pair towards 1.0640 levels.



The important levels to watch for today: Support- 1.0400 and 1.0375 Resistance- 1.0460 and 1.0500.

GOLD: On the daily time frame, the gold is currently supported at $1800, and the resistance is around $1822. On the upper side, the long-term buyers should wait for a daily close above the $1840.



The important levels to watch for today: Support- 1800 and 1795 Resistance- 1822 and 1835.

Quote of the day - “A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” - Warren Buffett.

Read more - https://gulfbrokers.com/en/daily-market-report-519

 

[syamfx2020]

Shares of the home goods retailer Bed Bath & Beyond (NASDAQ: BBBY) plunged more than 20% on Wednesday following the release of disappointing first-quarter earnings results. $BBBY dropped by 24% on Wednesday during regular trading, closing at $4.99 per share. The retailer reported a net loss of $358 million in its latest quarter, more than 7 times worse than a year ago.

• Loss per share (EPS): $2.83 vs. $1.39 expected
• Revenue: $1.46 billion vs. $1.51 billion expected

The company announced on Wednesday that CEO Mark Tritton is leaving the company and the board, effective immediately. The firm has appointed independent board director Sue Gove as interim CEO replacing Mark Tritton.

“I step into this role keenly aware of the macro-economic environment. In the quarter there was an acute shift in customer sentiment and, since then, pressures have materially escalated. This includes steep inflation and fluctuations in purchasing patterns, leading to significant dislocation in our sales and inventory that we will be working to actively resolve,” Sue Gove said.

During the last quarter, the company's sales have plunged by 25 per cent compared with a year ago to $1.5 billion with a net loss of $358 million. Bank of America analysts expect sales to plunge another 20% this quarter. And a new report from Bank of America claims that the company has cut air conditioning in an effort to quickly lower expenses to make up for a slump in sales.

 

[syamfx2020]

Precious metals like gold and silver prices extended declines in early trading on Friday. The strong bearish sentiment fueled by fed Chairman Jerome Powell's hawkish stance on Wednesday encouraged dollar bulls and pressured metal prices lower. As of this writing, gold price trades below the support of $1800 and silver price has already broken below the $20 psychological support area.

EQUITIES

European and UK shares started the fresh month on a bearish note driven by weak economic data and an escalating risk of a global recession. Meanwhile, the US futures slightly recovered from the early session losses, and focus shifted to the US manufacturing data which is set to be released later today.

OIL

Crude oil futures rebounded while the overall momentum remains bearish. While the OPEC+ ended its meeting yesterday with an agreement to boost production by 648,000 bpd in August. On the other hand, the oil investors are closely monitoring US President Biden’s trip to Saudi Arabia to increase supplies further.

CURRENCIES

In the currency market, the dollar index, which gauges the greenback's strength against a basket of six currencies remains in favour as a safe haven currency owing to the high level of uncertainty in financial markets. The Australian dollar fell back below 0.6800 as commodity prices reversed and as global investors repositioned for higher US interest rates.

GOLD

The precious metal stays below the $1800 psychological level ahead of the US ISM manufacturing report. The metal dips to a fresh weekly low of $1794 on Friday weighed down by the prospect of higher interest rates.

Economic Outlook

On the data front, the personal consumption expenditure price index in the United States increased 0.6% month-over-month in May of 2022, higher than 0.2% in April. The US weekly jobless claims decreased by 2K to 231K in the week that ended June 25th, compared with market forecasts of 228K.

Going into the US session we have the ISM manufacturing PMI report, the report calculates a manufacturing activity-based survey conducted every month by the Institute for Supply Management (ISM) of purchasing managers from more than 300 manufacturing companies.

Coronavirus update:

Worldwide, more than 543 million people have been confirmed infected and more than 6.3 million have died. The United States has confirmed over 86.9 million cases and has had more than 1015,200 deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

EURUSD: The pair broke to below 1.0400 on Thursday. The next immediate support sitting around 1.0370 and 1.0350. On the other side, a break above 1.0500 will open 1.0550 and 1.0580.



The important levels to watch for today: Support- 1.0400 and 1.0350 Resistance- 1.0500 and 1.0550.

GOLD: The precious metal remains under pressure a clear breakdown of the support at $1790 could open space for further declines while only a recovery to $1,830 would reverse the short-term negative trend.



The important levels to watch for today: Support- 1790 and 1785 Resistance- 1800 and 1812.

Quote of the day - Volatility is greatest at turning points, diminishing as a new trend becomes established – George Soros.

Read more - https://gulfbrokers.com/en/daily-market-report-520