The S&P 500 finished another week in negative territory, shedding -1.6% (-2.5% MTD). While it is clear that this market remains the domain of buyers, 90% of the upside in March has been reclaimed, and evidence is building for a deeper correction.
Deeper Correction Possible
Kicking things off from the monthly chart, following last week's all-time high of...
Sterling ended the week considerably lower against the US dollar, recording its largest one-week decline since July 2023 (-1.5%).
In light of the slew of UK economic data on the docket this week—wages, CPI inflation and retail sales—this will be a particularly key market to monitor.
Monthly Resistance Holding Firm
Price action on the monthly chart continues...
Following hotter-than-expected US CPI inflation numbers pulling the EUR/USD southbound yesterday, the currency pair is now testing the mettle of long-standing support ahead of today’s ECB rate decision.
While the central bank is unlikely to cut rates today, there is mounting speculation that we will see a 25bp cut at June’s policy-setting meeting, particularly...
Data came in broadly higher than expected for the March US CPI inflation print.
Higher-Than-Expected Reports on Three of the Four Major Prints
Year-on-year headline CPI inflation for March rose +3.5%, up from +3.2% in February and a touch higher than economists’ estimates of +3.4%. Of note, this follows a rise of +3.4% in December 2023, a rise of +3.1% in...
Market Pricing – Unlikely to Adjust Rates
The Bank of Canada (BoC) is poised to update policy later today at 2:45 pm GMT+1. Markets are currently pricing around a 16% probability of a 25bp cut at the upcoming meeting, with June pricing in -20bps of easing and July fully pricing in a -25bp cut.
Recent Macro Data
The most recent data to be aware of heading...
The spot price of gold (XAU/USD) concluded another week in positive territory, adding +4.3% and refreshing record pinnacles at $2,330/ounce amid expectations of lower rates this year, geopolitical tensions and speculative buying.
There’s no denying that the yellow metal is exhibiting an uptrend and has been since pencilling in a bottom around the $1,614 area in...
You will recall that the Bank of Japan (BoJ) increased its Policy Rate to +0.00%/0.10% in March, pulling the rate out of negative territory. While many, including the Research Team at FP Markets, expected the Japanese yen (JPY) to rally on the back of this, we instead witnessed a fall in the currency, consequently drawing the USD/JPY higher. Many desks labelled...
Fed Chair Jerome Powell recently made the airwaves, delivering remarks on the economic outlook at Stanford Business School.
Key Takeaways from the Speech:
• The Fed Chief does not envisage easing policy until there is more confidence regarding the inflation picture but still believes it will be ‘appropriate’ to cut rates at ‘some point’ this year.
• Powell...
Apple and Microsoft: Which Stock Offers Greater Technical Potential?
Reading time: 7 minutes
Tech giants Apple (ticker: AAPL) and Microsoft (ticker: MSFT) both outperformed last year, adding 48.0% and 57.0%, respectively. Both are also part of the widely talked-about Magnificent Seven Stocks (includes Amazon , Nvidia , Meta Platforms , Tesla and Alphabet ...
ECB Dovish Stance
Recently, the ECB adopted more of a dovish stance.
ECB President Christine Lagarde noted that the eurozone’s economy is in a disinflationary process and added that inflation is ‘making good progress’. Lagarde added that they are confident but ‘not sufficiently confident’ and commented that additional data is needed; more will be known in...
Year-to-Date (YTD) Outperformance
The technical landscape of longer-term flow on the EUR/CHF paints an interesting picture at the moment, poised to end the week higher for an eighth successive weekly session. Interestingly, the currency pair is up +5.4% (YTD), following the record low printed in late 2023 at CHF0.9254. You will also note that price has reclaimed...
Dovish Shift
It was another disappointing week for the pound, pencilling in its worst-performing week of the year (-1.1%). March is poised to end the month considerably off best levels, fuelled by the recent shift in MPC votes with the Bank of England (BoE) now edging ever closer towards easing policy (this was a surprise in the markets as investors were pricing...
Last week, the price of WTI oil settled considerably off its best levels, consequently delivering a Japanese shooting star candlestick formation on the weekly chart (bearish). Despite bottoming in late 2023 and printing a series of higher highs and higher lows on the daily timeframe, daily technical resistance also made a show last week.
The daily timeframe...
A Correction Was Inevitable at Some Point
Against the US dollar (USD), the price of Bitcoin (BTC) has been on a tear in recent weeks, refreshing all-time highs of $73,845. The recent correction, however, has some traders questioning how low the market can drop. Based on the current uptrend, in place since bottoming at $15,581 in late 2022, three corrections...
8-1 Vote in Favour of Bank Rate Hold
Following the Fed holding its Fed funds target rate at 5.25%-5.50%, and the Swiss National Bank (SNB) surprising markets this morning and cutting its overnight Policy Rate by 25bps, the Bank of England (BoE) followed the Fed and left the Bank Rate on hold at 5.25% (a 16-year peak) for a fifth consecutive meeting. This will...
Following the Reserve Bank of Australia (RBA) standing pat on rates and the Bank of Japan (BoJ) raising its Policy Rate by 10bps, consequently putting a cap on NIRP, as well as ending YCC, the focus shifts to today’s FOMC rate decision at 6:00 pm GMT.
Fed Funds Rate to Remain at 5.25%-5.50%
It is widely expected that the Fed will maintain its current...
Following a raft of mixed messages from the Bank of Japan (BoJ) and stronger-than-expected wage negotiations for corporate Japan, the central bank stepped up overnight and ended eight years of negative interest rate policy (NIRP) as well as putting a cap on yield curve control (YCC). The BoJ raised its Policy Rate by 10bps for the first time in nearly two decades,...
