Holiday in most of Europe, all eyes on the U.K, China, commodities, and inflation – Market Overview

Holiday in most of Europe, all eyes on the U.K, China, commodities, and inflation – Market Overview

Today’s trading session will be less eventful, as markets are closed in most of Europe. However, the U.K. is still open, so activity will not be completely underwater.

The uncertainty surrounding a potential inflationary outbreak in the United States still weighs in heavily on the markets.

Some investment banks such as JP Morgan have published studies predicting that growth and corporate profits could peak soon and that the Federal Reserve could change its discourse towards a more hawkish tone. However, the U.S.’ central bank could still maintain a very accommodative monetary policy for an extended period, as they have already stated.

If these forecasts are correct, we would be in a scenario in which the stock markets would lose the upward momentum they have garnered throughout the previous period and could even suffer downward corrections. At the same time, the fixed income market would continue to experience outflows with the consequent rises of bond yields. Finally, the U.S. Dollar would act as a haven currency, supported by the increase in interest rates and a weaker stock market.

In recent days we have witnessed corrections in the commodity markets. In this regard, China has spoken out against what they consider an excessive upward movement for commodities. The country has also issued a warning to commodity companies, announcing that they will monitor the market behavior and strengthen the commodity futures' supervision.

The Chinese authority also stated that it will not allow any violation of market rules and will severely punish monopolistic practices and excessive speculation. China is the world's leading buyer of raw materials, and such a warning could have severe consequences in the market.

COPPER, the main industrial metal that has a positive correlation with the price of the North American stock indices, has been on a downtrend for ten consecutive days, something that had not happened since the beginning of the pandemic crisis. Technically, this metal is close to a support level at 4.4270 below, which would make way for deeper corrections to the 4.34 and 4.00 zones.

In addition to being correlated with the North American indices, especially the S &P500, copper also has a positive correlation with the Australian dollar, the country's currency whose exports of raw materials go to China to a greater extent.

The AUD/USD pair has been experiencing flat behavior recently, with the previous bullish momentum lost. Technically it is moving around the 100-day SMA line but still far from its main support, around 0.7572.

Sources: investing.com, Bloomberg.

Maklumat/penyelidikan ini disediakan oleh Miguel Ruiz (“tpenganalisis penyelidikan”) dan tidak mengambil kira objektif pelaburan tertentu, keadaan kewangan atau keperluan khusus individu. Penganalisis penyelidikan bertanggungjawab terhadap kandungan laporan penyelidikan ini, samada sebahagian atau keseluruhannya, memperakui bahawa pandangan mengenai syarikat dan sekuriti mereka yang dinyatakan dalam laporan ini jelas mencerminkan pandangan peribadi dan pedagang bertanggungjawab sepenuhnya ke atas risiko mereka sendiri.

Penyelidikan yang disediakan bukanlah pandangan JME Financial Services (Pty) Ltd ataupun undangan untuk melabur dengan JME Financial Services (Pty) Ltd. Penganalisis penyelidikan juga memperakui bahawa tiada sebahagian daripada pampasannya, adalah, atau akan, secara langsung atau tidak langsung, berkaitan dengan cadangan atau pandangan tertentu yang dinyatakan dalam laporan ini.

Sehingga tarikh laporan diterbitkan, penganalisis penyelidikan dan pasangannya dan/atau saudara-mara yang bergantung kepada penganalisis penyelidikan, tidak memegang kepentingan dalam sekuriti yang dicadangkan dalam laporan ini (“kepentingan” termasuk pemilikan langsung atau tidak langsung terhadap sekuriti).

Penganalisis penyelidikan tersebut bukanlah di bawah JME Financial Services (Pty) Ltd. Anda digalakkan mendapatkan nasihat daripada penasihat kewangan bebas mengenai kesesuaian pelaburan, di bawah penglibatan berasingan, seperti yang anda anggap sesuai dengan objektif pelaburan tertentu anda, keadaan kewangan atau keperluan kewangan tertentu sebelum membuat komitmen untuk melabur.

Undang-undang Republik Afrika Selatan akan mengawal sebarang tuntutan yang berkaitan dengan atau yang timbul daripada kandungan maklumat/ penyelidikan yang disediakan.

JME Financial Services (Pty) Ltd, beroperasi sebagai ZA.CAPEX.COM, bertindak sebagai perantara antara pelabur dan Magnasale Trading Ltd, rakan kontrak untuk perbezaan yang dibeli oleh pelabur melalui ZA.CAPEX.COM, yang diberi kuasa dan dikawal selia oleh Cyprus Securities. dan Suruhanjaya Pertukaran dengan nombor lesen 264/15. Magnasale Trading Ltd adalah prinsip utama CFD yang dibeli oleh pelabur.