市場新聞與洞察

XAUUSD Analysis 8 – 12 May 2023 The gold price outlook is generally positive in the medium term. Although the close of last week's sell pressure bar indicates a significant loss of buying momentum, due to the sell-off during the week but the price is still moving above the 2000 support level after a rebound to test and then rebound. It is very likely that the price will continue to move or sideways above the 2000 support and there is a chance to rise further to test the 2070 resistance which is a key resistance on the timeframe level.

Weekly and is the price that gold used to do the most in history. Forecasting the price of gold In the short term, the price may move down to test the 2000 support again and if it can hold on without falling further, it may have a sideways correction before rising to test the resistance. 2070 again in the medium term on the daily timeframe level, but if the price moves sharply down with continuous selling momentum, it can break out the 2000 support level and continue down to the next important support at 2070. Should be closely monitored is 1960, which is a support level on the daily timeframe.

GBPUSD Analysis 15 – 19 May 2023 GBPUSD is bearish after rallying to test the 1.26660 resistance to successfully form a new high on the Daily timeframe, before strong selling momentum emerges on the Daily and Weekly timeframes. Currently, the price has dropped to support 1.24470, which is an important level to watch. Because the former price used to form a Double Top pattern on the daily timeframe level. forecasting that price This week, the price may have sideways at the 1.24470 area before plunging further.

There is a high probability that the price will test the support area of ​​1.22700 before a correction. But if the selling momentum continues to sell continuously and is very strong This will result in the price being able to break out at the 1.22700 support area and go further down to test the next support, 1.18080, which is an important support at the Daily timeframe level. EURUSD Analysis 15 – 19 May 2023 EURUSD has a bearish view after rallying to test the 1.11000 resistance zone, which was the last high on the daily timeframe level, but failed to make a new high and strong selling momentum is evident.

Looking at the close of the candlestick, selling pressure on the Weekly time frame last week indicates a strong sell-off in the market. forecasting that price This week the price will continue to decline. There is a high probability that the price will rebound to test the support area of ​​1.07450 before a correction. But if the selling momentum continues to sell continuously and is very strong This will result in the price being able to break out at the 1.07450 support area and go further down to test the next support, 1.05250, which is an important support at the daily timeframe level.

The word Populism is probably the buzzword at the World Economic Forum this year. The headlines this week were heavily dominated by the concerns of the rise of populism around the globe. “Brazil’s Bolsonaro is the Face of Populism at the Davos Forum” “Merkel encourages multilateralism in the face of populism…” “Chrystia Freelans decries the rise of populism…” “Is Davos listening? Populist wind blows over…” “Business leaders concerned about the rise of US nationalism, populism…” This year, three Western Leaders are not present, and the reason behind it is tilted towards the issue of populism.

This is actually a “ Strong Message ” for the financial markets. The United States is not in attendance due to the shutdown related to the funding of the Wall. President Trump is taking a hard line on immigration and trade.

The United Kingdom is trapped with Brexit. Theresa May abstained from the forum as Brexit uncertainties linger. The UK leaving the European Union is the notable example of the rise of populism based on the desire to regain control over immigration and national sovereignty.

France is being rattled by the “yellow vests” protests which initially begun because of the fuel tax hikes and mean well. However, as it lingers through more than two months, there are concerns that it has given rise to populist strategies in French Is Populism a headwind for Economic Growth and the Markets? The IMF recently flagged how policies need to be adjusted to face the slowing global growth amid rising risks and has called for multilateral cooperation to tackle protectionism and trade tensions.

The message echoed the fears of the rise in populism in the markets. The concept of populist parties and economic growth can be complexed as the effects need to be assessed on the short-term and long-term basis. Populist political parties sometimes come with a fiscal spending policy that stimulates the economy in the short-term, similar to the outperformance of the US economy.

The Trump administration has boosted growth, business and consumer confidence and reduced unemployment through various policies such as tax cuts. However, populist parties often come with protectionism measures and anti-immigration policy which is a hindrance for long-term economic growth. Domestic economies are not able to reap the benefits that normally come with globalization which means that trade restrictions and labour immobility can create a stagflationary environment.

The US is the example of how the US economy bolstered during the first two years of Trump’s presidency mostly driven by fiscal spending, but the growth is expecting to slow down due to the gridlock in Washington. Similarly, the spread in populist parties has prompted market angst in the European markets. European shares have been underperforming compared to the global markets.

The % change for a year shows that the fall in major European equities – Euro Stoxx 50, FTSE100, the Dax and the CAC 40 is deeper compared to the US or Australian equity benchmark. Source: Bloomberg The shared currency is also under pressure. A look at the graph below shows that since the beginning of the year, major currencies are in the green against the US dollar compared to the Euro.

A combination of weak data, domestic political challenges and a rise in populism are weighing heavily on the Eurozone outlook. Populism and Emerging Countries The list of headwinds that the Emerging markets have to deal with over the past year is long: US Rising rates and the Fed Trade tensions The rout in oil markets Populist parties Without any doubt, we saw EM crashing last year on the three main points listed above. Populism is another significant point to monitor.

Emerging economies are the ones who benefitted the most from globalization. Trade barriers can have a big impact, and EMs rely heavily on exports to developed countries. Populism is among the most significant risks to the financial markets which are increasing the risk of triggering a crisis.

Australian’s weak inflation report this week has set the tone for the RBA’s Rate Statement next Tuesday. The underlying inflation reading remains well below the RBA’s target 2-3% for the 11th consecutive quarter. There is no doubt that the Australian inflationary outlook remains feeble.

Some cyclical and structural headwinds are preventing wages and other inflationary pressures to climb higher. Even though the economy is on its 27 th year without a recession, the Australian economy is trapped with very high household debt. A subdued wage growth and high household debt are putting a squeeze on consumer spending.

It is hard to see consumer spending continue to stay strong in the upcoming quarters. There are some bright spots such as net exports, public spending and capital expenditure that are relatively solid to stimulate the economy but there are no signs of significant inflationary pressures from leading indicators across categories in the near-term for the RBA to increase interest rate. “Patience is the key here.” Unemployment rate is coming down gradually and will eventually push wages higher at some point. Therefore, even though the CPI figures were disappointing, it is too early to speculate about a rate cut or any changes for that matter.

The RBA was expecting both headline and underlying inflation to undershoot under their target range. We therefore expect the RBA to maintain its usual stance on inflationary outlook and keep interest rate on hold.

December started on a positive note, though it was short-lived. During the G20 meeting, there was more optimism in the financial markets than the market participants had anticipated. Investors were therefore hopeful that December would be promising.

Post G20 Reactions – Bullish Gaps Monday started on a buoyant note with a few bullish gaps, and risk sentiment was revived. The dynamic in the financial markets had changed, and investors entered the last month of the year with more confidence. The equity markets were flashing green again, and major equity benchmarks managed to climb sharply to the upside. (Daily Charts: WS30, NDX100, DAX30, US5OO, FTSE100, and CAC40) In the FX markets, all G10 currencies appreciated against the greenback.

The Japanese Yen and the Antipodeans emerged as the best performers. The British Pound struggled to keep the pace with the other G10 currencies, due to the Brexit uncertainties. Inverted Yield Curve and Trade Ambiguity An inverted yield curve and lack of details around the trade truce deal have halted the upbeat tone in the financial markets.

The yield spread between the 3-yr and 5-yr Treasuries dropped to -0.1 on Monday, triggering a massive sell-off due to rising fears of a recession. At the same time, investors were worried that a muted China regarding the ceasefire was bad news. Investors dramatically dropped riskier assets.

Wall Street bled the most: The Dow Jones Average Industrial dropped 799 points (3.10%), the S&P500 fell by 90 points (3.24%), and Nasdaq Composite erased 3.8%. (Hourly Charts: WS30, NDX100 and DAX30) The greenback retrieved its safe-haven status and bolstered against rival peers. The US dollar Index spiked above the 97 level before losing some bullish momentum. (Hourly Chart: US dollar Index) Brexit Aside from trade headlines and the fears around the inverted yield curve, Brexit news dominated the markets. A meaningful Parliament vote is scheduled on the 11 th of December, and there was much new information for market participants to digest.

Legal advice which states that Brexit deal can be reversed using Article 50 A motion to disclose the legal advice supported by the House of Commons Three Brexit defeats in the Commons Scottish political parties are joining forces to show their opposition. The GBPUSD pair swung up and down, depending on the headlines. Any gains appeared to have been capped by the downtrend line.

The pair has also broken key support levels and dropped to August lows. It briefly attempted a break outside the descending line. (H4: GBPUSD) Fundamentals are weak, and investors reactions seemed to be more pronounced. Sparks in the markets are either bringing relief or igniting the fears.

This article is written by a GO Markets Analyst and is based on their independent analysis. They remain fully responsible for the views expressed as well as any remaining error or omissions. Trading Forex and Derivatives carries a high level of risk.

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Deteriorating demand and rising global output are the main factors that sent the WTI Crude into a bear market territory. There is a shift of sentiment in the oil markets. The US sanctions have been the primary influence behind the rally in oil prices, and now that fears have eased, fundamentals took over, and economic forces- demand and supply are driving the markets.

Supply Side The US sanctions have created fears that oil supply will take a hit and will likely drop by 30% by next year. There was also resistance from OPEC members to increase the output ceiling and boost production. These downside factors have put upward pressure on oil prices.

In the last couple of weeks, sentiment soured as US crude oil reaches a new all-time high at 11.63 million bpd and is predicted to break through 12 million barrels per day by mid-2019. The US sanctions on Iran will be therefore unlikely to have a significant impact on supply. The US decision to offer Oil Waivers to different nations also came as a surprise mitigating the effect of the Iran sanctions on the global oil supply and accelerating the slide in oil prices.

It appears that the waivers were put in place to avoid a shock in the market and higher prices. Demand Side The concerns over global economic growth are forcing traders to reduce their projections for oil demand. Trade tensions are flashing warnings that could dent the world’s oil demand growth.

A slowdown in global economic growth, consumer spending, investment flows and a rising US dollar are leading to mounting uncertainties around the demand for oil. The demand shock is boiling over slowly, and the effect will likely be felt over time. It is too soon to know how the OPEC will react to the supply glut.

Meanwhile, we will have to wait for the OPEC and its allies to discuss scenarios of cutting production again next year. This article is written by a GO Markets Analyst and is based on their independent analysis. They remain fully responsible for the views expressed as well as any remaining error or omissions.

Trading Forex and Derivatives carries a high level of risk. More information on trading WTI and Brent crude oil here.

The Political Event of the Year 2020 The most-waited political event of the year is fast approaching: the US elections will take place on the 3 rd of November. The nominees of the two main political parties - Republican and Democratic party are yet to be announced at the Presidential Nominating Convention. However, the clear frontrunners are President Trump and Joe Biden.

Without any doubt, this election will be widely monitored as US politics may affect the global economy, alliances and trade agreements. Markets were rattled by the long-drawn trade war between the world’s two powerful economies. Even though we kick-started 2020 with positive trade negotiations, the tussle between the US and China over the transparency of the coronavirus outbreak worsen the already fragile relationship.

Ahead of the Presidential election, investors are bracing for the tensions between the US and China to get worse as it is a politically-motivated move by President Trump to win another term. Rightly so, the recent new tech war between the two countries are keeping the markets on edge. The COVID-19 Effect In modern times, history has shown that an incumbent President has a clear advantage and usually wins re-election.

The last president to lose re-election was George W Bush which was mostly due to an economic recession. Therefore, in recent history, an incumbent President has never failed to win a second term unless a recession has occurred during their time as president. At the beginning of the year, the odds of President Trump winning the election was high.

US-China Tensions & COVID-19 The Trump administration had a tough stance against China which had bode well with a majority of Americans. As per Pew Research Center: 73% of US Adults say they have an unfavourable view of China. Around two-thirds of Americans (64%) say China has done a bad job dealing with the coronavirus outbreak.

Around three-quarters (78%) place a great deal or fair amount of the blame for the global spread of the coronavirus on the Chinese government’s initial handling of the COVID-19 outbreak in Wuhan. However, as the virus continues to spread across the globe, the US recorded around 5.3 million of coronavirus cases with more than 165,000 deaths. The US was hit the hardest by the pandemic and the handling of the outbreak by the Trump administration was questioned.

The President has failed to timely respond to the crisis, is also being blamed for sidelining the advice of the experts and played down the severity of the coronavirus crisis. Strong US economy Heading into the election year, the US President was confident that its hard stance on China and a thriving US economy with a historically strong labour market and greater economic security will be the focal points of his election campaign. However, the US economy contracted due to the various forms of lockdown amid the pandemic.

The preliminary Q2 GDP figures show that the US is poised to shrink by a 32.9% – the deepest decline in decades. The pandemic continues to wreak havoc across the globe and the outlook for the third quarter remains murky. COVID-19 Changed the Odds As per the latest polls, the odds have changed – the battleground states look good for Joe Biden.

The presumptive Democratic nominee even has big leads over states like Michigan, Pennsylvania and Wisconsin where the Republicans won by margins of less than 1% in the last election: The most recent data suggest that even Republicans supporters are questioning its response to the coronavirus pandemic. COVID-19 is unlikely to fade away by the election date and combined with the uncertainty about the state of the US economy – the current polls show that Joe Biden is running well ahead of President Trump. Republicans and Democrats: Policies and Markets Under any presidential campaign, tax policies are the primary factor for the markets because of its direct impact on corporate valuation.

The Republicans are supposedly considered as more “market-friendly” compared to Democrats. Cutting Taxes vs Raising Taxes In simpler words, the Republicans encourage tax cuts and believe in an income tax system that does not unfairly target those who create jobs and wealth while Democrats support a more progressive tax structure to provide more services and reduce economic inequality by making sure that the wealthiest Americans pay the highest amount in taxes. After the 2016 election, markets rallied on the assumption of promises of tax cuts and faster economic growth.

However, the trade war has created an uncertain environment for investors and the economy did not progress in the way expected. For Joe Biden to see through this agenda, he plans to make new, bold investments and speed up the timetable for many of the 10-year investments he has already announced. He will pay for the ongoing costs of the plan by reversing some of Trump’s tax cuts for corporations and imposing common-sense tax reforms that finally make sure the wealthiest Americans pay their fair share.

Stock Market Performance by President The below interactive chart shows the percentage gain in the Dow Jones Industrial Average by Presidential term. Despite the pro-business policies, the Dow performed better under Barack Obama over the same time frame as compared to President Trump. Generally, a Democratic win means higher taxes which will negatively affect corporate valuation and the stock market.

However, we have seen that there are higher market returns under Democrats as both the combination of higher taxes and government spending stimulate the economy and support the markets. Source: MacroTrends The Need for More Fiscal Stimulus In a pandemic-induced environment, markets are in a need of more fiscal support from the government. The Fed Chair Jerome Powell has also emphasised on the importance of fiscal stimulus to support the economy.

The Democrats seem to be in favour of more government spending than the Republicans. A Democratic Sweep – Bad for Markets? Leading up to the election date, volatility may be high but markets will eventually adjust to either the Republicans or Democrats policy changes.

Investment opportunities will arise irrespective of a Democratic or Republican win. Some investors may concentrate on certain industries or sectors that can be impacted as the opposing views of both parties on renewable energy, climate, trade policies and health care could affect stocks related to those industries. But most importantly, this election will be geared towards finding a government that will fight the pandemic more effectively and also eased trade tensions with key allies.

A democratic sweep may not be as disastrous as investors fret as historically stocks did also well under the Democrats and in some cases even better than under the Republicans.