2024-01-30 15:41

IMF World Economic Outlook Overview IMF upgrades global growth as ‘soft landing’ hopes gain traction Oil and gold receive a minor lift in the moments after the release. AUD/USD undecided Major risk events ahead: BoE, Fed rate decisions, Mega-cap earnings and NFP Stay up to date with the major considerations for equity markets in the first quarter of the year by downloading our dedicated equities forecast for Q1 below: IMF Upgrades Global Growth as ‘Soft Landing’ Hopes Gain Traction The International Monetary Fund, or IMF, upgraded its outlook on global economic growth as major economies reveal their resilience. Disinflation also continues to push prices lower, supporting a potential soft landing in 2024 while acknowledging risks related to geopolitical conflicts which could affect global trade. In addition, the IMF also highlighted the potential for stubborn price pressures if reducing interest rates loosens financial conditions too much. The IMF provided an update on its global growth forecast, seeing the 2024 estimate rise from 2.9% back in October, to 3.1%. The organisation foresaw greater than expected resilience in the US, seeing its estimate for growth in 2024 rise from 1.5% to 2.1% for 2024. The organisation also acknowledged China’s fiscal efforts to jump start the local economy, seeing estimated growth rise from 4.2% to 4.6% this year. IMF Upgrades its Global Economic Outlook Source: IMF World Economic Outlook Markets have responded positively as gold and oil both moved higher in the wake of the update, although, gold has since reverted back to prices observed before the report was released. Oil received a boost, and remains a market filled with complexity amid supply chain uncertainty along the Red Sea and a rosier global economic outlook. API data later today, EIA storage figures and the NFP print on Friday provides oil traders with lots to think about this week. AUD/USD, the last chart shown below, is generally reflective of risk sentiment and hadn’t really seen a long-lasting advance in the minutes after the IMF’s update. The Aussie dollar is procyclical in nature which means it exhibits a strong correlation with the S&P 500, although this has weakened recently and may be something to keep an eye on if Aussie/China fortunes deteriorate in relation to the US. Multi-Asset Performance in the Moments Following the IMF’s Global Growth Upgrade Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/imf-upgrades-global-growth-as-major-economies-show-resilience-20240130.html

2024-01-30 14:00

GBP/USD Analysis and Charts GBP/USD’s broad range is holding into a busy week The Fed is up first, with the BoE to follow With no change priced in for both, what they have to say will dominate trade Learn How to Trade GBP/USD with our Expert Guide The British Pound has been confined to a clear trading range against the United States Dollar since mid-December and wasn’t about to break it on Wednesday. After all there are only hours to go before the Federal Reserve’s first monetary policy statement of the year. The Fed is coming up on Wednesday, with the Bank of England’s own interest-rate decision due just a day later. Neither central bank is expected to alter its policy settings but the meat for markets will lie in how ready they seem to do so later this year. The US central bank has so far tamed inflation more successfully than the British, but there are signs everywhere that prices are coming back under control. This could even be the first policy conclave since 2011 that sees no UK rate-setter voting for tighter credit. Could one (or more) even lean toward a cut? Probably not yet, but it’s possible. The major risk would seem to be that both central banks disappoint in terms of apparent eagerness to ease rates. They might. The US economy is still expanding at a reasonable clip, according to most recent data. The UK is still weaker, with inflation much further above target. The case that neither is crying out for lower rates now can still be made. Still, there may not be much movement for GBP/USD unless this disappointment is skewed toward one of the central banks. The decision to hold rates is now well in the price. All the market can do is wait. GBP/USD Technical Analysis GBP/USD Daily Chart Compiled Using TradingView The Pound is stuck in a range effectively between late December’s 1.28247 top and the first Fibonacci retracement of the rise to that four-month peak from the lows of early October. That comes in at 1.26365. There also appears to be quite strong support below that at the 1.26 psychological level. The market has bounced there twice in the past month. If Sterling bulls are going to make another attempt at the range top, they’ll need to retake January 24’s intraday top of 1.27764, a level which hasn’t been approached since. While it doesn’t look as through they have the momentum to try that just yet, it’s notable that GBP/USD is range trading at a relatively high level by recent standards. This makes fundamental sense, of course, as the Fed is expected to cut rates earlier and deeper than the BoE. If the market comes out of this week’s meetings with the same impression, the Pound could rise sharply. --By David Cottle for DailyFX https://www.dailyfx.com/news/gbp-usd-holds-above-1-2600-as-year-s-first-central-bank-meets-near-20240130.html

2024-01-30 10:31

EUR/USD Forecast - Prices, Charts, and Analysis Q3 revisions help Germany avoid a technical recession. Euro Area growth flatlines in Q4. Learn how to trade EUR/USD with our free guide: Most Read: Markets Week Ahead: Fed and BoE Decisions, US Jobs Data, Microsoft, Apple, Amazon Report The German economy missed slipping into a technical recession by the smallest of margins after the country’s Q3 GDP was upgraded to flat from -0.1%. The first look at German Q4 GDP came in line with market forecasts at -0.3%. According to The Federal Statistical Office (Destatis), ‘The gross domestic product (GDP) fell by 0.3% in the fourth quarter of 2023 compared with the third quarter of 2023 after adjustment for price, seasonal and calendar variations. After the German economy more or less stagnated in the first three quarters, economic performance decreased in the fourth quarter of 2023. Compared with the previous quarter, there was a marked decline, in particular, in gross fixed capital formation in construction and in machinery and equipment after price, seasonal and calendar adjustment.’ The Euro Area also missed slipping into a recession after growth flatlined in Q4, beating forecasts of -0.1%, after the economy contracted by 0.1% in Q3. The Euro is currently trying to stabilize around the 1.0825 level after touching a low of 1.0796 on Monday. The single currency has weakened since the end of last year as expectations that the ECB may cut interest rates earlier, and by more than originally expected, weigh on the Euro. According to the latest market forecasts, there is a 75% chance that the ECB will begin its rate-cutting cycle at the April 11th meeting and will force the Deposit Facility rate down to 2.50% by the end of the year from a current level of 4%. Initial support for EUR/USD is seen at 1.0787 ahead of a cluster of prior lows down to 1.0724. EUR/USD is now below the 200-day simple average and if this remains the case then the above support levels are likely to be tested. The latest Federal Reserve Monetary Policy decision will be released tomorrow and traders are hoping that Chair Powell will give at least a nod towards when the Fed will start cutting rates. Financial markets are currently pricing a 50/50 chance of a rate cut in March, while the May 1st meeting is now fully priced in. EUR/USD Daily Chart Charts Using TradingView IG retail trader data show 55.69% of traders are net-long with the ratio of traders long to short at 1.26 to 1.The number of traders net-long is 3.86% higher than yesterday and 16.12% higher than last week, while the number of traders net-short is 0.63% higher than yesterday and 16.84% lower than last week. What is your view on the EURO – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/euro-eur-usd-pares-recent-losses-after-german-and-euro-area-q4-gdp-releases-20240130.html

2024-01-30 09:13

Oil (Brent Crude, WTI) Analysis Brent crude oil backs off after Houthi strike WTI oil breaches long-term trend marker to the downside Find out what oil markets have in store during the first quarter by downloading our Oil Forecast for Q1 below: Brent Crude Oil Backs Off After Houthi Strike Brent crude oil was making a marvelous recovery since it consolidated in the early days of 2024 but such upward momentum has not only stalled, but cut back somewhat. After breaching the $83.50 mark, UK oil trade softened, closing around $82 flat yesterday and opening this morning a tad below yesterday’s close as markets continue to tread with caution. Prior targeted vessels in the Red Sea had not included oil or refined products, meaning the strike over the weekend marked the first of its kind, potentially altering the flow of oil through the Red Sea if other carries heed the warning. The 200-day simple moving average is the immediate level of support currently being tested, where a further decline could test the 50 SMA around $78.70. The MACD is yet to see a flip in momentum to the downside, holding out for some stability in prices ahead of US API data and EIA storage data tomorrow. Brent Crude Oil (UK Oil) Daily Chart Source: TradingView, prepared by Richard Snow Oil prices enjoyed a spate of increases as a result of extreme weather conditions. Icy conditions befell the Dakota and Texas oil fields, adversely impacting crude output by around 1 million barrels per day (bpd) in the week ending January the 19th. Adding to the bullish wave of support for oil prices was the positive surprise in US GDP for the fourth quarter (3.3% vs 2% expected). Source: Wall Street Journal, EIA, prepared by Richard Snow WTI Oil Breaches Long-Term Trend Marker to the Downside WTI oil turned lower, passing beneath the 200 SMA and the long-term level of significance $77.40. The next level of potential support is the 50 SMA around $73.63 and $72.50. The RSI had neared overbought levels but fell short as prices turned lower but positive upside momentum remains intact for now. Major economic news and data awaits as this week the Fed provide an update on monetary policy and US jobs data trickles in until NFP on Friday. WTI Oil Daily Chart Source: TradingView, prepared by Richard Snow Later today, API stock data is due, followed by EIA storage data tomorrow: https://www.dailyfx.com/news/oil-prices-pullback-sharply-after-oil-tanker-strike-caution-grows-20240130.html

2024-01-29 23:00

GOLD PRICE, US DOLLAR, STOCKS FORECAST The Fed’s decision on Wednesday could bring increased volatility for gold prices, the U.S. dollar and stocks The Federal Reserve is expected to hold its policy settings unchanged but could embrace a more dovish guidance Two possible FOMC outcomes are discussed in this article Most Read: Gold Price Forecast - Fed Decision to Guide Trend, Critical Levels For XAU/USD The Federal Reserve will announce on Wednesday its first monetary policy decision of 2024. This event has the potential to create attractive trading opportunities, but it may also bring heightened volatility and unpredictable price movements, so traders should be prepared to navigate the complex market conditions later this week. In terms of expectations, the FOMC is seen holding its key benchmark interest rate unchanged in its current range of 5.25% to 5.50%. The central bank may also drop language indicating a likelihood of additional policy firming from the post-meeting statement – a move that would mark a de facto shift toward an easing stance. While the strong performance of the U.S. economy argues in favor of maintaining a tightening bias for the time being, policymakers may start embracing a more dovish posture for fear that that waiting too long to pivot may cause unnecessary damage to the labor market. In a sense, acting early minimizes the risk of having to implement more extreme accommodative measures later on when hell has already broken loose. Interested in understanding where gold is headed in the short term? Uncover the insights in our complimentary quarterly trading guide. Don't wait; request your copy now! FOMC MEETING PROBABILITIES Source: CME Group For a complete overview of the U.S. dollar’s technical and fundamental outlook, grab a copy of our free Q1 trading forecast! It's still unclear whether the Fed will tee up the first-rate cut for the March meeting, but if it subtly greenlights that course of action, we could see a broad-based drop in U.S. Treasury yields, as traders try to front-run the upcoming move. This would be a bullish outcome for the stocks and gold prices, but would exert downward pressure on the U.S. dollar. In the event of the FOMC leaning on the hawkish side and pushing back against expectations of deep rate cuts for the year and an early start to the easing cycle, nominal yields and the U.S. dollar should rise sharply in tandem. This scenario would create a hostile environment for the equity market as well as precious metals in the near term. If you're looking for an in-depth analysis of U.S. equity indices, our first-quarter stock market forecast is packed with great fundamental and technical insights. Get the full trading guide now! https://www.dailyfx.com/news/forex-fed-preview-what-s-ahead-for-gold-prices-the-u-s-dollar-yields-and-stocks-20240129.html

2024-01-29 20:30

Alphabet’s Earnings – What to Expect Source: Refinitiv For Alphabet’s upcoming results, expectations are for a broad recovery on all fronts. Double-digit growth in both its key segments (Google Cloud and Google Services) is expected to power a 12.1% year-on-year (YoY) growth in overall revenue to US$85.3 billion. Likewise, its 4Q 2023 earnings per share (EPS) is expected to improve to US$1.59 from the previous quarter’s US$1.55, which will extend its streak of positive YoY EPS growth to the third straight quarter. Rebound in advertising activities to continue in 4Q 2023 Advertisement revenue accounts for 78% of Alphabet’s top-line. Having reverted to positive YoY growth over the past two quarters, the recovery momentum for the segment is expected to continue with a stronger 11.6% growth in 4Q 2023, up from 9.5% in 3Q 2023. Increasing views of a US soft landing and further clarity of a peak in the Federal Reserve (Fed)’s hiking cycle in 4Q 2023 may see business confidence return, which could further accelerate ad spending ahead. Back in 3Q 2023, Alphabet’s management guided that there has been some ‘stabilisation’ in advertising spend, which seems to set the tone for better times ahead. Source: Refinitiv Ongoing race to unlock synergies of generative AI on product offerings With the ongoing traction towards generative artificial intelligence (AI), Alphabet has previously incorporated AI-powered solutions like Search and Performance Max to help customers increase their ad’s return on investment (ROI), which may allow Alphabet to defend its edge over the broader advertising industry. Further integration of Bard with Google apps and services will also be on the lookout, but no doubt it will be a race against time against Microsoft, which has been a first-mover with its ChatGPT. Microsoft’s Copilot feature to integrate AI into its office applications will also serve as a threat to Alphabet’s cloud-based products, including Google Sheets and Google Docs, while further developments of Microsoft's search engine Bing could continue to compete for Google’s market share. The race to unlock synergies of generative AI on product offerings will remain tight, with any progress of new features on close watch at the upcoming earnings call. Cloud business performance will remain high on market participants’ radar In the 3Q 2023 results, Alphabet topped both revenue and EPS estimates, but its share price plunged as much as 10% in a single day due to a miss in its cloud revenue. This highlights the importance that market participants are placing on this segment as Alphabet’s key growth driver, amid the rising trend of generative AI which should translate to growing demand for public cloud services. Any lack of growth momentum on that front could mean losing market share to Amazon Web Services (AWS) and Microsoft Azure – the other frontrunners in the highly competitive cloud computing space. With that, a significant miss on this segment could singlehandedly drag the stock price down, given that the company has been investing heavily in its cloud unit and market participants naturally carry high expectations for its growth. Source: Refinitiv Can YouTube continue to hold up against its competitors (eg. TikTok)? YouTube Shorts (Alphabet’s short-form video feature as a reply to competitor TikTok) has been delivering thus far. In the 3Q 2023 results, it is reported to have 70 billion daily views, a significant growth from the 50 billion daily views at the beginning of 2023. With that, some focus will be on whether the solid momentum in both YouTube’s ads and subscription businesses from 3Q 2023 can be mirrored in the upcoming results as well. Technical analysis – Alphabet’s share price eyeing for a retest of its all-time high Alphabet’s share price has been trading on a series of higher highs and higher lows since the start of 2023, with price movement fitting into a broad ascending channel pattern. Trading above its Ichimoku cloud on the daily chart, along with various moving averages (MA) (100-day, 200-day), validates the overall upward trend as well. On the weekly chart, its weekly relative strength index (RSI) has also been trading above its key 50 level since March 2023, briefly retesting the key level back in October 2023, which managed to see some defending from buyers. Ahead, buyers may eye for a potential retest of its all-time high at the US$152.00 level, with current prices standing just 3% away from the target. On the downside, immediate support to defend may be at the US$142.50 level. A stronger area of support confluence may be found at the US$132.40 level, where the lower channel trendline coincides with the lower edge of its Ichimoku cloud on the daily chart. Source: IG charts https://www.dailyfx.com/news/alphabet-s-share-price-what-to-expect-from-q4-results-20240129.html