市場新聞與洞察

Let us open with this: “It’s unlikely that the next policy rate move will be a hike. I’d say it’s unlikely,” – US Chair Jay Powell This verbatim quote puts a lid on the movements seen in bond and interbank markets that might have overacted to recent data that has been above expectations and has led some to price hikes. The let us counter that quote with this quote: “I think my expectation is that we will, over the course of this year, see inflation move back down.

That’s my forecast. But I think my confidence in that is lower than it was because of the data that we’ve seen.” – US Chair Jay Powell This ‘lack of progress’ is testing the board, it's also clear that members are starting to get spooked by signs in the labour markets that employment is tight and starting to flex to the upside. This is why we use the term ‘lid’ – the lid can come off and judging by the trade in the US500 and USD over the 2 hours from when the statement was released through to the end of Powell’s press conference, the lid is ajar.

The May meeting was supposed to be the start of the Fed's march to lower rates. At least that was what the pricing at the beginning of the year was telling us. As we've seen with the data; persistent inflation, strong employment, flat growth have clearly complicated where the Fed is now going.

And the May meeting may be when the starter gun was lowered - signalling that the federal funds rate to remain at 5.25% to 5.5% for the foreseeable future. If we look at the futures market the expected 150 basis points of rate cuts price in January, forecasted to start at the May meeting, now sits at a mere 32 basis point cut for 2024. And it's falling further.

Risk on trading has been gorging on this idea since last October and in part explains why global indices have been so strong in the face of tough conditions. With the Fed in a fix about what to do next indices are now going to have to ‘prove’ (bottom-up fundamentals) that pricing is justified, something market is now testing. On the FX front, the May Fed meeting has been taken in a different light.

The lid has been taken as ‘firmly on’ and the USD has suffered for it. DXY shows that across the pairs the USD was turfed out as those traders positioned for US Fed hikes got squeezed. We need to be vigilant as to which pairs we looked at.

Considering the EUR, GBP, CAD and Scandinavian currencies are likely to see rate cuts from their respective central banks in the coming months the current fall in the USD may be short lived here. But currencies such as the AUD and NZD facing higher rates for longer may hold on to the gains they acquired. The conclusion, however, is that rates are on hold and will be higher for longer.

The pressure this will put into risk assets is likely to be seen in the coming months and therefore a real test for the bulls that have been driving markets since October last year.

The World Business Outlook Awards are among the most distinguished recognitions in the global business landscape, celebrating excellence, innovation, and outstanding performance across various sectors. GO Markets' remarkable win in this category underscores its commitment to providing exceptional services and building trust among its clientele. Founded in 2006 and headquartered in Melbourne, Australia, GO Markets specialises in Forex and CFD trading.

The broker provides 1000+ tradable CFD instruments, including forex, shares, commodities, indices, metals, cryptocurrencies and bonds. GO Markets is regulated by ASIC in Australia, CySEC in Cyprus, FSC in Mauritius, and FSA in Seychelles. As a globally recognised forex broker, they remain committed to pushing the boundaries of excellence and innovation in the financial services industry.

GO Markets clients can access a wide range of trading platforms like MetaTrader 4, MetaTrader 5, cTrader, cTrader copy trader, PAMM, MetaTrader copy trading, mobile trading and more. As GO Markets continues to expand its global footprint and enhance its product offerings, the company remains dedicated to providing education to novice traders. GO Markets provides educational materials and resources necessary to perform seamless trading.

There are various forex learning courses, video tutorials, and frequently held seminars and webinars included in the educational programmes that are free to use for all traders. Shashank M, CEO of World Business Outlook, commented, "We are delighted to extend our sincerest congratulations to the well-deserving winner. GO Markets' Journey to Success has been nothing short of inspiring, marked by unwavering dedication and utmost commitment to showcasing excellence in every facet of its operations.

With their exceptional services for trading forex, shares, commodities, and indices available to investors around the world, it is no surprise that they emerged as leaders in their field." Soyeb Rangwala, Director of GO Markets expressed his gratitude after winning the title and commented, "We are proud of our dedicated and expert customer service team who have garnered several accolades from across the globe. GO Markets is committed to maintaining its global leadership for customer service and education programmes. After receiving the top ratings for trading ideas and strategies, margin requirements, and account funding/withdrawals, this new recognition from World Business Outlook further boosts our teams’ morale and inspires us to dedicate a whole new level of experience for our clients." About GO Markets GO Markets is a regulated and multi-award-winning online global CFD trading provider, offering 1000+ tradable CFD instruments.

GO Markets began in Australia in 2006 and is widely recognised as Australia’s first MT4 broker. GO Markets has since added MT5, cTrader, cTrader copy trader, PAMM, MetaTrader copy trading, mobile trading, and a web-based solution to its trading platform suite. The clients’ trading journey is of the utmost importance, and as such, GO Markets is committed to continually refining its technology, client support, and education. https://www.gomarkets.com/au/ About World Business Outlook World Business Outlook is a Singapore-based print and online magazine providing comprehensive coverage and analysis of the financial industry, international business, and the global economy.

It offers a nuanced perspective on global economic trends, business strategies, and market insights. In a world where interconnectedness is the norm, the magazine provides a platform for thought leaders, industry experts, and policymakers to share their views on navigating the complex web of international business dynamics.

GO Markets proudly announces its achievement of ISO 27001 certification. This milestone underscores GO Markets' unwavering commitment to safeguarding its clients’ information assets and affirms its commitment to maintaining information security at an industry-leading level. This standard, part of the ISO 27000 series, sets out the specifications for an effective Information Security Management System (ISMS), offering a comprehensive framework for organisations to manage their information security adeptly.

An ISMS, as per ISO 27001, employs a systematic approach to ensuring the Confidentiality, Integrity, and Availability (CIA) of corporate information assets, providing a robust defence against evolving cyber threats. GO Markets' ISO 27001 certification is a significant milestone in its ongoing pursuit of information security. By adhering to the highest standards of data protection, GO Markets reaffirms its dedication to maintaining the trust and confidence of its clients while setting a benchmark for security excellence in the financial services sector.

About the International Organisation for Standardisation (ISO) Created in 1946 to establish best practices spanning from product manufacturing to process management, the ISO has 25,297 International Standards covering nearly all facets of technology, management, and manufacturing. ISO fosters international trade and cooperation among its 170 member countries, each represented by a single member. Through 830 technical committees and subcommittees, ISO ensures meticulous standards development, adhering to its inclusive, value-driven, independent, can-do, and global ethos.

Its consensus-based approach integrates feedback from diverse stakeholders, fostering trust and collaboration. About DNV DNV is a global leader in assurance, risk management, and classification services, dedicated to safeguarding life, property, and the environment. They provide expertise and innovative solutions across various industries, ensuring the performance and safety of organisations and their assets worldwide.

They are one of the world’s leading certification bodies, delivering world-renowned testing, certification and technical advisory services.

Plenty has been made of the drive towards nickel and lithium as “future metals” as the world's “electrification” takes hold. This “electrification” has been nicknamed the “volt revolution” and when you get these kinds of technological leaps - what's appearing to be the “winner” now doesn't necessarily mean it will be the overall. That is where Nickel and Lithium need to be examined.

The demand for these two metals over the last 15 years has been staggering and for good reason the uptake of electronic vehicles (EVs), household batteries and the accelerated push to “net zero” have made these two metals – must haves. However as mentioned, will the demand hold up or will these metals experience the same market translation social media went through in the late 1990s and 2000s. Think about it what happened to market leaders Myspace and Yahoo?

Think about all those search engines that lost out to Google? Or the online marketplaces that have been cannibalised by Amazon. I raise this because although right now nickel and lithium are all the rage, there are signs they may lose out to cheaper and possibly faster technologies in the EV and battery space over the coming decades.

Nickel in particular looks to be the first one of these under pressure, and not surprising it’s from lithium itself. The light speed advancement in cheap and safe LFP batteries (lithium iron phosphate) is staggering. In fact, they are becoming so good at holding charge and efficiency that LFP batteries have now conquered 70% of the EV mass market in China further to this - they don't need nickel or cobalt like previous iterations.

Then there is the new manganese twist to the LFP batteries. “LMFP” uses manganese as a cathode which almost exponentially upscales the quality. These batteries are now approaching the energy density and range of standard high nickel batteries that are sold in all EVs across Europe in the US — but here is the kicker its two-thirds of the cost. So it would appear lithium is the winner with the LMFP battery technology - Again, I am not sure as battery technology using sulphur and potassium suggests we could see another leap forward in the range and charging time of these players and they are due to hit the market in the latter half of this decade, the catch here – they don’t use lithium in anywhere near the quantities originally forecast.

Let me dig a little further - the Department of Industry and Resources anticipates that lithium prices won't return to the peak levels seen in late 2022 until the end of 2029. Why? Throughout most of last year a surge in lithium production chased the high prices of 2022 leading to a substantial increase in global supply.

Couple that with weaker-than-expected demand for EVs in the US and Europe balanced the market and caused prices to drop significantly. (Source: Department of Industry and Resources) Supply and demand being what it is prices fell throughout 2023 resulting in reduced production, particularly among some higher-cost producers. Which brings us to the 20% increase in lithium price since the start of the year, and forecasts of further gains through to 2025 according to the same report from the Department of Industry, Resources, and Sciences. However, from 2026 onward, lithium-ion EV batteries will face the pressure from the technologies mentioned above.

The impact on lithium prices such as lithium spodumene according to the Department is prices to climb to US$1,360 per tonne by 2026 before declining to US$1,090 by 2029. The reason I want to use the department’s forecasting is it is historically conservative and directionally accurate. So, what does this all mean?

Larger lithium producers like Pilbara Minerals, Mineral Resources, and IGO are expected to remain profitable at current prices, but the outlook for marginal producers like Core Lithium and emerging players like Liontown is less certain, with questions about whether current prices are sufficient to support their projects. It also suggests that when it comes to future metals – nickel, lithium and the like, a short term view may be the better option as picking the eventual winner in the ‘volt revolution’ is far from certain.

Thin trading in FX markets continued in a holiday shortened week with G10 FX mostly flat against the USD in Wednesday’s session also looking like traders are waiting for Fridays key US PCE inflation reading. The highlights were: USDJPY pushed past its November 2023 high hitting 151.97 which is the highest level this pair has reached since 1990 and bringing intervention speculation to the fore once more, with some trading desks flagging the possibility of intervention during thin Easter markets. Comments from Finance Minister Suzuki who said he was closely watching FX moves and won't rule out any steps including decisive steps to respond to disorderly FX moves also stoking the intervention fire.

Gold surged higher with XAUUSD testing the previous all-time high and resistance level at 2195 USD an ounce after an earlier sell-off on a Reuters report that India is to drastically cut its gold imports in March. While the USD was flat, treasury yields did have a decent drop which supported the gold price. Today ahead in economic news, the highlights are US jobs and GDP data.

After last week’s blockbuster NFP figure FX traders have a key US CPI reading to look forward to later today. Rates markets have seen see-sawing expectations on when the Fed will start cutting rates and today’s CPI will be another big part of that puzzle. US CPI for March is expected to come in at a 0.3% increase, a slight cooling from Februarys 0.4% but still stubbornly holding the Year-on-Year rate at 3.4%, showing that not progress in the battle to bring down inflation is slow going and not over yet.

USD has been in a holding pattern during April with the US dollar Index range trading between the support at 104 and resistance at 105, the 104 support is certainly in play should a cooler than expected CPI reading come in, with the next support at the 200-day SMA at 103.81 Golds record run-up to all time highs has seen the precious metal take headlines during April. As an inflation hedge it should benefit from a hot CPI reading, but a cool reading would see yields and the USD drop which is also gold positive. It’s hard to predict how gold will react fundamentally to todays CPI, though from a chartist point of view XAUUSD is in serious overbought territory and a correction is overdue.